Are We Still Trying To Keep Up With The Joneses?

racingAs many of you readers are probably already aware, I don’t write articles just to put content out into the world. I write primarily to inspire through action. I share the intimate details of my finances (and parts of the rest of my life) to inspire others into action by way of showing the results of my own actions, which, hopefully, shows what’s possible when a regular, middle-class guy harnesses the power of consistency, persistence, and good habits.

I’m also painfully aware, through personal experience, that others will only change if and when they want to change. So I’ve decided to be the change I wish to see by changing myself for the better.

And change I have. I’ve gone from being worth less than a baby that can’t walk or talk to a guy who controls a portfolio nearing $200,000 that should spit out $7,200 in passive dividend income this year.

I guess, in a way, I’m using my situation as an experiment of epic proportions. Can a guy in his late 20s who doesn’t make a lot of money, is deep in debt, knows nothing about finances, and works in a field that couldn’t be further from money management actually turn his life around and achieve financial independence by 40 years old?

The jury’s still out, but I’m well on my way.

As aforementioned, most of my content is designed to be as inspirational as possible. However, I’m going to take a slightly different approach today, even perhaps bordering on anti-inspirational. But there’s a good reason for this, which I’ll discuss below.

No Longer Keeping Up With The Joneses

I used to be guilty of trying to “keep up with the Joneses”, which is an idiom that refers to one comparing themselves to their neighbors, co-workers, or other peers in a way that uses these other people as a benchmark for success in life.

This is what led me to being in debt, unhappy, and working far too many hours in the first place. It was only after realizing that this benchmark only existed in my head that I was able to free myself of unreasonable, unrealistic, and irrelevant demands I was placing on myself – demands that led to more stuff, but less time to enjoy life. Nobody cares what kind of car I drive. Nobody cares what kind of apartment I live in. Nobody cares what size my TV is. And guess what? When I say nobody, I’m including me.

Fortunately, I was able to free myself from the need to impress people, including myself. For some strange reason I can’t really place right now, I worked for years at a job I didn’t desire to buy a bunch of stuff I didn’t need to impress people I didn’t care about. But no more. I now chase freedom rather than stuff; independence rather than bragging rights; happiness rather than a facade of happiness; time rather than money. However, it’s because money buys time that I’ve been such an aggressive saver and investor over the last five years.

But I have noticed as the community has grown that a new benchmark has potentially appeared.

Are We Chasing A Different Neighbor?

I’m incredibly grateful that Dividend Mantra has grown along with my own progress toward financial independence. And I say that because I’m now able to reach a greater audience than ever before. It’s not every day that someone is in a position to change the world for the better, even in a very small way. But with that greater reach comes greater responsibility. And I take that seriously.

On that note, I’ve received numerous emails and comments over the years that, jokingly or not, refer to individuals’ lack of personal financial success relative to my own. I can’t tell you how many conversations I’ve had with people that are decades older than me with half the assets. While that’s not a fantastic situation to be in, it’s also not all that uncommon based on the research.

But this is something I’ve been meaning to address for years now and just haven’t had the chance: My portfolio, dividend income, or position in life shouldn’t be anyone else’s benchmark. And this goes the same for everyone else. Just because Blogger X or Friend Y has $ABC in their brokerage account doesn’t mean you should as well. Don’t replace your neighbor with me – or anyone else. Furthermore, don’t replace the desire for stuff for the desire to have a larger portfolio balance and/or more dividend income. Chasing after more money rather than more stuff isn’t necessarily more healthy.

The journey to financial independence isn’t about accumulating the most money. It’s about attaining happiness. It just so happens that a good chunk of cash goes a long way towards that end because you can’t just pay bills with a smile.

You Should Be Your Own Benchmark

The only benchmark you should use for measuring your own success in life is you. Look, we’re not all the same age. We don’t make the same amount of money. We don’t live in the same city or state. Some of us have children, some don’t. Furthermore, not all of us have the same goals or vision of what financial independence is.

I can tell you that I’m aiming for $18,000 in dividend income as my long-term goal. I feel that I can be reasonably independent on that kind of passive income. For some people, that’s way too much money. For others, it wouldn’t even cover the mortgage.

Now, while I’ve always espoused the benefits of frugality, even the word “frugal” means something different to everyone.

As such, comparing your situation to my own – or anyone else’s – probably doesn’t make a lot of sense. In fact, it may even be harmful to do so, as one may feel inadequate for really no good reason at all.

Much like I don’t compare my portfolio to the S&P 500 index, I don’t compare my portfolio to anyone else’s. I don’t compare my dividend income to anyone else’s. Instead, I set realistic short-term and long-term goals. I know that there’s a me in the future that’s already financially independent, so I simply set annual goals to keep me on track for that eventuality.

Now, I like to call financial independence an eventuality because I believe in myself 100%. I have no doubt about my ability to do what’s necessary to succeed in life. However, I don’t base that belief on where I am relative to others. I base that belief on knowing myself and comparing what I’ve accomplished to what I know I’m capable of accomplishing. I’m pleased with my success thus far because not only am I more than on track for my long-term passive dividend income goal, but I also know that I’m giving everything I’ve got. I’ll never get upset with giving my all to something and failing. I’d only be upset with myself when I know I could have done more.

Thus, I think your benchmark should be based on where you are relative to where you want to be and what you know you’re capable of. Giving something your all and getting as far as you possibly can could never be thought of as a failure, no matter what others may or may not have relative to you. Your situation should only be relative and compared to the situation that the best version of you could produce. That’s it.

Financial Independence Isn’t A Race

Moreover, we’re not on a clock here. We all probably wish we could have started earlier. I know with a fair amount of certainty that had I never blown an inheritance I received at 21 years old, I’d already be financially independent. But I don’t dwell on past mistakes. I learn as much as I can from them so as not to repeat them, but every mistake I’ve ever made has made me into the me I am today. Such is life. Moreover, it was having a degree of money and freedom – and seeing it vanish – that further motivated me to get to where I am today. And you can bet I won’t make the same mistake twice.

But just like life is a journey, so is financial independence. It shouldn’t be thought of as something you look to conquer and get through as fast as possible. I’ve largely enjoyed the journey all the way through, and I continue to enjoy it to this day. To think that you have to get somewhere as fast as possible means you might end up fast-forwarding right through your life.

Maybe you have less than I do. Or maybe you have more. It doesn’t really matter. Set realistic and reasonable goals for financial independence based on your means and needs, and then aim to be as happy and successful every single day. Don’t sacrifice enjoyment today for what you think will be enjoyment down the road. You’re still you, regardless of whether you’re financially independent or not.

Conclusion

I’ve been meaning to write this article for a long time now, but there’s always been a different idea that has come up first. I just fear that some might supplant their desire to keep up with the Joneses and their income, lifestyle, and stuff with trying to keep up with the Joneses and their portfolio value, dividend income, and degree of financial independence. Neither is really healthy, as you’re trying to reach for some ideal or benchmark that might not be relevant to who you are and what you want out of life.

Be you. Set goals based on you and what you really want out of life. Your best should be your benchmark. If you’re giving it your all, your results will very likely reflect that. Those results may or may not exceed others, but that doesn’t really matter.

Don’t let the journey to financial independence consume you. Enjoy the ride, which will help prepare you for enjoying the rewards as well.

Finally, I’m not saying that you shouldn’t be aggressive. I try to inspire everyone out there to give the journey to financial independence – and everything in life – their all. But your all is really all you can give. If someone has more means than you do, that’s great. But don’t let that bum you out. Give this 100% every single day and I can assure you that you’ll go further than you ever thought you could.

What do you think? Are you still trying to keep up with the Joneses? 

Thanks for reading.

Photo Credit: iosphere/FreeDigitalPhotos.net

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142 Comments

  1. I think the core of the issue is that humans are innately social animals, and the vast majority of people cannot be truly independent-minded. They must have comparisons, whether that is with people in the larger herd of society at large, or in the smaller herd of the financial independence or dividend investing sub-communities (or whatever communities they may want to pick).

    People don’t like being lonely.

  2. Dividend Mantra,

    I hear people everyday say things as if they are trying to keep up with the Joneses. These people have to have the best smart phone, newest model of big screen TV, newer car, bigger house etc. Most of these people are people who “look rich but going no where”.

    One thing for sure, at least for me, is that I find the most upbeat people are the ones who are working towards financial independence. They see their life getting less stressful as their passive income grows whether from stocks, option premiums, real estate or a side hustle. If an individual works at a job, they are more comfortable as their passive income increases as we all know, their is no such thing as job security anymore.

    I am certainly less stress now then I was before I started on my journey a few years ago. I make a choice with every dollar comes into my pocket, to first save and/or invest before I allocate money to paying rent, food etc.

  3. Jason,
    Indeed, we love to compare ourselves to others. The old saying of “If you compare yourself with others, you may become vain and bitter; for always there will be greater and lesser persons than yourself.” is pretty accurate I think.

    When it comes to our financial situation, I try to avoid comparisons and just compete with myself. Too often I have looked with envy at people that seem so much more successful than my wife and I. They have huge houses, nice cars and cool toys. At some point, many of them have come to comment that they can’t retire because they have so many bills to pay. Well, I guess I just wasted my envy :-).

    As you said, everyone’s situation is different and our first goal should be to realize our own happiness. If you are happy, you are happy and another person’s situation shouldn’t have any bearing on that.

    Nicely written article!

    Steve

  4. Great article and I enjoyed reading your take on this topic… A lot of this resonates with me, as someone else who’s on the journey to early FI. It is easy to get consumed with wealth building, as it can be pretty addicting stuff! Tracking the net worth/portfolio growth is one thing, but I also think it’s detrimental when it becomes an addiction. Like you said, the chase should be to attain happiness in life, not trying to keep up or surpass anyone else.

    I’ve had meet ups with many investors through the years — many way more successful (and younger) than me. I guess it’s human nature to want to compare, but I’ve learned to look passed that. Rather, I instead ask myself, what can I learn from this individual? What strategies did they employ that got them to where they are? Even better is if I can becomes friends with them as it only expands my network to include more like-minded, and highly successful individuals. Rather than compete, I look at these folks as potential business/investment partners… I even partnered up with one particular reader and we closed two real estate deals last year.

    Helping each other succeed is way more fun than benchmarking with one another, as I’m sure you’ll agree! 🙂

  5. This is certainly some food for thought, and sadly true for some. When I look around the DG community, and the greater FIRE community as well, with all the openness and sharing that is abound, comparisons, both positive and negative, seem almost inevitable. The challenge is for each person, as you’ve stated, to listen to their own voice or to march to the beat of their own drummer. It is for this reason that I’m comfortable in my own skin, blog, and investments. Without that comfort or confidence, without a doubt I’d feel differently towards those around me who are at different points on their journey. Because lost in all of this is that while we are all seeking freedom, that freedom is completely different for each of us.

