There’s an old story about two coal miners who came up out of the mine after finishing work one day. One of them, after a hard day of work, had a face completely that was completely blackened by soot. The other miner, somehow, had managed to avoid the same fate and his face was completely clean.
They bid adieu to one another and turned away to walk in opposite directions to head home for the evening. As he turned away, the miner whose face was clean raised his shirt and thoroughly wiped his face. But the miner whose face was covered in soot continued on his way, evidently unbothered by the black residue covering his countenance.
How can you explain the seemingly nonsensical behavior of these two men?
Well, when the miner with the clean face saw his soot-covered companion, he assumed that he must have a dirty face as well, so he found it prudent to wipe himself off. Meanwhile, the dirty miner saw his colleague with a clean face and assumed that he must look the same, thus finding no reason to wipe his own face.
The lesson? Comparing yourself to other people is ultimately unproductive and often downright harmful.
Whenever I meet with someone for the first time, this is one of the questions that they’re most likely to ask:
“Based on what we have, where do you think we stand relative to other people our age? Are we behind where we should be or are we ok?”
Doesn’t matter. Wrong question.
How you compare to someone else is completely irrelevant because the variables in their life are guaranteed to be completely different from yours.
Consider a married couple, both 63 years old, with $500,000 saved for retirement. They live in a typical middle-class neighborhood in Durham and want to retire in two years. I might tell them that they can do that easily, in fact they could retire now if they want to.
Now compare them to their best friends who live across the street. Their friends are the exact same age, have the exact same $500,000 saved, also want to retire in two years, and (obviously) live in the same neighborhood. But I might tell them that they should consider working another year or two beyond their original goal.
Why the different advice for two seemingly identical couples?
Well, the first couple lives very comfortably on about $5000/mo. They don’t have any debt (including no mortgage), don’t care much for world travel (a couple of camper trips every year will be just fine), and the wife has been a state employee for the last 12 years, so she’ll enjoy a small pension for the rest of her life. Between their two Social Security benefits and her pension, their income needs will essentially be covered. They’ll barely have to touch their retirement savings at all to maintain their regular lifestyle.
The second couple spends closer to $7500/mo. They still owe about $100,000 on their house, and both have car payments (and they’re getting tired of their current vehicles and want to trade-in for a newer model soon). Once they retire, they want to take one big trip every year, probably spending around $10,000 per trip, and they’ll do this for the first 7-8 years of retirement. Neither of them has a pension.
It’s now obvious, after digging a little deeper, that these couples aren’t nearly as financially similar as they might seem on the surface. But since you’re not likely to have a financial conversation with your neighbors or friends that covers anything but surface level matters, you’re unlikely to be able to discern those differences.
So after comparing yourselves to each other, one of you walks away wiping your clean face, while the other whistles all the way home, blissfully unaware of his soot-colored face.