Comparison is the thief of joy, but many of us fall for it, especially when it comes to salary. John Coleman argues why everyone needs a ‘financial finish line’

Walk on to any London trading floor or into any magic-circle law firm and you will see a quiet arms race playing out on people’s wrists. As careers progress, TAG Heuer becomes an Omega. The Omega becomes a Rolex. The Rolex becomes a Patek Philippe. At every rung, the person who has just upgraded begins to feel self-conscious about what colleagues are wearing.

Watches are not the problem. The problem is the treadmill we step on when we begin to acquire things not for their worth to us, but for what they say about us to others. This is what psychologists call the comparison trap: we do not judge ourselves, objectively, by how we are doing, but subjectively in comparison to others.

And the problem with the latter is there is always someone with more. Yale’s Michael Kraus and Singapore Management University’s Jacinth Tan, who study the link between wealth and happiness, put it bluntly. Even when people today earn higher wages, attain better degrees and own more than their parents did, the impact on their happiness is limited “if they are not doing at least as well as, if not better than, others at the present”.

High earners in debt

This explains a paradox that should disturb anyone walking into a City office tomorrow morning. In the US, 38 per cent of those earning more than $100,000 a year carry credit card debt, and high earners are actually more likely than middle and lower earners to hold that debt for five years or more. The UK is no different. Plenty of outwardly wealthy professionals are leasing supercars they cannot afford and stretching for mortgages that quietly hollow out their finances.

What makes the comparison trap so insidious is that it is bottomless. There is always a colleague with a bigger bonus, a neighbour with a more prestigious postcode, a school friend with a better car. Social media has industrialised the dynamic. A 2023 Wall Street Journal poll found that across every income bracket, including those earning over $250,000, the average respondent believed they needed 30-100 per cent more to feel happier and less stressed. For those whose needs are met, wealth is not the problem. Comparison is.

Setting a ‘financial finish line’

The way out is not more income. It is a decision. In my new book, Good Money, I encourage everyone to set what I call a financial finish line: a defined level of net worth, or annual lifestyle, above which you commit, in advance, not to creep. When you achieve that finish line, you do not have to stop working. Meaningful work is an essential part of a fulfilled life. But your lifestyle does not escalate and you free yourself to do something more than consume the money – build financial freedom, invest in causes or companies you care about, build a meaningful business or help others less fortunate than yourself.

The finish line is not restraint for its own sake. It is the quiet relief of stepping off a treadmill that, by design, leads nowhere. Once you have defined enough, the next bonus stops being a verdict on your worth, the colleague’s new watch stops being a rebuke and you are free to direct your earnings toward the things that actually matter. If you find yourself dissatisfied with your finances despite an enviable salary, the honest first question is rarely “How do I earn more?”, but “Who am I comparing myself to?” Answer that, set a finish line, step off the treadmill, and you are well on your way to a richer life, in the real sense of the word.

John Coleman is author of Good Money: Six Steps to Building a Financial Life with Purpose