When is enough enough? If we are talking about something good, then enough is unlikely to ever be enough, and conversely, if something is bad, then enough will be enough much earlier.
Even Albert Einstein tried to answer the question. In one of his famous quotes where he explains his theory of relativity in laymen’s terms, he said: “Put your hand on a hot stove for a minute and it feels like an hour. Sit next to a pretty girl for an hour and it feels like a minute. That’s relativity.”
If we extend this theory to the accumulation of assets, how do we assess what level of assets each of us would accept as “enough”?
Identifying the shortfalls
The answer may be a tough call, but start by focusing on this question: “When I’m almost done on this planet and I look back at what I’ve achieved during my lifetime, what are the shortfalls in my material world that I will identify?”
Without being simplistic, let’s introduce a simple formula: will I, at the end, be content in the knowledge that my heirs will have a good home to live in, a reliable vehicle to transport them around and enough income from my long-term financial planning to maintain a healthy lifestyle? Some will describe that lifestyle as “the manner to which they are accustomed”, and therein lies the answer. We all have ideas about what a good home looks like and we all differ in our opinions about what a reliable vehicle may be and so on, but the standard we attain for all of those things is determined only by a lifetime of personal achievement and very definitely, planning.
I always identify the importance of the need to plan, even when individuals have been struck a cruel blow somewhere along the timeline and have to start all over again. Without careful planning and a lot of discipline to go along with it, it’s literally impossible to climb back up the ladder of success. The tougher the circumstances, the tougher the climb. People finding themselves in this unfortunate category will easily answer the question “When is enough enough?” “Right now!” they’ll say. It’s a fact that many within our population have suffered setbacks when negative events such as retrenchment or ill health have struck. They understand what I mean about the need for planning.
Financial planning these days includes the use of many tools which have been specifically designed to do the job for you, but a prerequisite is that the tools have to be employed by someone trained in the skill, someone with experience and specialist knowledge.
It is all about team effort. Just as the partners playing their doubles match in the finals at Wimbledon will rely entirely on each other, why then are so many South Africans reluctant to employ the good advice of a qualified financial advisor? To work together as a team employing the skills and knowledge of all the champions is surely the way. Only then will we be able to rest assured that our efforts to win the match will produce exactly that – a significant win.
It follows that a win will result in our best chance ever of being able to accumulate enough, with very few regrets. Sure, the process is subjective and there are likely to be many curved balls flying around during the session, but that’s life. The facts stare us straight in the eye: if we are to achieve enough assets to be able to retire happily, if we want to accumulate enough to be able to look back satisfied that our heirs are far better off than we ever were, then we have to ensure that we have done enough planning. Enough said!