Why competition in money matters can be damaging to your financial journey

Unnecessary competitiveness shifts our focus from our own destination to imagined races. It turns a fulfilling long-term journey into a relentless sprint that leaves us tired and anxious

I was 14 when our family bought our first car. On our first outstation trip, I was soaking in the joy of the open road when another vehicle overtook us from the wrong side. A teenager in the back seat waved at me triumphantly. Something stirred. At the next signal, we were side by side. I egged our driver to overtake. He did. I returned the wave, equally smug. The other car surged ahead again. Our back-and-forth continued until my father quietly asked the driver to stop racing. The thrill of the moment vanished, and I felt oddly defeated. 

The memory of that decades-old incident remains vivid. Evolution has hardwired us to be competitive. Natural selection rewarded the most adaptable and aggressive genes. Our species won the evolutionary game partly because we competed effectively. 

But truth be told, not all competition is useful. Some of it is downright harmful. 

During company offsites, teams battle over trivia games as if their lives depend on it. That’s fine as it fosters team bonding. But 

in other arenas, unnecessary competitiveness can derail lives.

 

Take personal finance. People stretch themselves to buy things they can’t afford, overwork until their health breaks down, or constantly switch investments to beat peers. Some chase trends (crypto, anyone?) without asking if they even need to play that game. It’s like burning fuel to win the 20 km leg of a 1,000 km journey. 

There is no universal finish line in personal finance. Each person must choose their destination and feel content getting there. That means defining goals, understanding available resources, and adjusting the plan accordingly. If your car is modest, the road rough, and fuel limited, pick a reachable destination. Yet many drive flat out, hoping speed alone will get them somewhere worthwhile. The old maxim applies: If you don’t know where you are going, any road will get you there. 

But for those who choose to pause, there’s good news. Historical data shows a simple plan works well. If you had systematically invested over 24 months in a portfolio comprising 55 per cent Nifty 50 Index Fund, 20 per cent S&P 500 Index Fund, 10 per cent gold, and 15 per cent liquid fund, held it for minimum six years, and then gradually shifted to a liquid fund over the final 24 months, you would have earned double-digit annualised returns for any 10-year period since July 2001. No complex strategies — just patience and discipline. 

Scott Adams, the creator of Dilbert, once shared an 80-word financial plan. Here is my 85-word version adapted to Indian realities: Make a will. Plan for disability. Don’t use credit cards except in emergencies. Get term life insurance if you have a family to support, and health insurance for all dependants. Buy a house if you will live in it and can afford it. Put six months’ expenses in a liquid fund. Invest the rest in the portfolio described above. Then stop thinking about it. 

Truth be told, I let a fleeting sense of “defeat” during that car ride rob me of what could have been a joyful, memory -filled experience. The journey — our first — is etched in my mind not for the thrill or novelty, but for a competition that never needed to happen. That’s what unnecessary competitiveness does — it shifts our focus from our destination to imagined races beside us. It can turn a fulfilling long-term journey — with its own celebratory moments — into a relentless sprint that leaves us tired, anxious, and unsure of what we were chasing in the first place.

 

The good news? Awareness is half the battle. More people are waking up to the toll unnecessary competitiveness takes — on wealth, health, and peace of mind. If you have read this far, perhaps you are ready to join them. 

The writer heads Fee-Only Investment Advisors LLP, a Sebi-registered investment advisor; X: @harshroongta