How much money is enough?

By Caitlin Kelly

Interesting, if scary, essay in The New York Times recently, by a former Wall Streeter — who once sneered at his $3.6 million bonus as insufficient:

After graduation, I got a job at Bank of America, by the grace of a managing director willing to take a chance on a kid who had called him every day for three weeks…At the end of my first year I was thrilled to receive a $40,000 bonus. For the first time in my life, I didn’t have to check my balance before I withdrew money. But a week later, a trader who was only four years my senior got hired away by C.S.F.B. for $900,000. After my initial envious shock — his haul was 22 times the size of my bonus — I grew excited at how much money was available.

Over the next few years I worked like a maniac and began to move up the Wall Street ladder. I became a bond and credit default swap trader, one of the more lucrative roles in the business. Just four years after I started at Bank of America, Citibank offered me a “1.75 by 2” which means $1.75 million per year for two years, and I used it to get a promotion. I started dating a pretty blonde and rented a loft apartment on Bond Street for $6,000 a month.

I felt so important…The satisfaction wasn’t just about the money. It was about the power…

Still, I was nagged by envy. On a trading desk everyone sits together, from interns to managing directors. When the guy next to you makes $10 million, $1 million or $2 million doesn’t look so sweet.

If you live — as we do — in an area filled with seriously wealthy people, some of whom attend the same church as we do, or sit beside us on the same commuter train, it’s disorienting to realize what “enough” looks like to those of us whose annual incomes are a puny fraction of theirs.

My first husband, a physician, earns in one month what I make in a not-great year writing.

A new film, The Wolf of Wall Street, is a true-life story of a former trader whose life defined greed. Cate Blanchett should get an Oscar nomination for her role in Blue Jasmine, Woody Allen’s latest film, about a New York woman who tumbles from tremendous wealth into poverty.


And here’s a stunning bit of new data, from Oxfam –– 85 people own nearly half the world’s wealth.

Here’s a sobering list of how much money you’ll need for retirement — if you need or want $4,000 a month, your stash needs to be $666,000. Very few people can ever manage to save that much, especially when battered by multiple recessions and a weak economy.

People who live nowhere near NYC have no idea how insanely expensive it is or why we put up with it — for some of us, it’s where we need to be professionally; my husband spends more than $5,000 a year just to get to his office, between train, cab and subway. There’s no practical way to cut that fixed cost, a stupid number to many of you, I know.

But moving an hour or two further away from the city to save on housing costs also means an even longer commute, (which costs more), and sharply diminishes the time and energy to spend on its cultural, social and professional opportunities — fine for some, not for others.

Let alone the time one has to see one’s family, relax or have a life; one of my favorite books is the classic, Your Money or Your Life, which makes clear that’s the tradeoff many of us make, with only 24 hours in every day.

One writer I know profitably pounds the drum of endless productivity — a very American obsession — with books like 168 Hours.

What the point of making huge bank if you’re working all the time and/or too exhausted to enjoy your personal interests, (or even have any!), let alone nurture intimate relationships with anything beyond your computer screen or phone?

Credit Suisse recently made headlines by suggesting its junior bankers take Saturdays off.

I come from a family with money, some inherited, some earned, but will never enjoy a lavish life like theirs, which is sometimes a little depressing after watching them spend freely on jewels, furs, limousines, property, cars, travel and antiques. You develop a taste for the best, with extremely limited ability to buy it yourself.

So what’s really “enough”?

For us, at the moment, it’s having decent retirement savings and adding to them every year, no matter how much immediate fun it costs us.

It’s my husband’s job that he still enjoys and which, thank God, offers a pension.

Above all, it’s good health — without which billions in the bank means damn little.

How much money is enough for you these days?

33 thoughts on “How much money is enough?

  1. Let’s just say I’d define enough money as enough to live in one of the artsy districts of Columbus, to do my shopping and afford a car and the insurance, plus all the other insurances you need to have these days. If I can find a job that’ll allow that, I’ll have less to complain about after graduation.

  2. Assuming the good health factor (or pray for, as I have been lately), USD$1500 a month.

    It will be enough as long as I remain on the road in current fashion. How realistic that is long term, I don’t know (probably not very). When I am old and decrepit? Consumed by figuring out how to do this now, I honestly have no idea.

