How Much Is Enough?

Over the course of our financial journeys there are a number of aspects that are important. How prudently we save, invest, handle and behave around our finances are all aspects that are important. But there is one aspect that is more important than the others. And it is one that is often overlooked. It is the awareness to realise how much money is enough given our needs and circumstances. We humans are mostly wired to be part of a lifelong rat race. It could be one of having a better job, more money or a better lifestyle. But after a point, this starts to take a toll on our physical and mental health. Fortunately, most people today realise that the only way to get themselves out of this rat race is to achieve financial independence We typically view financial independence as an end to our financial journey. But unless we know how much is enough, we cannot define our end points effectively. Therefore today I will focus on laying out how much money would broadly be enough for most of us.

The Dangers Of Constantly Pursuing More

We may think that not knowing how much is enough is a good thing. We assume it would help us to keep striving for more. But, that is exactly the biggest problem. Not knowing how much is enough first sees us strive for more. But we ultimately end up in an endless pursuit of more money. So we effectively end up dropping out of the rat race of life and dropping into another. A rat race behind more money. Knowing how much money is enough helps us stop and appreciate our journey to financial independence. Most importantly, it sets us free from all possible rat races once and for all.

So after a point, it is vital to develop the ability to say no to more money that comes our way. Until we develop that ability we would never know how much is enough. I feel we would have enough money when we can meet our basic necessities, achieve our financial goals, lead a fairly comfortable lifestyle, and have some money in reserve to be able to sustain our current lifestyle tomorrow. The caveat here is our goals and definition of a comfortable lifestyle must be realistic.

The Futility Of Luxury And Social Validation

We often tend to confuse a comfortable lifestyle for a luxurious one. This is because we tend to make two key mistakes. First, we feel that we would gain the respect and admiration of people around us by flaunting our material possessions. Nothing can be farther from the truth. Our material possessions do not define us. So flaunting them does nothing. When we flaunt our material possessions publicly, people tend to focus on our possessions more than on us. Spending money to show others how much we have is the fastest way to end up with no money. When we spend too much money on too many things, we are left with too little money for the things that really matter. So in the end, all that flaunting seldom has the desired effect.

Second, our general definition of wealth is typically distorted. We generally associate wealth with having loads of money and material possessions. But that is not wealth by any means. Genuine wealth comes from the things that can't be seen. It is about the money stacked away in our bank accounts. It is about cash flow positive assets that keep generating more money for us. Wealth lies in the desires we don't gratify today. But the most important indicator of wealth is the power to use our time as we please. Because that is what lasting wealth does. It gives us control over our time. This gives us lifestyle benefits that no worldly possessions can. But we usually use money to buy material possessions rather than buy back our time. It is no surprise that most of us today are a lot richer, but also a lot more stressed.

Not Overdoing It

Knowing how much money is enough doesn't mean we need to be ultra conservative and miserly. It just requires us to say no to money that costs us our peace and ethics. Also, in no way am I against making money and spending money on material possessions. Wealth is meant to be built enjoyed after all. What I am saying is, it is important that we build our wealth the right way, spend it on the right things, within the right limits and for the right reasons. Knowing how much money is enough just means we would not have an insatiable appetite for money. That would stop us from risking what we have and need for stuff we don't need.

Closing Thoughts

Money is definitely an important part of our lives. But it is ultimately nothing more than a means to an end. Knowing how much money is enough would therefore prevent us from doing stupid and irreversible things that we may regret later. It would also help us to say no to those money making opportunities which require us to compromise our morals and ethics. This would help us build enough money and ensure that our character remains unblemished.

The definition of 'enough money' depends on our individual needs and circumstances. But it is important to come to a clear decision regarding how much is enough. Without that we would never have enough and never be able to enjoy the well deserved fruits of our labour and hard earned money.