    I somewhat regularly revisit a post I wrote last year about the fact that it doesn’t matter how fast or in what means you accomplish financial independence, but that you do accomplish it and everyone should be able to rejoice in that victory. An extended quote from that post:

    “Being free and able to do as you wish, when you wish, is a universal and unparalleled level of financial freedom. There never has to be a battle about who did it faster or better than anyone else, or whether they’ve “made it” and actually retired. In fact, why should anyone care or limit others based on how one word gets defined? Instead, celebrate how awesome everyone is for working for the same goal…

    … So to everyone out there, let down your guard, invest in the path that best fits your desire, and pursue your freedom with wild abandon. Freedom doesn’t have to be defined by what you do once you’ve made it, but instead can be defined by the level of character and perseverance shown in the pursuit of that freedom.”

    Let’s all make sure we’re developing more than our bank accounts.

    Thanks for the great post Jason; extremely well done.

  6. innerscorecard,

    “People don’t like being lonely.”

    I’d almost reword that to: “People don’t like to think independently”.

    And that’s the real shame in it. Groupthink can be really dangerous because it can cause inadequacy issues, where there really shouldn’t be any. In the end, it’s all about being true to yourself and your journey. What others are doing or not doing really shouldn’t matter to you. 🙂

    Cheers!

  7. IP,

    I agree. I think it’s not just people aiming for financial independence that are upbeat and positive. It’s probably people that are chasing their dreams in general that feel great about life and what they’re doing. I’m not technically financially independent yet, but I couldn’t really imagine being any happier than I am right now. And that’s because I’m really doing what I want to do. Financial independence gives you that freedom and choice, which is why I continue to aggressively chase after it. However, not having it doesn’t mean you shouldn’t be as happy as possible. 🙂

    Thanks for dropping by!

    Best regards.

  8. FI Fighter,

    I think you’re a great case study for what I’m talking about here. Not only is it east getting wrapped up in the chase for “one more property”, but your experience shows the stress that the chase can cause. I certainly could have stayed in the auto industry and I’d probably be making $70k this year, but what’s the point? Would more money have made me happier? Would the bigger paycheck have made me more of a man? The chase for more is really unhealthy, because it’s unlikely that the chase will ever end. Someone who’s constantly comparing themselves and wanting more will probably not be very happy when they finally are financially independent. It’ll just be another search for more of something else, where they can compare themselves to someone else and “win”. Unfortunately, there’s nothing to win. Life isn’t a game where there’s a scoreboard.

    I’m definitely much more interested in helping others than trying to “beat” them, which is why I write and share everything. 🙂

    Thanks for sharing that!

    Best wishes.

  9. W2R,

    Thanks so much for the compliments. This article has been in my head for some time now, so it was about time to write it this afternoon. 🙂

    I think that one has to be an independent thinker and somewhat of an individual to even opt out of the system and march toward financial independence. Unfortunately, some individuals are perhaps more competitive than others. I’ve seen this here and there in the community. I’m not trying to change anyone’s behavior, but rather just pointing out that it’s not necessarily helpful to replace the object of your desire from a big house to a big portfolio. A big portfolio is wonderful in that it can buy freedom, but stashing money for money’s sake will do very little for you. You can’t eat it, breathe it, or live in it. Money has utility, which is something I always keep in mind. And I damn sure plan to take advantage of that utility sooner rather than later. 🙂

    You’re absolutely right in that we have to march to the beat of our own drummers. I would simply caution comparing the speed of your march to the guy next to you, as his path will likely be far different than your own.

    Appreciate the support. Thanks for adding the great thoughts there!

    Best regards.

  10. Hi DM

    Comparing one against the other is not necessarily a bad thing, if one can take the issue matters objectively and independently. For example, when I compare myself against situation for the poor in the middle east, I really look up and thank for what I have and where I belong. The same goes for people who looks up to you for inspiration.

    I think the bottomline of what you are trying to say is don’t keep up with the joneses the wrong way. Many times it’s the intention that makes this whole paradigm changes wrong rather than being objectively measured as something we can see as an inspiration.

    Good post.

  11. Sometimes benchmarks can hurt you, but sometimes they can help, too, because they show you want is possible and thus help you direct your attention.

    For example, several personal finance bloggers I read published summaries of their spending from 2014. I happily compared myself to them. Some had lower spending in virtually every category. Since low spending is not my only priority, I’m okay with that. But this time I did take a closer look at my utilities. I have now decided to get rid of the landline and switch to a new cell phone. I feel quite sure that these actions will make my life better (and not just cheaper). But the thing that got me to pay attention was comparing myself to others. I had already called my landline phone company to minimize my costs and they are still stratospheric ($53/month). I didn’t know it could be cheaper (apparently most people pay $30 or less–or zero). And I’m just slow to realize that nowadays I’m mostly called by telemarketers and people who want to tell me how to vote. And I mostly communicate via e-mail, not phone. So it made me realize that landlines, which were a great idea for me when I first got my own landline in the 1980s, is no longer a great idea for me.

    I do agree that it’s good to ignore benchmarks that you don’t care about like, in your case, TV size.

    And I agree that when you are observing benchmarks that you do care about, don’t forget that you also care about other things. Sure, I’d like to have some more fancy things, but I like being retired more. And I’d like to reduce my spending on utilities, but not enough to let the house get below 60 degrees.

  12. Jason

    You don’t have a child in high school and applying to college. I do and I am a high school teacher, so I see it all. This referencing to the “Jones” is something that behavioral scientists have been looking at recently and the marketing gurus have known for decades. Comparing money, grades, and college names runs rampant with the parents of budding young Collegiates. It is a crazy thing to watch, parents will mortgage their houses to send kids to big name schools. All for bragging rights to best others. As we are coming into the time of year that kids are hearing from colleges, the stress parents and kids are having is tremendous. It is really crazy and reaches the point of irrational feelings and stress for everyone involved. Such fear is aroused that it is felt the college kids go to will determine their path to a happy a fruitful life. Such a crazy notion!

    What you are saying is so true and takes on many different forms, money is just one form. Folks need to ultimately look within themselves to make decisions in life. This is when a level of happiness can be found.

  13. B,

    Right. The “if one can take the issue matters objectively and independently” is a big but. Human nature is what it is, and so people like to compare themselves to one another in a competitive way, which is why our society is the way it is. However, this post was really prompted by the comparisons going on within this community, which, I believe, is more harmful than good. But that’s just my opinion.

    If I could list the portfolio and the dividend income in some other currency, like “time units”, I would. The money just buys freedom and happiness. So comparing your portfolio size or dividend income isn’t really all that objectively beneficial because you should be comparing happiness levels. And that’s, unfortunately, subjective.

    I did come across a documentary a while back on happiness. And they interviewed people in India on their happiness levels. And the people they chose to interview (or show) for the documentary over there were fairly happy, overall. Maybe when your spectrum of possibilities or your benchmarks are much more reasonable, it’s easier to be content. Something to ponder a bit.

    Thanks for stopping by!

    Best regards.

  14. Debbie M,

    I agree in that looking at others’ results can be helpful in knowing the absolute possibilities across the spectrum. Otherwise, we would have nothing to read and nothing to motivate us to reach higher. We have to know the mountain is there and that it can be climbed in order to grab our gear and set out for the peak.

    But I also think we’re coming from different perspectives. I’m saying your benchmark should be you and you alone. And if you’re going to compare anything at all, it should be happiness. Unfortunately, happiness isn’t something that can be really measured and quantified on a blog, so we resort to using dollar signs. Those dollars can buy happiness in the form of basic needs and, eventually, freedom. But, really, we should be comparing ourselves to our best possible output. Knowing that, for instance, Pete from MMM was able to retire at 30 is really great in the sense that you know what’s possible, but comparing my results to his does me no good…and could potentially be harmful. I only compare myself to what I know I can do. And I find the most possible value in that. Just my take on it. 🙂

    Cheers!

  15. Brad,

    “Folks need to ultimately look within themselves to make decisions in life. This is when a level of happiness can be found.”

    Couldn’t agree more. I should have just wrote that and have been done with it. Could have saved 1,700 words and three hours. 🙂

    I hear you there on the comparisons. They’ll never end if that’s the perspective you see life through. If you’re marching toward financial independence using comparisons along the way and not happy until you exceed others, you’ll likely continue that for the rest of your life. Once you reach financial independence, it’ll then be something like comparing passports…or tools in the garage. Always something. But happiness comes from within, not without. It’s a shame that more people don’t see it that way.

    There’s always that “next thing” that will make someone happy. “Once I get here” or “Once my portfolio value hits $X” or “Once I have a little more time”. Well, the time is now.

    Best wishes!

  16. Interesting distinction, I agree. The fact is that thinking independently really is a lonely pursuit. It really is a lot easier to follow the herd. Easier in the short run, that is. But you have to do things differently than others if you want to have a result different than others. So this is a necessary burden if you don’t want to work until 65.

    You know, Disney’s Pinocchio really did have it right, when talking about how hard it is to take the straight and narrow path.

  17. It’s really hard to go against the educational industry. I’ve also seen how powerful it is. I know, as I myself have attended very elite institutions. I bought into all that crap. And then I somehow woke up.

  18. Great post Mr.Mantra.
    I agree with you bud. I feel when we read other people’s stories and income updates, its not to compare ourselves to them but taking it in as inspiration and motivation. Everyone’s lives are different. We’re all dealt with different cards in life and so our circumstances and situations are all different. However, if a person truly seeks out financial independence, only that person knows their “NUMBER” to be financially Free forever to cover their needs and wants.
    I myself am thankful for this online community. I have learned so much from all the blogs out there. The more you learn = the more you earn.
    18000 in Dividends for you Jason is the magic number. That’s awesome. I know you’ll hit it as I know you have succeeded already. It’s just a matter of time.
    For myself, I grew up really poor and I had a loser ass dad that cared about everyone else but his family. I remember telling myself when I was young that ” One day, when I have my own family, I will try my best to make them proud. ” So … Here we are and I’m gonna full fill that promise.

    Thank you Jason. You keep doing what you’re doing. I’m glad you got this article out. Let’s continue to help each other along this journey to be financially independent. Life’s great. Cheers.

  19. Great article, Jason!

    “Don’t sacrifice enjoyment today for what you think will be enjoyment down the road.”

    So many people do just this, I believe. And often, they run out of time and never experience the enjoyment they were seeking.

    On the other hand, there are people who go into debt “to enjoy life today” — in a play now pay later kind-of way.

