Enough, and Its Relation to Happiness

I just got to bring it back -- the savings ratio. It's the most important number to track if you want to know how much longer you have till you reach financial freedom.*

Let's just take another look at the chart, and understand what it says. 

Starting with a net worth of $0, it shows you how long you have to work till your money will make you enough money to live on forever. 

Make $1,000,000/yr, and live with a lifestyle cost of $950,000/yr? A 5% savings ratio. You will have to work 66 years till your investments will support your lifestyle.

Make $40,000/yr with a lifestyle cost of $15,000/yr? A 65% savings ratio. You only have 10 years of work ahead of you till you're financially free.

What gets you to financial freedom is the amount money you save and its relationship to your spending.


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And yes, that $1,000,000/yr and 5% savings ratio situation? It actually happens. Mike Tyson had $400 million and went bankrupt, and so have other rich and famous people

What they lost sight of was 'Enough.' There is a moment when buying more things and experiences no longer makes you happier. You can keep spending and spending until one day you find yourself alone and unhappy staring at a G6 private jet from inside the walls of an empty 6 story mansion and think, "What is this all for any way?"

Jack Bogle, the creator of the index fund and Vanguard, speaks about this balance between consumption and Enough in this wonderful interview (4:30). 

In it he shares a true story published in a 2005 New Yorker magazine that I think describes the concept beautifully. Here it is:

Joe Heller and Kurt Vonnegut, two of the greatest authors in history, walk into a party given by a billionaire on Shelter Island, New York.

Inside Kurt turns to Joe. He says, “See that billionaire host over there? How does it make you feel to know that that guy only yesterday may have made more money than your novel ‘Catch-22’ has earned in its entire history?” (Catch-22 was the top-selling book of its time.)

Joe gazes straight ahead, smiles inward and says, “That's alright. I’ve got something he can never have.”

Kurt turns to look at Joe and replies, “What on earth could that be, Joe?”

“The knowledge that I’ve got enough.” Joe says.

The knowledge that I’ve got enough. Bravo!

Bogle continues speaking about what Enough means to him in his own words. I love them.

"Think about what is really important in your life. Think about community before self. Think about family and friends. Think about building, creating a better world rather than accumulating all the money or all the prestige or all the wealth, fame, and power -- the conventional definition of success that too many people are seeking."

This blog is the not meant to feed you conventional money talk. It is meant to redefine it. Away from rising through the ranks of meeting room after meeting room to buy the new Porsche or the bigger house. And more toward a truer meaning of success.

To me this is having the freedom to do what I want, when I want, where I want without constraint, particularly of money.

Enough is a number for you to define for yourself. It is the lifestyle cost that provides you with true happiness as it is touched on above. Mine is a lifestyle cost of around $20,000/yr. This will provide me with healthy foods, the ability to surf, run, and snowboard, and a wonderful living situation.

Here's a family that does it on $25,000/yr (with a mortgage, travel, Crossfit, and home renovations) Give them a look to see where their money goes!

Your Enough number, your lifestyle cost, may be more or less. Either is fine by me. 

But you should know your lifestyle cost number, the length of time it will take for you to reach it (from your savings ratio), and how you will spend the time getting there.

For some a longer time period to get there may be okay because they are working a job they love and taking extended vacations. And that is awesome. But I recommend keeping a solid savings ratio in your back pocket throughout the way, just in case your mind or wants ever change. Which from listening to many elders, it sounds like they will.

Your Enough number will move about as you figure each piece of that puzzle outlined above. But once you have a grasp on each of these points such a life is yours to create!


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Keep reading. You won't regret it.

*Recently I've learned that you can start living a financially independent life well before hitting that financial freedom number.  

You just need F-You money. Or enough money to give you the confidence to do what you truly want and work for whom you respect. Here's JL Collins coveted article on exactly that, Why You Need F You Money. Read it.

I am enticed by this concept, and within the next year I will exercise my F-You money to step into a life I've dreamed of living.