One of the most common questions I get from clients of all ages is: “How am I doing compared to…?”
It is such a common question that I invented my own joke in response:
“There’s a tallest Vix in every Christmas photo, but that doesn’t make you tall.”
What I have come to realize is that most clients are really asking some version of:
“Am I behind?”
“Am I ahead?”
“Am I normal?”
Benchmarking ourselves against others is natural. It is an easy psychological way for us to measure how we’re doing.
However, in financial planning, benchmarking ourselves against others—especially random strangers—can be meaningless as each person’s goals are deeply personal.
As Morgan Housel says, “Personal finance is way more personal than finance.”
This is where financial planning becomes important. A good financial plan can help define what success actually looks like for you, not for someone else.
Portfolio values alone don’t tell the full story. The value of a portfolio does nothing to address the goals, spending habits, or lifestyle that someone is trying to build.
And in today’s social media world, it is harder than ever to avoid the comparison game.
In my experience, people care less about beating benchmarks, and more about living the life they want.
Defining what you want your money to accomplish—that’s when financial planning becomes personal.