*This post may contain affiliate links. This mean if you purchase through the link I will receive a small commission at no cost to you. It is the way sites like this are funded, but does introduce a conflict of interest.
“Comparison is the thief of joy”Theodore Roosevelt
And yet comparing ourselves is human nature.
According to the Social comparison theory, when there is a lack of objective, non-social means to evaluate ourselves, determine we compare ourselves to those around us.
So is comparison the thief of joy, or a useful way to evaluate and motivate us in making progress towards our goals?
There is upward and downward comparison.
Comparison is the Thief of Joy? Upward Comparison
Upward comparison refers to comparing ourselves with someone we think is superior.
This can actually be used as a powerful tool for self-improvement. Motivated people use upward comparison in a similar way to athletes trying to beat a personal best.
When motivated people find a social comparison they feel is “like them”, but further advanced, their peer’s success is a source of inspiration.
But upward comparison can be a destructive force.
Instead of benchmarking ourselves against the average peer, people have a habit of comparing themselves with the most elite peer they can find.
Some of these may not even be genuine comparisons, such as in the case of the teenage girl comparing her figure with the airbrushed, technologically tweaked image of an Instagram influencer.
Even with genuine comparisons, we tend to compare with the best rather than the averag.
Imagine you come in the top quartile of your class at an exam. You would be pretty pleased with yourself, I imagine? Well above average you can use your rating to benchmark your performance.
Now imagine exactly the same result, but this time your best mate won the prize for top performance at this same exam. Human nature dictates you will now compare yourself with your mate, and self-evaluate your performance negatively, even though you still came in the top quartile of your class.
In this example, comparison is the thief of joy. And jealous friends are no fun!
Comparison with the very best can be very damaging to self-esteem.
Very few people feel good about their bodies after looking at Instagram models
Comparison is the Thief of Joy? Downward comparison
Downward comparison can be helpful in helping us remember we are all pretty spoilt in Australia. Those of us with an internet connection are downright indulged and wealthy individuals living in one of the wealthiest countries in the world.
Check out how wealthy you are in comparison to the rest of the world. It helps us to remember to practice gratitude, an essential component of happiness.
But downward comparison has a dark side.
I see it in my 5-year-old when he wins a game and rubs it in loudly to his older brother. Adults are similarly prone to gloating, they have just learned to stop expressing it out loud!
Comparing yourself with someone you consider inferior is often performed by people with low subjective well-being, in order to boost self-esteem.
“Pride gets no pleasure out of having something, only out of having more of it than the next man…
It is the comparison that makes you proud: the pleasure of being above the rest. Once the element of competition is gone, pride is gone.”C.S. Lewis
Introducing Dr Smith & Dr Jones
Dr Smith and Dr Jones graduated together best friends 10 years ago.
They became friends because they share a lot of common values, a hard work ethic and an awesome sense of humour. After medical school, their paths inevitably separated but they keep in touch and try to hang out a few times a year.
Dr Smith chose to train as a General practitioner. She enjoys the long-term relationships she gets to develop with her patients, and their families. She enjoys using her hands and performs minor procedures as part of her practice. Despite irritations with the medicare system, and the chronic undervaluing of GPs by the government and the general population, Dr Smith gets a lot of satisfaction out of her day to day work.
Dr Jones also enjoys working with her hands and chose to train as a plastic surgeon. She enjoys the challenge and satisfaction of helping breast cancer survivors with her incredible reconstructive surgery. She has also built a successful private practice, where she gets to be her own boss, away from the annoying inefficiencies of the public health system.
The Friendship is Not as Easy as it Once Was.
The two friends like to book a weekend away together to catch up, gossip and generally have lots of fun. Over the last few years, their friendship doesn’t feel as easy as it once was.
Dr Smith, having recently turned 35 years old, has started to think about funding her retirement. She earns around $150,000 gross per year. Up until recently, this has funded a good lifestyle given it’s well around double the average Australian household income.
But as usual, when Dr Smith sits down, sets goals and makes a financial plan, there isn’t enough income to fund all of her goals. Isn’t that always the way?
Dr Smith has been feeling a little demoralised, and it hasn’t helped to see Dr Jones’ significant lifestyle expansion over the last few years.
Curiosity got the best of Dr Smith last time she met with Dr Jones, who arrived in her brand new luxury vehicle.
