I just got a nice email from Ben at MoneySmartLife, about a contest he's holding: readers are invited to submit a story about how a personal finance blog has inspired them. The entry that gets the most comments will win a free 1-hour consultation with a certified financial planner. Ben called my attention to an entry which mentioned me and Boston Gal:
The two bloggers I find most inspiring are Boston Gal and My Open Wallet. Like them, I am a thirtysomething single woman. They have shown me that it is possible to make it financially on your own. I am not doing as well as they are: I am 33 years old, my salary is only $53k, my net worth is only $135k, I’m still renting an apartment, and I drive a 15 year old car.
Of course it's very gratifying to be mentioned-- this is the kind of thing that makes me feel really good about blogging. But here's what bothered me a little: It's not the first time I've seen this kind of comment, about not doing "as well" as someone else. It's good to be inspired by people whose financial habits or success you wish to emulate, but I think everyone should be careful about judging themselves against others, or against any kind of absolute benchmark of what your net worth "should" be. As I commented back to Emily, it sounds like she's doing just fine. I am several years older than her, but at her age, my situation was quite similar... worse, perhaps, as I didn't have a car, even a 15-year old one!
Age is a big factor in judging your financial situation. Someone whose salary is $50,000 and net worth is $100,000 may be in great shape... or not so great shape, depending on whether they're 25 or 65. (Of course regardless of their age, they may be better off than almost half the people in this country, as the median income and net worth in the USA are close to those levels.) Salary itself is a factor in whether your net worth is a sign of overall financial success-- if you're making $100,000 a year but only have a net worth of $50,000, you either spend too much money, or you're carrying a lot of law school debt, probably! A commenter on this blog recently remarked that even now, my net worth isn't necessarily all that great in relation to my salary-- I'd take that even further to say that it's probably really low in relation to most of my college classmates, many of whom have parlayed a top-notch education into careeers in law, medicine, Wall Street, politics, etc.
So many issues come into play-- family background, education, personality and luck. We all come from different starting points in life. Some of us are always going to have a harder time than others in reaching that American dream of a life of financial security-- we all dream different versions of that dream anyway. And of course one of our great political divides is between those who believe that hard work is the only thing needed to succeed, and those who believe that the playing field is not even enough, and that many people who truly work hard still can't get ahead. I'm not suggesting people should come up with excuses for why their net worth isn't higher-- I'm just saying don't be so hard on yourself if you don't feel you measure up to some mythical ideal.
So think about all these things when you look at your own financial situation. What did you start out with? What do you want to end up with? How much time to you have to get there? And most importantly, how are you working towards that goal, from today on? You might be in better shape than you think... or you might not, but you need to ask yourself the questions either way.