Who Are You Competing Against?


In the field of psychology there is a term known as relative deprivation, which is defined as:

feelings of anger and resentment stemming from the perception that one is deprived of a deserved outcome relative to others.

This phenomenon is widely studied in psychology because it literally shows up everywhere. Writer Malcolm Gladwell provided a famous example of relative deprivation in his book David & Goliath, in which he compared the bottom one-third of Harvard students with the top one-third of students from a state school in New York called Hartwick:

“Think about this for a moment. We have a group of high achievers at Hartwick. Let’s call them the Hartwick All-Stars. And we’ve got another group of lower achievers at Harvard. Let’s call them the Harvard Dregs. Each is studying the same textbooks and wrestling with the same concepts and trying to master the same problem sets in courses like advanced calculus and organic chemistry, and according to test scores, they are of roughly equal academic ability.

But the overwhelming majority of Hartwick All-Stars get what they want and end up as engineers or biologists. Meanwhile, the Harvard Dregs—who go to the far more prestigious school—are so demoralized by their experience that many of them drop out of science entirely and transfer to some nonscience major. The Harvard Dregs are Little Fish in a Very Big and Scary Pond. The Hartwick All-Stars are Big Fish in a Very Welcoming Small Pond. What matters, in determining the likelihood of getting a science degree, is not just how smart you are. It’s how smart you feel relative to the other people in your classroom.”

The Harvard students suffered greatly from relative deprivation. Although they may have been succeeding in class, they weren’t succeeding to the same extent as everyone around them, which was demoralizing. This made them far more likely to quit. Gladwell refers to this as being a “little fish in a big pond.”

No matter how smart or skilled you are, if you’re surrounded by enough people who are even smarter and more skilled than you, you’ll feel insufficient. Hence, you’ll be a little fish in a “very big and scary pond.”

This example illustrates an important point: We have a tendency to judge our own successes and failures in comparison to those around us. Before we celebrate an accomplishment, we first look around to see how it compares to the accomplishments of our peers.

If a student snags a $50k salary in his first year out of college, it means nothing if his three best friends all find $100k salary jobs.

If we buy a beautiful 2,000 square foot house, it means nothing if all our neighbors have 4,000 square foot McMansions.

Feeling deprived relative to the people around us has the ability to make us feel miserable, no matter how great our accomplishments may be.

Relative Deprivation Makes Us Materialistic

As social creatures, we have a tendency to constantly monitor where we are in relation to those around us. We like to keep tabs on where we are in the pecking order. And this isn’t always a bad thing – after all, competition drives us to be better, to strive for more, and to be the best we can be.

But typically we’re competing for the wrong things. 

When we feel deprived relative to others, we have a tendency to compensate for these feelings of inadequacy through buying more stuff. We attempt to prove that we’re successful through our purchases. We let the stuff we own become a replacement for our personal identity and self-worth.

A 2015 study by a team of researchers at Nanjing University in China actually revealed that when people feel deprived in some way relative to people around them, they are more materialistic, meaning they will try to compensate for these feelings of deprivation through buying stuff.

For the study, 171 undergraduate and graduate students first answered a survey to assess the extent to which they suffered from relative deprivation. The students would read a series of statements and rate how strongly they agreed with them. Two sample statements from the survey were:

“When I think about what I have compared to others, I feel deprived”
“When I compare what I have with others, I realize that I am quite well off”

Next, the students took a survey to assess how materialistic they were, responding to statements such as:

“I enjoy spending money on things that aren’t practical”
“I’d be happier if I could afford to buy more things”
“The things I own say a lot about how well I’m doing in life”

Based on the results, it was shown that the more a student felt relatively deprived, the more likely they were to be materialistic. This also meant they were more likely to consider spending money on stuff to be a viable way of overcoming these feelings of deprivation.

So not only does relative deprivation cause us to be jealous, envious, and discouraged, but it actually makes us more materialistic. The more inadequate we feel, the more likely we are to attempt to make ourselves feel better through spending.

