How much money is enough?

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You may feel you’d like more money in your pocket, but have you ever asked yourself the philosophical question, “How much money is enough?”

If you ask a billionaire, the response is likely to be that no amount is enough. Let’s face it, they become billionaires because they’re constantly driven to make money.

However, other people might settle modestly for $1 million.

People who are a little more thoughtful might give you a different number, somewhere between the two extremes.

Let’s be honest, we all need money, and we all want a decent standard of living. Don’t we?

The cost of chasing money:

However, always remember that there is a cost to chasing money. And that cost, among other things, is the impact it has on your time.

We can get more money, but we can never get more time. We all get 168 hours each week, and that’s it.

So, there comes a point where there might be a better way to spend your time than chasing more money.

And you’ll never know if you’ve reached that point if you don’t define it.

Achieving happiness:

Studies have shown that happiness doesn’t increase beyond an income of $70K–$80K per year.

Perhaps modest, but that’s comfortable living in most parts of the country.

However, it’s not enough to drive a new Mercedes every three years and vacation in Europe with the family every summer.

It would be tough to send your child to Harvard on a $70,000 salary.

So, ask yourself, How much is enough?

The answer is that it all depends on you and your circumstances.

Factors to consider:

To consider how much you need to live fully, think about the following:

1. Age

How old are you?

How much longer do you expect to live?

If you’re 90, you probably require less money for the rest of your life than people in their 20s and 30s.

There are actuarial tables that can tell you how much longer you’re expected to live. However, you should plan to live longer than expected!

2. Expenses

How much are your monthly expenses?

What would your expenses be if you were living the life of your dreams?

Let your imagination run wild. What expenses would you have?

A new bowling ball each year or a second house in Vail? A housekeeper? A thoroughbred?

It’s your life. Determine how much it would take to finance your ideal life.

3. Dependents

Who are you responsible for?

Do you have three children attending college in the next 10 years?

Do you have a spouse who doesn’t work?

Do you care for an ageing parent?

For how long do you expect to financially provide for others?

Ultimately, you must consider every potential demand on your wallet or purse.

4. Debt

What is your current debt situation?

Do you have 20 years left on a mortgage hanging over your head?

Significant medical bills?

Credit cards?

Debt must be financed, and repayments must be made. So, you can’t ignore debt.

5. Retirement

None of us can go on forever. At some point, we must all take life at a slower pace.

So, when would you like to retire, and how much do you need each month to live comfortably?

How would you like to spend your retirement?

Do you want to travel regularly?

Play golf every day?

How much would a typical month in retirement cost?

6. Lifestyle

What toys do you want to own?

A plane? A Porsche? A boat? A second home? Swimming pool? Motorcycle?

If they give you pleasure, then it’s reasonable to work towards owning them

Then again, maybe you value your free time above all else and would be happy living a simple life with a Labrador retriever and a large vegetable garden, reading books all afternoon.

The choice is yours.

For everyone, it’s different:

There’s no right answer to the question, “How much money is enough?“

Everything depends on your desires and circumstances.

The number for you might be quite small or very high.

It’s just your number. It’s personal, that’s all.

If you’ve never considered how much money you need, then take the time to think about it.

Money in perspective

Having money and financial freedom is great for a couple of things, primarily solving problems and providing choices.

However, beyond that, it has limited value.

Certainly, it’s a mistake to use money to establish status. Worrying about impressing your peer group should be left to teenagers.

Needing money for the wrong things is limiting. It requires working longer and harder than necessary.

You could be doing other things with your limited time on Earth.

Think long and hard about what is most important to you.

Ensure that you develop an income, savings, and net worth to acquire the possessions and freedom that will allow you to live your life the way you desire.

Spend time addressing this important issue, and you might be able to quit working sooner than you think.

Have money in your head, but never in your heart.

And never let your pursuit of money prevent you from spending time with family and friends.

A lonely old age would be a heavy price for wealth creation.

There is little point in being the richest person in the graveyard with no one to mark your passing.

And remember this: You’ll be a long time dead. So, focus on living life now.

How much money is enough?

The cost of chasing money:

Achieving happiness: