What is the end goal. What will you be happy with?

[4x4toy]

A common question I always ask myself is what will it take to be content…….. and by this I am bringing my professional life and finances into the equation in which I’m saying, what do I need to earn to stop chasing money.

The last year or two I finally started making really good money in my job and the earning potential is ridiculously good. The more I work the more I earn, but I really am trading time for money. Now I know I may be coming accross tone deaf and maybe a little narcissistic but I absolutely work my ass off to earn what I do and I’ve become addicted to it, my partner and parents have even started to tell me to pull it back a little. I’m aware that it will have a negative impact on my life in the long term, but the last year of two it has put us in a very fortunate position that I am so so grateful for……….but all I do is work. I literally have Sundays free. Most nights Monday -sat I work 8 am until 7/8/9pm. At the same time the money doesn’t necessarily make me much more happier, I just know I’m financially secure, which sounds a bit contradictory …I know. I’m a pretty content guy but my baseline standard of living has for sure dramatically increased the last two years with the increase in income and I’ve gotten too used to it to revert back. I’m not into flashy things and I’m just having a bit of an existential crisis thinking wtf am I doing???

In short, I’d love to hear people who have been in my position / have any life advice on how to approach things.

What do people think is a number where you should be able to truly relax. I just do not want to be that person who looks back in 10 years with a ball of money and think, woah I f****d up…

 

[frickinbeon26]

@4x4toy The biggest financial cost in life is moving your expectations with your means. If you get a better job or make some good financial decisions, and all of a sudden you’re wearing designer clothes, driving a car that’s 50% more expensive, and so on and so forth, you will simply drive up your costs and keep yourself on the hamster wheel. “Having low expectations is the first rule of a happy life,” as Charlie Munger used to say.

I grew up in constrained circumstances. When I sit down on a Friday night with a nice bottle of whiskey in my nice home with the heating on, watching a movie or chatting with my missus, I occasionally stop and think “this. This is what I worked for.” And I’m quite happy with it.

For me the goal of financial hard work - earning, investing and trying to be wise - is to have the independence to enjoy a pleasurable life, free of worry.

 

[bso66]

@frickinbeon26 This.

Also keep in mind that the joy of "moving up" is less than the pain of "moving down". So if you get comfortable to a certain lifestyle it becomes your default and makes scaling back harder and harder to do.

My advice would be to not take a 20% increase in take home pay and start buying things that are 20% more expensive. When you get payrises or windfalls, pump it into savings or pension or something where it's not immediately liquid. Let the extra dough pile up and if you want to buy something new or something nicer, make it a considered decision. There's diminishing marginal returns on everything. Going from a 3 to 6 euro back of coffee is less satisfying than going from a 6 to 9 euro bag or 9 to 12 euro bag.

You can drown out or mask symptoms of an unfulfilled life through retail means. So if you stop spending outside of your norms for a bit you can see if the extra work is actually making you happy or if it's the purchasing power it affords.

It's also possible your work habits are a bonafide addiction, in which case even without spending the extra money, the work itself is the thing you're after. In that case, it might be worth asking yourself if you have adequate hobbies and human connections outside of work. We shouldn't live to work or for work.

 

[trevor11]

@frickinbeon26 I love this comment so much I saved it for future perspective. I did inflate my lifestyle a little after moving into a higher paygrade for quality of life improvements - but ultimately I found a lot of other elements of lifestyle inflation were fairly superficial when it came to just being content.

 

[baboo]

@4x4toy Honestly from reading this sub regularly enough, I get the impression that most people haven’t really defined what enough looks like. I mean, there’s people on here who want to move countries just to avoid tax on non-value add activities like trading and investing.

 

[peter1000]

@baboo Ya, that's always sounds mad to me. Leaving family and friends, not out of financial necessity but to optimise your investments tax performance

 

[cechols]

@peter1000 It's to minimize how much you have to work. I'll be able to retire in Ireland at 45 due to leaving for a few years.

If I stayed in Ireland I'd be looking at 58~

 

[sheshe11]

@cechols Where did you leave to?

