Household Income (Peer Normalized)

What it is: A benchmark that compares your current household income against others with a similar profile (same career, education level, age, and location). This marker identifies the income gap between what you currently earn and the average earning power of your direct peers.

What it tells you: It highlights your unrealized earning power. Think of it as a "performance check" for your career—it doesn't guarantee a raise, but it reveals if you are being under-compensated relative to the market value of your skills and experience.

Why This Matters Financially

In the world of finance, this is known as Opportunity Cost. If your peer-normalized data shows you are earning $20,000 less than the "normalized" average for your profile, that isn't just a $20,000 difference this year—it is a compounding loss.

The "Hidden Loss" Example:

Imagine you are 35 years old. Your peers in your city with your same degree earn $120,000, but you are currently earning $100,000.

Direct Loss: You have $20,000 less in "dry powder" this year to invest, save, or pay down debt.
Compounding Loss: If you had invested that "missing" $20,000 in a standard index fund (averaging 7% return), that single year of under-earning costs you nearly $152,000 in retirement wealth by age 65.
The Multiplier Effect: If you remain under-compensated for 10 years, the gap doesn't just stay at $200,000; because of lost raises (which are usually percentage-based) and lost investment growth, the total "lifetime loss" can easily exceed $1 million.

The Risk: Someone "loses money" here through inertia. By not knowing their normalized value, they stay in a role that pays below market rate, effectively "donating" their potential wealth back to their employer rather than capturing it for their own balance sheet.

Household Income (Peer Normalized)

What it is: A benchmark that compares your current household income against others with a similar profile (same career, education level, age, and location). This marker identifies the income gap between what you currently earn and the average earning power of your direct peers.

What it tells you: It highlights your unrealized earning power. Think of it as a "performance check" for your career—it doesn't guarantee a raise, but it reveals if you are being under-compensated relative to the market value of your skills and experience.

Why This Matters Financially

In the world of finance, this is known as Opportunity Cost. If your peer-normalized data shows you are earning $20,000 less than the "normalized" average for your profile, that isn't just a $20,000 difference this year—it is a compounding loss.

The "Hidden Loss" Example:

Imagine you are 35 years old. Your peers in your city with your same degree earn $120,000, but you are currently earning $100,000.

Direct Loss: You have $20,000 less in "dry powder" this year to invest, save, or pay down debt.

Compounding Loss: If you had invested that "missing" $20,000 in a standard index fund (averaging 7% return), that single year of under-earning costs you nearly $152,000 in retirement wealth by age 65.

The Multiplier Effect: If you remain under-compensated for 10 years, the gap doesn't just stay at $200,000; because of lost raises (which are usually percentage-based) and lost investment growth, the total "lifetime loss" can easily exceed $1 million.

The Risk: Someone "loses money" here through inertia. By not knowing their normalized value, they stay in a role that pays below market rate, effectively "donating" their potential wealth back to their employer rather than capturing it for their own balance sheet.