I have two boys, Otto Barnaby and Charlie Cecil, and it’s wonderful to see them grow and develop over time.
Each child is an individual, I know this. But even so, it’s sometimes impossible not to make comparisons.
When family members talk about them, they’ll often comment on their similarities and differences.
While it’s natural to make these comparisons, when we compare ourselves to others it’s rarely helpful.
Sometimes, we compare ourselves to others to make ourselves feel better. But other times, it can make us feel worse. No matter the reason for the comparison, it’s usually a distraction.
The trick is to have your own plan and to thread your own path.
That’s easier said than done, though, particularly when it comes to our finances.
So if you’re wondering how to stop comparing yourself to others financially, read on.
You’re only seeing the highlight reel
When you and your partner meet your friends for dinner, how often do you talk about your father’s care needs, your daughter’s credit card bill, or the argument you had last week? If you’re anything like most people, the answer is probably never.
Instead, you’ll probably tell them about the kindness of your dad’s carers, your daughter’s impressive grades, and the holiday you’re taking next month without the kids.
Most of us focus on sharing the highlight reel, whether in person or online, so when your friends talk about how amazing life is for them, you’re probably not seeing the full picture.
Behind the scenes, your wealthy friends may have bigger debts than you do. They might lie awake at night worrying about their kids’ financial decisions. And while it may have been a few years since they last slept on the sofa following a row, they may be relegated to the spare room from time to time.
Comparison will only slow your own progress
Comparison is a distraction and it can cost you both time and money.
Let’s imagine you’ve been investing for 5 years and your stock market investments are growing between 5-8% each year.
It’s a steady return but you’re getting impatient - especially when you see people online boasting returns of 10% or more thanks to cryptocurrency, day trading or whatever the ‘next big thing’ happens to be.
You sell some of your stocks and reinvest the money in Bitcoin and Ethereum, only for crypto to turn out way more volatile than you expected.
You’re used to the rises and falls of the stock market but this is on another level. You panic, sell at a loss, and buy back your previous stock market investments at a much higher price than you originally paid.
You call your financial planner for advice. Your eagerness to leave the workforce 10 years earlier than originally planned has cost you tens of thousands. It’ll be a long road to recovery. Comparison really is the thief of joy.
You may spend on things that don’t really matter to you
Pay too much attention to your friends, neighbours and colleagues and you may find yourself spending on things that, in the long run, don’t really matter to you.
Sure, your friend might live in a mansion, own a dozen rental properties, and drive a vintage Rolls Royce, but do you really want these things? Do you need 7 bedrooms when your kids will fly the nest soon? Do you actually want to be a landlord? Do you really want a car that will be fun for a month or two?
If not, it’s time to come up with your own list of dreams, aspirations and success markers. What’s important to others doesn’t have to be important to you.
More money doesn’t always equal more happiness
In The Spirit Level by Pickett and Wilkinson, the authors provide compelling evidence that shows when societies distribute wealth evenly, they do better in almost every measurable way.
It can improve literacy and life expectancy while reducing rates of obesity and depression.
Interestingly, it doesn’t seem to matter if those in the middle are less wealthier than the median of other countries.
Believe it or not, you can be poorer and do better in life, as long as the gap between the top and bottom isn’t too wide.
Compare yourself to who you were yesterday
So what’s the solution? Well, I propose that instead of comparing ourselves to others, we simply compare ourselves to who we were yesterday.
Next time comparison steals your joy, cast your mind back a year, 2 years or maybe 10. Remind yourself how far you’ve come.
And the focus doesn't solely have to be your bank balance or investment portfolio.
Think about how you’ve spent your money too.
Perhaps you’ve traveled the world, moved house, had grandchildren.
Maybe you’ve read 30 books this year, raised money for charity, or embarked on a fitness journey.
For most people, when they think in these terms, and consider what once made them feel anxious or stressed 10 years ago, they’ll notice big improvements.
In most cases, you'll significantly further forward than you were 10 years ago in all forms of measurement.
Of course, there may be instances where you’d do anything to travel back in time and relive earlier years - before the loss of a loved one, for example.
But in general, by thinking in this way, we compare ourselves to something that’s far more tangible and important than the fortunes of others.
And, when I think back to where both of my boys were even a year ago, one was in nappies and the other couldn’t read. That's progress in anyone's books.
And remember, life was only ever a one-horse race.