When Is Enough, Enough?

When I was a child, my family received the advertisements for the Publisher’s Clearing House Sweepstakes. Do you remember that? You’d get a booklet of magazines you could buy and something that claimed that YOU MAY BE A WINNER!!

I’m embarrassed to admit how much I thought we really were the winners. Like, every time. Every damn time we’d receive that envelope, I thought we would soon see the Prize Patrol at our door. I was ready, y’all. We were going to win.

Clearly, we did not win. Ah, the ignorance of youth. I miss it.

Anyway, we sometimes played a game at the dinner table. Let’s call it “How Would You Spend The Money?” You will not be surprised to learn that the premise of the game was to talk about how you would want to spend the millions of dollars we were soon going to win. Of course my parents knew this was never going to happen, but it entertained us children. Besides, we all ended up being pretty good at math. I like to think this game had something to do with that.

We’d list off all the things we’d buy when we won our millions. Mansions. Fancy cars. Toys as far as the eye can see. I don’t actually remember this, but I’m willing to bet we probably talked about wanting an entire house full of pets at one point. I know for a fact I used to draw up plans for that, so it makes sense that I’d list it during this game.

It was going to be glorious. Money was going to make us happy, and more money was going to make us more happy. I didn’t know how much was enough, I just knew we ‘needed’ more.

Why Am I Telling You This?

That’s a good question. I got a little ramble-y there, didn’t I?

Here’s the point: I no longer want those things. None of them.

I want a nice place to live. I most emphatically do not want a mansion. A modern, decently sized place in a safe and convenient neighborhood is enough for me. A mansion would be a hassle. It’s not just how much they cost. They also tend to be further away from things, meaning I can’t just walk to a store. They would take way too much time to clean, or I’d have to hire help. And they aren’t ecologically responsible. I’m no tree-loving hippie, but I don’t hate the Earth either. I realize that heating and cooling 5,000 sq ft for a small group of people isn’t a good use of resources.

As for cars, it should be clear from last week’s post that I’m not a fancy car person. I owned that Honda Civic for 12 years. I value reliability in a car, not how many features it has. Sure, seat warmers are nice (love them!) but I don’t need them. My 12 year old Honda was enough for me, until it became too much for me.

Toys? Pffffftttt. These days, toys are a great sauté pan and a really powerful vacuum. Adulting is hard.

Okay, not really. I’m not *quite* that lame. I do keep some fun items. But I definitely don’t want toys as far as the eye can see. I’m digging the minimalist thing that’s popular right now. Less stuff = less responsibility and more money for experiences!

And about those pets? One radical dog is perfect for me. Look at him. What more could I need?

What Does This Have To Do With Money?

Keeping a relatively simple life means that enough is easier to attain. And when we are talking about money, that means I don’t need millions of dollars in the bank to feel financially independent.

If I want to maintain basically the same lifestyle I have right now, but with some extra travel thrown in, my retirement spending will require approximately $50,000 in gross income. That amount is enough for me. Plenty. More than enough, really, to live comfortably, but since I want security and extra money for travel, I’m going big with my $50,000 goal.

For me, that means that once I can reliably generate $50,000/year from passive and residual income, I don’t need to work anymore. At least, not for pay. Not to amass wealth. At that point, I have the freedom to choose what I want to do. I can stay with my current career (my calling), switch to something less time consuming, or stop working altogether.

Maybe your spending plan in retirement is more luxurious, or you have children to support. Your enough might be higher than mine. You might want $60,000/year, or $75,000, or $100,000+.

If your money goals include leaving money behind when you pass, then enough…isn’t enough. You will want to accumulate more than you need to simply meet expenses. You will want enough money to fund your retirement and have money left over. This means you need a lower withdrawal rate, which equates to a higher balance than someone with the same spending needs but no worries about leaving a legacy.

If your needs are fewer than mine, then my enough is overkill for you. Maybe you only plan to spend $30,000/year in retirement. Maybe you are going to live overseas where $20,000/year will give you a luxurious life.

And if your goal is to build as much wealth as you possibly can, then you have no enough. That’s okay. I know people like that. It’s not something I personally want, but I can understand the desire. I felt it myself when I was the kid wanting the mansion and the toys and the room full of fish tanks.

Have You Defined Your Enough?

A lot of Americans go through life without really understanding what their enough is. There are several problems with that, but we won’t get into most of them here. The problem I care about today is that if you don’t know what enough is, you don’t know when you can stop. Or downshift, if stopping your job isn’t one of your goals.

Way too often, people don’t save enough. They don’t plan for their future. But sometimes, people also don’t stop early enough because they’ve never thought about their needs. They’ve never calculated what enough is. Hard work is a virtue, but working until you keel over dead because you don’t know when to stop isn’t.

I’m often asked how to figure out how much money people need to save for retirement. I’ll cover that soon. I’ll even show you my planned retirement budget so you know I’m not just making this stuff up. In the meantime, think about what you want your post-work life to look like. You can’t find your enough without knowing that.

Do you know what your ‘enough’ is? How are you planning to achieve it?