Two of the most helpful financial tools out there might just be:
- A pair of earplugs
- A set of blinders
Hear me out…
The Thief of Financial Joy
The idea that “comparison is the thief of joy” deeply resonates when it comes to how a lot of us think about money and wealth, especially in a world that grows more connected by the minute. All we have to do is open our phone, and almost instantly we’re likely to be reading about or looking at someone else’s beautiful life, thinking “wow, they have got it made in the shade”.
We all do it to some degree. I like to think I’ve gotten better at recognizing and limiting it with age. Nevertheless, it’s dangerously easy to stack ourselves up against everyone else we encounter. There must be something evolutionary about mentally calculating whether we have the leg up on another person or vice versa. And we come to all sorts of conclusions based on a long list of information we subconsciously gather… What car does she drive? Where does he shop? What kind of house do they live in? How do they travel? And on and on…
There’s a Lot of Bull💩 Out There
But the truth we all know, and simply need to be regularly reminded of, is that things are not always what they seem. The grass is, in fact, NOT always greener on the other person’s side of the fence. Maybe now more than ever, in our influencer age, there’s a lot of B.S. and heavy smoke screens out there. Virtually everyone is trying to present themselves in a very curated way.
Comparison + a Lack of Context = Monster
Sometimes we might have the whole picture and can make a fair assessment of what’s being presented. Where comparison can really send the mind spiralling, though, is when we don’t have the full story. Lack of context can unfortunately open the door for one’s imagination to fill in the blanks.
A client recently shared a story with me that highlighted just how this can play out…
An Unimaginable Loss
During our meeting, she told me about a conversation she’d had with an acquaintance a while back, in which he disclosed that he’d “LOST $250,000 in an investment account”. While the guy revealed this information rather calmly, my client was floored by the thought of this staggering and sudden loss in wealth.
And she brought this up with me because it was influencing how she felt about her own investment strategy… Fueling a growing nervousness about the stock market. In her mind, there’s NO WAY she could stomach losing $250,000. The idea left her terrified.
So I asked two questions:
➡️ How much total money did this other person have?
➡️ What was he invested in?
(There was also a 3rd question: How do you know he was even telling the truth?)
Of course, her conversation partner didn’t fill her in on any additional information… She didn’t have the full picture. So her mind defaulted to filling in the blanks with her personal financial situation – a perfectly natural thing to do. She thought, “Given my own financial circumstances, how could I deal with losing $250,000???”
We don’t know the reality. But it could very well be that his liquid net worth was north of $12.5M, and he was referring to a time he lost 2% or less (an objectively minimal drop). Or maybe he experienced that decline purely in a highly volatile stock (whereas this client is only invested in well-diversified portfolios). In any case, he doesn’t share all the same data points and goals as our client.
There are a couple lessons here:
1️⃣ CONTEXT is KEY… One small detail can be misleading. But if you have the whole picture, it might be a different story altogether. Don’t take everything you hear at face value.
2️⃣ FOCUS on YOUR plan… Your situation is highly unique. Don’t apply someone else’s experience (alleged or true) to yours. Tune out the noise. Put blinders on.
There’s enough emotion that comes with watching the movements in the market – though there are things you can do to prepare for and handle them. Avoid making it even more challenging by taking these two lessons to heart.
Real Wealth is Not Usually Loud – It’s Quiet and Boring
The bite of comparison can hurt us in several different ways. The example above made it difficult for our client to view her investment strategy through the appropriate lens – one that made sense specifically in her case.
Another way we may succumb to the challenges of comparison is when we have all these influencers flaunting their supposed riches and sharing the “secrets” of how they amassed their fortunes. It can look enticing and make us feel like we’ve really missed the boat. But in many of those instances, they’re saying what they think will get clicks and followers, not necessarily the truth. So don’t let it get to you.
The Millionaire Next Door paints a detailed portrait of what many people with wealth actually look like. The book tells us that, for the most part, they’re hidden in plain sight. Generally, people who do have money aren’t the ones trying to prove it to the world. Instead, they wear normal clothes, drive older cars, and live lives that mostly seem outwardly modest. While it was originally published almost 30 years ago now, I believe the theme of the book tends to hold true today. Those who are living loud, flashy, extravagant lifestyles very well may be rolling in more debt than dough.
Today, the more modern term might be the “Stealthy Wealthy”.
Remember this if you start to fall into the financial comparison trap…
- Just because someone seems to have money, or presents themselves a certain way – it doesn’t make it the case.
- No, you’re likely not missing out on a “secret strategy to build wealth fast!”
- Those who do have meaningful wealth are probably pretty boring about how they deal with it, and built it in the first place.
- The only person worth judging yourself against is… you.
- Keep your mental energy strictly on your own goals and situation.
- Don’t listen to the limited information you may gather about someone else’s financial situation and try applying it to your life.
- Do listen to a professional who understands your entire picture (AKA a trusted, fiduciary financial planner).
Don’t let comparison rob you of your joy, especially if you don’t have all the context. Keep that monster at bay and turn away.
With that, I’m out – gotta go talk to Mike about Upbeat Wealth branded earplugs…
Eddy Jurgielewicz, CFP® is a Partner and Lead Financial Planner at Upbeat Wealth, a fee-only firm based in New Orleans and serving clients virtually across the country. He specializes in providing straightforward financial guidance to ambitious young families as they navigate life’s many milestones.
Do you have questions about what we shared in this post, or anything else in general? Feel free to schedule a free consultation or drop us a line!
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