How To Be Happy While Pursuing Financial Independence

How to be happy

In the past year, I have struggled with finding the balance between pursuing financial independence and being happy at the same time. I have recently read a few things by Tal Ben-Shahar who is a Harvard University lecturer that teaches and writes about happiness and how to be happy. I have found his work very inspiring and it has put my journey into perspective.

Pursuing financial independence means saving a lot of money, which in our modern society involves some sacrifices. This means saying no where other people say yes, which is not always fun. These decisions become sacrifices in the present to be able to enjoy financial independence in the future.

For me, it is extremely important that my journey towards financial independence and early retirement is enjoyable despite some spending sacrifices, so I don’t miss out on some great years of my life just to be able to live a financially independent lifestyle in a few years.

To make sure that I actually enjoy the road towards financial independence, and not only financial independence itself, I have started to think about happiness in a different way:

How To Be Happy: The Happiness Matrix (The Hamburger Model)

Tal Ben-Shahar has defined happiness in a 2×2 matrix called “The Hamburger Model” (as a consultant, I think everything in the world can be explained by a 2×2 matrix).

He explains that happiness is a function of present happiness and future happiness. The combination of present and future happiness leads to four different happiness stages:

Most people will be in each of them many times during a normal week. The idea is that it is best to be in the upper-right quadrant (“happiness”) as much of the time as possible.

The idea is that you are the most happy you can be when you strive for both present happiness and future happiness at the same time.

Nihilism: The disgusting hamburger

The most unhappy you can be is in the bottom-left where present happiness is low and future happiness is low.

You can compare this state to a disgusting hamburger. You don’t really enjoy eating it in the present, and your body/health will not benefit from it in the future.

People who are in this quadrant have given up on happiness and are unable to see a life beyond their current state. They believe that life has no meaning and hold on to past failures.

For a financial independence journey, this can be compared to working in a job you don’t like while continuously making stupid financial decisions (such as buying things you don’t need). The job where you spend most of your time makes you unhappy in the present. Your stupid purchases leading to brief “happiness” will not make up for this, and they do not make it possible for you to achieve your (financial independence) goals in the future either.

This is a quadrant you want to avoid as much as possible.

Hedonism: The greasy hamburger

The bottom-right quadrant is where present happiness is high, but future happiness is low.

This can be compared to a greasy hamburger with lots of cheese and BBQ sauce. You know, the hamburger you just crave once in a while. You really enjoy eating it in the present, but your body/health will not benefit from it in the future.

People who are in this quadrant typically seeks pleasure and avoid pain. They believe that a succesful life equals lots of pleasurable experiences in a row. They might become frustrated when they experience that what they do is tiresome/unhealthy and it feels like they have no goals to achieve.

For a financial independence journey, this means having a well-paid job that you like while spending too much money on different things that you like. It comes at the expense of your savings and will significantly delay your financial independence journey (your future happiness). You might realize that you will never be able to become financially independent, which can be frustrating. Your life is focused on activities that makes you happy in the present at the cost of your future happiness.

Rat race: The healthy hamburger

The upper-left quadrant is where present happiness is low, but future happiness is high.

You can compare this to a healthy hambuger. It probably has salad leaves instead of a bun and no cheese. You don’t really enjoy eating it in the present, but your future body/healthy will love you for it.

People who are in this quadrant usually live by the “no pain, no gain” philosophy, and they believe that they will become happy when they have achieved a certain goal. They typically set new goals once they reach the first one, and therefore never really reach a happy state.

For a financial independence journey, this means having a well-paid job, but you might not really like it (being a consultant, I sometimes experience this when work weeks creep towards 100 hours). You save all of your money to become financially independent fast and might make big sacrifices on the way. You might also continue to set new goals for your net worth, so you continue working too much for far too long. This way, your life centers on activities that brings you future happiness, but might make you miserable in the present.

Happiness: The delicious hamburger

The upper-right quadrant is where present happiness is high and future happiness is high.

You can compare this to a delicious hamburger. It is made with fresh organic vegetables and organic low-fat meat. You enjoy eating it in the present, and your future body/health will love you.

People who are in this quadrant typically experience both present and future happiness. The two may conflict, but it is possible to maximize both most of the time.

For a financial independence journey, this means loving your job while living a satisfying life saving just enough to become financially independence at the your preferred pace. Your life is being spent on activities that both bring you present happiness and future happiness. This is where you want to be (most of the time)!

How I’m trying to be happy while pursuing financial independence

It is perfectly fine to be in all four quadrants (or at least three of them), but we should strive to mostly engage in activities that are in the upper-right quadrant leading to present and future happiness.

The matrix obviously applies to all kinds of decisions – both big and small. Eating a hamburger is obviously a smaller decision than choosing a career path.

I have started to evaluate my decisions (big and small) in the perspective of the matrix.

