Generally when we think of a baseline for the future, we tend to assume it's a flat line from exactly where we are now. But this is almost never actually the case. If you're actively investing, net positive returns mean almost nothing. The actually useful question is whether you're outperforming the simple counterfactual: putting your money in an index fund and letting it compound. This concept of comparing to a simple counterfactual generalizes surprisingly well to almost every aspect of life. It's easy to be complacent, seeing how far you’ve come and the obvious differences between you now and you in the past. But it's a lot harder to see which parts represented genuine changes beyond the trajectory you were already on. For example, graduating high school feels like progress, but a freshman version of me was on the path to do this. The reason I’m writing this is because I have a mental list of things I've done that I’m proud of, and I realized that I’m most pr...
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