Financial Goals and the Arrival Fallacy

When I was an undergraduate, I had a dream of getting a job doing the kind of data mining that I was really interested in. I had a wonderful mentor that lit a deep interest in the subject under me and I wanted to do it for the rest of my life. Things will be good then, I thought. Then I got a data mining job.

For the first year or so of our financial turnaround, Sarah and I were focused on a pretty singular goal: paying off our debts and achieving debt freedom. Things will be good then, I thought. Then we got there.

As I started to build The Simple Dollar into something more than a way to figure out my own finances and into something that I hoped could earn money, I had a pretty singular goal: turn The Simple Dollar into my full time gig. Things will be good then, I thought. Then I got there.

Later, Sarah and I decided to buy a small home for our burgeoning family, taking out a mortgage to do so. We were scared to be back under that debt load, but it provided us with a pretty clear goal: get rid of that debt. Things will be good then, I thought. Then we got there.

Each time, I thought that when I achieved my big goal that I had set for myself, lasting happiness would be the inevitable result.

Each time, when I actually managed to achieve that goal, it felt great… but lasting happiness was elusive.

Getting a job in the field of study I enjoyed didn’t bring lasting happiness.

Paying off all of our debts didn’t bring lasting happiness.

Turning The Simple Dollar into a full time gig didn’t bring lasting happiness.

Paying off our mortgage didn’t bring lasting happiness.

Each time, I thought that achieving the goal would bring lasting happiness. It never did.

This phenomenon of believing a goal will bring lasting happiness only to find that it didn’t bring lasting happiness when you finally achieved it is called “arrival fallacy,” and it’s covered wonderfully in this recent New York Times article by A.C. Shilton, discussing the work of Dr. Tal Ben-Shahar, who studied and coined the term.

This pretty much sums it up:

The problem is that achievement doesn’t equal happiness — at least not over the long term. But this isn’t a message that most of us are familiar with. In fact, it’s almost antithetical to the American dream, which tells us that hard work and achievement deliver a happy life. And so we push our children to become captain of the travel soccer squad, a first-chair player in the orchestra and student body president, because we want them to be successful. We want them to be happy.

And then, when they’re 34, fresh off a big achievement and so deeply unhappy that they find themselves sobbing in their truck in a Walmart parking lot (hello again, it’s me), they could end up feeling as though something is inherently broken within them.

Part of the problem is that we’re good at predicting how events will make us feel, but bad at predicting how long that feeling will last and how strong that feeling will be:

“Affective forecasting is our ability to predict how events will make us feel,” Dr. [Jamie] Gruman [, a professor and senior research fellow at the University of Guelph in Canada,] said. He pointed to a study from 2000 that showed that college sports fans overestimated how happy they would be a few days after their team won a big game.

“We tend to be pretty good at knowing what things are going to make us happy and unhappy,” he said, “but we’re not very good at predicting the intensity and the duration of the effect of events.” That can leave us feeling let down after the fact.

In each of those situations in my own life, I knew that achieving that particular financial and career goal would make me happy, and I was absolutely right. Each achievement did make me happy.

Where I was wrong was that I thought the happiness would persist for a very long time, that it would make me feel like a better and more complete person. It didn’t last.

Rather, what happened is that my life just settled into a somewhat different but still pretty familiar routine – and sometimes the routine didn’t really change much at all. It was a better routine, sure, but it quickly became the new baseline in my life.

Rather than being Trent, the college student with no prospects, I was now Trent, the data miner. Still Trent.

Rather than being Trent, the person with a lot of debt, I was now Trent, the person with no debt. Still Trent.

Rather than being Trent, the data miner, I was now Trent, the writer. Still Trent.

Rather than being Trent, the guy with a big mortgage, I was now Trent, the guy without a mortgage. Still Trent.

I still woke up in the morning and stretched my same old body. I still had a pretty similar pile of responsibilities. I still had really similar hobbies. I still ate the same foods and hung out with many of the same people.

Sure, I had achieved a big goal, and it was great, but that lasting happiness and transformative change that I thought such a big goal would bring simply wasn’t there. It was the same old me with one new achievement, one that didn’t really alter as much of my life as I thought it would.

Before you think that this is an argument against setting and achieving goals, it’s not:

To be clear, acknowledging the power of arrival fallacy does not mean we should settle for a life of mediocrity.

“We need to have goals,” Dr. Ben-Shahar said. “We need to think about the future.” And, he noted, we are also a “future-oriented” species. In fact, studies have shown that the mortality rate rises by 2 percentamong men who retire right when they become eligible to collect Social Security, and that retiring early may lead to early death, even among those who are healthy when they do so. Purpose and meaning can generate satisfaction, which is part of the happiness equation, Dr. Gruman said.

So, let’s look at the big picture here. Setting goals and working toward them brings us purpose and meaning, which generates satisfaction, which is a key component of overall life happiness. Yet achieving goals doesn’t bring happiness. How does that add up?

Well, the article offers several suggestions for finding happiness outside of achieving goals.

Their Suggestions for Bridging Goals and Happiness

The first suggestion the article offers is to give our life relationships real time and focus, because good strong relationships are a very strong indicator of personal happiness. People often think that having friendships and a social life and good familial relationships is easy until they wake up one day and realize that they’ve not actually fed those relationships or built any new ones in a long while and they no longer have any good friends or strong family ties, and that’s a serious punch in the gut that many people feel after a decade or two in adult life.

