How much is enough?

  1. The concept of enough
  2. Definitely not enough
  3. Sources
  4. Bernie Madoff - Wikipedia
  5. The Psychology of Money
  6. I Can Make You Rich
  7. How Much is Enough?
Photo by Niels Steeman on Unsplash

Everybody wants to make more money, right? With the cost of living rising all the time and further pain to come, most people actually need more money. But how much is enough. Who really needs to make more money, and who doesn’t? How much do you need?

If you haven’t considered these questions before, you should. Money is as necessary to our lives as food, and you wouldn’t just keep eating and eating with no thought given to how much you actually need. Nor would you last very long with no food at all.

How much money you need depends on who you ask, and it what you focus on. There is a point at which the pursuit of money is necessary, and there is a point at which it seems ridiculous. This article will help you to think about money clearly, so you can figure out how much you actually need.

The concept of enough

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At a party thrown by a hedge fund manager, American novelist Kurt Vonnegut told his friend Joseph Heller, that their host had made more money in a single day, than Heller’s novel Catch 22 had made in it’s entire lifetime. “Yes,” replied Heller. “But I have something that he will never have; enough.” Heller’s response was excellent, and it makes an excellent point. For some people, no amount of money will ever make them happy.

Ask yourself a question; once your bills are taken care of and you have enough money to live comfortably, what is the point of more and more money if it is never going to satisfy you? There are wealthy people who have ruined their lives in the pursuit of more and more wealth. The best recent example might be Bernie Madoff. Before starting the fraud that ruined him and his family (Bernie’s son Mark committed suicide two years after his father was arrested), he had a perfectly legitimate business making around $50 million dollars each year. But he wasn’t satisfied.

People like Madoff were never satisfied, and they were never happy. What makes people like that, and how can you avoid the same thing happening to you?

Certain work environments will encourage the worship of money above all else; investment banks come to mind. How many happy, pleasant investment bankers have you met? Pleasant bankers are a rare breed because they are reared in an environment where their value (and eventually their self esteem) is tied entirely to the amount of money they make. Being in a culture where money is worshipped above all else might increase your chances of being rich, but it greatly decreases your chances of being happy, or ever having enough.

Another factor that impacts the concept of enough is consumerism. Like overly avaricious work places and peer groups, consumerism aims to tie our self worth to money, in this case, the amount of it that we spend. Advertising, the glamorous and evil twin of consumerism, was designed to make us feel inadequate unless we spend money. It has succeeded. How many people do you know who truly believe that they are superior to anybody around them who has a less expensive watch, car, hand bag, or anything else? The amount of money you spend really says nothing about how good a person you are, but consumerism and advertising has convinced us otherwise. What kind of idiot believes that a person’s value, happiness and quality of life, correlates directly with the amount of money they spend on luxury items? Most of us.

People purchase expensive items to show other people how much money they have. You can’t go around waving your paycheque or your bank balance in peoples faces, but you can roll up your sleeves and let them all see your £20,000 watch! People are so taken in by the need to look rich, that most of them get in to debt to do it. They are amongst the people who definitely don’t have enough, and really do need more money.

If your highest value is money, and everything else takes a back seat to it’s accumulation, you’re at risk of becoming somebody like Bernie Madoff. By realising that money is a tool, and it is not litmus test for your value as a human being, you are less likely to fall victim to the sort of avarice that destroys lives and makes happiness almost impossible. The love of money above all else is never going to lead to any good. That wisdom is centuries old, it even appears in the bible.

There’s nothing wrong with having money, and the more of it you have, the more options you have.

Definitely not enough

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I’ve been well off, and I’ve been totally broke. Whilst I’ve been more stressed and prone to bad moods when I’ve been broke, a lot of the time, I’ve been broke and just as happy as I when I was rich. Your happiness and fulfilment in life are not the same as your income or your bank balance.

There is obviously a level of income below which you will find things much more difficult. If you cannot pay your bills, or feed yourself and your family, or keep a roof over your head, things are going to be very difficult. You need to make enough money to cover the essentials. The exact amount varies greatly depending on where you live, and how you live. One thing that we can all do regardless of our living situation, is stop wasting money. Spending money gets you things, but not spending money gives you freedom, options, and security.

