Most of us struggle with the above question. Never before in modern history has the question been so important. We are living longer. Our expected “unproductive” time of retirement (approximately 25 years) and as youth (18 to 22 years) is about the same as our “productive”, time working (45 years).
It is also a time of much uncertainty. Dr. Richard Swenson noted futurist and author of the best-selling book Margin, said in a recent interview “The world is in its most perilous state of the last 33 years… There is drama and suddenness baked into the cake right now. People better hang on to God and do it quickly. It is a wild world and it is not going to settle down.”
Regardless of what anybody says, I do not think you can ever have enough money for protection. I “cut my teeth” in the banking industry in the late’ 80s. I saw people of wealth lose much from no apparent fault of their own (and I saw people who lost much due to their obvious fault!) In this world, it is not possible to physically protect yourself and your family.
I do not think that means we should not plan for the future-I am a financial planner after all. A question that should be asked along with, or maybe even before, “How much is enough?”, is ” How much is enough for what?” Most people do not know the amount and purpose of their spending. If you are retired, the answer is easier—the annual amount you are withdrawing from your savings is the amount that your remaining savings will have to support for the rest of your life (given no change in lifestyle).
If you are working, the answer can be a little harder to discern. Usually, the answer is the amount of your take-home pay. Noted financial writer Ron Blue says there are five uses of money:
- debt payments
No matter what the return on your investment, your withdrawal can be too much (and your withdrawal, or lifestyle, is the only thing that you have any control over). There is no right answer to the original question. Each individual will come up with a different answer. A financial plan is part of that wisdom. We would love to help you answer “How much is enough?” for yourself.I will close with a quote from a former Uruguay president who spent approximately 10 years in solitary confinement. The strangely familiar quote (Philippians 4:11&12) is from the powerful YouTube movie “Human“. I wish I could learn the concept myself.
Computer apps are now available that make this job much easier (see our article here).
Either you are happy with very little, without overburdening yourself, because you have happiness inside, or you’ll get nowhere. I am not advocating poverty. I am advocating sobriety. We invented a consumer society… which is continually seeking growth. When there is no growth it is tragic. We invented a mountain of superfluous needs. You have to keep buying, throwing away… It is our lives we are squandering. When I buy something, or when you buy, we are not paying with money. We are paying with the time from our lives we had to spend to earn that money. The difference is that you can’t buy life. Life just goes by. And it is terrible to waste your life losing your freedom.
We would love to help you answer “How much is enough?” for yourself.