Weekend Reading – When enough is enough edition

Weekend Reading – When enough is enough edition

Welcome to some new, fresh Weekend Reading: the enough is enough edition.

You can some recent Weekend Reading editions below:

Why most stocks are duds!

Why dividend income matters!

I also recently shared my latest dividend income update – a brand new all-time high.

Last but not least, I’m giving away 6 copies of The Money Master with thanks from the author, savvy real estate investor and speaker Sandy Yong. Check out my interview with Sandy and enter The Money Master giveaway here.

Have a great weekend and enjoy these reads!

Mark

Weekend Reading – When enough is enough?

While every money number for every person may be different, depending on your circumstances, values, needs and wants, “the science” continues to support that happiness tends to level off at about $75,000 per person per year as of 2010. Maybe slightly higher of course now thanks to inflation.

The abstract and summary is here.

Give or take, $75,000 USD is “enough” for most of us.

That number comes our way according to an older 2010 study, by famed psychologist Daniel Kahneman and economist Angus Deaton (who both won the Nobel prize in Economics) when they undertook research to figure out the role of money in two aspects of people’s emotional lives: emotional well-being and secondly, life evaluation.

For reference, here are definitions for the two key things they investigated, emotional well-being and life evaluation:

  • “Emotional well-being (sometimes called hedonic well-being or experienced happiness) refers to the emotional quality of an individual’s everyday experience—the frequency and intensity of experiences of joy, fascination, anxiety, sadness, anger, and affection that make one’s life pleasant or unpleasant.”
  • “Life evaluation refers to the thoughts that people have about their life when they think about it.”

When “enough is enough”

Essentially what this study has told us is, if you are not going hungry, if you have shelter covered, if you can put clothes on your back regularly then generally speaking you are capable of at least being as happy as the world’s billionaires per se without feeling unpleasant

In re-reading the takeaways from this study recently, I was reflecting upon my own emotional well-being and life evaluation.

Well into my 40s now and thinking about semi-retirement in a few years, while I could certainly work full-time much longer (say into my 60s, likely generating far more wealth in the process), I’m not convinced it’s going to deliver more emotional pleasantry or superior life experiences. In fact, it might do just the opposite for me.

Beyond a certain point, each additional dollar you make really doesn’t add too much value to your life. I’m finding this as I get older…

For well over a decade now, I’ve long since had some designs about what my “retirement lifestyle” might look like – and it’s exciting to know we’re getting very close to those realities…

However maybe those goalposts will change in the coming years. I might just fall into a just-one-more-year trap like many of us aspiring early retirees do. I could also seize any near-term workplace opportunites and keep any higher-octane pace to help my organization deliver. I guess I won’t really know how I feel about any sort of retirement until I get there…

I do know; however, I must remain cognizant and readily aware of my thoughts and feelings when it comes to the emotional side of any retirement plan – the stressors that may come from it but also the calming peace of mind it could deliver knowing I’ve struck the appropriate balance between working, living and playing for today.

I’ve written about my “enough” number many times on this site in many ways.

Here are some ways to figure out your financial independence number.

Determining Your Financial Independence Number

Have you considered what your “enough” number is? How does that make you feel? Is it realistic or too daunting? Do share…

Further Reading from Daniel Kahneman: my takeaways from Thinking Fast and Slow.

Weekend Reading

Aligned to understandng your “enough”, read on in this Morningstar article about investing – there is far more to investing that just risk and return. Amen.

From the article:

“I wish we were all operating with so much self-awareness of “enough”–how big our portfolios need to be, how much we need to save and spend to have good lives, and how much risk we need to take in our portfolios to ensure a high quality of life. “Enough” is a relative of peace of mind, but it’s arguably an even more fundamental consideration because it relates directly to lifestyle choices.”

Fans of this site – 5iResearch – posted content on the same wavelength of late: investing really comes down to understanding yourself.

While I’ve covered my game plan to fight inflation going-forward, I’m well aware when it comes to inflation – every time it is different. As such, check out this article: we have no theory of inflation. 

Weekend Reading - Projections for Inflation - Wrong

Henry Mah wondered: is it possible to pay no tax? The answer: “it depends” and yes. 

I tend to disagree with Tom Bradley from Steadyhand in his post: is it time to raise cash? Yes.

Based on my financial lessons learned, cash is always a core component of any diversified portfolio and it’s always a good time to have some, even more of it when you enter retirement or any sort of #FIWOOT. In fact, I could make a case that you could live without any bonds if you had enough cash on hand via a Cash Wedge.

There are only a few reasons why bonds might work for the next 10-20 years. I could be wrong of course but I don’t see that asset class as helpful unless these reasons apply:

Why would anyone own bonds now?

I enjoyed this read: trying to make sense of the markets from MoneySense and blogger Dale Roberts. I also think higher inflation is here to stay – from the article:

“We see that BlackRock has U.S. inflation at the 3% range even into 2025.”

From the adventure file – some amazing mountaineering pictures from Chris Istace from Vancouver Island. Enjoy.

Justin Bender compared global ex-Canada ETFs VXC vs XAW recently.

Hard to go wrong with either really…

On Cashflows & Portfolios, we shared some of our favourite U.S. Dividend ETFs to own and why. 

That post comes on the heels of the Best Canadian Dividend ETFs and why.

Labour to Leisure enjoys money while he sleeps.

More FREE My Own Advisor content:

How I invest in dividend paying stocks is always found here.

Why I invest in low-cost ETFs – along with dozens of articles about ETFs can be found here. 

Looking for free calculators, tools, or even my support? Check out my Helpful Sites page here.

A reminder you can Hire Me! to run any retirement projections for you. See my link below!

I also run a site with my partner called Cashflows & Portfolios, a site dedicated to free content for any age but also low-cost services about how to drawdown your retirement portfolio and provide personal, tailored answers to these time-tested questions:

  • How much can I safely spend in retirement?
  • Will I run out of money?
  • What accounts should I drawdown first?
  • What is the best drawdown order for tax efficiency?
  • When should I take CPP or OAS?
  • How much will my estate be taxed?
  • And more!

Cashflows & Portfolios

Finally on Boomer & Echo, Mike Drak was back to discuss retirement lifestyle design. Essentially saying:

“To create your own version of retirement heaven, you need to find balance and the right mix of work, leisure, health and relationships. Working too much, or focusing on just one thing, throws everything else out of kilter. And it can come back and bite you in the butt hard.”

Save, Invest, Prosper with BMO and other Deals!

As always, check out my Deals page.

My very own personal BMO promo code remains available!  Use that BMO code to get hundreds in cash back when you open investment accounts with BMO like your RRSP, TFSA, taxable account and more! What’s even better with BMO now is they have commission-free ETF investing. Yup. They are now offering commission-free investing for more than 80 Exchange Traded Funds (ETFs), via their self-directed BMO InvestorLine clients. The ETFs cover a broad range of asset classes, geographies, management styles and popular themes from Canada’s largest ETF providers, including BMO, iShares and Vanguard. Simply awesome and I hope more big discount brokerages follow their lead. 

I’ve got a new partnership with EQ Bank – just look at the banner in the margin! EQ Bank typically offers the best savings account rates in Canada. I hope to park my cash wedge for retirement there!

With 5i Research, take a no obligation FREE trial for your ETF and stock research.

With LegalWills.ca use my personal My Own Advisor promo code for 15% off any services – that never expires.  

I earn $600 in cash back every single year. Scroll down my Deals page to get the same credit card I use in your wallet. 

Reader Question of the Week (adapted slightly for the site):

Hi Mark,

Thanks so much for your site. I was wondering if you have any articles or would you know answer to my
question. In the long run, let’s say I only have an RRSP worth close to $500,000. No non-registered account and maybe my TFSA is maxed in the coming years. Could I retire? I also have questions about the drawdown order of my RRSP, thinking I could tackle that RRSP first before I’m forced to at age 71? Thoughts?

Thanks for your readership and question.

In fact dear reader, we had a very similar case study recently on Cashflows & Portfolios, showing what the “max spend” might be for a retiree (Tom in the case study) who wanted to retire at age 65 with just that, $500,000 invested inside his RRSP, no workplace pension to speak of and no spouse to rely on either. Check that out and let me know your thoughts!

Reading: Can you retire with just $500,000 inside an RRSP?

Have a great weekend,

Mark

My name is Mark Seed and I'm the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I've surpassed my goal and I'm now investing beyond the 7-figure portfolio to start semi-retirement with. Find out how, what I did, and what you can learn to tailor your own financial independence path. Subscribe and join the newsletter! Follow me on Twitter @myownadvisor.

59 Responses to "Weekend Reading – When enough is enough edition"

  1. What’s my number? It’s highly variable at this point. Today, at 54, I’m prepared to let the number be whatever it is when I get to age 60 (my wife will be 58, and we will retire together). If we get an average return of around 7.5% between now and then my number will be pretty much where I want it. (Today my annual yield is about 5.5%)

    Getting to “my number” also assumes my wife is able to work full time over the next six years to get the most out of her defined benefit pension. Compared with her statement from last year her pension benefit would double in value if she works full time to end her career. She would end up with a pension less than half of what her peers will get (because they have all worked full-time), but it is still significant.