    I guess the point is that finding enjoyment in what you do today is crucial, whether it is writing, working, jogging, eating, vacationing, or partying…

  20. I think this statement sums it all up for me, “Chasing after more money rather than more stuff isn’t necessarily more healthy.” I have been getting that same sense over the last few months as I have been reading more blog posts about individuals achieving a 50% savings rate and 60% and even 70%. Chasing after these savings equates to chasing money which doesn’t always equate to happiness. I feel that people tend to mimic stock buys as well and try and keep up with the Joneses in that manner as well. The bottom line is that we are our own benchmark and when we don;t compare ourselves to others we can truly feel a sense of contentment. Thanks for sharing.

  21. I totally agree

    Everyone has its own path, with it’s own goals and particularities, so benchmark is comparing different portfolios, diferent lives

    You should be comfortable with your own way, and that’s all, we’re not funds managers who have to impress our client, we’re our own clients.

    Regards,

  22. Chasing high savings rates is not necessarily about chasing more money, if you’re aiming for financial freedom in your life then you need to aim to get there in the way that suits you. Jason wanted to accelerate his savings because he has a clear goal to reach.For some people, they reach for achieving a high savings rate, because they can. For me, that’s not an option. I’m building up a small stream of dividend income because I have a miniscule income with which to invest at present. But like Jason, my goal is that our family has more freedom and will not always be tied to having to work 5 days a week just to survive. I want us to have the freedom AND the choice to be able to work how, when, and in which industry we want. That is my work freedom goal and the reason I’ve been building up passive income streams for several years, even though my savings rate may be fluctuating wildly.

    We could all take a lesson from Trevor at DividendLife.com, who actually has a ‘work freedom day’ on his website. This shows which day of the year he could stop working and live off the dividend income until December 31st. This focusses on the end goal, financial freedom for your everyday life, rather than on the amount of money. I think it’s a really cool way of keeping your mind on the goal of freedom, rather than looking at how much money is in your account.

  23. A great take on the ‘Keeping up with the Jones’. I’ll admit to being guilty of this type myself. While I’ll totally ignore the flashy cars and expensive holidays for others.. I get envious when hearing about people’s Financial Independence pots. However luckily so many people now are running blogs to tell their stories that you can go back through them and see the hard work and time it’s taken to get to that stage and use it as inspiration myself.

    I’m a big fan of benchmarking things. The thing to remember though is making sure its a comparable benchmark. For instance there’s no point even trying to compare a US blogger’s food expenses to my own as it’s soo much mroe expensive in the UK… and the other way round for healthcare expenses where we pay nothing.

    Taken in relative terms, benchmarking can be useful.. you just have to apply it carefully.

  24. Man, what a fantastic article Jason.

    I read the headline and part of me thought ‘hmm, I think I’ve read about this concept a few times already’, but what an important and different perspective on it. I must admit, I’ve often had pangs of inadequacy when I see some of the super savings rates and tremendous dividend income generated by some bloggers, but fortunately it doesn’t last long and I tend to come back to my own goals and values, and what I can do to progress towards them.

    It’s not an easy thing to avoid comparing yourself to others, whether it’s buying flashy things or having a huge portfolio with lots of passive income, but you’ve provided a wonderful perspective on this that I’m sure will inspire others to look ‘within’ rather than at others, online or offline.

    Cheers,

    Jason

  25. Hi Jason,

    we all have the danger to compare and compete each other. Its all in us and I can´t deny that I´m sometimes doing this as well. When I see that some people are saving 70% of their income, I think to myself: Man, with that rate I would be FI in only five years. On the other side I like to live and have some fun, so I save probably 30 – 40% of my income. I know, it lasts much longer than it could be. I even have no goals for the year to reach because I don´t know what will happen every year. And I´m not as frugal as some of the guys who are blogging.

    I have some friends who are doing competition in spending a lot of money to buy themselved or their familiy nice things. They are earning much more money but they really have to work hard for it. On the other side they spend nearly everything they earn and so they have to do the job the next decades to live their life at it is. On the other side I don´t see how it is possible to get 100.000 € income per year with dividend stocks. As you can see you are doing quite well and may be if you are lucky you will get 8.000 $ dividends this year. You can increase this amount at the moment every year with 2 – 3000 $ and even if you spend all the dividend income in new shares it takes it time to reach $20.000. I´m not sure if FI works for a guy who want to spend $10.000 per month. OK, if you get older you don´t need all the fancy things any more, I doubt that it is useful to buy a nice car at the age of 80 or a big house -> what will you do with all the space? But with 80 it is OK not to think about money any more and for this $1.500/month today is quite OK.

    I think the best is a balance of saving and living. This means for me. that it is OK to have a month to save only 20% if you go to holiday or doing something really nice with your family or friends. On the other hand I have some months where I can really save a good amount of money and I like this, too.

    Competing each other is a motivation for some people to reach a goal faster. It´s not too bad to do that, if this is your wish and to get your goal some day. But you are right: The balance is what is very important – not the money you might own is doing really nothing for your life. But it´s up to yourself how you are handling this.

  26. Id like to thank you DM, you and some others have inspired me to really reign in on my investing career, ive also started a blog and a savings challenge and hope through writing it keeps me held accountable to myself. Its barely up and running (started last night), but check me out http://www.dividendyoungster.com

  27. This is a wonderful reminder to me! While it’s easy for me not to keep up with the materialistic, traditional Joneses, it’s a whole other story for me with the march to FI. I think your point is well made–jealousy and envy in any facet of life are poisonous.

    Comparing ourselves to others can serve to motivate us, which is a good thing, but when it stops being motivation and starts being envy, it’s no longer a fulfilling endeavor. As I get older, I find myself caring less and less about what others think of me or what others have, and it’s a freeing way to live! After all, who does care! Thanks for this thought-provoking piece.

  28. I halfheartedly do this but use it as more of a motivational tool rather than instilling envy/jealousy. It just motivates me to try even harder because I know there’s still leaks in my budget and I might not do the best job at investing so any extra motivation is always helpful. Whenever I see some of the financial milestones others hit I have to admit it crosses my mind that “I sure would love to be there already”. Who wouldn’t like an extra $500 or $1,000 per year in passive income? But I know it’s a process because some of us have to just focus their savings whereas others have to completely change their spending habits; some started earlier than I did, others later; some make more money than I do and some don’t… Everyone’s journey is unique to them and their situation is relatable to others but it’s never a carbon copy. The key is whether you’re better off than you were yesterday, a week ago, a month ago, a year ago, not whether you’re better than anyone else.

  29. I couldn’t agree more that you should be your how benchmark. I think it’s part of the maturation process, but the older I get, the less I care about what other people think. My mom gave me good advice when she said “you don’t have to do anything you don’t want to do…” and I take that to heart today. As long as it makes you happy and you aren’t hurting others in the process, that should be your goal and benchmark, not Mr. and Mrs. Jones.

  30. I read how you set SMART goals article awhile back, and I thought to myself, this guy’s success is no coincidence. I continue to come back because you are inspiration, and your writing is relevant and educational. If I don’t learn anything from your post it’s alright because you offered it for free.
    I found your method is effective, buying a couple share to begin with, then average up or down depend on your funding and situation, some months, I only see a couple dollars on dividend on a stock, but collectively, you earned >$600 because you diversify your portfolio. I learn from you, but I don’t need to be exactly like you, everybody is different.

    I choose to invest in bond, house, land, rentals, business, your career path takes you to blogging and writings and it’s all great.

    Keep on writing, will be looking forward to more. Thank you for continue writing and sharing.

  31. Joneses? Who are they and why didn’t anyone tell me I needed to be keeping up with them? 🙂

    Another great article DM. I think people tend to fall into the trap you are describing because they fail to construct an adequate philosophy of life for themselves. The comparison, whether it be with material goods or financial metrics, is merely an attempt to locate our position on the map of life when we forget that we could be creating our own maps. However, this is a far more difficult undertaking, requiring a great deal of inner discovery that some find best to avoid. Coming to terms with oneself is the most difficult thing we will face in this lifetime. It’s far easier to navigate someone else’s map, but the rewards are far less fulfilling.

  32. DM,

    Very good write up there. To quote you:

    “For some strange reason I can’t really place right now, I worked for years at a job I didn’t desire to buy a bunch of stuff I didn’t need to impress people I didn’t care about.”

    It feels like a line out of Fight Club, and its one I have always agreed with. I think I have the smallest TV amongst my friends, but it works well and fine all the same. There is no need to have to be #1 or even enter a race for something no one truly wants, whether its luxuries or experiences.

    I also agree to not replace those around us with those online – around us. I view it rather as a moral support, its good to know I am not the only one who sees the best approach to investing as DGI and that I am not the only one who does not want to work forever.

    Thanks for writing,
    Gremlin

  33. DH,

    Absolutely. It’s all about finding your number and then sticking with that number. I know you discussed your number a little while back. We have very different numbers which reflect very different goals/lifestyles, so comparing ourselves to one another would be pointless.

    That said, there’s nothing wrong with being inspired from someone else’s success. And I certainly hope to inspire people every single day. But being inspired by someone and using that person’s situation as some kind of benchmark are very different.

    Appreciate all the support. You’re doing great over there. I’m quite confident you’ll get everything you’re going after! 🙂

    Best wishes.

  34. FerdiS,

    Thanks! 🙂

    Yeah, it’s really all about being happy. In my view, the whole point of financial independence is to own your own time. That gives you the opportunity to pursue activities that bring you the most joy in your life. Some people may view financial independence as some kind of race or competition for who can have the most money, but that’s just never a game I’d wish to play. And I’d bet those that look at it that way will never be fulfilled.

    Thanks for stopping by!

    Cheers.

  35. DivHut,

    Well, I certainly encourage high savings rates. I think it’s fantastic if one can save 60% or 70% of their net income. And I’ve certainly tried my best to inspire others to save as much as possible through my own budget reports. However, there’s a difference between being inspired by someone’s saving prowess and using that number as some kind of benchmark for your own savings. What someone with two kids and a stay-at-home wife can save and what someone who lives at home and pays no rent can save will not only probably be very different, but also not relevant to one another.

    The key is to set SMART goals relative and meaningful to your own situation and use your progress against those goals as your benchmark. Looking at everyone else and comparing yourself will probably not really add a lot of value to what you’re trying to accomplish, and may actually bum you out for no good reason. There’s always going to be someone who’s ahead of you. But remembering that life (and financial independence) isn’t a race means you needn’t worry about it.

    Take care!

  36. M,

    Great point there. The savings rate (and the money/passive income you have) is all about freedom. As I mentioned in another comment, I would just display my results in “time units” or something else if I thought it would be accurate and get the point across. Unfortunately, our world doesn’t run on such units; it runs on dollars. And since money buys time, I’m aggressively saving and investing so as to buy myself as much time as possible.

