Search
Close this search box.

ACCOUNTANT EXPLAINS: Signs You’re Doing Well Financially (Even if it doesn’t feel like it)

Money is a commodity accepted by general consent as a medium of economic exchange. It is the medium in which prices and values are expressed. It circulates from person to person and country to country, facilitating trade, and it is the principal measure of wealth.

In the world of finance, success is often measured by external symbols of wealth. However, true financial well-being may not always align with these outward indicators. This article, inspired by Nischa’s insights, delves into the signs that you’re doing well financially, even if it doesn’t feel like it. It explores the games people play to measure success, the importance of earnings, the fundamentals of financial health, and the individual lens through which one should view financial success.

5 Key Takeaways

  1. Playing the Right Game: People often play the “status game,” comparing themselves to others, which leads to discontent. The “wealth game” focuses on personal growth and investment, leading to true financial success.
  2. Understanding Earnings: Comparing earnings with peers can lead to dissatisfaction. Understanding that earnings are not the sole measure of success is crucial.
  3. Three Financial Fundamentals: Awareness of financial health, having an emergency buffer, and managing debt are the three fundamentals of financial well-being.
  4. Individual Perspective: Viewing success through an individual lens rather than societal expectations leads to a more accurate and satisfying understanding of financial standing.
  5. Avoiding the Trap of Comparison: Recognizing and avoiding the psychological traps of comparison and loss aversion can lead to a healthier financial self-image.

Are You Playing the Right Game?

There are two games people play to measure financial success: the status game and the wealth game. The status game is an external ranking, where success is measured by material possessions and social comparisons. This game leads to constant competition and dissatisfaction. On the other hand, the wealth game focuses on personal growth, investments, and building assets. It’s about what’s going on behind the scenes, not what others can see.

How Much Should You Be Earning?

Earnings are often used as a measure of success, but they can be misleading. Comparing earnings with friends or colleagues can lead to dissatisfaction, especially if you earn less. This is due to a psychological concept called loss aversion, where the pain of losing is more potent than the pleasure of gaining. Escaping this cycle requires understanding that earnings are not the sole measure of success.

The Three Fundamentals

  1. Understanding Your Relationship with Money: Knowing your income, expenses, and living below your means is essential. Using a tracker can help you understand where you stand financially.
  2. Having an Emergency Buffer: A specific amount of savings for emergencies sets you ahead of many. Having at least one month of living expenses can make a significant difference.
  3. Manageable Debt: Avoiding unnecessary debt and being able to pay bills on time without going into debt puts you ahead of most people.

Viewing Through the Individual Lens

Society often drives our perception of success through expectations and comparisons. Rewiring thoughts to view success through an individual lens frees you from these societal pressures. It allows you to evaluate your success based on your terms, not what society dictates.

Lessons Learned

  • Focus on personal growth and investment rather than external symbols of wealth.
  • Understand that earnings are not the sole measure of success.
  • Emphasize the three financial fundamentals: awareness of financial health, emergency buffer, and manageable debt.
  • View success through an individual lens, not societal expectations.

Final Thoughts

Financial success is a complex and often misunderstood concept. By focusing on personal growth, understanding the true measures of success, and viewing financial well-being through an individual lens, one can achieve a more satisfying and accurate understanding of financial standing. The insights provided in this article challenge traditional views of financial success and offer a more holistic approach to financial well-being. It’s not about what others see; it’s about what’s happening behind the scenes and how you view yourself.


Note: The information provided in this article is for educational and entertainment purposes only and does not constitute financial or investment advice. Always consult with a financial professional before making any significant financial decisions.

more insights