How much is enough? Specifically, how much money would you have to earn to say that you earned enough? Let me pose another similar question. How much money will you need in retirement to be happy?
There are many different tools and software programs that we use in the financial services industry to help people determine how much they need and how to make sure that they reach that goal. In fact, every time I turn around, someone has developed a new software program that is more colorful, better organized, has easier-to-understand charts and is more comprehensive than the one that was available last year. And I use just such tools to help my clients. But it is very important to remember that these are just tools. They take many different numbers and input them into complex mathematical equations in order to produce a finished product that helps you, the client, have a clearer understanding of your financial situation.
And I’m glad that these tools are available. They make it much easier for a financial planner to do his or her job. They make it possible to know approximately how much money a person will need to set aside to reach their goals. Or they may tell how long a person’s money will last. Or they may tell you that you will need to do some estate planning to address the tax consequences of leaving money behind when you die. And for these reasons, financial planning software is a good thing.
However, it is important to note what these tools cannot do. They cannot, and never will be able to, tell you what the purpose of your life is. Though it may seem laughable that financial planning software would tell you what the purpose of your life is, many people have come to believe that that is the purpose of these tools. We have started to believe that if all of the numbers line up right and there is enough money in the bank then everything will be OK.
I think we have bought into the mentality that is characterized by the once-popular bumper sticker. It reads, “He who dies with the most toys, wins!” I think everyone has seen that one. One that you may or may not have seen, that is much more appropriate, says, “He who dies with the most toys, still dies.” Over and over again people turn to money to answer the questions of life. As someone that deals with finances for a living I can see the struggle in my clients’ lives and in my own. I’ve found that people often think that they’d be content if they had just a little more than what they currently have. This seems to be a constant no matter what a person’s income is. The Bible, however, says that “Godliness with contentment is great gain.” (1 Timothy 6:6) One thing that a sound financial plan must have is a good dose of contentment — but no software will compute that.
So, by all means, go talk to your financial planner about how to manage the money that you have. And please, do the best job that you can so that you will get that big raise. Just remember, whether it is retirement or just that new flat screen TV that you are looking for, no matter how much planning you do you can’t buy contentment — it’s free.
Jeff Hupman is a financial advisor with Christian Values Investing. You may reach him at 748-9321.