How Much Money Is Enough?

So many people spend their lives only chasing money. I can see it literally and figuratively every day when I walk to my office. Blank faces, coffee in hand, bobbing and weaving past other blank faces. I used to be one of them.

how much money enough

Sure, it’s early in the morning, but I can guarantee that 99% of them wouldn’t be slogging to work a cold 15-degree Chicago winter morning if they didn’t have to. Most of them are commuting long distances for the money. Most of us need to work to make money. Other people pay us for our time.

But How Much Money is Enough?

I’ve asked friends, people sitting next to me at airports, and the occasional person who finds out that I blog about money this very question. I always get the same free answers. “More” “There’s never enough” “$1 million dollars”.

That used to be me. I bought into the myth of more. It was an empty way to live a life. I was told early in my career that money is a scorecard. I was also told it’s a measure of how much value you have put into the world. But neither of those are true.

How much money you have in the bank is simply how much exchange-value you possess. That’s it. Sure, you can trade it for a ton of things – even your freedom, but it’s not a measure of your value. Don’t let anyone tell you that.

How much money you have isn’t a reflection of your value.

I bought into the myth and pursuing money above all else. It is my top millennial money mistake. Looking back I sacrificed too much for it. During the 5 years it took me to go from $2.26 to $1 million in my bank account, I gave up countless opportunities. I was getting rich, but I wasn’t living a rich life.

I realized that chasing more wasn’t sustainable. I was burning out. I wasn’t connecting with my wife like I used to. I need to find how much money was really enough.

How Much Money is Really Enough?

Here’s how I determined how much was enough for me.

I started asking myself tough questions I broke into two categories.

First I needed a mirror

I encourage you to find a quiet place and write down your answers to these questions. Be honest with yourself. Also, realize that your answers to these questions will change over time.

  • What kind of life do I want to live?
  • What do I really love?
  • What is my mission?
  • What does the perfect day look like?
  • What truly makes me happy?
  • What do I want to be my legacy?


Since I first answered these 3 years ago, I make a point to go back them every year and update them. I now have 3 versions that show how my desires have changed. You don’t have to write a lot. Just answer each question on a piece of paper (not your phone because you might lose it) – save it in a drawer or in the cloud. Email to yourself. Whatever, just write it down.

It’s a lot easier to figure out how much money is enough when you know the type of life you want to live.

Second, I needed the number

Once I wrote down the type of life I wanted to live – each day and in the future, I just needed to figure out how much money it would cost to live that life. I started calculating what I need over a year and then I broke it down into monthly, and finally daily increments.

  • How much do I need to live the life I want to live?
  • How much do I need to take care of my families basic needs?
  • How much money do I need to maximize my happiness?
  • What is the minimum amount of money I need each month to live the life I want?
  • How much money do I need to help others?

Tip: make this as tangible as possible. I like taking two big trips a year that cost about $7,000 each (for me and my wife) and I estimate that to live a normal happy life I need about $3,000 per month (includes mortgage, a few nice dinners a month, and plenty of concert tickets!). So my total is about $50,000. I’m not planning on spending over $210,000 in one year again. If you aren’t already, start tracking your spending use my favorite free net-worth tracker Personal Capital and measure what you spend each month. Multiply it by 15 to get your number (15 instead of 12 to give you a buffer).

I knew these were some of the questions that would help me determine how much is enough.

I needed a simple goal. I needed to find the amount of money that would help me maximize my happiness and do the things I love with the people I love.

Some of those blank face commuters have numbers too. A goal. Maybe it’s what they need to retire or buy the house of their dreams. Maybe they made up the number or maybe they pulled it from a retirement calculator or advisor.

Unfortunately, a lot of these numbers are too limiting. There are retirement calculators at Personal Capital that run over 5,000 simulations to determine how much money you need to weather the likely market fluctuations in the future.

But while these calculators are a great starting point. They don’t take into account who you truly are, what you care about, what you love. A number is just a number.

Easy right? Not really, but you can get pretty close. Sure, there are a ton of variables that you can’t control (future interest rates, future tax rates, future expenses, inflation), but get as close as you can. A vast majority of people can live insanely happy lives with annual expenses between $25,000 – $60,000.

How to Calculate Your Financial Independence Number

There are a number of ways you can calculate how much money you need for financial independence, but the most accurate is to multiply your expected annual expenses by 25, so it takes about $50,000 to live the life I love to live, so my number was $50,000 x 25 = $1,250,000

My calculation ended up being simple and I decided to stick to it. That was enough for me.

I made a promise to myself that once I reached $1,250,000 it would be enough for me. At that time I would no longer pursue money unless it aligned with something I’m incredibly passionate about or that aligns with the life I want to live.

I broke it down into my $50 a day early retirement strategy and hit my goal in 5 years. It’s enough.

I am still making money of course, but I love what I do and only work on what I’m passionate about.

Money is just a number unless there are dreams behind it. What’s your number? How much money is enough?