    Thanks for adding that. I’ve done my best over the years to explain that the saving and investing is to buy time, not to hoard money.

    Cheers!

  37. ERG,

    You’re definitely not alone there. I’ve had many discussions over the years where readers compare their results to my own, even if their results and mine have nothing to do with one another. I think it’s just human nature.

    But I hope you found some value in the post. 🙂

    Cheers!

  38. Jason,

    ” I’m sure will inspire others to look ‘within’ rather than at others, online or offline.”

    That’s exactly what I was trying to get across. 🙂

    I know what you mean there about feeling inadequate from time to time. I’ve certainly felt that way here and there when I first started as well. But as I started to save and invest more, I started to wonder why I would feel that way. Why would someone else’s portfolio value or degree of financial independence have any bearing on my own happiness? And then I realized that I was simply replacing the chasing of a nice place or nice car with a bigger portfolio balance. It’s really the same thing if it’s just the chase you’re after. So I stopped that years ago. I now applaud others that are both ahead of me and behind me, but I don’t compare my results to their own. I may jokingly mention that I need to “catch up” as a tongue-in-cheek comment, but that’s really the extent of it for me. I only worry about meeting the Jason of 2022 who’s already financially independent, and doing everything I can today to get there while still enjoying the ride.

    Thanks for dropping by!

    Best regards.

  39. Good read as always. I think it’s useful to keep reminding ourselves that savings result from the combination of income and outgo, and they’re both important. I’m in my mid-fifties and I’ve never driven a car with power windows or power locks, and I’ve never been envious of friends with expensive cars. When I see a car that costs twice (or more) what mine costs, my first thought is: Wow! Just think of the investments that poor guy missed out on!

  40. olli0816,

    Right. It’s all about finding a savings rate that works for you and your goals. What I’m saving or what anyone else is saving really has no bearing on you and your life.

    Those that spend $10,000 per month will probably never be financially independent. And that’s okay if they don’t want to be financially independent and are okay working for most of their lives. I’ve always said that FI isn’t for everyone. I think there are benefits in it even for those that want to continue working, but that’s neither here nor there.

    But it’s really about being happy. If you’re happy with taking a slower approach to FI and only saving 20%, then that’s great. I’m certainly taking a slower approach these days as I’m no longer able to save ~60% of my net income. But I’m very, very happy. Comparing the Jason of 2015 that’s saving 40% with the Jason of 2012 or 2013 who was able to save near 60% is like comparing apples to oranges. I’m glad that the me of a few years ago put in the hard work. And I’m glad that the me of today is writing for a living. And I hope to be glad that the me of ten years from now is financially independent and…doing whatever he’s doing. It’s about being okay and happy with all phases of your life.

    Best wishes!

  41. DivHut, while I would agree there is at times a herd mentality within even the DG community, we do need to be careful about labeling something as cause and effect, or following the crowd, when it reality it is more coincidence. For example, I’ve seen you comment on sites and mentioned that quite a few people were buying JNJ, and before that, you’ve made similar remarks about other buys as well.

    The question really is, did a bunch of people follow each other and buy JNJ or did they all happen to jump on board when it dipped below $100 per share. While I can’t speak for anyone else who picked up shares of JNJ, I know for me, JNJ is a permanent watchlist item. After kicking myself repeatedly for not getting some in October when it dropped down to the mid-90s, I made sure that it wouldn’t be missed again. Same with the big drop in oil prices over the last few months. Were people following the herd when picking up XOM or CVX as prices dropped 10% below their cost basis, or were they just averaging down their holdings?

    Again, I agree that the herd mentality does exist, but one has to be careful when labeling actions that others are taking. The last thing I’d ever want to be in that case is wrong.

  42. Ben,

    Awesome. Glad to have another member of the community. Hope you find as much success and joy with blogging your way toward FI as I have. 🙂

    Best of luck with the savings challenge as well. I used to be able to save near or above 60% of my net income fairly regularly, but these days I’m not making as much money. However, the key should be to focus on happiness, rather than a specific number. I’m sure you’ll find your balance as time goes on.

    Cheers!

  43. Mrs. FW,

    I hear you. I was the same exact way for the first couple of years with this. And then I realized that I was simply supplanting the house/car/wardrobe/electronics collection/lifestyle with the portfolio value/savings rate/passive income/degree of financial independence. One is not necessarily better than the other if it just creates envy in your life. You’ll never be “enough” and you’ll never have “enough” if it’s always a race with a score attached to it. Just my take on it.

    I definitely recommend to be inspired and motivated by others’ success. No doubt about that. And I hope to continue inspiring people through my own actions. But there’s a difference between being motivated or inspired by someone and using that person’s success as some kind of benchmark for your own life. For instance, I’m always inspired by your savings reports, but I also know that your income and spending is not really meaningful relative to my own. So it’s really a fine line one has to walk. Be motivated, but benchmark yourself against your best.

    Thanks for dropping by!

    Best wishes.

  44. Nice article DM. Comparing with the peers is one of the most common problem most people have. Everyone’s situation is different and any comparison is not an apples to apples comparison and would only cause more problems.

  45. JC,

    “I sure would love to be there already”

    Right. That’s the race I was mentioning in the post. I think a lot of us are guilty of that – trying to race one another, or trying to catch up to where someone else is at, even if their milestones or lives are really very different. For instance, you have a wife and a child now. I don’t. You own a house. I don’t. So it’s important to be mindful of our differences even as we inspire each other to reach our individual aspirations.

    It’s wonderful to be motivated or inspired by what someone else is doing. I know I was certainly inspired by Pete over at MMM when I first started (and still am today). But his situation and mine are very different from one another. I think you’ll find that lives are like snowflakes, where no one life is exactly the same as one another. As such, being inspired by someone and using their success as some kind of yard stick are very different concepts.

    Thanks for stopping by. Hope all is well with Lucas!

    Best wishes.

  46. DM,

    Very intense and very personal, thank you for writing this. You’re right – you should be giving it your best to achieve your personal goals and not to chase others account portfolios or other things that they own . You should know what you want out of life and as long as you are on your plan/path to achieve those goals – then one should be motivated to achieve those items.

    It comes down to time and finding out within oneself what one really wants to do with that time – and if it’s “time” spent the way you have planned and wanted that really satisfies the passion in your heart – then one will be happy, truly happy.

    Thank you for transitioning to a perspective Mantra, we, the readers, appreciate it.

    Very best,

    -Lanny

  47. FF,

    I definitely agree. It’s part of maturing and getting older. I’ve noticed myself caring less and less about what other people think to the point now to where I don’t care at all. Maybe it’s also a thickening of the skin that’s somewhat of a byproduct of blogging for years.

    But I just want to be happy. And while I certainly aim to inspire others to march to the beat of their own drummer, I also keep in mind that our drummers may drum a very different beat. And that’s okay. If you’re happy and I’m happy, then that’s wonderful. That’s really what it’s all about. 🙂

    Take care!

  48. Vivianne,

    Appreciate the support and kind words there. 🙂

    There’s a lot of ways to skin a cat, right? And certainly the same is true for not only financial independence, but life in general. What makes me happy will almost certainly be very different from what makes you happy. As such, it’s important to keep in mind that while I aim to inspire others through my writing and actions, the blog and the journey I’m documenting is not meant as some kind of exact road map that one should follow to the T.

    If financial independence is a mountain, there’s countless ways to climb to the top. The key is to find a path that works best for you and makes you happiest, not finding the quickest way up there so you can beat others. You may find yourself racing to the top and then not knowing what to do once you get there. That would be an awful situation to be in.

    Best wishes!

  49. You hit the nail on the head on this one, DM. The moment I stopped caring what I owned or drove, is the moment I realized that no one else really cared either. I used to have a brand new car to make my 7 mile (each way) drive to work. I decided I just didn’t need it. What I NEEDED was something practical for where I live (northeast). So, now I drive a 12 year old Subaru. And my friends sure were happy during the beginning of a blizzard Saturday night that I had said Subaru and it’s AWD awesomeness. It allowed us all to go out and celebrate a friend’s bday together…relatively more safely than my old “new” car would have done.

  50. Stoic,

    Haha. You’ve been oblivious to the Joneses? I’m jealous of you. Wait a minute… Wasn’t I just writing about this? 🙂

    Completely agree with what you’re saying. Building a construct of your own life based on a vision of what you want and living within that construct is much more difficult than copying what someone else (or everyone else) is doing. But, as you mention, the rewards are far less fulfilling. In fact, I would even argue that the rewards are imaginary.

    I think it comes down to society and human nature. Most people are followers. And that’s why “jobs” are so prevalent where most people are “workers” following instructions. It takes a lot of independent thinking to opt out of that system and attain financial independence. But I think there’s a lot more to it than that. You can simply supplant one system for another, following someone else. So the journey to FI (and FI itself) is very much a new beginning, rather than an ending. It’s a constant discovery process. Of course, life would be very boring if it were any other way, right?

    Thanks for adding your thoughts. We’re on the same page. 🙂

    Best regards!

  51. Gremlin,

    Ahh, Fight Club. A classic. I think all of us fighting for financial independence have a little Tyler Durden in us. 🙂

    You’re absolutely right in that the community is wonderful in terms of moral support, mutual inspiration/admiration, and guidance. And I hope that continues and grows. It’s just important to draw the line there and not use someone else as a benchmark for your own success, because this isn’t a race and we’re all different. One needs to look within themselves to discover what they want, and then go after that with all they’ve got. If you can do that, then you’re succeeding.

    Thanks for stopping by!

    Cheers.

  52. Dividend Mantra,
    Excellent post! I have a confession to make, before starting this journey there was a jelousy in me and I would ask myself why this fellow has more money than me or why are they in a better situation than I am. I reversed that thinking nowadays and I use that thinking as a tool, to motivate and to encourage myself to be a better person. As a matter of fact I am kinda open with friends and co-workers on what I am trying to achieve in life. I want to be a living example for them, I want to coach them. And I always tell them there is an online community of personal finance bloggers that will help with their finances. And I always point at dividendmantra.com first and tell them to explore the site. Another good read DM!
    FFF

  53. Jim,

    Absolutely. And not only is savings a combination of the income and expenses, but a combination that is probably unique to all of us. Thus, comparing oneself to another will be of limited value, and may actually be harmful.

    “When I see a car that costs twice (or more) what mine costs, my first thought is: Wow! Just think of the investments that poor guy missed out on!”

