How much Money do you Really Need to be Happy?

It’s a question that’s been asked by millions of consumers and millions of new investors; how much money do you really need to be happy?

The answer is found by defining your goals. You need to determine what it is you actually want. Is it a comfortable retirement? Owning a beautiful, comfortable home and not having any debt? Having your own private jet?

Whatever the answer to these questions are, and others about your wants and needs, they set the approach that you need to take as far as handling your investment portfolio in order to earn money.

The fact is, sociologists define the term “rich” as being able to live off of your investments and not off of the money that you make from working. For example, even a lawyer earning $1 million per year isn’t as “rich” as a person who earns the same $1 million in the same year from the money made from their stocks, real estate investments, bonds and any other passive income sources they have.

The reason is simple; while the investor is able to basically do nothing and still make money, the lawyer has to continue working every day because if he or she doesn’t their paycheck will stop.

Most Investors actually don’t want to be “rich”

Interestingly, the Center for Health and Well-being at Princeton University published a study showing that, up to about $75,000 a year, money actually can buy happiness.

What the study showed was that, once a person makes over $75,000 in one year, their actual day-to-day experiences don’t improve any further even though their income might.

In other words, if you want to put together a successful investing strategy it should be designed to do a number of things including;

  • Get you to the point where you can live debt-free.
  • Getting to the point where any financial stress that you have is stopped. This includes having enough high-quality investments providing enough money to allow you to live in the lifestyle that you choose.
  • Having enough insurance that, if something goes very wrong, you still don’t have to worry about losing everything.
  • Having multiple income streams so that, if one were to suddenly dry up, the others would still be there to take its place.

Numerically speaking, and following the “4% Rule”, you would need a net worth of approximately $1,875,000 in order to generate the $75,000 in passive income annually that you need. That means saving $1165 a month for 35 years at an annual return of 8%.

Not all that money would need to come from your income if you used a 401(k), IRA and/or any matching programs that they offered.

And so, if you want to be happy with in this life, you need to do what it takes in order to one day be able to generate $75,000 a year in passive income.

So get going.

Speak Your Mind

*

Read previous post:
Borrow Smart, Avoid High Fees

Whether you are looking for long term credit or a short term loan, ensure you are getting great interest rates...

Close