  3. Eurolanguages-Pt

    I’ve always lived with very little money! Even when I had a good salary as a nurse it all went into the mortgage & once a month I’d have to wait for the next paycheck for such essentials as milk & bread! Mortgage first!
    I was always extremely thrifty and managed to make ends meet by living the simple life; I’ve always been cheaper than anyone I know!
    Today my kids are on their own, and my earnings have drastically diminished, but I’m so used to it that as long as I can make my obligatory payments & have a bit of emergency money stashed away, I’m ok!
    The other day I came across someone (in a forum) else ho thinks just like me (I thought I was unique!), and it was so cool to read all of her/his tricks to manage on minimum wage; this person even grew leafy greens in a balcony containers in order to have chemical free veggies for the household because organic produce is not accessible to folks earning minimum wage!
    Hurrah for the simple life style!

  4. As the article says, there is no “rich enough” when the person next to you makes more. I was staying with a peer at her home in Scottsdale–rich and rich can be–and she was ashamed of the place because it didn’t have the fancy things that the other houses have near them. Once unspoken competition was the have the best holiday decorations. So people hired professionals to try to be the best. Studies show, however, that once you have enough to meet Maslow’s hierarchy of needs, more money doesn’t make you happier.

    As a consultant, I sometimes to talk people with some family members with toxic mental illness. Mr. Smith, a corporate tycoon who owns his own jet, has so much trouble with his BPD wife: he’s spent $250,000 on therapy and no one but me every told him that this therapy wasn’t working (and he got the best) because the wife didn’t believe she had a problem and never took any of this therapy seriously. I honestly think they didn’t tell him this because that would have meant the end of therapy and they couldn’t conceive that their own special brand of therapy could ever fail. And then a major politician’s wife dies of suicide and I know he did everything possible, but then America blames him for not preventing something he had no control over.

    In other words, these people are about as happy and you and me. When people’s income raises or they win the lottery, there is a sense of the “new normal” and then life begins again with the same things that made us happy or unhappy before. Except that the kids, I think, are in serious trouble. I knew a woman so anorexic she had a feeding tube because her parents just gave her a bunch of money rather than spend time loving her and sharing their life. She got into drugs and had to leave treatment to deal with her legal problems.

    If I won the lottery, I wouldn’t need to buy myself a whole lot of stuff. But I would try to change the world by using the funds to improve situations I think needing improving. That would be really special.

  5. there were two main reasons i left the world of advertising: one was that i wanted to do a job where i could help people in a very real, hands-on way. the second reason was that time became much more valuable to me than money.

    the way i see it now, is i like knowing i can pay my bills, and buy a few things or travel or help people who need it. i live in a little house, ‘the cottage,’ can walk into my city, carpool to work, and rarely feel financial stress, because my needs are so simple.

  6. ianprichard

    That Sam Polk essay was great. I’m sure he’s been getting a lot of flack from old cohorts, but I’m also pretty sure, from the sounds of it, that he probably couldn’t care less.

    Erin and I are doing okay the way we are – if we weren’t both saddled with pretty hefty student loans, we’d be in great shape. Not that it’s easy, by a long shot, but I’m okay with that – I honestly believe I appreciate things more when I save and wait for them.

    That pressure to earn more is always there, though. I went to school with some guys that are at Polk’s level, and it’s mind-boggling to think my erstwhile friends are making seven-figure bonuses.

    But, they’re “erstwhile” friends for a reason – that money creates serious gaps between people. I keep that in mind whenever “fat stacks” start to sound more appealing than normal…

    Thanks for another great read.

  7. I try to ignore the student loan – payments are deducted at source in the UK, so I just view it as another tax. My focus remains on the mortgage. The sooner I can get it paid off, the sooner I can hope for a little more freedom in my work choices and a bit more style in my life.

    1. Both my husband and I were very fortunate to graduate with no debt at all — my college was very cheap and he had a full scholarship. So many people are saddled with so much educational debt…

  8. I think it boils down to wants vs needs. We need a roof over our head, food on the table, gas in the car, and a little entertainment. That can be had for damn little. Beyond that comes the wants. The smart phone, tablet, computer, Big screens, fancy cars, 5,000+ square foot house for two people, jewels, furs, trips, etc. I have been blessed to make enough to live comfortably. Needs are met and most of my wants taken care of. In my opinion, we have lost track of the difference between needs and wants. It does not require two six-figure salaries for a family of four to ‘survive’ and prosper. Life is full of choices.