    I used to think the same exact way a couple of years ago. I don’t anymore. While the research has been done and it proves that the beautiful car won’t provide lasting joy, to each their own. If he’s happy in his own ignorance, then I say more power to him. It’s been said that ignorance is bliss. For much of society, that’s probably unfortunately true. I don’t mean that in a condescending way either. I just mean that we all need to find our own paths and be happy with our choices.

    Best regards.

  54. W2R,

    Agreed. I’ve noticed similar comments as well, and I don’t think they’re necessarily correct. We have to keep in mind that there are probably only 100 or so really high-quality dividend growth stocks in existence. So it shouldn’t be surprising that we all own quite a few of the same stocks.

    The same goes with savings rates. In order to achieve financial independence in 10-15 years, one has to save 50%+ of their net income. Just a fact. Shouldn’t be a race, as I said in the article, but you have to set up a timeline that works for you and your goals. And if you’re aiming to achieve freedom within a decade or so, then you’re going to have to get used to saving a good chunk of your income.

    Thanks for adding that!

    Cheers.

  55. DGJ,

    Thanks!

    I think it’s great to find inspiration in what someone else is doing. I certainly aim to inspire people via my own journey. But finding inspiration in what someone is doing is very different from using that person’s success as the benchmark for your own success. Motivation is great. Endless comparisons are not.

    Take care!

  56. Lanny,

    Right. It definitely comes down to knowing yourself and knowing what would make you happy. And I think that’s the crux of it. A lot of people probably just don’t know what they want or what will make them happy. So they rely on others for that. They see others smiling and having a good time and copy what they’re doing. And that’s really not the correct way to do it. Some people are happy with five Ferraris in the driveway. Others would be perfectly happy living in a van. One isn’t “right” and the other “wrong”. As long as they’re both happy and being true to themselves (and not hurting others), then they’re both “right”. One would only be wrong if they’re pretending to be happy.

    It’s about discovering you and what makes you happy. Financial independence is wonderful in that it’s kind of this great little life hack, allowing you to freely explore activities/hobbies/experiences without regard to making money. But owning all of your time only to realize that you haven’t actually discovered who you are and/or what makes you happy would be a poor position to be in. Going after financial independence just because other people are doing it isn’t the right way to do it. And racing others to the top is even worse.

    Do what makes you happy and stay true to yourself along the way. Don’t worry about what others think.

    Best wishes!

  57. GG,

    Escaping the material world is really difficult. And once one escapes, they feel free. I know I sure did for years (and still do). However, it’s easy to become complacent and start comparing yourself in different ways, which can be just as unfulfilling and dangerous. Just like that 12-year-old Subaru gets the job done, so can a really small portfolio. 🙂

    Cheers!

  58. DM,

    If only you could see a picture of the car in my driveway 🙂 Let’s put it this way… my parents are embarrassed to be seen in it. I, on the other hand, could care less and have cared less for many years.

    It was either 1999 or 2000 when I read Rich Dad, Poor Dad. Something in that book about rich dad having an old best up pickup in his driveway stuck with me. Here I am, 41 years old, and I’m on the second car of my life. What a beautiful, cheap piece of junk she is.

    Best,
    DWC

  59. Interesting… I do think not everyone is in compare mode when they look at blogs such as your own, but are perhaps in aspire mode. They are here to see what is possible. And that is a good thing: it motivates and it lets one know such a dream is possible.

    My own aspiration of FI comes from my earlier experience. I’ve always been a saver by nature; nothing intentional, just the way “gramma built me.” In my mid-30s, I got very very ill. Getting through it and recovering enough to return to the FT work force took about 10 years. Even though I had meager disability payments to live on for a few of those years, all the rest came from savings – living expenses and uncovered medical payments. I’m fortunate that I had those savings but they were depleted over that time. Also fortunately, I never went into credit card debt or had to declare bankruptcy, the most common “side effect” of serious illness.

    Anyway, I don’t have access to disability insurance any more (once something big happens, no way you can get coverage). And JUST IN CASE something hits me again, I want to be financially independent, and the sooner, the better. So that’s the goal I’m working towards. It won’t happen in a timeframe that would rouse the “early retirement” crowd, but I’ll get there. And when I think I’m doing just fine or even getting a little worried that it won’t happen, I look to others to see what is possible and ask myself to stretch just a little further… to aspire…

  60. DM,
    I use to try keeping up with the Jones in my early 20’s. I liked the high end clothes, TV, phone, computer, etc. Now, the only thing I care about spending money on is high end food. I prefer organic and gluten free foods even though it is a bit pricey. I liked how I could relate to your article. It seems like we have both made some serious changes in our life.

  61. “Many people would rather die than think; in fact, most do”. Group think is very very dangerous.

    As for keeping up with the Joneses – this is just a stupid way to behave. I agree with your premises that you should be happy with what you achieved. If you earn $60,000/year but hate your life, you are worse off than earning $18K/year but being happy ( especially if all you need is $18K). I know some are not happy with the $18K figure you have provided, but that’s their issue.

    I also think the worst thing investors these days do is compare their results to a benchmark. The goal of the investor is to reach their goals and objectives, and live off their nest egg. The goal of the investor is not to outperform anyone – that is a dumb goal to have. After all, if you need your portfolio to generate $20,000 in annual dividend income in 2024, you will be successful if you earn at least that in income in 2021. Whether your portfolio would have done better investing in risky technology stocks, or S&P 500 or rental real estate or in US Treasury Bills, it doesn’t really matter. All it matters is that you save money, put that money to work, reinvest dividends selectively, and keep at it for the next 6-7 years. If your portfolio is valued at $500,000, and an investment in S&P 500 would have been valued at $600,000 or $400,000, doesn’t really matter – as long as your portfolio generates the $20,000 you need ( I adjusted your $18K for inflation for a few years, just in case).

    Either way, keep up the work motivating others.

    And good luck in your dividend investing journey!

    Dividend growth Investor

  62. Solid stuff, Jason. I agree it’s healthier to be intrinsically motivated. I’m naturally an extrovert, so I do try to use that external comparison to my advantage. For example, I’ve recently taken on the same goal as the 1500 Days blogger, trying to get to $1M in assets by a certain date. It’s not a race, as you said…but ‘external benchmarks’ aren’t all bad, when it comes to motivating toward a goal.

  63. DWC,

    I hear you. My 2006 Corolla has burn holes in both front seats. But I look at them like a badge of honor. 🙂

    That said, I’m even thinking of going back to the car-free lifestyle. A cheap, used, reliable car is great. But no car is even better, if you can get around without one.

    Cheers!

  64. FFF,

    Appreciate the support and you sharing the site with others. I hope they find value in it. 🙂

    And I’m in the same boat as you regarding being a coach of sorts. And like a good coach would do, I just want people to be the best versions of themselves they can be.

    Thanks for dropping by!

    Best wishes.

  65. ToughMother,

    Right. I’d hate to paint anything with a broad brush. I wasn’t inferring that everyone (or even most people) that stops by this blog or any other blog/website is comparing themselves to the information therein. But I have noticed a trend, which prompted me to write the article. I think it’s flattering to be compared in a favorable light or be looked at as someone who’s achieved a level of success that others crave, but I also fear those comparisons may be unwarranted or irrelevant.

    That’s a tough go of it you’ve had. But I sure bet your proud of yourself and stronger on the other side of it. That’s great!

    Some of us, like yourself, have had a harder slog up the hill than others. That’s just the way life goes. I certainly haven’t had it real easy either. Which really brings me back to the original point about how we’re all different.

    I agree that we should and can find mutual inspiration toward our individual aspirations. That’s the main reason I write. I would just caution against crossing the line from inspiration to benchmarks. Only you can define personal success and happiness. 🙂

    Best wishes!

  66. DM,

    Every day is an opportunity to make a positive change in our lives. And it’s up to us to take advantage of those opportunities. 🙂

    Great job making the most of your money and your time. Your future self will surely be grateful.

    Cheers!

  67. DGI,

    Exactly, my friend. All that matters is that you’re doing the best you can possibly do as it relates to what you need to be happy.

    I remember being asked on a podcast not long ago about how I respond to people who say I might be better off in an S&P 500 index fund. Let’s ignore the fact that I’ve outperformed the index over the last five years. Here’s how I answered the question: Let’s say someone were to review my life situation in 2022. I’m financially independent. I’m living off of ~$20,000 in annual dividend income. I’m completely free to live my life on my terms and I own all of my own time. This person would probably be ecstatic and proclaim that my entire journey was a success. But what if they review my results and find out I underperformed the index by 0.5%? Oh, no! I’ve failed. Sure, I might be financially independent and completely happy and able to do whatever I want…but I underperformed the index by a slight amount. I could have a few more grand in the bank. My life is a failure.

    Notice the sarcasm? 🙂

    Thanks for the support. Keep up the great work over there!

    Best regards.

  68. DB40,

    Hmm, I don’t necessarily agree it’s introvert vs. extrovert. I would agree, however, that an introvert probably needs less passive income to be happy. I think it’s just determining what you want out of life and how best to go out and get that. The research has already been done, so we have a pretty good idea as to what makes most people happy and how much money would be necessary to maximize happiness. More money isn’t it. So benchmarking yourself against someone else and the idea of having the most money by a certain date is, in my opinion, probably not all that helpful outside of the goal of just achieving $X by 20YY. But to each their own. As long as you’re maximizing your own happiness, that’s all that really matters. Doesn’t matter what I or anyone else thinks.

    Cheers!

  69. Hi DM!

    Great article! I do recognize some of that comparing in myself but it’s important to notice that. As an investor I’m in the beginning of my journey and I sometimes wish that I was making progress more quickly. But I guess there is nothing wrong with taking the slower road to my goal. Thanks again and keep up the great work!

  70. Great stuff, it’s important not to keep up with the Joneses…with so many PF blogs out there and people mentioning their savings rate, dividend income, portfolio worth, it’s hard not to compare yourself to other people. But like you said, you are your own benchmark. When I see other bloggers’ savings rate, dividend income, or portfolio worth, I take them in as inspirations rather than comparison. If you’re inspired you will be able to achieve many great things.

  71. Keeping up with the Jones will put you right where they are… broke. The Millionaire Next Door taught me that and ever since I read that book, I’ve looked at my neighbors and fellow people in my community differently. What an eye-opening book! And what a great reminder this post is of what the Jones’ finances really look like.

  72. Thanks for the thought provoking post! We extricated ourselves from the influence of the Joneses long ago and we haven’t looked back. Right now we are enjoying a lifestyle made possible by financial independence. We are not super rich, we have just accumulated enough assets to fund a lifestyle that is very suitable to our needs and accomodates our few wants. I value having reached FI at the age of 35 than continuing to work in order to accumulate superflous wealth.

    Btw, being in Florida must be hitting the spot for you right now, I’m sure you’re enjoying great weather!

