Why People Were Happier in the 1950s
In the 1950s, new home builds were roughly 1/3 the size of current new home builds, and when families left those homes for vacation, they camped more often than they stayed in hotels. When they went to the grocery store to stock up, they spent more than 20% of their monthly budget on food. Today, we spend only 10%, leaving far more available for discretionary spending.
The real GDP per person was ¼ of what is it today, which means the US produces 4x as much as we did in the 50s even after adjusting for inflation. That is almost mind-bending to consider. This has resulted in countless luxuries that we consider necessities today. People in the 1950s could hardly imagine a color TV, but I’m frustrated when there is a one-second lag on the live football game I’m streaming from a smartphone.
A 2017 report found that peak happiness in the UK and other developed economies was the year 1957. Why then were the 1950s a happier time if they had so much less? The report suggested that one of the main causes of happiness is when expectations match reality. It turns out that the gap between people’s expectations and their reality was the closest they had ever been in the 1950s. Sure, people lived in smaller homes, but so did everyone else that they interacted with. So, their housing expectation matched their reality. In the 50s, we faced reality face-to-face.
Now, we face reality far removed from another human, behind a computer screen. We can quickly go online and see other people living vastly different lives from ours. While all our neighbors might be living similar lives to us, we interact more with people who live different lives from us online. Online is also not a proper sample size. In the past, if we talked to 10 friends in a week and 1 had just lost a job, 8 were living status quo, and 1 had just got a kitchen renovation, we might be quite content. Now, with those same 10 online friends, we only see the family with a kitchen renovation. People exaggerate the positives and completely hide the negatives.
So, it may be true that we have bigger homes and take nicer vacations, but that is drowned out by even higher expectations. It’s no surprise that it’s very difficult to be happy in this state. Morgan Housel writes in Same as Ever “Imagine a life where almost everything gets better but you never appreciate it because your expectations rise as fast as your circumstances. It’s terrifying...” I agree, that sounds like a miserable way to live.
While I’m tempted to believe that lowering my expectations will remove motivation, I don’t think it has to. Housel goes on to say that wealth is what you have and happiness is based on what you expect and need. I think it’s perfectly fine to spend time focusing on growing what you have as long as ample time to spent reflecting on how you have more than you need and making sure your expectations stay in check.
Happy Planning,
Alex
This blog post is not advice. Please read disclaimers.