One of the most interesting subjects is that of the human mind.
What factors drive our behavior, thoughts, and tendencies? A particularly interesting study involves the relationship we have with pain and why, in some cases, we actually choose to take on pain. A recent article titled “Why a Meaningful Life Is Impossible Without Suffering” by Stephen Johnson discusses what drives us to intentionally seek out pain in order to find meaning in life.
Why Do We Choose Pain?
Johnson gave three possible reasons why we intentionally choose suffering or pain.
One, we choose to go through painful experiences to feel the contrasting pleasure. Johnson wrote:
“In order to maximize the pleasure of an experience, you often need a big dose of its opposite. That’s one reason why a dip in the hot tub feels especially good after a frigid winter day, or why a Thera gun hammering into a sore muscle can feel nice.
Two, we seek the meaning that comes from accomplishing something difficult. Athletes choose to sacrifice their bodies, especially when a championship is on the line. Why would they do this? Because holding that trophy would make it all worth it.
Third and much more existential, we choose to suffer to escape. Johnson continued, “[When] our attention and energy are focused on a single task, painful episodes seem to snap us out of our everyday self-consciousness and into something new.”
Looking through a wider scope, we ultimately choose pain and suffering because we have some sort of understanding that the sacrifice will bring us meaning in life. The ability to pass through suffering for meaning is a huge determinant of having success in all aspects of our lives.
Where Does Money Come Into All This?
Unfortunately, money is misconstrued in most people’s minds.
Some people see money as meaning, the end goal, or ultimate happiness. With this as your understanding of money, you will live a life of disappointment or, worse, be driven to make irrational decisions that could deteriorate your life. Viewing money as a tool, on the other hand, opens the door for happiness, meaning, and accomplishing goals.
When you think about your financial future, money is the tool that enables you to retire. Over the course of your life, and depending on your dedication to saving, you accumulate money not just to fund your basic retirement expenses but also to accomplish goals such as traveling, making charitable donations, buying that property you always wanted, and so on.
Sometimes it’s helpful to look at saving as deferred spending. It takes self-control not to spend every penny you earn. In most cases, it involves varying degrees of pain and suffering. You sacrifice comfort and desires for the ability to do things in the future.
Not only do we experience pain in the accumulation of our wealth, but we also experience pain when we see losses in our portfolio. If only we all passed through that pain dedicated to long-term goals knowing that experiencing losses is part of the journey.
Pain and Money
Daniel Kahneman and Amos Tversky authored the idea of the loss aversion principle.
They found that losses carry a heavier weight than equally sized gains. In fact, they found that we value a loss to be 2.3 times greater than a gain of the same value. This is further expedited when someone retires.
Our brains are wired to focus on losses—to focus on the pain.
In fact, our brains aren’t just wired to focus on them; they are wired to fallaciously exacerbate them. For this reason, it’s critical to find the meaning behind the pain.
- Why are you saving for the future?
- What do you value?
- How can money be a tool to accomplish what brings you meaning in life?
When this structure is in place, we choose our course knowing we will suffer. Our portfolios may take a beating along the way, but staying the course is often the only way to make it all worth it.
Although it seems that money is the root cause of our pain when we sustain losses and the root cause of our happiness when we experience gains, nothing could be further from the truth.
Emotion clouds our judgment, and it is hard to discern what our mind is actually doing. A healthier approach is to think of the root cause as our sense of security. After all, we simply just want to know if we’re going to be okay. So, when our sense of security is attacked or bolstered up, consider taking a step back.
Don’t fall for the trap and associate money with your emotions. If investors could detach money from emotion, they would most likely be happier, less stressed, have a healthier relationship with money, and enjoy the life they are living now instead of “suffering” until retirement comes along when they can “finally live.”
Remember, money does not define who you are. Whether you have a little or a lot, money does not have the ability to accurately define you as a person. Some think it does, and others wish it would, but for each, the outcome is the same—it doesn’t.
Choose TrueNorth Health as Your Wealth Management Firm
Make your financial journey less painful by working with a trusted fiduciary. TrueNorth Wealth has a team of fee-only financial advisors dedicated to helping you grow your wealth and getting the most enjoyment out of it. We offer financial planning services in Boise, ID, and throughout Utah. Contact us to schedule a free consultation.