How much is Enough?

Amar Pandit , CFA , CFP

There is this insightful column by Morgan Housel “When Rich People do Stupid Things?” In the column, he writes about the Vanguard Founder John Bogle’s book “Enough” and the thought behind it. Bogle explains a conversation between a gentleman and novelist Joseph Heller, who are at a party hosted by a billionaire hedge fund manager. The gentleman points out that their host made more money in one day than Heller ever made from his novel Catch-22. “Yes,” says Heller, but I have something he will never have: ENOUGH.

What a line and thought? It is absolutely mind-blowing, and I can tell you from experience that it’s so liberating to figure out how much is enough for you and then to live that life you had imagined.

The column then goes to speak about Rajat Gupta (former McKinsey boss who was already earning millions and yet did what he did) and Bernie Madoff (who was legitimately earning $100 million a year and still ran a $ 70 billion Ponzi scheme). We all know similar stories (doing things because of the feeling of not having enough despite having more than enough) not only in India but in our social circles and families.

I will not get into the psychology of why people do what they do, but the point really is “How much is ENOUGH for you?” The people who have figured this out are living the life they had imagined.

I will illustrate this with an example of Dr. Rajshekhar Mehta. He had a roaring practice in Mumbai, but his children were in the US. Like many doctors who continue practicing well into their late seventies (it’s a passion for many and rightfully so), Dr. Mehta had also thought he would do what most world class surgeons do – Practice. He had saved and invested well for several years with the guidance of his financial coach. He had minimum another 10 years to go and he could have saved and invested an additional Rs. 10 Crore.

He deeply thought on what was important for him and in one of his annual financial planning discussions, he asked his financial coach Meena “I want to be closer to where my children are and pursue my hobby – flying. Yes, I know I can work for the next several years, but I am always thinking about this. Do I have enough to take this step?” Meena had been guiding Dr. Mehta to save and invest wisely for several years and initially Dr. Mehta did not understand the importance of investing consistently every month. When Meena told him “Yes, you absolutely can do all of this right now. After all isn’t this the reason why we all save and invest for. To Live the Life, we have Imagined. Dr. Mehta could not believe what he was hearing, and he was so appreciative of all that Meena had done that words are not ENOUGH.

Dr. Mehta wound up his practice, went to the US and settled with his family. He enrolled himself in flying and is now regularly flying and pursuing his passion. He now shares his story with other surgeons on the journey that he took and how understanding how much was enough and then planning for this helped him to live his ideal life. The key learning here is that “Money is merely a Tool for our Service”. We are not here to service Money. There is a difference between these 2 lines, so think about this for a moment. The people who have not understood this worry about money, feel they still do not have enough and continue to accumulate more.

Dr. Mehta on the other hand understood the role of money, how much was enough for him to live the life he had dreamt of and took actions to fulfil his dreams. This is one exercise that each one of us should do and have complete clarity on. Yes, things change, life happens, uncertain things will take place and you will need to revise & course correct. However, getting clarity on this front will give you phenomenal peace of mind and satisfaction even in COVID-19 times.

There is no right or wrong answer on how much is enough. Your enough can be different from someone else’s enough. However, every person will have their ENOUGH and it is in the best interest of you and your family to figure this out. One caveat: It cannot be a moving target every year or once you have achieved it. Yes, there can be changes sometimes but if this is changing regularly means you have not figured it accurately. Seek the counsel of a wise financial planner who can help you in this process. This is an expensive question that you must get answered.

We would love to see millions of stories like Dr. Mehta’s than to see stories of people who felt they never had enough (and did stupid things in the process).

Alexander the Great’s tombstone epitaph reads “A tomb now suffices him for whom the world was not ENOUGH.