Are you rich enough to retire or enjoy spending some of your money as you work toward long-term financial goals? Many people ask themselves that question, and high earners recently revealed some of the signs that you’re rich enough to spend a little extra.
The conversation started on Reddit, where a 30-year-old with a net worth of $1.5 million earns roughly $450,000 per year. He doesn’t feel close to retirement and isn’t sure what to aim for or when to stop. He spends on hobbies but keeps expenses low and doesn’t need much money to cover his living expenses. He sought advice on knowing what to aim for and wanted to know how others gauge if they have enough money.
Several Redditors offered their thoughts in the comments.
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Pay For Things You Care About
If you narrow your purchases to things you care about, it’s easier to allocate money toward those areas of your life while having extra cash to invest in assets. One high earner decided to change their mentality once they reached a certain level and shared the details in the comments.
“Once I got to a certain level, I decided to pay for some things that I care about,” the commenter said. “I like adventures, so I’m willing to pay for them. I like flying first class, so I always do. I don’t care about cars, so I continue to drive my 12-year-old car that’s been paid off forever.”
Opting for an old car lets this commenter spend money on travel. Then, there’s still some money left to invest. A car enthusiast responded to the comment and shared how one car purchase helped them feel like they had enough money.
“I knew I had enough when I stopped worrying about the costs associated with another car,” the car enthusiast said.
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Family Size Plays A Role
One commenter asked the original poster if he plans to marry and have kids. That’s a big question when it comes to financial management, as a smaller family is easier to manage in the monthly budget. Some people feel compelled to have large families anyway, but that’s not the case for the 30-year-old.
He plans to have no kids, which gives the $1.5 million portfolio more mileage in retirement. Some Redditors suggested that it’s possible the 30-year-old will change his mind and have kids in the future.
“Do you plan to, though?” one commenter said.
“I didn’t, but…,” someone responded.
It’s good for the 30-year-old to continue working hard and having good financial discipline. That way, he can have children if he changes his mind. However, it becomes less likely to have kids when you are in your 40s or 50s. If he has no kids, the Redditor may put himself in a position to retire in his early 50s.
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Golden Years Aren’t So Golden
One Redditor said that it’s a good idea to spend some money now on things you enjoy. While saving money will help when you retire, it’s not a guarantee that your golden years are golden. That was the big message from the commenter who explained what can derail your retirement years.
“Golden years aren’t so golden; you might not make it or suffer health problems,” the commenter said.
It’s possible to take care of your body now so you don’t have health problems in your golden years. However, the future is uncertain. While it’s good to build a strong financial foundation, it’s okay to spend a little on discretionary items and experiences if you have enough space in your budget.
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