Which direction should I take my career? Whom should I date? What will make me happy? We may consult with friends or do a little research before making big life decisions such as these…but at the end of the day, we tend to go with our gut. Unfortunately, our guts may be wrong! Researchers have taken deep dives into some massive data sets and determined that there are many important ways in which our instincts steer us wrong on some of our most important decisions.
If you want to make a lot of money, the data makes it clear what you should do—launch a business. Among the top 0.1% of earners, about 84% own businesses, versus only around 20% who receive most of their money from wages, according to a 2019 study in The Quarterly Journal of Economics by economists at Princeton, UC Berkeley, University of Chicago and the Treasury Department. Unfortunately, our gut instincts often fail us on a few key points related to founding businesses…
Entrepreneurship isn’t for the young. If you are nearing retirement, your gut might be telling you that your opportunity to start a business has passed you by. Don’t listen.
A team led by MIT management professor Pierre Azoulay, PhD, discovered that the older an entrepreneur is when launching a business, the greater the odds that the business will succeed, all the way up to at least age 60. Example: The odds of success are around three times higher at age 60 than at age 30, likely because older entrepreneurs have extensive experience, professional networks and access to capital.
The belief that young adults with fresh ideas make the best entrepreneurs likely stems from society’s glorification of business wunderkinds like Mark Zuckerberg, who started Facebook at 19—but those are the exceptions. When Azoulay’s team dug into the data, they discovered that young entrepreneurs don’t even dominate in the famously youthful tech sector—the average age to start a tech business is a solidly middle-aged 43.
The businesses people dream of opening often become nightmares. It’s tempting to start a business doing or selling something you’ve loved ever since you were young—your gut might tell you it’s what you’re meant to do. The data says that’s probably a mistake.
When a pair of researchers at UC Berkeley examined the lifespans of start-ups across a wide range of sectors, they discovered that the fastest to die were record stores, amusement arcades, hobby/toy/game stores, book stores, clothing stores and cosmetic/beauty-supply stores—all businesses people open because they love what they’re selling.
The businesses most likely to endure and make their owners wealthy include real estate leasing/property management/property appraisal companies…new-car dealerships…investment-management companies…market-research firms…and wholesale middlemen, such as beverage distributors. Top wealth-generating fields such as these might not be the stuff of childhood dreams, but they tend to have two key things going for them—they generally are local or regional in nature, reducing competition from massive global corporations…and they usually have barriers to entry that prevent numerous competitors from rushing in and stealing away customers by charging less. Example: Successful investment managers build loyal client rosters that new competitors can’t steal away simply by undercutting their fees.
Most adults believe they will recognize Mr. or Ms. Right when he/she appears. Maybe not.
A study published in Proceedings of the National Academy of Science in 2020 explored this topic. A team of 86 academics used cutting-edge “machine learning” data-analysis techniques to sort through a massive data-set of 11,196 couples and hundreds of variables to figure out what makes some romantic relationships happier than others. The academics came to one central conclusion—relationships are unpredictable. Some suspect that romantic relationships are “chaotic systems” like the weather—accurate predictions are possible in the short term, but over extended timeframes there are simply too many factors and forces at work to forecast outcomes with precision.
But while data analysis appears unable to point people to their ideal mates, it can tell us why our gut instincts so often get this wrong.
When people choose partners, they tend to strongly favor those who are physically attractive according to conventional beauty standards as well as people in certain height ranges. In heterosexual couples, tall men and shorter women are widely preferred. When women choose men, they also tend to favor those in occupations associated with protecting people, such as firefighters, police officers, soldiers, doctors and lawyers. The researchers discovered something interesting about all of those partner-selection criteria—none of them have any significant impact on couples’ long-term happiness.
For daters, this points to a potential strategy—seek out the people that other daters tend to overlook. For heterosexual men, that means seeking women who are not conventionally attractive and/or who are five foot nine inches or taller…for heterosexual women, that means seeking out men who are five foot eight inches or shorter, not conventionally attractive and/or in professions widely viewed as unsexy, such as teaching or engineering.
Also consider seeking out potential partners who have “unsexy” first names. Incredibly, simply having the wrong first name can halve the odds that someone will click on a profile on a dating website. That improves the odds of anyone who does reach out to people with oft-spurned names such as Dennis, Justin, Kevin and Marvin for men…and Celina, Chantal, Jacqueline and Mandy for women.
Two more ways to improve your odds of ending up in a happy relationship…
Find a partner who’s already happy. Someone who already is satisfied with his/her life and free from depression while single is likely to also be happy in a romantic relationship.
Be wary when you share a superficial connection with a potential partner. It’s surprisingly common for people to feel an immediate connection because they share something completely meaningless, such as initials or birthdate. That sense of connection can cause them to overlook clues that this person is a poor match.
How could we possibly be wrong about something that’s entirely about our own preferences? Easily, it turns out.
A pair of economists at London School of Economics and University of Sussex in the UK created an app that periodically asked more than 60,000 participants what they were doing and how happy they felt on a scale of one to 100. After collecting more than three million happiness measurements, they determined that most of us spend a lot of our free time doing things that don’t actually make us very happy.
Main problem: Our brains tend to overestimate the enjoyment we get from things that are very easy to do. Examples: Browsing the Internet, using social media or taking a nap tend to provide virtually no enjoyment…and watching TV, listening to podcasts and reading are only slightly better.
The activities that truly bring us great enjoyment almost always require some effort. Among the effort-requiring activities that truly produce impressive levels of happiness: Sex…attending the theater or a concert…visiting museums or exhibitions…exercising or playing sports…and gardening.
Additional findings from happiness research…
Rooting for a sports team reduces happiness. Fans get about a four-point boost, on average on a one-to-100 happiness scale when their preferred team wins—but they take about an eight-point hit when their team loses. Result: The typical fan comes out far behind. Also, rooting for teams that win more than two of every three games isn’t a long-term solution—the mood boost fans of great teams receive diminishes over time as they come to expect wins.
Coastal regions really are the happiest places on earth. You’ve probably heard that spending time in nature boosts mood. That’s true, but the size of the boost varies dramatically depending on the type of natural setting. Being outdoors in a suburban area boosts happiness by less than one point on that 100-point scale…farmlands, grasslands, woodlands and areas near freshwater, by around two points…mountains, moors and heathland, by as much as 2.7 points…and marine and coastal areas, by an astounding six points. Why does being within sight of saltwater provide more than twice the happiness boost of other natural settings? The data doesn’t provide an answer, but if that’s something you want to contemplate, do so while walking on the beach.