    At retirement our GTA area home will be sold in favour of moving closer to my wife’s family in eastern Ontario so, should our returns be less than stellar, there is an opportunity to downsize and invest / live off the difference in home values, if need be.

    Lately I’ve been watching a YouTuber who views retirement in three phases: Go-Go, Slow-Go, and No-Go. Roughly speaking he divides them up into three 10 year periods, but it’s just a reference point. The idea being the first phase there’s lots of travel and other activities that require more income. The second phase, things start to slow down – less travel, less activities, and the final stage even less.

    With that in mind I feel like “my number” will be inflated about 20% for the first 10 years, then I’ll knock it back down 20%, and then another 20% ten years after that (at age 80).

    Ideally, we will rely heavily on only living off of our dividends and her pension, but I will also incorporate the Go-Go, Slow-Go, No-Go methodology to allow for higher spending (and perhaps harvesting some gains) in earlier retirement (assuming all my modelling can support it of course), and then two main reductions at about 10 year intervals after that.

    Our plan is to delay CPP and OAS to age 70 for both my wife and I which will come around the entry point for “Slow-Go”, so it’ll mean the income needs from our investments drop significantly after the first 10 years given her pension will keep rising with inflation, as will OAS and CPP. We may be subject to clawbacks because of the dividend gross up, but I feel like if that happens at our “Slow-Go” phase then we will have more than enough income as it is.

    There’s a lot of variability to account for over the next 5-6 years so my planning is flexible. Today, my current dividends, combined with what I could get in dividends from other investments would net me about 65% of my number. With DRIP, and regular contributions and regular dividend increases I’m highly confident we’ll get “my number” in time. If not, I think we will both be able to prevent “one-more year-itus” by making some accommodations to our budget, especially the generous “Go-Go” budget.

    I continue to model and assess, but like I said – at 60 my number is pretty much going to be what it is then and there – a full market meltdown might be the only thing that could dissuade me from that.

    I’m loving this weekend’s comments – especially from those who have “been there and done that” – thanks to everyone for sharing.

    Reply
    1. Great stuff James.

      Ideally, we will also rely on “living off dividends” and distributions in the early years of retirement. It is my hope our taxable income + RRSP withdrawals + part-time work will be “enough” income in the early years. Then, as I stop part-time work, drain RRSPs in our 50s and 60s and get rid of taxable as well. TFSAs are left “until the end” in our No-Go years.

      I think your plan to delay CPP to age 70 is great, and if you can do the same for OAS to age 70, great as well. Any, small, OAS clawback is a great problem to have. I hope you have some 🙂
      Mark

      Reply
  2. I could have a full year cash wedge but choose to invest the majority of it and now keep about 2-3 months wedge.
    The invested portion is now paying me $100 a month. When i have to withdraw from the RIF/LIF next year a major portion will go in to the non-registered portfolio. So those dividends will grow by a fairly significant amount. I agree with you that if I had to sell them in a “panic” situation I might lose some bit never the less the increase in dividends is looking fairly bright at this point. If need be, I could always take money from the TFSA, which is close to $1K per month in divs as well, rather than sell stocks.
    So while the cash wedge is good comfort if you are concerned about your finances it may not be necessary when you factor in the possible TFSA contributions in a tight spot.
    Like DivInv I also changed out my HVAC unit this year and am still within my yearly budget. If nothing else, CV-19 has freed up funds that were previously being spent on travelling.
    Prior to retirement I met with a CIBC advisor and upon reviewing my budget and portfolio at that time. 2017, he said I could possibly kick the bucket with more money than I had now. Eventually will have to sell the abode and while this would mean rent of some sort, the house sale should more than cover that for the time left.
    Don’t live extravagantly, in my opinion, but do like to enjoy life without having to wonder if I can afford that ice cream. Then I will have to cut the calorie intake, but not the budget
    Take care, stay healthy, enjoy life

    RICARDO

    Reply
    1. Great stuff Ricardo. I know some readers disagree with me, but I truly beleive having some cash on hand in my upcoming semi-retirement is very important (to me). Worse case, I can deploy that cash to buy some stocks when they go on sale.

      “Prior to retirement I met with a CIBC advisor and upon reviewing my budget and portfolio at that time. 2017, he said I could possibly kick the bucket with more money than I had now.”

      Yes, sequence of returns can be very positive in nature as well but certainly we’re all concerned with the downside.
      https://www.cashflowsandportfolios.com/managing-sequence-of-returns-risk-in-retirement/

      Best wishes back,
      Mark

      Reply
  3. i like the way the Financial Samurai put it: “when you’ve won, stop playing.”
    So don’t do things you don’t enjoy and don’t risk your capital to make it grow.