  73. Jason,

    Thanks for the epic post, it really spoke to me and I also enjoyed reading all the great comments the piece sparked. My fiancé married someone with the last name “Jones” so when I saw your article title I told her “Jason put a new post up about your sister!!!” She read it too and really liked it, hehe 🙂

    I’ve never had an issue keeping up with the Joneses because I’ve been poor almost my entire adult life. It was only in the last few years I finally started getting decent income and I’m so happy I found your website and other like minded people before I started to spend it all. What really stood out for me in the article was that there is no race to FI. This is great advice. I remember seeing a doctor when I was about 20 years old for depression and he told me that same advice and it clicked: “Life isn’t a race.” I understood that we’re not suppose to know what we want to do or what we’re meant for, but over time those things will develop on their own. I moved to LA shortly after that, and just went with the natural flow of life to get to where I am now. The past year of consistent investing was awesome, but I’ve often been unable to help feeling overwhelmed, like it’s only just beginning and I’ve got such a long journey ahead. At some point, we might want a child and a house. While those would be serious setbacks to FI, they’re also the things that can make life even that much more worth living. You’ve reminded me that it’s okay to slow down when it’s time, but for now I’m going to keep at it! It’s always great when you post about lifestyle topics like this and I’m happy to tuck away even more knowledge from your blog. Thank you very much for all the inspiration, motivation, and for sharing!

  74. All really good points, including all the notes about independent thinking in the comments. Harsh but true. Converting money to some kind of time-unit metric is also a great idea for personal recordkeeping.

    For the longest time my answer to “What do you want to do with your life?” was “Not this.” I never really took it the next step further to, If not this, what? You may as well have asked what kind of fish I’d rather be. Being reincarnated as a fish seemed just about as likely as my ever being able to do what I wanted to do (whatever that was). That lack of direction prevents setting goals beyond “accumulate,” and that leads to borrowing other people’s magic numbers.

    I’m just now starting to figure out my numbers and my goals, and the other blogs out there are good reference points for general education and ideas on how to save and spend less. I rely on other people to help me bracket what reasonable costs might look like when we have kids, for example. Yet at the beginning it’s tough not to get riled up by those writers out there with the attitude of “I do this and so should you and if you don’t, you’re just not trying!” Separating what’s valuable advice or a great idea from what’s better shrugged off (instead of burning up inside with “But I *am* trying, and I’ll show you, anonymous blogger!”) takes perspective, and perspective comes with time and maturity.

    $0 makes a nice comparison point better than anyone else’s magic number. It doesn’t change no matter who you are or how much you make. And all of us are members of Club Better-Than-Zero. 😉

  75. Good perspective. It’s dangerous to compare our cars, houses, job titles, etc… to our real life peers. But people don’t often talk about the potential discouragement of comparisons within the FI community as people share so much information. I occasionally feel frustrated not being in the same position some other are with their passive income levels. It does encourage me to keep striving though.

  76. Nice article, and one that I both agree with and have been guilty of in the past. In fact, the idea that I needed to keep up with the Jones’ is primarily why I bought my Cadillac CTS 4 years ago. What a horrible reason to drop so much money on a car, but hey, live and learn.

    You’re right that there isn’t any one way to achieving financial independence. My wife and I will retire in 5 years (the goal is 7) even though we probably spend more money than we otherwise need to at the moment. It’ll happen because, well, we don’t give a damn what our neighbors are doing. That guy who drives around in a BMW and feels superior to everyone else because of it? Nope, not worth the effort focusing on.

    Like you, that part of our lives is over. Today, we’re bringing the focus in on ourselves. We concern ourselves only with what will help us achieve our short and long term goals. Life sure does get a bit simpler when you aren’t always focused on what other people are doing.

    And I like simplicity.

  77. Sampo,

    I know exactly how you feel. I was guilty of the same at the beginning of my journey. And I think that’s natural. We “awaken” only to find out we’re way behind the curve. But it’s important to not get bummed out about that and put 100% effort into turning that situation around. If you do that, you’re pretty much guaranteed success, or at least as much success as you can possibly have.

    And I’m not recommending taking a slower road or being less than 100% aggressive. I encourage maximum effort. Rather, I’m just saying that your effort may or may not be more effective than someone else’s because we’re all in different stages of life and/or have different lifestyles and expectations. As such, your results will naturally differ. As long as those results are meeting your goals, that’s all that matters. 🙂

    Best wishes!

  78. Tawcan,

    Agreed. It’s inspiring to see what so many people are capable of. And I do my best to likewise inspire others. I just hope that people don’t look at my results (or the results of others that have surpassed my own) and use that as their own yard stick. What I need and what others need will invariably differ.

    But if you can take that inspiration and use it to maximize your own effort and be happy with what 100% of your effort can generate, then you’re doing it right. 🙂

    Thanks for dropping by!

    Best regards.

  79. Spoonman,

    “superfluous wealth”, indeed. I liken money to oxygen. Breathing heavier won’t help me when I’ve already got all the oxygen I need.

    You and I are on the same page, my friend. Working longer and/or harder than you have to and suffering from OMYS to accumulate more money you don’t need is a total waste, in my view. I don’t compare myself to anyone anymore, other than the best version of myself I can possibly be. And it’s in that revelation – that I can only be me – that I’ve become most happy.

    Florida is wonderful this time of year. Mid-70s today. Would love to meet up if you’re ever in the area! 🙂

    Best wishes.

  80. DD,

    Thanks so much. Glad you found some value in the article. 🙂

    I agree with you on the dividend income goal. Looks like I’m a year or so ahead of schedule, which will continue to snowball itself unless I slow the new capital contributions down markedly. We’ll see how that plays out. I hope to one day be in a position to engage in some kind of substantial philanthropy.

    Cheers!

  81. Ryan,

    Appreciate you sharing that! 🙂

    I know how it feels to be at the beginning of the journey. It can feel overwhelming and, potentially, depressing. Especially when you’re starting late after wasting away a lot of money (like me). But every step forward puts you one step closer to the you you want to be and one step further from the you you don’t want to be any longer. And along the way you learn a lot about yourself, who you really are, what you want out of life, what makes you happy, and how all that of that intertwines. That is perhaps what’s best about the journey and why it shouldn’t be fast-forwarded. Learning about yourself is a great journey, and even better than all the financial stuff (which comes naturally once you figure the basics out).

    Having a family and a house (or whatever else you may want in life) should never be looked at as a hindrance. Letting the money control you in that regard would be just as bad as working non-stop for your whole life and letting your stuff control you. Just make sure you want those things for the right reason (because you want them, not because you want what your friends have). You’re on the right track. Be aggressive while you can, which will allow you to feel okay about slowing down if/when the time comes.

    Best regards!

  82. Jana,

    I know exactly how you feel with the dogma (you should be at position X by age Y) that you see out there in the blogosphere sometimes. I try to be anti-dogma here. I also notice that some in the index investing community like to talk about how if you’re not buying Vanguard funds, you’re an idiot. I think index investing is a great way to go, but it’s not the only way to invest. I even have a few blogs on my blogroll that actively promote index investing. Having perspective comes with age and maturity, but some older and supposedly wiser people still lack it. And that’s a shame. Just the way the world is.

    But you’re absolutely right in that you have to be able to answer exactly what you do want out of life. Being financially independent makes it easy to enjoy whatever it is that you want out of life without regard as to how you’ll make an income…but it won’t magically answer that question for you or create interests out of thin air. If you’re unsure as to what you want or who you are, having even more time on your hands might actually be depressing. Because then the lack of an answer is right in your face. By the way, it’s okay to just be someone who doesn’t have a lot of interests. Nothing wrong with being leisurely. I’m not saying that’s who you are, but I sometimes get annoyed with people who act like you have to be some kind of world-conquering rock star. I personally like an easy, quiet life. For instance, I’ve had opportunities to grow this blog beyond its current platform and do some really unique things, but I kind of like it how it is. I like just writing what I write and doing what I do. Sometimes the answers are really easy.

    Wish you luck as you continue to march toward FI and find yourself. It’s a great journey and discovery process. 🙂

    Cheers.

  83. Adam,

    Thanks!

    I can’t say I’ve ever come across anyone ever discussing the potential pitfalls of supplanting the comparisons of social status with degrees of FI. And because I’ve had a lot of interactions over the years, it gave me a unique perspective on this.

    As I’ve mentioned a few times now, finding inspiration is incredibly valuable and useful. But it shouldn’t cross over into benchmarks and comparisons. If I started comparing my own financial position to others, I’d be bummed out in a hurry. Instead, I look at my personal goals against where I am currently, and I’m ecstatic to realize that I’m more than on track for FI by 40. It’s easy to turn that perspective around by just looking at information a little differently.

    Thanks for dropping by.

    Take care!

  84. Steve,

    “Life sure does get a bit simpler when you aren’t always focused on what other people are doing.”

    Hallelujah. Not only is focusing on oneself more relevant and helpful to their own goals, but it’s just plain easier. I can say for sure my life is way less stressful these days now that I’m not constantly worrying about where I stand on some imaginary leader board. The score was always all in my own head.

    Sounds like you guys are on the right track there. As long as you’re doing what’s necessary to fulfill the goals you’ve put in place that will maximize your happiness and quality of life, then that’s all that matters. Damn all other opinions. 🙂

    Cheers!

  85. Jason,

    Thanks for the great article, you’re an inspiration to me. Funny thing about keeping up with the Joneses, I’m 25 and fortunately have a high income which lets me have a high savings rate, but I drive a 20 year old car, (which was a gift from my father/grandfather, both of which have passed away unfortunately), because it is so cheap to run, stunningly reliable, and has sentimental value . When I take friends/dates in the car, I take note if they make derogatory comments about my car being “old” and decide whether they indeed share my values…this is particular important for date prospects.

    Life has many ups and downs, I’ve been encountering a lot of downs lately, but at the end of the day, I take a look at the passive income I have built, and am proud of that achievement. It is not about the money. I find humans are goal-seeking beings, the dividends provide the freedom to constantly pursue more goals beyond just “more stuff” and “work”, but potentially more valuable ventures like family time, hobbies, or whatever one may find pleasure in. As you always remind me, the freedom is key. I started building an income portfolio 2 years ago, and was inspired to act because you post specifics which provided more insight to actionable things for achieving FI. So whether things are going well or poorly, I take a look at the progress, and know that at least one element of my life is constantly moving forward, it is a great feeling mentally.

    Bottom line is thanks again for another great article, and I hope you continue to have success and pump out these great thought-provoking articles!!

