Updated on 05.26.11

The True Nature of Fulfillment

Trent Hamm

One of the best things I’ve ever posted on The Simple Dollar (in my opinion, anyway) was an article entitled “Some Thoughts on the Fulfillment Curve.” From that article (where I’m referencing the book Your Money or Your Life:

The middle portion of the first chapter focuses on the “fulfillment curve,” which basically refers to the idea that once you reach a certain level of luxury in your life, anything beyond that level is merely diminishing returns.

I went on to provide a visual example of this “fulfillment curve”:

Here’s another example (with a picture of the curve again, for visual aid).

Fulfillment curve

Example #2: Home Buying
1 – We’re essentially homeless. We live in our car.
2 – We live in an extremely cheap, extremely small old apartment. The rent is extremely cheap, but there’s barely enough room for sleeping space for everyone or room to do anything at all. We’re embarrassed to have guests at all.
3 – We live in a nice apartment or a small house. There’s enough room for everyone to sleep and have meals, but we’re sometimes pinched for space and there’s more clutter than we’d like. We have some of our friends over, but we feel pretty self-conscious about the place and don’t have the dinner parties we’d like.
4 – Our house is just the right size for our family. We feel comfortable having any and all guests over, the housework doesn’t overwhelm us, and the bills are completely manageable.
5 – Our house slightly exceeds what our family needs, but it gives us some room to grow. The bills are slightly painful, but we can manage things. We spend a bit more of our weekends on home cleaning and maintenance than we’d like, but we feel quite proud giving dinner parties and inviting people over.
6 – Our house is a McMansion. We can afford the bills, but just barely, and only if we eat everything at home. The bills make me feel kind of guilty, and there are times where it feels like all we do is upkeep.
7 – We bought a house nine times our annual income on an ARM and it just adjusted. Our house is mind-blowingly awesome, but we’re getting foreclosed tomorrow. We have no equity and we have no idea what we’re going to do. I wish we’d never come here.

It’s a really powerful idea and the more thought you give to it, the more you see it popping up again and again in your life.

However, this idea eventually leads to a much more challenging question. What is fulfillment? What does it mean to be fulfilled?

In the above curve, you can see that the peak of the curve is at #4, correct? Let me repeat my description of #4 when the curve is used for buying a home.

Our house is just the right size for our family. We feel comfortable having any and all guests over, the housework doesn’t overwhelm us, and the bills are completely manageable.

That’s the ideal house, right? Here’s the catch, though. How do we know what that house is when we’re shopping for it?

Quite often, we don’t make our financial moves based on real fulfillment. Instead, we make our moves based on perceived fulfillment.

When my wife and I were shopping for our home in 2007, we had what we thought was a good idea of what we were looking for, and we actually managed to find something close to that. However, once we actually moved in, we discovered our home was closer to a #5 on that curve than a #4. Our house is actually a bit bigger than we needed for one child, and it’s probably a bit too big for the three children we have now. We could probably use the same square footage, but only if it were arranged quite a bit differently.

Thankfully, we had more sense than that when we replaced our college cars in 2009 and 2010, but when we purchased our first cars, we definitely made choices that leaned more toward a #5 or a #6 on the fulfillment curve than the optimal #4.

Perceived fulfillment is a tricky thing. Often, it’s informed by what we think our needs are rather than what our needs actually are. That disparity is fueled by a lot of things: marketing (not just TV ads, but things like product placement and PR releases that show up as “news”), using neighbors and friends and family as measuring sticks, a sense of “I deserve it,” and so on.

What I’ve learned is that when I make a purchase, I usually actually aim for a #2 or a #3 on the curve rather than some optimum #4. If I can’t articulate a deep, clear reason for a particular feature, I won’t pay for it. If I see an item and just want it without a clear reason why, I know I should think about the decision more carefully.

Almost always, the purchases that I perceive to be on the “lower cost, but perhaps not as feature rich” end of the fulfillment curve turn out, in the long run, to be right at the peak of that curve. I bought a seven year old vehicle off of eBay last year, thinking that it might not be quite as reliable or feature-rich as I hoped but that the price was right. After driving it for three months, I came to discover that I loved the vehicle and it met my needs and wants almost exactly.