    This column of yours is about deciding when you’ve won, of course.

    In making that judgment, I keep in mind what a former colleague of mine says, about 15 years after leaving a job he was very good at: “Retirement is the closest you can get to heaven without actually dying.”

    Reply
    1. “This column of yours is about deciding when you’ve won, of course.”

      Good stuff. That’s quite a line John G re: “Retirement is the closest you can get to heaven without actually dying.”

      Health is wealth in semi-retirement or retirement.

      All the best,
      Mark

      Reply
  4. One more year trap indeed. Maybe two. LOL. I do have my excuses: Kids still home so I cannot go anywhere anyway. But maybe that’s just it: excuses.

    I have a number and I have changed that number and now surpassed that new number again. Although I am not retired yet, but knowing I can retire any time now certainly changed my mind. I don’t let my work to stress me anymore. I am still a full-time employee but with a semi-retirement mind.

    One thing I think I should try is changing my spending habit. It’s hard.

    Reply
      1. I think the main thing here is that I already base my spending not only on the price tag, but mainly price performance ratio. This habit is pretty hard to break. Like I am eyeing to buy an iphone 13 pro max, but meanwhile, I feel my current cell phone pretty much already satisfied all my needs, so difficult to convince myself to spend that money. Another example is that my family enjoys steak a lot, I buy the second best steak at COSTCO. The most expensive one, well, I feel it’s not worth the price. When we need to buy a car, we don’t hesitate to buy a new car as we don’t have time and energy to search for a second hand one, but when choosing between Highlander and MDX, we feel Highlander is good enough, don’t want to pay the extra for a fancier car and also more money at gas station as MDX requires higher standard of gas. This kind of decisions are hard to change.

        At this stage of our life, we also don’t want to do things that would make a big impact on our life. E.g. moving to a more expensive area. Or if it’s something requiring too much work then out of question too. E.g. renovating our house so that I could have a Wok kitchen would be nice, but I don’t have that energy at this moment to do it.

        I assume you are in a similar situation. All your needs are already satisfied. You do have expensive hobbies like your cars.

        One easier category to spend more money is travelling for sure. So maybe after the pandemic we will travel more and spend more while travelling. I already decided we will not travel on the cost that the kids will miss school so we could save money. From now on, we will travel only during school breaks.

        Another category might be contracting out some house work. I am trying to persuade my DH to contract out the yard work, not with a success yet. Also, it’s better to do this kind of things after the pandemic. I am still uncomfortable to contact people if not absolutely necessary.

        Reply
        1. Deane Hennigar (RBull) · Edit

          We are somewhat different on the spending.
          We own cheap phones – $$200 or so 2 years old and our last ones were 8 years before replacing. Good enough.
          We almost never buy steak- maybe 1-2x a year. Too expensive and we don’t find the cost justifies it at all. Hard getting a good steak.
          We only buy used cars (moderate prices) since 12+ years ago, and that will always be the way. My wife’s is 4 years old (bought 6mths ago), my 2 are 14 years old and my motorcycle is 13 years old. I do most of the repairs and maintenance myself. = way less cost overall than having new(er) car(s).
          I have a huge property and do all the lawn/gardening maintenance ourselves = saves money, some satisfaction and pride of doing it on our own. The only contracting on house stuff I can’t do myself other than unexpected repairs is for winter plowing which costs us about $350 annually, and still leaves me with about 3 hrs/wk week work for 5 mths of the year.

          Reply
          1. Phones, laptops, tablets, kindles, those are our toys just like cars to you. Almost everybody at my home has own laptop, kindle, and tablet or phone. My daughter as she is going to high school now, has all of them: laptop, tablet, kindle and cell phone. My son will get cell phone when he is going to high school. Plus the kids also have Nintendo Switch.

            I think I cannot call myself frugal any more, can I? LOL. But we really don’t buy luxury things. I don’t even buy makeups. Now we are working from home, I only buy clothes from costco, and it’s also rare as I don’t feel any need of new clothes. We also try to only buy things if we really want to use it.

            Talking about the property, one thing we can do is switching to a different house, not need to be bigger, but I would like everybody has own bathroom and also a Wok kitchen for me. But I hated moving, so NO.

            Anyway, I can see it will be even harder for you to spend more than us.

            Reply
            1. Deane Hennigar (RBull) · Edit

              All good May.

              I think its better to say we’re probably both careful with money and what and how we spend it. Comes from having a discipline on saving/investing and focusing on goals or priorities.

              We have desktops and ipads, 100% gutted and renovated & expanded home 10 yrs ago. Luxury stuff never really been a factor for either of us and prefer to live more modestly.

