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.
If you come from comfortable money, it bestows notions of entitlement, if you come from nothing, it may buy the comfort & relief rather than happiness, that's the continuum.
We are also receiving a generous single pension and Social Security, and have the good fortune of saving of all that, while paying off all our debt (over a decade ago). We havn't starved ourselves, though. 1 main home and 2 vacation homes, but nearly no traditional vacations - about to remedy that situation this year! The pension and SS payments go straight into our investments in equities. As a precaution, though, we do calculate our 2% of investments budget amount as an average of our last 3 year-end investment balances. That has given us a smooth upward curve for the last 2 decades. Over the last 20 years, our annual budget amount decreased only on 2 occasions. 2008-2009 and 2020. Both times the decrease was minor enough to stay the course. I was still employed for the first market decline, and on a pension for the second. Overall, our self-imposed draconian method saw a civil servant and a secretary through to financial independence. We don't need the pension or SS anymore, but we certainly invest it, only to increase our 2% each year! We have peace of mind. we are guilt free, and our 2% annual budget figure grows and grows. America and index investing is a good thing. Our philantropy begins after we finish living. So buy the MB already, and don't feel guilty.
I think there are a lot of folks on this forum that are on similar paths as yours. I'm about 15 years behind you in key respects, i.e., age and lifetime financial goals. I already wrestle with your same personal questions and issues about spending off some of my savings/portfolio profits on things never before affordable to me or anyone in my family. My method isn't for everyone, but here's how I look at it. Ignor all sorts of your current steady income streams, and calculate 2% of your current portfolio. That's your annual budget for everything, including your fun money. It's all guilt free spending at that point, becasue your portfolio should still be increasing each year. I am just crossing that threshold now, where my guilt-free 2% amount will cover all of my usual frugal spending habits, and I can start increasing the smallish amounts I've been spending on the things that I do for fun and enjoyment. It sounds as though you're well past the time when you should have lost the guilty feelings. Life long diligence in managing your lot in life, and doing a good job it, is a career in itself. It's how you make your money in later life. Your heirs and favorite charities will be glad you did a great job for them, and for yourself, too!
Comments
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.
Post: How would you define “enough”?
Link to comment from September 2, 2023
If you come from comfortable money, it bestows notions of entitlement, if you come from nothing, it may buy the comfort & relief rather than happiness, that's the continuum.
Post: Does money buy happiness?
Link to comment from September 2, 2023
We are also receiving a generous single pension and Social Security, and have the good fortune of saving of all that, while paying off all our debt (over a decade ago). We havn't starved ourselves, though. 1 main home and 2 vacation homes, but nearly no traditional vacations - about to remedy that situation this year! The pension and SS payments go straight into our investments in equities. As a precaution, though, we do calculate our 2% of investments budget amount as an average of our last 3 year-end investment balances. That has given us a smooth upward curve for the last 2 decades. Over the last 20 years, our annual budget amount decreased only on 2 occasions. 2008-2009 and 2020. Both times the decrease was minor enough to stay the course. I was still employed for the first market decline, and on a pension for the second. Overall, our self-imposed draconian method saw a civil servant and a secretary through to financial independence. We don't need the pension or SS anymore, but we certainly invest it, only to increase our 2% each year! We have peace of mind. we are guilt free, and our 2% annual budget figure grows and grows. America and index investing is a good thing. Our philantropy begins after we finish living. So buy the MB already, and don't feel guilty.
Post: My Car Journey
Link to comment from September 2, 2023
I think there are a lot of folks on this forum that are on similar paths as yours. I'm about 15 years behind you in key respects, i.e., age and lifetime financial goals. I already wrestle with your same personal questions and issues about spending off some of my savings/portfolio profits on things never before affordable to me or anyone in my family. My method isn't for everyone, but here's how I look at it. Ignor all sorts of your current steady income streams, and calculate 2% of your current portfolio. That's your annual budget for everything, including your fun money. It's all guilt free spending at that point, becasue your portfolio should still be increasing each year. I am just crossing that threshold now, where my guilt-free 2% amount will cover all of my usual frugal spending habits, and I can start increasing the smallish amounts I've been spending on the things that I do for fun and enjoyment. It sounds as though you're well past the time when you should have lost the guilty feelings. Life long diligence in managing your lot in life, and doing a good job it, is a career in itself. It's how you make your money in later life. Your heirs and favorite charities will be glad you did a great job for them, and for yourself, too!
Post: My Car Journey
Link to comment from September 2, 2023