If you earn over $30k you need to read this

It hit me this week.

After spending the last 18 months planning, designing, and building, we’ve finally settled into our ‘dream home’.

And let me tell you it feels…‘okay’.

I mean it’s a nice house, but it’s not like I wake up early to admire the designer taps in the kitchen.

Apparently, I’m suffering from ‘hedonic adaption’. That’s what economist and author Arun Abey has labelled the short-term sugar hit that buying stuff has on our brains. And like all sugar hits, it wears off quickly, and leaves us no more or no less happier than we were before.

Your phone is a good example of hedonic adaption. The days leading up to purchasing it were probably mildly pleasurable (and if you were a real weirdo you may have even lined up outside at an Apple store to buy one). Now you probably see it as ‘just a phone’, and depending on how long you’ve had it, you’re waiting for the next upgrade.

That’s just how our brains are wired.

In the 1930s the nephew of Sigmund Freud, Edward Bernays, worked this out and made himself (and big tobacco) a fortune, and in the process kicked off modern consumerism.

Intellectually, we know this is marketing bulldust — but that doesn’t mean we don’t all do it. Really, I’m no better equipped to turn off the impulse than my wife is able to switch off The Bachelor.

The truth is, our reptilian brains are hardwired to seek out the new and the pleasurable.

Advertisers take advantage of it by serving our brains images of George Clooney drinking a new type of coffee, or Miranda Kerr in sexy new lingerie, or Nicole Kidman holding a new angle grinder, and we want it.


The Triangle of Happiness

Thankfully, there is a wealth of research that shows us how to get more smile from our pile.

The nation’s longest-running and most comprehensive survey on happiness, the Australian Unity Wellbeing Index, has just been released. And after fifteen years of detailed research, the author of the survey, Deakin University Emeritus Professor Robert Cummins, says he’d finally cracked the code to wellbeing, which he dubbed the ‘golden triangle of happiness’:

1. A sense of purpose.
2. Strong personal relationship/s.
3. Financial control.

Let’s take a look at each.

A Sense Of Purpose

Yes, that sounds like something Malcolm Turnbull would say.

For most people their ‘purpose’ is pretty simple: to live a better life, and to look after their family.

That explains why most people (often unconsciously, with the help of advertisers) strive toward outward symbols of success: owning an expensive home, in an expensive suburb, and driving an expensive car to drop the kids off at an expensive school.

Yet fifteen years of detailed research proves — quite convincingly — that once you earn over $100,000 a year, money won’t actually make you much happier.

Here’s you: “What a load of rubbish. I like buying stuff. I’ll take the short-term sugar hit!”

Here’s me: “It’s often what you have to give up to get the sugar hit that makes even high earning people unhappy. You bite off more than you can chew. You work more. You stress more. You fight more”.

Strong personal relationships

One of the building blocks for happiness is strong personal relationships…yet the number one cause of relationship break-ups is fights about money. It’s important to understand that Relationships Australia says this is universal, and not just confined to low income earning couples who shop at Aldi.

Yet I’m not Doctor Phil, so let’s look with something I do understand: money.

Financial control

Years ago, a woman approached me after a seminar I’d done in Perth, clutching my book.

Her husband had walked out on her — and their two preschool kids — a few years before.

He’d left her with massive debts that he was never going to repay.

And she was…absolutely beaming with happiness.

She told me that once she put my book down, she didn’t have any doubts. It was clear to her that if she followed the simple, commonsense plan, she would be okay. For her there was no doubt. No indecision. She had a roadmap that clearly pointed out her destination.

And that’s the huge takeout for me in this research:

Money may not make you happy, but the research shows that not being in control of your finances will make you very unhappy: in fact Professor Cummins and his research team found that financial insecurity produces similar feelings to that of physical torture.

And the lesson I learned from that single mum is just as profound:

Achieving a sense of financial control isn’t about your net worth — it’s about your self worth.

You don’t have to wait until you’ve paid off all your credit cards.

You don’t need to wait until you have bought a home.

You don’t have to wait until you have paid your home off.

You don’t have to wait until you have saved enough for retirement.

You can achieve it the moment you make a decision to commit to putting in place a realistic plan. One that’s realistic and based on hard work, savings, paying down debt, and investing conservatively. If you know in your bones it will work, then the anxiety vanishes immediately. It then simply becomes a matter of time: so long as you keep following the plan, eventually, everything will be okay.

The research in the survey backs this up. It found that low income earners who rated themselves at least an 8 out of 10 for being in control of their finances were far happier than those people who were earning substantially more, but rated themselves as not as in control of their finances.

People often write to me, often IN ALL CAPS, telling me that my stuff is just common sense.

Well, guilty as charged.

That’s how I’ve built one of Australia’s largest wealth building communities: I help people get their Mojo back. For years I knew it worked. Now I have the research to back it up!

Tread Your Own Path!