How Much Money is Enough Money?
To an extent, the question “how much money is enough money?” sounds like one of those philosophical questions to which there is no real answer. “What is the sound of one hand clapping?” “If a tree falls in a forest and there’s no one around to hear it, does it make a sound?” You see where we are going with this… That said, having a grounded sense of your own material ambitions is vital when you are setting up a business. It helps you establish targets, assess your success and appreciate your accomplishments. Here are some tips for quantifying your financial aspirations:
1. What are your priorities?
Ask yourself what you want to achieve through your business. This might be:
– Buying a house in a particular neighbourhood;
– Sending your kids to private school;
– Having a certain car;
– Accumulating a level of security through savings and investments;
– Travelling and experiencing different cultures.
What sort of income will this require? How much business will you need to attract to achieve this? How long do you expect it will take you to start turning around this kind of profit? Set this as your initial goal and don’t think too far beyond it so you aren’t overwhelmed by the challenge. You will also experience a real sense of accomplishment when you reach this milestone.
2. Are you interested in money for its own sake?
Well done! You have achieved your first goal. Take some time out to enjoy it and determine what you hope to accomplish next. Ask yourself whether your life will be significantly improved by having more money. The answer to this seems glaringly obvious: you can never to be too rich, can you? Well, once you reach a certain point, having further wealth won’t necessarily make much difference to your life. Are you happy to take on the extra stress and expend the additional effort involved in accumulating more wealth? Will you have the time and physical health to enjoy the rewards of your labours if you carry on building up your finances?
3. What risks are you prepared to take?
Are you prepared to risk your existing resources to invest in opportunities for further growth? If you have a minimal appetite for the risk that accompanies investment then you might be best served by just protecting and consolidating your existing “nest egg.” The yields on low risk investment products aren’t so great but your money is pretty safe.
4. Do you still enjoy your work?
Enjoyment of the so-called “daily grind” is key to a long and profitable career. And doubly so when you have built a business up from scratch. As long as you still find your work rewarding and it isn’t compromising your health and happiness, the chances are that the accumulation of more material rewards is a fortuitous by-product than an end in itself. If this is you, then you should probably carry on. Should you find yourself losing your enthusiasm for the job or it is negatively affecting your well-being and you can sustain your current lifestyle or something comparable on your existing resources, then you have probably reached the point when you have enough money and can take a new direction in life.