So, how much money before you say enough?

Kartik Jhaveri Posted: Dec 03, 2012 at 0359 hrs
We all need money, but then how much money is really enough for you? Money is a fundamental need and we all know it. Further, we all want a lot of it and we are always on the look out for ways, methods and advice by which we can earn more.

How much is that “more”? Have you ever asked yourself that question? How much is it that will satisfy you? Beyond a certain point, any amount does not really matter. If you are satisfied with R 5 crore then the amount of pleasure you derive from having R 20 crore is really no different.

In economics this is known as the theory of diminishing marginal utility. You may be really excited to make your first million, more exited to have R 5 million as your networth and excitement for you may climax at R 40 million or R 4 crore. Thereafter, for each additional million the excitement reduces and perhaps beyond R 5 crore it hardly makes a difference. Numbers are purely for purpose of illustration. Facts may differ from one individual to another.

So, the point I am trying to convey is that there is only one Bill Gates or Richard Branson or LN Mittal in the world and everyone may not be as lucky to have the same fortune however secretly we, in our sub-conscious, keep telling ourselves, ‘I wish if it were me’.

The point I am trying to convey is that if you really think hard your probably need much less, perhaps a fraction of what is really owned by these legends. You don’t need to worry and feel bad if you don’t have the mansions, the private jets or the fleet of Mercedes — perhaps you may not really need it.

Let’s put it another way. Say if I gave you R 5 crore, what would you do? Make a list. How would you spend it? Now… do this exercise and do it very seriously without going ahead.

Perhaps that was easy. Now what if I gave you R 10 crore? Perhaps you managed to make a list again or enhance your existing list. Now how about R 50 crore? The more the amount rises beyond a certain point, we tend to run out of options. Unless, of course, you have desires to set up petrochemical plants! But all of us don’t want to have the hassle of running a business.

If you think crores is too big to work with, the same could be applied to your monthly salary. If it were R 25,000, you would do a few things, if it were R 75,000, you would do a lot more. Once it starts crossing R 2,00,000 - R 4,00,000 per month, you tend to run out of options.

So how much is really enough?

In my view, if you were earning say R 3-4 lakh per month you could pretty much live most luxuriously and have a feel of a lifestyle matching that of the wealthiest you know of. This is not to say that you cannot derive satisfaction from R 40,000-R 50,000 per month. It really depends on where you live, how you live and what exactly you want your life to be. For example, you could buy the best dinner in town for two for a price of R 5,000 in Mumbai but in Madurai the same would cost you R 1,500 and you would be equally happy.

The secret is to know your critical or optimal level and once you know that, you know for sure that no matter what, life is never compromised on anything. You will always have ample and moreover whatever you do, you will love it, feel complete and have an optimal level of satisfaction and accomplishment.

Anything over and beyond your critical level is money that you may splurge in a casino if you like. That’s the good news. However, by experience I can assure you that most people are far away from reaching this level. The irony here is that for most people to be able to reach that level is quite easy; it is comfortably possible provided they are able to accept new thoughts and ideas.

Critical or optimal level is that quantum of money that you need to have and you must aim to touch that threshold. Otherwise nothing will really change; life will be just the same.

—Author is Director, Transcend Consulting

kartik@transcend-india.com