Should you compare yourself to others?
My wife compares me to Ryan Reynolds sometimes.
She says, “you’re nothing like Ryan Reynolds.” 😂
There will always be someone with more success and money than you.
Maybe it’s better to compare yourself with who you were in the past, than with who someone else is today.
Comparison is the thief of joy after all.
But I don’t like the saying “never compare yourself with others.” I think there’s a time & place for comparison.
Personal finance is not just personal, it’s also relative
If your income grows by 5%, but everyone else grows their income by 20% then you’re getting left behind.
Yes, you’re doing better relative to your past self. But that’s not what really matters.
Since we live in a society with others, we have to make an effort to keep up with societal norms.
In the past perhaps it was the norm to pay $1,000/month to rent a 1 bedroom apartment.
But the norm today is to pay $2,000/month. The cost doubled.
Isn’t there some utility to track how the norm changes over time, since shelter is important?
I think in some sense it does help to know how rich other people are getting. The price of labour in a community impacts the cost of living for everyone. Just look at the Bay Area, Seattle, or any other city that has become a tech hub over time.
If you don’t keep up with society’s changes your standard of living could suffer over time.
Comparisons can have other benefits as well.
If you’re doing similar work as others, but getting paid less, it’s probably in your best interest to know you are being underpaid so you can look for ways to improve your situation.
Comparing your situation against others allows you to make more informed decisions.
It’s hard to learn new skills, or improve yourself if you don’t consider how others are doing things differently.
But to reveal those differences & make improvements you necessarily have to compare what you’re doing to what others are doing.
You can’t run a business successfully without doing market research and looking at your competitors once in awhile. 🙂
At some level don’t we all depend on signals from other people to guide us forward, and to help us figure out which direction to go?
Can you compete without comparing yourself to others?
You can certainly compete only against yourself. But sometimes that’s not enough.
If your net worth grows 100%, how do you know if that’s good or bad if you don’t compare with others?
It’s difficult to maintain your purchasing power if you don’t have any external standard to measure against.
Is comparison a necessary evil you have to do in order to live a decent life within mainstream society?
Maybe one solution is to compare with others when you want to improve your situation.
But do not compare when you want to relax and not stress.
Random Useless Fact:
This is what a fpoon looks like.
A lot of truth in your post today.
I’d say it’s useful to compare yourself to your past self if you’re a beginner.
I also think that this is good advice but only for mentally resilient people like yourself. Just like many people will melt down in the face of a leveraged bet gone wrong, many people would perform worse with the added stress that comes with comparison.
Well said, Andrew. Comparison when one is not yet ready can do more harm than good. Perhaps people ought to only compare to their past selves when they’re just getting started, especially as children. 🙂 Then when they’re ready, slowly look outwards for guidance, direction, and perspective. It can be challenging to find the right balance though.
Isn’t Ryan Reynolds punny like you? Also you are both born in British Columbia. There are quite a lot of similarities right there already, lol.
For my investments I like to compare to benchmarks… if I continued my path of dividend stock selection based on higher yield back in the day and not delved into hybrid investing, my returns would not be as decent as they are today.
I like comparing net worths but I take it with a grain of salt and don’t beat myself up. For example, I know I can’t compare yourself to someone making $25,000 a month.
It’s a good thing you went for a hybrid approach. 🙂 It would be amazing to earn $25,000 a month. Although that seems like a lot now I think many people will be able to make that much in the future because of inflation.😂
Actually I don’t know if you are born in BC I am assuming, haha, apologies!!
No worries. I wasn’t born in BC but I came here when I was a toddler, so close enough. 😅
Nice one, couple of interesting graphs would be average salary growth, your profession salary growth, net worth growth and etc…
You’re right we should compare cost of living growth, else we might be forced out if the city due to high costs.
Those are all great metrics to compare yourself against. 🙂 I think a lot of people who are priced out of their city could have prevented the situation had they understood the broader scope of what’s happening and planned accordingly.
I think the key point here is balance. It’s not healthy to compare with others but also at the same time like you said, if you aren’t looking at this at a macro level then you will be an ostrich with its head stuck in the sand. Mental resilience for sure is a key factor in how much sh*t you can take before you explode lol but I think it’s just the same as setting a personal finance goal, it has to be actionable and measurable or else it’s not a goal at all.
Similarly, if you don’t look at others then you won’t have a benchmark to gauge how you’re actually doing. So it’s important to keep your head and grind but every once in a while you gotta look up and see what everyone else is doing to keep up pace. I think you really hit it outta the park with that example, sure making 5% return this year was more than you did last year but all your peers be hitting 20% then maybe it’s time you talked to them and see what they’re doing lol.
Balance is certainly key. It relates a lot to developing awareness about yourself and also your surroundings. Learning from others is so important for personal growth. 🙂
In a sense we are all competing to stay relevant and make our lives better on a personal level. But on the other hand we’re also helping each other improve and get better. Society is advancing in large part because people choose to cooperate with a win/win mentality.
Haha! Sounds like we know what her fantasy man is.
I think because people can’t help but compare, I don’t share my net worth any more. Because some people get really pissed off. It’s better to just share percentages.
Have people gotten pissed off at you when you share?
If people get pissed off because of facts then that’s not my problem. But luckily I haven’t had any readers tell me they don’t like it when I post my net worth numbers, lol. Then again, not many people read my blog, and the people who do come here tend to like the transparency I provide. Maybe an alternative way is to only share the liquid net worth, and not the total net worth. 🙂
It is human nature to compare yourself to others.
Absolutely. I think it’s part of our evolutionary instinct. 🙂