Chapter 17: How much is enough?

By Hieronymus Bosch - www.google.com/culturalinstitute : Home : Info, Public Domain, https://commons.wikimedia.org/w/index.php?curid=22174600

I wish there was a rule that said once you reach $1,000,000 you’ll be happy. Wouldn’t that make life so much simpler?

There is a scientific study that showed that happiness plateaus after $75K a year. Phew! Now we have our goal post.

But more recent data suggests that more money might actually make you happy… back to the drawing board!

But can we even trust science to give us hard answers about something as ill-defined as happiness?

Well maybe we can just reverse engineer how much we need using the 4% rule?

It goes like this: if we want to spend $50K a year in retirement we need:

$50K / 4% = $1,250,000

Ok great! And if we invest in low-cost index funds, get a 7% return (adjusted for inflation) and plan to retire in 40 years, we can plug our numbers into a financial calculator:

That is, we need to save  $6,261.42 / 12 = $521.79 per month to be happy one day!

A couple issues with this:

1. There's debate around whether the 4% rule actually make sense.

2. There’s no guarantee we’ll continue to see 7% returns in the stock market.

3. Is it even ethical to invest in the stock market when a lot of these big companies are involved in really awful things?

Beyond this there’s a bigger issue: if I’m not happy now, how would sustaining my current lifestyle in retirement make me happy? $50K probably isn’t enough…

Maybe spiritual leaders or philosophers can help us out?

Health is the greatest gift; contentment is the greatest wealth. —Dhammapada Verse 204

Contentment is the greatest wealth hey? Not exactly what I was looking for.

Wealth is evidently not the good we are seeking; for it is merely useful and for the sake of something else. — Aristotle, Nicomachean Ethics

Is he trying to say that money actually isn't the solution?

Watch out! Be on your guard against all kinds of greed; life does not consist in an abundance of possessions. — Luke 12:15

I suspect these guys are on to something but if its not money, what is the key to happiness?

References:

• Can money buy happiness? https://ici.radio-canada.ca/rci/en/news/2056543/can-money-buy-happiness-income-may-boost-emotional-well-being-more-than-we-thought

• Financial calculator: https://www.calculator.net/finance-calculator.html

• I used ChatGPT to find a couple of these quotes