I've got an unrequited affection for the wisdom spouted by Philip Galanes, the NYTimes Social Qs columnist. Hot on the heels of that blog-crush is one for Carl Richards, who offers financial advice as the Sketch Guy (he likes to sketch his ideas on the back of a paper napkin; see below). While he may not directly target our demographic (parents of adult children), his words of financial wisdom often pertain.
Take this recent sketch on the importance of defining how much income is enough, a calculation that, for those of us in or near retirement, may also apply to the accumulation and the spending of savings.
On the income question, Richards asks whether, if you could double your income in 18 months for only five more hours of work per week, would you do it? He then ups the ante: triple the income for 10 hours; quintuple for 20. "At what point," he asks, "would you answer “No”?"
His point is to figure out how much money we need to live happily and breathe easy (pay our bills; live the way we want to). Once paying the rent and grocery bills are assured, the calculation comes down to accumulating more money versus spending more time with family or at leisure.
For those of us at the farther end of the income-earning cycle, we might ask ourselves, how much in bankable assets do we need to live happily and breathe easily in retirement and how much would be willing to give up to double that amount. For some of us that means, how much longer should we work and put money away for our retirement?
Once we're retired and living off fixed assets, how do we want to add to the pot by taking a job--maybe as a barista or in retail sales. How much is enough to pay the bills and still have the wherewithal to offer our grown children a helping hand (if we think they deserve it) or indulge our grandchildren (if it gives us pleasure). It's the same calculus we would use if we decided, as friends of ours have, that, once their grown kids graduated college, the Bank of Mom and Dad was shuttered. They've used their "excess" retirement money to travel the world and engage in hobbies and activities that require an investment in equipment or material.
How much is enough? It is more than a question of dollars and real estate. It's about our values. With income, it's a balance between money and time; with retirement savings, it's between money and what gives us pleasure and meaning.