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Upstartist Diaries

How Much Money is Enough?

I’ve been thinking a lot about money lately. I don’t have much of a choice. It’s in my face every day, the engine driving so much fear and action in America.

“The S&P 500 is down 4% today.”

“How much is he making? Why can’t you get a job like that?”

“The Jones are doing very well, they must own at least 8 properties.”

Money is top of mind and the easiest way to show others – and ourselves – that we are winning.

I have friends making $200,000, $300,000, and $500,000 per year. Years ago, they would have popped champagne for those salaries. Now? “I’m underpaid. I could make much more at another company.” “You think half a million is a lot? My boss makes four times as much.”

I’m no different. Ten years ago as an employee, I would have cherished my salary working on my own. Now that I am here, I need to make three times as much.

My point? It will never be enough unless we define enough.

Enough must be translated into concrete numbers to uncover our definition of survival – and success. What do we really need to be secure? What do we really need to feel successful?

Enough

Enough is a fascinating concept because it has a lower end (“did you eat enough?”), a mid-range (“I’m satisfied, thank you”), and a higher end (“I’m stuffed!”). Enough is a range of values.

These figures will be different for everyone, which shows just how much our feelings towards money depend on disposition, circumstance and comparison.

Harvard Business School Entrepreneurship Professor Howard Stevenson studied success in Just Enough: Tools for Creating Success in Work and Life. After interviewing 150 top executives, he mapped success on four dimensions:

  1. Achievement (money, power, fame – who do you compare yourself to?)
  2. Significance (have you had positive impact on the people you care about?)
  3. Legacy (have you done something others can build upon?)
  4. Happiness (how do you feel about yourself and your life?)

Most believed that 1) achievement would lead to 2) significance which would lead to 3) legacy and 4) happiness. Stevenson’s finding was that this didn’t hold true, because people had trouble defining enough and knowing when to move on. After all, achievement depends on who you compare yourself to. An entrepreneur worth $60 million could feel like a failure next to Bill Gates. As Stevenson quips, “You can always compete against someone who makes you feel bad.”

Success in one dimension didn’t transfer to success in the other dimensions; in fact, it usually took away from the other three. Stevenson concludes that success isn’t a linear progression, but rather a juggling act. You must give energy to all four balls, but the most important ball is the one falling down. Some balls are made of rubber: your career. Others shatter when dropped: your relationships. Success is about defining which balls to juggle and then not dropping them, because dropping leads to regret.

“If you don’t define enough, you have to go for more, and more crowds out everything else. Enough, therefore, motivates and rewards you. Setting limits increases the dimensionality of success, and helps us move on to the next ball.”

– Howard Stevenson

We need real numbers here. Otherwise, we’ll be stuck on the proverbial hamster wheel no matter how much money we make.

Coming to a reasoned sense of enough can both motivate us (at the lower end) and reward us (at the upper end). These numbers can also ring alarm bells when our natural instinct to compare goes haywire.

The Lower End of Enough

For my lower end, I need enough money for essentials (shelter, food, medicine, transportation), to protect against financial ruin (insurance), and to save just enough for retirement.

In case you can’t see them, I’ve written my “lower enoughs” below.

Enough (Surviving) Annual Income = $_____

  • enough to live in a safe neighborhood near loved ones = $_____
  • enough to eat healthy food = $_____
  • enough for transportation = $_____
  • enough for medical, dental and eye care = $_____
  • enough to protect against financial ruin (insurance) = $_____
  • enough to enjoy life experiences with loved ones = $_____
  • enough to save for minimum retirement = $_____
  • if an employee, to be within 10% of average salary for a similar position

Enough (Surviving) Net Worth = $_____

  • earns 3-5% passive returns through interest, dividends or rents, which along with social security, pensions and royalties (if any), are enough to cover my minimum annual needs

The Upper End of Enough

Defining the upper end of enough is trickier, which is probably why so many of us get stuck chasing more. Enough changes as you change and as your peers change. Plus, who wants to cap their upside?

Still, it’s useful to get to the essence of your upper enough. What do you really want from those numbers?

Enough (Thriving) Annual Income = $_____

  • enough to build up retirement nest egg quicker (the essence of what I want is security)
  • enough to provide for family (security, significance)
  • enough to do my best work and serve more people (significance, legacy)
  • enough to travel to and live in dream destinations (life experiences)
  • enough to attend gatherings of exceptional people (life experiences)
  • enough to treat family, friends and strangers to life experiences (significance)
  • enough to give to favorite organizations and causes, such as libraries, parks and exchange programs (legacy)

Enough (Thriving) Net Worth = $_____

  • At 3-5% return, I earn enough to live my best life without having to worry about money

It’s important to get as specific as possible. You might be able to get what you want without any money at all. Vague language keeps enough undefined.

For example, which exchange programs do I want to impact? How would I want to invest or donate the money?

(I prefer to keep my numbers and desired impact private; I also hope you define “enough” numbers grounded in your reality)

Have you taken action towards what you’d do if you had more money? Or are you using money as an excuse to delay living your best life?

Those chasing money for money’s sake lack imagination. They (me? you?) have nothing better to do.

On the flip side, the more concrete your upper end of enough, the more reasons you’ll have to get there.

The Wisdom of Enough

Our feelings of enough revolve around our stories and comparisons. But, we get to choose the story! It’s human nature to compare – especially with money – and this can sidetrack us from our best lives. That’s why we must spell out what enough money really means. These numbers keep us on track, grateful for what we have accomplished, and rooted in what we really want in life.

When writing this post, I asked my retired parents, “How much money is enough?”

Their minimum amount of savings number was close to mine, and they defined the upper limit of enough as enough to live comfortably. They also mentioned the importance of good health insurance. But, they both footnoted their numbers:

“Money doesn’t make you happy. I’m happiest playing pickleball and mahjong, which hardly cost anything. Good health and a supportive group of friends are worth even more.” – Dad

“As you get older, you get wiser. You just need enough to be comfortable. You don’t care if others make much more.” – Mom

Maybe enough gets easier as we mature, too.

 

 

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