My brain seems to have wandered off the straight and narrow path in which it usually travels.

For years, I’ve been chasing financial freedom.

Now I’m wondering if the joy from finally getting there will be fleeting.

Before I go on, let me add some context.

A Quick Reminder of My Personal Financial Situation

For those new here, I don’t share all of my personal financial details publically. Sorry about that if you’re the voyeuristic type. I’m a little too private to do so. Still, I need to provide some context for this concept to make sense.

From a financial perspective, my wife and I are killing it compared to the national average for our age. We’ve been saving a healthy percentage of our income since getting real jobs in our early 20s. We’re debt free. Well, except for our mortgage, which is at such a low rate that I choose to invest over paying it off quickly.

We were able to afford Mrs. WPF leaving a lucrative job to stay home with our boys. We’re on track for our goal of saving $36K this year by maxing out our retirement accounts and adding a little more to taxable investment accounts.

Sure, our savings rate over the past three years (since moving to one income) has been the lowest we’ve ever had. But overall, we’re doing pretty well. We’re about 10 years from financial independence and are not making sacrifices to do so.

I’ve Been Financially Stable Since Adulthood

I’ve been lucky enough to be on solid financial footing since my early 20s. After I graduated from college, I started a good job and lived with my parents (effectively) rent-free for two years while building up a healthy savings balance.

I married into a small amount of student loans that we paid off in full shortly after our wedding. Besides those loans and the mortgage on our primary residence, we’ve never had any debt. Nor have we ever been close to living paycheck to paycheck.

What Does It Mean To Be On The Hedonic Treadmill?

Hedonic Adaptation is the idea that you quickly become accustomed to any changes in your life, either good or bad. As a result, these changes don’t have a material effect on your long-term happiness. You may have previously heard this concept called the hedonic treadmill.

Imagine wanting something, working for it, getting it, getting used to it quickly and having it not be exciting anymore. Then you want something else and start the cycle again. That’s the hedonic treadmill.

Just like the belt on an exercise treadmill that spins round and round, you keep running on it but make no forward progress.

Today, I’m wondering if the freedom from financial security has the same impact. Said differently: is the joy of financial freedom fleeting?

How Does Hedonic Adaptation apply to a Consumer?

Before we talk about my recent epiphany, let me point out how this concept is traditionally applied in personal finance circles.

Mr. Money Mustache wrote a classic post about hedonic adaptation turning you into a sucka. It includes the example of a lottery winner’s beverage of choice – “A cold Bud Light was once a true delight after a work day for the lottery winner, but after the win he quits the job and takes up high-end scotch, poured by a personal butler. Both serve the same purpose, and the pleasure is about the same.”

The concept explains why increasing your lifestyle (think nicer car or house) does not make you happier in the long run. You’ll quickly just get used to the new luxury item. I’ve recently discovered this applies to my life as well, but in a new and unexpected way.

Being In Debt Reduces Your Freedom

The Bigger Pockets Money podcast with the Busy Budgeter included a discussion about the confined feeling of being in debt. They talked a bit about the stress of living paycheck to paycheck and not knowing what to do if an unexpected expense popped up.

They eventually turned the conversation around to describe the freedom they felt by getting out of debt and how it’s improved their lives.

My reaction to the conversation was counter intuitive.

I related more to a person being stuck in debt than the joy shared by those with financial freedom.

Shouldn’t I relate to the “joy of financial freedom” side of the conversation instead of the “it stinks to be stuck in debt side?”

Hmmm. What’s wrong with me?

My Realization: Hedonic Adaptation Applies to Your Level of Freedom

How can I be in a strong financial position without feeling free at all?

I think it’s because I’ve adapted to the level of freedom I already have. I’ve had financial stability for a long time now. It feels normal, not freeing.

That level of freedom as a standalone factor is not making me happy anymore. It’s old news. I want/need to reach “independence” to increase my financial freedom-related happiness. Does that sound familiar?

I think it sounds just like the person who “needs” a new car to be happy, gets it and then starts to focus on the next material possession they “need.”

Why I Feel “Captive” Without Consumer Debt?

