[0:00]Most people who feel financially behind aren't actually behind. They're just measuring themselves against the wrong scorecard. I spent 13 years inside some sort of finance field. I studied finance at university, I qualified as a chartered accountant, and I worked for investment banking for nine years. So in this video, I thought it'd be interesting to pull back the curtain on why that feeling is so common. What's really driving it and how to know whether or not you're on track. So let's dive in. So let's start with the main point. And that is that a lot of the people that might be making you feel like you're behind, might actually be faking it. You just have no way of seeing it. So if you think about how easy it is to look rich, you can lease a car that's well out of your budget. You could put a designer bag on a credit card. You could book a holiday months before you've even paid for a single night of it. That lifestyle is available so easily and so quickly, even if at the time, you don't have money to justify it. So while it might seem like your friends and all your favorite influencers are financially successful, if you look under the hood, the reality could be far less glamorous. And this isn't just a hunch. There's actually data to show how extreme and real this is. In fact, at the end of last year, US credit card debt hit a record of 1.28 trillion. Buy now, pay later, which is splitting the cost of things people can't afford out right, that has gone completely mainstream too. And the CFPB found that more than a third of the people using it have already fallen behind on a payment. So, that financial security that you might think other people have when they're portraying a certain lifestyle, might not even be there to start with. Especially not if they're relying on debt to fund what you're seeing from the outside. And before I continue, I'm not saying debt is automatically bad.
[1:54]If you've followed this channel for a while, you would have heard me say the opposite and how if you're smart about how you use debt, then debt can actually leave you better off under the right circumstances. So, for example, instead of paying for everything up front, some people choose to borrow at a low interest rate and spread the repayments over a set period. And then if they use that money that they would have otherwise used to pay for that thing out right to instead spread those payments and save and invest the difference, and they earn more from that than they spend on interest on their debt, this can in fact leave them better off. So debt isn't actually all bad. The problem instead is that what a lot of people are seeing are borrowed lifestyles. And we're using that to define our sense of normal. So when everyone around you seems to be upgrading at once, you start asking the questions in your head. How can everybody afford this? Am I falling behind? Am I doing something wrong? And since very few people are willing to talk about how they're funding their lifestyle, we might assume that actually doing better than they really are. So now that you know this, how do you solve it? Well, the key here is to stop guessing and actually look at the facts that you really know. You don't know whether or not someone has bought something on finance unless you actually tell them and they answer honestly. You don't know what someone else has had to cut back to be able to afford the thing that they're buying that is the only thing that you see. You don't know what someone's debt position is, but what you can for sure know is how you stack up against the markers that actually matter for your personal finance situation. And I'll come on to those in just a minute, but first, I want to talk about another thing that makes us feel like we're consistently behind. And this specific thing is an unavoidable part of being human, whether it's in terms of success, appearance, skills, or something else. Comparison is one thing you can't really opt out of. We are wired for it. But here's the part that often catches people out, and that is that we don't compare in every direction. We almost always look up. We're drawn to the people we think are doing better than us, never the ones doing worse, and psychologists have a name for this, they call it upward comparison. For most of human history, the pool of people you could compare yourself to fit in one room. Your neighbors, your co-workers, maybe the one family in town that everyone whispered about. There was always someone doing a bit better, but that list was finite. Today, that list is roughly the entire planet. Before you've even had breakfast, you might have seen a 25-year-old who just sold a business, a friend posting from a very luxurious apartment in the city, or an influencer explaining how they retired at 30. The internet didn't just expand the pool, it literally made extraordinary lifestyles, or the anomalies, feel very close and very ordinary. And therefore, your otherwise perfectly good life, now might feel a little bit insufficient. And honestly, most of what you see online might be just a small snippet of that person's life at that moment in time. In fact, I know that I've made videos about productivity in the middle of probably the most unproductive week of my life. I've also filmed content about how important it is to have a clean, tidy environment, only to look up from the camera on the sofa next to me, and just see it overflowing with a week's worth of clothes that I hadn't put away. You're often seeing a snippet of someone's life, which might not actually be the reality in that moment in time. And then it's so easy to assume that that 90 seconds or 60 seconds dictates how someone's life might be. And so, again, I mentioned this a bit earlier, but the only thing we can focus on and know for 100% certainty is the thing that we know that is true about ourselves. And when it comes to personal finance, there are some very clear financial markers that can help you understand whether or not you are on track. And I'll say that the main three is firstly, that you are saving at least 10% of your salary or your income every single month. Secondly, that you're putting some money towards retirement, be it through your workplace pension or your own investing. And thirdly, that you are on top of your debt. Those really are the basis for a very strong financial foundation to build from. And if the answer to any of those questions is, no, I'm not there yet, or I'm not sure if I'm saving enough, I'd really recommend, as a very first step, using a manual