              Looking forward to hearing about when you decide to retire. You’ve earned it and seem to be headed for a great one.

              Reply
        2. There are no Acura models, including the MDX, that require premium fuel. The MDX is listed as “premium recommended” by Edmunds because you’ll get slightly higher horsepower and better mileage with 93 octane fuel but neither is noticeable and certainly not nearly enough to justify the higher price. There is no risk of engine damage, the engine has knock sensors and adjusts the timing to prevent any engine wear and tear from lower octane fuel. I drive an Infiniti that is also “premium recommended” but I can’t tell the difference in performance on 87 octane fuel. Its a rocket sled on either premium or regular gasoline, so I buy the less expensive.

          Reply
    1. Every month the kids are getting older May – get them done school and “out” 🙂

      “I am still a full-time employee but with a semi-retirement mind.” Ha. Pretty much there in another year or so myself.

      Reply
    1. I haven’t shared my entire sesson here Raj largely because I can’t recall every single thing I said 🙂
      You can still get access I recall to the entire sessions (including mine) here:
      https://www.myownadvisor.ca/weekend-reading-most-stocks-are-duds-edition/

      (Links to the Summit in that post). I also have some free content, based on what I talked about here for you!
      https://www.myownadvisor.ca/salary-or-dividends-from-a-corporation/

      https://www.myownadvisor.ca/how-to-invest-inside-a-corporation/

      I appreciate your readership Raj and ask any questions, any time. 🙂
      Mark

      Reply
  5. 75K is a great target. I suspect many can live quite well on 50 or 60, it really depends on their travel and extra curricular activities. I have budgeted closer to 95K for the next 15 yrs as we really ramp up our travel post-pandemic (fingers crossed on that one haha).

    Reply
    1. I would definitely agree Peter. I think $75K for most couples (in retirement) in fact is great, assuming they have no debt. That’s about $5K per month after-tax or if that $75K spend is after tax-spend closer to $6,250 per month.

      If you are not servicing debt spending $6K per month seems like a decent lifestyle to me.

      Anything around $95K or $100K spend would be amazing – tons of financial flexibility.

      I hope you get there 🙂
      Mark

      Reply
        1. Deane Hennigar (RBull) · Edit

          Yes, good catch. But it also says employment income.

          Gets a little muddied when we’re talking retirees in Canada. I suspect most of us aren’t going to have $200k in retirement.

          Reply
          1. Good point. For employment income, CAD$200K for a family will be comfortable enough with savings to all registered accounts, paying mortgage, with kids to be expensive, but not luxurious either.

            If making more than that, then accumulation for retirement could be pretty fast.

            Reply
        2. Well, that’s on a scale of emotional well-being. I don’t believe you really need that much to retire on from a spending perspective. 95% of the world will never see that type of money and many are happy – I hope. 🙂

          Reply
  6. The question of enough money for retirement has also never been a fixed amount for me. I agree with Cannew that a growing income is ideal. But the enough balance on the other items is right on. How much work, play, family time, etc, is good to have. I feel like I semi retired long before I stopped working.
    But Mark, it makes no sense to have a cash wedge and keep increasing it when you still have a paycheck. Tom Bradley’s article is right on when he say’s “it depends”. Idle cash is a lost opportunity to create that increasing income. I know you will disagree with me but for the rest of your readers, think of the reasons you invest, and your time horizon.

    Reply
    1. Hey DivInvestor – thanks for your feedback. I tend to disagree on the cash wedge. I suspect that will come in handy for folks that want to have a reno, buy a car, take a big trip, other in retirement without needing to sell assets in a bad market cycle.

      Idle cash has opportunity costs but a bigger cost is selling equities or part of your portfolio when the market is down 20%.

      Thoughts? How are you managing sequence of returns risk?

      Reply
      1. I knew you would disagree Mark. Sequence of returns risk is only relevant if you have to sell securities. We structured our retirement portfolio for dividends. Where will this market go? We have been withdrawing dividends for almost four years now and the portfolio is still growing. As for big expenditures, we just installed an AC system in our house and had nothing saved for it. (21K). We negotiated a four month term before we had to pay in full. Now we have the funds, dividends only, to pay for it. The opportunity cost of having idle cash is greater then having to pay a little interest when you have that big expenditure. Can’t wait to spend some US dividends on travel, but for now will have to re-invest. I would have never imagined in my early working years for a person with a grade 10 education and never making a big salary to have this kind of lifestyle after leaving the workforce. I had a plan and stuck with it. And still am.

        Reply
        1. Ha. Good stuff. It’s good to agree to disagree.