The next time you go for a big purchase, underwhelm yourself a bit. Get the item that makes you think, “Eh, the price is great, but I kind of want the features over here.” Don’t skimp on the things you’re certain you need, but scale back on the things that you’re trying to convince yourself that you want. Buy that #2 or #3 on the curve.

You might just find out that it’s right at the peak of your curve. Even better, you’ve probably saved some serious cash in the process.

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  1. MollyH says:

    I think a good corollary to this is an asymptotic curve that doesn’t dip down after #4, but stays pretty much the same. Ie – you can spend more and more money, assuming you have it, and while it won’t make you less fulfilled, it also won’t add any additional fulfillment. I think the curve you’ve shown is great for purchases with ongoing payments such as car or a house, but for one-time purchases, it’s probably better to think of an optimal cut-off point where spending extra money on additional features will not necessary bring extra fulfillment or joy.

  2. Trent,
    I like this post as I also try to find the right value for the price, not always the most feature rich.
    I think we are all guilty of falling for that feature rich item and then, after a few months, realize we haven’t utlized fully.
    Buying a computer or smart phone (for most people)is an excellent example. Rarely does the average person utilize the full capacity of these items.
    Thanks for getting me thinking this morning.

  3. lurker carl says:

    Where does Trent’s dream house in the country fall on this scale? Inquiring minds would like to know. Perception versus reality are impossible to predict.

  4. Tracy says:

    Ok, here’s the problem with your example. You’re falling into the same old trap you consistently do – assuming that if somebody has ‘more’ than *you* deem necessary, they have to be struggling financially. They can have two rooms a person and actually pay all their bills, get a housekeeper to come in once a week, etc.

    WHY is the person in the McMansion struggling to pay bills? By that logic, you forgot to mention that in 1) the family in the car had millions in the bank. And that in 2) they save 80% of their income and plan to retire at 35.

    The REAL reason that would start to go down on the fullfilment curve, based on your previous examples, would be something like ‘we have a McMansion, and thought it would be great to have an entertainment room and a craft room and several spare bedrooms for friends, but we really just keep them all shut up and nobody goes into them. Plus while there’s room for everything and nothing looks cluttered, it takes longer to clean.’

    There’s nothing wrong with saying ‘figure out what you can financially afford and then cut back on features you don’t need to go even lower’ and I think that’s a great way of practicing frugality. That there’s no point in paying for features that you won’t use and may not even know something has, just because something is deemed latest and greatest by somebody else.

    But there’s no magic that makes somebody’s precise ‘real’ needs equal to their financial abilities. Just because you CAN downsize in your needs doesn’t mean that not doing so puts you into debt!

  5. Frank says:

    Thank you for pointing out what I was thinking the entire time I was reading this post.

  6. Johanna says:

    I’m still confused about how a four-bedroom house can be “too big” for a family with three children, especially when one of the bedrooms is used as a home office. What would you do in a smaller house? Make all three of your kids share a room? Or give up your office?

    There’s an interesting and useful point in this post – how to notice and correct for a tendency toward overfulfillment – but it gets lost in a sea of weird examples (the house), overgeneralizations (not everybody thinks like you do, and maybe you don’t always think the same way in different circumstances), and poorly defined concepts (fulfillment is not the same as affordability, as Tracy points out here and as I pointed out on the original post).

    And aim for a “#2 or a #3”? In the examples you give, there’s a big difference between a 2 and a 3 – and a HUGE difference between a 2 and an optimal 4. In the housing example, aiming for a 2 means aiming to live in a place that’s so small (or old, or ugly, or poorly located, or any of the other things that make housing cheaper) that you’d be embarrassed to have people over. In the video game example (in the original post) aiming for a 2 means aiming to own only one game ever, even after you’re totally sick of it. I can’t believe this is serious advice.

  7. Amanda says:

    I don’t know Trent. Based on my experience, I would way rather be a #5 in housing than a 2 or a 3. We are probably at like a 2.5 right now in housing – 2 kids and a third on the way in a 2 bedroom 900 sq ft apartment and it stinks. We are constantly trying to declutter and rearrage to make it work. We don’t have room for the kitchen table to be pulled out from the wall and we use Japanese futons instead of beds to save space. But, it is in a postdoc budget. So, I also don’t think the money and the amount of space you have always got on the same scale, unfo rtunately. We lived in a larger apartment with only one kid and it was more space than we needed, but I liked it and we grew into it. So for me, in something that I am going to have for a long time, especially when my family might grow, I would way rather have more space than less if I could afford it.

