Feeling Behind? Think Again

"Three Practices for Financial Contentment”

A question we hear on a surprisingly regular basis is, “How are we doing compared to other people like us?”

For what it’s worth, most people who ask this question are well on track to reach their financial goals—to which, I cannot imagine a more important measuring stick than that—but they remain curious about their relative standing.

It’s understandable, but here are two questions that might offer a helpful perspective on comparing ourselves to others:

• If you were on track to reach your financial goals, but “behind” your cohort of colleagues, would you be disappointed?

• On the contrary, if you were not on track to reach your financial goals, but “ahead” of your colleagues, would you be pleased?

As obvious as I hope the “right” answers are to those questions, I’m confident that the number of people who might answer yes to either question is not zero. I say this because there was a study [1] titled “Is More Always Better?” that showed how people will sometimes prefer having less on an overall basis if that meant they would have more when compared to others [2].

It’s a curious phenomenon that might explain why wealthier nations aren’t as happy as they probably should be. Since we’re constantly exposed to people who have bigger houses, nicer cars, and (presumably) earn higher incomes, it’s easy to become discontent with our situation, despite all of us being some of the wealthiest individuals in the world [3].

Admittedly, escaping the comparison trap requires intention, so I thought I’d share three ideas that might encourage more financial contentment. Here we go.

1.      Inner Scorecard vs. Outer Scorecard

Warren Buffett often talks about the value of having an “inner scorecard.” That is, measuring yourself by your own standards and values as opposed to the “outer scorecard,” which defines success by societal validation or comparison. Ask yourself:

“Am I basing my financial satisfaction on whether I’m meeting my own long-term goals, or on how I stack up against my peers?”

If your financial plan is on track and you’re funding the life you want to live, then you are “winning,” no matter what anybody else is doing.

2. The Gap vs the Gain

Most people spend almost all their time focusing on how much more they need to do to get to their future goals (the Gap) and rarely, if ever, take the time to observe how much progress they’ve made through the years (the Gain). To encourage the latter, how does your current situation compare to your wishes from 10, 20, or 30 years ago? Where were you hoping to be today?

In my experience, many clients have accumulated more wealth than they ever imagined or thought possible when they started their journey. Recognizing that simple fact can quiet the restless urge for more since it reframes your financial life from “How much further do I still have to go?” to “Look how far I’ve come!”

3. Ask: What Am I Giving Up Today for a Supposedly Better Tomorrow?

Many people delay the things that would bring them joy today—bucket list trips, experiences with loved ones, or even modest purchases that would meaningfully improve their lives—because they think it’s prudent to wait. Meanwhile, the money piles up.

But as Bill Perkins [4] wrote in Die With Zero,

“Since the whole point of money is to have experiences, investing money to get a return with which to have experiences is a roundabout way of having experiences.”

Yes, saving and investing are vital. But so is knowing when enough is enough, so you can start living the life you’ve worked so hard to afford.

The Takeaway

In the Western world, it’s easy to confuse “being ahead” with “being happy.” By keeping our focus on our own scorecard, occasionally pausing to see how far we’ve come, and recognizing when to spend for today instead of saving for tomorrow, we can step out of the comparison game.

True wealth isn’t about having more than others. It’s about having enough to live in alignment with what’s most important to you—and then actually living that life.

[1] Is More Always Better? by Sara Solnick and David Hemenway

[2] For example, half of the respondents preferred earning $50,000 (while others earned $25,000) rather than earning $100,000 (while others earned $200,000).

[3] Wealth Inequality Database

[4] Die With Zero

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