We are obsessed with comparing ourselves to others.

This is pointless behavior, of course. How other people are doing has nothing to do with how you are doing. But it’s what we do.

A famous Harvard study asked people to choose between two futures. 

In the first, they would earn $50,000 a year while everyone else earned $25,000. In the second, they would earn $100,000 a year while everyone else earned $200,000. In every other respect, life remained the same. Their purchasing power, the economy and the value of money were all held constant.

Obviously, you’d pick Option 2, right? Of course we would want more money, independent of what everyone else had.

Wrong.

Surprisingly, a significant number of participants preferred earning less, provided they earned more than everyone else.

Think about that for a moment.

They were willing to sacrifice their own standard of living simply to improve their relative position.

As investors, we quietly fall into the same trap.

We compare our portfolios with our neighbors. We worry because a colleague’s fund generated higher returns. We celebrate outperforming friends and feel disappointed even when our own wealth is growing simply because someone else’s grew faster.

The irony is that your financial future has almost nothing to do with somebody else’s portfolio.

Your retirement will not be funded by beating your neighbor. Neither will your peace of mind will ever come from winning a race that has no finish line.

The purpose of investing was never to become wealthier than someone else. It was to become financially free enough to live your own life on your own terms. The day you stop measuring your wealth against other people’s lives is often the day your money begins working for the only person it was ever meant to serve.

You.