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  • Comment Author image blank
    I'm 26 and starting college for financial planning and so this was a big question for me. How much money is really enough for me ? Well I actually typed in google how much money do I need to be rich? I quickly learned that being rich is different for everybody. I love the idea of just asking myself the questions listed in this article and find an amount I can be happy with and then to have enough financial independence to do what I'm passionate about. That's all I've really wanted in my life is not to chase money and do the things I want to do. Thanks a lot I bookmarked this article and even watched the entire 1 hour video. Good luck to everyone in achieving financial independence.
  • Comment Author image blank
    I have worked endless jobs gone to lengths I just cant fine my way to saving or investing, Where should i start?
  • Comment Author image blank
    […] passive income opportunities take a lot of your time! You must find a special balance of having enough money and not striving for more at the expense of your time. This concept of enough is very […]
  • Comment Author image blank
    A billion dollars is enough. Or quit working if you cannot earn more than 0.1% of your net worth per year. Anything less than 0.1% of your net worth is insignificant. For example, if you have 100 million, if you cannot earn more than $100,000 a year, quit your job, because your earned income won't add much to your net worth anymore.
  • Comment Author image blank
    With the right mindset and goals, we can use both fear (to push away from working until you drop) and joy (the pull of doing what you want when you want) to become financially free. Money gives you the options and choices but the real freedom comes from truly living your life to the full.
  • Comment Author image blank
    When you said your goal was to hit $1,250,000, did you mean you have that much money in cash or was it worth your total assets and investments?
    • Grant Sabatier
      Hi Dexter. Total amount in investments that I could cash out. This does not include my primary home. Thanks for asking.
  • Comment Author image blank
    How much is enough? You can never have enough. $1 million isn't much these days. Where I live (Auckland, New Zealand), that would buy you an average house in an average suburb. Leaving tons in the bank isn't a great idea either. So make your money work for you, don't work for money (figuratively speaking). I never set a numerical goal. The trick I used was to buy investment properties, saved up to buy a boat, and then lived on the boat in a fully serviced Marina. Free Wifi, free electricity, and free water. Daily ferry service to the CBD. My tenants pay my mortgages, but I leave around $100K in high-interest on-call term term deposits as a kind of "emergency fund". The properties I have bought so far have more than doubled in value in 7 years and continue to increase in value at the rate of a several hundred dollars per day, something like that. Add to that capital appreciation, savings of around $600 per day from IT contract work 6-8 months per year and you are an asset millionaire just by owning property. Stash whatever earnings excess you have leftover, and put it towards another property. It just continues to grow because 800 more people arrive in my home town every day to live, and they need somewhere to live - like, for example, your properties. I have steered clear of stocks thus far, but would consider it. And for heaven's sake don't have kids!
    • Comment Author image blank
      Thanks Kim. These are all great ideas. Thanks for sharing. New Zealand sounds lovely!
  • Comment Author image blank
    Great post, Grant! I love the line "Money is just a number unless there are dreams behind it.". My number is basically the same is yours, $1,250,000, but I got to that number a slightly different way. I am a dividend investor working towards earning $50,000 annually. A 4% yield on 1.25 million will earn me 50k a year. I think that number puts me in a great position to do what I love - blogging, travelling a couple times a year, and having more time. Thanks for sharing!
    • Comment Author image blank
      Thanks Graham. I think the dividend approach is another great angle. I've bought a few strong dividend stocks, but haven't had the patience to really build out a specific dividend portfolio strategy. I'm more focused on index fund diversification (domestic/international) and a portfolio of individual equities (mostly tech stocks) that I think are awesome businesses. I do look forward to exploring dividend investing more.
  • Comment Author image blank
    So if someone hasn't his that number yet (mine is also about $1.25 million) how much should they sacrifice in lifestyle and expenses while trying to save up, if at all? To what degree should I live on less than $50k so that I can get to $1.25 sooner?
    • Comment Author image blank
      This is a personal decision, Julian. It really depends on how much you want to reach financial independence. I personally sacrificed a lot, because I believe that investing as much money as possible while I am young was the key. A lot of sacrifices helped me significantly accelerate the time it to me to reach my number. Ideally, you find a balance that works for you, but the sacrifices often end up being worth it.
  • Comment Author image blank
    Enough would be somewhere about the 1,25 M € mark for me. That would offer a luxurious 500 k€ home and 750 k€ in financial portfolio to live of. More than royal. But Financial independence would come at around 800 k€ for me. A nice 300 k€ cozy home and 500k€ portfolio to generate to generate about 2 k€/month to live on. Life would be good.
    • Comment Author image blank
      Nice! It's great you have your number and interesting that your number is actually over your FI target number.
  • Comment Author image blank
    Nice article Grant. I tend to think getting the number is the easy part of the equation. It's getting the money that's the hard part. It's easy for someone who's reached the number to tell everyone that it's important to have a number. For me, it's the how, not the what, that is the most important. And the how is the really tough part that takes the most work and can't be gotten over night...there's no 1 solution to the how. There are so many factors for how such as one's income. It's much easier for someone pulling in a couple hundred grand to get to financial independence than it is for someone making 50K per year. I really look forward to reading your insights going forward. Thank you.
    • Comment Author image blank
      Thanks Bud. I agree the journey is the hardest part.
  • Comment Author image blank
    I don't have a number at this point... I'm single so I really could get by with very little, but once I have a family, things will change! That's why I'm looking to build a business on the side where it will become a full-time gig when I leave my job! Thanks for sharing Grant
  • Comment Author image blank
    I think this is what's behind the case of "1 more year syndrome" that financially independent people face. You feel like you don't have enough money, even though math says otherwise, and you continue to trade your life for money. Our "enough" number is kept pretty small so I should be able to retire around 35.
    • Comment Author image blank
      I know! There is definitely a difference between "need to work" and "want to work". I'm just having fun so I can't imagine stopping anything right now. 35 will be awesome!
  • Comment Author image blank
    I would happily accept the $1million and the $40k annual spending as the number for enough,