The Temptation to Compare Ourselves to Others, by Scott Stolz, CFP, RICP (week 15)
My wife and I spend the summers at Lake of the Ozarks in
Missouri. We are fortunate to have a
home on the Lake that my wife inherited from her parents. While we typically have some extremely hot
days there in the summer, it’s much more pleasant than the Florida summer
heat. Not surprisingly, most people
associate Lake of the Ozarks with the show “Ozark.” If you’ve watched the show and never been to
the actual Lake, you would assume that it’s a pretty rustic place with mostly
small cabins and the occasional boat or two.
Nothing can be further from the truth.
Even after 5 summer stays at the Lake, I still marvel at the number of
mega mansions and $500,000+ boats. The
picture below belongs to our next-door neighbor. Trust me, our house pales in comparison.
While this house is the largest by far on our street, if you
take a short boat ride in either direction from our house, you will see
countless houses that are comparable.
And if you have a house like that, you have to have a large dock with 2
if not 3 boats. And at least one of
those boats will likely have 4 or even 5 motors. For many of these people, this is their
vacation home, and they are only in residence a couple of months a year if
that. We see the same thing in our
primary city of St. Petersburg, FL.
Condos that sell for $1,000 per square feet sit vacant much of the
year. These too are second or third
homes for many of the owners. I can’t
help but wonder how so many people seem to have so much money. The key words here are “seem to.” Maybe they do and maybe they don’t. Unless we live next to Elon Musk, Jeff Bezos,
or Bill Gates, we never really know how our neighbors are doing no matter how big
the house is. But that doesn’t stop us
from making comparisons.
Typical Summer
Weekend at Lake of the Ozarks
Author and Podcaster Mogan Housel has a theory about how
this makes us feel about our own situation.
In fact, he covers this is his most recent podcast (Two Big Stories That Help Expl… - The Morgan Housel Podcast
- Apple Podcasts. Basically,
his theory is that we judge how well we are doing by comparing ourselves to others. If they appear to be doing much better than
we are, we feel left behind – even if we are doing just fine. Forty years ago, this comparison would be
made against our neighbors and close peers.
Since they lived in the same neighborhood, sent their kids to the same schools,
and hung out at the same places, everyone seemed to be on an even footing. And think back a moment. How many of you took family vacations to
Europe or fancy cruises? My family only
went to places that were easy to get to by car.
I can only remember taking one plane trip before I was in college. In short, our world was much smaller than it
is today, so these comparisons were made mostly against our peers. Housel points out that in the world of the
internet and social media; we are now comparing ourselves to people all over
the world. We can now follow their
lifestyle in real time. It’s easier than
ever to assume that we are falling behind.
This in turn can lead to much of the divisiveness that is so prevalent in
our world today.
This can be a trap for retirees in particular. We all want that perfect retirement that we
see in the commercials and the brochures.
We want to take that fancy trip abroad, buy the big summer home or the
fastest boat. That can cause us to
either overspend in retirement or become bitter if we feel as though we are
missing out.
We all know that this is not the frame of mind that leads to
a happy and satisfying retirement. We
may not have the mega mansion on the lake or the fastest and baddest boat, but
we have a perfectly nice house that we love and boat we enjoy. And that’s more than enough. I often have to remind myself of that when I
go by our neighbor’s house. As the
Rolling Stones famously said, “You can’t always get what you want, but if you
try sometimes, you just might find you get what you need.”
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