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I recently read this article by Morgan Housel and this passage stuck with me.

In his book on the final days of World War II, Stephen Ambrose writes about a wounded American soldier who’s carried back to the medic tent. He knows he’s going home – his war is over. “Clean sheets boys!” he yells back to his comrades still fighting. “Clean sheets, can you believe it! Clean sheets!” Living in foxholes for weeks caused soldiers to daydream about normal life, and few things tickled their imaginations like the dignity of clean sheets. Not money or status or respect or glory. Just the absolute pleasure of clean sheets. It’s an extreme example of when the outside world ceases to exist, and everything becomes relative to an internal benchmark.

The article goes on to discuss the differences between internal vs. external benchmarks.  As we get ready to celebrate Thanksgiving, I think it provides an opportunity for our own self-reflection.  We can measure ourselves against other people and various metrics of outside influence.  Or we can choose to measure ourselves against our own internal expectations and self-defined goals.

It’s very easy and in many ways is basic human nature to compare yourself to others, especially your peers and friends.  As I reflected on this, I considered that it wasn’t too long ago that I sat in a high school classroom, yet to head to college or begin my career.  My classmates and I had various talents, resources and backgrounds, but we were, more or less, in a similar situation with the same opportunities ahead of us.  Fast forward 15-20 years, and some people in those classes are unemployed and deep in debt while others are comfortably retired.  If I chose to measure myself against others, I’d spend a lot of time feeling sorry for myself and wishing for what I don’t have.  If I remain internally focused, I’d realize that I am living my dream.  I have a rewarding professional career, I am happily married, raising two great kids and lucky enough to have the resources to save money and live a comfortable life financially.  Regardless of our position in life we can always make the choice to be grateful for what we have while at the same time striving to improve in the ways that matter most to us.

If you work with us at TAAG you know that we encourage all our clients to put together a goals-based financial plan.  We review those plans on a regular basis in all our meetings.  This process ensures we end up with a plan unique to each family we work with.  The probability of reaching those goals becomes the internal benchmark and measure of success that we focus on.  Each financial decision we make is made with those unique goals in mind.  It doesn’t mean we ignore external benchmarks, such as broad market returns.  However, we acknowledge that those are secondary, and far less important than designing a saving and investment strategy that leads to our clients realizing the personal goals we help them define and quantify.

Losing track of the internal focus increases the potential for overspending, taking on too much risk, or not saving enough.  If we make any of those financial mistakes trying to live up to some external benchmark or comparison to others then we not only fail to stay true to ourselves, we lower our chances for a successful financial future. However, if we continually make the choice to measure ourselves internally then we not only maximize our probability for success, but we are likely to be much happier along the way.