Why it’s healthy to step off your hedonic treadmill
Why it’s healthy to step off your hedonic treadmill
At what point do you say, I’m happy with what I’ve got?

Have you purchased a dental practice because that is what everyone else was doing, been ecstatic about it for a short while but then not felt quite satisfied? Or earned six figures in a year for the first time and still thought you could have done more?

If so, you’re not alone. Actually, studies suggest that it is very common. While you may find that you could have had your best year yet, happiness with your current situation does not last long.

This phenomenon has been observed for decades. In the late 1970s, American scholars Brickman, Coates and Janoff-Bulman set out to determine how people adapted to happiness. Based on their findings, lottery winners were shown to have similar levels of happiness before and after winning. This suggested that there wasn’t a consistent correlation between increased happiness and personal financial gains and that the foundational level of happiness for the lottery winners over time would remain nearly the same.

I noticed an advert for The National Lottery the other day that was promoting winning “£10k every month for 30 years”. Among the top percentiles of earners in society, dentists often match, if not exceed, this level of positive cash flow. This is an aspirational amount of income and yet from experience, clients aren’t always satisfied with it, it doesn’t service their needs.

At what point do you say I’m happy with what I’ve got? comparisons to others can make you feel dissatisfied with what you have achieved.

To ensure clients are maximising their hard-earned cash we run a personal budget exercise with them. As accountants, we see the ins and outs of their business finances but can be blind to how the £10k drawn from the business is deployed each month.

Initially, we ask clients to breakdown their monthly personal spending using a simple template, we then assess to identify any tax leakage. Perhaps you’re extracting funds from your company each month to squirrel away in ISA…sounds sensible but when you consider you might be suffering tax at 32.5% when you withdraw this amount for negligible interest in a personal bank account, is this really the best use of your funds?

As well as ensuring current needs are being met, working through the exercise closely with our clients also helps us identify their future goals and aspirations. This enables us to map out a bespoke, tax-efficient pay plan for them to help them get there.

I’m not saying at all that you shouldn’t stop trying to push yourself, but maybe once in a while, it’s healthy to step off your hedonic treadmill, or at least lower the speed setting. Working smarter and not harder. When you slow down and look out of the window, you may realise that your peers do not have everything as it seems. The most important grass to water is yours.

Kyle Fraser
By Kyle Fraser Trainee Accountant
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