    1. “It does not require two six-figure salaries for a family of four to ‘survive’ and prosper.”

      Actually, I disagree. Not sure where you live, but anyone who lives in or near NYC is going be paying a LOT of money for schooling, rent/mortgage; gas and tolls (one bridge here charges $8 each way), taxes and other costs that people living in much cheaper places simply don’t face. Yes, it’s a choice to live here. But the costs are crazy and nothing we can control on fixed, stagnant or falling incomes. We live very carefully and are very frustrated by the constantly rising costs.

      Even with a very low six-figure income — and we are only two people — there are many “wants” that remain very firmly out of our reach.

      One of the many “wants” that many Americans still choose to ignore is a pleasant and comfortable retirement — we’d have a lot more daily fun if we spent the money we faithfully put away every single year for our future.

  9. Enough is a relative term. Money is such a sensitive subject! Anyone who thinks it isn’t only needs to make twice as much and see how their friends react!
    We’re okay. Like most people, we pay too much for health coverage, and we save a pittance, which is usually spent on a need. We have a low mortgage because we set a budget, and we meant it. 20% down and 15 years. We didn’t travel for two years, among other things, in order to save that 20%. We could have bought “more house” with a longer loan, or in a lesser school district, but comfortable finances and the kids’ educations are crucial to us.
    We’ve lived on less, with less, and when two more kids were still at home. Those were lean years with many a sleepless night. Even though we came from different economic backgrounds, we had both been taught how to handle money carefully, and we knew how to budget, how to make do. That is to say, live within our means. I don’t think many people understand living within one’s means.
    When my husband was military (second round) we had cheap insurance premiums, no out-of-pocket expenses, higher salary, housing allowance, and much more financial freedom — but, at the expense of his life in deployments, gone at training, many missed special occasions…
    For us, it’s about balance. When we can easily afford the things the younger two need, when we can have a date night after paying the bills, we consider ourselves blessed.
    If we won the lotto, our lives wouldn’t change very much. I suppose we’d pay off our mortgage, buy a car for me, hell, maybe even a new car for him, add some fencing, get our floors re-done…but you know, all that will come in time, without the lotto. We could certainly dramatically change the lives of others with that kind of money.
    I don’t find that we have huge gaps between those who have more or less than we do. We have more poor friends than rich. I will admit to laughing about my single dad friend who lives in a manse with just his son and a cat. I laugh at my friend and her refrigerator with a tablet built-in. I laugh at Tiffany sunglasses for a teenager. But if people were honest with me, they might admit to giggling just the same about something I spend money on.
    The main difference I see isn’t about values (which is why we chose those friends) but about problem solving. Money can solve a lot of problems. When something goes wrong, people with money can fix or replace things immediately, whereas people without money may need to suck it up, borrow, or opt for an alternate ending entirely.
    I only feel the gaps when things like that happen. Things don’t make people who they are, and lack of things doesn’t define anyone, either. My mother taught me a long time ago, what the Jones’s have is DEBT!
    I wouldn’t feel comfortable living in a place like NYC, because I know I couldn’t achieve the same lifestyle there. In Indianapolis, Indiana, a family of four can live well on less than ONE six-figure salary. But well is a relative term, too.

    1. Thanks for sharing all this.

      Money and its use is a difficult issue to discuss rationally — because so much of what drives us is emotional: shame, pride, envy, status, etc.

      My husband grew up with no money and I with a lot, yet (ironically) I’m super tight-fisted and he is OK with debt, (to a degree that terrifies me.) But he has also had 30 years’ unbroken employment and I have never had any job longer than 2.5 years, and have been canned from a few, which left me very wary of a repeat.

      We don’t live in NYC — that’s completely out of our budget! — but are subject to many of the same economic pressures.

      Money certainly does solve problems, some of which are urgent; we got whacked with $4,000+ (yes) in car repairs in 2013 for our one vehicle. Those, living in suburbia, were non-negotiable but a nasty, huge hit on our finances. I would much rather have spent that money on a dozen more amusing things, but there is only so much money and only so much debt we can bear.

