By Dr. Jim Dahle, WCI Founder
I've written before about some of the struggles of the young who are financially independent (FI). However, some of these struggles can extend into the lives of those who are not even financially independent yet. Here's an example from my email inbox:
“I am a private practice optometrist that was approached by a private equity group to buy out my practice. I am having a tremendous internal struggle with this. On one hand, if the sale would go through, I would hit instant FI. I would be FI by 40. This would give me the freedom to continue to work only because I want to, not because I have to; more vacations with family, etc. I think back to ‘if you have won the game, stop playing.' On the other hand, I would be an employee and would have to give up some of my entrepreneurial side. I would be young and have plenty of time to do other things, but there will be noncompetes and legal things in place that would make owning another clinic difficult without moving my family.
My clinic does well, and we are continuing to grow. So, break-even point would probably be about 10-15 years if I decide not to sell. My entrepreneurial side comes in again and I think to myself, the practice still has room for growth and I could cut down that break-even point. The sky's the limit. I could open up another practice, but the hill to climb to get to this point has been a lot. How does one navigate these struggles? What stops you from walking away and doing whatever you want with life? Have you spoken to others that have sold to PE? Are they happy with the decisions that they made? What would they do differently? As I write this email, I find myself going back and forth in my thoughts.”
I'm not really going to answer this question in the post (I already emailed this person back addressing their questions). What I want to talk about is hedonia and eudaimonia and how they interact in our minds, especially when dealing with questions like these.
What Is Hedonia?
You may be familiar with the term hedonia from the term “hedonic treadmill.” The treadmill is simply the idea that when you spend money on something new and cool—whether an experience or a thing—it soon becomes routine. You've spent money and even raised your ongoing lifestyle costs without actually increasing the amount of pleasure in your life. Yet you keep seeking more and more, having to run faster and faster at work to afford the next level of pleasure-seeking.
Academics define hedonia as experiences of high positive affect, low negative affect, and high life satisfaction. However, it is probably best to just think of it as pleasure or fun. The personal finance (and especially FIRE) blogosphere/podcastophere spends a lot of time encouraging you to become FI so you can be happy and do what you want. They're mostly talking about hedonia. When you are slogging away at work and spending all of your time thinking about retiring, traveling, playing, and lying around, you probably have an acute hedonia deficiency. You're hedonipenic.
More information here:
What Is Eudaimonia?
The term you may not be as familiar with is eudaimonia. Eudaimonia also broadly means happiness, but it's a different kind of happiness. A Greek word, originating from Aristotle, it usually translates to human flourishing or living well. However, the best way to think about it is “purpose.” Hedonia is pleasure, and eudaimonia is purpose.
Arthur C. Brooks, in his excellent From Strength to Strength: Finding Success, Happiness, and Deep Purpose in the Second Half of Life, discusses these two types of happiness. He writes:
“Over the years, I have endured many graduation ceremonies and have observed that there are two basic types of speeches from commencement speakers. The first can be summarized as ‘Go find your purpose.' The second is ‘Find work you love and you'll never work a day in your life.' Which one is better advice—not just for graduates, but for all of us? . . . This is an example of the age-old debate over two kinds of happiness that scholars refer to as hedonia and eudaimonia. Hedonia is about feeling good, eudaimonia is about living a purpose-filled life. In truth, we need both. Hedonia without eudaimonia devolves into empty pleasure; eudaimonia without hedonia can become dry . . . I think we should seek work that is a balance of enjoyable and meaningful. At the nexus of enjoyable and meaningful is interesting. Interest is considered by many neuroscientists to be a positive primary emotion, processed in the limbic system of the brain. Something that truly interests you is intensely pleasurable; it also must have meaning in order to hold your interest. Thus, ‘Is this work deeply interesting to me?' is a helpful litmus test.”
Balancing Hedonia and Eudaimonia in My Life
I love the concept of balancing hedonia and eudaimonia. I have had periods where I was hedonipenic, and other periods where I was eudaimopenic. The classic example in my life is a couple of months between my first and second year of medical school. I had a military rotation right in the middle of those three months, but that left me with a month on either side to do whatever I wanted. So, I played. A lot. Golfed most days. Went climbing. Played a lot of video games. By the end of the month, going to the golf course felt like work. The pleasure was gone. I had no purpose. I was eudaimopenic. Residency was the opposite. Incredible purpose and meaning. I was finally applying what I had been learning for the prior eight years. I was helping people, learning cool new stuff, and becoming more and more competent each day. But there wasn't a lot of pleasure in my life. I was hedonipenic.
Balance is the key.
Hedonia is pleasure. For me, this is a great meal. It's going rock climbing or canyoneering with my friends. It's planning and going on a trip. It's floating down a river, anticipating the next rapid. It's snuggling up with my kids or my wife and watching a movie on Netflix. It's “Netflix and chill.” It's playing video games. It's playing hockey or going skiing. Not much purpose, but a whole lot of fun and pleasure.
Eudaimonia is purpose. It's typing random thoughts into the internet for you to read and other WCI work. It's seeing patients. It's coaching hockey. It taking youth canyoneering. It's volunteer work and church service. None of that is really pleasurable in the same way as the activities listed under hedonia above. But without it, the hedonia activities aren't nearly as enjoyable. I need work—meaningful work—to be happy. Now, I don't need that much of it. I probably don't need as much as I'm doing now. But I absolutely need some of it.
I want my obituary to read that I lived a life of adventure and service. Hedonia and eudaimonia. What will yours read?
More information here:
Balancing Hedonia and Eudaimonia in Your Life
The doc in the example above could probably use a little more hedonia. But he is rightly worried about not having enough eudaimonia or letting the pendulum swing too far. Selling out to private equity is great . . . if you're done working.
Nobody Very few actually prefer working for a PE-owned clinic instead of a clinic they own. They're only doing it for the money, and money doesn't bring any eudaimonia. So, older docs are much more likely to sell out (especially if they're short on cash) than younger docs. The questions that a young doc needs to answer before selling are:
- “What am I going to do with the rest of my life?”
- “What is my purpose?”
- “How will I get eudaimonia?”
- “Will working as an employee optometrist really do it for me?”
If you're like most working docs, you've got plenty of eudaimonia in your life right now. You're probably a little short on hedonia. Are there adjustments you can make to shift your balance a little without killing the goose that lays the golden eggs (both financially and in terms of eudaimonia)? Maybe you can drop a half-day of clinic a week and go golfing or hiking. Maybe you need to see fewer patients per hour so you can get your charting done by 5pm. Maybe you can spend a little less so you don't have to take so much call or work so many shifts.
On the other hand, are you a bored, purposeless retiree? Can you go back to work on your terms? Is volunteer work right for you? Can you derive purpose from helping to raise grandkids or caring for an ill spouse?
Creativity and knowing yourself go a long way. I hope everyone gets a chance in their life to experience too much and too little of each of these two types of happiness. Then, you can find the perfect balance for you between pleasure and purpose.
What do you think? Has your pendulum swung too much toward hedonia or eudaimonia? What can you do to swing it back a bit the other way? What do you want your obituary to say? Comment below!