When you’re crafting your financial plan, it’s natural to focus on strategies for accumulating wealth.
However, while this may seem like a clear first step to planning your future, it’s important to remember that there is such a thing as “enough”. This number varies for everyone depending on your personal circumstances and goals.
In fact, the question of what “enough” means has been inspiring some of the greatest minds for thousands of years. Many ancient philosophers have taught the importance of being sensible with your wealth.
Even though some of their teachings are thousands of years old, you can still apply many of their wise words to your finances today. Continue reading to discover what ancient philosophers can teach you about the idea of “enough”.
1. Lao Tzu
Lao Tzu was a renowned Chinese philosopher of Daoism from the sixth century BC who once wisely said: “If you realise that you have enough, you are truly rich”.
Lao Tzu also believed: “Chase after money and security, and your heart will never unclench”.
His words emphasise that the ceaseless pursuit of wealth is unlikely to lead to contentment.
Instead of simply accumulating wealth, it’s essential to determine how much you realistically need to save to achieve your goals, then work towards this target.
One of the tools your financial planner can use to establish how much is “enough” for you is through cashflow forecasting.
We use specialised software to assess your required future income alongside several financial variables that could affect you, such as investment performance, inflation, and your projected earnings. Then, we can develop a model that gives you a clear overview of your current financial situation and how it may progress in the years ahead.
You can then use this information as a starting point to establish how much is “enough” for your desired lifestyle and whether you’re on track to meet your goals.
Ancient Greece was a hotbed of great philosophical minds. Among the most celebrated is Socrates, an Athenian philosopher who is often credited as one of the founders of western philosophy itself.
During his life between 470BC and 399BC, the great sage noted that: “Happiness does not depend on external things, but rather how those things are used. A wise person will use money in the right way in order to make their life better; an ignorant person will be wasteful and use money poorly, ending up worse than before”.
Socrates' astute words underline the importance of how you use your wealth. It’s not simply about how much you have, it’s about how you spend your wealth to create a happy life.
When saving, it’s essential to be specific about your goals. Instead of asking yourself whether you have “enough”, the real question may be “enough for what?”.
Indeed, specific goals such as going on a dream holiday, retiring early, or buying a home in your favourite location could serve as the foundation of your financial plan, inspiring and driving you to achieve them.
Working with a financial planner could be an invaluable source of help and guidance as you save towards your goals. They could help you make a clear and in-depth plan that enables you to strike a balance between financial security and your preferred lifestyle.
As well as philosophy, the ancient Greek polymath Aristotle was interested in various subjects, and his studies on them formed the foundations of modern science.
Aristotle believed that everything had a purpose or a “final end” and to understand something properly, you had to know where it was going. He called this “telos”, and on the subject of wealth, Aristotle insisted that “money was invented to be used in exchange”.
This belief further reinforces the fact that it’s just as important to your overall wellbeing to spend your money as it is to save it, especially during retirement.
It can feel daunting to start spending the money you’ve carefully saved throughout your life. But remember that retirement is precisely what you’ve spent your whole life saving for; don’t be scared to use your hard-earned wealth to enjoy your post-work years.
If you’re worried about running out of money during retirement, financial planning can give you the confidence to make sensible spending decisions.
A cashflow forecast can show you the potential impact of your financial decisions in black and white, helping you to make an informed decision about how to use your wealth today without risking your ability to achieve your goals in the future.
Working with a financial planner can help you realise when you have “enough”
As you can see, several ancient philosophers from diverse cultures all emphasised the importance of using your wealth to create a fulfilled and happy life.
Many of them believed that “enough” isn’t about having a vast amount of wealth accumulated, but rather achieving a lifestyle that aligns with your values and goals.
While defining how much is “enough” can be complicated, especially if you’re an expat, we can help you define your goals and create a plan that enables you to achieve them.
We can also help you to feel confident that you’ll have enough money to cover your living expenses for as long as you need to without running out of funds later in life.