      I’ve been asked twice in the past few days if we would consider moving away from NY, but it is where my husband has a good, steady, secure, well-paid job he enjoys — *extremely* rare in print journalism today. We would be stupid to leave it. And moving way upstate for cheap housing is just not a good option for me. I tried rural/small town life in NH in 1988 and have never in my life, anywhere, been as lonely, bored, broke and miserable.

      Yes, we pay for ready access to the city. But, today, in a snowstorm, I’ll go to the Morgan Library and see a show there, then a classical concert and that is what I moved to NY *for.* I value access to a wide array of great culture and history, style and good food. Yes, other, cheaper places also have it…at this age, I’ve no appetite for starting life anew unless it’s in France, which is our plan for retirement, at least part time.

      We have no kids, so our choices are ours to make.

      We also chose to stay in a 1-bedroom apartment and a 11-yr mortgage (10 yrs left) rather than acquire a long mortgage and a bigger place (not really, affordable houses here are barely 1,200 sft — and those are $400k+ with 12K+ a year in taxes for tiny lots). I love our view, the light, our pool, our neighbors. I’d much rather spend any “disposable” income on travel, anywhere, anytime, than heating, cleaning and furnishing a bunch of extra rooms we really don’t need.

      I agree, people’s values are much deeper and broader than the stuff they own and amass. We do live in a country addicted to showing off the coolest new…whatever. It takes confidence and self-discipline to say “No, thanks” to most of it.

  10. 1920 bungalow with all the charming woodwork and arched doors, separate public and private spaces,1500 sq ft, 3 bed, 2.5 bath, 1.3 acres, long, paved driveway, detached garage, fenced, apple trees, quiet, dead-end street, family-centered community,10 minutes from downtown, excellent schools…don’t cry, $77,500. really, don’t cry, $750 a year in taxes.
    In a nutshell, where you live scares the crap out of me! lol

    1. I won’t cry. You can’t buy a garage spot for that price in NYC.

      That’s quite extraordinary — our total monthly housing cost is four figures (low) and the monthly maintenance charged by our apartment co-op (non-negotiable) is $847 alone. I can hear you cry…:-) That buys us a shared pool, tennis court, lots of nice landscaping (and today, snow shoveling), garage, storage lockers…it is what it is.

      A costlier place is not, per se, scary IF:

      1) you have no kids and their attendant costs; 2) you have affordable health insurance; 3) you have good skills/network and are willing to hustle HARD for work. As with every other place one chooses to live, you have to strike some sort of balance between what the market will pay for your skills and what you enjoy most… I’ve never had a huge jones for a big house (and all the costs of that) but want access to other things I really like, like theater, dance and museums.

      For some people, these costs are scary. To me, any housing cost beyond $2,000 a month would make me feel ill…and many, many people here are paying a LOT more than that here, even for rent. To put it into context, we would pay the same amount to rent a not-nice, not-large studio apartment in a not-great outer borough NYC neighborhood for what we already pay to own our renovated home and build equity.

      Don’t forget — salaries here are also, typically, higher than elsewhere.

      1. Yes, cost of living is a marvelous thing. Yeah, the maintenance thing/condo fees can be really daunting, BUT, it provides you with a lifestyle that many people desire: time left to pursue adventures and not time spent to manage pools, snow, shrubs, etc. which can certainly be daunting at times!
        Rent is ridiculous compared to housing costs where I live. The house across the street from me is half the size of mine, although still quite cute, and it rents for more than twice our mortgage. Eek! People pay it, though, because of the school district.
        I recently took our youngest to a sleepover, in our district, only to find out that the mother home schools. I thought: Gee, I hope they love that house. I can’t imagine paying to live here without the need for schools. We certainly wouldn’t.

        It’s interesting to me, how other people live, what they prioritize, what they value — even when they’re just a few states away. The way you and your husband live makes a great deal of sense to me. Our house will be paid for before the youngest two depart for college. We plan to do more traveling then. The last thing I’d want is to upgrade into larger, high-maintenance housing!

      2. I rented a house in Toronto and had to shovel the walk. UGH. Here, we have very little to attend to beyond cosmetic changes to the interior of our home. I house sat for someone two years ago and had to water a large garden in a heat wave and clean the pool. Never again. It sucked up hours every day and taught me a lesson.

