Knowing When You Have Enough

“My love, how much money will be enough for us?”

I asked this question to my wife, rather seriously last week.

Her reply: “The amount that we have right now.”

To be honest, this reply took me off guard. It highlights one of the reasons why I love my wife, but it also got me thinking. So much so that I rushed off to write down some of my ideas that followed her very wise comment.

Beware the hedonic treadmill.

In How To Think About Money, Jonathan Clements defines the “hedonic treadmill” or “hedonic adaptation” in this way: “We aspire to get that next promotion and, initially, we are thrilled when the promotion comes through. But all too quickly, we adapt to our improved circumstances, we take the new job for granted and soon we’re hankering after something else.” (21)

There are always more things to buy, and new things to have. But after our initial needs are met, it’s unlikely that those extra things are going to bring us enduring happiness.

Last year I listened to a very perceptive interview between James Osborne of Bason Asset management and Michael Kitces on Kitces’ Financial Advisor Success podcast. The conversation was based on the fact that James, unlike many entrepreneurs, took a different approach when he started his firm. He attempted to identify what most mattered to him, and then created a business to allow him to live a happy, successful life.

During their conversation, James talks a little about something that he calls “upgrade-itis.” He relates it to cycling, but the argument can be applied to practically anything. There is always going to be something newer, prettier, or better. But the truth of the matter is that it’s unlikely to matter all that much soon after we obtain it.

But it will be hard for you to maintain that sort of perspective. One of the reasons it’s so tough is that there are a lot of voices telling you what is important, and what you need. Think about all the information that you digest on a daily basis. So much information that you probably don’t have time to really process it—to really think about it.

So no wonder why so many of us blindly chase after things that don’t really make us happy, and don’t live our lives intentionally.

The importance of defining “enough” early on.

My family and I recently watched the movie Free Solo in which Alex Honnold scaled El Capitan in Yosemite without a rope. I’m certainly not advocating that his chosen hobby is one that others should pursue, or even that his way of life is a healthy one. But when I saw him living out of his van, watched him eat straight from a frying pan with a spatula, and do his laundry with his feet while taking a shower, it got me thinking. We really don’t need all that much to cover our needs.

Rick Ferri is a well-known financial advisor and promoter of the movement to passive index fund investing. His work and writing have influenced my simple approach to investing. During a recent episode on the White Coat Investor podcast, Rick talked about a trip that he and his wife took to travel the country. One of the takeaways for him from this experience was the realization that you don’t really need all that much. In the podcast he mentions a dollar figure for his monthly expenses. To be honest, I was shocked by how low it was. This is a guy who has started multiple businesses and who I would have expected to have monthly expenses much higher than the figure he mentioned. I believe that he recognizes that spending more money isn’t going to make life any more fulfilling.

It is important to define what will be “enough” beforehand. There will always be people making more than you. Your value to society and those around you is not dependent on the fact that you earn more or less than your neighbor. But if you don’t define “enough” early on, you might find that you pass through a lot of life chasing after the wrong things.

And it won’t necessarily be easy to define “enough” at first. You will need something to record your thoughts so that you can write them down as they come—because they will come when you least expect it. I have a Google Doc where I capture all of my ideas and organize them.

But it’s not enough to simply capture your thoughts, because over time you will forget what “enough” means to you, and what you want your life to be like. For that reason you will need to schedule time every week to read this document. Consider it your VISION for what you want life to be like. Add thoughts to your document when they come to your mind so that the document lives and breathes.

You don’t have to know what your ideal life is from the beginning. You’ll learn what it is as you go—but you do need something to remind you on a regular basis what you actually care about. Otherwise you’ll find yourself chasing after things that aren’t important to you, but that people tell you should be important to you.

Understanding what makes you happy.

What is it that you actually value? I’ve given some thought to this personally, and I include it in my vision document that I read every week. Some of the things that make me happy include spending time with my family, independence and autonomy, free time, and the opportunity to learn new things. Is an extra $100,000 worth sacrificing any of those?


While the items I listed above are very important to me, what is important to you may be very different. And that’s totally fine. You want to know yourself enough to understand what you value.

But many of us don’t think things through that far. We get caught up knowing that we need to provide for ourselves and our loved ones. Before we know it, we’ve achieved everything that we need, yet we find ourselves chasing after more and more things. So if we don’t define what “enough” is from the beginning, we can get caught up in something that we never intended to happen.

Some final thoughts.

James Hindes at More Signal Planning shared a poem with me that has stuck with me ever since.

It’s by Kurt Vonnegut about Catch-22 writer, Joseph Heller. Here’s how it reads:

“Joe Heller”

True story, Word of Honor:

Joseph Heller, an important and funny writer

now dead,

and I were at a party given by a billionaire

on Shelter Island.

I said, “Joe, how does it make you feel

to  know that our host only yesterday

may have made more money

than your novel ‘Catch-22’

has earned in its entire history?”

And Joe said, “I’ve got something he can never have.”

And I said, “What on earth could that be, Joe?”

And Joe said, “The knowledge that I’ve got enough.”

Not bad! Rest in peace!

(The New Yorker, May 2005)

A lot of people are telling you what is “important” and that you don’t have enough. How about you define what is important to you, and then inscribe that on your heart so that you will always remember it, and so that you will know when you have enough.


The content you just read is for informational purposes only. Yes, I’m a financial advisor, but this article really isn’t intended as advice for you specifically. Your unique situation needs to be taken into account, and the ideas presented here may not apply.

So, please make sure you do your due diligence BEFORE implementing anything. Due diligence may include hiring a qualified professional who understands your situation completely and can offer you personalized advice.

Donovan Sanchez