How Much Is Enough?

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Success in western culture centers on excess–millions of dollars, giant houses, multiple exotic cars. While none of us would complain about having these things, does there come a point where more doesn’t make things better? Maybe the question should be how much is enough?

I’m convinced that somewhere along the way, we reach a place of diminishing returns; accumulating more ceases to drive significant incremental happiness. For the last 9 months I have been renovating and furnishing a house. My wife and I have broken every personal spending record for our American Express Card. At first, it was exciting when the Amazon boxes would arrive. At some point it just became routine and the excitement was no longer there.

The tipping point—There’s nothing worse than the fear of not having enough to pay your bills. Hopefully at some point (assuming you maintain financial discipline) we all reach a point where we can cover all of our bills. This is the tipping point. Having the financial security to know that you can afford your lifestyle could be the most rewarding part of earning a living.

Another major milestone is the point at which you have accumulated enough assets to maintain your lifestyle without ever having to work again. In other words, if you chose to, you could retire.

I have a friend who reached this point in his mid 40’s and recently retired. Here’s what he’s learned:

1. Manage your lifestyle—You can’t spend more than you make long-term. Create a personal budget if you need to get more clarity on the numbers. Maintain the discipline to pay off all your bills every month in full.
2. Decide on a percentage that you can dedicate to saving and investing every month. Treat it like a bill. If you get a raise, bonus, or financial windfall, put it away and continue with your current lifestyle.
3. Stop trying to impress others. No one really cares, and if they do, are those really the people that are important to you?
4. Reflect and appreciate what you have.

The question of how much is enough is a personal one. If you’re anything like me, you always strive for more. Lavish toys are great but not at the expense of your long-term lifestyle. Think long and hard about your priorities, take care of the important responsibilities first, if there’s more left over, indulge.