  86. Great Blogs guys (Dividend Mantra and DGI)! Keeping up with the Jones is a dangerous game to play, in particular I find it strange and don’t understand it. I’m a little bit of a worry wort and always wonder will I have enough to retire? In fact, I’m not 100% sure what our magic number is going to be for retirement. Instead, I’m shooting for an age bracket, first is to be able to retire by 55 (if I have too) the second is to retire by age 62 which would be in about 20 years. As far as investments, before my first home I was into individual stocks then went into mutual funds because that’s the advice I was given. Fast forward 18 years and through research (running into your blogs) got me into dividend growth stocks all over again. For me, the difference between buying quality individual dividend paying stocks and ETF’s/mutual funds is almost indescribable. One gives me a sense of accomplishment and satisfaction and the other feels like something is missing. Dividends also gives us a clearer picture of what we have going for us in real time and with more time it gets better.

    Keep up the great work guys!

  87. Great post Jason as always. I tell myself and my wife that it does not matter that people have Millions or Billions, what matters is whether we are happy with our life. An early sacrifice in life goes a long way to achieve that.

    I also have 12 yrs. goal of being FI as you, however, I see somewhere close to ~$25K in dividend income as a goal post to achieve, which looks quite daunting now. But, I’m sure you are going to smash your goal $18K soon 🙂

    I think that this DGI community is smart, inspiring and sharing, which greatly help all. If this help other readers to save more, better it is for them and that’s also one of the goal of my blogging.

    Best,
    PIM

  88. Ben,

    Thank you so much. Appreciate the support and kind words very much! 🙂

    Sounds like you have a great perspective over there. And I’m glad you’re maintaining your values right now. It’s especially difficult to not try to keep up with the Joneses at 25 years old. I know I certainly had my own challenges in my mid-20s.

    While life has its ups and downs, I find having a good chunk of passive income coming in – which can buy you a good chunk of freedom – has a way of acting like a shock absorber, where it cushions the downs and provides more spring for the ups.

    You’re in a great spot. Keep up the great work!! 🙂

    Best wishes.

  89. Raymond,

    Thank you!

    I’m with you on dividend growth stocks (obviously). While investing in funds can be a great way to go as well, I love knowing exactly what I own and, perhaps more importantly, exactly what I don’t own. And I really enjoy seeing the sizable dividend income grow and grow and grow.

    Being able to retire by 55 years old would be fantastic. That’s far earlier than what most people are able to accomplish. Good luck!!

    Cheers!

  90. PIM,

    Agreed on early sacrifices. Those early “sacrifices” I made put me in the position I’m in now, which is a wonderful position to be in. Meanwhile, they weren’t really sacrifices at all when you really look at what those of us in first world countries call “sacrifices”. Living a slightly less luxurious lifestyle than what we’re used to is generally all that’s necessary.

    Let’s hope we’re able to keep inspiring for years to come! 🙂

    Best regards.

  91. Jason,

    I am a reader of your blog for a year or so. I find your blog so valuable, because you write very personal. The tracking of your ongoing success is highly motivating for others and me. I agree with you that a portfolio benchmarking against an index or the comparison to others is not needed. Nevertheless, as Buffett always tells us, if you don´t be able to beat a major index, the buying of a low cost index fund should be favourable. Personally, I find such funds boring. It makes more fun to read, survey single stocks and to learn about companies. These activities motivates me a lot also to stick to my financial goals. On the other hand, we should consider how much free time we could have with an index fund. Nevertheless, I see stock investing also like a passion.

    Kind regards

    Marco

  92. I was just reading Naked Economics and he quoted a survey of adults. Given the choice of a: making $100k a year and your neighbors making $110k a year or b: making $90k a year and your neighbors making $80k a year. Most people chose b. Wealth is all relative. If you can break that thought process…you are going to be so much more successful. Good article Jason.

  93. Marco,

    ” On the other hand, we should consider how much free time we could have with an index fund. Nevertheless, I see stock investing also like a passion.”

    I’m in the same boat. We have to spend our time on something, right? It’s not like freeing all of your time up means you’re going to sit on the couch and just stare at the walls every day. If something is a passion, then you’re going to want to spend time on it. For some of us, one of those passions is investing. I happen to find a lot of enjoyment from all of this, but I also happen to find it not particularly time consuming. If it were something that sucked the life out of me, I probably wouldn’t enjoy it as much. Of course, it helps that I know I’m generating more wealth and income this way than if I were to buy a vanilla S&P 500 index fund.

    Appreciate the support for the blog. I write from the heart and I place a pretty high standard on the articles. 🙂

    Thanks for dropping by!

    Best wishes.

  94. Scubatoad,

    No kidding? I had no idea about that. Too funny, isn’t it? People are strange. I sometimes feel like I’m from an alien planet. 🙂

    Thanks for sharing that. It’s a real shame that people are so busy worrying about others. Makes it difficult to look within and find true happiness.

    Cheers!

  95. You bring up a great point, I think many of us who read and write about early retirement see so many stages that it’s very hard not to compare. DM has 6K in dividend income, why do I only have $20, Frugalwoods retire in 2 years, why am I at 6? While it’s great to compare and contrast to make your plan better it’s more important to reach YOUR goals that you have put out there.

  96. Good topic to address! No one should be seen as some sort of God. I do think some comparison can turn out to be great motivation however. It doesn’t mean, as you clearly mentioned, to use someone’s goals or situation as a benchmark, rather to get inspired by others’ successes and apply it to your own goals in your own way. When living someone else’s dreams, it always explodes at one point anyways…

  97. I have a few neighbors who have the Tesla Model S parked in front of their houses. I’m a bit tempted to buy one. Whenever I see those cars, I always think how much debt they signed up for buy them. Still nice cars nonetheless. Maybe in the future, but not now I guess.

  98. Jason,

    Very good read, thank you. I completely agree with you about being your own benchmark (I think you should coin the expression – it’s catchy!). It’s great to progress and see slow but steady results, be it in dividend growth investing, fitness, or work. However I also think it’s important to get inspired by other people, or even other DGI bloggers like yourself. Trying to achieve similar result than somebody else can be a powerful motivator 🙂

    DL

  99. Steven,

    Indeed. It’s hard not compare yourself when the information is so easy to access. Just like it’s difficult not to see that your neighbor has a nicer house or nicer car in the driveway because it’s sitting right in front of your face. Ignoring these things is difficult, which is probably why so few people succeed at getting and staying out of the system.

    But the only life that you can live is your own. As such, only your goals and your progress toward those goals matters. 🙂

    Thanks for stopping by!

    Cheers.

  100. DivGuy,

    Absolutely. It’s important to recognize motivation and inspiration for what it is – a tool you can use to better your own situation. However, there’s a fine line there where you cross over into comparisons and benchmarks. The danger being that it’s possible to feel inadequate if you’re not up to someone else’s standard – a standard that may not be relevant/applicable to you. I certainly use others’ success as a motivational tool, but I don’t gauge my success against anyone other than the me that I see myself being in the future.

    We have to be true to ourselves. 🙂

    Best wishes!

  101. Henry,

    Can’t say I share that desire. A Tesla S seems like a cash incinerator to me…just a way to burn a lot of cash.

    I’ve always wanted to own a mint muscle car, like a 69 Camaro. But, again, it’s really just a cash incinerator. I guess if it’s such a small part of your net worth that it wouldn’t matter, then no big deal. But that would have to be years and years from now.

    Cheers!

  102. DL,

    I’ll have to look into trademarking that phrase or something. 🙂

    Like I’ve mentioned a few times, inspiration and motivation are incredibly valuable tools one can use to get to where they want to be and succeed. And I certainly hope to provide a lot of people inspiration through my own actions and experiences. However, I would never want anyone to look at what I’ve done as some kind of benchmark for their own life. Unless you are my twin and you started saving/investing on the same exact day, and you’ve completely mirrored my every action in life, my success won’t necessarily be accurately comparable to anyone else’s.

    Just the same, some people have started investing way earlier than me. If they become financially independent at 37 years old because they started investing three or four years earlier in life, does that have any bearing on what I’m doing? If someone’s able to save 80% of their net income because they live at home, should that mean I change anything?

    So, again, it’s important to be inspired and motivated. But take that inspiration and be the best you you can be. If you can do that and operate at 100%, you’ll realize the maximum possible results you can. And that should be your benchmark.

    Best regards!

  103. Hello Jason,

    What would be your thoughts on increasing your average portfolio yield from the current yiels of around 3% up to 5-6% by adding some higher yielding positions to you mix?

    Tickers such as NLY, PSEC, NRZ, VNR etc.. These investments offer 10+ % income yields with somewhat stable payout history and if you were to spread the risk out over multiple holdings and mixed in with your higher quality blue chips, I think you could reach your FI goal a few years early without adding that much more risk.

    I noticed that your holdings are more geared towards future growth but your goals are geared more toward current income.

    Thanks for your inspiration, would love to hear your thoughts on increasing your yeild.

    Scott

  104. Scott,

    I’d be careful with your line of thought there. It sounds like you’re underestimating the risk with some of those stocks there. It also sounds like you’re blinded by current yield, which will likely not serve you well over the long haul.

    Stocks like NLY and PSEC have performed very poorly over the last five years. I think NLY has cut its dividend something like eight times over the last five years. PSEC just recently cut its dividend as well. And what happens when dividends are cut with high-yield stocks? The stock price tanks. And that’s what you see with these stocks over the last five years.

    I would recommend you read up a bit more on dividend growth investing, why one should limit risk, and the importance of focusing on quality.

    You can read a bit more on why I avoid stocks like NLY here:

    https://www.dividendmantra.com/2014/08/think-like-an-owner/

    But, really, most of my articles on dividend growth investing will explain that as well.

    I hope that helps.

    Cheers!

  105. Hi Jason,

    Have you ever felt that the joneses are forcing you to compete against them? Apparently it’s very rare these days for 26 year old to be working 60+ hours a week when he has no kids, houses, loans, or wife. Sometimes I feel like my co-workers are trying to force me into the classic marriage, kids, house, and debt.

  106. Extremely well written post, and I think it’s something that we all need to take a step back and think about when we are frustrated about not reaching a goal, wanting things to progress faster, etc. It’s important to realize that your own situation is unique and while benchmarks and goalposts can be useful, they can also be detrimental.

    It’s important to carve your own path and like you said, nobody has the same cost of living as you, makes the same amount of money, or had the same sort of opportunities or lack of opportunities. It does seem that human nature leads us to compare ourselves to others though!

  107. BDI,

    Hmm, that’s a good question. I can’t honestly say that I ever felt forced to compete or fit in. I’ve always been a bit weird in my desire to actually be different from everyone else, which is perhaps why I started this journey to financial independence in my late 20s. I was guilty of trying to keep up a bit in my early 20s, but I guess I was fortunate in that I realized that that kind of lifestyle wasn’t really rewarding. I always knew I was a bit different, but it wasn’t until I came upon this lifestyle a few years down the road that I actually felt like I had awoken from a long dream.

