How much money is enough?
27 comments
If you look at it as a big pile, there will never be "enough". Someone will always have/make more. CEOs are probably more susceptible to "keeping up" than most and executive compensation is out of control as a result.
You are truly rich as long as you make more than you spend and save. That does not need to come with any kind of 7 figure rider attached if you are happy and live within your means.
Put another way, I know people who make 300k a year and feel miserable and poor. I'm sure there are people who have multi-million dollar portfolios who look at real-estate prices in many places and feel poor.
On the other hand, I have relatives who make 50k a year and live happy lives surrounded by great friends and family doing what they love to do.
Who is richer in the end?
You are truly rich as long as you make more than you spend and save. That does not need to come with any kind of 7 figure rider attached if you are happy and live within your means.
Put another way, I know people who make 300k a year and feel miserable and poor. I'm sure there are people who have multi-million dollar portfolios who look at real-estate prices in many places and feel poor.
On the other hand, I have relatives who make 50k a year and live happy lives surrounded by great friends and family doing what they love to do.
Who is richer in the end?
This! Too many rich people I know are very miserable people. Sometimes I wonder whether it is an effect of having too much wealth that makes one miserable. Personally, being a minimalist (naturally because of how I was raised), I also wonder sometimes how I should calculate as to when I would/could retire.
Anyone has any links to do these calculators would be great. I can choose to retire in Canada, India or US if that matters.
Anyone has any links to do these calculators would be great. I can choose to retire in Canada, India or US if that matters.
Written by yours truly for Chris's website.
https://chrisreining.com/calculators/
https://chrisreining.com/calculators/
I don't want to spoil a good thing, so keep it between the two of us, but if you can generate/afford $2k US a month, you will live well in Costa Rica.
The same goes for Mexico and probably you could apply this for the rest of LATAM, too.
The thing is that you need to get used to live in a bit of a disorder. I still cannot get used to it sometimes.
Anyway, if you want to live in a "first world country", I cannot recommend Czech Republic enough. It's modern, super safe and still cheap. Plus we definitely need a bit more of diversity there.
The thing is that you need to get used to live in a bit of a disorder. I still cannot get used to it sometimes.
Anyway, if you want to live in a "first world country", I cannot recommend Czech Republic enough. It's modern, super safe and still cheap. Plus we definitely need a bit more of diversity there.
Reminds me the story of a billionaire German retailer,who committed a suicide when the financial crisis hit the world. Surely he lost hundreds of millions but I bet he still had enough to live for 100 years or so..
Tolstoy has short story somewhat relevant to this: "How Much Land Does a Man Need?" http://www.online-literature.com/tolstoy/2738/
And a bonus anecdote:
"At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds,“Yes, but I have something he will never have . . . enough."
And a bonus anecdote:
"At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds,“Yes, but I have something he will never have . . . enough."
Another related novella by Tolstoy:
https://en.wikipedia.org/wiki/The_Death_of_Ivan_Ilyich
$10M is in my opinion the optimal amount.
It’s enough to guarantee an upper middle class life style without having to work, but it’s not enough to make it wise to start wasting it on hedonistic crap (boats, multiple mansions, …), so it will keep you grounded.
That’s the goal I’m striving for, hopefully I’ll be there in a few years.
It’s enough to guarantee an upper middle class life style without having to work, but it’s not enough to make it wise to start wasting it on hedonistic crap (boats, multiple mansions, …), so it will keep you grounded.
That’s the goal I’m striving for, hopefully I’ll be there in a few years.
If you own your home, you don't need anywhere near 10M to live an "upper middle class" lifestyle.
I generally do not disagree, but that’s kind of like saying: if you already have $X, then you just need $Y - $X.
My answer is based on someone going from $0 to $Y, i.e. the most conservative interpretation.
My answer is based on someone going from $0 to $Y, i.e. the most conservative interpretation.
In some countries or even some parts of countries, $3m should net you a mansion and a decent amount of hedonism.
This is relative, so maybe the right answer is like 100 times the (average) amount you can live on for a year.
How much is enough? "Just a little bit more." (Attributed to John D. Rockefeller, but apparently never said by him.)
I think it works like this: You're just scraping by. You don't bother dreaming about a ski vacation or a nicer car, because you know you can't do either one.
Now you get an extra $100/month. Now you can dream about a ski vacation or a nicer car, given enough time. But you can only do one, or at least you have to do one first. That is, when you got more money, your number of possible dreams went up faster than the number of dreams you can actually do. This means that your discontent may go up rather than down when you get more money.
But, you think, even more money would fix that. But then, even more dreams become possible.
The only way out of this is to not chase the bigger dreams. Sure, $80 million can buy a really nice yacht. But I don't actually need to dream of that yacht, even if I have $80 million. (If I decide I really want it, I can rent one for a month. I don't have to buy it.)
For me, personally, I think "enough" is around $5 million. That's enough for everything I want to do, and to live on for the rest of my life.
