The richest life

How much is enough?

Posted by webmaster on December 29th, 2007 — Posted in Prosperity, Thinking, People, Money

Further to yesterday’s post, here is another idea that I found to make a significant difference in the lives of successful people: more is not always better.

In the Brazen Careerist: The New Rules for Success the author says that all you need to make to be happy is $40,000 a year… “pick a job you are going to enjoy instead of one that makes a lot of money — just be sure your job will get you to that $40,000 mark.

In fact, this salary guideline is well established in research: the first $40,000 makes a big difference in a person’s level of happiness. Happiness is dependent on being able to meet basic needs for food, shelter, and clothing. ”

I can hear the protests from here, and I can relate. I live in the Vancouver area, where the average home price is over $600,000. But the author tested the theory by living in New York with her husband on less than $40,000. And 20 years of experience with other people’s personal finance challenges affirm her conclusion — happiness depends on having enough to pay the bills, but once you meet that threshold, more money doesn’t make for more happiness.
The truth is that I don’t know if $40,000 is the right number — and I certainly don’t know what the right number is for you. I’ve been cash-starved and unhappy with a family income of $300,000 per year and fulfilled and financially comfortable on an income of less than $30,000.
But the point, I think, is that we trade the only thing that’s truly invaluable in our lives — our time — for money, and money for stuff. While we tend to think of financial freedom as something that arrives when we’ve accumulated a really big pile of money or stuff, it is much more achievable when it comes from finding something we love to do that pays for our food, shelter and other essentials.

Living modestly also allows us to prepare for a comfortable, secure future. It is the people whose expenses exceed $100,000 per year that have to worry about saving millions for retirement. For people who have paid off a modest home and can live on less than $30,000 (which is, by the way, a majority of North Americans) a comfortable retirement is very achievable.

I encourage you to consider the advice of The Brazen Careerist. This year, think about beginning to craft a life that is rich and fulfilling in the day. Find work you enjoy doing, and if possible, limit the hours you work to 30 or less each week. That balance will fulfill you in ways that a mansion full of toys and an investment portfolio never could. (And if you think  I’m misguided, ask the people in the mansions full of toys.)