Why You Always Feel Behind (Even When You're Doing Fine)

Transcript

Why do other people shape your financial life?

If you took a walk through an American suburb in 1948, most of the houses would look remarkably similar. Small lots, modest square footage, one bathroom, a kitchen meant for cooking rather than gathering. For a family moving into one of those houses, it felt like the dream, the American dream. Stability had a shape, and that shape was widely shared.

Over the following decades, something subtle happened. The homes grew slowly enough that nobody experienced a dramatic change year to year, but a garage became common. Then a second bathroom. Then a larger living area. Each addition made sense on its own, and each step felt ordinary. By the 1980s, a 1948 house might look small and incomplete compared to the houses of the 1980s. What really changed was the shared expectation. We started comparing ourselves to our neighbors. We've always done this. Expectations around homes started to change, and a home started to become a status symbol, because human beings rarely evaluate their lives in isolation. We compare ourselves, and usually to our neighbors. If our neighbor added an addition or got a garage, well, I wanted that too.

The mind uses other people as reference points. This is different from envy. It's not malicious, it's orientation. The brain is constantly asking where it sits relative to the people around it. Economists noticed a version of this more than a century ago. They wrote about how people would purchase visible goods to communicate position. The item itself matters less than what it signals: a carriage in his time, a larger home today. The markers change over time, but the behavior is driven by location within a social environment.

Back in the day, that comparison circle was really just your neighbors, or the tribe around you physically. In modern life, the circle has expanded dramatically. A person now observes hundreds of people in a week: careers, houses, routines, many belonging to people they've never met. Hundreds and hundreds of reference points, hundreds of comparisons. The brain is just treating those observations as context. And without realizing it, an internal timeline starts to form of what successful adulthood is supposed to look like at a certain age. This is what psychologists call social comparison. The mind tracks position as much as progress. It's why we like the bigger home, even though it's a pain to maintain. It's why someone with a net worth of half a billion dollars is striving for a billion, because their circle probably has more. That measuring stick keeps updating quietly.

Not only has the modern circle expanded, along with our reference points, but we're seeing people post 1% of their lives, and the best 1% of that 1%. That's why we see Instagram stories, and I'm guilty of this too, of mainly cool stuff: vacations, the beach, here's where I'm at, here's what I have. The environment changes, the reference point moves with it, and we adapt fast, often without realizing it's happening.

Keeping up with the Joneses is a real thing. It has been forever, and it probably will be forever.

Hosted byNick GeorgeCFP®, ChFC®, CLU®, IWA™FounderView bio →

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