How the concept of “flow” applies to financial planning

I finally read the book Flow: The Psychology of Optimal Experience. And I want to share some highlights with you. I didn’t read it for professional development but, surprisingly, so much of what he says applies to financial life planning. (Everything in quotes is directly from the text.)

Flow = Optimal Experience

Flow is defined as “a genuinely satisfying state of consciousness where people experience deep enjoyment, creativity, and a total involvement with life.” Think of a time when you became completely immersed in something you were working on, distractions disappeared, time flew by, and all your energy and creativity were focused on your task. That’s flow. That’s what the author calls “optimal experience.”

Optimal doesn’t mean easy

Finding ways to be in a flow state more often may be the secret to happiness.

What I learned from this book is that we can’t achieve flow by doing things that are easy or mindless. “Enjoyment appears at the boundary between boredom and anxiety, when the challenges are just balanced with the person’s capacity to act.”

Work as optimal experience

This got me thinking about retirement planning and goals of financial independence. So many of us just can’t wait to get away from work. We think if we just didn’t have to work, all our problems would be solved. I’ve been there, too, at different points in my life.

But is it true? Will we be happy when we retire or reach financial independence and don’t have to work anymore?

Here’s what the author says about work:

“When it comes to work, people do not heed the evidence of their senses. They disregard the quality of immediate experience and base their motivation instead on the strongly-rooted stereotype that work is an imposition, a constraint, an infringement of their freedom, and therefore something to be avoided as much as possible.”

I take this to mean we need to stop and evaluate our work instead of assuming it is an impediment to freedom. We should consider our actual “immediate experience” at different points in the day or week. And pay attention to when we lose ourselves in our work, not just when we’re frustrated or overwhelmed. 

Finding happiness in retirement

To be clear, work — as in doing a job for money — is not the requirement; it is not the only way to achieve flow. The route to optimal experience starts by doing anything purposeful and challenging. For many of us, work fills that role.

With financial planning, we can solve the problem of how to pay for life after work. But there is an even bigger issue to tackle: What will we do that is meaningful (purposeful and challenging) when we no longer have to work?

Because doing nothing is not the secret to happiness. “The worst moods are reported when one is alone and there is nothing that needs to be done. With nothing to do, the mind is unable to prevent negative thoughts from elbowing their way to center stage. Worries are always hovering at the periphery of attention, waiting until there is nothing pressing that demands concentration.”

Time: Fill or kill

When we’re in a flow state, where we are working on a challenge that is just balanced with our abilities, that is optimal experience. Perhaps we can call that happiness. The books says that our work is one of the places where we often achieve flow. But flow can be achieved in many other ways. So, left to our own devices, what should we do with our time?

“To fill free time with activities that require concentration, that increase skills, that lead to development of the Self, is not the same as to kill time by watching TV or taking recreational drugs.”

Setting internal goals

Which leads us to goal-setting. “Alone, when the dark night of the soul descends, are we forced into frantic attempts to distract the mind? Or are we able to take on more activities that are not only enjoyable but make the self grow?”

When we don’t have the external demands of work, we have to watch out for negative thoughts, worries, and loneliness. The way to avoid the darkness is by setting our own goals and structuring our time and attention toward achieving them.

I think the best motivation behind wanting to quit working (retirement or FI) is to be able to set our own goals. That’s why I often ask clients: What do you want to retire to? 

The author makes a distinction between accepted (external) goals and discovered (internal) goals. He says that one will be more strongly dedicated to a goal when you know that you have chosen it, not some outside determining force. I see it as a joy and a struggle to discover our own goals after a lifetime of pursuing accepted ones.

Conclusion: Heed the evidence of your senses

This book wasn’t quite what I expected. It’s much more actionable. And we can test his suggestions for ourselves.

For example, after dinner this evening, I was sitting on the couch feeling lethargic and bored. I mustered enough energy to get back to work on this post — which has been a difficult one for me — and now I feel great. I think this is an example of a challenge balanced against my skills.

My biggest takeaway is that we should be striving for more flow. Right now starting today. At work, we can “heed the evidence of our senses” to notice becoming immersed in an activity. We can pay attention to what elements stretch our capacities just enough to help us grow without creating too much anxiety, and look for ways to do more of that stuff.

And especially important for those among us with early retirement or financial independence goals, is to get specific about what you will pursue in your post-work life. “Optimal experience is not the result of a hedonistic approach to life nor a laissez-faire attitude.”

“If goals are well-chosen, and if we have the courage to abide by them despite opposition, we shall be so focused on the actions and events around us that we won’t have the time to be unhappy.”