  8. Maureen says:

    I think Tracy summed it up nicely. You really have a prejudice that people with visible signs of wealth must be struggling financially and living beyond their means. Sometimes people really are quite wealthy. My brother and his wife, for example, own two expensive homes (for their own use, hire housekeepers to maintain them and take extensive winter vacations in Barbados. They are not in debt. They are multimillionaires.

  9. Whoa, Trent, your post brought out the naysayers.

    To #4 Tracy, it’s “Our house is a McMansion *and* we can barely afford the bills” not “Our house is a McMansion *therefore* we can barely afford the bills.”

    To #6 Johanna, well, you don’t approve. What else is new?

  10. Tracy says:

    To #9 Derek

    Hee. So, um, you believe that it’s just a COINCIDENCE that in the fictional family that Trent *created* that the family wasn’t able to afford the lifestyle? Despite all of Trent’s previous posts where he talks about things like seeing somebody in a luxury car and ‘knowing’ deep in his heart that they’re probably struggling financially? Okieeee.

    But then why did he still forget to mention that the family in example two were going to coincidentally retire at 35? Oversight, I guess. To err is human and all that.

  11. LB says:

    I like the concept of this post. We’re planning to buy a house this summer, and we’re currently at a 3 on your scale in our 2 bedroom, 850 square foot apartment. We’d like to have a couple of kids in the next couple of years, so it’s hard to know exactly how much space we’ll need. I’m going to try to think about it as a curve as we shop for a home and look to get the ideal amount of space without buying more house than we can afford to heat in the winter.

  12. Johanna says:

    @Derek: “What else is new?”

    Certainly not people who have nothing to say themselves telling me to shut up. That hasn’t been new for a long time.

  13. LB says:

    I agree that it’s judgy to assume that all families in McMansions cannot afford them and that having too much or too little space will cause all people embarrassment, pain, or guilt. Before I looked at the comments, I thought about the curve Trent describes as a personal curve for each household. My retired parents might be at a 4 on the curve in a 600 square foot retirement apartment, and my cousin with 5 kids might have the budget and space-needs that his 4 would be a 2400 square foot house with a furnished basement. I think the analogy works better if it is taken to be a personal curve- not a one-size-fits-all judgement of the “right” size of house.

  14. valleycat1 says:

    I think the example would work better if Trent isolated a range for one variable instead of arbitrarily linking multiple variables.

  15. Joanna says:

    I think that #1 MollyH has an excellent point. The fulfillment curve wouldn’t really dip back down after it’s “peak”, it would just be increasing at a much slower rate. Thus every $$ spent after the peak brings less satisfaction, much like eating a lot of ice cream. Seems like the only way you get it to dip back down is to add in the affordability factor. I mean, is Oprah really thinking, “man, I’m so much *less* happy w/ my 60,000 sf house than I would have been with a 30,000 sf house”? Or is it rather the case that she would probably have been just as content with the 30,000 sf house? I also think Trent put the house size/features & affordability into his own terms. But really the curve would be very different for each person or family b/c what they need/value is very different *and* what they can afford is very different. Agree w/ the other posters in that it’s a valid point, esp wrt the pre-purchase perception, but an awkward execution.

  16. Steven says:

    This example might have been better explained with chocolate…

    1) You only get a small taste of the chocolate, and are left craving more!

    2) A nibble of the chocolate…better than a taste, but still not enough!

    3) A bite of chocolate…fulfilling, but you’re still left wanting more.

    4) A whole chocolate bar, enough to fulfill your craving, and just enough that you’re satisfied and content.

    5) Two chocolate bars…more than enough, and you’re left feeling a little queezy after eating it all at once.

    6) Even MORE chocolate…too much, and now you’re feeling sick to your stomach…

    You get the point.

  17. Andrea says:

    @6 Johanna – When Trent mentions that his current house a bit too big for his 3 children, he does say that they could use the same square footage but with a different layout. So perhaps what he means is that they could use the same amount of space but rather than having say, a formal living room and a family room, take one of the living spaces away and give a bedroom to the 3rd child. The first house I lived in as a child had a formal living room and family room, the formal living room was pointless space, and myself and a younger sibling shared a room. I can easily see how my family would have been happier in a house with an extra bedroom and only one living room. I doubt Trent wants a home with fewer bedrooms. :)

  18. Allie says:

    Thank you, Tracy and Johanna.

