What’s Your Number?

I get this question posed to me all the time.  What’s your magic number? When will you have sufficient assets to call it quits?  How much is enough?  And each time I shake my head and respond in a bewildered tone.

I have no idea.

I guess I just haven’t put that much thought into what my true goal is.  The number, so to speak, is fairly ephemeral.  In many ways, it really depends various factors:

Are we  going to continue working after we reach FIRE?  Well yes, We already are.  In theory, this should decrease our number.

Do we want to spend more in retirement, less, or the same?  We probably will spend about the same, although we will eventually have college bills for the kids.  We plan to travel more, but we  could travel hack. Maybe our number should be higher?

Will our number stand the test of time, will our needs increase, or will our assets lose value?  We fully expect to suffer through inflation, a short-term stock market crash, and need a certain bit extra for healthcare and taxes.  Well then, maybe our number should be inflated.

Will spending decrease over time?  I mean, how many times can we travel around the world, how long can the kids depend on us financially?  At some point we will likely spend less and need less per year.

The list could go on and on.  A more fascinating question is how do we know if we have reached our number?  Sure, I can calculate my net worth.  But guess what?  My net worth can vary by five figures from day-to-day depending on the market.  And how are you calculating net worth anyway?

Do you include your house?  How about your car? Art work?  We have $320,000 in 529 plans for our children.  Are these included when calculating our number?  How about the 80K cash value of our long-term care plans?

I see that some include their business in their net worth.  Is it really worth that much?  Could you really sell it today?

Although I am starting to ramble, the point is that this whole number idea is a fallacy.   We like to stick to something simple.  Something straightforward.  But the calculus of enough is a heck of a lot more complicated, and our views a bit too antiquated.

My advice is this.  Stop trying to calculate a number to live life.  Your number is whatever you happen to have when you are existing  with purpose.  Rejoicing in relationships.  Learning something new if you want to or, conversely, sitting in your underwear playing video games.

You’ve reached your number when you wake up every morning and feel free to follow your own unique path whichever way you decide to let it take you.

Doc G

A doctor who discovered the FI community but still struggling with RE.

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6 Responses

  1. LF Tommy says:

    Great post. I get the same question from people too. They are looking for the number I used to retire early so they can gauge where they are at. I have to explain that my number isn’t relevant. What is important is how you figure YOUR own number out, knowing when enough is enough, and then having the courage to jump off the merry-go-round. Some fixate on a number that isn’t based on any financial reality and others who passed the number they really needed, keep plugging along and complaining about the rat race. All because they allow fear, ego, and greed keep them from what you said, existing with purpose and rejoicing in their relationships. Everyone’s number is as unique as they and their lifestyle goals are.

  2. Steveark says:

    It is very hard to know, a point you make well in this post. There are so many variables that can change. I think human perception always sets the number that feels safe as about twice what you currently have. If you have one million then you think two million would be worry free. If you have five million then you think “If I just had ten million I’d know I had enough!” So if you are basing the number on feelings then you will probably never get there. Having the ability to adjust your spending and to generate income after you leave the workforce are the two things that help combat that feeling of not having quite enough.

  3. Caroline says:

    My number is a moving target! I don’t want to have to worry about it:)

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