a perspective by roooted (Yes, that’s spelled correctly) | 24 November 2020
Last week, a friend asked me if I’d rather:
Make $50k/year and while everyone around me makes $25k/year OR make $100k/year and while everyone around me makes $200k/year?
It’s complicated because as humans, we gauge our wellbeing relative to those around us.
Feeling wealthy has little to do with what you have. It seems like it’s more about the gap between what you have and what you expect— and what you expect is driven by what the people around you have.
Think about it this way…
If you currently earn $50k or more annually, you’re in the top 1% of all incomes globally. If you’re living in the United States and earning $50k/year, you probably don’t feel like a 1%-er. Not even close.
Another interesting thought…
Over the last 40 or 50 years, the average American’s income has remained largely stagnant. You currently aren’t earning more or less than you would have in the 60s and 70s. So, why do so many people feel like they don’t have enough?
Here’s what I think…
We’re constantly comparing ourselves to those around us. We do it subconsciously to know if we’re normal or have enough. Those subconscious comparisons, however, can go in two directions: up or down.
By default, our social comparisons tend to skew upwards, looking to those who have more than us. For the stagnant middle-class American, staying in place feels like falling behind. Especially, when other people are getting further and further ahead.
Some *bittersweet* news
No matter how much you’re making, you’ll never really feel rich. But that doesn’t mean you’ll never feel happy or content. I think the key is to maintain a healthy gap between what you have and what you expect.
I know what you’re thinking
Cool. Maintain a healthy gap. Okay, how do I do that. Luckily, there are some useful strategies we can use to feel good about what we already have.
We can learn from people who are smarter than us
Keith Payne is the author of “The Broken Ladder: How Inequality Affects the Way We Live, Think, and Die.” He believes we can strategize and make those comparisons work in our favor.
Payne suggests using a healthy dose of upward social comparisons to motivate and energize you to get sh*t done. On the other hand, downward social comparisons can be used to destress and practice a lil’ gratitude.
I’m curious to know your thoughts on all of this. Let me know by replying here.
#1 Start a gratitude journal
Research shows that spending 5 minutes per day to write down what you’re grateful for can enhance
your happiness in the long term by 10%.
(Read more about the benefits of gratitude here.)
#2 Prioritize your inner scorecard
Our inner scorecards are a list of values that we aim to live by. An outer scorecard refers to what could
be measured by your peers. According to Warren Buffett, if you can find peace with your inner
scorecard, “you’re going to live a happy life. But people often subscribe to the outer scorecard.”
#3 Cultivate an abundance mindset
Stephen Covey, author of “The 7 Habits of Highly Effective People,” coined the term abundance mindset. It implies that there is plenty out there for everybody. For example, if someone else wins or is successful, it doesn’t mean you lose. Embracing this mindset takes training. Let’s work on it together 🙂
Psychology and Gratitude: How Being Grateful Can Improve Your (Financial) Wellness
Psychology of Consistency and Money
We’re changing the narrative around money but change can’t happen with a one-sided conversation. That’s why we’re excited to bring different voices and experts to share their wisdom. Send us an email and let us know what you think. And remember the nav.it money app offers you free tools for checking in and managing your money moves.
You can download it at Google Play and the Apple Store.
What does being “roooted” even mean?It means being aware of the immense impact money has on my life and on the world around me. I think the trickiest part is putting that awareness into practice. Save, spend, and invest in ways that align with your values.
What is roooted anyway? We’re a newsletter and community dedicated to making money cool. For most people, when thinking about finance, “cool” is not exactly the first word that comes to mind. We’re trying to change that.
To check out the full newsletter, click the link or check out the Website.