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Monday, May 1, 2017

Start From Where You Are

Posted by Robert on September 10, 2012

It seems to be human nature to compare ourselves to others. In school, in sports, in politics, everything becomes a competition. Doing well seems to take a back seat to doing better than someone else. I even find when I’m driving that I don’t really mind how long it takes me to get somewhere, as long as I feel I’m getting ahead of other cars.

Money is a little different, because it’s taboo to talk about how much we have, but I sometimes I can’t resist comparing myself to others. It isn’t helpful at all, though. In fact, there are so many things I don’t know about other people’s situation, that comparisons are meaningless. When I’m driving, we all follow the same road, face the same traffic lights and are subject to the same speed limit. But when I try to compare my net worth, savings or spending to others, there are so many other factors.

I worked as a financial advisor for a man in his late thirties who had at least $1.5 million in net worth between his home, his cottage, his cars, his own investment accounts and the accounts I managed. I’m not sure how he got there, but he was far ahead of where I could even hope to be at the same age.

I’ve read stories of people who saving a large proportion of their income. I estimate I was able to save between 30% and 50% of my income, depending on the year. Some people are able to save more than 50%, even as much as 75% of their income. That’s impressive.

I know a young couple who recently had their first child. They both worked for the government, had generous pension benefits and could expect to retire with a full pension at age 55. Add to that the fact that they didn’t need both incomes, and they could probably retire earlier without having to save anything.

I was an advisor for another couple who had a reasonably large investment account, but never saved anything. It turns out they got the capital from their parents (on both sides) and their plan involved inheriting a lot more money to be able to retire. In contrast, I don’t expect to inherit money (I have siblings who need it more).

We tend to notice the most extreme cases: those who start with a lot, those who save a lot, those who earn high returns. But that’s not really helpful. Those people are not on the same road I am, and I can only work with what I have, starting from where I’m at.

Where am I now? Where do I want to be? How do I get there? Am I doing what I need to? Then it doesn’t matter what anyone else is doing. My unique ratio of spending and saving is right for my goals, no one else’s. So it shouldn’t matter if I’m saving more or less than someone else. It shouldn’t matter if I start with more money or less. I’m trying to achieve my own goals with my own resources. And that’s what I try to remind myself when I see someone who starts with more or is saving faster.

How do you combat the tendency to compare? Or do you simply pick comparisons that are motivating for you?

Comments

9 Responses to “Start From Where You Are”
  1. Duane says:

    I see comparison as a tool for staying on task. I have a few friends who have similar goals/conditions and I like to keep them in mind when I feel my will is weak. Shopping for fun? No thank you – Bob and Diane are at home listening to jazz on the radio and reading library books. I find it helps to sharpen ones focus when you have comparative others…just like the Olympics does in sport. As with all things though, you need to be reasonable and moderation is important.

  2. Devin says:

    Great article. I have found it often that comparison occurs when you don’t have clear goals in mind. Often early in your goal setting. Once you have the skill set the comparison often fads with it. Essentially you are using comparison to develop the skill sets or discipline that you might not have been able to create with just just yourself. You look for ways to affirm that you are doing well. If you have no other way to measure progress comparison seems to be the easiest. When you learn to measure your goals based on a plan comparison seems to disappear. It becomes how well am I doing with respect to my plan. This comes with time and obviously planning. I have found that comes with maturity and time. I used to measure how well I was doing as compared to my fellow students, then co-workers, then friends. Then I developed a plan and the comparisons stopped. Why? Mostly because I was looking inward not outward for validation. This is a huge change in mind set and can be very valuable mentally.It meant I set goals that I wanted to accomplish with a plan that I had developed for me. It took time, but I found what I really wanted not what someone else wanted or thought was good for me.
    Thank you Robert for reminding me of my goals.

  3. greg says:

    “So it shouldn’t matter if I’m saving more or less than someone else. It shouldn’t matter if I start with more money or less.”

    Until you end up holding the bill for their negligence.

  4. Robert says:

    Duane, you make a good point about comparisons sharpening our focus. But it’s important, in that case, to make sure the comparisons are appropriate. For example, I can compare my triathlon ability to an Olympic triathlete, but that would likely depress me. If I compare with my friend, however, it’s more motivating to try and catch up to him, since he’s only somewhat stronger.

    Devin, your comment is very insightful. Thanks for giving me something to think about.

    Greg, I was thinking about people who either start farther ahead or who pass me from behind. Worrying about the people who are behind and not able to keep up is a different issue, but also valid (especially when they are family).

    The motivation for this post was when I was out running (trying to complete 10k in an hour) and, after I finished 6km, another runner came up from behind me and ran past at a higher speed. At first I thought of trying to keep up (which I wouldn’t have been able to do), but then I thought of all the reasons he might be going faster: maybe he just started his run, maybe he’s only running 1k, maybe he’s been training for years, etc. I chose instead to focus on my own goal and not on trying to match the performance of a stranger.

  5. Sheryl says:

    I find as I’m getting better at managing my money, I’m comparing myself to others less.
    Thank you Devin for pointing out the internal vs external validation, I think this means I’m on the right track.

    I find the one area I compare the most still is how much I spend. If I know someone is in a similar boat as I am (relative income to debts and expenses), I notice the vacations, lunches, new clothes etc. they get. Sometimes I’m still envious that they get these ill afforded treats (they usually admit the trip went on their credit card, which never gets paid off), but I try to remember that I’m working towards something else, not temporary pleasure.

  6. deegee says:

    Like you, Robert, I never compared myself to anyone else because I knew my situation was unlike anyone else’s.

  7. GPS says:

    Thank you for this article.
    I have been struggling with this for awhile.

    Devin’s comment is very insightful. Once I set up a budget, I compare myself externally less, because I know what I am doing is ambitious for myself.

    Perhaps I could use that insight in other areas of my life where I am having anxiety. I get anxious about being compared with my running regime, with whether I am being successful or not, if I’m being ambitious enough with my career. It can all be incredibly overwhelming.

  8. Tim Stobbs says:

    @GPS,

    “Perhaps I could use that insight in other areas of my life where I am having anxiety. I get anxious about being compared with my running regime, with whether I am being successful or not, if I’m being ambitious enough with my career. It can all be incredibly overwhelming.”

    I agree entirely with your plan. It’s hard to get used to being yourself and moving according to your own plan and comparing yourself to your internal yardstick, but it is worth getting there. You end up being a lot happier about your life and making decisions based on what is really best for you (instead of what you think should be best for you because of what everyone else says).

    Good luck,
    Tim

  9. CF says:

    I try not to compare myself to others but sometimes it’s hard to avoid. I especially get frustrated with myself for choosing my first career, making less money, and “wasting” time with it, instead of going into my current (better paying) career right from the start.

    But you’re right, of course. You have to set your own goals and be happy to achieve them.

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