More vs. Enough: The Principle of Financial Finish Lines

“Wealth is like seawater: the more you drink, the thirstier you become.”  Arthur Schopenhauer, German philosopher

John D. Rockefeller, widely considered to be the richest person in history, when asked how much more he needed to earn until he had enough famously replied, “Just a little bit more.” 

Author Mitch Anthony reports, “A friend of mine who works with ultra-wealthy people in a major metro area conducted a survey that asked, ‘How much money would you need to consider yourself rich?’  Those with $50 million said the number was $100 million.  Those with $100 million said the number was $200 million.  The first group who would admit they were already rich were those with $200 million dollars.” 

I don’t believe this “just a little bit more” attitude only applies to the rich like Rockefeller or the people in the survey.  It applies to just about everyone and can be thought of as part of human nature.  Those making $50,000 are sure they would have enough if they made $100,000.  Those making $100,000 think they need $200,000.

This desire for more leads to great accomplishments for many, but can also cause problems.  For starters, it makes happiness difficult to achieve.  Seth Godin writes, “If your happiness is based on always getting a little more than you’ve got…then you’ve handed control of your happiness to the gatekeepers…You are always on the treadmill, unhappy today, imagining that the answer lies just over the next hill.  All the data shows us that the people on that hill are just as frustrated as the people on your hill…The never-ending cycle (no surprise) never ends.”    

Financial Finnish Lines

So how do you end the “never-ending cycle”?  How do you get off the more treadmill?  In the book, God and Money: How We Discovered True Riches at Harvard Business School, authors Gregory Baumer and John Cortines propose the principle of Financial Finish Lines as a powerful weapon in the more vs. enough battle.  Baumer and Cortines recommend establishing two financial finish lines, a spending finish line and a wealth finish line.  Of course, to avoid the “just a little bit more” trap these finish lines must be established well before you reach them.     

The first finish line is the spending finish line, where you establish a limit on how much you will spend annually.  This amount will need to be adjusted for inflation over time but other than that the amount will remain constant.  A finish line, by definition, cannot be constantly moved during the race, although you might need to change it for major life events such as marriage. 

Your spending finish line can be whatever you choose for it to be, but Baumer and Cortines suggest setting it at somewhere between $100,000 and $150,000 depending on family size and the cost of living in your area.  This is after taxes, so it represents the amount of money you actually have to spend.  This is sufficient to provide a comfortable middle-class to upper-middle-class lifestyle. 

What do you do if you are lucky enough to make more than your spending finish line?  Anything above your finish line should be split between increased savings and increased giving.  How you split it is completely up to you. 

Although you should be giving some of your money away prior to reaching your spending finish line (the authors suggest at least a Biblical tithe of 10 percent) passing the spending finish line will provide the opportunity to be more generous in giving.  You should also be saving some prior to reaching your spending finish line, but once again passing the finish line will allow you to step-up your savings game.    

The second finish line is a wealth finish line.  The amount of your finish line is a personal choice but the authors believe that a $1 million dollar wealth finish line should provide for basics through retirement and a $3 million dollar finish line should provide financial independence and security.  Any amount within that range would be a reasonable finish line.      

Up until now this plan is not much different than a lot of the “Retire by xx” plans that are so common.  The difference happens after you reach your wealth finish line.  Instead of retiring you keep working – but give all your additional income away.  I love this idea of financial finish lines with the extra devoted to giving.  What a great way to add happiness, meaning, and fun to the later part of your working years and into retirement.    

Of course, reaching your wealth finish line also provides freedom.  If you love what you are doing you can just keep doing it, but crossing the wealth finish line also allows you to pursue other options.  You could try a different type of work or simply work less and use some of your extra time to help others.  The possibilities are endless. 

The key is to establish the two finish lines in advance and stick to them.  The goal is to get off the treadmill; to win the more vs. enough battle, put it behind you, and move on to the more important work of making the world a better place. 

I enjoyed the book God and Money.  It was written from a Christian perspective with frequent references to scriptures in the Bible.  As a religious person I appreciated this but some people might not.  However, regardless of your feelings about religion the principle of financial finish lines is a powerful idea for winning the battle of more vs. enough and doing more to help those in need.  It is a great idea that anyone blessed with enough should seriously consider.                 

Leave a Reply