Thursday, May 31, 2007

keeping up with the joneses

i read a few personal finance blogs and subscribe to some magazines and all too often i read something about how someone is doing relative to some benchmark. it's great for stats, but in the end, the question that you have to answer is whether you have enough money to live how you want to live in retirement.

a good friend of mine does really well financially and he has this annoying trait of trying to talk salary with everyone to see where he stacks up (generally, he's at the top) -- and he's very competitive about it. he takes it very seriously that his salary is largely a measure of his success in life. well, we all know that people have very different values and some careers just don't pay like they should -- people get into teaching, social work, and a lot of other careers for rewards that are likely worth more to them than cold hard cash (which is not to say that teachers and social workers and what-have-you shouldn't be paid more).

in the end, what you earn is not nearly as important as what you spend, and what you spend isn't nearly as important as what you save. because one day, we're all going to be retired and not making a lot of money. so, ultimately we'll all be at the same end of the salary measuring stick (we'll all be making $0 from our non-existent employers, hopefully), so it's probably not worth obsessing about keeping up with your neighbors, friends, or the joneses. you just have to keep up with you and how you want to live.

1 comment:

HMG said...

Very much agree with your comment. I hate the idea of keeping up with my peers. I have a pretty aggressive savings plan and hope to be able to retire much earlier than others in my profession.