What is Enough?

What is enough?

This is one of the tough questions I see people pursuing financial independence coming to grips with.    What is enough?  The material goods might be the easy part:  There will always be a bigger house, a bigger boat, and a fancier car to buy.   The career may be tougher as there may always be a bigger job just within your reach, but everyone has to decide when do they have “enough”.     

Separating yourself from material goods equaling status is part of having enough. But is that all?  Successful people garner personal satisfaction from achieving goals.  The goal could be money driven, title and status driven, or material goods driven.  I’ve seen the question come up asking “How do Type A goal driven people ever actually retire?”  We see early retirees running successful online businesses, pouring thousands of hours into book-writing, and building real estate empires.  Is this about having enough or is it redirecting that personality into the next venture.  

Mr Money Mustache has one of the most successful retirement sites on the internet courtesy of his shock value to most people describing “enough”:   $25,000/year plus a paid off house.   His writing is intentionally designed to push people to decide what is enough.  

I’ve had the blessing of working with many self-made millionaires throughout my career and started observing the idea of “enough” early in my career.   I want to share one of my early introductions to this concept, with the story of Sam.

“Sam”

Sam and his partner were professionals making high five figures/low six figures and decided to make a career change and go into the franchised fast food business. They struggled along figuring out this business for this first couple years then poured themselves into getting locations three and four open.  They experienced moderate success above their prior jobs but exchanged that for significantly more time worked and responsibility.  

Around the fifth year, everything stated turning for the better.  The franchise they were in was selling more every year and debt used to start the business up began getting paid off.  They opened a couple of additional locations around this time and found themselves earning five, six, seven times the money they were as working professionals.

So what did they do?

• They considered opening additional locations of their existing franchise, but the projected return rate they wanted/needed actually went up.   New locations equaled more of their time invested in the beginning.  An average “store” was no longer worth the trade of time to money.   Early on, an additional store allowed them to make 100%, 50% more, or 33% more money.   At store #7, they would only make 15% more.
• They signed a deal with a new franchise to the market, but only chose to open a couple of stores in direct proximity to existing locations.  They wanted the challenge of figuring out a different business without creating any crazy geographic restrictions.  After four locations of this business, they decided the franchisor was intolerable to work with and hit the stop button.

One of my final in-person meetings with Sam was on his back porch while a pool installation was being finished.   He lived in a subdivision full of working professionals in an averaged sized house for the neighborhood and I asked him the question of “what’s next?”.   He looked at me and gave a profound answer:  “I think I have enough”.   

Sam went on to explain how he got into college from playing football at a lower level school and ended with a degree that wasn’t useful but allowed him to get good enough grades to stay on the team.  The only job he could get out of school was selling payroll and going door to door at industrial parks wasn’t all that fun, especially during Northeast winters.  That job however taught him about people and got him into a higher level professional sales job where he learned the basics of business.   That ultimately led him to meet his friend turned business partner and they got the courage together to sign up with an up and coming fast food franchisee.  

Now I was meeting with Sam after doing some business with him and asked him what was next?  We met on his back porch and it turned into him describing what “enough” looked like for him.  Sam was proud that “enough” meant he was watching the installation of a pool for his young son and friends to enjoy every summer.  His wife could have whatever car she wanted and they now had the means to take a couple week vacation each year and even sit in the front of the plane if it was a long trip.   He has the option to send his kids to their school of choice.  To Sam, this was luxury beyond the wildest dreams of his 24 year old self in snow boots knocking on doors to sell payroll processing.

He said he didn’t desire the same stuff some of his peer franchisees had: A boat didn’t appeal to him, a plane to get between two cities his company operated in was a waste, when he could just drive, and he could rent nice vacation homes and saw ownership as more of a status symbol.  We talked for a long time and ultimately Sam was describing how he’s come to peace with “having enough”.  (Note: Sam drove a Ford Taurus with 200,000+ miles for most of the time I knew him, the car was a tool for him and he wasn’t about to look rich to his employees by at a fast food restaurant in a BMW).  

I’ve watched some version of this conversation I had with Sam happen a few times in my career.  I’ve gotten better at spotting the signs and how to get someone to open up about their philosophy.   Its fascinating each time I get to have this discussion and the conversations are filed away to memory.  

 What can you learn from Sam’s story about deciding what is “enough?” 

• Remember your beginnings.  Ask yourself “If you told my 20, 25, 30 year old self I would be here, would they be happy?”   Sam mastered this mindset by always recalling the door to door sales early in his career.* 
• Be conscious of your social circle.  Sam had the benefit of employing managers, assistant managers, and staff supervisors in markets with lower than average incomes.**  He remained grounded from being around his staff-supervisors and assistant managers that were often single parents with a high school education.  
• Remember the premise of Your Money or Your Life:  Calculate how much of your life energy you are exchanging for material goods.  Sam and his partner could easily calculate this decision after opening a few stores, they knew both the time investment required and each additional store had a smaller contribution to their finances.

Final Thoughts:

Knowing what you want to do after you leave full time work is important to any successful retirement, especially if you can start doing some of it now.  Catch yourself if you think “I’ll be happy when”.   If you’re convinced that your job is your source of unhappiness, you may be disappointed when you eliminate the job and wonder “why am I not happy?”.   

The last couple times I have talked to Sam he’s gone back and fourth on selling the business.  He’s getting within ten years of a traditional retirement age and by all mathematical standards hasn’t needed to work in five years.  Sam has the benefit of being an entrepreneur and has scaled back his involvement by investing in more people to delegate tasks/decisions he used to have to make in the business.  However he doesn’t have a complete answer on “what’s next” and that’s kept him from selling the business and transitioning into full retirement.  

*This is still a work in progress for me, but the above suggestions have helped

** Sam’s method to hiring for a new store was so incredible I can’t go without sharing.   Sometime around three months before opening, he would get breakfast/coffee at a couple of the surrounding fast food restaurants, usually the one known for two golden arches and lower pay.  Sam would order breakfast/coffee, make some friendly small talk with the staff, then work on his laptop for a couple of hours each day in a seat where he had a view of the cash registers for 3-5 days.   He would get his read for the store:  Who was the manager, assistant manager,staff supervisors, and which employees were the others going to when they had questions.  

Once Sam had his read and knew the manager wasn’t around, he would simply pass his card to the assistant manager/staff supervisor he wanted, compliment them on how hard they were working, tell him/her that he’s opening a new place a couple miles away, and would love to talk to them if they had an interest.  He knew how to spot the right employee for success in his stores and knew how life changing an extra $1,000 – $1,500/mo could be for that person.  As you might expect, Sam hired a number of successful managers and assistant managers and had a loyal following.