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The Concept of Enough & Its Role in Early Retirement


How much is Enough for you? The answer can be life changing.


It's a word that factors heavily in so many calculations and decisions we make every day.

How much propofol do I push on induction? Enough.

How much dinner do my boys need to finish and still get a treat? Enough.

How much money should you set aside each month? Enough.

How much do you need to retire? Enough.

How many shirts do you have in your closet and drawers? More than enough.

How much time do you have to do all the things you want to do? Not nearly enough.

"At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel Catch-22 over its whole history. Heller responds, "Yes, but I have something he will never have… enough."

Like Mr. Bogle, I found this anecdote to be quite compelling. Knowing what 'enough' means for you and being content when you have 'enough' is powerful stuff. The hedge fund manager on the hedonic treadmill may never get to 'enough'. Or, if one day he realizes has 'enough' money, he may not have 'enough' of other things that matter in life, like friendship, time, love, and happiness.

I'd like to return to a few of the questions first posed. Exactly how much is Enough?

Propofol? About 2 to 2.5 mg/kg usually does the trick.

Dinner? We like the boys to finish the things we know they eat and at least try the foods that are new.

The money questions are a focus here on this site. How much is 'enough' to set aside each month? It depends on your goals, but I'm going to assume that Financial Independence is among them. Once your debts are paid off, saving 1/3rd of your gross salary is a good goal. This counts pre-check savings like the 401(k) / 403(b), 457(b), SEP-IRA, HSA, etc… If you can't manage that, start with 10% and work your way up to 1/3rd or more.

How much is Enough to retire? At least 25 times your annual spending, which allows you to use a 4% withdrawal rate and expect it to last 30 years. If you are like me and expect to have a longer lasting retirement, you might be more comfortable with a 3% initial withdrawal rate, and will need a minimum of 33.3 years worth of expenses in your nest egg to have 'enough'.

Your spending dictates your needs. You have probably figured out that you don't actually need to replace a percentage of your income in retirement as many experts will have you believe. That works if you are spending the vast majority of your earnings each year, but that's not going to be the case for you or me. The less you spend, the less you need to retire. Income shouldn't factor into this calculation.

Of course, you need to know how much you spend, and that can be difficult, particularly early in your career. You are working on paying down student loans, saving up for a down payment on a home, perhaps starting a family or moving for a new job when the first one doesn't pan out.

Arcadia Whitsun

Enough for the weekend?

When life becomes stable, you can better look at how you spend your money. The concept of 'enough' enters the picture again. Are you spending wisely, or spending to add to an ever-growing pile of stuff? My wife, who reads much more and looks much better than I, just finished the über-popular book, The Life-Changing Magic of Tidying Up: The Japanese Art of Decluttering and Organizing.

book that I borrowed from the library, "Work Less, Live More" by Bob Clyatt tells me that per capita consumption has doubled over the past 30 years. A peek into your neighbor's garage or mine will confirm that stat.

Recognizing we have more than enough stuff is a good start. The next step will be to take bigger steps towards reducing inventory, but that takes time. How much time do I have? Not nearly enough.

How can I "buy some time"? I have written before about how money buys time and the best way to buy time is by working less (as in part time) or not at all in an early retirement. How can we make these better lifestyles a reality? We come full circle and start setting aside a good amount of money each month. How much? Have you been paying any attention???

Star wide receiver Calvin Johnson of the Detroit Lions seems to understand the concept of 'enough'. He walked away from $67 million when he retired early this off-season with plenty left in the tank. Fellow blogger Mr. Firestation is another man who is on to the concept of 'enough'. He left his Megacorp job (and the opportunity for further career advancement) Apri 1, 2016, just a couple weeks shy of his 50th birthday. He's got enough and he knows it.

John Bogle and Joseph Heller are two more people who have clearly mastered the concept of 'enough'. Mr. Bogle is proud to share with us the fact that his net worth is less than $100 million, when there are hedge funders bringing in over a billion a year. His estimated $80 million could be much higher, but he already has more than Enough.

How do you define Enough? Do you know it when you see it? Will you have enough money when you are ready to retire? Is $1 million or $2 million enough? $4 million? $10 million?!?

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Victor J. Dzau, MD, gives expert advice
Victor J. Dzau, MD, gives expert advice