How Do You Measure Financial Success?

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I recently finished the amazing book, American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road by Nick Bilton.  If you’re not familiar with the story, it gives a behind-the-scenes look at the rise and fall of Ross Ulbricht, the founder of the Silk Road. The Silk Road is an online black marketplace, best known as being a platform for selling illegal drugs on the dark web.  To say that this book was fascinating is an understatement. I honestly couldn’t put it down.

 

If you’re into stories about 20-somethings trying to change the world, murder for hire with the Hells Angels, running into corrupt government officials while using Bitcoin before it became mainstream, you’ll be thrilled.  This book has it all.

 

One of the most interesting aspects about Ross Ulbricht was his disappointment on where he was in life.  He was PhD dropout.  Although he had a brilliant mind, he was incredibly discontent that he wasn’t doing something more with his life.  The crazy part of all of this was he wasn’t even motivated by money.  He just wanted to be able to make a lot of money if he wanted to.

 

He was reticent to talk about money in front of his friends and family, since he was so embarrassed about his financial situation in life.  This got me thinking about how I measure financial success.

 

Whether or not we realize it, we all have a certain measuring stick to determine financial success.  It may be criteria based on the influence of friends or family or even celebrities in Hollywood. Whatever or whoever sets them, we each have a standard.

 

Today, I thought I would highlight four common ways that people measure financial success.

 

Comparing Against Your Friends

For Ross Ulbricht, his measure of financial success was to compare himself to his friends from high school.  He was constantly thinking about how inadequate he was running a small-time, non-profit bookstore in comparison to his friends, whose jobs made him jealous.

 

Ross thought that he was a uniquely gifted individual.  He couldn’t understand why he was having such a difficult time transitioning from college into the real world.  He had trouble adapting his book knowledge into the workplace, which haunted him in the end.

 

I actually don’t find myself comparing myself to my friends very often.  A couple of friends of mine are doing really well financially. I’m honestly incredibly happy for them, although, I might feel differently if I was toiling in a job and struggling financially.  All that to say, I am incredibly grateful for where I am.

 

Related:  When Gratitude Requires Hindsight

 

Comparing Against Your Peers At Work

Admittedly, there are times when I have hints of jealousy measuring my financial success compared to my peers at work.  Working for the government, I do love serving my country and am passionate about the work that I do. However, some of the contractors that I work with make double or even triple what I do.  They drive very nice cars to work and go home to mega mansions that line the DC area.

 

My boss likes to joke around and say that we must really love the work that we do because when we put on our government badges at work, we take a vow of poverty.  It’s clearly not our paychecks that motivate us to show up to work each and everyday.  

 

Related:  How I Became a Millionaire While Working For The Government

 

Comparing Against Your Family

Whether conscious or not, most of us probably compare ourselves to our siblings and parents to see if we are keeping up with their progression in life.  For instance, my sister is an amazing artist.  She has more talent in her pinky finger than I’ll ever have.  But, I’ve never really felt jealous of her financial successes.

 

However, recently, I have been looking at where my parents were on their financial journey when they were my age.  I end up shaking my head at how housing prices have exploded since then.

 

My wife and I grew up seven houses down from each other in the DC suburbs.  We recently saw my former home go up for sale on Redfin.  It was nostalgic to look through the pictures of the house and all the changes that the homeowner had made.  But then I became depressed knowing that there was no way that I could afford the house, even if I wanted to.  

 

Looking at where my parents were at my age, I feel a pang of guilt knowing that I may not be setting my children to have a better life than the one I grew up with.  

 

Related:  Living Near Family…Is It Important?

 

Comparing Against Your Own Financial Goals

If I’m being honest with myself, this is the only one of these four that should actually matter.  The only person I should be trying to measure my financial success against is me. I have the ability to decide what financial goals I want to set and what financial goals are unrealistic, based on the decisions I make.  

 

As a quick reminder, I love using Personal Capital to create my financial goals to see how I am progressing against those goals.  If you haven’t signed up, I encourage you to sign up today.

 

I like working for the government.  I’m not interested in taking a contractor position, even if it does make double or triple what I make. On top of that, the housing market is completely different from when I was a child.  Comparing myself to my parents and what they accomplished shouldn’t denigrate from the financial successes that I’ve had over the years.

 

While I think it’s important to monitor your financial success so that you aren’t spending too much time on your laurels, I believe that you should skip the first three ways and concentrate exclusively on the one you actually control.  

 

Related:  My 2018 Goals: Stretching Myself

 

So readers, did I miss any additional ways to measure financial success?  Have you fallen in the trap of any of the above? Share your thoughts below.