As you make your way through life in general and through this journey of making money online in particular, you will inevitably encounter people who are doing better than you are. Maybe you quit your day job so you could pursue blogging and Internet marketing on a full-time basis. And then you see your old classmate from college who took a more traditional career path and he just got a promotion at work. He’s raking in six figures and recently moved in a beautiful new home in the suburbs to raise his young family.
You’re jealous. You begin to second-guess all the life decisions you’ve made recently (like quitting your day job), thinking that maybe you should have taken that path instead. You look at the spreadsheets you put together to track your online earnings — because it is absolutely paramount that you stay on top of the numbers, just like a real business (because this is a real business) — and you see that you’re barely scraping by and the bills keep piling up.
You’re getting disheartened and discouraged, because you’re not doing as well as you hoped you would be. And then come to a blog like this and see that John is making over $200,000 in a single month from just a single income source and feel like you’ll never live up to that potential. You want to give up.
Looking Up Puts You Down
This is what happens when you compare yourself to other people. No matter how much success you are able to achieve in life, there will always be someone who is doing better than you are. You might look up to big names like John Rampton, Darren Rowse, and John Chow, but the income and wealth of these dot com entrepreneurs still pales in comparison to mega giants like Richard Branson, Jeff Bezos and Warren Buffett. There will always be someone above you.
Even if you move your perspective much further down the scale and look at your immediate peer group, you’re basing your comparisons on incomplete information. Your friend might have that fancy new house in the suburbs with the hot new cars in the driveway. What you don’t see is the crippling mortgage that he has taken on, the overwhelming student loan he’s still paying off, and the struggles he’s having day-to-day with his wife and children.
You don’t see the hardship.
You only see the polish on the outside.
What’s in the Box?
Now, don’t get me wrong. Sometimes comparing yourself to other people can be incredibly motivating, inspiring even. You see that if other people, especially other people who may be new to the industry, are able to achieve great success, then you’ll know that it’s possible for you too. And comparing yourself to other people can put your own progress into perspective. You just have to be really careful about how you go about doing this, because as I said, it can also be terribly deflating.
That’s why, in the long run, it is much more fruitful to compare yourself… to yourself. Or rather, you should be comparing yourself to your past self and then projecting goals for your future self to achieve. This involves everything to do with your online career, as well as your overall financial well-being.
I recently decided to start up a spreadsheet where I’d track my social media numbers. Once a month, I check to see how many followers I have on the major platforms. This is really something I should have started doing a long time ago. By doing this, I can see if I’m making positive growth over time and, if so, how quickly those numbers are growing. Seeing this kind of growth, presented with actual numbers, provides firm evidence that I’m doing something right. It’s motivating and it keeps me going.
Two Steps Forward
Another point worth mentioning is that while you should be tracking your income, perhaps a more important number is that of your net worth. It doesn’t really matter if you’re making $100,000 a year if you’re spending $200,000 and you’re just piling on the debt. Your net worth is calculated by adding up all your assets (cash, investments, house, etc.) and subtracting all your liabilities (mortgage, credit cards, car loan, etc.).
See how you’re doing compared to yourself one year ago, two years ago, five years ago. And then calculate the rate of growth year-over-year. This rate ideally should be increasing too, as the more wealth you have, the easier it is for you to accumulate even more wealth. Get your money to work for you.
If you want to compare your net worth to more of an established benchmark (or at least an estimate of one), the calculation suggested in The Millionaire Next Door by Thomas J. Stanley and William D. Danko is:
Age * Annual Pre-Tax Income / 10 = Net Worth Benchmark
Say for example that you are 30 years old and you earn about $40,000 a year before income tax and other deductions. Based on the formula above, you target net worth should be about $120,000. That’s just one perspective, though, and you really shouldn’t be taking it as gospel, since everyone’s circumstances and living expenses are different.
The Man in the Mirror
At the end of the day, especially if you are a self-employed online entrepreneur, the only person who is going to keep you accountable is yourself. So the only appropriate yard stick on which to measure your progress is you. Just remember to progress daily.