The Money Marathon – Compete Against Yourself Only
In any competition, there are always ways to measure competitors. You could look at the time it takes them to finish, the distance they compete in, and the level of difficulty, just to name a few. The world’s best athletes set their first priority as competing against themselves and trying to better what they scored before. Competing against other people will only make things worse, as there will always be somebody that appears who can do one thing or another just a little better than you can.
When I’m looking at any run, I don’t look at the top winners from previous years and try to beat them. I look at what I have done before and set a target of several percentage points better than I have done before. Setting benchmarks against other people will only frustrate and disappoint you, eventually leading to giving up or doing things you would later regret.
This can be called “the keeping up with the Joneses” phenomenon.
In your Money Marathon, you’ll want to avoid competing with the Joneses or anybody else for that matter, and only compete against yourself. There are many ways to do this. Look at the previous year. How much money did you save? How much did you invest? How much did you spend? How much did you earn? How much did you keep for yourself? How much time/energy did it take you to do all of the above?
Now, you can add 5% to 10% to those numbers for the next year. Aim to earn 10% more this year, to save 10% more than you did last year, to increase your savings rate by 10%, invest 10% more in P2P loans on Lending Club, and so forth.
If you are comfortable and you have previously achieved 10% growth across the board, you might aim for 15% or more improvement. But don’t try this the first time; you want to see how you initially compete against yourself first and then set bigger goals.
As long you as you improve performance from year to year, you will never lose. You will always be winning, while others will be chasing the next big thing. Stick to the basics of bettering your numbers each year and then you’ll look like one of the “Joneses” to other people.
Thursday, December 27th, 2007 at 10:10 am