Is Mine Bigger Than Yours?General Behavioral Finance
We are obsessed with comparing ourselves to others.
This is pointless behavior, of course. How other people are doing has nothing to do with how you are doing. But it’s what we do.
And it starts early. Remember the kid in school …
- More friends
- More popular
- Bigger house
- New car
- Better athlete, musician, test taker
You think we’d know better by now! Yet, we sometimes find ourselves falling in the same old trap. Whether it’s comparing our home, car, career, bank account, vacations, kids’ activities or where they go to college, we continue to ask “How do we measure up?”
Social media has intensified the impact. Today we aren’t even comparing ourselves to the truth. Oftentimes, postings are filtered stories that are far from reality.
There will always be someone with more or less of something than us. That’s life! At the end of the day, does it even matter? Even though our brain knows better, human nature is to want to be bigger than the next guy even if it means you have less.
Don’t believe me? Consider this:
Researchers from Harvard gave participants two options:
- Earn $50,000 per year while everyone else earns $25,000.
- Earn $100,000 per year while everyone else earns $200,000.
People were told to assume that everything else (like the economy, the value of the dollar, etc.) stayed equal. More money meant the ability to buy nicer things.
Obviously, you’d pick Option 2, right? Of course, we would want more money, independent of what everyone else had.
Half the people in the study didn’t want more money… they just wanted to have more than everybody else, even if it meant having less overall.
That. Is. Crazy.
It also shows just how competitive we are. We’ll sacrifice our own well-being just to do better than someone else.
Our advice? Stop thinking about everyone else. It doesn't matter how big anyone else's house, truck or 401k is... because they aren't you.
To living your ideal life,
The Paradigm Team
Paradigm Advisors is a fee-only financial planning firm based in Dallas, Texas and Fayetteville, Arkansas. Paradigm Advisors provides comprehensive financial planning and investment management services to help clients organize, grow and protect their wealth throughout life’s journey. Paradigm specializes in advising well-established career executives through financial planning and investment management. As a fee-only fiduciary and independent financial advisor, Paradigm never receives commission of any kind. Paradigm is legally bound by certification to provide unbiased and trustworthy financial advice.