Friday, October 24, 2008

Tanking Net Worth & Happiness - Linked or Not?

Life seems to be lived on two levels these days, the every day and the long view net worth financial crisis level. For those who have already lost their jobs, these levels have merged to create a new, terrifying reality, but for the rest of us, what are we to make of it? The advice to those lucky enough not to need our assets in the short term, is not to panic and wait it out. All evidence shows the stock market recovers over time. Conventional wisdom aside, this feels like something way more catastrophic than even baby boomers have experienced. Our parents were children during The Depression. Three generations ago, most of our grandparents didn't lose much in the way of assets, since they didn't have much to start with.
Everything I have read about what makes people happy points to happiness not flowing from the material, once basic needs are met. If you achieve a level of secure comfort (shelter, food, health) other factors become more significant, like family and friendship, meaningful work (not necessarily paid), spiritual centeredness, and community and belonging. Though the hitch is that people compare themselves to their perceived peers, and if the gap is too wide, it creates frustration which makes it more difficult to be happy. The American story these last decades is wider and wider distribution of wealth, with some people becoming obscenely wealthy while most workers' standard of living, as defined by income, is stagnant or falling. So while people can be happy with modest incomes, since they can enjoy an actual high quality of life, if they feel they're not being left out while "everyone else" has more, seeinge the disparity up close creates discontent.
Our contemporary society has not faced massive downward mobility. Those who grew up poor, during the depression, and eventually achieved a comfortable, affluent life style often comment, "We didn't know we were poor. No one had anything!". If we all have lost a great deal of our financial security what will it feel like? It will be an entirely different experience than watching others propser while we are sinking. Nicholas Kristof recently highlighted statistics pointing to a paradox: during economic downturns, personal wellbeing actually shows gains. We will all be in this together, and that could enhance interconnectedness and mutual support. Crises can bring out our better natures.
We shall soon find out what our new shared reality will look like. Interesting. How are you feeling about things? Economizing? Obsessing? Detaching? Willing to look at your own statements?

image from MedHorizons

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