  19. Troy says:

    Issues with this post are similar to yesterdays.

    Yesterday T man pointed out that cars are not important to him. Ther are simply something to provide transportation. Point a to b.

    Yet he strives for a dream house in the country.

    But a house is just a place to live, or can be viewed that way. Just a box. Just as material as a car, and just as utilitarian.

    But perception changes the feelings associated.

    Same with this post. According to T #4 is right where you should be and no more.

    But many don’t live according to T. Many live in a 7, except they can afford it. Most people can’t. That is part of the appeal.

    Many people see cars as more than a functional form of transportation. Some see them as expression.

    And this notion that the fulfillment curve looks like a bell curve is complete opinion, one which I do not share. I think the curve continues to increase, though sometimes at a slower pace.

    It is nice to justify this type of curve to support your existing situation, and to make yourself feel better about your own situation, but it simply isn’t true. Yes, some people that have nice homes and cars are barely getting by, or worse.

    But many people that have nice things and nice lives DESERVE them. They EARNED them. They didn’t inherit it, they didn’t finance it, they aren’t in debt, they simply worked their fannie off for it. And they can afford it.

    They do what they love, but that love pays them very well. Their spare time is spent doing other things than reading and playing bored, I mean board games. Believe it or not, many wealthy people watch TV. People sacrificed time to go to school, become professionals, start businesses, etc.

    This blog is starting to become irritating becasue the central theme is nearly continuous praise of total frugality and minimalism, and shunning of work, success, and real financial freedom.

    Though it is difficult to admit, because it many times exposes your own shortcoming and mistakes, there are young people that have built themselves from nothing, are great parents and spouses, and very successful in their careers. They have ample funds, extremely large incomes, nice homes, nice cars and clothes and experiences and live great lives.

    There were sacrifices, but those that really know what’s up made them long ago, when everyone else was ignorant to the idea and living it up.

    Everyone gets it eventually. Some people simply got it right up front. You can’t continually bash them just because you didn’t.

  20. Sarah says:

    Wow, I thought the whole bell curve example was just a general example for explaination purposes only, rather than getting into specifics. As for Trent’s advise aiming for a 2 or 3 to see if it meets your needs, I get it. I like to go to the spa, and it can be pricey. I “downgraded” to the student school spa, and found out it was actually better then the pricey spa for a lot less money. My perceived 2 ended up being a 4 in reality.

  21. WhiteCedar says:

    Ted’s 5600 sq ft house is just the right size for his family. He feels comfortable having any and all guests over. He isn’t overwhelmed by housework because he’s hired both a housekeeper and a landscaper. Because of his generous professional salary, the bills are completely manageable.

    Ted’s house is a 4. He briefly considered an 8,000 sq ft. house like his senior partner, but decided he wouldn’t use the extra space. That would have been a 5. Instead, he’ll get that cottage in the Keys.

    The beauty of Trent’s scale is it’s flexibility. Ted get’s to decide what’s “just the right size,” what’s overwhelming, what’s manageable. Trent was careful to relate the scale to how it affects the person making the decision, not some arbitrary dollar amount.

    Then, he gave some personal examples from his own life.

  22. kristine says:

    Interesting post, and conversation. I think it is accurate, for the majority of the middle class (though we shrink by the minute). But this graph key addresses an assumed paradigm, not a universal truth.

    I know many very wealthy people who simply CAN afford the huge home, the fancy cars, and dinner out 3 nights a week. And they pay their taxes, and for their kids to goto college. What can I say? A lot of dot.com millionaires around here- the ones who got out in time.

    This post correlates more to the study that once you are lifted from poverty, and can meet basic needs without worry, happiness tied to money has a diminishing return.

  23. Allie says:

    Sure, but there’s a difference between a diminishing return (in which you still get benefit but it becomes progressively smaller) and a negative return.

