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Did you ever buy something to make yourself feel happier? Did it work, or did it perhaps leave your wallet emptier and your life more cluttered? Perhaps you believe that more is better – this article is going to look into what is enough.
He who knows that enough is enough will always have enough.
– Lao Tzu
Your money or your life
Vicki Robin and Joe Dominguez’ ‘Your money or your life’ touches on several aspects, briefly summarized here (perhaps a more comprehensive review will follow):
- Find out your total lifetime earnings (how much did you earn at any time in your life)
- How much do you have to show for it (your net worth) – calculated by taking all your stuff into account (I don’t necessarily agree – see why here!)
- Keeping track of the hours you spend making money, where the money is spent on and whether it provide fulfillment.
Especially this fulfillment is an aspect that I wish to go into more detail in this article – especially their fulfillment curve.
The Fulfillment curve
The original concept and curve
Vicki Robin and Joe Dominguez’ ‘Your money or your life’ talk about how many of us are raised to associate spending money with more fulfillment, an increased quality of life. A reinforcement that when in need, an external factor could bring joy – in today’s society at a click of a button.
But as we progressed from spending money on necessities such as food and clothing, and started spending it on luxuries things like cars, we usually fail to notice that the relationship between spending money and fulfillment changes. With the need of spending higher amounts to gain an increased fulfillment and increasingly getting less and less enjoyment in return. Which led to their fulfillment curve below. Illustrating that as one progresses down the lane of spending money and more possessions are collected, life tends to get cluttered – more worries are created as you have more and more material possessions to lose and more and more financial responsibilities to maintain.
This is where they suggest in ‘Your money or your life’ the concept of ENOUGH – which lies at the peak of the curve, just around the point where you start to spend money on luxuries.
This, as a side note, is an interesting fact – as this book is considered to be a key starting point for the FI/RE movement, however, many in this movement have taken into an extreme, removing any kind of luxury in order to reach financial independence as quickly as possible. This suggests that they are actually living below their ENOUGH – which might explain why this lifestyle is relatively hard to maintain for a lot of people. They might benefit of going back to the roots described in this book.
Going beyond ENOUGH is to be avoided, naturally, however later on in the book ‘Your money or your life’ provides an alternative route with going from GETTING more to GIVING more to result in increased fulfillment with only minor increase in money spent (not depicted in the graphs here). The concept of giving (back) I will talk about more elsewhere as this is a topic more books discuss as a vital part of a wealthy life.
Nice concept – less than perfect curve.
As a pharmacologist, I don’t like the original curve – not a nice dose-response – as it does not happen that any kind of money will necessarily increase fulfillment. Take, for example, spending 0.50 on your rent, while the whole rent due is perhaps 500, although increasing the amount of money spent, it probably does very little for your fulfillment.
Also – the curve puts two different variables at the x-axis, which is illustrated by the tombstone at the right. Not only is it reflecting money spent, it is also reflecting stages of life (only clear while reading the text provided with the graph in ‘Your money or your life’) – starting in infancy on the left until the grave on the right. This creates, for me at least, some confusion as it appears that spending a lot of money will be a cause of death (which it probably could of course).
Therefore, my – new and improved – fulfillment curve (v2.0). Starting somewhere on the left, where one might have too little money to spend on essentials (being broke) – eventually one can spend enough to start covering the essentials and fulfillment starts to increase exponentially. This continues when spending money on comforts – beyond the essential needs – and start to flatten off when starting to spend on luxury goods and services. On the top of the curve, you’ll find the goldilocks zone at the top where you’ll spend ‘enough’. Beyond this point, one will reach the ‘overconsumption’ (red) zone. As you spend more, it will lead to more clutter, make life unnecessarily complex, creating more financial obligations and eventually lead again to you being broke, but now also miserable as this is a self-made situation, which could have been avoided. Also this last stage will not go exponentially and the curve will flatten out before reaching the final stage.
This curve also illustrates that, for instance, buying more house than you can afford might cause you to slide down to being broke and miserable – and that ‘following the Joneses’ really can do some damage to your personal happiness.
What is ENOUGH? Enough is where you can life in comfort, not needing to worry about your basic needs and where you can enjoy a few luxuries, without the need of a bigger house because of all the clutter you’re keeping in drawers all over the place. Enough is where you’re not stuck paying for a car loan with the car itself being bought and sold again already years ago. Enough is freedom to let go of what the ‘Joneses’ are doing.
Overall, it should be clear that the luxurious position of ENOUGH is a tight balance between your wants and your needs and it is clearly hard to maintain without rebalancing every now and then to declutter and simplify your life.