Your Dopamine, Your Retirement

There is a simple experiment with very significant consequences mentioned in Tim Harford’s ‘The Logic of Life,’ the book I am currently reading.

The Experiment In one case, experimenters offered a group of subjects a choice of a snack: fruit or chocolate. Seven in ten wanted the chocolate. A different group of subjects was offered the same choice, but with one small variation. They were told that they’d be given the snack one week after the question was posed to them. 75% of the subjects chose fruit.

What is happening here? The impatient part (the dopamine system) of our brain craves the chocolate right now, but the more sedate cognitive side opts for the healthier fruit because it is good in the long run. Harford very aptly dubs this ongoing tussle between the cognitive system and the dopamine system a ‘mental civil war’ that’s going on in all our brains.

The Relevance I first came across the various implications of the dopamine system in Jason Zweig’s excellent book Your Money & Your Brain (read it!). The book covers several interesting discussions around dopamine and the role it plays in the financial decisions we end up making and how we feel about them.

For me, personally, the cognitive side is able to assert itself over the dopamine side. When my dopamine side starts salivating at something, the cognitive side is quick to chide it saying things like “Don’t you remember? When you bought that other gizmo you used it for all of two times?” or “You know that in just two weeks you will outgrow it.” Consequently (most of the time) I am able to quell the instant-gratification urge. I will also try and wait six months to see if I am still interested in something.

This one aspect of my genetic lottery ticket has, I really believe, played a significant part in my being able to resist frivolous purchases, save up some money and be able to go with zero income for some time.

Though I haven’t seen it mentioned explicitly in the retirement context assertiveness over the dopamine system has to play a huge role in who is able financially to retire early. (Whether they choose to do so or not is a different matter.)

So if you are itching to give up your job and your current financial situation is the one thing that is stopping you, then start getting that dopamine system of yours under control.