I have a $5.7 million in net worth plus another $5 million in investments – why do I feel like a failure?

It’s a general rule of thumb that you should compare your portfolio to the returns of the S&P 500 benchmark index. The thinking goes, if you can’t beat the market then you should just buy the market. Yet there are a host of reasons why you shouldn’t.

For example, individual investors often have different goals, risk tolerances, and time horizons than the S&P 500, which represents a broad market of large-cap U.S. equities. If your portfolio is designed for income, capital preservation, or high growth in specific sectors, comparing it to the index might not be appropriate. Better yardsticks, such as a different index or even your own financial goals, might be more appropriate.

Similarly, people look at where they are in life and lament they are not as successful as others around them, and become depressed because they haven’t achieved as much. That’s also a bad idea, but is common and one which a Redditor on the r/fatFIRE subreddit is experiencing.

The situation

Despite being a financial success, one who has accumulated a lot of wealth by the time he turned 38, the Redditor is depressed because after 10 years in the legal field he is far behind colleagues who have progressed further in their careers.

Yet by all indicators, he has “made it.” His net worth is $5.7 million, he has $4.5 million in liquid investments split between $3 million in a taxable brokerage and the rest in retirement accounts. He also lives in a $1.2 million house. 

But because he suffers from depression, he took several years off from his profession, so while colleagues are now partners at big-name law firms earning fat salaries, he’s making $300,000 a year, or what a fourth-year lawyer at one of those white-shoe firms earns.

He is considering just giving up and quitting his job to go live in some low-cost area, maybe even Europe. He considers himself a failure compared to his peers.

The problem

Now I’m not a financial planner or even a therapist, so these are only my opinions, but the Redditor’s problem is having unrealistic expectations. Because he bowed out of his career fast-track, he shouldn’t expect he is going to end up at the same spot as others who toiled away.

It’s like a woman who takes a long leave of absence from her career to raise a family. She shouldn’t expect to return to the workforce at the same level as those who chose to avoid the immense satisfaction derived from having children. It’s an absurd belief.

So even though he no longer believes he will ever hit his $10 million goal, he needs to put on his big boy pants and realize just how far he’s come even though he took time off. He can still live the fatFIRE lifestyle he desires if he simply adjusts his outlook and his numbers just a little.

The solution

Despite feeling left behind, the Redditor can redefine success. He should focus on personal fulfillment rather than career comparison. His wealth allows for early retirement or a career pivot to something passion-driven, perhaps consulting or teaching law, in a location where living costs are lower, enhancing his quality of life.

Obviously, because the Redditor suffers from depression, seeking out therapy might be a good option too. He might not be able to escape his feelings of inadequacy otherwise. You need to be comfortable in your own self-worth before you can worry about your net worth. Doing the one first can often help resolve the other.

Key takeaway

Whether it is your portfolio, your career, or your place in the world, comparing it to some arbitrary yardstick is often not appropriate or helpful.

Look at what you have achieved, be thankful for what you have, and look at how you can not only survive but also thrive considering how far you have come.