When I was in my early twenties and had just started my first professional job, I thought about how much money would be needed when I retired. Although I was young and three to four decades away from retirement, I believed it was important to start planning for this eventuality. The large company that employed me had excellent pension benefits upon retirement: fixed monthly payments based on your salary/age/service, health insurance, and matching pre-tax investment funds. These benefits lowered my anxiety, but I believed that I needed to save more money.
I decided to pursue a savings goal of $1M by the time I was 40 years old. My reasoning was simple. $1M in a diversified investment portfolio should yield $40k a year and grow with inflation. I was earning a salary of less than $40k per year and $1M seemed like an impressive investment portfolio. I would be a millionaire! Saving $1M in less than 20 years would be difficult, if not impossible. However, it was worth the try. I started investing 10% of my salary each year in a diversified investment portfolio.
Early in my trading career, I traded with a trader who was previously unemployed for almost a year. He left a large energy company about five years ago for a trading position that significantly increased his salary. His trading positions initially did well, but then did poorly resulting in his dismissal. After searching for another trading position, he reluctantly accepted a trading job with a small, refined products trading company that had a poor reputation in the industry. His assignment was to interface with the large energy companies and build back the reputation of this small company. Unfortunately, putting lipstick on a pig does not make the pig a beauty queen. I liked the guy, but his company had major issues.
Over lunch, we discussed why he left a large, stable energy company. He explained that the lure of a much larger salary gave him the possibility to retire early and accumulate more material goods, like a larger house and cars. He gave up his pension benefits for the possibility of a higher future net worth and leaving the trading business before he was fifty. I asked him, “How much is enough?” He stared off into the distance and became silent. After a long pause, he said, “I don’t know.” Within a year, he changed jobs again, but this time he chose a larger, more stable company.
The question, How much is enough?, is a good one to contemplate at any age. It drives an individual, couple, or family to think deeply about their values, work, and priorities. On July 29, 2022, $1.337B was awarded to a single lottery winner, the third largest in history. The largest lottery ever awarded was $1.586B shared amongst three individuals. Most people would say that $1B was more than enough money. What would you do with all this money?
A person with $1B has unlimited choices and attracts crowds of individuals, non-profits, and investors hoping to take it. Life becomes complicated. Suddenly, universities will grant you honorary doctorates or name buildings after you for a $10M donation. Non-profits will name you ‘person-of-the-year’ at their annual fund raiser for $1M. And your email and telephone messages will be filled with wealth managers who want to buy you lunch, play a round of golf, or visit your home. Your senior minister might even stop by your house with a coffee to chat about the upcoming stewardship or building campaign. You will suddenly become popular, whether you want this attention or not.
As I grew older, my answer to the question, How much is enough?, changed. My salary continued to increase and so did my expenses: children, a bigger house, college tuition, clothing, charities, etc. Inflation also contributed to the need for more income. Life became more complicated. Once the children went off to university, my expenses decreased but were offset by more discretionary travel while working in Europe. I was able to afford our higher expenses. But the question still nagged me. How much is enough?
During our last assignment in London, my wife and I pondered this question and decided: we have enough! Money was not the issue. What we lacked was time and our family was far away. In my youth, I did not ponder mortality or the lack of family time. As I grew older, my priorities changed. The question expanded past finances, encompassed the totality of vocation, and the deeper meaning of life.
The question, How much is enough?, isn’t relevant for the vast majority of people in the world. The average annual world income is $17,760 — far less than my 1980’s dream income of $40k per year from investing $1M. The median American yearly income is $31,133 (2019), also less than my dream 1980’s income. The average social security retirement income is $19,476 per year. People live meaningful lives without asking the question I asked many years ago. The richest people in the world can never be satisfied with material things. There will never be enough. True meaning is found in life’s most basic commodities, such as faith and community.
In Acts 3:1–10 (NRSV), Peter encountered a lame man at the temple Beautiful Gate in Jerusalem. The lame man sought alms as the Jews passed through the gate into the temple. Peter looked at the man and said, “I have no silver or gold, but what I have I give you; in the name of Jesus Christ of Nazareth, stand up and walk.” The lame man was healed. “All the people saw him walking and praising God.” Alms did not cure his disability. Money did allow him to meet life’s basic requirements. But faith healed him and gave him renewed purpose. How much is enough? As I age, less than I originally thought and that is comforting.