Many consumers have adopted a “think positive” mantra, and perhaps for good reason. Being more optimistic has been linked to everything from a longer lifespan to better sleep and a lower risk of disease.
However, a new study conducted by researchers from the University of Bath has presented new evidence on the “think positive” front. Their work found that being realistic trumps optimism when it comes to consumers’ long-term well-being.
“Plans based on inaccurate beliefs make for poor decisions and are bound to deliver worse outcomes than would rational, realistic beliefs, leading to lower well-being for both optimists and pessimists,” said researcher Dr. Chris Dawson. “Particularly prone to this are decisions are employment, savings, and any choice involving risk and uncertainty.”
To better understand how optimism, pessimism, and realism can correlate to well-being, the researchers analyzed responses to the British Panel Household Survey, which gathered information from nearly 2,000 people on a yearly basis for just about two decades.
Participants reported on their tendency to have a positive, negative, or realistic outlook when it came to their finances. The researchers had access to the participants’ financial information so they could determine how the participants’ attitudes stacked up against the reality of their situations. They also evaluated the participants’ mental health and overall satisfaction with their current life status.
Ultimately, the researchers learned that staying in the middle lane -- avoiding either extreme optimism or pessimism and focusing on the facts -- is a consumer’s best bet. The study revealed that participants’ well-being suffered when they leaned too far in either direction.
Being overly optimistic or overly pessimistic about money had a negative effect on the participants, though negativity wore more heavily on their spirits. Over the course of the study, optimists' well-being dropped by just under 14 percent, whereas pessimists’ well-being dipped by nearly 22 percent.
The researchers believe it’s the anticipation of poor or good outcomes that gets to people and affects their mood. Whether you’re constantly waiting for the other shoe to drop or have the highest hopes that your fear will never come true, it’s hard to maintain good spirits for too long. It’s because of this reason that the researchers recommend trying out a balanced, realistic approach.
“I think for many people, research that shows you don’t have to spend your days striving to think positively might come as a relief,” said Dr. Dawson. “We see that being realistic about your future and making sound decisions based on evidence can bring a sense of well-being, without having to immerse yourself in relentless positivity.”