How Do You Let Enough Money BE Enough?

[Retired To Win]

Declaring money victory has been hard for me. I explore that issue in my blog post <a href=http://retired-to-win.savingadvice.com/2014/07/06/letting-enough-money-be-enough_122491/>Letting Enough Money Be Enough</a>. As I explain in that article, "I reached the point of passively making more money than I need a good while ago. But I have kept trying to make more money [even though] increasing my cash flow would not result in a significant boost to my financial security." Do you find yourself doing the same?

I end my post <a href=http://retired-to-win.savingadvice.com/2014/07/06/letting-enough-money-be-enough_122491/>article</a> asking "Why not just use the time to have more fun or relax more?" (instead of using that time to labor for more money.) Which would you choose? How would you let enough money be enough?

[bjl584]

I guess it depends how much money you have compared to how much you think you need.

I'm not to the point of financial independence yet, so it's a hard question for me to answer. When I get there hopefully I'll know and I'll be able to back off the throttle a bit.

[Retired To Win]

I guess it depends how much money you have compared to how much you think you need.

I'm not to the point of financial independence yet, so it's a hard question for me to answer. When I get there hopefully I'll know and I'll be able to back off the throttle a bit.

You cannot get to financial independence until and unless you determine first "how much you think you need." (In other words, how much is enough.) Otherwise, you won't know that you have reached financial independence when you get there. Or you never will get there because you will just be chasing a moving target that will always be just a little more than you have.

So that takes me back to the question: how does one let enough money be enough?

[AnotherReader]

I think it depends on two things.

First is your experience with money throughout your life. Was there always an abundance and you wanted for nothing? Or were there periods of uncertainty and/or loss, where the lack of money created fear? If the latter is the case, I don't think there is ever "enough." There is always the fear that it could all disappear.

Second, how confident are you that you have "enough?" Are you one of those people that runs every type of retirement calculator under 100 different scenarios and isn't satisfied until the results are 100 percent your money will last forever? Or did you accept a 90 or 95 percent probability that things would work out? If you are not completely confident, that unconscious nagging may be keeping you at the stock analysis every day.

For some folks, making money picking stocks or trading is a hobby, no different than your Pacific War game. You aren't risking your retirement by doing this, so why not just call it another hobby?

[jaynorth]

Re: How Do You Let Enough Money BE Enough?

Exactly, it depends on your experience with money throughout your life and how confident are you that you have "enough?".

[bjl584]

You cannot get to financial independence until and unless you determine first "how much you think you need." (In other words, how much is enough.) Otherwise, you won't know that you have reached financial independence when you get there. Or you never will get there because you will just be chasing a moving target that will always be just a little more than you have.

So that takes me back to the question: how does one let enough money be enough?

I know how much is enough for me. I just don't know if I'll be able to adjust my savings habits when I get there. It will be a hard barrier to break.

[Retired To Win]

I think it depends on two things.

First is your experience with money throughout your life. Was there always an abundance and you wanted for nothing? Or were there periods of uncertainty and/or loss, where the lack of money created fear? If the latter is the case, I don't think there is ever "enough." There is always the fear that it could all disappear.

Second, how confident are you that you have "enough?" Are you one of those people that runs every type of retirement calculator under 100 different scenarios and isn't satisfied until the results are 100 percent your money will last forever? Or did you accept a 90 or 95 percent probability that things would work out? If you are not completely confident, that unconscious nagging may be keeping you at the stock analysis every day...

These are good points. But...

For the first person in your reply, "enough" can never be defined in dollars. Like you said, that person would never be at peace with however much they had or were making.

For the second person in your reply, there would still have to be a dollar-figure-answer to the question of enough if only to have a number to plug into those calculators.

Bottom line, though, those are both examples of people with a certain level of financial psychology problems. How about a scenario featuring a person that can be objective about it all?

[Retired To Win]

... For some folks, making money picking stocks or trading is a hobby, no different than your Pacific War game. You aren't risking your retirement by doing this, so why not just call it another hobby?

Well. you are on the right track there. And I explored that to a good degree in my article <a href=http://retired-to-win.savingadvice.com/2014/05/17/should-i-still-work-at-investing_108959/>Should I Still Work At Investing?</a>

BUT, before I can determine to what extent I can change my approach to investing from money-making work to fun-and-interesting hobby, I have to free myself from the "pressure to earn" from that investing. That is where "letting enough be enough" comes in.

(BTW-- for those who may find AnotherReader's Pacific War reference a little cryptic, here is the back story: <a href=http://retired-to-win.savingadvice.com/2014/01/07/strategy-games-my-rainy-day-passion_106565/>My Strategy Games Rainy Day Passion</a>)

[Retired To Win]

I know how much is enough for me. I just don't know if I'll be able to adjust my savings habits when I get there. It will be a hard barrier to break.

Thanks for putting that angle on the table. It shows that the "enough" question presents not one, but 2 quandaries. Once you have "enough" passive income coming in, (1) do you cut back on the amount of labor you are doing to generate income and enjoy the extra free time while financially coasting on that passive cash coming in? (2) Or do you keep working as much but cut back on your savings rate and crank up your discretionary "splurging"?

As I explained in <a href=http:retired-to-win.savingadvice.com/2014/07/06/letting-enough-money-be-enough_122491>Letting Enough Money Be Enough</a>, in my case I am already hard-pressed to spend my discretionary income as it comes in. So that being a mute point, I just looked at the opportunity to free up more of my time.