But I don't actually need that $5 million to be happy (because my happiness isn't in stuff money can buy). So maybe "enough" is "enough to meet my needs, and some of my wants", and $5 million is well past that. For example, I don't have to never need to work again, because I can work, and sometimes I even enjoy it.
I think it works like this: You're just scraping by. You don't bother dreaming about a ski vacation or a nicer car, because you know you can't do either one.
Now you get an extra $100/month. Now you can dream about a ski vacation or a nicer car, given enough time. But you can only do one, or at least you have to do one first. That is, when you got more money, your number of possible dreams went up faster than the number of dreams you can actually do. This means that your discontent may go up rather than down when you get more money.
But, you think, even more money would fix that. But then, even more dreams become possible.
The only way out of this is to not chase the bigger dreams. Sure, $80 million can buy a really nice yacht. But I don't actually need to dream of that yacht, even if I have $80 million. (If I decide I really want it, I can rent one for a month. I don't have to buy it.)
For me, personally, I think "enough" is around $5 million. That's enough for everything I want to do, and to live on for the rest of my life.
But I don't actually need that $5 million to be happy (because my happiness isn't in stuff money can buy). So maybe "enough" is "enough to meet my needs, and some of my wants", and $5 million is well past that. For example, I don't have to never need to work again, because I can work, and sometimes I even enjoy it.
I classify people into three categories.
Poor: They want enough money to survive until the next paycheck, whether it's tomorrow or next month.
Middle class: They want enough money to survive their whole lives (retirement).
Rich: They want enough to do their projects, which presumably give them more money, and lets them do bigger projects.
The mindset of all these groups seem drastically different. Some people look at the poor person and wonder why they risk their lives and health all the time, but many of them don't even expect to live that long. Some look at the rich guy and wonder why he builds space companies when people on Earth are starving.
There's also lower/higher variations. Like many people who are mentally in the rich group don't buy houses or save up for retirement. They often have less savings/assets than an equivalent middle class person, but the difference in ambition means they end up rich or broke. Likewise many poor people will spend excessively on food but be wasteful in things like health or maintenance which may cost them a lot later.
I think suicides also most commonly occur when someone drops a class. Someone rich finding out that they need to work, or someone middle class who has to dip deep into their retirement funds.
Poor: They want enough money to survive until the next paycheck, whether it's tomorrow or next month.
Middle class: They want enough money to survive their whole lives (retirement).
Rich: They want enough to do their projects, which presumably give them more money, and lets them do bigger projects.
The mindset of all these groups seem drastically different. Some people look at the poor person and wonder why they risk their lives and health all the time, but many of them don't even expect to live that long. Some look at the rich guy and wonder why he builds space companies when people on Earth are starving.
There's also lower/higher variations. Like many people who are mentally in the rich group don't buy houses or save up for retirement. They often have less savings/assets than an equivalent middle class person, but the difference in ambition means they end up rich or broke. Likewise many poor people will spend excessively on food but be wasteful in things like health or maintenance which may cost them a lot later.
I think suicides also most commonly occur when someone drops a class. Someone rich finding out that they need to work, or someone middle class who has to dip deep into their retirement funds.
>So how much money do you think is enough to be satisfied with one's life?
A very difficult question, there are so many variables and you know for sure the value of only one or two.
I like to play it differently in times current life cost/income.
Let's say you have a net yearly income of 100,000 US$, depending on where you live that may be "slightly more than average" or "well off" (in the sense that you are not anywhere near the poverty line).
Provided that there is no inflation, that your income is stable, and that it doesn't change when you retire and that you are 25 years old and single.
Over the course of the 60 years you have before you eventually die, you will get 6,000,000 US$.
Now, let me (hypothetically) double that.
Suddenly you have 200,000 US$/year.
What you would do (probably) is to get a more expensive car and move to a larger/better house.
Let's double it again, 400,000 US$/year, you can buy another car, move to a yet larger house, maybe hire some domestic full-time, then you might want to marry and hopefully have a couple sons.
Let's double it again, 800,000 US$/year, what can you do more, sure, a seaside or mountain villa, a couple more nice cars, and a boat, then what?
Let's double it again, 1,600,000 US$/year, that's it, you cannot think anymore how to spend or use that kind of money.
We are between the 2^3 and the 2^4 times what your current normal life income and costs are, beyond that point you will simply be not capable of using/spending it (without throwing it out of the window, mis-investing it in futile endeavours [0], or giving it away).
So the upper limit is 2^3 or 8 times what you make now, guaranteed for the rest of your life, in this example, the most is 48,000,000, what will you do with the 250,000,000 "excess"?
In the real world, 2^1 or 2^2 are already much more than enough.
[0] considering that if by any chance you are successful, the end product will be more money, which is what you don't know what to do with by now
A very difficult question, there are so many variables and you know for sure the value of only one or two.
I like to play it differently in times current life cost/income.