          How did you save for your AC? ($21K) You must have needed cash. If you had excesss dividends whereby you didn’t have to sell any assets to pay for that – that is awesome. The reality is, I believe, most Canadians will not have dividends flowing consistently such that they are always > expenses. It’s just not realistic for most. Something to aspire to, but not realistic.

          As such, they will need some cash savings to pay for expenses and doing so when selling assets could be very detrimental when equities are down 20% or more.

          I also can’t wait to spend my dividends at some point. Just can’t now 🙂
          I appreciate your discipline – you’ve done very, very well.
          Mark

          Reply
  7. Suggesting an “enough”, before one is retired is meaningless. What might seem enough today, might actually be well below what you’ll actually need in the future.
    Enough for me is a “growing income” always, even during retirement.

    Reply
    1. Yes, growing income can be important Cannew for sure (I’m hoping for that as well as you know) but what I am also suggesting in my Weekend Reading update is that folks consider how much work is enough, what time is important with family, friends, other relationships, and striving to realize their own balance for life’s ambitions. If you try and do it all, it’s just not possible. You have to find your own balance and tradeoffs are required I believe.

      Thoughts?
      Mark

      Reply
      1. “how much work is enough, what time is important with family, friends, other relationships, and striving to realize their own balance for life’s ambitions”.
        Unanswerable! What is right for one will likely not be right for others, and I doubt there would ever be two the same. Some can do all, and do it right, while others would screw up every one of them, with even trying. Others think of nothing but themselves and expect others to help them.
        I’ll stick to suggesting an investment path every person can do on their own, regardless their situation or means.

        Reply
        1. Yes, that’s my point 🙂 Knowing what is right for you, “enough” for you (balance of income, family, other), when you can stop working because you have “enough” IS the answer.

          Reply
          1. I havent for a long time described what I do as work. I get up every day and enjoy what I do. Yes it is different when you run your own business so you have more control over many aspects of your life but I do enjoy what I do. For most of my life I prioritized lifestyle so when my business is in a slower period I work 4 days a week and have a long weekend. Our business gives everyone Fridays off in July and August. Again it is to foster a healthy lifestyle.

            I could stop what I do and would have enough funds but I think it would take me quite some time to figure out what to do with my life even though I have a number of activites/hobbies I do on a regular basis. I enjoy what I do so stopping work for me isnt about a number. I enjoy my lifestyle that includes my interactions with people I provide services to..

            I had meetings with two clients yesterday whose financial advisors were giving various advice to them. It is interesting that both who are in their late 50s early 60s viewed any long term projections by their advisors as not being reflective of what will happen for them. They both felt it was hard to assess what they need in the future when they dont even know what they will be doing. Being told they had enough didnt mean they were going to stop working. Both of them have modified there work to do what they enjoy and are continuing to work. They are just more selective on the work they do.

            For some of us we will stop working when we dont enjoy it. The goal isnt a number.

            Reply
            1. That punchline was great Brent and I think that point hits home for many. When you enjoy what you do, and want to keep doing it, it doesn’t feel like work. I’ve also learned from others (and my own path…) that work is much more enjoyable and rewarding when it aligns to your values AND you’re not stressed about making money. In other words, for some, work is more enjoyable when you don’t have to do it.

              It is hard to asses the future when you don’t know what you will be doing in the future. They go hand in hand.

              I suspect many financial advisors are a bit like a coach in that regard. There is more about the emotional-side for retirement than any math. Would you agree?

              Mark

              Reply
                  1. Work is like jail time for many people. Making wise career choices and wise handling of money should be taught formally in our schools. So many parents and adults have zero knowledge and experience with money management

                    Reply
      2. I’m re-reading Morgan Housel’s Psychology of Money, and he dedicates a whole chapter to “Never Enough,” opening with a story from John Bogle describing a wealthy hedge fund manager who brags that he earns more in a day than a novelist did from his latest book. The novelist retorts “Yes, but I have something he will never have… enough.”

        His main points are:
        1) the hardest financial skill is getting the goalposts to stop moving – if you hit your $50k dividend goal, do you fixate on $75k?
        2) social comparison is the problem here – there will always be people wealthier than you – let it go
        3) “Enough” is not too little – it does not mean depravation
        4) there are many things never worth risking, no matter the potential gain – pursuing wealth to the detriment of family, health, happiness

        It resonated with me as I’m evaluating life/career/wealth choices right now – I could step off the treadmill and rationally know I have enough, but emotionally I’m not there yet. Working the grind for another 5-10 years would grow my wealth for sure, but I doubt my life would be any better/happier.

        Mark, a whole post could be done on deciding when enough is enough!

