What's your enough? How do you know that you've "made it", that you can stop (or slow down) playing the money making "game"? 

I've talked with many high-income professionals and entrepreneurs. They're driven. Focused in creating wealth for themselves and their families. Hard workers. This question ("what's your enough?") often takes them off balance. Some of them haven't thought about it, specially if they started from $0. 

Is it $1 million? 5? 10? 

After all, why would they put a "limit" on what they can earn? Why stopping when things are great? 

It's a very reasonable objection. Imagine if Warren Buffett stopped at $100 million. Or $200. Or a billion. How would the world be? 

But, the thing is, some people don't want to keep building wealth. Some people find the job of "making more" harder, energy draining and time consuming. Professionals like Doctors and Lawyers can't wait to jump off the money making machine they've built and "start" to enjoy life more. Slow down. Focus on things beyond making money. It's people like them who need the most to define their "enough". It's people like them who need to know if they can make work optional. The sooner the better. 

So, how do you define your enough? 

Start by knowing where you are: How much have you saved? Where is it? Do you have large expenses down the road? (like funding college for your children, or buying a second or third home?) Then, you can start running some numbers on any of the many retirement calculators out there (although note that some are more complex than necessary).

Remember, at this point, you're just making guesses. Who knows what you'll spend in groceries in 30 years. Who knows what your electric bill will look like in 2035. Instead, focus on the "big rocks" of your spending: What are your bare minimum living expenses today? How much do you spend currently in vacations and healthcare? And go from there. Many calculators focus on looking at the next 30 years. While I see the good intentions behind this exercise, the reality is that the longer the timeframe, the murkier it gets: We're talking about making guesses about 30 years into the future! Just look how much life has changed in the last 10 years alone! Who knows where it will be in 30 years. The point, though, is to have a starting point. 

That's what I tell my clients: We don't know what will happen in 30 years. But we now have a starting point. My job is to help you make sure that

  • You have clarity about where you are today: Are you at your enough yet?  
  • You have clarity about how much you could spend today and the potential consequences of spending more (or less) than what you should 
  • Help you remain disciplined regardless of what happens in the market and 
  • Help you remap your financial plan as your situation changes

Helping you define your "enough" can give you clarity, peace of mind and the control over when you can slow down or completely retire from your job. And that can be liberating. 

(An audio version of this post was published on July 26, 2018 on my Podcast, "Love Where Your Money Goes". You can find it on iTunes or on this same website).