Let's say you have a net yearly income of 100,000 US$, depending on where you live that may be "slightly more than average" or "well off" (in the sense that you are not anywhere near the poverty line).
Provided that there is no inflation, that your income is stable, and that it doesn't change when you retire and that you are 25 years old and single.
Over the course of the 60 years you have before you eventually die, you will get 6,000,000 US$.
Now, let me (hypothetically) double that.
Suddenly you have 200,000 US$/year.
What you would do (probably) is to get a more expensive car and move to a larger/better house.
Let's double it again, 400,000 US$/year, you can buy another car, move to a yet larger house, maybe hire some domestic full-time, then you might want to marry and hopefully have a couple sons.
Let's double it again, 800,000 US$/year, what can you do more, sure, a seaside or mountain villa, a couple more nice cars, and a boat, then what?
Let's double it again, 1,600,000 US$/year, that's it, you cannot think anymore how to spend or use that kind of money.
We are between the 2^3 and the 2^4 times what your current normal life income and costs are, beyond that point you will simply be not capable of using/spending it (without throwing it out of the window, mis-investing it in futile endeavours [0], or giving it away).
So the upper limit is 2^3 or 8 times what you make now, guaranteed for the rest of your life, in this example, the most is 48,000,000, what will you do with the 250,000,000 "excess"?
In the real world, 2^1 or 2^2 are already much more than enough.
[0] considering that if by any chance you are successful, the end product will be more money, which is what you don't know what to do with by now
I have always aimed to have a day job in fields that I'm interested in. Not everyone has this luxury, but I have. So for me, considering I am currently in a situation I really like, "enough" _right now_ is being able to pay my bills and have my entertainment expenses while also being able to save/invest a reasonable amount on the side for retirement. I would not, for example, stop what I'm doing just because another higher earning offer comes along. I like what I'm doing and make enough doing it.
I live in a country with a general and occupational pension scheme, but I also save on the side for myself. This is not only to supplement that, but in case one day I decide to just do something totally different. Go start a farm or something, even though that's not what I want to do right now. For me, that feeling of freedom of being able to pivot whenever I want to something else is the _long term_ sweet spot of "enough". It's a hard goal to reach, because I get anxious about finances when I'm not earning even though I have savings in the bank, so that number will have to be especially high for me to feel safe. But I think it is doable.
I live in a country with a general and occupational pension scheme, but I also save on the side for myself. This is not only to supplement that, but in case one day I decide to just do something totally different. Go start a farm or something, even though that's not what I want to do right now. For me, that feeling of freedom of being able to pivot whenever I want to something else is the _long term_ sweet spot of "enough". It's a hard goal to reach, because I get anxious about finances when I'm not earning even though I have savings in the bank, so that number will have to be especially high for me to feel safe. But I think it is doable.
I've just recently FIREd on $650k in Poland (I'm in my early fourties). To me, that is enough.
Congrats!
Unfortunately not in the US. Health care alone will likely to take at least a third of that.
"Because of the effects of inflation, a 50-year-old couple in 2019 planning to retire at age 65 can expect to spend about $405,000 on health care in retirement. A 40-year-old couple faces $455,000 in expenses, the report says."
https://www.annuity.org/retirement/health-care-costs/
Unfortunately not in the US. Health care alone will likely to take at least a third of that.
"Because of the effects of inflation, a 50-year-old couple in 2019 planning to retire at age 65 can expect to spend about $405,000 on health care in retirement. A 40-year-old couple faces $455,000 in expenses, the report says."
https://www.annuity.org/retirement/health-care-costs/
My philosophy has always been to live with as little money as possible. I think it's not a bad paradigm for the upcoming decades, considering climate crisis etc.
I think about 10-15M. It allows you to have all the nice things that are fun to have: sports car, boat, nice house, lots of travelling and etc. At the same time it's not the amount where things get complicated very quickly. Sure, having 500M is nice but then it also becomes a hassle on its own on how to retain it and etc.
For me, enough to pay the bills for the rest of our lives, and afford a new toy, or take a road trip every once in a while.
At current rates, somewhere around 25 bitcoin would do it.
At current rates, somewhere around 25 bitcoin would do it.
If you have enough money to pay your bills, with a lifestyle that works for you, that is enough. Because we all live in different places, have different families, different desires and goals... Different people will have different numbers.
The key is that you did not ask how much money to never have to work again and have complete freedom - that is a vastly different number than "enough to be satisfied".
The key is that you did not ask how much money to never have to work again and have complete freedom - that is a vastly different number than "enough to be satisfied".
Someone once asked oil tycoon J. Paul Getty how much money is enough. He replied, "A little bit more."
(https://www.resilience.org/stories/2014-12-21/greed-explaine...)
(https://www.resilience.org/stories/2014-12-21/greed-explaine...)
2009 version of this thread
https://news.ycombinator.com/item?id=751624
https://news.ycombinator.com/item?id=751624
So how much money do you think is enough to be satisfied with one's life?