Comparison is a thief of joy. Generally comparison is looked down upon and for good reason, but a part of me wonders if there is some good that comes from comparison. Growing up going to public school there are many things to compare yourself to. Grades, looks, athleticism, height, maturity, lunches, clothes the list goes on. Now in most circumstances this can lead to anxiety, depression, self consciousness but there can be a positive side to comparison. It leads to norms and leads to social order. If you are too weird you might get made fun of which in turns makes you second guess acting out in the future. Not wanting to stand out, most teens will conform to the norms they see around them.
It can also work with motivation. Seeing a kids with a better grade than you, it can push you to study harder. Faster kid during recess, it can push you to run faster. You can learn what is possible amongst your cohort and learn of the methods or strategies used to excel. I remember being quite a fast runner in elementary school being in the top 4 fastest runners but in grade 6 I moved to another school and suddenly became a lot less fast. I became aware of others in my age bracket that were not just faster than me, but a lot faster. I became self aware of my strengths and weaknesses and realized I was a better long distance runner. Comparison adjusted my decision making.
There is a music video by Nickelback called Savin' Me in which a man suddenly is able to see the amount of time left in people's life by looking at a digital countdown above their heads. He is of course confused and disoriented yet it is eye opening to see with certainty the remaining time for each person.
Now imagine this phenomenon happened to you but instead of seeing the amount of time left in others lives you could see everyone's net worth. Just live numbers going up or down in real time, floating above everyone's head. Would you be shocked at what you saw? Would you feel ashamed? Would you be proud? Would you treat people differently? How would your net worth compare to your coworkers? What about those in your age group and life situation?
So much of life we try to compare to make sure we are on the right track. Going to post secondary when others are going to post secondary, getting married similar to others, buying a house and having kids. Life almost feels like a checklist. We use our peers as a gauge to how we are doing whether you are ahead of schedule or falling behind. Comparison with wealth is normally a bit trickier since you can fool others by using debt and people are not open with their financial situations. I imagine if someone suddenly did gain the ability to see everyone's net worth it would drastically affect their spending and saving behavior since they could suddenly and accurately compare to their peers in terms of wealth. Maybe they would lighten up on their budget feeling ahead of schedule or maybe they would be devastated at how far behind they are.
Net Worth Targets
Now there is a way to compare yourself without gaining the ability to see net worth and that is with net worth targets. These targets are commonly used to help you keep on track since no one talks about how much money you should have. They are based on your annual salary or income and they are excluding your home value. For example if you make $50,000 a year then you would want $100,000 by your late 30s in terms of investment and savings. If you’re planning as a couple, you might aim to have twice the target amount combined, especially if both partners have similar income and retirement goals.
- Target Net Worth by Late 20s: Roughly 0.5x annual income
- Target Net Worth by Mid-30s: 1x annual income
- Target Net Worth by Late 30s: 2x annual income
- Target Net Worth by Mid-40s: 3x–4x annual income
- Target Net Worth by Mid-50s: 5x–6x annual income
- Target Net Worth by Retirement (65+): 8x–10x annual income
The more fascinating thing other than the big number floating over someone's head would be how quickly the number changes? Are your coworkers earning money outside of work, do they have investments that are working for them even while they work? Are they gaining worth from their home passively? Do you see some people only growing their wealth during work hours and others growing throughout the day?
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Minimum Wage Machine
There is a machine called "Minimum Wage Machine." Created by artist Blake Fall-Conroy, this machine allows users to crank a handle and receive a penny approximately every 4.5 seconds, equating to the U.S. federal minimum wage. The experience is meant to be an eye-opening demonstration of how slowly minimum wage earnings accumulate. The machine has sparked discussions about the challenges minimum-wage workers face and has been shown in art galleries and exhibits to drive awareness and empathy. Now when you see your coworkers net worth is it only going up by a few cents every minute or is it jumping up with stock dividends, house value and stock value increasing. Is the movement erratic, or is there a constant direction and upward trajectory?
Observing Net Worth Naturally
Now in normal life net worth is not discussed in polite society and not viewable above someone's head, so we are forced to observe and derive net worth from purchases we see attached to others. The clothes we wear, cars we drive and houses we live in. These are normally good indicators but they can easily manipulate reality. Fancy cars and clothes can be purchased with debt, disguising one's net worth. Trying to look wealthy can delay growing real wealth. Wealth isn't grown by buying fancy cars and eating delicious food or traveling to exotic destinations. It is built bit by bit, dollar by dollar, budgeted, saved and then invested.
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Create Your Own Superpower
Create your own super ability and simply ask those you are comfortable with, how much wealth they have. Ask your parents how much money they had at your age (take inflation into consideration). Reach out to your siblings, friends and even close coworkers. Maybe they will have a money tip for you, or maybe you will realize you are doing great or right on track. Or maybe you will realize what you have always feared, that you are shockingly behind and the comparison will make you feel horrible. Now feeling horrible is not ideal, but if it will change your behavior for the better then comparison might just be a good thing.
If you found this helpful and would like help budgeting or investing please email me at taylormckeecoaching@gmail.com
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