How much money do you need?

"I think people can have too much money", I said and was instantly met with amusement. "You can buy a sailing boat for me", was the response, followed by "and a new car".

It was midsummer night in Finland and we were already quite relaxed from wine. My audience was of friends who all have it quite well. Some have a million or two, some "just" hundreds of thousands. In the next circle of acquaintances, some have tens of millions.

And everyone's trying to get more. The pissing contest annoyed me. Why are we doing it? Does it really make people happy?

Or are we lost in what we want from life?

How much money do we need, really?

We survive with very little

Nearly half of the planet (46%) lives on less than $5.50 per day (or $165 a month, or $2007.50 per year). Over a quarter (26%) lives under the poverty line of $3.20 per day. Sounds like a very tough life to me. Even unbearable. Yet people manage it. They survive.

There's a blogger in Finland who systematically spends less than 400€ a month. I know, it's insane. But she does.

What do you really need?

Imagine an apocalypse. A virus kills 99.99% of the population. Everything's gone to shit, but you're immune. What are the basic things you need to be able to live from one day to the next?
  • A safe and warm home
  • Food, water and means to cook
  • Clothes
  • Means to stay clean
How much does having a home, clothes and food cost per month? You can do with 500€, if you need to, right?

A quality of life

Once we've satisfied the basic needs of surviving, what do we do then? A life of mere surviving doesn't sound like worth living. As soon as we are able to meet the basic needs, we grow hungry for more: connection, acceptance. So what is required?
  • Other people
Of course! I'm sure you'd be able to survive without, but it's nice to have other sentient beings around you. A pack is stronger than any individual, but it might keep you from going insane. After all, we're all social animals.

In fact, among the common regrets of dying people there are pure gold nuggets such as "I wish I would have worried less" and "I wish I would have focused on my relationships more". It's rare to hear "I wish I had amassed more wealth" but instead people say they "wish they had worked less".

But in today's world we've added quite a few costly needs to our living, such as the need to have your appendix removed were it to become inflamed or the need for a quick transport to the hospital in the odd chance your heart stopped pumping blood.

Since it's a connected world, we do also have such needs as having a terminal that we can use to acquire information otherwise not available to us. We need to move quickly between places, for whatever reason.

Since a lot of the solutions to the modern life's needs are provided by other people, we too have a need to work to be able to pay for all that.

These needs are fabricated. We invented them. Yes, they make our lives better, but shouldn't we approach them as possibilities rather than things that might be lacking from our otherwise almost complete lives?

The average person in a developed country has superpowers in their disposal akin to black magic as far as Napoleon would have been concerned. The only thing we don't have is immortality.

And yet, we feel it's not enough.

We should be f**king immortal, right?!

If I'm dying, there's something wrong with that, isn't there? All the world's wealth ought to be applied to my failing body, right?

But we'll die eventually. We're not immortal. 

The embarrassment of riches

Household incomes vary greatly by country. In USA it's about $59,000, in Finland it's around 33,000€. Globally the median is $10,000.

How much of that goes to stuff that is necessary to our existence and our happiness?

Once we surpass the basic needs, and then the requirements for a healthy, high quality life with people around us, what happens then?

We start spending.

We upgrade houses, TVs and cars. We go on expensive vacations just because it's exclusive. We shop experiences for an Instagram photo. We start acquiring stuff we don't need: ice-cream machines, dive computers, DSLR cameras, tailor maid suits.

I recently published a blog post about my 2018 annual budget of 26,477€. If we double my personal costs, we come close to our combined household costs.

Whoah! Where the f**k does all that money go to?! Do I really need to spend all that? 

When I look back to that, I realize a couple of things:
  1. I splurge. There's a lot that I could save on, if I needed to.
  2. Yet I don't have regrets of the way my costs are split.
"Do I really need all this?"

When you assume a frugal way of living, it becomes natural to cut costs where they don't produce value or happiness to you.

But frugality isn't the norm. It's not natural. The norm, in my opinion, is to have an easy moment. Spend. Because why not? Apparently I'm not very frugal either.

So perhaps it's acceptable for me to say this: We (I) over-consume. I spend on stuff that I really don't need to spend on, that doesn't produce happiness. But I do it, because I haven't thought about what I really want.

It's easier that way.

The rat race is captivating, because happiness is just around the corner. When you have just a little bit more. And it's going to be so damn worth it to spend the next 10 years pursuing it, all the while being blinded by the abundance around us.


But we don't need more. We don't even want more. We're just confused.

The need for self-actualization

Look at the guy driving a Porsche. Would you rather be him? Or the guy with the yacht. Or the guy who only stays at 5 star hotels and complains when the shower drain isn't able to handle his 20 minute morning showers?

Imagine you suddenly land two million euros in your bank account. What happens? How does your life change? Will you stop working? Then what? Will you travel? When does that get boring?

Or will you start stressing over the two million in the bank and how to make most of it? How to live the fullest life you can now that you're all set for good?

I've always thought I'd just quit, have a sabbatical and then decide what to do. The honest truth however is that I'd probably grow more anxious about having a life without regrets now that I have virtually no real boundaries.

I don't want a Porsche. I don't want a yacht. Staying in five-star hotels too often makes me way too conscious of the money I'm burning.

What I want is significance, a purpose, something meaningful to do. The two million doesn't solve any of that. Instead, it highlights my inability to apply myself in a self-actualizing way.

Perhaps it's good I don't have two million. What if this is actually the happiest I will ever be? What if pursuing something for years, only to realize it wasn't something I wanted, will devastate me?

I think you can definitely have too much money.

How much money do you need?

So how much do you actually need?

If we do actually need significance, we'll need to find something to do to fill our days. Like so many have said, retirement doesn't mean "stopping to work". It means the flexibility to do what you want.

So the question is, is your purpose worth anything? If it's of any significance, I'm sure it's worth something.

With the 4% rule, every 1000€/mo income equals about 300,000€ in the bank (not accounting for taxes in any way).

Having e.g. 900,000€ sure feels great, but what if instead, you found the true meaning for your existence? Instead of 900,000€ in the bank you knew what your purpose was, and to fulfill that purpose, you'd get 3000€/mo forever?

Which one sounds more appealing to you?

I know, I know: "I'll take the 900,000 and THEN I'll do that purposeful thing for 3,000€/mo."

No, that wasn't an option. Either 900,000 and just leisure or 3,000€/mo and completely purposeful life.

Honestly, I'm not sure I'd have the stomach to go for the purposeful life if I was faced with this choice. I should though, definitely. But I'm so hard-wired for wanting more and measuring my self worth through net wealth.

What about the middle-ground then? Having 300,000 and fulfilling your purpose for 2,000€/mo? Surely that can be achieved, right?

You don't need a lot of money to have a fulfilling life!

Despite what I would do, it's important to at least acknowledge that

  1. There could be such a concept as "too much money", the pursuing of which makes you miss more important aspects of life.
  2. The relationships you have in life are far more valuable than any material
  3. "Enough money" is surprisingly little, if you want something else than 100% leisure.
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