Do You Have Enough?

Following on from my earlier article that highlighted the growing social divide between the rich and poor, I ended it by concluding that we as individuals should not rely on world governments to ensure our own financial wellbeing. While some of us may have certain advantages and others, disadvantages, all of us can become financially literate and take control of our financial situation if we change our mindset.

Note that I said “change our mindset” instead of “learn the necessary skills”. That’s because the basics of financial literacy require a right understanding first before anything can be learnt. Once you have the right perspective, that’s half the battle won already. But many won’t ever be able to attain this perspective, and you’ll see why in a moment.

Consider the word ‘enough’ in your life. I’ll be assuming that you’re a working adult that works for a living (and not for passion) for the purposes of this article. You earn a wage, you have some expenses and you (hopefully) save the remainder. Now imagine that you come into an unexpected windfall. An inheritance, or winning the lottery. With that sum of money, is it enough for you to retire on?

I’ve asked quite a few people this question, and their response is that they’ll most likely keep working anyway, even if they don’t enjoy their work. While their reason for doing so is definitely multi-faceted, it is beyond the scope of this article to delve into the non-financial aspects of why they would choose to continue working despite coming into money. The fact is that many of us would choose to continue working simply because we don’t have certainty that what we have is enough.

Consider that most of us aren’t fortunate enough to strike the lottery or be the heir to a large inheritance, and it becomes clear why most of us never have the peace of mind to retire, even when we reach our fifties, sixties and beyond.

But do we really need a lot of money to retire? Well, that depends on – you guessed it – what’s enough to you. You are the one that decides. Do you need multiple mansions? Sports cars? Yachts? Maybe you do. But for most of you that think you do, it could be that you just want the experience of living in a mansion, or driving a sports car, or lounging on a yacht.

Staying in a mansion through airbnb for a few days, renting that Maserati or that yacht is definitely not cheap. But the cost of doing so is a lot less than actually buying any of these things. That’s literally years of working and saving that you don’t need to go through. This is the first point: Have a good think about what you really want. Chances are, you may be able to achieve what you really want for a lot less than you originally assumed.

The next point has to do with societal pressure. Think of your current salary and then visualize what your dream salary would be. This would be the salary you believe would bring you happiness, or ensure you never had to worry about money ever again. Keep this figure in your head.

Now imagine that you did earn that salary, but everyone around you earned twice as much. Would you still be happy to earn your ‘dream salary’? Probably not.

Like it or not, humans are social creatures, and being social, we compare ourselves with each other in everything from looks to brains. In the current age of technology that we live in, social media and globalization have awakened people around the world to their position relative to the rest of Mankind. Whereas previously we would only compete to be the best in the village, town, city or at most the country, we now compete with the entire world. Somewhere in the world, there is someone who works less but earns more than you. There is someone who has X but you don’t, whatever X is, whether it’s a big house, a nice car, or a high-paying powerful job.

Comparison is the thief of joy. – Theodore Roosevelt

As one of America’s presidents wisely said above, comparing often brings misery and for no good reason. Why should other peoples’ salaries matter to you if you are earning enough for your own needs and wants? If you’ll only be satisfied when you’re the top earner on the whole planet, I’m sorry to say that you’re in for a really hard life of disappointment. Because whatever you earn will literally never be enough.

And that’s the second point: Don’t compare. Ever.

These two points: Knowing what you really want, and not falling victim to the trap of comparing to others, are the twin building blocks of the financially literate mindset. Together, they define the concept of “enough”. This may seem like a overly simplistic concept to deserve the role of being the foundation of something as important as financial literacy, but stay with me. Even though it’s simple, most would prefer to remain sorrowfully ignorant.

If you know exactly what you really want, you will be able to figure out how much what you want really costs. And when I say what you really want, I mean everything. From the mundane costs like housing, healthcare, transport to the pleasures of life like holidays, that new car you’ve been hankering after for months and a meal at your favorite restaurant, you need to list it all.

Assuming you did it right, you should eventually have a rough figure for your desired annual expenditure in mind. It could be $20,000. It could be $200,000. It doesn’t matter how little or large the figure is, because what does matter is that this is the figure you need to be able to generate to live the lifestyle that you want.

Simply knowing this number puts you way ahead of most of the world’s population in terms of financial literacy. You don’t have to make more money than others to be more financially literate. There are countless people who are highly educated in their respective fields and earning big bucks, but their lack of knowing how much they need means that they will need to work endlessly, hoping their entire lives that whatever they earn throughout their career will be enough to not only sustain their current lifestyle, but also fund their retirement when they can no longer work.

Not you, though. You now have that magical number in your head. All you need at this stage is to learn how to generate that amount from non-work sources. At first glance, this appears impossible. After all, if it were possible for everyone, then no one would still be working, right?

I will be covering the answer to this question and other related topics in my next article, so stay tuned. Please leave a comment or share this article with your friends and loved ones if you think it managed to help you!

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