If one doesn't know the answer, then one will never get there:-)
As More, more, more .... and then some more notes "we never seem to have enough money.... ever." In Silicon Valley, Millionaires Who Don’t Feel Rich by Gary Rivlin of The New York Times observes that people with a net worth of $2, $5, or even $10 million feel they don't have enough money, and need to keep working. People see others with $100 million in net worth and start thinking they need more.
To me, the question should be "How much is enough lifestyle?" Once the lifestyle question is answered , "How much is enough money?" will have a straightforward answer. For example, if someone wants to live in a $2 million house, drive a Mercedes 500 SL, attend private schools, and have a yacht, then $3 million net worth is probably not enough. On the other hand, a $250,000 house, 2003 Camry, public schools, and ski boat can probably do very well on $3 million net worth. To me, either lifestyle is acceptable. I am not one to judge the lifestyle another person chooses, if they can financially support it.
In our case, once we chose a lifestyle, it was easy to calculate the cost of supporting that lifestyle. We took that number and multiplied it by 20 to get a good initial estimate of a comfortable value of "enough money" on which to retire. Of course, as with any major personal finance decision, we had our professional advisor do an in-depth analysis to confirm the validity of our estimate.
For more on Ideas You Can Use, check back every Tuesday for a new segment.
Photo Credit: morgueFile.com, Matthew Hull
To me, the question should be "How much is enough lifestyle?" Once the lifestyle question is answered , "How much is enough money?" will have a straightforward answer. For example, if someone wants to live in a $2 million house, drive a Mercedes 500 SL, attend private schools, and have a yacht, then $3 million net worth is probably not enough. On the other hand, a $250,000 house, 2003 Camry, public schools, and ski boat can probably do very well on $3 million net worth. To me, either lifestyle is acceptable. I am not one to judge the lifestyle another person chooses, if they can financially support it.
In our case, once we chose a lifestyle, it was easy to calculate the cost of supporting that lifestyle. We took that number and multiplied it by 20 to get a good initial estimate of a comfortable value of "enough money" on which to retire. Of course, as with any major personal finance decision, we had our professional advisor do an in-depth analysis to confirm the validity of our estimate.
For more on Ideas You Can Use, check back every Tuesday for a new segment.
Photo Credit: morgueFile.com, Matthew Hull
This is not financial advice. Please consult a professional advisor.
Copyright © 2007 Achievement Catalyst, LLC
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