Happiness Dividends: Making your Experiences Pay you Back

BLUF: Our experiences, like investments, have the ability to pay us a dividend long after the original experience is over in the form of happiness. These dividends increase our happiness through the recalling of those happy original experiences. Unlike investments, however, we have the ability to force those happiness dividends to be paid on demand through our actions.

Note: The cover photo is from the Albuquerque balloon festival, the largest in the world. The “balloon glow” is when all pilots stand up their balloons at night and illuminate them with the burner. It’s truly stunning to see and hear hundreds of balloons doing this at the same time.

I recently read the book Die with Zero by Bill Perkins. The title comes from the idea that to maximize your happiness in life you should really aim to spend down or give away all your money such that at the end you die with close to $0. A idea in that book that resonated with me was the concept that experiences, like money, can compound and pay dividends to us over the course of our life. The idea was especially intriguing to me since I’ve been changing my spending focus from things to experiences over the last 10 or so years.

My Journey Away From Consumerism

One very substantial change in my life that happened progressively over time was the change from valuing stuff to valuing experiences. I was very fortunate to grow up in an upper middle class family that could afford nice things. I got a TV for my room when I graduated elementary school. In the mid-90’s when computers were very expensive we constantly bought the latest trends whether it be a full desktop computer, a CD burning drive or having Road Runner high speed internet (cable modem).

As a twenty something I wanted to have all of the same cool new gadgets that seemed to be coming out constantly. When DVD players were brand new I was still in college making very little money and I bought one new for $500. I also put together a 5.1 surround sound system with the main driver being to watch this cool new movie that came out called “The Matrix.” As sweet as it was to hear bullets flying past your head for the first time, it was a lot of money to spend for a kid that didn’t really have any.

When my divorce happened at 31 and I was faced with both a tougher financial reality paying for a house and lifestyle alone along with going through the experience of separating “stuff.” I think that started to change my worldview that the pursuit of stuff wasn’t adding a lot to my life and it could of course disappear at any time. I also realized that the concerts, parties and vacations that I had experienced were a lot more enjoyable to me and started to focus a bit more on spending on my money there.

How Experiences Pay Us Back in Happiness Dividends

I used to think about stuff as more valuable than experiences because I perceived that stuff could keep paying me back with it’s utility. For example, that $500 DVD player is something that I could enjoy for at least two or three years watching movies. By contrast, if I took a $500 vacation for a long weekend then I thought that I would only get 3 days of enjoyment from that experience.

The experience itself was usually much cooler than the “thing” I would otherwise buy but the stuff had the capability to hang around in my life for much longer. To have more enjoyment from experiences meant that I would need to schedule another and another because the happiness derived from the experience only happened while I was living it.

Thinking about Individual Experiences

I could have a really great experience like a Caribbean cruise vacation one year and reap the benefits of that time away. Relaxing on the upper deck sipping a cocktail. Enjoying fancy restaurant meals or gut busting all you can eat buffets. Seeing great onboard entertainment like singers serenating us and comedians making us laugh until our stomach hurts. Taking excursions at port stops to have experiences like feeding the stingrays.

A great week that’s high up on the happiness scale but after a couple weeks back at work you’re thinking about what to do next. Then perhaps the next year you go see a great concert that you’ve always wanted to see. And then the next year you throw a surprise birthday party for a great friend of yours. Each event in itself is wonderful but they are each discreet events that when over, the happiness gained from that event effectively ends.

The Happiness Dividend Concept

This thinking was flawed though, because that’s not how experiences work when it comes to the happiness that we derive from them. There’s actually a cumulative effect to it where old experiences that are truly meaningful to you are stored in your memory banks. When you recall memories of that experience due to some trigger like looking at a picture, that experience pays you a happiness dividend. You are transported back to the time when the picture was taken and derive a sense of gratitude. If it was very memorable you might be able to recall the smell of the ocean from the cruse ship deck or the feel of the stingrays sucking food out of your hands.

Looking at my previous experience timeline example, the timeline actually starts to look at this. That Caribbean cruise was a tremendous experience in the year that it happened. However, in year two on the anniversary of the cruise your Facebook memories pop up with pictures from your cruise that happened one year ago and you are transported back. Maybe you sit down with your partner and open up the pictures from that trip and take a walk down memory lane. You laugh about the things that didn’t go right but turned out to be a great adventure. You enjoy recalling your favorite “remember when…” moments to each other.

The joy, gratitude and happiness that you feel during the recollection of fond memories is the happiness dividend being payed to you from that previous experience. You get paid this happiness dividend from that old experience and it didn’t cost you any money. Then the next year your friend comes to you thinking about taking a similar cruise and asks for your help in planning it since you’ve taken the cruise. You get to once again recall all of the details of the experience all while helping your friend. Another happiness dividend paid on the original experience.

Over time you see that this can cause your level of happiness to build from each successful new experience on top of the dividends paid from old experiences. Just like a financial dividend paid on a stock, the longer you have to remember the experience, the more time you have to be paid dividends. This is a strong motivating factor to really use the energy of your teens, 20’s and 30’s to make some great memories and get those happiness dividends flowing early in life. That maximizes the time in your life that you have for those experience based “investments” to pay you back in happy memories.

Being FI minded, there’s obviously a balance to find between spending all your money on experiences when you’re younger and have less income and saving and investing for the future. The great thing about being young, though, is that you’re typically willing to put up with some much cheaper and less comfortable options that the later in life you wouldn’t dream of doing. Backpacking around to travel, sleeping in hostels, taking long road trips, getting the cheap seats at a concert. The key thing is that you’re trying new things and making memories that you can then start recalling. No great story starts with “I went to bed early.”

