How Much Is Enough? | 09/13/05
Let me ask you a question. How much money is enough for you? To live very comfortably for the rest of your life? Let's find out. Most of us are in are mid to late 20s. Let's say we're 25 and we plan to live until we're 80. We now have 55 years of spending of ahead of us. First we need a house. And not just any house--a comfortable house. Something like 2500 square feet. And we don't want to live just anywhere--we want something good. Let's take Moorestown, NJ--the best place to live in America in 2005. So we've now spent $275,000. Let's take a generous hearty $120/mo for utilities--around $80,000 for your life. You gotta eat. I eat a lot and spend about $500 a month; another $330,000. Ok...food...water...shelter...oh right, cars. You're going to buy at least five more cars and since we're living comfortably we might as well spend $25,000 per car ($125,000). Now for the luxuries. Cable TV/Internet will run you about $100/mo ($65,000), your home furnishings and upkeep another $5k/yr ($275,000). Went to school? Might as well get that Ph.D--another $120,000. Got a pet-$55,000 more. A kid, through, age 17 is going to cost you $230,000 (ouch). What else do you need to spend money on? Health Care? How's $250,000 sound. And just for kicks, let's give ourselves $5k/year ($275,000) to blow on whatever the hell we want. Ta-da. Now, let's start counting.
So now we owe a little over $2 million dollars. There is good news, though--if you're married you can whittle your portion down to about 70% of that--or a little less than a million and a half dollars. Yikes. Before you freak out, over 55 years you'd only have to earn (after taxes) $27,000. Impossible you say. Too bad you want to retire. At like, age 60. So now we only have 35 years. Eek. But I've got good news--you only need to net $41,000/year. And with your Ph.D you should be able to make at least double that. So where does all the extra money in this country go?
I know what you're saying--this doesn't take into account a bunch of things--taxes...savings...etc. Fine. But think about it. If each American only needs $2million dollars each to live nearly in the lap of luxury and there only 300 million Americans we only need $600 million dollars. So there you go. We're spending $10b to rebuild New Orleans. I don't get it.