Enough use to be one dollar more than what I already had. Now it is knowning that if I go down the tubes in a financial crash then I will have most of America down there with me and it couldn’t be avoided.
The answer is different for everyone, but for me…it is knowing that my wife and I can spend $100,000 a year, adjusted for inflation, every year, until we both die.
What about inflation? Handled. I have 4 deferred indexed annuities, with income riders, that we can turn on, when needed.
What about sequence of returns risk? See annuities above and because our income is not predicated on taking withdrawals from our market invested portfolio, we can let it stay fully invested.
No debt…no mortgage…no real financial worries…that’s enough for me.
What’s enough? It’s different for everyone, but I have saddled myself with a high bar since my teen years, when I didn’t have any idea about what the stock market was. I was sure I’d never own any stocks, ever. I did know simple math and figured that if someday I could live on 10% of my total annual interest from my savings account, that’d be enough. Fast forward 50 years of hyper savings to today, and I’m feel’n that I now have enough, becasue I’m comfortably reliant upon stock index funds. A 2% draw upon a 3 year rolling average of our investments year-end value outpaces (customary 2%) inflation by 3x. I feel “relief”, not so much “enough”, and whatever is left over, goes to my wife and child, and then I hope to a good cause. In that order.
I will attempt to answer what “Enough” means to me in the financial wealth sense. First a little background:
When we bought our home after finishing my residency, I assumed we would stay for five years max then move to a more expensive neighborhood, where most other physicians lived. My initial assumption was that a more expensive home would be a “better investment”. Funny thing was, we liked the house, the neighbors, and our boys were happy. I asked my senior partner for his opinion, and he shrugged and said simply “Don’t buy a big house”. Around then I started reading Jack Bogle and Warren Buffett, and eventually many others too.
It became increasingly obvious to me, that the higher my present cost of living, the less available there is to invest for the future. Not to mention, the larger nest egg I would need to fund those higher costs in retirement. I realized my partner was advising against a more expensive lifestyle. It was necessary to make some financial tradeoffs.
My wife retired at 61. When I turned 64, I realized my nest egg had exceeded my “number”. I took Bill Bernstein’s advice and “quit playing the game”. I gave my partners a full year notice, reduced my hours, and enjoyed that last year. Then I joined my wife in retirement.
We still live in the same house. Our sons have grown up, and they along with their families live a short drive from us. We made tradeoffs between present and future consumption long ago which funded a lifestyle we greatly enjoyed, and still do, and for which we are grateful. “Enough” means we were happy with the lifestyle those tradeoffs allowed for while working, and which provided a nest egg sufficient to allow us to continue that same lifestyle now.
Enough use to be one dollar more than what I already had. Now it is knowning that if I go down the tubes in a financial crash then I will have most of America down there with me and it couldn’t be avoided.
Enough?
The answer is different for everyone, but for me…it is knowing that my wife and I can spend $100,000 a year, adjusted for inflation, every year, until we both die.
What about inflation? Handled. I have 4 deferred indexed annuities, with income riders, that we can turn on, when needed.
What about sequence of returns risk? See annuities above and because our income is not predicated on taking withdrawals from our market invested portfolio, we can let it stay fully invested.
No debt…no mortgage…no real financial worries…that’s enough for me.
What’s enough? It’s different for everyone, but I have saddled myself with a high bar since my teen years, when I didn’t have any idea about what the stock market was. I was sure I’d never own any stocks, ever. I did know simple math and figured that if someday I could live on 10% of my total annual interest from my savings account, that’d be enough. Fast forward 50 years of hyper savings to today, and I’m feel’n that I now have enough, becasue I’m comfortably reliant upon stock index funds. A 2% draw upon a 3 year rolling average of our investments year-end value outpaces (customary 2%) inflation by 3x. I feel “relief”, not so much “enough”, and whatever is left over, goes to my wife and child, and then I hope to a good cause. In that order.
I will attempt to answer what “Enough” means to me in the financial wealth sense. First a little background:
When we bought our home after finishing my residency, I assumed we would stay for five years max then move to a more expensive neighborhood, where most other physicians lived. My initial assumption was that a more expensive home would be a “better investment”. Funny thing was, we liked the house, the neighbors, and our boys were happy. I asked my senior partner for his opinion, and he shrugged and said simply “Don’t buy a big house”. Around then I started reading Jack Bogle and Warren Buffett, and eventually many others too.
It became increasingly obvious to me, that the higher my present cost of living, the less available there is to invest for the future. Not to mention, the larger nest egg I would need to fund those higher costs in retirement. I realized my partner was advising against a more expensive lifestyle. It was necessary to make some financial tradeoffs.
My wife retired at 61. When I turned 64, I realized my nest egg had exceeded my “number”. I took Bill Bernstein’s advice and “quit playing the game”. I gave my partners a full year notice, reduced my hours, and enjoyed that last year. Then I joined my wife in retirement.
We still live in the same house. Our sons have grown up, and they along with their families live a short drive from us. We made tradeoffs between present and future consumption long ago which funded a lifestyle we greatly enjoyed, and still do, and for which we are grateful. “Enough” means we were happy with the lifestyle those tradeoffs allowed for while working, and which provided a nest egg sufficient to allow us to continue that same lifestyle now.
When Charlie Munger passed recently there was an article about why he lived in the same house for l