For anyone who hopes to achieve financial independence some day, relative deprivation is your worst enemy. It will cause you to spend frivolously. It will prevent you from saving money and building wealth.

But worst of all, it tricks you into entering a competition with others, when really you should be competing with yourself.

When you compete with yourself, you push yourself to be better, to earn more, save more, life a happier life, always striving for more freedom. But when you fall into the trap of competing with others, your focus turns to earning more so you can spend more. You lose sight of your own goals all in an attempt to have more stuff, own more things, and prove to others that you’re successful.

Sneaky Materialism

In the modern world we live in, most of us aren’t in a situation of true deprivation. Most people reading this blog aren’t worried about where their next meal is coming from, where they’ll sleep tonight, if they have enough clothing, etc. Economic prosperity has allowed people in first-world countries to have all of their basic survival needs met and much, much more.

But because of this economic prosperity and the incredible lifestyles it has enabled us to live, we are finding smaller and smaller things to feel deprived of. All it takes to feel deprived now is simply having an old version of an iPhone. Or an outdated television. Or a car more than five years old. 

Materialism is sneaky in this way. When we’re the only person in our peer group who doesn’t own the gizmo-gadget, we’re convinced this means we are living in deprivation.

How to Combat Relative Deprivation

The best way to combat feelings of relative deprivation is by practicing daily gratitude. One simple practice I have implemented in my morning routine is writing down three things I am thankful for in my life.

The key to this practice is to be specific. Don’t be generic and write “I’m thankful for a house, a car, and my family”. Instead, be as detailed as possible. Here’s an example of my three I wrote this morning:

-I’m thankful for having a twin sister I can call, text, or talk to about anything.

-I’m thankful for the new boss I have at work, who gives me full autonomy and responsibility to work on projects at my own pace. It’s a blessing to have a boss I enjoy working for.

-I’m thankful for my laptop, reliable internet connection and the power to write about whatever I want from the comfort of my own home.

By writing down what I’m grateful for in the morning, it sets the tone for the entire day. It forces me to remember Oh yeah, I am incredibly blessed and no matter what goes wrong today, I still have an incredible life and far more than I need.

Conclusion

Next time you feel deprived, remember to practice gratitude. Allow yourself to take a step back and be grateful for all that you’re already blessed with in life. Don’t go spending money in an attempt to make yourself feel better. Nothing you buy can bring lasting happiness.

Compete only with yourself, not with those around you. Strive to be better, but only by your own standards. This is how to overcome feelings of deprivation.


I strongly suggest using free financial tools like Personal Capital to track your net worth, spending habits, and cash flow to help keep an eye on your money. The more you track your finances, the better you get at growing your wealth!

You can also sign up to have my most recent articles sent straight to your email inbox for free 🙂

13 Replies to “Who Are You Competing Against?”

  1. Great article! Some psychological insight other than about investing/money. Lately I’ve been wondering about this also, when I look at the data from my Personal Capital account. I’ve only recently accumulated a good sizeable net worth, due to deep diving into some of my data of expenses. A good decade in my 20’s I was “keeping up with the Jones”, especially moving into a big city like San Francisco.

    I had friends driving BMW’s, eating out all the time, yet always wonder how they are funding all this? It wasn’t till I was in my 30’s I realize they were in the same boat as I was, trying to “fit in the big pond”.

    I made a complete 180 in my life, and decided to lead a simpler life. I’m much more happier now, and haven’t been eager to purchase the newest tech trend, or dining at the hippest restaurant. It’s the little thing that I enjoy, like waking up early in the morning and walk around the neighborhood in San Francisco.

    Before the chaos, of the day, it’s nice to stop and smell the early morning air, and hear birds chirping. Those little things makes me realize how lucky I am, to be in the position that I’m in.