Once you can pay your bills, you want to have some fun, and if you’re smart, you want to save. Burning through your paycheque every month puts you in dead end territory. You should get to the point where you spend less than you earn so you can start saving. In most cases people can cut back on their spending without really affecting their quality of life.

Once your needs (food, bills, rent / mortgage, etc) are taken care of, you have your expendable income. That’s what makes the difference, it allows you to do things, like going out with your family and friends. Those activities will make you happier. Connection with people who matter to you is a far more reliable source of fulfilment and happiness than possessions. Another thing which brings happiness and fulfilment is learning new skills, so maybe you can enrol in a class with some of that wonderful expendable income. If you want to be happy, you can get there faster by spending your money on learning and experiences and time with loved ones. Having a safety cushion (savings) will increase your peace of mind, which also leads to a happier life. The least reliable (but most popular) way to enjoy yourself and feel good, is buying lots of shiny new things.

Is a million a year enough?

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Clearly the more money you have, the more you can do, so it can seem difficult to decide exactly what is enough. Studies in the United Kingdom have shown that people do experience greater satisfaction and happiness as their income increases, but the correlation diminishers rapidly after yearly income reaches £75,000. Beyond that level, money doesn’t seem to make much of a difference to how happy a person is.

A person who earn £75,000 is likely to be just as happy as someone who earns a million a year. On £75,000 a year you’d certainly be able to take care of all your needs. A person who earns a million a year and still doesn’t think they have enough, is probably less happy than someone on £75,000 a year who thinks they do have enough.

How can someone earn a million a year and still not think they have enough? The answer to that question comes from psychology.

Several studies have asked some version of the following question and the answers are almost always the same. Subjects are asked whether they’d rather earn £80,000 a year, whilst their friends earned £70,000 a year, or £100,000 a year whilst their friends earned £110,000 a year. Invariably, people prefer to earn the lower amount, as long they are earning more than their friends. People want to earn more than everybody around them. The worldwide obsession with celebrity and wealth means we can always find out about someone who earns more than us. Concentrating on all the people who have more than you will make it extremely difficult for you to ever be happy with what you have. You will never have enough. There is nothing wrong with wanting more money, but use yourself as your barometer. Are you making more than you used to? If you are, you can be happy. If you want more, then find a way to make more, but don’t decide that everything you have sucks, because someone else has more. Someone else always has more. It’s that simple.

So you want to make more money…

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Once you’ve figured out how much is enough for you personally, you can go after it.

I don’t know what industry you’re in, and I don’t know your skill set, so I can’t tell you how to get a pay increase, or what side hustle you need to engage in, or what you need to invest in to make more money. But what I can tell you, is that you’re never going to improve your financial situation unless you believe you can.

You need a plan, and a you need belief to execute that plan. Plans come from ideas. To generate ideas you need to ask yourself some questions. The most obvious one is ‘how can I make more money?’ Write it down and try to come up with 50 ideas. You could also ask yourself, ‘how can I spend less money?’ then once again try to come up with 50 answers. They don’t have to be good answers, just write down whatever comes into your head. If you aim for fifty, you will almost certainly get some good ones. Other questions you can ask are ‘what skills do I have that I can make money from?’ or ‘what skills can I learn that I could make money from?’ This may seem a little obvious, but it’s a very useful exercise that most people never do. Train your brain to look for money making opportunities and you will start to notice them. I’ve done it and I’ve seen other people do it.

You may need to make more money, but not want to make it, because you can’t be bothered, or you don’t think you’re capable. You can get over that bit of self sabotage with a pen and paper. Lists can help to focus and motivate you. Make a list of fifty ways your life would be better if you earned more money. Do it. Then make a list of fifty things you’d like to do if you had more money in the bank. Go on. Doing these exercises will give you ideas and motivation.

Once you have ideas and motivation, you need belief, so you can go and execute those ideas. You can trick your brain into giving you belief by imagining how your life will be improved once you have more money. Imagine it vividly and imagine it regularly, you’ll become motivated and you’ll take action. Once you do that, you greatly increase your chances of having enough.

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