        The whole school thing is so alien to me, having grown up in Canada — where schools are funded very differently, so you don’t get these weirdly skewed real estate values linked to a district.

  11. Enough to pay routine monthly expenses. Be able to buy a book or two, maintain the required necessities for diabetes care and future medical test and lab work. Enough to routinely pay tithes and make monetary donations, Enough to look beyond just surviving, but the ability to thrive during difficult financial setbacks. Enough to come home and simply be at peace that it is OK for now. Enough to actually fulfill a few things on my bucket list. Enough to retire with good amount of quality life and still work part-time. Enough for me without comparing my life style, needs and wants to the rich and wealthy. Enough to know that what I currently have is enough or be able to identify what’s enough, how do I define “enough” based upon cash flow, how to handle finances at a better level of knowledge and have no fear as the aging process introduces itself day-by-day.

    I have far less money and have and still experience difficult financial challenges. However, through these difficulties I found me. Yes, believe me there have been those times when complete envy of the rich and/or wealthy has struck, but that type of envy has diminished tremendously over time. It’s now at the point that sometimes there’s a sense of sorrow for those within the category of rich or wealthy because of the need for some to prove their worth as humans by their monetary status. Sometimes you sense something is missing within their soul and seeking answers via the purchase of expensive toys, clothes, trips, false friends, etc…However, there are those within this category that have done great things to lift humanity to a greater level of themselves.

    1. Thanks.

      I suspect our “needs” and wants can change quite a bit. After three days in the hospital on an IV in 2007, I have worked less. It has hurt my income but getting that ill by working when already quite sick was terrifying. No $$$ is worth that.

  12. The New York Times piece is about an addiction to money. It’s not a question of how much money is enough. But in our society, we tend to confuse having and being. To be, in this society, needs a little bit of money. But to have needs more money. I would say what I earn is enough for me.

    1. But money is always proxy for…power/status/control. In a culture where being “productive” is seen as such an essential (versus being creative or kind or smart), this obsession with having more stuff is often a substitute for all the time lost to get the money to buy the stuff. It’s crazy.

  13. Steve

    Can’t help but weigh in on this one. Life is all about choices. You have chosen to live in (near) NYC where it costs a fortune to live. Personally, I wouldn’t choose to live there if you gave all of Manhattan as I despise city life. Nothing there appeals to me. I enjoy mountains, woods, hunting, fishing and fresh clean air. The guy you mentioned in your piece that isn’t satisfied with 5or 10 million, I actually feel sorry for. He is working like a dog and missing out on life for what, a bigger house than the guys he works with? To me, that’s sad. The choice he’s made however is his own, not mine. Where I have a problem is when society comes to the conclusion that he has enough and wants to penalize him for his decision to make money. Who is it that gets to determine how much is enough? Money is such a variable thing that is really just a way of measuring our value of our time. Some people’s time is worth more than others. We only have 24 hours of it every day and in my opinion, NO ONE has the right to tell someone else what their time is worth. I thank God every day that I don’t have to pay $8 to cross a bridge. It’s kind of funny as my one son loves the city and he’s always trying to get me to go into Philadelphia with him to go see hockey games, football or whatever and wife laughs at him every time he tries because she knows its hopeless. Country boys don’t do well in the big city. You can keep it! Let me know if you ever have a desire to go fishing or hunting. Now you’re talking!

    1. Let’s also remember the key reason we’re staying put for now — my husband’s good job. Those are rare these days at our age in our field.

      But one man’s hunting and fishing is my city pleasure — tonight attended a concert of Haydn, Mozart and Beethoven. That’s heaven for me.

  14. I have been LIVING this post, lately. We go back and forth from the expenses owed to the expense we dream of paying. Somewhere, in a long ago dream, I stood up to myself in the mirror and said, “I’m not going to make a lot of money. The important work doesn’t pay well.”

    So, there ya go.

    1. It’s an ongoing challenge to reduce your basic expenses to the bare bones (what do you cut? for how long? why?), enjoy a quality of life that makes life pleasant (or better) and save money! For short or longterm uses.

      Oh…and if you are not a $$$$$$ earner and/or live in a costly area, good luck with all of that. Money only goes so far, no matter how frugal.

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