Enough. Part 2 - Assigning Jobs

Returning to the topic from two weeks back on Enough in our lives. (If you missed the first one, go read it here.) 

Quick recap: Money should be a means, but it has this sneaky habit of becoming a meaning. 

At the peak of his wealth, John D. Rockefeller had a ridiculously large net worth. Estimates vary because of inflation, but some peg his personal wealth being equivalent to 1% of the entire US economy at the time. For comparison’s sake, Forbes #1 richest person, Jeff Bezos, has a net worth of  around $146.9 billion. The US GDP from 2019 was $21.43 trillion, meaning Bezos’s net worth is around 0.68% of the US economy.

A famous story is told of someone asking Rockefeller how much is Enough for him - and he answered “Just a little bit more.” I don’t know enough about the man or the context of that conversation, but that answer has always haunted me. 

It seems like an awfully tiring hamster wheel to run on.

Chances are, you and I aren’t going to be approaching Rockefeller’s net worth, or popping up on the Forbes list anytime soon, yet I think we should take time to contemplate the answer to how much is Enough in our own lives. 

One way that we can do this is by assigning the dollars in our lives. Giving them a job, and measuring their ability to do it. 

A few examples: 

I’m going to be saving _% of my income towards retirement, because I know that as of right now, I need $__ to achieve my goal of phasing out of work at age __. 


I’m going to keep $__ in the bank because I know I have this upcoming expense that’s going to cost $__. 

Or its counterpart

I’m going to keep $__ in the bank because I don’t really know what COULD happen, and want to be prepared.


I’m going to grow my business to __ revenue/employees because that fulfills my goals of ____. 

These questions require intentional thought. And they should be written in sand, not in stone. Life changes; we’re naive if we think otherwise. But they’re a good starting point. And once we know those approximate numbers, we've taken an important first step in establishing Enough.

Yet there's still more work to be done - more on that next week. 

Interesting Resources

St. Augustine 
"I had learnt that wisdom and folly are like different kinds of food. Some are wholesome and others are not, but both can be served equally well on the finest china dish or the meanest earthenware. In just the same way, wisdom and folly can be clothed alike in plain words or the finest flowers of speech." 

The Sweet Spot
10 min read | Mr. Money Mustache
Delivered to my inbox earlier this week, I thought this was well written and ties into my series on Enough. Mr. Money Mustache encourages his Mustachian readers to try and identify the "sweet spot" between too little and too much in their lives. Money, career, friendships, fitness, and others. I like how he took a broader angle of not just looking at money, but in other important areas within our lives, and ranked himself in various categories. Well worth the read. 
5 min read | Verdad Weekly Research
Imagine yourself in the summer of 2010, and an investment manager pitches a new strategy to you: "Never mind the fact that speculative purchases of expensive assets caused the last market crash. We have a great new strategy for the next decade: buy the most expensive stocks with the lowest profitability.” You'd probably have laughed and hung up. Well, turns out - this seemingly foolish approach would have performed really well, tripling $100 from July of 2010 to $321 in June of 2020, while cheaper valued stocks would have only grown to $167. But what if we looked at earlier 10 year increments? Different story. 
4 min read | A Wealth of Common Sense 
A personal pet peeve of mine is the mentality that your primary residence is a great long-term investment. On price appreciation alone, it's pretty lousy in general. The US housing market from 1900-1996 had an annualized real rate of return (net of inflation adjustments) of just 0.1%. And from 1997-2019 only saw a 2% annualized real rate of return. Factor in property taxes, maintenance, insurance, landscaping, and a host of other fees ... and well, you get my point. 

However, this is an interesting read suggesting a range of causes may actually drive up the prices of our homes in the coming years. Homeownership is fast-approaching the historic levels not seen since the 2006 levels (see chart below), millennials who have been renting are now looking to buy (later in life compared to other generations), interest rates are historically low, lots of people are working from home (and that may continue even post-Covid) looking for more room, and the supply is limited. An additional interesting read is this Wall Street Journal piece (paywall) that talks about the non-price appreciation aspect of home values, such as spaces for at-home learning, working, and home gym options.
I wanted to take a quick minute here and personally thank you for the amazing response from last week's edition on the topic of human trafficking. I was touched by the financial responses, but equally as much by those who shared stories of their own involvement with organizations seeking to end trafficking.

Just a heads up - I'll be on vacation starting today through next week, and won't be responding right away to any replies. Next week we'll continue the series on Enough, and I look forward to that!

Copyright © 2020, Fident Financial, LLC. All rights reserved.

Phone: 717-208-2235

Not for you?  No worries - update your preferences or unsubscribe below. 
I only want to be in your inbox if you want me to be.
No hard feelings. I promise. 
Fident Financial, LLC (FFL) is a registered investment advisor offering services in the state of PA and in other jurisdictions where exempted.  Opinions expressed in this email are solely those of FFL, unless otherwise specifically cited.  Material presented is believed to be from reliable sources but no representations are made by FFL as to another parties' information accuracy or completeness.

This email was sent to <<Email Address>>
why did I get this?    unsubscribe from this list    update subscription preferences
Fident Financial · 1 Thunder Ln · Lancaster, PA 17602 · USA

Email Marketing Powered by Mailchimp