I try to choose as many happiness-generating activities as possible, but I definitely still have some “rat race” and “hedonism” activities.

This means that I probably spend a bit more money than I should if I wanted to become financially independent fast. I eat more at restaurants with friends, travel more etc. because it gives me happiness in the present. At the same time, I still have a strong focus on saving. For example, I carefully choose which restaurants I eat at and how often, and I try to travel hack and compare travel prices as much as humanly possible when I go abroad. I am still trying to find the right balance between spending and saving, but as a rule of thumb, I stop spending when it doesn’t give me more happiness than saving the money. I have found that simply starting to think like this makes me spend less.

In the end, it is all about finding a balance that works for you in the present and in the future 🙂

Your turn: In which quadrant do you have most of your activities? Have you found a balance yet?



Xrayvsn July 21, 2018 - 17:55

Really novel way to present lifestyle choices we have in front of us. I have definitely visited all 4 hamburgers/quadrants in my life but fortunately the majority of my choices have now got me in the best quadrant where I plan on staying (upper right).

If you work hard in the beginning and stay in the rat race quadrant, you soon can have capital that will start working for you and make your transition into the happiness quadrant that much easier.

Carl July 22, 2018 - 18:49

Very true! I have also been in all four quadrants. It’s a question of how long time you want to sacrifice in the rat race quadrant to move to the happiness quadrant – and whether you could actually move into the happiness quadrant already today rather than wait.

Ms99to1percent January 22, 2018 - 01:51

Yes must strive for present and future happiness bcuz life is too short. We don’t know what the future will bring so might as well also enjoy the present.

Carl @ MoneyMow January 22, 2018 - 22:49

Fully agree, Ms99to1percent – it’s a balance 🙂

Finore January 15, 2018 - 17:15

I failed to explain myself properly. I was actively pursuing different goals because I – wrongly – thought they would lead to happiness in the future quadrant. The reason for tracking them was to see if the happiness I believed they would bring would persist. It was a very deliberate attempt to asses trade offs between now and future in terms to allocating my time and money to optimize my happiness based on my “best guess” (estimation) of my personal utility function.

The essence of what I was trying to convey is that I think happiness can’t be chased and locked down. It’s not such a thing.

Carl @ MoneyMow January 19, 2018 - 23:07

Fair point. I believe that finding happiness is based on the learnings you make in life (sometimes activities that you thought would bring happiness, will not – sometimes they will). Those learnings can be used to make better choices in the future, which will hopefully lead you to more activities in the “happiness quadrant”. I guess it also depends on your definition of “happiness”. For me, it is a special feeling. I know exactly how I feel when I am happy, and I know some of the activities that often can bring me this type of happiness.

Finore January 12, 2018 - 11:51

I’ve found that this way of looking at happines doesn’t work for me. Over a period of 10 years, I have tracked and accounted for my life goals (things like moving abroad, getting my degrees, buying a house, etc.). Achieving most of them actually only gave me a very temporary sense of accomplishment (however living abroad and buying a house have had longer lasting effects than some of the other goals). That sense of accomplishment gave me some present happiness, but it never carried over into future (or persistent) happiness.

I’ve actually realized that the less time I have to ponder about my happiness, the more happy I am (or the less I think about my degree of unhappiness, depending on how you look at it). So despite adding a boatload of worries and definitely encoumbering my finances, having kids is actually the best thing I’ve done to increase my happiness (or lack thereof). I simply don’t have time to worry about it, because my needs and wants have become secondary.

I think pursuit of happiness is a dangerous ambition to have in your life. I think it’s especially dangerous if you believe that achieving FIRE is going to make you happy. My experience tells me that achievements don’t make you happy.

Carl @ MoneyMow January 13, 2018 - 17:48

Very valid input, Finore! I agree with you – being in the “happiness quadrant” should not necessarily be the same as pursuing different goals relentlessly.

The situation you describe with tracking and accounting for life goals that only give a temporary sense of accomplishment sounds more like the “rat race” quadrant to me. In your situation, it seems like having kids is the perfect balance between present and future happiness (despite encoumbering your finances and bringing worries), and I think that is what you should strive for.

I don’t think you can predcit what type of present/future happiness an action will give you, but as you go through life, you find out what gives you happiness in the present (and you become better at predicting what will give you happiness in the future), and it is these learnings that you should use to make sure you move towards the “happiness quadrant” most of the time. But of course, if it makes you unhappy to spend time thinking about how to become (more) happy, then it is obviously not worth it 🙂

Chris January 12, 2018 - 01:23

I feel like most of my activities lean more toward the “rat race” quadrant. Perhaps it stems from tightening the budget to pay down debt and such, but I plan on trying to shift to be more in the upper-right quadrant – hopefully.
Interesting post and analogy!

Carl @ MoneyMow January 13, 2018 - 17:37

I know how you feel! I definitely still have some “rat race” activities, but I try to shift more of them towards the happiness one.


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