Don’t let that happen to you. Intentionally put aside time and energy and attention in your life to shoring up friendships and good family connections. Have people over for dinner. Contact people out of the blue to ask how they’re doing. Invite people to do all manner of ordinary things with you, things like meal prepping or going on walks. Go out in the community and check out groups of interest – start by reviewing the community calendar and Meetup. If you find it hard to socialize and connect, use Dale Carnegie’s advice, for starters. Build and feed those relationships, and make such effort into a normal routine for you. This doesn’t mean daily posting on social media, as that does very little to build lasting relationships. This means one-on-one contact at a bare minimum, and ideally face-to-face time, particularly time spent doing things together that is of mutual interest.

Another vital suggestion from the article is that income matters, but only up to a rather low point, then additional income ceases to impact happiness very much. Once you have your basic needs covered – basic food, clothing, basic shelter, and things like that – additional income is all about buying things you want, and that really doesn’t bring any additional happiness. That minimum income threshold varies a lot from area to area and from family size to family size, but it’s not nearly as high as you think and the average American family is definitely above that level. Most of the time, more income won’t make you happier – it might buy things that make you happy for a while, but it comes with things that suppress joy and it doesn’t change what’s going on inside of you.

A third suggestion – and I think this one is the best one from the article – is to have lots of big goals spread across all of the areas of your life. This is something that I’ve personally found to be incredibly impactful over the last few years. Having a major goal or two for each area of your life gives you that constant feeling of purpose and progress that makes each day feel important and worthwhile. I have some big many-year life goals, like full financial independence, and some multi-year goals like getting a black belt in taekwondo, and some shorter-term goals that center around things like reading or dietary experimentation or building relationships. At any given moment, I’ve got somewhere around seven to ten ongoing goals of various timeframes, and the feeling that I’m moving forward on multiple goals each day fills me with a deep sense of purpose and progress.

Start setting some good goals for yourself – short term ones, long term ones, goals in different parts of your life. Aim to read five challenging books by the end of summer. Aim to lose 20 pounds by year’s end. Aim to pay off your credit card by next February 1. Aim to develop a plan for earning a promotion or raise at work, then complete that plan by your next performance review. Then simply check in on those goals each day and do something to move forward with each of them while avoiding, to the best of your ability, any backtracking on each of them. You’ll feel a strong sense of purpose coursing through each day when you start doing this, and it feels good.

A Few Additional Suggestions from Me

A few additional tricks work well for me to help myself avoid the arrival fallacy.

First of all, when I achieve a goal, I don’t bask in the success for very long; rather, I set a new goal in that area pretty quickly. In fact, I’m usually thinking about that new goal before the old one is even completed.

Why don’t I relish in a success? It’s because of the arrival fallacy – while a success does bring a burst of happiness, it doesn’t last very long at all. What brings lasting happiness, I’ve found, is the journey and the very gradual improvement in your life that comes from achieving lots of goals. Individual goals don’t radically shift your life, but each individual goal nudges it a little, and completing lots of goals ends up changing the course of things quite a bit.

There’s always a new mountain to climb.

Second, I recognize that achieving a goal, even a monumental one like financial independence, isn’t going to radically change how my life feels. All it’s going to do is remove an obstacle or two from my environment, giving me more potential paths to consider going forward. It’s still up to me to find a meaningful path forward – achieving the goal itself isn’t going to do it.

What will actually change in my day to day life if I achieve this goal? Usually, the changes are pretty minor, and even if the changes seem like they’ll be big, they usually won’t be as big as they seem.

Rather, what I’m looking for is the slight improvement in every single day, rather than the big transformation. I’ve found that, over the years, little improvements in your daily routine that repeat day in and day out end up being the real thing that makes your life better. There’s almost no goal that completely transforms your life; rather, a better life is built by achieving lots of little goals, each of which nudge your daily life a little.

Finally, if you’re still struggling to find happiness in your life, make sure that you’re in a physically and mentally healthy place. Make sure that you’re getting plenty of sleep at night, eating a healthy diet with plenty of vegetables and fruits, practicing good hygiene, and getting at least some exercise and getting outside at least a little. Also, make sure that you have some blocked-off room in your life for leisure activities, meaning that you’re doing something beyond just sitting there staring at a television or at your phone or at a computer screen, whatever that might be.

If you’re doing those things and you still can’t seem to shake the blues, talk to a doctor. There may be physical or psychological issues going on that merit some investigation.

Final Thoughts

Achieving your financial goal – or any other big life goal – won’t bring you lasting happiness. It won’t transform a life that you feel is miserable into one filled with wonder and joy.

What it will do is unlock some doors in your life that were previously closed. You still have to walk through them.

It will make bigger goals that once seemed absurdly impossible now seem within reach. You’ll have new exciting mountains to climb.

What you will find, though, is that the journey itself is the deeply fulfilling part, and the reward, while not transformative, is just another step in building a daily life that you really value.

Good luck!

Trent Hamm

Founder & Columnist

Trent Hamm founded The Simple Dollar in 2006 and still writes a daily column on personal finance. He’s the author of three books published by Simon & Schuster and Financial Times Press, has contributed to Business Insider, US News & World Report, Yahoo Finance, and Lifehacker, and his financial advice has been featured in The New York Times, TIME, Forbes, The Guardian, and elsewhere.