Three Ways Being American Causes Financial Failure

By Jimmy Turner, MD
The Physician Philosopher

Let’s bring you back to my roots as a philosophy major in college.  Everything in philosophy is about “isms.”  Some of them are religious philosophies like Buddhism and Judaism, or pluralism versus monotheism.  Others are political in nature  like communism or fascism.  Today we are going to talk about another “ism” that dramatically impacts our ability to build wealth and achieve early financial independence: American exceptionalism.

Before you click the “back” button away from this site, stick with me for a second and you might learn something about yourself that you didn’t already know.

Let’s dig in.

American Exceptionalism

American exceptionalism is rooted in the idea that most Americans think that our country is a special place and very different – and better – than all others.  In fact, many people call it the greatest country in the history of the world.  You probably don’t have to think back too far to remember a presidential candidate who recently won an election on the premise of “Making America Great Again.”

The implicit theory behind MAGA is that America deserves to be great and that recent leaders have failed us on this mission, which led to a lesser America.  The assumption is that we needed to be great again. Why?  Because we are America.

However, this kind of thinking has extended far beyond national pride in recent years.  It has had multiple down stream effects that have incidentally changed the way we view ourselves and many others around us.

Why?  Because we all want to be special little snowflakes that deserve attention, exception to the rule, and to be noticed.  You might think I am throwing darts, but its the truth.  We just have to admit it and recognize how it makes us weak.

Three ways that American Exceptionalism negatively impacts our financial success:

1. Everyone wants to be Nostradamus

Think about the following phrases:

People say things like this because they want the adrenaline rush and recognition for being the one who “got it right.” Everyone likes picking the winner. Why do you think dog racing and lottery systems exist?

We all want special recognition.  We don’t stop there, though.  Everyone is driven to be the best.  If someone else wants to be better, it’s American to want to crush them, because being average is never enough. We want to be exceptional.

The sad truth is that when we realize we are average, we feel like failures.  It’s a hard truth to accept in our culture.

2. The Average Market Return Is Not Enough

Certain people don’t like talking about financial independence and efficient investing.

If you’ve read this site for any amount of time, you know that I believe in passive/index fund investing.  The reason why is that it is a “set it and forget it” method of investing.  This allows us to focus on our work responsibilities and gets the worst enemy of success in personal finance – ourselves – out of the way.

Every now and then, you will come across someone who doesn’t accept the idea of efficient passive investing.  Usually their reason is that they want to pick winning stocks or find the financial “guy” (or girl) to help them beat the market.

For the American Exceptionalist it is unacceptable to have the average market return.  They want to brag about their wins and flaunt them, in spite of the fact that their wins will soon revert to the mean. They won’t talk much when that happens, though.

3. Out Jones-ing the Joneses

Unfortunately our distaste for all things average is not where our exceptionalism ends.  Not only do we not want to be average or accept the average market return; we actively seek to out do everyone.  Average?  Hell no.  I want to be exceptional!

As we saw in our Tale of Two Doctors: Dr. Jones loses badly.  It’s a fact.  Not an opinion.

Yet, we all have the natural tendency to want to keep up with the Joneses.  We want their cars. Their house.  We assume that our kids must be under-educated in public schools.  It’s natural human inclination.

Keeping up with the Joneses is rooted in American Exceptionalism where we feel like we have “earned this” or we “deserve that.”  We are slow to remember the help we had along the way, and quick to point out how others deserve less than we do.

Wouldn’t it be grand if we all thought of other humans as equal, deserving, and important?  This cannot happen until we realize that we are no more special than the man or woman standing next to us.

Don’t Miss My Point: Take Home

Please, don’t misunderstand or misconstrue what I am trying to say.  I am not a communist, socialist, or fascist.  There is nothing wrong in my mind with trying to separate yourself from the pack by working hard and doing your best.

The point is that when this sentiment gets to the core of who you are and how you see people, you must be careful.  When we expect better just because we exist, why should we be surprised when we are constantly disappointed?

It’s okay to be average.  In fact, it’s probably best if you live below your means.  When you finish training, you should live like a resident.  This implies that the Joneses will someday be trying to catch up with you. It just might not seem like it right now.

Don’t be afraid to make things simple, to accept average returns, and to realize that a lavish life does not a happy person make.  You be you.  Nothing less and nothing more.

Have you ever struggled with this concept?  Did you know the name before today?  Are you okay with being average and getting average returns?  Are you okay with the Joneses living differently than you? Leave a comment below.



  1. Doc G

    This is a great point. We can’t let perfect ruin good. Often average is good enough. Especially with market returns!

  2. Xrayvsn

    Great points TPP about how we have had this ingrained in our psyche for ages living in America.

    This starts from the very beginning with grades etc. Being average or even above average just doesn’t get recognition and I’m guilty of that as well when my daughter might get a B on her report card. No it has to be excellence and an A we shoot for.

    That can work out for a lot of things obviously (an employer is going to pick the exceptional over the average every time) but it is a definitely wrong philosophy with the stock market where being average is actually a great thing over the long term

  3. Dr. McFrugal

    Ahh, American exceptionalism. It’s been a part of our cultural heritage since John Winthrop declared to the early American colonists that their new community would be “as a city upon a hill”, as a model community for the rest of the world to see.

    As Americans, we take pride knowing that in capitalistic competition, we are the best.

    Sometimes the sense of fierce competition and striving to be the best can be unhealthy for our overall financial success.

    • ThePhysicianPhilosopher

      Agreed. And to our overall humanity, too. It’s an unfortunate time where we think we are more important than the man or woman standing next to us. Feels a bit like dog eat dog right now.

  4. Steveark

    Having average returns is fine, but being average as a person is crazy talk. Average people aren’t disciplined, aren’t frugal, aren’t giving and aren’t financially independent. My wife and I choose to be above average in all those ways because average just isn’t any fun! Great post, you are clearly way above average as a blogger, something I can’t say about me!

    • ThePhysicianPhilosopher

      That’s nonsense. You write good stuff.

      I chose to focus on some of the negative aspects of American Exceptionalism (viewing others as less important, wanting to beat the market, etc). There certainly are some great things they come from wanting to be different and separate yourself. Some of that is also cultural. I can name a few countries where people are almost universally hard working and disciplined.

      Not sure if they are giving and frugal there, though. You probably have a point about that!

  5. Half Life Theory

    Coming from an immigrant, i still think America is THE greatest country to be in to build a successful future…. Now will that change in the near future…. the way things are going, i’m thinking probably so.

    Now does that mean that America will cease to be great? Of course not…. it just seems that other countries are picking up steam.

    As far as single stock investing, i personally want to try my hand at it with a small portion of my portfolio, because i feel i shouldn’t completely rule something out until i try it. It isn’t really for the thrill of outperforming others, i just feel everything i think i “know” about investing was told to me by someone else.

    While i’m an avid believer in learning from others mistakes, i think it is still possible to test things out on a smaller scale, and reap outsized rewards or learn the most valuable lesson of my life…. Maybe i’m just a glutton for punishment lol 😉


    • ThePhysicianPhilosopher

      Hahaha I love your perspective. Definitely a glutton for punishment, though!

      People have shown that you can diversify your portfolio with as little as 20-25 stocks. Problem is that if one of them tanks, you just lost 5%. This, of course, can be made up for if one of the others excels. But it’s all about unmitigated risk and keeping costs low (buying and selling costs money).

      If you do it, you should totally write a post on it and explain how you chose what you did. Would be fun to read!


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