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:
Will More Money Make Me Happier?
Leaving Dentistry and Finding Happiness
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:
Do What Others Aren’t Willing to Do
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!
Excellent.
Agreed. Great post. Thank you.
Jim,
I have been a WCI reader for years. I have learned a lot. In fact, I have been a subscriber for so long, the material has repeated itself. I guess there is a capacity with some of this. But this is the first time I read your work and think you are dead wrong. Specifically, practitioner “selling” their practices are “doing it for the money.” Yea, there are situations where this is true. But not my situation. In fact, I can take your FI model and say that’s no longer the ultimate goal. It’s nice to have, I’m sure, but having a more substantial goal, that’s not measured by a number is so much more. I don’t care about money anymore and I’m not financially independent. My new partnership I now am involved in, has reinvigorated me in ways I had no idea would happen. I could easily talk more about it. But what you said that we do it for the money is a very weak minded opinion. One that I have never used to describe this platform. We tend to have metrics to measure our success. Ever thought of how we all want better for our children than we have/had? It’s really immeasurable. We make sure we provide what our children need to thrive, not just survive. It’s not an allowance or a car or tuition payments. It’s providing the basis for their success and it never wavers. It evolves and grows as they do. That’s a similar mantra of my new partnership. And it has nothing to do with financial (production) goals. It’s about a new culture to create a better platform for patient care. One that I couldn’t do alone in my private practice setting. And it has been transformational. There is purpose that now brings even more pleasure. Without money even entering the metric.
-Patrick
Hey Patrick, yeah I think Jim meant in the terms of the emailer. You’re right you don’t need to sell to PE or the hospital just for the money. You’d be though The “very few” that Jim is referring to that I have sold out for other reasons other than money.
When you sell something, what do you get? You get money.
Maybe afterward you found something good, even better than you had before. But if you sold something, you did it for the money. That’s what selling means.
Glad you like your new working situation. Your experience is pretty rare among docs who were happy about the work situation after they sold to private equity though.
Cool odor Jim. How do you think this balance of you eudemonia and hedonia fit in the concept of ikigai? It almost seems to me that the need for hedonia is not really addressed in the ikigai concept, it is more eudemonia, the purpose, that matters. However, it seems you can’t live a purposeful life or reach ikigai without some hedonia according to your post. It seems all that golf and video games that you got out of your system in med school really contribute you to you reaching ikigai, and continuing the balance of hedonia and eudemonia.
odor?
I agree. Ikigai is about eudemonia.
Not the point of the article but as an eye doc who’s been approached by PE multiple times please understand that as an employed physician you don’t necessarily get more free time just because you’re FI. My friends that have sold do not have the freedom I do owning my own practice. When I want to take tomorrow off I tell my staff and they rearrange my schedule. I contacted my friend who sold to PE recently to play in a golf tournament 2 months away. He told me he couldn’t get the day off! They’ve cut his staff back. Patients and staff are not happy with the changes but the docs have no control over it or their schedules. You might be FI but you’re no longer work independent. I’ll take work freedom over FI for now.
Good point. If you don’t retire after getting the big check, you definitely have less control. Funny the direction this comments section has taken. Often does go after one line in a post rather than whatever the main point of the post was.
For anyone wanting more granular discussion of PE in health care you might consider “These are the Plunderers” by Gretchen Morgenson and Joshua Rosner. The real question is before you sell while you have some bargaining leverage what terms should be in a sale contract. Seems like there should be a set of WCI or doc based recommended seller covenants for those deals, if for no other reason than to clarify what you are really getting into as it is being negotiated.
Never thought I’d see the concept of eudaimonia on WCI of all places….neat.
Glad to be of service.
This was a really impressive post. We all know WCI for expert financial knowledge, expert outdoorsman knowledge and having a generally balanced approach to the world but this was a truly excellent mini-primer on happiness, purpose, and balance.
-A psychiatrist who spends too much time thinking about the above topics.
Thanks for your kind words. Glad you enjoyed it.
Jim, enjoyed the post. The concepts of balancing fun and fulfillment aren’t new, but it’s good to be reminded. I think something that would help docs is if we understood the potential power we have as a profession to shape our own destinies. We are some of the most highly trained people on the planet but act like feckless employees as soon as we graduate. Sometimes it’s hard to feel fulfilled as an employee, sometimes you can. But study after study confirms that self-determination is a key component of job and life satisfaction. If we have the knowledge and confidence to keep someone alive or heal them, then certainly we should have the confidence to lead our profession. As physicians, I posit that we can get more of both, hedonia and eudemonia when we take control of how we perform our work.
As an example, work for a crap employer? Find another job or do locums, then quit. Tell your employer why you quit so that maybe they will fix the problems. Tell other physicians about the reality of working for that employer if they ask. Headhunters are expensive for hospitals, so enough physician churn will eventually get too expensive for even the “suits” to ignore.
Continually push for better pay, more staff, more days off, less “compliance” or “training,” and less paperwork. We should make it the standard that physicians are there to treat patients, not slog mindlessly in an EMR chasing MIPS or whatever arbitrary “quality” criterion the payor is pushing that year.
Demand representation on decision making bodies. We don’t like to do this because it takes up a portion of our already precious free time, but we should push to be in the C-suite or in positions of power because we know how to take care of patients. The MBA who’s switched from four different healthcare systems over the last decade for stock options and a better bonus doesn’t care about you but instead their vacation home in Martha’s Vineyard. They want RVUs per doc, and of those RVU dollars, they want to keep as many as they can.
Only when we create breathing room for ourselves do I believe we can get both of the ideas listed above.
Well, as usual you plainly said the thing I struggle to put into words. Great job!
This is exactly my current part time work at the VA as an FI military retiree. On Thursday night, I am ready for my long weekend off. By Sunday night, I can’t wait to get back to taking care of my “tribe” and working with residents and great partners.
Purpose. Mine has always been to give my children a safe financially secure and loving home with parents who love each other and stay together. Providing a much better situation for my children than I had was fairly easy: avoid divorce, protect from any abuse, be financially responsible, and support the mental health and well being of the family. Routine stuff, right? Of course it’s harder than it sounds.
Work is work. I picked health care. I helped patients and their families for three decades. It was a good job. It also paid well. Lucky me.
It’s certainly easier to reach an enjoyable and content space and have peace of mind working two days a week. Downsizing and finishing full time work at age 58 was one of the best decisions I’ve ever made.
My purpose is to live, love and learn with my wife and family and help my children and eventual grandchildren until I’m of no use. It is not and never was all about work. I’m fortunate that I enjoyed my work for many years and it involved helping people. I hope something I did inspired my children. They all love and support each other.
So far, so good, on purpose.
“If you’ve won the game, stop playing.”
Thanks for this post, Jim!
I am 53 and in a similar situation as the optometrist in your post: Either continuing my current position as an hospital employee for two more years (then FI) and quit it all- or trying to found a private practice on my own in the subspeciality I love. The first possibility would be the easy one. Very good salary but lower satisfaction and purpose from month to month (incompetent head of department and administration, more and more “quality” reports and restrictions, MBA here and there). The second posibility means to build a new business, heavy investing and being an entrepeneur for the first time in my life. Tend to do the latter. Would be interested in your advice.
Greetings form Austria
Thanks for your work!