The Trouble With Net Worth Comparisons

You know, in real life very few people discuss their income and expenses, but in the world of personal finance a lot of bloggers share their numbers. Those black numbers pop off the page of my browser and stare back at me from my light-filled computer screen.

Do you ever look at those numbers? Do you ever compare your financial state to others who write about personal finance? Rockstar Finance documented the net worth of over 700 bloggers. I don’t know how up to date this list is, (I’m pretty sure it was written a few years ago), but you can get a general idea of how much other bloggers are worth. You can look through the list and figure out where you would rank among all those people and personalities.

I read ESI Money’s Millionaire Interviews religiously. Every time John writes a new post I scroll through the details until I reach the question “What is your current net worth?“. If the total is larger than my own or the age of the interviewees much younger I read the post from start to finish. Otherwise I typically move on.

I am very interested in the psychology of my motivations so I want to point out that while I compare myself to others I do not do so from the standpoint of jealousy or envy. I am simply curious as to where I might rank among my blogging peers. This has been true since I started blogging about money, but it has become even more true now that our number has grown.

I’ve never included the details of my finances in this blog. I’m so proud of all that my husband and I have accomplished, but I don’t want to put too much information out on the Internet. I only recently alluded to the fact that by definition we’ve reached financial independence.

Comparison is a tricky little devil and when you look at the numbers it’s difficult to understand all that went into them. For example, how much work went into the number you achieved? Doctors study for many years to attain the right and knowledge to practice. Software engineers can start writing code right out of high school.

Is the speed at which you become a millionaire important? Is the software engineer smarter than the doctor, because he can achieve a high net worth with little to no formal schooling? Is the doctor providing a more important service to his patients than an engineer? Should we put additional weight into these net worth numbers and how they are achieved?

Should the young real estate mogul get higher accolades for finding alternative ways to build wealth than the loyal employee who sat in her cubicle for twenty years?

Net worth is just one piece of the financial puzzle. And while the financial community often focuses on the amount of money we’ve accumulated I think it’s equally important to place importance on the life we lived to reach those numbers.

Ignore the people who tell you how you should live your life and instead seek to satisfy your our own needs and goals. One person may love searching for dilapidated old houses and fixing them up. Another may be more fulfilled in a traditional 9-to-5 job. You may think it’s super cool that you ditched your job to get rich through real estate, but that’s not the life for everyone.

In my youth I had a lot of ideas of what made sense when it came to money. I thought a lot about how to earn as much as possible. Without children I was willing to put in ridiculously long hours to propel my career. I would work until two or three in the morning solving complex problems. I sat at my desk for hours writing and rewriting code often skipping showers or even stepping outside when I worked from home. My efforts paid off in the form of raises and promotions, but my health took a back seat to my financial progress.

Having a high net worth doesn’t mean a whole lot if you are unhealthy or unhappy.

Net worth also doesn’t say anything about the life in which you lived. Maybe you chose to earn less money and pursue a career that earned little but helped others immensely. Maybe you chose to spend time away from the workforce raising children. Or maybe you just fell on hard times due to unexpected medical issues.

When you compare your financial figures remember that there are many factors that impact the totals. It may be fun to rank yourself among the list, but remember that all of those numbers have a backstory. If life is a contest having the most money does not necessarily make you the winner. You win by having a life well lived.

1 thought on “The Trouble With Net Worth Comparisons”

  1. Shoot, I keep meaning to take mine down. Maybe now I’ll remember to figure out how to do that this time But seriously, our net worth could be higher, but we would be a lot less happy with our day to day lives to get there. And then, ours is significantly higher than it would be thanks to timing in the real estate market (home and investments). A few years difference would make a HUGE difference in our net worth, even if we did everything exactly the same otherwise.


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