In today’s jittery economy, what does feeling rich even mean? According an article over at CNN Money.com, the most common definition includes “being able to live a comfortable life without having to work." That would certainly be my definition, having enough to live the life that will make you happy. How much is enough?
Well that’s where things get a little surprising:
“ ‘I’d like to have enough money so my family and I wouldn’t have to work anymore or worry about the necessities, and maybe travel a bit,’ said Deborah Veale, a Southern California resident visiting New York City.
“Veale said she’d need about $10 million to consider herself set.”
One women quoted in the article thought a “couple thousand dollars a month” would be enough, but another figured it would take about a billion.
I suppose the range of what is considered comfortable is a very personal thing, but $10 million? A billion? Is that really what it takes to be happy in retirement? I’d say that’s possibly a tad bit overkill, and according to this article in the New York Times, that much may even hinder your ability to be happy.
This brutal recession has caused people to spend less and save more. The personal savings rate is up to 6.4 percent now, up from the 1-2 percent range it had been for many years before the Great Recession. Many recent studies have shown this change in consumption patterns may bode well for happiness levels. The Boston Consulting Group recently reported that “recession anxiety had prompted a “back-to-basics movement,” with things like home and family increasing in importance over the last two years, while things like luxury and status have declined.” And that’s good news considering a slew of recent research showing that experiences that connect us to others make us happier than accumulating stuff.
It’s not just that the stuff doesn’t make us happy, it appears that such wealth actually “interfered with people’s ability to savor positive emotions and experiences, because having an embarrassment of riches reduced the ability to reap enjoyment from life’s smaller everyday pleasures, like eating a chocolate bar.”
How much do I need to be happy? Enough to live comfortably without worrying about a paycheck. Does having that make me feel rich? Yes, and with a whole lot less than a billion dollars.
What is a Comfortable Retirement?
This is a post from Retirement: A Full-Time Job
I wish the NYT article had played up the no-kids part of the Strobel's lifestyle. That is a big way for someone (or a couple) to require less wealth to retire early.
I retired in 2008 at age 45 on just under $1M because that (about $650k in taxable accounts, $300k in IRA) could easily generate enough dividends to cover my annual expenses of about $21.5k.
I own my apartment outright so I am debt-free.
No kids, no debts.
Posted by: deegee | August 10, 2010 at 06:38 AM
@deegee: Well you have a point, it certainly plays a role in finances, and studies out over the last couple years show, on happiness levels as well (and not in a good way). But that's a whole 'nother article:
Posted by: Retired Syd | August 10, 2010 at 09:14 AM
People can get use to anything including wealth. But being wealthy doesn't necessarily mean being happy. Income may not be the most important contributor to how happy most people are. However, money matters, if only a bit.
Posted by: make money at home | August 11, 2010 at 08:18 PM
well ms. syd it's all relevant. no debt, the same amount in your savings, checking accounts at the first of the month every month, and squirreling away 10 to 25% in savings and investment each month. and knowing that at 62 social security will kick in is icing on the cake. i personally would do the same if i had a million dollars a year for the rest of my life.(after the first year of eating lobster three times a day i think i'd settle in to a sensible budget.) as far as stuff goes well george carlin addressed that in one of his stand up acts. i watched it and laughed but i still fell into the trap. my god were did all the sh*t come from not to mention cleaning around it. divest,divest is the answer.
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