    Keep fighting the good fight, but only if that’s what you really want. 🙂

    Cheers!

  108. Debt Hater,

    Thank you. Appreciate the compliment! 🙂

    I agree with you on human nature. It seems to be human nature that leads us to be competitive and compare ourselves to others. I think that nature is why society is the way it is, where everyone’s trying to keep up with each other. Unfortunately, those same tendencies are easy to carry over into the chase for more wealth/passive income/freedom. It’s important to find inspiration and motivation by looking at what others have been able to accomplish, but comparing your situation to another beyond just pure inspiration will probably provide limited value, and may actually cause unnecessary harm.

    Thanks for dropping by!

    Best wishes.

  109. I’m a big DGI investor too, have read your blog every day for 3-years. But I think the concept within DGI community that is if as stock has high a yield it’s automatically labled as of “low quality” is dogma.

    After all, Aflac for example, has the same PE has PSEC (around 9x’s) but if AFL were to have the same div payout ratio as PSEC (98%), it too would be a 10%- yielder.

    I like to add a few of these 10% yield stocks (maybe around 5-10% of my overall holdings) to give my blue chips divs a littl income kick. They can go up sometime too you know!

  110. Scott,

    “But I think the concept within DGI community that is if as stock has high a yield it’s automatically labled as of “low quality” is dogma.”

    You’re incorrect. I (and I presume others) label a stock low quality because it’s low in quality, not because it has a high yield. It just so happens that a lot of stocks that offer high yields are such because the demand is low (due to perhaps the quality issue) and the market is pricing in the risk. That’s why I advised you that you’re underestimating risk. If everyone wanted PSEC, its yield likely wouldn’t be so high. But those who see PSEC for the higher-risk stock that it is probably stay away from it, reducing overall demand. To each their own.

    “After all, Aflac for example, has the same PE has PSEC (around 9x’s) but if AFL were to have the same div payout ratio as PSEC (98%), it too would be a 10%- yielder.”

    PSEC is a business development company. It’s required by its very nature to pay out at least 90% of its taxable income to shareholders in the form of dividends. Comparing AFL to PSEC is like comparing apples and oranges. Again, I’d recommend further reading on stocks and investing in general.

    I’d also note that AFL has outperformed (in terms of total returns) both PSEC and NLY over the last five years. It does sound like you’re blinded by yield. I invest in the stocks I invest in because they can provide plenty of income now, robust income growth, low risk, great and understandable business models, and attractive total returns. These are qualities that the stocks you’re referencing don’t offer holistically.

    Cheers!

  111. Thanks for this great post Jason. This is something I’ve grappled with since I started becoming more financially independent, and comparing yourself to yourself is definitely the best way to go. Everyone has their own stories and battles, so there is really no way to compare yourself to anyone else.

  112. Syed,

    Thanks for the comment!

    We’re definitely on the same page. Nobody is completely the same as another, so comparing oneself to another will naturally lack applicability. It’s fantastic to be motivated and inspired by another’s success or results, but it’s important not to look at those results as some kind of personal benchmark.

    Cheers!

  113. Thanks for the great non-financial entry Jason. Being an avid reader, I struggle not comparing my investment process/holdings/dividend income to bloggers in the FI community. Your post helped to remind me to focus on my own journey, and not to be pre-occupied by the results of others.

  114. Great post DM. Keeping up with the Joneses will never satisfy a person (unless they enjoy material things) and it certainly will slow down someone’s progress towards early financial independence. It’s challenging in corporate America not to keep up with the Joneses, but we do what we need to do because of our long-term vision. And as you pointed out, comparing ourselves with people who have more money than us will just make us depressed. I agree wholeheartedly with you… We should only compare with ourselves – as long as we are improving and moving forward in the right direction, that’s most important.

  115. James,

    Glad this post provided you some value. Your experience is exactly what I was writing about. And I know how that feels, because I was once there myself.

    It’s difficult to look within, as it’s probably against human nature. But that’s where you’ll find the most value and happiness. It’s great to be motivated by myself and others, but only you, your goals, and the best you can possibly do should be what you’re truly comparing yourself against.

    Cheers!

  116. ACI,

    Thanks for stopping by and sharing that.

    I agree that it’s difficult to go against the grain and avoid trying to keep up with others. But anything worth having in life is worth working for. And I generally look to see where a large crowd is going. Then I go the other way. 🙂

    Cheers!

  117. So this is probably the top argument with my wife and I. She compares our lives to all of her Facebook friends. They did this, they bough that. It wasn’t always like that. Like you that is what got us in almost 15G of credit card debt. At that point the arguments ensuied and after 10 years the debt was gone. We still don’t do as much as other families so we can stay within budget. I try to set a good example daily living frugal in hopes that my spouse and kids will learn and change. Everyone has a different story to tell and like you said they should have their own goals/benchmark to work with. This community is my backbone. Thanks for sharing Mantra.

  118. DM,

    Thanks for the response. Being true to oneself and doing what one finds with passion and happiness in life should be the pursuit and then that will ultimately transcend and touch many people in your life. No more worrying about everyone else, pushing along with what makes you happy will make other people end up copying you almost at the end of the day because of what they see/actions that the one person is doing.

    Going after FI is because its fun to me and makes me happy when I can see/use what I’ve learned play into a positive impact to my life to reduce the time doing something under constrains of others. All about the meaning behind the goals and the goals are there for most, but sometimes the meaning is yet to be discovered.

    -Lanny

  119. DFG,

    Appreciate you sharing that. Your story is very, very typical from what I can see across the country. It’s this race that nobody is winning. If we’re all rats in a wheel trying to outrun each other, who’s winning? And even if you could win, you’d still be a rat.

    Really glad you guys were able to turn it around. And I’m sure you’re setting a good example, even if it seems like it goes unnoticed at times. Keep up the great work!

    Best regards.

  120. Lanny,

    Right. It really comes down to being true to yourself. And the more you’re comparing yourself to others and trying to keep up with others’ results, the less true you’re really being to yourself.

    I’ve certainly benefited immensely from starting down the path to financial independence. It’s literally transformed my life. And so I’m eager to share that with the world. But my results will be unique to me, for better or worse. That said, I think many people can do even better than I have. A slightly larger income and/or starting earlier in life would make a huge difference. Of course, I wouldn’t compare myself to those people because we’re simply in different situations. Being happy with who you are and what you have is the only way to find contentment in life.

    Best wishes!

  121. Enjoying the financial independence journey is the key. Fortunately I am addicted in purchasing great blue chip dividend paying companies. Thanks for the great read!

    BeSmartRich

  122. Pingback: 25 Fun But Meaningless Facts About Blogger Net Worths
  123. This is one of the reasons we’ve never talked about net worth

    I get emails all the time, “Hi, I found your blog 5 minutes ago, what is your net worth?”

    Aside from the tact factor, It doesn’t matter. What matters is that we are comfortable with our investments and level of risk for the quality of life we want. Somebody else might want to spend more (or less), have a different tolerance for risk, different cash flow requirements, or some other completely different expectation. Comparing offers no advantage, and is potentially even harmful

  124. Jeremy,

    Couldn’t agree more. I also don’t post my net worth up. It’s inconsequential to what I’m doing, as all that matters is my cash flow against expenses. Of course, having a large net worth will simply be a byproduct of doing this right…but it’s not the main goal and my “number” will be irrelevant to everyone but me.

    It would be like asking someone who looks healthy what much they eat throughout the day and then trying to copy that diet to the T, forgetting to factor in that they may have totally different genetics, metabolism, and exercise regimes.

    What you do in life should be what’s best for you and that’s it.

    Thanks for stopping by!

    Best wishes.

  125. Great share, I have never read that but it really seems to makes sense with how people think in America.

  126. Jason,

    I really liked this post as it touches upon a couple of things I’ve experienced myself already. While I’m not one to compare myself to others, in the past I’ve noticed being ‘jealous’ of others’ savings rate, excellent stock purchases, dividend income, etc. Now, however, I don’t really care anymore.

    Much of the jealousy – again, it’s not really being jealous – was probably due to uncertainty. When I first started my FI journey, I sometimes felt a bit lost and uncertain over my approach. Being able to compare myself to others then made me feel good about myself, even though I wasn’t necessarily doing any better.

    I’m glad that I’m past that phase though. I enjoy the achievements of other bloggers just as much as mine and don’t make comparisons anymore. What’s the point anyway? One Dollar means something completely different to you than it does to me!

    Best wishes,
    NMW

  127. NMW,

    I hear you. I was guilty of the same thing early on in my journey. It really came down to me being upset with myself that I had wasted money and time, knowing that I could be so much further ahead. So I’d use others’ success as a yardstick for catching up. But I realized after a year or so that it just wasn’t appropriate. Like you say, a dollar to me might be different to you. I was comparing myself to people making a lot more money or in different age ranges, education levels, or with children. I was fortunate to realize the error in my ways and I’m now much happier for it. 🙂

    Thanks for dropping by!

    Best regards.

  128. When I was younger, I’d say that I tried to keep up with the Joneses (friends, colleagues and family) because I wasn’t as confident then as I am now – to be like them to me was to ‘fit in’ or to be ‘as good as they were’.

    I also didn’t have the confidence to say ‘no’, because ‘no’ meant being different.

    This included not being able to say no when I couldn’t afford to go out on social events, couldn’t afford to travel abroad, couldn’t afford expensive presents, couldn’t afford expensive gadgets.

    This all resulted in a lot of debt piling up but for many years.

    When I first came across the PF/FI blogging community, whilst being excited as I was going to embark on a journey of my own, I initially felt a little pressure at having to play catch up as a many bloggers were a lot younger, yet already had big pots of investments tucked under their belts.

    I still can’t help but compare other people’s investments and savings rates with my own etc so thanks for this timely post as I know it should just be me I should be concentrating on and that what other people do should just act as something to motivate me.

  129. weenie,

    I totally know what you mean. I think all of us have that desire to “fit in” or be wanted among a community. And because most of society is one way, we try to fit ourselves into that mold. And that’s really what’s so wonderful about technology – we can connect with other like-minded people who have kind of opted out of society’s measure of what’s normal, which allows us to both chase after our dreams while still “fitting in”. 🙂

    Glad the post was of value. If one is always looking at everyone else, they’ll be less able to focus on their own life. Furthermore, there’s always going to be someone better looking, smarter, richer, faster, stronger, or otherwise more of something than you. I can only be the best me I can possibly be. Nothing more, nothing less.

    Cheers!

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