Welcome to Lake Wobegon, where all the women are strong, all the men are good-looking, and all the children are above average. – Garrison Keillor
Back in the mid-80s, Prince created a little-known funk band called The Family as a creative outlet to write and release more of his music. The Family only released a single, self-titled album which contained a track titled “Nothing Compares 2 U.” The album and the track, which was never released as a single, received little attention or recognition.
In 1990, an Irish performer, Sinead O’Connor, released her own cover of this Prince song, and her version went on to become a worldwide hit. And she’s been quoted in the last couple years that she’ll never perform the song again.
In this video, where Prince sings this song live, TV host Ellen incorrectly states that Prince wrote the song for Sinead. In fact, there was apparently some drama about her cover of his song.
And if you’re curious, here’s the original recording of the song by The Family.
With the help of Google, you can find some interesting history about this song and the supposed throw-down between Sinead and Prince back in the day.
So now, I have an important question for you.
Which is the better performance?
Prince or Sinead?
That’s right, I’m asking you to compare performances of the song “Nothing Compares 2 U.”
Personally, I’d never heard the song until Sinead sang it in 1990. And while I can appreciate both the Prince and Sinead versions, my favorite is the cover by the late Chris Cornell which you can listen to here.
Even if you throw Chris Cornell into the mix, I think you’d agree that comparing these three artists’ version of the same song is a very subjective and personal matter.
Well, guess what?
It’s just as subjective and personal when attempting to compare yourself to someone else financially.
I’m often asked some variation of the following from both clients as well as potential clients.
“How do I stack up compared to the other folks you work with?”
And I’ll tell you exactly what I tell them.
That’s the wrong question.
But I’ll come back to that in a moment.
Most folks can’t even deal with a $500 surprise expense.
According to this article from earlier this year, the average 55-64 year-old American has a net worth, including home equity, of $164,498.
OK, so what?
This is simply information. Nothing more.
What if you’re 57 years old and have a net worth of $200,000? Or a net worth of $2 million?
Whether you’re worth $200,000 or $2 million, if you’re between the ages of 55 and 64, according to this article you’re “above average.”
But if you’re worth $200,000 and spending $70,000 per year, you’re headed toward financial ruin at a brisk pace.
If, on the other hand, you’re worth $200,000 and only spending, let’s say, $7,000 per year in addition to other income sources, you might just be OK for the rest of your life.
And before you think simply having more money is always the solution, even if you have a net worth of $2 million, but are spending $500,000 per year, you’re likely to run out of money long before you run out of blood pressure.
You see, it’s all about your personal situation and your life. Not the lives or average statistics of others.
And living within (or without) your means is only part of the equation.
Same thing with investment portfolios and returns.
I’m often asked, because people have been conditioned to ask this question, how my clients’ investment returns compare to a person’s current financial advisor.
Again, wrong question.
I mean, if your only goal is to use your money to make more money, then sure, I guess that’s a valid question.
And believe me, you’ll find no shortage of advisors and financial products salespeople that can convince you that their investment approach is better than the last person you talked to or worked with.
Good luck with that.
I can’t imagine a lifetime on the hamster wheel of chasing performance and the next great investment strategy that you hope will be better than the last.
Instead, my approach and one my clients have told me they appreciate is using your money to make more of your life. Money is simply a tool to help you achieve the things that are important to you and the people and organizations you care about.
That could be simply supporting a great life for you and your family.
Or it could involve specific travel goals. Or charitable giving. Or lifetime learning opportunities. Or volunteering your time. Or anything else that’s personally important to you.
For example, in order to comfortably, confidently and sustainably support you for the rest of your life, you may, in fact, need to take fewer risks with your money and investments than you think. Again, this is something that’s based entirely on your situation and your unique life.
At least, I believe it should be.
Like the Garrison Keillor quote above, all of my clients are above average, both literally and figuratively.
Compared to articles like the ones I linked to above, my clients are beyond compare, in my humble opinion.
They’ve taken responsibility and control of their finances and are living their lives deliberately and purposefully.
So if “how do I compare to others?” is the wrong question, what’s a better alternative?
I propose you consider how you stack up financially relative to the goals, possibilities, and aspirations you have for yourself and your family in the future.
This is accomplished through a financial planning approach that focuses not just on your money, but on the whole of your life and all that’s important to you.
So I ask you to stop comparing yourself to others when it comes to money or anything else. Keeping up with the Joneses can be an expensive pursuit.
And if you take nothing else away from this article, please remember, Nothing Compares 2 U.