 

[cechols]

@sheshe11 Japan and US, back now though.

 

[rickylee]

@baboo It's not that. It's a case of working in another country and building wealth to retire earlier and have a lovely financially secure retirement, or working until much older in Ireland. It's about quality of life.

 

[baboo]

@rickylee That’s exactly the ‘purely numbers’ POV I’m talking about

 

[rickylee]

@baboo It's not about "purely numbers" though, when those numbers translate into whether you can retire at 55 or 70. That is a life changing decision. It's very difficult as a medium/high earner to figure out how to make your money work for you here.

You have to weigh up if an extra 10-15 years working is outweighed by being around family and friends. That is not an easy decision, and one higher earners don't need to consider in other comparable countries.

 

[baboo]

@rickylee This is quite an extreme example you’ve given and the achievability of retiring at 55 here versus elsewhere isn’t predetermined by where you live to such a degree where we know for sure it to definitely be the case.

 

[rickylee]

@baboo Yes it is extreme. But when you look into the ability for higher earning PAYE earners in Ireland to build wealth to retire early, it is extreme vs other comparable countries

 

[resjudicata]

@4x4toy Freedom to not be at the whims of a shitty employer. To have more of my time back and spend it how I wish, particularly with friends and family. That’s the end goal for me.

It’s difficult to quantify and would be different for many depending on the lifestyle you want. Money absolutely isn’t everything in life but it’s a bloody good tool for helping get to a place where these end goals are possible.

The key is knowing are your sacrifices in pursuit of more money yielding more than what your giving up in the short to medium term. If it’s not, definitely have to re-evaluate your approach in my view.

 

[sycarton]

@4x4toy I would like to reach a stage where I’m not living paycheque to paycheque in the short future and then try and build some wealth. Don’t plan on retiring early per se but definitely moving careers at some point once I have a decent base.

 

[clairedet]

@4x4toy Everybody's number is different, it's totally dependent on their individual circumstances.
Whether people would be satisfied even if they actually reached their number is questionable however.
5 years ago I would have said €1M x 4% rule was the goal and I could 'retire' then, but I have reached that now and it hasn't changed a thing.

Sounds like you are experiencing some lifestyle inflation: more disposable income is being met with more discretionary spending. You can well afford it, and it sounds like you deserve it, especially for working so hard and making big sacrifices.
But this could become a vicious cycle: you need to fund the big lifestyle, so you need to continue the hard work and big sacrifices. The stereotypical rat race. If you don't break the cycle, you will end up sacrificing a lot.

A quote I like is from Immanuel Kant - We are not rich by what we possess but by what we can do without.
I think it means that if we always want more, we will never be rich, and a rich man is a man that wants for nothing more (i.e. can happily do without anything he doesn't already have).

It sounds like more money is not the main motivator for you (otherwise you wouldn't be asking this question), so maybe you need to figure out what it is that is driving you now?

 

[noose]

@clairedet Congrats on hitting the €1m mark. Can I ask what age you are and what you did to get there?? I only started really hammering my pension 18 months ago and I’m at €160k and have a defined benifit pension from previous employer than I’d value around €175k. Hoping to hit the €1m mark in about 10 years

 

[clairedet]

@noose Early 40s. Most of it is in a contributory pension, my employer makes a decent contribution and I've increased my personal contributions up to the max for the past 5 or 6 years. The rest is in an S&P500 ETF with Degiro.

Lifestyle is the big thing. Sure, you need a big income but you also need to not spend that income if you want to reach financial freedom.
That's why I really like that quote: it's not about what you have or what you want, it's about what you don't want.

 

[noose]

@clairedet Fair play. I’m 39, I prioritised paying down the mortgage (mortgage will be gone in c9 years) and only got into the investing side in the last 18-24 months. I’m maxing out pension now tho and employer puts in 15% so I’ve 35% of income going into pension at the mo. I’ve always been good at the lifestyle side, not into flashy or expensive things, I mainly like to travel and use a side hustle to pay for that.