Have you ever played the “when-then” game?
It’s a pretty good way of instilling self-discipline.
When I finish this page of homework, then I’ll reward myself with these M&Ms.
When I finish studying, then I’ll watch an episode of Friends.
When my exams are over, then I’ll go out with my friends.
The problem is that this mindset can be taken too far.
When I reach $1m, then I will enjoy life.
When I finish paying my mortgage, then I will start saving for retirement.
When I retire, then I will spend more time with family.
This is the Arrival Fallacy.
It is the belief that reaching a certain milestone is the answer to your problems.
But reaching a goal doesn’t make your life magically change.
You won’t feel any different after a day or two.
In fact, we might end up feeling worse.
The Progress Principle
We prefer the pursuit to the prize.
That is to say, progressing towards the goal is more rewarding than actually achieving that goal.
To be sure, achieving a goal feels great.
But it only feels great for that little bit.
Once the high wears off, we’re off in search for the next source of dopamine.
This leads to goal escalation.
When we reach $1m, we aim for $2m.
When we pay off a housing loan, we want a bigger, better house.
When we achieve a career goal, we set a higher goal.
This is why you need to know your “enough”.
If not, we will be stuck on the progress treadmill.
The Milestone Treadmill
In Singapore, life goals are represented by a set of milestones.
First, score well in PSLE.
Then, score well in O Levels.
Go to Poly/JC, then get into University, and get a job that pays $5k.
Then reach $6k, $8k, $10k, and so on.
When life is structured in this way, we are set up to fail.
We are always in a state of failure because we have not yet reached the next goal.
Worse still, we are bad at affective forecasting.
We don’t know what will make us happy in the future.
This leads to us setting mistaken goals for the future.
We make significant sacrifices today in the expectation that the future will be bring us happiness.
But that happiness quickly fades due to hedonic adaptation.
Live in the Moment
Successful financial planning enables “funded contentment”.
This means achieving life satisfaction throughout the lifespan.
Spend time with loved ones, make small meaningful purchases, and live in the present.
It is right to save for the future.
But not at the full expense of the present.
Because we will never arrive at the future.
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