When Is Enough Really Enough?

For many, retiring at a younger age is a goalpost that marks you’ve “made it” and no longer need to work to support the lifestyle you desire. But some people who can afford to retire early later find their life is missing something — their net worth might be big, but there’s a void in their self-worth.

This topic often comes up in our conversations with clients, and we recently had the opportunity to dig into the concept of “enough” with one of our Money Tale$ guests, Paul Ollinger. Paul was an early sales leader at Facebook and retired in 2011. It didn’t take much time not working for Paul to realize there’s a whole lot more one gets from work than just a paycheck. Today, he has been building successful second careers as host of a podcast, Crazy Money, and as a stand-up comedian.

“Enough” is highly personal. Not only does the definition differ from person to person, but it can change over the arch of one’s life.

Quantity or quality?

Determining how much is enough involves honest soul-searching, some visioning and then math. Here are three steps to help you decide.

1. Identify the context and time over which you are asking yourself if you have enough.

There are numerous situations in life that prompt people to think about how much is enough. Usually, we start with financial questions that have a time horizon. For example, are you:

• Looking to stop working for a short period of time … or forever?
• Deciding to change jobs or professions?
• Making a decision about how to diversify a concentrated stock position?
• Determining how much life insurance to buy?
• Working on a marital settlement agreement as part of a divorce?
• Wondering how much money you can tap into from a trust that is established for your benefit and also for your progeny?

As you can see, the context and time period implied in the questions are important factors for answering them. This is especially true if determining how much is enough is part of a high-stakes, irrevocable decision you’re making that will impact you for decades or even the rest of your life.

So be sure to really challenge yourself on how your vision for these things may shift over time. A word of caution here — envisioning who you’ll be and what you’ll be doing in the distant future is an extremely challenging exercise. How will you know, right now, if you’re going to desire a mountain home or beach house in the future? Or if you’ll want to become an angel investor? Or if you’ll want to move to Europe for part of each year? Or if you’ll need long-term care in the later years of your life? It’s impossible to contemplate all future decisions now. But do the best you can to consider likely scenarios that could arise down the road. And when they do, don’t worry, you’ll be able to evaluate them based on the facts and circumstances at that time.

2. Answer the question, “Enough what?”

When people talk about having enough, they’re usually talking about money. Be sure to consider additional factors involved in the definition of enough for you like time, freedom, friendships, emotional support and other intangibles. Often these things have an indirect money-related cost, and it helps to know everything you’re measuring before you can evaluate how much of it you need or want.

We’ve heard from people who retire early that they miss the sense of belonging and self-esteem that a job can bring.

Consider your personal values, the purpose that drives your life and your priorities. They are the things that are most important to you. Imagine how you’ll be spending your time, where you’ll be spending it and who you’ll be spending it with. Envision whether you’ll be making money. How will these activities support your values, purpose and priorities? Will they provide your life with the meaning and satisfaction you desire?

This visioning exercise is important because it will allow you to mentally try on what works for you. Thinking about these factors in conjunction with the context, time period and resources will help you create a tangible vision for what enough means to you.

3. Calculate what it will take to achieve your vision of enough.

We prepare long-range wealth projections for clients all the time at Aspiriant. While you may not need an advisor to run the numbers for you, it can be helpful to have an objective professional help you develop reasonable assumptions for costs, inflation, investment returns and other factors that are involved in calculating how much money is enough for you. They can also help you determine how much additional cushion you might want to pad the projection with so you can address unknown factors that may come up.

If the long-range projections indicate that you already have enough assets to meet your vision, congratulations. This should provide you with peace of mind and a feeling of security to confidently make decisions.

If your balance sheet isn’t where it needs to be, you have some choices to make. You can keep working toward accumulating more money until you reach your goal of enough, or you can revisit your vision to determine if there are trade-offs you’re willing to make now or later to scale down and achieve a new vision of enough sooner.

Finally, while it can be difficult to avoid the influence of others, we strongly encourage you to resist the urge to be swayed by unprofessional opinions and actions. This is your life and you’ll gain the most satisfaction by living it in service of what’s most important to you.

Hear modern-day movers and shakers share their stories about how money decisions intertwine with their daily lives and the wisdom they gained from those experiences on Money Tale$.