The Financial Sweetspot

I’ve never made a ton of money in my life but I certainly have wanted to. I’ve dreamed of yachts and beach houses, ski chalets and Ferraris. I’ve dreamed of sipping mai thais in the Maldives. You know, the good life....

The thought of being a billionaire is nice, but what would that life look like?

Walking into that much money (i.e.- lottery or inheritance) would most likely leave me feeling inadequate and unworthy. Earning that much money would leave me feeling burned out and overworked. Just having that much money would leave me feeling gluttonous and selfish.

I have no ill will towards billionaires, I just don’t think I want to be one.

There is a significant, like super significant, amount of money between where I am currently and a billion dollars. Hundreds of millions of dollars to be exact. But I do not think I want that either. A smart man once said, “Mo money, mo problems.” In my experience, that was true.

I believe that there is a financial sweetspot that lends itself to being the most content. This amount of money varies by the individual and depends on their ideal lifestyle. For the sake of illustration I’ll go through mine.

Let’s start by looking at the graph below:

As one accumulates or makes more money, their stress decreases and their fulfillment increases. Up until they've hit their financial sweet spot. What does this financial sweetspot entail?

The financial sweetspot is the amount of money that allows someone the following:

  • They can give sacrificially

  • They can save for the future

  • They can live comfortably - needing nothing and wanting little

What does giving sacrificially look like?

  • Tithing and/or freely giving away resources without concern of your own financial wellbeing

What does saving for the future look like?

  • Peace of mind that you have six months of living expenses in cash

  • The ability to save at least ten percent of your income for future use - i.e. retirement savings

What does living comfortably look like?

  • Having a safe place to live

  • Having enough food to eat, and enough money to eat out and “splurge” on occasion

  • Having enough money and time to spend it leisurely (hobbies or vacations)

  • Having a fulfilling way to make money (productive work that is appropriately challenging)

  • Needing nothing and wanting little (mindset of contentment)

I think most people would agree that having no money would lead to high levels of stress and low levels of fulfillment. Yet, many have not given much thought to the effect that high levels of money may have on stress and fulfillment.

The exact level of money required to attain your personal financial sweetspot will depend on what you value and what your specific level of comfort looks like.

However, I can promise you, it is likely less than you think.

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