She breeched the money taboo and asked her friend how much money she was making.
These ladies have shared so much, been buddies through hellish exams, relationship breakups and crises of confidence. Although a little startled by the taboo question, Dr Jones was willing to share with her friend that her income had peaked this last year at six hundred thousand dollars!
Of course Dr Smith congratulated Dr Jones on her fantastic success and ability to build her private work up in a relatively short time. Dr Jones treated them to a great meal and bottle of champagne to celebrate both of their career successes.
But things between them are no longer quite the same.
Dr Smith can’t help comparing herself with Dr Jones. Her income now seems pitiful in comparison. The ease with which she could meet all her goals if she had that kind of income!
Upward comparison, in this case, is denting Dr Smith’s confidence, creating jealousy and damaging a valued friendship.
Dr Jones has noticed her friend is cooler with her nowadays and makes superficially jovial but undermining comments or jokes at her expense.
It seems likely to Dr Jones that the source of this change is the income differential between the two friends.
She wishes she hadn’t shared her income, but it would have been awkward to avoid answering the question, and she now doesn’t know how to restore the friendship to what it once was.
Dr Smith comparing her very healthy income with Dr Joneses is not helpful.
It is not the sort of upward comparison that is inspiring, unless she can utilise some of Dr Joneses techniques to improve income at the General practice surgery. Dr Smith has no intention in taking the years required to train as a plastic surgeon!
All this comparison has done is devalued Dr Smith’s opinion of her own progress and income.
Hopefully it won’t discourage her enough to give up on those financial goals, because Dr Joneses situation is completely irrelevant to Dr Smith’s financial picture.
She is in no better or worse financial situation than she was prior to the income conversation.
Let’s take a privelidged peek behind the curtain to see what the two doctors entire financial pictures look like.
|Dr Smith||Dr Jones|
|Effective tax rate||27%||42%|
|Equity in Investments outside Super||$50,000||$200,000|
|Savings Rate (post tax, exec super)||34%||34%|
|Financial independence number||$1,750,000||$5,725,000|
|Years to Retirement||16.38 years||16.51 years|
Dr Jones receives around four times the compensation of Dr Smith but is taxed at an effective rate of 42% in comparison with Dr Smiths 27%. The ATO seems to be on Dr Smith’s side. This does significantly decrease the gap in the two friends take-home pay.
Dr Jones loses the immediate tax benefits of paying into super above the concessional cap of $25,000 (increasing to 27500) so has limited her contributions to this.
Both doctors have an impressive 34% post-tax savings rate excluding super. Dr Smith doesn’t understand how Dr Jones could spend so much whilst Dr Jones cannot comprehend how Dr Smith can manage on so little.
Check out the difference in the financial independence number. This is the investments needed to completely fund the doctors lifestyle at their current savings rate!
Both doctors are enjoying their work and don’t intend to retire particularly early.
But the time when they could retire and live off their respective investments is approximately the same, despite the significant differences in incomes.
Why Care About Financial Independence?
Being financially independent does not mean you have to retire. It does mean you can:
- Cancel your income protection premium (finally!)
- Reduce your hours
- Perform volunteer work instead of paid work for some or all of your hours
- Take extended time off in case of illness, family emergency or just because you want to
- Introduce boundaries for your employer and colleagues
- Be pickier about the work you do
The important factor in getting to the point where you can decide how much you do or don’t work is the savings rate. Because both doctors have similar savings rates, they are financially independent at around the same time.
Comparison is the Thief of Joy – What You Don’t Know
Don’t compare your situation to others. You don’t know what goes on behind the scenes.Purehappylife.com
There are so many factors beyond income that contribute to a person’s overall financial wellbeing. Debt levels, dependent children, parents and siblings and savings rate.
Comparing salaries is missing the point.
No one else has your exact goals, so no one else’s financial picture is relevant to your situation.
Income is only a portion of a household’s wealth story. What you feel behind on in some areas, you can make up for in others.
Stick to your own lane, your story is the only one that matters.
Your wealth accumulation journey starts as soon as you make the first step. Subscribe to Aussie doc for a weekly email to keep you up to date on track with your goals.
Call to action –
Aussie Doc Freedom is not a financial adviser and does not offer any advice. Information on this website is purely a description of my experiences and learning. Please check with your independent financial adviser or accountant before making any changes.