My small house on Cape Cod needs sprucing up, but from the kitchen table, I can see a home that is in much better shape. Its owners hope to sell it for $8 million.
This palace — which really isn’t overstating things; it looks like a small hotel — is 10,000 square feet, or about five times the size of my home, has seven bedrooms, nine baths and was, according to the real estate listing, “built to capture 180-degree breathtaking ocean and harbor views and receive the natural light at the most appropriate time of day.”
It is stunning.
I’m as far from a fashionista as you can get; I am wearing a T-shirt and shorts as I write. But I’ve always loved the way the clothes fit on 1930s and 1940s movie stars like Fred Astaire, Gary Cooper and Cary Grant.
And from time to time, this paper runs a special horology section that features some of the finest watches ever made. I study them all at length every time.
But here’s the thing. I like my house, shabby though it is. I like my 30-year-old watch, which I bought to celebrate the publication of a commercially successful book, which I viewed as my first significant accomplishment as an adult. And I have two “good” suits that aren’t tailored as well as Mr. Astaire’s in “Swing Time,” but they fit me.
And so does my life.
While I continue to invest for a retirement that grows ever closer, I am no longer focused on trying to increase my net worth. There is nothing more I want.
When the goal posts are fixed.
My position, when it comes to financial planning — a topic I have written about for more than 30 years — is that people are not emotional enough.
Yes, understanding the numbers is important and so is basic knowledge. You need to know things like this: Stocks historically outperform bonds, and you don’t want to have too much money in cash equivalents like certificates of deposits or money market funds because their rate of return usually is less than inflation, meaning, you actually lose ground by investing in them.
But you are not a robot. You aren’t saving and investing for some abstract reason. Maybe you are doing it because you want to buy a house, put the kids through college, have that once-in-a-lifetime vacation or retire the way you want. In other words, because you have emotional wants.
Those desires keep you moving toward your goal. But once you have sufficient resources to achieve your objectives, the pressure to achieve them goes away. And if you don’t move the goal posts — you don’t decide you need a bigger house, a nicer car or a more elaborate vacation — you can simply make sure your investments are staying ahead of inflation, and you can enjoy what you have.
I probably would not have come to this conclusion if we were not in the middle of a pandemic, when so many people, including those who are close to me, are suffering financially and otherwise.
I going to help those I can. When you have enough, you can share.
That’s where I am now. But this day was a long time coming.
What’s in this for you?
Here’s what else I’ve learned.
While I followed all the advice I had been giving over the years — such as save aggressively for retirement with most, if not all, of your money in stocks when you are young — what I realize now is that my guidance was insufficient. It needed to include an end goal.
The goal could have been time based. “I want to stop working at 62, 66, 70,” or whenever you choose. Or it could have been tied to a specific monetary goal. “I need to save $750,000. That will be enough to let me stop working and still live the way I want.”
Another thing I now understand is that I could have taken a brief hiatus from all that aggressive saving to pay for something worthwhile: an once-in-a-lifetime trip or an anniversary party more elaborate than our (relatively modest) wedding. Not all gratification needs to be deferred, if you are willing to push back the date when you will achieve your goal.
But I didn’t think of those things when I started working and saving.
I was a senior in college the first time I got paid to write. This was back in the 1970s, and not only were newspapers plentiful, they were thriving. So much so that local papers could afford to have college students — I went to Rutgers — report about what was going on around campus.
I got a byline in The Star-Ledger, “the newspaper for New Jersey,” as often as six times a week. At $15 an article, I was making serious money: A pitcher of beer at the local campus hangout cost $2. It took $5 to fill the gas tank of my battered Datsun, and a “serious date” — at place that had tablecloths — cost $10.
I had more than enough money then.
It has taken me more than 40 years to regain that feeling.
Yes, the pressure was self-induced.
I didn’t need to put financial pressure on myself over the last 40 years.
No one said I should have four children. There was no legal mandate that I live in places with good public schools (which meant that housing was expensive and taxes were high). My wife and I didn’t have to scramble to help our children pay for college.
I could have made more money, but I turned away from some lucrative opportunities because the long hours and travel would have meant I would not have seen my children grow up.
And I am painfully aware that families have lived happily on far less money than I have earned. And that many people are in desperate need.
On balance, I’ve been extraordinarily lucky. I am proud of our children and their spouses (and significant others.) I like where we live, even though we have a three-year schedule to cover all the home repairs required (as of today.)
There was no epiphany, just gradual understanding.
I wish I could tell you I had some blinding insight that made me realize I could stop striving financially. But that is not what happened.
I was skimming a personal finance book about “can you afford to stop working,” to see if I wanted to review it, and I applied all the various formulas and tests to my own situation to see if the advice made sense.
What I realized was after 40 years of working seven days a week — for the last 25 writing books to pay the bills and freelancing to afford everything else I “needed” — that it would be more than possible for me just to stop. We have great health insurance. Our mortgage debt is relatively small and there is nothing more I need to buy.
I suppose I expected to hear angels sing and feel a Zen-like calm wash over me when I realized that I would not have to work so hard any more.
But what happened instead was I looked at the world around me and at my own life and I felt out of sorts for a couple of months.
It was like jogging on a treadmill and hitting the stop button by mistake. You are thrown off the machine, and it takes you a minute or two to understand what happened. It’s disorienting, especially when you see so many people forced to run as fast as they can just to try to stay in place.
Unsettling though it was not to wake up every morning trying to make as much money as I could, I came to realize that I have more control over my time than I ever have. I am pleased to be able to work as much as I want to and to be able to help others. I am not unique in that. Maybe I’m naïve, but I think just about all of us do what we can. Especially now.
John C. Bogle and Joseph Heller had the answer.
All of this has gotten me to recall a story Mr. Bogle, the founder of Vanguard, used to begin one of his books.
“At a party given by a billionaire on Shelter Island, Kurt Vonnegut informs his pal, Joseph Heller, that their host, a hedge fund manager, had made more money in a single day than Heller had earned from his wildly popular novel ‘Catch-22’ over its whole history.
“Heller responds, ‘Yes, but I have something that he will never have … enough.’”
Mr. Bogle used the punchline for the book’s title: “Enough” (Wiley, $14.95.)
I think I’m there.
I have enough.