        Reply
        1. Bart, I appreciate this comment very much. I don’t think enough is written about this point. I look forward to reading that book, on my to-do list and will be another giveaway 🙂

          I’m coming from the same mental place – how much work or being on the treadmill is enough? Will I move my own goalposts in 3-4 years? I say I want to semi-retire but what could prevent me from doing so? Money? Fear? Lack of purpose? I’ve been so “wired” to work, save, spend in that order for about 30 years – it’s going to take a MAJOR behavourial shift to change it. I’m sensing it now and trying to unlearn things a bit to be honest. I know I need to do it but it’s hard. I’m not concerned about other people having “more” than me, I gave up on that a long time ago. I’m trying to figure out my “enough” so I don’t have any regrets when it comes to leaving the workforce.

          Then again, maybe I’ll stay in the workforce and just do more of a balancing-act of stuff. I don’t know. It will be interesting to me to find out. Very much embarking on a discovery process.

          More to share I’m sure 🙂
          Mark

          Reply
          1. Thanks very much for your reply – fear and lack of purpose are what is holding me back – I claim money is too, but I know it isn’t really the problem.

            Most of my reading has been personal finance planning related, but I’ve recently dipped into the social and psychological side of transitioning to retirement. Having a sense of purpose, in whatever form it takes for each person, is extremely important. I’ve allowed myself to be so chained to the work treadmill that I haven’t found that higher order sense of purpose.

            Much to learn on this topic – I hope others who have gone through this transition can weigh in with their experiences and advice.

            Reply
            1. Same. Much to learn (about myself included). Purpose will always be important to me. I could see a slow transition for me over a number of years. I’m planning that purposely. Likely semi-retire in 3-4 years (?), then part-time work for another 3-5 (?), then we’ll see.

              I know this transition approach has seemed to work well for others but that doesn’t mean it will/work not work for me. Should be interesting – the journey is fun trying to figure this out. Certainly far less stressed about this process than I used to be – less debt helps 🙂
              Mark

              Reply
        2. Deane Hennigar (RBull) · Edit

          Great comment and great book. The “enough” story is one I enjoy and use sometimes in my life now, and all those points above are excellent. The book resonated with me too even as a retiree.

          Yes, deciding when is enough is a biggie and IMHO many folks just don’t give it serious thought. Easy to fall into when fixating on growing assets and/or income, especially in accumulation stage. Its a MAJOR life choice and shift in head space and even though I understand all this and I’m still guilty of sometimes being a little reluctant to spend and keeping an eye on asset and cash flow “growth” – thanks markets (vs plan of utilizing capital). I suspect a lot of people on this blog have or will have this same issue which is a consideration for your “enough” decision.

          Am retired 7.5 yrs now and went through that thinking and discussing with my wife- twice (for each of us). I read, learned and chewed on it for some time and (long story) but we both decided to pack it in earlier with less $$ because had “enough”. I eased into it with a new easier career after selling little business, then went PT (when my wife stopped work) for a couple of years before jumping off. Every year that goes by reinforces it was a good decision, since what we see as important after the necessities are paid evolves more from things to experiences, hobbies, people, time and health, much of which doesn’t cost money or little, more so since travel has been curtailed for a while. We found we haven’t spent anywhere near what we “could”; and have enough financial security, happiness, and choices to live great. Can’t see we’d truly be any happier if we had another 10k, 20k or 50k / yr available to “spend”.

          Reply
          1. You’ve done extremely well and everything is well-planned out on your side Deane. My goodness. Something I aspire to!

            I suspect we’ll pack-in full-time work in favour of part-time work in another few years, just because, more time can be more fun. For us, we will likely take less $$ because we should have “enough”. I have no idea of when the decision will be right, but I can only hope I’m making a good one with all the factors considered including any risks in semi-retirement. I think sequence of returns risk worries me the most.

            DivInvestor isn’t a huge fan of cash but it helps me sleep at night 🙂 It’s hard to overcome that comfort factor.

            Thanks for your detailed comment Deane. Off to REDBLACKS game very soon!!
            Mark

            Reply
            1. Deane Hennigar (RBull) · Edit

              Thank you for the kind comments Mark.

              Clearly its the same answer for you +++. You also have more years likely to save and have assets grow before settling in to using even a small amount of cash flow from assets. Your “less” will be a lot more than most people retired, even those working! A model to aspire to for most anyone.
              Until you stop working altogether sequence of return risk isn’t overly an issue. You know the solution after that but you just don’t like it. Hold more cash or GICs or bonds. A big part of why I do.

              I like my cash, and I will really like it “if” rates ever get back to some kind of normalcy.
              Probably not as governments and CBs have boxed us into this ugly debt is wonderful hole.

