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Choose Your Financial Role Models Well

The comparison game is hard to avoid. It’s been played for a long time, and lately it’s become even more challenging.

“I think the difference today is the unending nature of knowing what ‘the Joneses’ do, given technology. Purchases, vacations, educations are all broadcast via social media and other means.” That’s Sarah Stanley Fallaw, Founder and President of a social research organization called DataPoints, co-author of The Next Millionaire Next Door, and daughter of the late Thomas Stanley, who co-authored one of my favorite personal finance books: The Millionaire Next Door.

Picking up where her father’s work left off, her company’s research has found that the people who are most successful at building wealth are those who are best at tuning out what other people do.

“If you look at some of the research that relates to self-efficacy (which means you believe you can do things) and internal locus of control (believe that things around me are driven by my actions and behavior), you see the importance of social indifference. Do I care what other people are driving, or about trends? That sort of thing…the research we’re doing demonstrates that those who ignore trends have higher net worth, regardless of their age, income and percentage of wealth that they inherited. Building wealth means ignoring what others are doing, which may be more challenging today than [ever].”

Choosing who to pay attention to

I like that phrase—social indifference. But I also wonder whether it’s possible to completely ignore what others are doing.

Adam Galinsky and Maurice Schweitzer say it isn’t. They’re social psychologists at Columbia University and the University of Pennsylvania respectively, and co-authors of the book, “Friend and Foe: When to Cooperate, When to Compete, and How to Succeed at Both.” They call the comparison game “the thief of joy,” but also say, “It’s pretty much inevitable, so you may as well learn to use it to your advantage.”

They point to comparisons that can be helpful. If you want to get better at a sport, for example, comparing yourself to people who are better than you and playing against them will tend to elevate your game.

But choosing our role models is more complicated than that, isn’t it? We don’t want to emulate those who are a success on the field but a mess off the field.

Looking beyond the surface

Choosing financial role models can be especially challenging. Our culture admires those with the outward appearance of success, and if we’re not intentional about it, we can end up doing the same thing. We can’t help noticing what our neighbors and co-workers are driving or where they go on vacation. Sometimes we can’t help wanting what they’re driving or where they go on vacation.

One of the many problems here is that we don’t really know if they can afford the life they’re living. Some probably can, but some surely can’t. We don’t see the late night arguments brought on by financial stress.

I’m thankful for several friends who could afford to live bigger financial lives, but choose not to.

Like Rob and Amy. He’s a pilot for a major airline, and yet when we met them he and Amy lived in a small two-bedroom townhouse. Over dinner one night, they said they had no immediate plans to move, even though they were expecting their second child.

They explained that living below their means gives them great freedom and flexibility. When the airline Rob works for got into financial trouble several years ago and made significant cuts to all of the pilots’ salaries, they weathered the storm without having to make any significant changes to their lifestyle. By contrast, many of Rob’s colleagues had to sell homes they could no longer afford.

Since we now live in a different state, Jude and I haven’t seen Rob and Amy for a long time, and yet they continue to influence the way we manage money.

We’re thankful to have numerous role models like that. Tom and Rachel, Dick and Sibyl, Warren (leader of the first biblical money management workshop I ever attended), and others.

One challenge in finding good financial role models is that most of us don’t typically talk about our finances, even with our closest friends. That’s a shame because we could be such good sounding boards for each other, such good accountability and encouragement partners.

Who are your financial role models? What is it about the way they manage money that challenges you and motivates you to manage money well, even if that means swimming against the current of our culture?

Money. Purpose. Joy. is a small group resource that explores some of this further, while teaching practical steps for wise money management. Watch the first video free.

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