Maslow’s fourth level need on esteem indicates the need for recognition on wealth, position and power. In fact, these needs are double edged swords and act like salt in a curry. Excess of it brings unhappiness rather than happiness. I got its validation at a Satsang; “The loser in an undesirable ego battle is happier than the winner”. This has been my secret in being happy in the housing society I live.

Social comparison is an innate human tendency. On the one hand, it can fuel motivation and on the other it can bring jealously. The assessments are not evaluated in isolation but in a comparative manner. We don’t assess objectively; we rely on comparisons. We are hard wired to make comparisons across every domain- beauty, wealth, intelligence, success, and whatever else that does not fall in the above categories. That is the reality of human nature.

Morningstar’s behavioural economist Sarah Newcomb says: “We can’t turn them off, we can only channel them.” So how can we work around it to our benefit?

1. Pick your comparison wisely

We make upward comparisons with people who we think are better than us, and downward comparisons with those who we think are worse off. The key rule in using social comparison; seek favourable comparisons if you want to feel happier and seek unfavourable comparisons if you want to push yourself harder.

A study on Olympic medallists reveals; Silver medallists tend to feel miserable because they have missed the Gold, because their comparison is with the gold medallists. Interestingly, Bronze medallists are happy and relieved that they got a medal and so compare their outcome to those who never made it – the fourth and beyond. Consequently, they tend to be more pleased with themselves than the silver medallists are. It is Ironic.

2. Be extremely cynical when it comes to comparison on Social Media.

Social Media portrays a heavily skewed image of one’s life. It depicts a distorted slice of reality. You have no idea if they are deeply in debt to fund that lifestyle, if their investments are worth as much as yours, if they have any savings discipline, and so on. You may feel deficient seeing their holiday images, but unaware that financially you are way better off.

Researchers have found that the neighbours of lottery winners were more likely to get into a financial mess because they unconsciously tried to match their spending with the newly rich guy next door. Keeping up with the rich neighbour leads to additional and unsustainable borrowing to promote conspicuous consumption. The result; financial distress.

3. Be focused about what you want from your life.

Discover what you value and choose your own metrics for success. You may be spending time and energy working towards a goal that isn’t in line with your values.

    George Kinder has an interesting incident to narrate. At a workshop in the U.S., a man stated that his goal was to buy a particular investment property. He discussed with Kinder the potential returns and what steps he would need to undertake over the next 10 years to make that project a reality. Kinder then posed three scenarios and asked him a few questions (read that here).

The individual realized that his dream was to build an authentic and deeper relationship with his 6-year-old son. Had he gone after his construction project; he would have had to spend more time away from his son. While he would have met his “goal” as he perceived it, it would have taken him further away from where he really wants to be as a person and as a father.

4. Compare yourself to a role model.

The effect of upward comparison is toxic. Frequent upward comparisons can result in having more debt, lower savings, higher stress levels, and lower satisfaction with your situation. On the other hand, a downward comparison will just naturally make you feel better.

The answer is in finding a role model. When you have a role model or mentor, you have a desire to learn and get better. Think about someone whose financial life or behaviour you admire. You could look up to them for their contentment, lack of stress over money, their ability to live below their means, their humility in not wanting to impress others, their minimalism. You don’t need to know them or their finances well. The point is to find someone whose lifestyle you admire and that you think you can realistically achieve for yourself over time. Make sure the goal you are setting is realistic, positive, and practical.

Source: https://www.morningstar.in/posts/53704/comparison-friend-making-poorer.aspx