I enjoyed that article, thanks Brian. It certainly made me think and I came to a realization that will be my answer. Simply, it'll never happen. I'll never feel that it will be enough. Now that's not greed, that's my habit of living with "what if's." What if I can't work when I'm older? What if I can't find a job and my home is in danger of being taken? What if another great depression happens?

All these things are what force me to keep overworking myself and rarely take a break. "What if I use up everything I have saved twenty years from now and there's nothing left?" It just goes on and on. Thanks for making me realize that. I will never feel wealthy because the "what if's" take over.

The sky has to be the limit, because unless one reaches a point where managing the accumulated wealth with all the available help is not possible, then that will be it, but unless there is such a handicap and the sources don't dry up, there is always use for wealth, while at the same time wealth brings to the fore many interesting things.

right now, my goal is to save at least 20% of my income and still have enough to contribute to my loved ones here at home. but my remote goal is to have passive income which can allow me to leave even for a year so i can travel yet still have money flowing to my bank account.

Well, setting aside 10% in my income may lead me to have wealth for the future, though it takes many years to have it plenty and enough.

Great article, it is very important to understand that hard work is neccessary. And there is this iota of luck with ensures that you get to taste success.

There will never be enough if you can be happy with what you have. The gotta have more attitude happens in paupers and millionaires alike.

I truely believe that know one feels that they have enough wealth. I think the more you have the more you want. People set thier goals and once they reach them they are not satisfied and set them higher.

Hello
Der Fehler muss also irgenwo in der Win-Registrierung liegen.
Hat jemand ne Idee wo ich suchen muss ?
G'night

My primary goal is the elimination of my non-mortgage debt, followed by reducing my mortgage and providing my kids a decent chunk for college.

I'm trying to focus on these things first and avoid using money earned from my business for "extras." You know, new furniture or a vacation, etc. If I can keep perspective, I believe we'll do well.

This post bears ressurection. Personally, I will have enough wealth when my wife and I can afford to have children.

I've known the answer to this for some time.

I needed 5 million in cash to live my life how I choose without working and just managing my wealth. But then I got married and had a kid - now I figure 7 million.

1 billion is a better top end number

I believe if you wait until you can "afford children", you will never quite get there because there will always be something else needed first. Having children requires a commitment to each other, as well as to the well being of the child. Priorities change once you have a family.

As far as how much is enough?
If you allow 10x your annual salary (40,000 => 400,000) you will most likely be alright. This allows you to live off the interest (@10%). Although there is inflation to add into the equation, interest income may be tax free (Roth IRA, Roth 401k, Insurance withdrawals/loans) or taxed at a lower rate since it is free of FICA/SSI-Medicaid withholdings. Ten percent is not an unreasonable return to expect from something as simple as a mutual fund. Some do much better.

Also, if you are looking at a retirement situation, you may have your home paid off, you no longer have a daily commute to work, or the need for special work attire, or lunches out every day. Overall, you will most likely have a lower cost of living at that time.

I definitely think your not wealthy unless you can live without 'working' per say. Wether through different realestate or other investments or absent t businesses I don't care how much you make if your punching a clock you can be well off but not wealthy enough. I'd rather make 150,000 and collect from investments than make 500k and be a slave to a time clock. Thats just me.

Anyone ever read Rich Dad Poor Dad? Changed my whole way of looking at things like this.

While I agree with Dru wholeheartedly, I have to disagree with the numbers.

First off, you can't live off the interest on 10%, you'll run out of money.
1. Your investments will not exceed 10% each and every year, meaning in some years you will withdrawal and eat into principal, which will reduce your income the following year, etc.
2. Monte Carlo simulation runs 10k scenarios through even an aggressive portfolio, and a 10% withdrawal rate will fail almost 100% of the time.
3. If you are living off your investments, you cannot take as much risk with them, meaning a portfolio weighted more towards bonds and secure investments that won't help your portfolio produce 10%.
3. Many studies have shown that a 4-5% withdrawal rate (you can get up to 6% with some variable annuities) shows the highest probability for success.

So here's how you determine how much you will need for retirement. Take the income that you want today (e.g. $100k). Now, what you want to do is adjust for inflation, so you multiply this amount by 1.04 (4% inflation) for every year until retirement. Example, if you have 5 years until retirement, your math would be: 100,000 x 1.04 x 1.04 x 1.04 x 1.04 x 1.04
(this is easier with a financial calculator)

Take that amount (in the example above, $121,655), and now divide it by 5%. Math: $121,655 / .05 = $2.433 Million. What this means is that I need a pool of money of $2.4 million at retirement age in order to provide me with an income of $121,655, which is $100,000 in today's dollars.

Then you can work backwards from that dollar amount to see how much you need to save each year to get there. This is traditional financial planning, and there are some reasons why I believe it doesn't work, but that's a story for another time.

Wealth is more than investments. Wealth is freedom. Freedom to do what you want, have your needs taken care of, have your family protected. Wealth is family, love, honor, integrity, and trust. You can be very, very wealthy without having any money in the bank.

Chris