              Reply
              1. Ya, not worried about sequence risks right now but preparing my cash wedge for the most part. In my next Goals Update for 2021, I will highlight I have completed saving for all 2022 TFSA contribution room so we’re ready to go 🙂

                I might consider entering full retirement with one 1-year GIC + cash. That might be a great buffer. Would give me 2-years+ of expenses without spending any dividends or capital at all. Still some thinking to do!

                Reply
                1. Deane Hennigar (RBull) · Edit

                  Great. Ready to go here too. Doing some shuffling out of TFSA before year end, replace with others in early 2022 plus cash/in kind transfers to top em back up. Also bumping up unregistered from LIF in kind, some cash. More cash flow.

                  Reply
          2. Thanks for sharing your perspectives Deane, your comments echo what I’ve read Fred Vettese has said in his books that most retirees don’t spend anywhere near as much as they worried they would need. I don’t have expensive hobbies or lifestyle activities, so “enough” isn’t really a high bar.

            As you note, there is an important shift in mindset from being a careful saver and accumulator to accepting that I am going to need to stop seeing it grow and actually draw it down or at least live off of the income stream. As well, I’m increasingly mindful of the declining health issues that may be ahead of me – more money can’t buy happiness if you aren’t healthy enough to enjoy it.

            Reply
            1. Deane Hennigar (RBull) · Edit

              You’re welcome BartBandy.

              Its probably true on the retiree spending thing, if you don’t have expensive hobbies or lifestyle.

              That shift still confounds me. Its hard to loosen up after being disciplined on accumulation. I have been on record here for 7 years saying we wanted to not take money with us (no heirs) and spend capital etc. Good markets with avg (not high) spending has driven assets up ~50% and with a strong bond mix. Income is rising, and OAS/CPP @ 70 will give a pretty big bump.

              Great point on health and happiness. My wife spends 6-7 hours a week at the gym and I am a fitness fanatic exercising vigorously about 14 hours/week (competitive runner now sidelined with torn meniscus from my last event in Sept), but can still bike now and strength train – a lot. I am a huge advocate of getting into a physical routine (habit) with things you enjoy well before retiring, if you are able and aren’t already. It keeps you physically and mentally well. I love having enormous energy and feeling 20 years old. My Garmin claims I am that equivalency!! LOL

              Reply
              1. I really admire your exercise. I always hate exercise. Have done some cycling this summer but now the weather is getting in the way.

                It would be interesting to see if you could indeed change your spending habit. Without travelling, it would be even more difficult. With kids, we might be OK to leave money behind. But still better if we can enjoy our life in full.

                Reply
                1. Deane Hennigar (RBull) · Edit

                  Thank you May. If you find what you like to do the exercise becomes habit. At least that’s me.

                  I don’t know on the spending. I’m going to guess and say yes probably. But yes we were spending $25k/yr travelling and that’s more like 2k for now. I have been waiting so long for a real correction and that holds me back. LOL, my VPW 2020 said 90k withdrawal from assets and we did 15k, as an example. This year will be~35-40K, which is around average.

                  The key point I take away from your scenario is you will likely have good options. Leave money or spend lots. Nice.

                  Reply
                  1. The ratio of your actual withdrawal and what VPM suggested looks like will be smaller and smaller, especially you are on a gliding path to have more equities. A good problem to have for sure.

                    I assume you already have a list where your money could go for good causes as I am sure you will not be able to spend all your money.

                    Reply
                    1. Deane Hennigar (RBull) · Edit

                      I don’t expect that to change much if I go from 70/30 to 80/20 or 85/15. Small potatoes difference, and with no significance unless we started spending way closer to our potential. The biggest impact is the markets which we don’t control. All these numbers come from unusually good extended markets and that’s going to change – perhaps very badly for a while.

                      Yes, our wills are made out with charities being our sole beneficiaries whenever and however that happens.

                    2. When I began the retirement plan in 2017, everybody thought a big market drop will happen soon. Nobody expected the bull market still had such a long run. It’s good I didn’t wait for a market correction.

                      That’s actually a big reason why I decide not to retire yet. 2008/2009 had almost no impact on us as we are still working and the only thing is no Christmas party and salary raise anymore. I was always afraid that I might retire at a time similar to 1999 or 2007. Looking at the number right now I feel it’s more than enough. But if another 2000 or 2008 comes, that number could be cut in half. That’s why I need to have this DGI core holding for such a scenario. There will be at least ten years we have to live off our investment alone. Worst case, hopefully we can still survive on the dividends income.

                    3. “Worst case, hopefully we can still survive on the dividend income.”

                      If you can do that, you have definitely saved enough. It is my hope as well in the coming years that dividends > most basic expenses. If that’s the case, I know we’re good to semi-retire.

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