Increasing Happiness Dividends

A beautiful thing about experience based happiness dividends is that you can control the size and frequency of that dividend. If only we had the ability to do that with our financial investments…

Increasing the Dividend Amount

Have you ever noticed that not all experiences are created equal? I’m not just talking about the “in the moment” how awesome it feels. I’m talking about how you feel years later when you think about memories of that experience. Why do you remember some more often than others? Why do you remember some very fondly and can be transported back to that place and time? Why are some barely able to be remembered?

To increase the dividend amount we want to have more fulfilling and impactful experiences. Unfortunately, I can’t give you a precise answer to that because it could be different for each of us. My opinion is that it can be one or more components that matter most to us.

Experience Components that May be Important:

• Doing something new or novel. Often things I’m recalling are some experience that is very different from anything else in my life. For example, the article feature image are hot air balloons lighting up in the evening when the burners were turned.
• It involves people. It could be family, friends or complete strangers. I’ve found that my richest experiences involve people. Often times it’s bonding with others using that experience. Sometimes the experience is really making a deep connection with another person through a meaningful, deep conversation.
• It involves multiple senses – Touch, taste, sight, sound and smell.
• It involves emotions. If you experienced excitement, anxiety, nervousness, joy, pain as a part of the experience it could very well become something that stands out in your memories.
• It involves something that you already love as a hobby or passion. Animals, sports, race cars, painting or gardening just to name a few.
• It involves laughter. There’s just something about laughter that not only makes you happy but can turn an average evening into a memorable one.

For me personally the one that seems to be most important is people. There’s something about experiences that involve connecting with people that make that one of the most important ingredients to my memorable experiences.

Increasing the Dividend Frequency

Forget quarterly dividends, when it comes to happiness dividends you actually have the ability to make them pay out on demand. The key is that you aren’t just leaving the recollection of those memories to chance due to a trigger from the environment around you like something on TV. If you take deliberate action then you can enable the recalling of memories when you want to.

One of my favorite ways is to post up pictures of my experience on social media like Facebook (FB) or Instagram (IG). On a daily basis I can pull up the “memories” and see everything that I experienced on that particular day. It transports me back in time reminding me of things that I had forgotten about. Vacations, festivals, concerts and any number of other memorable things. If I happen to be getting together with other people that were also part of that experience then the dividend can grow as we reminisce about that shared experience.

Ideas to Recall Memories more Consistently:

• Post on social media and then look at FB memories, IG memories, FB/IG stories archive daily.
• Post reviews of experiences on TripAdvisor.
• Join travel groups and help share your knowledge which will also make you think back to those trips and look through pictures.
• Make the recalling of memories a conversation topic when you get together with family and friends. Ask people to discuss their favorite experience from the past year.
• Look at old photo albums / online archives from your experiences more regularly. Pick one or two and review it. I like to organize my photos chronologically by experience which makes this easier.

Connecting Old Memories with New Ones

Do you have fond childhood memories of visiting a certain place or doing a certain activity? If you re-do that experience with other people that you care about like your children, other family or friends then you can create a whole new memory. However, that newer experience based memory has a connection back to the old memory because there’s a common thread of the experience. Now there’s a forever connection between the two and recalling either fond memory will pull forward the memory of the other.

For example, if going to the state fair and riding the Ferris wheel was a fond memory from your childhood then consider repeating that experience with your children and grand children. Repeating that experience will make you recall and tell stories about when you used to ride the Ferris wheel with your parents and how much you loved it. In the future you can then remember the experience both as a child and then as a parent sharing it with your child.

We Aren’t Getting any Younger

It’s also important to start young because some experiences will not be possible or desirable to do after a certain point. Despite what we may tell ourselves, our bodies age and get less capable over time. No matter how good the 50 year old you feels, your body can not handle and recover from physical activity like it could when 20. There are certain physical experiences that if you want to have them, you need to do them by a certain age.

Eventually they won’t be possible like climbing a high peak or taking an expedition to a remote jungle. Even if you are physically capable of doing it when older, it might be so much less enjoyable because of the increased aches and pains that you might not even want to do it. A hard truth is that one day you won’t be able to do most of these experiences. All that you will have will be your memories of past experiences to pay you happiness dividends. Start investing.

Action Steps:

• Making Memorable Experiences:
  • Figure out what kinds of experiences bring you the most joy. Is it trying new things? Is it doing things with people? Combining experiences with things that you love? Figure out what you enjoy most and do more of that.
  • Consider bucketizing experiences by age range so that you do the most physically demanding ones earlier in life.
  • Make a plan to regularly research and seek out new experiences.
  • Try to make a backlog of things that you’d like to do and then actively work on planning to do each one.
  • Use some form of social media like FaceBook to document your experience.
  • Take lots of pictures but don’t miss the whole experience focused on capturing it with your phone.
• Getting Happiness Dividends:
  • Look back at your Facebook memories on a daily basis. “On this day X years ago.” Don’t wait for the FB algorithm to maybe bring one up. Go to your profile > Memories section and look at all of them for that day.
  • Go through travel and experience pictures periodically.
  • Think back to a time or place in your life and try to recall every memory that you can. For example, every memory that you have from high school. Write them down as you go and see how much you can remember.
  • Join interest groups around your experiences like a Facebook travel group or forum so that you can recall and talk about those experiences.
  • Ask friends and family about their favorite experiences lately. In turn, share yours.

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