How To Tell If You've Made It
Marketwatch posted an article that looked at various factors, some financial and some not, to determine whether someone has "made it." It showed the average income of those surveyed currently at $57,000 and the belief that someone has "made it" when their income goes to $147,000. The average commute time in the group is 17 minutes with a goal of getting down to ten minutes but it would be even better to work at home (agreed) for only 31 hours a week.
In looking at the various factors they cite, where do you stack up? Comparing ourselves to others is probably a very bad road to go down as you might end up spending time and money working toward something you don't actually care about. Life has enough challenges without chasing after the wrong things both in terms of keeping-up-with-the-Jones-stuff as well as financially.
Part of my time working at Charles Schwab was in a three person group doing a particular type of trading. One of the other guys was a little older and had been with the company for quite a while and as the tech bubble was cresting his stock in the company was worth well north of $1 million. The other member of our trio and I begged him to sell perceiving that he had "game over" money. He said he needed $5 million to pay for some sort of boat. The stock fell from the low $30's (split adjusted) down to the high single digits. Maybe he really needed a boat but maybe not.
My idea of having "made it" is making enough to pay the bills, set some aside and have a little left over for some fun. This doesn't require a high income but it does require understanding yourself enough to know what really is important to you and what isn't and depending on your situation it might require downsizing your spending habits.
The process of figuring yourself out on this level may not be easy but I think it is vital to longer investing/financial planning success. The easiest way to start this conversation might be to think about discretionary spending. How often do you need a new car, how frequently do you need to eat out, if you like to travel do you have to spend $300-$400 per night on a hotel when you could spend $150 on an Airbnb. There are countless articles and websites about people accumulating too much stuff and the fortunes they squander on their stuff, there used to be a lot of TV shows about this but they seem to have gone away.
Non-millennials make fun of that demographic for a lot of things but one thing the millennials have right is favoring experiences over accumulating stuff. This makes life simpler. A simpler life can make it easier to figure out what matters and what doesn't.
The catalyst for this post in addition to the above linked article is that a former work colleague passed away last week. He was younger than me and had a wife and two young kids. Over the years we had more of a social media connection than a real one but he appeared to love what he was doing and the family photos were great.
I don't know his mental state in terms of having figured anything out along the lines of what we are talking about today but his story is a reminder of why this is such an important topic.