Why Everyone Around You Seems Rich?
Hello folks,
If you have decided to read this post just by looking at the title, then I am sure you must have experienced it as well. The majority of people who are in their 20s have a very common question: how does the other person earn so well, how does the other person have such an expensive car or smartphone, howcome the other person able to afford branded clothes? Comparison is obvious not only for youngsters but for most of us.
Let me tell you why this happens.
One of the reasons is social media, where we witness only nice things about others. For example, you must have seen the pics posted by your friend when they visited for a vacation, the car he or she bought, birthday parties or family gatherings, and so on. The moment you see your friend’s post, you start to assume that the lifestyle of your friend is sorted. He or she has the best car, best smartphone, international vacation, etc.
Suddenly, you start to believe that your earnings are less compared to what your friend has been earning, which eventually results in pain or jealousy inside you. Till the time, you were not aware of your friend’s earnings, it was all ok, but now that you know everything, it is not okay.
In this post, I will tell you how you can get rid of this money comparison trap.
Reasons behind money comparison
First of all, let us understand the reasons behind money comparison.
1. Human nature
We grew up in a community where our parents used to compare our grades with the grades of our friends. However, the intention was not bad because our parents wanted us to be motivated to accomplish good grades and be the topper of the class. The same nature carries on when we enter into the corporate world but this time, it’s not the parents that compare our earnings, rather we compare it with our friends.
2. Past experience
“The scarcity of something, that you begin to get, makes you not manage it efficiently”.
This statement has been proven in research multiple times. It is absolutely true from the money point of view. If your earnings were limited earlier and all of a sudden you start making more of it, you begin to spend more and show off as well. This is a very natural process that happens with most of us. However, there is nothing right or wrong in this. It is a natural response to something that was lacking.
Consider an example of a person who hasn’t eaten for so many days. The first and immediate natural response when he sees the food will be, to eat as much as possible. Same is applicable to money.
3. Easy access to the credit
Any form of credit, whether it is a personal loan, credit card loan, car loan, or home loan, is a trap. You are always ready to take alone even at the cost of a small interest amount paid monthly for several years. It is a type of addiction because you can buy an expensive car, smartphone, or big home, with a low income. To have a good lifestyle and show off to others, you will be ready to fall into the credit trap.
How to compare money?
The best way to money comparison is by comparing the net worth. Net worth means the total of all assets minus the total of all liabilities. This will include the investments and other remaining assets, loans, credits and depreciating assets.
The problem is we consider only those things that are visible to us, like cars, branded clothes, expensive smartphones, international vacations, big houses, and many more. The things that are not visible to us are investments, bank balances, savings, loans, and so on.
Wealth is all the money that you cannot see.
You cannot compare your net worth and your friend's net worth because all the assets owned by your friend might not be visible to you.
How to get out of the money comparison trap?
The one and only solution is to increase your net worth. This can be possible either by increasing your assets or decreasing your liabilities.
Assets are all those things that can help you to generate more money, for example, fixed deposits, mutual fund investments, provident funds, equity, bonds, physical or digital gold, rental property, and so on. Liabilities are all the obligations that you have to pay in the short term or long term. A smartphone is a liability because it is a depreciating asset and you have to pay the phone bill each month, similarly, your car is also a depreciating asset that needs fuel to run.
We also have an illusion that all the people who own an expensive car are rich, people who have helpers at their homes are rich, people who own big houses are rich, people who wear branded clothes are rich, people who go for vacations are rich, and so on. These are the things visible to us which is the reason we compare. But, that is not the right way to compare.
Generally, we are taught how to earn money, but not how to make money. Earning money can be a job, a business, or a freelance service. Making money is how we actually grow the earned money. This is not taught in any schools or colleges, rather it is the major trap that we all experience. If we all get to know how to make money from our earned money, then we all can be set free from this trap.
Thanks for reading……..
Disclaimer: You must invest after considering your risk-taking capacity. The above information is not any type of recommendation or suggestion for investment. It is only for an educational purpose. You must seek the advice of a professional financial advisor before making any investment.
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