  24. almost there says:

    #19, Troy. I agree with your post. The curve was taken from YMOYL book and illustrates the example that increasing anything leads to less fulfillment. I have read the book twice and come away agreeing with it as far as furgality but realize that is is socialistic in that the authors depend on government subsidized transportation and services to live their lives. I still don’t see how investing in fixed savings can generate income fast enough to reach the break even point with today’s rates even with the revised book. Some of my thoughts are Trent values family yet doesn’t set aside a room as a guest room? Trent thinks of cars as just transportation yet has a Honda Pilot that seats 8 for a family of 5. He could have spent thousands of dollars less for the same year model Saturn Vue with the same Honda engine and transmission, though only seating 5 people. Remember how T writes, he establishes a conlusion and then writes the post to arrive at it. Most writers do.

  25. moom says:

    An economist would break this down into benefits and costs. Mostly the benefits will rise at a slowing pace like some of the commenters have said and not actually decline. The costs should should be measured relative to income and are likely to rise at an increasing pace as you go to a larger and larger house say. The net benefit will rise and fall in the way that Trent showed. But where the peak is will depend on your own preferences and income. The example that Trent gave would likely be true for the average middle class household.

  26. Kate says:

    I can’t understand why people continually think that Trent says that ALL people who have big houses/fancy cars are overextended. I thought that the point of this blog was to help people who are finding themselves in debt over their heads and sinking fast. If that is so, then the majority of people who come here looking for suggestions and are living in McMansions quite likely ARE at risk of foreclosure (especially if they are overextended and have an unforseen circumstance arise).
    “Trent thinks of cars as just transportation yet has a Honda Pilot that seats 8 for a family of 5. He could have spent thousands of dollars less for the same year model Saturn Vue with the same Honda engine and transmission, though only seating 5 people.” I can definitely understand the need for a bigger car for a family of five–to have enough room for friends and extra family to come along.
    What a luxury it would be to have a dedicated guest room in a house with three kids. Sheesh!

  27. Genny says:

    Given that the news media has been chock full of stories about people who have overextended themselves on their housing and are now in foreclosure, and stories about people who have huge amounts of credit card debt, I wonder why people complain about Trent thinking that (in general) people who have a a great deal of material things and large mortgages may be overextended. Yes, many people may very well be able to afford what they have. However, many people cannot afford what they have or we would not be bombarded with news of record foreclosures and credit card debt. So pointing out that some people can afford nice things is stating the obvious, and complaining about this writer’s point of view may be ignoring the obvious, in my opinion.

  28. Joan says:

    I have enjoyed all the comments as well as the post. Everyone who commented seemed to be thinking about the post and not just disagreeing or agreeing with Trent. I get the idea of a bigger car. With a family you always need room for all the extra items you take with you especially with three small children. It isn’t just how many people it will seat. My car replaced a pickup, which had very little room in the second seat, but which I had gotten use to carrying everything in the back of the pickup. Solution, a honda odyssey which has plenty of room for carrying items and seats seven. Most days this is to much car; but when I take a trip with the family, or need to take several items to a family get together, it is just right.

  29. Andrew says:

    If Trent had bought a Saturn Vue he would now be saddled with a vehicle made by a defunct line, with no resale value at all, and with available parts in ever-diminishing supply. Seems like the Honda was the smarter decision (even though I admit hindsight is 20/20).

  30. Debbie M says:

    Although this curve may not be exactly the right illustration for this idea, I quite like the idea of figuring out which way you tend to err, and then adjusting your behavior in accordance. I have done this in the following areas:
    * When I’m injured and I’m resting the injured part, how do I know when it’s time to stop resting? I tend to err toward the macho side, so if I ever don’t feel sure, I keep resting. Same with if I’m trying to decide whether to see a doctor–if it even occurs to me at all, I should go see one (or at least call the nurse line). (Other people err toward the hypochondria side.)
    * When I’m trying something over and over and it’s not working, how do I know when it’s time to give up? I tend to err toward giving up too soon, so when I’m not sure, I keep trying.

    I like the idea of applying this strategy to purchases, too. I’m now to the point, though, where I’m erring in both directions about the same amount of time. Sometimes I buy things that I end up not using; sometimes I refrain from buying things which I later wish I had bought. I’m pretty good at knowing how much I’m willing to pay for varying levels of quality, too.

    So, rather than your advice to aim for a 2 or a 3 on this scale, I’d recommend finding out if you tend to err in one direction or another first, and if so, then aiming a little differently.

  31. Kate says:

    Debbie M: I like your way of thinking and think it is applicable for me. Thanks!

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