There was a popular bumper sticker in the 1980s which more or less sums up everything that was wrong with the consumer frenzy of that decade. It read, ’He who dies with the most toys, wins’.
Stuff, for this crazy period, was status. Consumer was king. And everyone ran themselves ragged, talking on their brick phones and posing in shoulder padded power suits.
Sound like fun?
Like backcombing and mullets, this sort of consumer frenzy didn’t actually look too hot then, and is certainly not attractive to many of us these days. Thankfully, things have changed. These days there is a growing realisation that balance – in work and life – is preferable to excess. Even for those of us actively climbing the career ladder, there is a recognition that taking a holiday can help your career. It’s going to help more than shoulder pads will, anyhow.
So for lots of us, getting stuff isn’t a priority. Pulling together the sort of money needed for a deposit puts home ownership out of reach for mere mortals in many cities, leaving us with more location freedom and often more disposable income. But we are not stockpiling fine art or vintage wines, investing in bonds or squirrelling our cash away into ISAs and pension pots. We are filling our boots with experiences. But why?
The Scientific Explanation
If you think that the key to happiness is money, then the Easterlin Paradox is here to – scientifically – prove you wrong. It is true, of course, that we need money up to a point, to ensure we can be happy. There are some necessities in life which there is simply no getting away from. We need a roof over our heads, food on the table and a Netflix subscription. And none of this comes for free.
But the logic that the more money we have, the happier we are, does not hold. Research has shown that there is a point up to which more money does indeed increase the average happiness of an individual – but beyond that point it is a lesser factor. In the US, the magic number is only $75k. Any household income brought in, in addition to this, is not going to materially impact your happiness measure. So instead of focusing on accumulating wealth above this point, perhaps a better strategy is to start accumulating experiences.
And gathering experiences rather than things is not simply a question of not needing more money – but that the satisfaction derived from things – as opposed to experiences – is smaller and shorter lived. Further research has demonstrated that although people asked to rate their satisfaction after either a major purchase, or an experience, rate their initial happiness at a similar level to each other, over time, the satisfaction with a ’thing’ diminishes, whereas the satisfaction with an experience does not. In fact, it might even become a source of increased satisfaction over time.
Although this might sound counter intuitive, it is not that surprising when you think about it. You buy a new car, or an expensive handbag. Over time, you get used to having it until it is no longer a source of pleasure. Where you once smiled every time you turned on the ignition or picked up your bag at the door, you now do so without giving it a second thought – and what’s more, the bag is getting scuffed, and your car is in need of repairs. It’s not long before the positive pleasure of the purchase turns into dissatisfaction.
Now contrast this with an experience. You spend a fantastic month backpacking around Asia or visit a high class restaurant with friends. Although you do not have a material reminder of the trip (apart perhaps from that dodgy tattoo you’re now thinking twice about), you have memories which will last, and even grow with the recollection and retelling. This source of happiness keeps on giving – much more so than a material ’thing’ ever could.
The Social Explanation
One of the reasons that experiences live longer and give back more than ’things’ is the social aspect of an experience. Owning a thing is often – at best – a comparative thing. You want to keep up with the Joneses perhaps, buy a new bike to outclass your buddy, or a new dress which will make sure you’re as well kitted out as your friends. There is a competitive element which can be subtle or overt – whereas a shared experience is something you all have, with no element of trying to outdo each other.
How much more likely are you to bond with new friends over a chat about holidays in the same country, or a great night out together, than you are when you’re comparing watches or Jimmy Choos?
A shared experience gives a shared history for a group of people, drawing them together in a way that stuff cannot. It’s why school friends and siblings can remain friends despite growing up to be very different people – that shared childhood goes a long way to creating something intangible which keeps the bonds together. Having the same set of wheels does not.
This is a powerful argument for the Millennial generation. More than ever, we are looking for a sense of meaning and purpose, rather than a pure consumerist rush of purchasing. For Millennials who grew up, or endured their first steps into the working world during the great recession, ’stuff’ does not hold the same appeal as it did for previous generations. We saw how transient stuff could be as people lost their homes and livelihoods over night. Experience, on the other hand, lasts forever, and is recession proofed by design.
The shift to valuing experiences over things is both a product of, and a cause, of the way that society at large has changed since the 1980s bumper sticker moment.
If you’re under 35 years old, the chances are I’m preaching to the choir here. We grew up watching our parents struggle through a 9 to 5 to achieve a meagre pension, and put all their experiential dreams on hold until retirement. As we hit the jobs market, unemployment rocketed, jobs evaporated and the whole house of cards tumbled down. The boomer generation ended up in many cases putting off retirement to continue to work in poorly paid jobs, and bearing the brunt of changes to the state pension system.
The rules changed. We have created our own world, in which more than ever, people work on a flexible basis to fulfil both income and creative needs simultaneously, rather than waiting for retirement to have some fun. Between the impossibility of making substantial purchases like a family home, and the rise of evangelists like Tim Ferriss promising you can have it all in a mere 4 hour working week – and take mini retirements along the way – we are carving out a new way. Experiences grow in importance, while material things diminish. Material things continue to cost to maintain and keep competitive, while experiences bring us together with those that matter to us. I know where my free money goes these days. How about you?