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Enough

NO MATTER HOW much money we currently have, there’s always the temptation to want more. This is understandable—we like the idea that the future will be brighter than today—but it also carries risks.

There’s the obvious danger: We’ll never feel satisfied with what we have. For most of us, the big financial finish line is retirement. How much do we want saved up by then, so we can retire in comfort? Even if we later revise that number, it’s helpful to set a goal, so we know what we’re aiming for—and what success looks like.

There’s also the less obvious risk: We might continue to invest aggressively, even though we’re comfortably on track to meet our financial goals. Yes, if we’re ahead of where we need to be, arguably we can afford to take additional risk. But this added risk could come back to haunt us, and we might end up snatching defeat from the jaws of victory. Remember, the goal isn’t to grow absurdly rich, but rather to have enough to lead the life we want. What if we forget about that goal? The math of investment losses is brutal: If we invest aggressively and lose 50% of our portfolio’s value, we need a 100% gain to get back to even.

When we ponder what constitutes enough, we shouldn’t just think about our nest egg. It’s also a concept worth applying to the size of our homes, the possessions we accumulate and even our career. We don’t want to reach the end of our working life and feel we could have achieved so much more. Instead, we should figure out what would constitute success, write it down—and then, fingers crossed, achieve our goal and feel satisfied with our accomplishments.

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