tracker to get really clear on where you stand. AI has blown up and it's kind of made a lot of us lazy with our finances, and often it takes away one of the most important skills when it comes to managing your money, especially when you're looking to build your savings, and that is awareness. You want a manual tracker that really makes you see and think about what every transaction you make is doing to your overall financial picture. I've linked the one that I use for many, many years when I was building out my savings is also been used by over 100,000 of my viewers and it is completely free. It comes with a free video on how to set it up and use it as well. You can download it on nischa.me/IST or click the link in the description. And while I say that, if you've watched a lot of my videos before, you probably have got a lot of these in check already. But very likely, you still feel like you're not where you want to be. And again, this has a name, Hedonic Adaptation, or otherwise known as the Hedonic Treadmill. The idea is that your baseline happiness is surprisingly stable. Something good happens, you spike for a bit, something bad happens, you dip for a bit, then in almost every case, you drift back to roughly where you started. So if you even think about it in your own life, maybe you hit a financial milestone that you once assumed would change your life. The first proper pay rise, the first car that you got, getting into the flat that you've been saving for. You probably pitched yourself sitting there, feeling really secure or really successful or finally relaxed when you got those things. And maybe you did for a couple of weeks. And then something started to happen. The pay rise just became your salary, the car just became the car that you drive, the flat just became a home, the achievement turned into an expectation. That, that is the treadmill bit. You can keep walking faster, earning more, buying more, upgrading more, but that floor, it moves with you. The salary that used to feel like a dream becomes the salary you probably complain about now. The lifestyle you worked years to build, probably becomes the lifestyle you take for granted now. And when you put all of this together, the borrowed lifestyles, the upward comparison, a brain that resets your sense of normal, is no wonder so many people feel behind, even when they're objectively doing okay. And that's where I want to bring in the next point, because there's one more layer underneath all of this. And it's been doing the same thing for thousands of years. This video is sponsored by Shopify. I created my first business on Shopify, and what surprised me was how quick it was to get started. I didn't have to figure everything out from scratch. It was all in one place, and honestly, that's what gave me the confidence to actually get started in the first place. Because Shopify takes all the guesswork out, and your products get discovered everywhere people are already shopping, Google, YouTube, Tik Tok, even chat GPT. And when someone's ready to buy, shop, pay, makes check out one click, which means fewer abandoned carts and more completed sales. And for everything you're not an expert in, the analytics, the copy, the promotions, Shopify's AI co-founder sidekick handles it. So you can focus on the fun stuff, the creative stuff, the stuff you actually started a business to do. So if you've been sitting on an idea, go to shopify.com/nischa to start your free trial today. That's shopify.com/nischa. Rich people have always found ways to make sure you know that they're rich. In ancient China, for instance, only royals were allowed to wear yellow. And wearing yellow, therefore, showed some sort of status. In ancient Rome, the same idea and concept went for the color purple. Whatever the status symbol of the moment was, it was always something that most people couldn't have. And my favorite example to explain this even further is from the late 1800s, is when X-rays were brand new. They were incredibly expensive, so rich Victorians started having X-rays taken of their own hands and then hanging them on the walls. It was their status symbol. It's the thing that most people can't have, and so having it and flaunting it was a sign to show that you were rich. And then that very same thing, the moment it becomes easier to get hold of or feels like it's no longer exclusive or desirable, it loses its value and stops being a status symbol and instead starts being set as a new standard. Same thing happened with Burberry. I remember Burberry being the thing growing up in the UK in the early 2000s. That check pattern was one of the clearest signals that someone had money. Then the brand expanded, there was fakes everywhere, really easily available, it was overexposed, and it nearly lost its luxury status completely. And within a few years that same pattern that meant prestige had lost its appeal, and it took years for Burberry to rescue that image by withdrawing that pattern from what was at that time, so easily available. And these aren't one-off examples, it is the pattern with every status symbol throughout history. The minute everyone can have it, it stops working. So if you're trying to win this game, the rules are really stacked against you, the whole point of a status symbol is that not everyone has it. So the moment that you get that watch, that car, that home, and the moment it becomes a new normal where people around you are getting it, your goalpost is going to move. You're not chasing a destination, you are actually chasing a moving target. And so by design, that fight doesn't stop. And the way I see it, the things that are most exclusive these days and that very few people have that are worth chasing is time, privacy, flexibility, wellness, creativity, health, freedom. And if you pay too much attention to the material symbols, these exclusive markers that actually have an impact on your life and well-being, can become virtually impossible to achieve if you're stuck achieving the wrong thing. So if you're looking for the very first thing you could do or take away from this, it's to stop measuring your life against someone else's definition of success. One that by design will keep moving. You want to decide what your version of a good life actually looks like, and then once you've done that and you've got really, really clear on that, you want to stack your money decisions to buy you that version of a good life. I've got a video right here that can help you do just that. Thanks so much for watching, see you there.
