How Much Money Makes You Comfortable

[watsoninc]

I guess it is fair to say and unsurprising that everyone's financial comfort level is different. However, it does sound as if there is consensus that financial solvency is a must for comfort. It also appears that there are plenty of people who probably won't be comfortable financially until they are financially independent and ready to retire or at least getting there (i.e. liquid net worth of $1 million). Lastly, I guess there is a minority who will never be financially comfortable.

[disneysteve]

Having read other responses and thinking more about this, I think from a different perspective, I'm already financially comfortable. I have a good job and a good income. We are able to pay all of our bills, take nice vacations, go out to eat, generally enjoy ourselves and still save well over 20% of our gross income for future needs. I realize that when looked at in that way, we are very lucky to be where we are financially and are certainly comfortable with what we have.

[Runaway Finances]

When a reporter asked Howard Hughes how much is enough money, he answered "One dollar more!" You are financially comfortable when you have enough money to pay your bills and reasonably do the things you want. In other words, you are satisfied with where you are. That doesn't mean you can't strive for more, but you are fine if you don't achieve more. You are content with where you are. Hopefully, we are doing things to help others when we are financially comfortable AND all along the way while we try to get there!

[Goldy1]

If I had a paid off mortgage and a defined pension and health plan, you could consider me a happy cookie. I have none of these things yet. Paid off mortgage is soon, but I face an uncertain financial future due to the lack of jobs out there having worked outside my field for lower pay.

Enough to not have to worry about taking my kid out for icecream or a yearly family trip. Having health insurance, and enough to pay bills and some for the future. I am a simple person. I like money, but I am not in love or obsessed with it. I know people like that. No thank you. I do not want to live like that. Bless them. I know people who seem to live for money. They have more than enough if they had half of what they had and each day is a drawn out pursuit for more. Life is too short.

[Goldy1]

Retirement(which could mean p/t job for me and dh during it for money and sense of worth) at age 50 ish is my goal.

I just had a child, and money is ironically more and less important to me. I need more, but having more free time to be with him rules. I care less about "things" but I never cared a lot anyway.

[watsoninc]

Goldy1 -Thanks for your input,

The irony of your last comment is that when you achieve your financial goals, you will likely have more time with your child and more time to do whatever else you want to do as well.

[Ima saver]

When I was younger, I always wanted a million in the bank and I could just live on the interest. That was back when the bank paid 6% interest and you could live comfortably on $60,000 a year.
Now, the banks are only paying 2% and it is hard to live on $20,000 a year. I guess you would need about 3 million in the bank today!

[disneysteve]

When I was younger, I always wanted a million in the bank and I could just live on the interest. That was back when the bank paid 6% interest and you could live comfortably on $60,000 a year.
Now, the banks are only paying 2% and it is hard to live on $20,000 a year. I guess you would need about 3 million in the bank today!

That's only if you wanted to keep all of your money in a plain old savings account for some reason. More likely, you would have money in some higher yielding instruments like corporate and municipal bonds and dividend paying stocks. You'd also want to keep at least a small portion in growth stocks to keep you ahead of inflation.

[Well Spent]

I will never have enough money to feel comfortable about it. You can always get robbed by people like Bernie & Ruth Madoff.

[Alex_Adviser]

Some very nice discussion going on here.

IMO, Financial Comfortable is to have enough saved that you can live frugally off the interest or Spending less than you make. It can be done whether you make $35,000 a year or $350,000 a year.

[blankcheck]

We're overanalyzing it.

The answer is the same as it has always been, no matter what the scenario:

"More."

Too many people downplay this natural response, to their financial detriment. Goals (retirement, a specific dollar amount, etc) will help you maintain this drive, but treating those goals as "the end" usually results in some level of discomfort.

[Pitman]

I'll never be completely comfortable.

[sandrark]

For me, there's a difference between "comfortable" and "wealthy."

Comfortable means I can afford my needs, and a reasonable number of wants - such as travel, the occasional spa day, a good watch or jewelry when I find something that appeals. By that definition, the amount of money I make now is comfortable.

Wealthy means I don't have to work at an outside job, unless I want to. My income is passive, rather than actively earned.

It's one reason that self-employed people are intriguing for me - to my mind, you'll never be wealthy working for other people.

Sandi

[money blogger]

When I was younger, I always wanted a million in the bank and I could just live on the interest. That was back when the bank paid 6% interest and you could live comfortably on $60,000 a year.
Now, the banks are only paying 2% and it is hard to live on $20,000 a year. I guess you would need about 3 million in the bank today!

You're absolutey correct.

I remember only 4 years ago when my wife and I were earning only about $70,000 per year as a couple. That was pretty easy, as I'm very frugal and as we were starting out, our rent, with all expenses was only $600 a month.

However, now that our circumstances and lifestyle have changed, I couldn't see living on anything less than $100,000. With inflation, this number will only go up.

I suppose there's three ways to achieve this, if the bank only pays 2%.

1. Invest 5 million and live off the interest and leave 5 million to heirs.
2. Invest 2-3 million and live off interest and principal. Money should last long enough.
3. invest in a business that continues to grow and put money into my bank account long after I stop working. Create my own pensionf from residual passive incime. Also, because this is my own business (and thanks to our free country, anyone can start their own business) it can grow as fast or slow as I want, and I can live off that residual income earlier than the typical 35-40 work life. If I build a business properly and groom a proper successor, I can achieve this goal in as little as 5-10 years.

They say the average millionaire has more than 5 different income streams. How many does the average person have. How many do you have. Most have only their job, and maybe investments. What if you could have 5 or more. Would it be easier to live a satisfying, stress-free life knowing that if one stream isn't producing too well that you have 4 more that you can rely on? I know I could.

So, as things go now, I'm comfortable with $100,000 a year, but my dreams are growing and that number is too.

[gekkoplus]

At this age of mine (30 years), I would have liked to have $100K in retirement savings and $100K in cash savings while living debt free. In reality, I am just half way through with my retirement savings and trading in negative territory on my net worth (debt and income)..