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Some mornings, after my first cup of coffee, my brain spins up and pursues some line of philosophy or thought. As part of this morning's mental ramble, it occurred to me that it would be interesting to pose this scenario and see what people would say to it.
There is no right or wrong answer and it isn't a trick. I'm not going to "Ah-ha!" anybody. I just wonder what people think, that's all.
If some kind of a magical being who could grant wishes, or some person with nearly infinite wealth, an entity who you may take my word in this story, absolutely DOES have the means to follow through, were to appear in your life one day, and say:
"I wish to offer you enough wealth, that you may live comfortably for the rest of your days, with no fear that illness or mishap would render you poor and destitute, with enough to set your kids or grandkids (if you have any) on their paths, with enough so that you never need work doing anything unless you do so for the love of the thing itself... I will offer this asking nothing in return and with no strings attached.
But. Here's the catch.
You must give me a number, a dollar figure that will provide for you as I have described. If that the number is too low, then I will deem you a fool. I don't give my wealth to fools. If that number is too high, then I will believe you are greedy, out to rob me, and therefore immoral. I do not give my wealth to people of bad character. So you must give me a number that in YOUR mind and your heart, is what you need to live a good life, and no more. I will know the truth of your answer when you speak it.
I’d say a home with it’s expenses paid for and about $20k/year is where a person’s happiness becomes dependent on their own ability to foster happiness.
The reason I arrived at this question, is how many of my friends on social media these days are explaining the magnitude of "billions" and saying that no one needs billions of dollars. Now I know lots of Americans who defend anyone's right to have as much wealth as they can accumulate. But I also know a lot of Americans who have a sort of humility that they feel they don't need a LOT to be happy. I understand the stress of living in economic hardship and scarcity, and I understand when people say that they can feel like they're doing really well one day, and then a serious life crisis like someone dying of cancer, can drain everything they've got and leave them in the hole. There are threads in Psychology subforum talking about whether anyone has an "easy" life, and asking "when was the last time you were truly happy?" While I do not believe that money guarantees happiness, I know that financial insecurity can make a person unhappy.
And a lot of American day to day life is driven by the concept of trying to reach a place of "enough." Where one is not in debt, and has savings, and is financially secure.
So this led me to think..."I wonder what various people would say, in coming up with an idea of what constitutes ENOUGH?" Where exactly is the line crossed, between being financially secure, and just being a greedy person who hoards wealth for its own sake?
Many of the books I've read have explained that how one thinks about money is a fairly philosophical matter, and I didn't really want to get too political with it, and I wanted to cut past the overthinking and put it in such a way that a person would have to give a quick, off-the-cuff, sort of answer.
Enough so that in my COL area I could live comfortably with a reasonable cash flow from investment income after taxes. So, where I live, about a million invested in something like 7% returning REIT would give (after taxes on dividends) about $50k a (dividend income is taxed at 28% last I recall) year to live on. Enough (for me) to go on vacations and enjoy my new found leisure time while I pursue other side interests in more depth.
I'd wish for three more wishes though since I'm philosophically greedy
Time traveling and stopping capability
Invisibility on demand capability
"I wish to offer you enough wealth, that you may live comfortably for the rest of your days, with no fear that illness or mishap would render you poor and destitute, with enough to set your kids or grandkids (if you have any) on their paths, with enough so that you never need work doing anything unless you do so for the love of the thing itself... I will offer this asking nothing in return and with no strings attached.
....
How much is enough?"
Hmmm, I think/believe that I am at the point of life and in the place where I would recommend someone else to this potential benefactor.
1. I am retired in a foreign country with with a decent steady SS and private pension income stream.
2. Private health care is good and far below U.S. costs. I have good insurance.
3. My one child was adopted at birth by another man whose name is on the birth cert. at his request, and is to my knowledge the child is unaware of the fact. There has never been contact, though through most of his life (now in late fifties) his mother had contact with a relative of mine and could easily have asked for contact info has she felt it desirable.
4. My apt. and car were purchased without loans or mortgage. I don't need newer or better ones.
5. I have problems in my life, the normal ones of life and death. Someone else's money would have no effect on them.
I know someone in the U.S. who is suffering rather badly and could use this benefactor, so I would point him in that direction.
Many of the books I've read have explained that how one thinks about money is a fairly philosophical matter, and I didn't really want to get too political with it, and I wanted to cut past the overthinking and put it in such a way that a person would have to give a quick, off-the-cuff, sort of answer.
I think my own response, already posted, may suggest I have it made. Probably, "Yes." But depends upon what the "it" is. My background as a youngster and young adult toned my answer much more than any deliberation over the question. I was aware of our financial precariousness in my childhood, but it never affected who I played with or how I was treated either in school or by adults. I worked all through jr. high and high school and loved it. Half of my adult working life was a mess (mostly my fault), and I lived in an seedy SRO for more than a year and later a slum for quite awhile. I landed a decent job, held it for twenty years and was unexpectedly part of a layoff.
I can't remember being unhappy or shamed by even the worst of my living circumstances. And what made me more satisfied was not achieving that final "good job," but rather changes in my personal life. When I finally moved it was not because I could afford better, but because of problems in the building. In my estimation the increased costs in a better neighborhood did not get me anything I was more satisfied with overall.
If I had lived a consistent middle class socio-economic existence in my first fifty-some years, perhaps I would think that I could use a hand from this mythical benefactor. Having done otherwise for most of my life, I consider that I did okay when living in rather skeevy circumstances, so now that I am living in pleasant circumstances with all bases more reasonably covered than ever in the past....what's to want from the Cash Fairy?
The thing is, you can't know for sure what you'll need to live comfortably for the rest of your days.
What if you (or a relative) need long-term care?
Therefore, best to err on the high side.
But tell the benevolent being, "if no one close to me needs long-term care,
when I go out there'll be a lot left over for some good charities."
This depends entirely on our prowess as investors. Why? Because initially we labor to accumulate a sum of money. Then, having achieved this, we cluck and fuss over the preservation and growth of this money. If one's rate-of-return is insufficiently high, especially after taxes and inflation, then the money will decrease over time, even if we're frugal and keep our expenses to the minimum. But if we manage to perennially obtain the sort of returns that fawning financial magazines would envy, then the underlying sum need not be all that large.
Your question, OP, is exactly the question posed in the early-retirement community: if your remaining lifespan is very large, so that you can't say that your money merely needs to last 20 or 30 or whatever number of years, then what's "enough", to supply one with comfortable lifestyle in perpetuity? Well, the numbers that I've seen range from maybe $3M to $10M and higher... per person.
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