Posted in Finance, Life lessons

The Million Dollar Question…

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The never ending question of how much is enough?

How much is really enough?  How much money does it take to make you happy?  If you were a millionaire or even a billionaire how would you answer the question?  I guess it all depends on your definition of money (and of happiness).  It depends on how you earn, save, and spend money.  If you don’t know how to properly earn, save, and spend money then you might be like I have been in my past years, one of the many who does not properly understand money.  Let’s assume for a moment you do understand money.  How much would be enough?  According to Daniel Kahneman, the magical number is $60,000 (I’ve also heard $75,000).  Anything beyond this amount is not really needed.  Here is the excerpt from the TED talk he gave in response to the Gallup Poll and the correlation of happiness to money:

“Sure. I think the most interesting result that we found in the Gallup survey is a number, which we absolutely did not expect to find. We found that with respect to the happiness of the experiencing self. When we looked at how feelings vary with income. And it turns out that, below an income of 60,000 dollars a year, for Americans, and that’s a very large sample of Americans, like 600,000, but it’s a large representative sample, below an income of 600,000 dollars a year…

CA: 60,000.

DK: 60,000. (Laughter) 60,000 dollars a year, people are unhappy, and they get progressively unhappier the poorer they get. Above that, we get an absolutely flat line. I mean I’ve rarely seen lines so flat. Clearly, what is happening is money does not buy you experiential happiness, but lack of money certainly buys you misery, and we can measure that misery very, very clearly. In terms of the other self, the remembering self, you get a different story. The more money you earn the more satisfied you are. That does not hold for emotions…”

As Mr. Kahneman points out annual salary below $60K produces more unhappiness, above $60K there seems to be a flatline.  Although this suggests that $60K is the magic number, again it all depends on how you understand money and how you are able to utilize it as a resource rather than some maniacal goal.  Leaning on money as the means and not the ends as it is so often categorized.

Cleaning out the cupboards is the first step in starting a diet.

Have you ever tried to start a diet and quit a few days in?  For that matter have you ever set a New Year’s Resolution?  How has that worked out for you in the past?  Without diving into methodologies about achieving goals, understanding the mechanics of goals, human behavior, or psychology, I would recommend a few things that can help if your current money is not where you want it to be.  It is as simple as the diet.  Start first by emptying everything in your cupboard and throw it out.  The stuff that is in there now has not helped you to achieve the results you want (obviously) so get rid of all of it and start with a clean slate.

  • Start by writing down all of your expenditures for at least 1-3 months (without trying to figure out a budget).  ::you have to have a baseline in order to figure out what you want to tweak.
  • Once you see what you are taking in and sending out in the form of income, bills, expenditures, Netflix accounts, excessive car payments, etc. go through the list and see if the expenses and income are consistent every month.
  • Find out what the outliers are (impulse shopping)
  • Ask yourself if these outliers are really things that improve your life over time
  • Figure out what monthly bills you are paying that are actually doing you good.  I have an app that tells me all my bills and lists them out in a short text message.  It also gives me some tips for things I may not need like forgotten subscriptions.  TRIM  But being able to see your bills in front of you is actually the most important thing. (not out of sight out of mind)

Now that you have an overview you can easily see what makes sense and what doesn’t.  Most of us have things we pay for that make no sense.  We don’t change them because we don’t like change.  Humans, by nature, do not like rocking the boat.  The whole process above will probably need to be run every couple months.  Things change.  Income changes.  Life changes.  Being able to adapt and move with it rather than sit and push forcefully back against it will not get you where you want to be.

