Time Preference

Dear readers,

I don't really know where to start. It has been a while since my last post and if it wasn't for Zoe who is a multitasking goddess, there would not have been a single sign of life on this blog in over three months. So, the fact that you are reading this is due to my dear friend's efforts. Thanks.

Throughout my studies I have regularly come across something called time preference. It's something we all have and do all the time. For instance, the fact that I am currently writing this post instead of finishing the exercise in "UML 2.x Modelling" I was working on five minutes ago shows that I prefer investing my available time in the present (I am thoroughly enjoying this post at the moment) rather than in the future (the exam in "Informatics for Economists II" is coming up next week). And as standard theory of Economics suggests, the people who tend to live a hedonist life à la James Dean with high time preferences, on average end up with far less attractive jobs, less savings, lower life expectancies, and ultimately a poorer life in the long-term. So, from a rational point of view I am currently doing the wrong thing for me and my future well-being.

Now, this is all theory and some of you might defame this narrow and too rational, cold hearted and economist-like point of view on the rich- or poorness of life. But as you can see by the existence of this post, I do not - and simply cannot - follow all of the doctrines I am confronted with throughout my studies, mainly because I am human and therefore irrational. However, I suppose we all find ourselves in these inner conflicts when deciding whether to enjoy the moment or invest in the future - at least once in a while. And I further assume that what might become one of the arguments for investing in the future is somewhat mentioned in the statement of the paragraph above. In fact, it is what most of our parents, teachers and mentors tell us: work and study hard, think about the future, don't make the same mistakes I did 20 years ago, and so on. In other words: the more you invest in the future now, the more is going to come back to you later. Or else, the more you abdicate the immediate pleasures in life, the better you are off in the future. So, all in all my point of view doesn't seem too alien to most of society's values - whether it be in the US, Europe, Asia or in many other parts of the world. 

But is this way of thinking the right way to go? Does the constant investment in our future on average really pay off as predicted? And if so, does this really make our life richer? Now, a philosopher would be infuriated by the lack of sensibility in the usage of my words. In fact, he would demand a definition of what is right and wrong, rich and poor. But since I am unversed in this area, I will continue using these words hoping you get what I mean by rich, poor, right and wrong.

Steve Jobs has responded to these questions in one of his many famous quotes: 

"Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma - which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary." (Stanford commencement speech, 2005)

So in his point of view, I should give up my studies, open a bar on a beach in Sydney, work on my blog, be a dj and photographer - because a good part of this is what I think of when someone asks me what I would love to do in life. I do think there is some truth in his words and we all need these motivational speeches to believe in ourselves, even beyond our capabilities. But many of us, like me, simply don't have this mentioned courage to live the life he suggests. And quite frankly, I assume that many of us don't even know what their heart and intuition is trying to tell them. As a result, this recipe doesn't always work out since it does not go beyond our imagination. 

Most of you will probably think that is is the healthy balance that makes us most satisfied with our life. Investing in the future whilst not forgetting to enjoy the present whenever possible. But this every so often is an idealized point of view. Some need to study so hard in order to succeed that spare time is not an option. Some have jobs that are so time consuming that the pleasures of the moment are almost inexistent. And arguments suggesting that the chosen study field or chosen job should be so satisfying in itself that it can compensate for at least a good part of the lack of pleasures in the present rarely go along with reality. So, where do we draw the line for the healthy balance mentioned above? Personally, I don't have a good answer to this. I simply know that there is a line. But I don't know where exactly. 

I would like to close this string of thoughts with the question on what makes us happy since I guess this is the ultimate question I was actually aiming at. I rarely feel unhappy, even in times in which I do nothing else than studying, working, eating and sleeping. Times, in which I scarcely see or speak to my dearest friends, barely follow my hobbies (as you might have noticed) or go out and enjoy the environment in which I live in. However, I do feel that something is missing in my life and when I take myself some time for the pleasures mentioned above, I feel overwhelmingly satisfied. Therefore, I sometimes wonder whether I am doing the right thing to maximize the amount of personal happiness in my life.  So the question I want to leave you with is: What way of life will make you most happy, now and in the future? 

Here's a TED talk about happiness by Daniel Kahneman - one of the persons who has influenced my way of thinking in a profound way. I hope you enjoy it as much as I did. Note: it's the last four minutes that are most important. And now back to UML 2.x.