I’m Not Financially Independent

If I stopped bringing in an income, we’d have to make drastic life changes or the savings would eventually run out. Based on the 4% rule of thumb, I still need to save a huge sum of additional money to support my current lifestyle (and even more for my ideal lifestyle) with passive income. While I’m working on doing just that, I’m probably still a decade from my goal.

I Know How Important Time is to Growing Wealth

I feel the need to make and save money as quickly as possible to make it work for me longer. Saving a dollar this year is much more valuable than saving a dollar five or ten years from now. Knowing this makes me feel more pressure to save now.

I Spend Most of my Waking Hours Working or Commuting

To be clear, I’m not working for the enjoyment or self-satisfaction it provides. I apply my unique skill set to maximize my income. I spend my time doing so about 230 days a year. Think about that for a second, 63% of my days are spent just to make money. No wonder I care about money enough to write a weekly blog post about it.

We Don’t Spend Without Intention

My wife and I track every penny that goes out to make sure we’re spending on only our needs and top priorities. We do so to save as much of our earnings as possible.

Life Is Good

I’m not complaining about our current life (financial or otherwise). It’s great. I know how lucky I am. I just don’t feel the sense of financial freedom discussed in the podcast at all. I’m far from the massive debt or paycheck to paycheck living. Yet, I’m more able to relate to the person deep in debt than the hosts talking about being financially free.

I Live Like I’m In Debt

Unfortunately, being on solid ground still leaves me spending 63% of my days focused on earning money. That’s time I’ll never get back to work on something more fulfilling.

If I was in debt, my time would be spent similar to how it is now. I’d earn as much as I can and would keep spending under a tight leash. I think that’s why I associate with the debtor more than the person who’s financially independent.

I spend my time practically the same way I would if I was broke – and very differently than I would if I won the lottery. If I had struggled with debt and instability at one point, would I feel more appreciation for my current situation?

My wife is way smarter than I am. She reminds me all the time that we are in a good place. She reminds me that if something “bad” comes up, we’d find a way to deal with it. She’s right, we would.

On the other hand, she’s not telling me to quit my job to ski, run, bike and work on Winning Personal Finance full-time. Being in a stable position is great, but I want more. I want to be at the finish line, financially independent with full control of my own time.

Would Full Financial Independence Lead to Increased Happiness?

Mr. 1500 retired early and wrote a look back on his first year of early retirement. In it he said:

“I discovered that FIRE doesn’t make me happier: This is a big one. I thought that when I left work, I’d be happier. Nope. Instead: I felt the exact same.”

Hmmm. Well, that’s not very encouraging. I’m glad he’s not less happy. But isn’t the point of saving and retiring early to live a happier life once you get there? Did he just adapt to his new freedom?

Would he (and I for that matter) be just as happy if we blow all our savings on “nice stuff” and never be able to retire? Sure, after the initial dopamine boost from the new stuff, we’d get used to it and revert to the same level of happiness. But have we or will we adapt to any new levels of financial freedom we attain anyway?

My Takeaways

This blog post is a bit different from anything I’ve written previously. I’m not presenting a choice and sharing a result or recommendation. I’m talking about mindset and I don’t have the answers.

Drafting this post alone is a reminder that I have it pretty good. For those of us between being in debt and full financial independence, it sometimes it feels like a struggle. We need to remember and appreciate what we have. Just because we’re dealing with a 9-5 or 9-9 right now, we have more options than we realize on a daily basis.

As for the application of the hedonic treadmill to financial freedom, I genuinely don’t know if I’ve stumbled upon something with this idea or if I’m a bit crazy. Maybe my lack of tolerance for risk won’t let me step up my happiness level until I have 25x my annual spending in my investment accounts. Maybe I’ve uncovered a deep-rooted flaw in my brain and I’m the oddball.

Or maybe I’m normal and there are other people out there (you?) that are financially stable or even FI, yet are chasing that next level on the freedom scale to find more happiness. Will we find it when we get there?

I Want to Hear From You!

Do you also feel “stuck” even with financial stability?

Have you adapted to your current level of financial freedom?

Did getting out of debt feel awesome and freeing and then just become normal?

If you’re financially independent, did you just adapt to your freedom and stop appreciating it? Is it even worth chasing?

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