    1. I love the idea of waking up early, walking around the city, and focusing on how fortunate of a position you’re already in. I think being able to enjoy these little things are really what life is all about. The more research I do on psychology, the more I realize that the only way to find contentment and happiness is to look inward and find happiness in ourselves. There’s nothing we can buy that can fill the void, and trying to keep up with others is a recipe for dissatisfaction. Thanks for sharing your own experiences 🙂

  2. I like to compete with myself and others. I compete with others not so that I can spend more money but because I want to be more successful. E.g. If I see a 26 year old with a $1 billion tech startup, I say to myself “work harder! Be like him!”

    1. I think being competitive with others can definitely push us to be better ourselves – we just need to make sure that our intentions are to be the best versions of OURSELVES, not to beat the best version of someone else.

  3. Great idea to incorporate gratitude into your morning routine! A daily practice like that has the power to transform your outlook.

    How cool that you have a twin sister! I’ve always been fascinated by the close relationships of twins.

    Today I’m grateful for my midday walk in the nature park, especially the trillium blossoms and the singing wrens. :o)

    1. It’s funny, the more I look for common ways that people find happiness in life I keep seeing the simple act of walking show up. I think I need to start taking more walks myself to experience this magic. I even heard Mr. Money Mustache say on a recent podcast something like “walking can literally solve all our problems.” Thanks for the feedback! 🙂

  4. Great idea! I’ve been trying to integrate more gratitude into my daily schedule. I’ve found that meditation really helps, too. Sometimes I like to watch those awful “New Housewives” shows just to keep myself honest. It reminds me that even people with gobs and gobs of money still aren’t happy (I know it’s TV, but still).

    1. Haha reality TV definitely illustrates how gobs of money doesn’t automatically mean gobs of happiness – in fact, the people with the most money on those shows are often the most miserable of all because they aren’t using their money in a way that brings them more joy and happiness.

  5. Zach, I always enjoy the psychology behind things. This is a great and well thought out post.

    I had a manager a few years ago tell me this, “Swim in your own lane.” Don’t worry about what others are doing because it doesn’t matter. Focus on you.

    Also, I think Jon Acuff said, “Don’t compare your beginning with somebody else’s middle.” You’re not comparing apples to apples, but apples to oranges. We don’t know all the ins and outs of how somebody got to where they are. But, we can be sure we won’t get anywhere close if we spend all of our time focusing on them.

    Another one I like and I use in my running is “Run your own race.” I’m not going to finish first or even 20th, but I do better than I did last time. The goal is continuous improvement (kaizen as the Japanese say) and that’s how you will get to where you’re supposed to be.

    Awesome analysis. Thanks for sharing!

    1. Dave, I’m a huge fan of the phrase “Don’t compare your beginning with somebody else’s middle.” This is a common trap most of us have fallen into at least once in life in thinking “I wish I had what they had, I wish I was in their position, had their stuff, their money” etc. but in reality we have NO IDEA how hard or how long that person worked to achieve their lifestyle. I have found that running my own race always leads to more joy and less stress because as long as I’m improving, who cares if someone else is beating me? Thanks for the feedback 🙂

  6. Daily gratitude is definitely key here. As is perspective. The fact that we can even complain about silly things shows the amount of privilege we have. For example, I often gripe about the crappy wifi on the plane. If I know I have a long flight I mentally plan to catch up on some of my blog reading, commenting, etc. When the wifi sucks I can’t do any of it and it makes me crazy!! But it takes only a moment to step back and see a completely different perspective – it is INSANE that I am flying on a plane at 500 mph, 40000 ft in the air, and there is even wifi to complain about! All it takes is a moment to break your perspective and show gratitude for your life, a safe flight, and a successful landing. Im going to add my gratitude journal to my daily habits to ensure I make an entry every day. Thanks for the inspiration, Zach!

    1. That’s such a good example of how we take things for granted so easily! The fact that planes even exist is simply incredible, but we’re so quick to dismiss what we already have since we’re always in search of more. I can’t imagine how often you see people in grumpy moods on flights and in airports…cheers to you for putting up with that, and I’m glad to hear you’re going to pick up the habit of keeping a gratitude journal – it only takes a couple minutes each day but it makes a massive difference 🙂

Leave a Reply

Your email address will not be published. Required fields are marked *