Enough - How much is that?

[Mr. Tightwad]

I've actually struggled with this exact point.


In 2019, I earned about 240K. Our portfolio, after all spending was accounted for, ended the year 300K higher than it started.


In 2020, I earned about 240K. Once again, our portfolio ended the year 300K higher than it started.


Each year, we added 100K of new money to the portfolio out of current income. But that still means the portfolio grew by about 200K each year on it's own - more than we spent either year.


My problem is that this all occurred during a tremendous bull market. There's no way I can reliably count on growth like that each year. Our portfolio could easily drop by 200K or more this year if the market goes south.


At what point do you decide you have enough of a cushion so that even in the bad years, you'll still be okay? I guess that's the age old question we all have to answer before retiring.

I was referring to rents collected + dividends exceeding my salary, not portfolio value. I was making X at work, and another X off monthly investment income. So 2X total. So at 45 I quit and just make X.

 

[Sunset]

......

My problem is that this all occurred during a tremendous bull market. There's no way I can reliably count on growth like that each year. Our portfolio could easily drop by 200K or more this year if the market goes south.


At what point do you decide you have enough of a cushion so that even in the bad years, you'll still be okay? I guess that's the age old question we all have to answer before retiring.

For me, it was assuming we lost 20% of our savings, would we have enough to live on ?
We would, so we pulled the plug.... later that will have another meaning

 

[DrRoy]

I felt like I had enough when I RE'd 4 years ago. Since then, we have been spending more than I thought we would, but NW is still up 1/3 from then. We have enough to do whatever we want to within reason. Started buying first class air. Thinking of replacing the 4 year old car next year.

 

[Ronstar]

$2 m seemed like it would be enough when I was young. Then the enough number climbed to $4m, but we retired way short of that number. $4m would still be enough to maintain our current lifestyle, but $10m would be enough to maintain the lifestyle I desire.

 

[kcowan]

When I graduated, I made a pact that I would work for 30 years and retire for 30 years. I was planning based on time not money. OMY meant 31 and 29 etc. So even though I was making big bucks, I avoided OMY.

A relative just fell of his Peloton dead of a heart attack at age 48. He was trying to lose some pounds for a pending trip to Jamaica. Time >> Money

Approaching 19 years retired. Still have more money than when we retired.

 

[JoeWras]

The real test is getting through a drop in your NW. Right now, we are all riding high. The challenge will be when the stock market takes a 20% or more hit.

We kind of got "vaccinated" in late 2018. After I retired late summer 2018, the market promptly went into a swoon for the rest of 2018. It was a good test, and a kind of vaccination to something worse. I hope... I managed to not panic or look for a job, even though NW was dropping. This will happen again. I hope I have antibodies against stupid behavior next time.

Someone above said "be sure you are ready for a 20% hit". Yep. We actually are ready for a 40% stock market hit.

The long term worry to me is inflation. The current situation is fuzzy. Here we are, watching every day products going up, yet the official numbers say no inflation. And then there is health care inflation.

Inflation is the reason we are not just piling everything into something "safe" like a CD. Why? Because it isn't safe when the inflation monster roars.

 

[Fermion]

I am pretty happy but I would not say no to Bezos levels of money. There are things I want to do that are just out of the realm of possibility without many billions.

 

[twaddle]

The classic test is dory36's bucket test:
http://www.early-retirement.org/for...aise-your-std-of-living-20605.html#post381043

You start with two buckets, one in each hand.

One bucket started empty, and gradually filled with b.s. as you worked there.

The other started out with your net worth, and it too continued to fill as you worked there.

Eventually, the b.s. will outweigh the net worth, and you'll know it's time to go.

If you aren't there yet, enjoy what you're doing and keep filling that other bucket.

 

[LARS]

The answer to your question is much like the thought experiment of Schrödinger’s cat: the concept of enough and not enough exist at the same time until the box is opened.

And the irony of your question enough/not enough is that the answer is only known after you’re six feet under in your own box.

 

[ExFlyBoy5]

When I graduated, I made a pact that I would work for 30 years and retire for 30 years. I was planning based on time not money. OMY meant 31 and 29 etc. So even though I was making big bucks, I avoided OMY.

A relative just fell of his Peloton dead of a heart attack at age 48. He was trying to lose some pounds for a pending trip to Jamaica. Time >> Money

Approaching 19 years retired. Still have more money than when we retired.

These are the stories that reinforce my idea that I have more than enough. Could I go out and earn more? Why yes I could...but I live a very good comfortable life and have zero desire to have any more "stuff."

On occasion, I will watch "Office Space." if I ever have a inkling to w*rk again, it nips that in the bud immediately.

 

[GravitySucks]

I had a similar conversation back in Jr. high school. My friends uncle quit a six figure job (in 1971) to spend his time going door to door spreading his religion. My friend couldn't believe he would give up such a lucrative career at such an early age. I figured it made sense because he was happier and more fulfilled.
I lost my wife at 53 and realized more money wasnt that important anymore and retired at 54. My old friend is still working though I imagine he is much wealthier than I.

 

[Nemo2]

The answer to your question is much like the thought experiment of Schrödinger’s cat: the concept of enough and not enough exist at the same time until the box is opened.

Or..."How long is a piece of string?"

 

[JoeWras]

On occasion, I will watch "Office Space." if I ever have a inkling to w*rk again, it nips that in the bud immediately.

"Office Space" lopped a few million off my NW goals.

Just kidding. It didn't do anything to my NW goals, but it did inspire me to reach for retirement. It is great inspiration to stay retired. DW and I both worked on the Y2K problem and this movie really hit home.

