As financial life planners, we often answer a crucially important question:
“Do we have enough?”
Allow me to retell a short story told by the late John Bogle, the founder of Vanguard, responsible for saving ordinary investors $100 Billion a year (and a real unsung hero if you ask me):
“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.”
Enough. I was stunned by the simple eloquence of that word—stunned for two reasons: first, because I have been given so much in my own life and, second, because Joseph Heller couldn’t have been more accurate. For a critical element of our society, including many of the wealthiest and most powerful among us, there seems to be no limit today on what enough entails.”
There are countless stories of people continuing to seek more, all because they had no sense of enough. I’ve seen it in my time as a financial life planner.
As a basic example, take punters in a Casino. A lucky streak at the roulette table may end up profitable in the short term, yet many continue this “hot streak” in the quest for more. You know the outcome.
This quest for more is dangerous.
I would say that a measurable percentage reading this post will at some point in their life, earn a salary or have a sum of money that is sufficient to cover every reasonable thing they need and a lot of what they want. If you are one of them, remember a few things:
1. Stop the goal posts moving
This is really difficult to manage, but so important.
If expectations and spending rise with results then there is no logic in striving for more, because you’ll feel the same after putting in extra effort. You may have heard us financial life planners refer to it as avoiding “lifestyle creep” – the act of spending more as you earn more. It gets dangerous when the taste of having more increases ambition faster than satisfaction.
Really consider what you value in your life. Typically, top of the list are free time, friendship, family and health. I recommend writing down ten ways in which you enjoy spending your time.
How much does it cost for you to feel secure and happy? Life isn’t any fun without a sense of enough, so work it out. Better still, speak to your financial life planner about your enough.
2. Stop social comparison
We compare ourselves to colleagues at work, neighbours, friends, even family. Social Media platforms such as Instagram allows people to portray this incredible but false lifestyle. I fear for youngsters who fall in this trap of comparing themselves and feeling unhappy as a result.
Consider a young footballer, earning £500,000 per year (many of them do). He is by any definition, rich. But he plays in the same team as the club captain, on £5m per year. But the club captain, plays for his national team, and the star player and top goal scorer is on £10.5m. He then compares himself to the best player in the world, earning £26m. Eventually, we get to likes of Jeff Bezos, whos net worth increased by $24 billion in 2018.
The point is that the ceiling of social comparison is so high that virtually no one will ever hit it. It is a battle that will never be won, so do not fight with it in the first place. As Theodore Roosevelt once said, “Comparison is the thief of joy”.
3. Be happy with enough
The idea of enough may be perceived as leaving opportunity on the table. I’ve seen this in retired business owners, who simply cannot resist seizing this potential for more.
Enough is realising that the opposite, the insatiable appetite for more, will push you to the point of regret. Many only stop reaching for more when they break, make a huge mistake or are forced to.
The inability to deny a potential extra pound will eventually catch up with you.
4. Some things are never worth risking, no matter the potential gain
Freedom. Independence. Family and Friends. Happiness. Health. All are invaluable. Your best shot at keeping them is knowing when it’s time to stop taking risks that might harm them. Knowing when you have enough.
Calculate what your enough is, and stick to it.
This post was inspired by a book I read recently, The Psychology of Money, found here