How much is enough- Does this have an answer?

I have often come across this question from various people that I interact with. But is there truly an answer to ‘How much is enough?’ In a world where success is measured in terms of quantitative growth in every field, be it education or career, it is difficult not to try and look for a magical number when you can say, ‘Yes, I have enough!’.

In my last article I wrote about creating your pot of gold before you touch the age of forty. The figure I had taken was Rs.1 crore. This might seem like a very large figure to someone who is just starting out in life. Ask someone at 40! For him this might not sound good enough. We always create moving wealth targets for ourselves thinking that we will be happy when we have a networth of ‘x’ amount- a figure that might differ from one person to another.

In 2006, Alan Krueger and Daniel Kahneman (winner of the 2002 Nobel for economics) of Princeton University, along with three other researchers published an article titled “Would you be happier if you were richer? A Focusing Illusion”. In this study they realised that the belief that high income is associated with happiness is illusory. People with above average incomes were relatively satisfied with their lives but barely happier than others in their daily experiences, they were more tense and tend to spend lesser time in particularly enjoyable activities. The research said, “Despite the weak relationship between income and global life satisfaction or experienced happiness, many people are highly motivated to increase their income. In some cases, this focusing illusion may lead to a misallocation of time, from accepting lengthy commutes (which are among the worst moments of the day) to sacrificing time spent socialising (which are among the best moments of the day).”

Another research in 2010 by economist Angus Deaton (winner of the 2015 Nobel for economics) and psychologist Daniel Kahneman tried to find the correlation between money and happiness. What they found was beyond a limit higher income did not add much to the happiness of an individual. This study was conducted on about half a million Americans. They found that good income was necessary to provide for comforts of life, but beyond a comfortable standard of life, extra money did not bring extra happiness. This comfortable standard was found at an annual income level of around $75000 in this research. This figure of $75000 might be different for people living in diverse cultures across the world. The idea is that money is important, but it is only a means to an end, not the end in itself. Absence of money can create lot of problems, but having lots of it does not add to your life beyond a point.

hiearchy-of-needsAbraham Maslow in his 1943 paper on ‘Theory of Human Motivation’ proposed a hierarchy of needs. This shows at the base level of the pyramid, the basic needs like food shelter safety etc, next level is of love/belonging, self esteem and the last level is self actualization. When we talk about money, it can satisfy only the lowest level of needs, but the others do not need money, they are beyond money. But if you do not have the basic things like food shelter and safety in place, you cannot move ahead in life. This gels perfectly well with study by Krueger & Kahneman and later Deaton & Kahneman. The 2010 paper has estimated the figure for meeting the base needs.

Unfortunately in the current world we fail to recognise these aspects and run a race to earn more, accumulate more. If money was the answer to all needs then why would rich and famous people commit suicide, why would politicians who have money that can last for several generations still be corrupt?  Adding to this mad race is ignorance on personal finance front. Wrong money decisions lead to longer time frame for people to get out of the base of the pyramid. Being stuck at the base will mean having no time to nurture relationships, no time get involved in meaningful activities which enhance self-esteem and beyond that lead to spirituality and self actualization.

To answer ‘How much is enough?’, I feel every person will have to look within himself for the answer. If you have a comfortable home, good food to eat, a comfortable car, money enough for some holidays, you are probably more comfortable than most people in the world!

To move beyond that, try pursuing experiences. Instead of trying to build the second, third and fourth house or shopping mindlessly during sales to fill your homes with unnecessary stuff, try travelling near and far, look at spending more time with family, have a conversation with your parents, engage with your neighbours to improve the neighbourhood, find joy in the blooms of spring, feel the peace in droplets of rain on your face. Not all of this needs money, but it can add tremendously to your well being and will rid you of the question- how much is enough.