Why You Should and Shouldn’t Compare Your Income to Others

The saying that money can't buy happiness is true to a great extent. Yet, new psychology research points to a strong link between money and happiness, and it might not be exactly the link you would expect.

The saying that money can't buy happiness is true to a great extent. Yet, new psychology research points to a strong link between money and happiness, and it might not be exactly the link you would expect.

Keeping up with Dr. Jones

It turns out that relative income is a much stronger determinant of happiness than actual income. In other words, it is not how much money you have, but how much money you think you have in comparison to others that plays a larger role in your personal happiness. Research shows that people who perceive their incomes as lower than others are less happy than people who perceive their incomes as higher than others.

Relative income is a leading component of happiness, but who you compare yourself to is the key to whether you consider your income high enough to make you happy or too low to make you happy. When people compare themselves to others, they don't compare themselves to 100% of the population. Doctors don't compare their salaries to sports heroes or movie stars, as that comparison could make anyone unhappy. Nor do physicians compare themselves to people who are financially struggling. Such a comparison should instill a sense of relief and gratefulness, protecting against personal dissatisfaction. Yet neither is the case. Instead, doctors, and all people for that matter, compare themselves to a few key people who they view as equals. So, even if you were earning a salary that you would normally consider quite decent, your estimate of a peer's salary can be the main factor that makes you unhappy with yourself.

Should you stop comparing?

According to happiness research, yes and no. Benchmarks are an important aspect of functioning in the world. It helps for you to know the appropriate compensation you should expect based on your specialty, your years of experience and your geographic location so that you can make solid career choices and negotiate your contracts fairly.

But, since money is among the most quantifiable yardsticks by which adults compare themselves to others, the motives for learning about other doctors' incomes generally goes far beyond gathering basic information for contract negotiation.

Doctors, income and happiness

Certainty doctors mentally compare their own incomes with those of other doctors. But, how can you gather that information? Are the specialty reports true? What if you want to double-check your standing? And what if you want to know if your income should make you happy? Overall, people aren’t happy or unhappy based on national income statistics, but instead, based on differences in income between themselves and a few key people who are, in some ways, relatable. But this is where it gets interesting.

You can ask colleagues and peers about their incomes, which may or may not yield useful facts. At the same time, excessive nosiness about another physician's salary can interfere with collegiality and, more importantly is, more often than not, likely to yield misleading misinformation anyways. The ‘information’ gleaned from peers can lead to agonizing perseveration that doesn’t really give you the data that you really need to determine your value at work.

Taking control of your happiness income link by taking a seat in the front of the room

Have you ever been in a crowded class where you were so far back or your view was obscured in such a way that you were not able to see the instructor? What can you do if you can't see the board or hear the lesson? The only option is to follow along with what someone else is doing in hopes that you are getting accurate second hand information. The same goes with the strategy of determining your preferred salary as a physician based on tidbits gathered from a small group of peers who you deem as your equals.

Instead, when you understand the RVU value of your work, the reimbursement and collection rate of your clinical practice, and learn the accurate overhead costs, you stand a much better chance of gaining a realistic and empowering view of what your own salary should be. If you decide that your earning potential based on the reimbursable value of your clinical work is not enough to make you happy, then perhaps you need to make a job change in response on your accurate billing information rather than allowing your happiness to be determined by Dr. Jones.

No More Keeping up with Dr. Jones

Psychologists say that comparison is an inherent part of human nature. Comparison itself can result in frustration. And comparison may end up even more disturbing than it should be because it is often based on at least a few half-truths- even among doctors. Gaining knowledge of the components of your income can help you get a handle on where you stand and what you should expect in ways that comparison with a few peers cannot. As a physician, you need to get a seat in front of the room, where you can clearly see the chalkboard, instead of sitting in the back and copying off of someone else’s scribbled notes.