How to Tell if You're Doing Well Financially

Do you know (or care) how well you’re doing financially compared to others?

If I’m being totally transparent, this has always been in the back of my mind. I see folks with nice cars, big campers, and expensive vacations all around me. Sure, there’s a few that are officers and get paid a lot more than me. However, most of them are peers or folks lower ranking than me (more common nowadays). So, are they really doing that much better than us?

What I’ve figured out over the years is most of the time, when people with similar incomes have more stuff, it comes down to a combination of things (usually, not always):

1. Debt
2. Not saving for retirement
3. Bonuses
4. Help from family (money, free childcare, etc.)
5. Spousal income

However, I know this doesn’t actually matter in my situation. Their financial life doesn’t affect mine (unless I make choices based on their financial signaling). I wanted to get those things (new truck, nice camper, fun vacations) and felt like I was “behind” somehow.

When I was younger, I didn’t understand the actual costs of debt. I tried to finance my way into a lifestyle I wanted. Eventually, I had an epiphany in a cold, stinky tent in Afghanistan - my path wasn’t sustainable. Debt was stealing from my future. So, we made some major changes in our lives. Now, I share my story so others can do the same. It's liberating!

And now, we can actually have most of those things because we took the longer, more sustainable path to building wealth. It's taken a long time to dig ourselves out of debt and flip the script, but now compounding is on our side and doing well!

So, What’s the Better Alternative?

Compete with yourself, track progress, and get clear on what’s really important to you. My latest article, Know Your Top Financial Health Numbers, discusses what numbers and ratios to track in your financial life. But not to compare with others, just to measure progress toward your own goals.

In short, you should track your net worth, debt-to-income ratio (DTI), liquidity ratio (emergency funds), and savings rate. I’ll walk you through each of those and how to calculate them in the article.

Wrapping Up 2024, What’s Next?

It’s hard to believe 2024 is almost over! This has been a great year and I’m so excited for 2025! It will be one of, if not the biggest, transition years of my life.

I’m so excited! Retirement is a huge milestone, and I’m ready to start the next chapter of my life. This also has a big impact on my goals for this coming year.

I’m working on an article about this, but I’m working to simplify my life and start tracking what I call “Metrics That Matter.” I want to start tracking things like:

• Playing LEGO with my son
• Watching shows/series with my wife
• Family trips and outings
• No's to good opportunities (that I don't have time for)
• Miles on my motorcycle
• Phone calls and lunches with friends

There might be more, but I’ll simplify this to make tracking easier.

As I enter the next decade of our life, I really want to focus on flexibility, family, and fulfillment.

I’d like to wish you a very happy holiday season and a happy new year!

Thanks so much for being on this journey with me!​
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