Moving forward

Back to my live stream the other night…

Discussing what the big deal is with $1M (cash or net worth).  Some people don’t like talking about money.  That’s fine.  I like dealing with the elephant in the room sometimes.  I take her for walks through the park and invite her to be my guest at dinner parties sometimes.  She tends to make everyone uncomfortable, and that is ok as well.  So let’s peel this onion back a few layers.  I mentioned near the end of my video how people complain about “the rich getting richer and the poor getting poorer”.  I went on to say “the rich are not getting richer, they are getting smarter”.  Firstly, complaining in itself is the root of most people’s problems.  Have you ever noticed that being nice to people and not being a complainer attracts more people than complaining does?  Do you want to be around a complainer?  I didn’t think you did either. Stop complaining, and just start doing something… anything.  Secondly, the rich really are getting smarter and I would even venture to say that no matter what regulations, taxes, obstacles or barriers to entry the government or anyone else puts in their way, smart business minded people will find a way to traverse the chasm.  Being an Accredited Investor is one of these ways.  A lot of people think this means you have to make $1M in income.  That is not true at all.  Actually, you only have to make $200,000 a year for at least 2 years OR have at least $1M in net worth (or cash if you are that good).  Personally, I would shoot for the $200,000 marker.  It seems like a lot but it’s really not that much.  You don’t have to earn it all in one place either.  Multiple streams of income is the way to get to this point.  Figuring out what you really really enjoy or what really really bothers you in life.  Putting together a solution for that thing.  Sharing it with the world.  It is really that simple.  You are not going to make it all happen overnight and it will more than likely not go the way you plan it in your head or on paper.  But with persistence and repetition, you can make just about anything happen.  Also, don’t forget that you should be super excited about what you are doing.  That is a really good thing if you are.  You should also share that excitement with the world as much as humanly possible.  You never know who is listening.

The other way to get to this is to have a net worth of $1M dollars (assets, insurance, property, investments, etc.). Here is what Wikipedia has to say about an Accredited Investor (much easier to read than the SEC website)

United States[edit]
In the United States, to be considered an accredited investor, one must have a net worth of at least one million US dollars, excluding the value of one’s primary residence, or have income at least $200,000 each year for the last two years (or $300,000 combined income if married) and have the expectation to make the same amount this year.[9]
The term “accredited investor” is defined in Rule 501 of Regulation D of the U.S. Securities and Exchange Commission (SEC) as:
  1. a bank, insurance company, registered investment company, business development company, or small business investment company;
  2. an employee benefit plan, within the meaning of the Employee Retirement Income Security Act, if a bank, insurance company, or registered investment adviser makes the investment decisions, or if the plan has total assets in excess of $5 million;
  3. a charitable organization, corporation, or partnership with assets exceeding $5 million;
  4. a director, executive officer, or general partner of the company selling the securities;
  5. a business in which all the equity owners are accredited investors;
  6. a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, or has assets under management of $1 million or above, excluding the value of the individual’s primary residence;[10][11]
  7. a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year;[12] or
  8. a trust with assets in excess of $5 million, not formed to acquire the securities offered, whose purchases a sophisticated person makes.”[9]

So there are many ways to get to that point.  This has nothing to do with having this much net worth per se, it has more to do with getting to a point where you can open some really big doors for yourself, your family, and your future.

Like I mentioned in the video, getting to this point alone is a huge step and it is sort of a validation for doing some really hard work and heavy lifting.  The rewards are immense once you are there.

Without droning on about $1M this and Accredited investor that I will leave you with a couple things to think about.

Does anyone have your best interest in mind besides you?

ONE THING you can do right now is doing a little research on a Fiduciary.  The real Fiduciary is a type of financial planner.  These people “should be” but are not always bound by the law to have your best interest at heart.  They are advisors who can tell you, based off your current situation, what things would be best for you and point you in the right direction.  Because these folks have a fiduciary responsibility to you and they do not work off commissions they will be one of your best resources figuring out your investing strategies as well as put you in touch with deals once you become an Accredited Investor that would otherwise not be available. Why not start building this relationship now?

Here is an example of an investment only available to Accredited Investors


One of my really good friends asked me one time about understanding all of this financial jargon and investment mumbo jumbo.  I started from a place not too far from you, and believe me I have a long way to go.  For me, it’s about the journey even if I don’t make it all the way to the destination.  I still want to leave my kids with some knowledge about making their lives easier.  Give them some things they will never learn in school and teach them that in order to make an informed decision you have to be informed.  Please don’t read all of this and feel like a moron or that you don’t understand.  There are people in the industry that don’t fully understand.  Taking that first step, whether it is a diet or working out or investing, is the most crucial part.  Staying around and getting to know the people and dialogs is second (persistence).

I will leave you with a great story that is probably more important than making a million dollars,

“What I Learned Losing a Million Dollars – Jim Paul / Brenden Moynihan”

Probably one of my top 10 books I have read that dives into the life of luck (good and bad) and money…and watching it all come full circle.  It will teach you about your own shortcomings in life and really kick you in the feels.

Thank you always for stopping by!  Hope you enjoyed this!  Please let me know your thoughts below either way.  I will always answer them directly!


Just a normal Army guy trying to be an abnormal Real Estate investor. I devour information such as books, blogs, podcasts, quotes, actual networking with people smarter than me. I write from time to time on my blog and have begun to fully embrace IG.

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