Enough. How much is enough? 

Amid the relentless pace of modern life, a question emerges: how much is enough? The nature of this pursuit, be it material wealth, possessions, or personal accomplishments, captivates our minds. What compels us to continuously yearn for more, and what shapes our ever-shifting perception of fulfillment and balance in life? When it comes to money, luckily we have a solution.

"Wealth consists not in having great possessions, but in having few wants." - Epictetus

Psychology of enough

At the core of our desires lies complex psychological factors. The study of human psychology reveals that our yearning for more is deeply rooted in evolutionary instincts, societal influences, and personal experiences. These factors shape our perceptions of what constitutes "enough" and fuel our never-ending quest for fulfillment. Some of these are:

Evolutionary Instincts: As descendants of ancestors who struggled for survival, the human brain is wired to prioritize acquiring resources. This inherent drive, once crucial for our survival, often translates into an insatiable desire for accumulation in modern times. 

Societal Influences: In a world where material possessions and social status are frequently equated with success, society plays a significant role in shaping our desires. Advertising, social media, and cultural norms all contribute to the constant bombardment of messages that encourage us to seek more to feel validated, accepted, or superior. 

The Hedonic Treadmill: This concept suggests that as we attain higher levels of comfort and affluence, our baseline expectations and desires also increase. Consequently, what was once considered "enough" becomes insufficient as we adapt to our new circumstances. 

Individual Experiences and Comparisons: Our upbringing, education, and cultural backgrounds influence our perspectives on what constitutes a satisfying life. Additionally, we tend to compare ourselves to others, creating reference points that influence our desires. 

How much is enough money? 

Why do we want to know how much is enough? Is it a measuring stick to compare ourselves to? Do we want to find out if we work too much, or too little? Maybe we just want to know that we will have enough for our golden years.

The wonderful thing about financial independence is that you can put a number on your “enough”. All three of the ways to reach financial independence require investing, which we will touch on below. In financial independence, we use expenses as the core to calculate how much we need instead of using a percentage of a potential future income as the financial advisory industry uses. This way you're in control of the amount of money you need to be financially independent. (*Read this article for the differences between financial independence and normal retirement.)

There are three ways to calculate how much you need to be financially independent: 

Stock market investing (Passive investing): The 4% rule states that you can take your annual expenses and multiply them by 25 and you will reach an amount that, when invested, can produce the income you require as expenses for at least 30 years. Here is a calculator to help you calculate yours and a video of how the tool works.

Property investing (Hybrid investing): Property investing allows you to calculate the number of properties you need to own and repay over your lifetime to live financially independent. For this, you will also need to know your FI number. Here is an article for more information on property investing for financial independence, plus a calculator and a video to explain the tool. 

Business investing (Active investing): Where stock market investing is a truly passive source of passive income as you don't do anything to receive the return, property investing requires some sweat equity on your part. Business investing is the most active form of investing from financial independence. If you can't outsource or receive income from the business then you should not include it as passive income, as you need to be there to make money. If you don't have to be there or you can outsource your inputs then you can use the income to supplement your passive income for financial independence. 

Summary

For most of life's factors, the question of how much is enough is not easily answered, as it encompasses a myriad of psychological factors that differ from person to person. Luckily the question of enough money can be quantified. Whichever path or combination you choose to achieve financial independence, try and find contentment in the present moment. Ultimately, striking a balance between personal aspirations and appreciating what we already possess can lead to a more fulfilling and meaningful life.

At Finsights, we want you, the everyday hero, to take control of your finances, become aware of financial independence, grow your knowledge, and let us be your financial independence partner. 

 Onward to Financial Independence