Using Peers As Motivation To Reach Your Financial GoalsSubmitted by Castlebar Asset Management on August 27th, 2015
Everyone is motivated in different ways to reach their goals. If you are a runner you might be able to jump out of bed and hit the streets to train by yourself. Or maybe you need to join a running club to help motivate you to reach your next race goal. You know that you respond better when someone challenges you to run longer, faster or having some competition within a group of outpacing people in will help you achieve your next goal.
Reaching your financial goals can be a DIY event or maybe you work with a financial planner or advisor as an accountability partner. Some 401k plans are starting to use your peers as a way to motivate you to contribute more to meet your financial goals. We have all been curious about what co-workers, neighbors and friends are doing to meet their financials goals. It is natural that we want to peak over the financial fence to see how we compare to them. It appears that this maybe become a common way to motivate us to contribute more.
While it may be self-satisfying to see that you are contributing more than 50%, 75% or 90% of your peers it still might not be good news for you. Just because you are contributing more than others doesn’t mean you are doing enough to reach your financial goals. Financial goals are very specific to each of us and while contributions are a very important part, it only tells part of the story.
Many of our clients and prospects want to know how they stack up to others in the age group when it comes to contributions, savings and level of debt. Braver clients ask straight up how they compare to someone in a similar situation. It can be reassuring hearing others are experiencing a similar situation or have the same questions. We all want to feel good knowing that we are better than someone, hopefully many but the only thing YOU should be focusing on is YOUR goals.
If I am training for a half marathon but I only care about beating the people in my running group in a mile run I am likely not going to achieve my goal of running 13.1 miles. It can be healthy to know where you stand compared to others particularly if you need some accountability but keep the end goal in mind and don’t get competitive with people who have a different end game then you.
Andrew Comstock, CFA
Disclaimer: The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results.