In recent years, every time some policy from Megacorp would come up, someone in my dept. -- possibly me sometimes -- would say, "Oh, another TPS cover sheet request." We'd all have a good laugh, except for our boss. Our boss was a very straight laced guy and did not watch R movies. We tried to get him to watch it so he could be in on the joke, but he never would. Too bad.

 

[flintnational]

I am pretty happy but I would not say no to Bezos levels of money. There are things I want to do that are just out of the realm of possibility without many billions.

But we have something Bezos does not. A lot of discretionary time! I'm slow smoking a brisket today and listening to Van Morrison. My guess is he is shuffling from meeting to meeting.

 

[Sniggle]

For a while now I have looked at $2.5 million savings as the right number, because it could spin off $100,000 a year per the 4% rule, with $3 million as my stretch goal (to supplement modest pensions, SSN). I am close to the $2.5, and with the government devaluing the currency I guess I should get over $3 in a few years.

Although my DW does not spend foolishly, I know she wished she could, so 'enough' for her would be at some level I will never get to (short of a lottery win).

 

[Mr. Tightwad]

These are the stories that reinforce my idea that I have more than enough. Could I go out and earn more? Why yes I could...but I live a very good comfortable life and have zero desire to have any more "stuff."

On occasion, I will watch "Office Space." if I ever have a inkling to w*rk again, it nips that in the bud immediately.

"Looks like you have been missing a lot of work lately".

"I wouldn't say I've been missing it, Bob"

 

[JoeWras]

"Looks like you have been missing a lot of work lately".

"I wouldn't say I've been missing it, Bob"

Best quote from that movie, full of good ones.

Our department also had two guys named Bob. They didn't mind being called "The Bobs" for laughs. They also joked that one day they'd be laying us off. It wasn't too far from the truth.

 

[Music Lover]

Our boss was a very straight laced guy and did not watch R movies. We tried to get him to watch it so he could be in on the joke, but he never would. Too bad.

I didn't realize that Office Space was R rated...then I remembered the "not just a regular prison, a federal pound you up the *** prison" bit

 

[Markola]

The real test is getting through a drop in your NW. Right now, we are all riding high. The challenge will be when the stock market takes a 20% or more hit.

We kind of got "vaccinated" in late 2018. After I retired late summer 2018, the market promptly went into a swoon for the rest of 2018. It was a good test, and a kind of vaccination to something worse. I hope... I managed to not panic or look for a job, even though NW was dropping. This will happen again. I hope I have antibodies against stupid behavior next time.

Someone above said "be sure you are ready for a 20% hit".

Yes, I’m grateful in hindsight for the un-fun investing callouses built up in 2000, 2009 and last March. We have “enough” for our current lifestyle and the goal now is to keep it that way.

Circumstances can change. For example, I heard recently a well-known, highly-regarded FIRE blogger, one of the very founders of the whole modern FIRE Movement, say on a podcast interview that he finds himself in a tight spot financially. He bought a dog of a house for cash that requires so much unexpected work that the majority of his net worth is now wrapped up in it. More recently, I saw on his own blog that he’s planning to sell it and move to a small town TBD. OK, but is he moving to a small town because he wants to or because he now has to in order to stretch the dollars left after a real estate fiasco? I have empathy for him, and he’ll probably un(stick) himself. At the same time, this is a guy who is generally smart with money and who is a role model for thousands of other FIRE enthusiasts, i.e. he should know better.

My takeaway is, smart people can make dumb, emotional mistakes -including me - so it’s a defensive game for me now. Part of that is having “enough” house. Another is staying married. Another is staying out of debt. Another is trying to stay healthy. We have “enough” but it’s a lifetime project.

 

[Calico]

"Office Space" lopped a few million off my NW goals.

Just kidding. It didn't do anything to my NW goals, but it did inspire me to reach for retirement. It is great inspiration to stay retired. DW and I both worked on the Y2K problem and this movie really hit home.

In recent years, every time some policy from Megacorp would come up, someone in my dept. -- possibly me sometimes -- would say, "Oh, another TPS cover sheet request." We'd all have a good laugh, except for our boss. Our boss was a very straight laced guy and did not watch R movies. We tried to get him to watch it so he could be in on the joke, but he never would. Too bad.

I loved that movie!

"Joanna : You know what, Stan, if you want me to wear 37 pieces of flair, like your pretty boy over there, Brian, why don't you just make the minimum 37 pieces of flair?"

 

[Leo1277]

...
And the irony of your question enough/not enough is that the answer is only known after you’re six feet under in your own box.

It's actually worse than that. If you don't have enough, you will find out during your lifetime. Only if you had enough, that answer will only be known after your demise.

 

[LARS]

But we have something Bezos does not. A lot of discretionary time! I'm slow smoking a brisket today and listening to Van Morrison. My guess is he is shuffling from meeting to meeting.

You got more than that: you have anonymity. Something I’m guessing old Jeff would part more than a few billion to recapture.

 

[LARS]

It's actually worse than that. If you don't have enough, you will find out during your lifetime. Only if you had enough, that answer will only be known after your demise.

My real point was that both states exist right up until they don’t; and, there is no definitive way to know what's what until it is too late for you to do anything about it.

Either because you died with too much left over or you found yourself broke.

 

[tdv2]

Enough for me was when I reached the point, with a reasonable cushion, where I felt my funds would be more than sufficient to carry DW and myself to the end. As far as lifestyle, we have the means to ratchet things up a bit but it's not easy when you have been super frugal all along. Working on that part of the equation now.

 

[Walt34]

Like most here we do have "enough". We live in a nicer house than either of our parents and they did just fine. All the bills are paid, the pantry is full, we have reliable vehicles. We have an income more than the average U.S. household income but few (in the U.S. anyway) would call us rich.

If we won the lottery (would probably help if we bought a ticket once in a while) we wouldn't turn it down but I seriously doubt it would make us any happier.