How Much Money do you Need?

Jonathan Fields just tweeted:

How much do you need to make you feel like you’ve made it? Just a little bit more… Live life differently. 🙂

To which I replied (Follow me @solson on Twitter):

I need enough to reach my goals. Money is an important tool. How much you need depends on your goal.

But what I wanted to say couldn’t be said in 140 characters.

When Christine and I bought our first house in 1994, I made $6.25 an hour. She didn’t make much more. I had big projects planned for that house. I thought – I might not have much money, but I can work hard, and I’ll fix this place up. This is an example of a classic working class mindset. We were taught that hard work alone can overcome any obstacle. It’s a lie. It can’t.

After a few months of home ownership, Christine and I joked that every trip to Knox Lumber to get supplies for a home project cost fifty bucks.

“Trip to Knox, fifty bucks!” We said.

To us fifty bucks was huge money. Although fifty bucks was worth a lot more in 1994, it still didn’t buy much. As you can imagine, our projects were small. A shelf, a curtain rod, some paint, a new number for the front of the house, and we could only afford one trip to Knox a month.

But I wanted to move the water heater, finish the basement, replace the windows, redo the siding, replace the carpet, add a bathroom, and landscape. And no matter how hard I worked, I couldn’t make those things happen. I didn’t have the money.

Seven years later we were able to make many of these changes, not because we worked hard, but because we had the money.

Now you might be thinking, “Yeah, but you had to work hard to get the money, right?”

No! I have never worked harder in my life than when I made 6-8 bucks and hour. And no matter how hard I worked, I couldn’t get ahead.

To make more money I had to change the way I thought, the way I thought about myself and everyone else. I had to learn to value knowledge over manual labor, be open minded, make partnerships with others, leverage technology, and work smarter. I found better ways to contribute than selling my time for money. I lost the idea that hard work was a value unto itself.

When I did get my home improvement projects done, I had the money to pay skilled craftsmen to do them for me.

When you hear someone say, “Money isn’t important.” Don’t argue, but remember to tell yourself, “yes it is important.” Money is one of many tools you will need to reach your goals. It doesn’t matter if your goal is to end poverty, build a skyscraper, play in a rock band, or start an internet company, you need money. The amount of money you need is dependent on the size of your goals.

There is no such thing as a person having “too much money.” Too much debt, maybe, but money and debt are different things… (Well… I guess money is debt in America, but that’s another post for another site.) At any rate, your money and your debt carry very different implications for reaching your goals.

Never ask,

“How much money does a person need anyway?”

Instead ask,

“How much money do I need to reach my goals?”

Then be smart, gain some knowledge, invest in yourself, and focus on acquiring that amount.

3 thoughts on “How Much Money do you Need?”

  1. Steve,
    Nice post. There’s lots of advice out there about how to make money, but all of them seem to focus on this singular goal as the end point.

    You are correct when you say you should be looking at money as a nothing more than a tool in your toolbox. It’s pretty easy after that to determine if you are spending all your time “working hard” instead of working towards your goals.


  2. It is only when I learned this lesson of money being a means to an end and that clearly defining my goals, as opposed to saying I want to be rich, only then did I start to reach my goals.

    What helped me turn my thoughts around years ago was the great book Think and Grow Rich. The ebook you featured in a post in mid-December has proven to be an excellent resource (and a bargain) has helped me further refine the process as I worked on my goals for 2009.



  3. Goal =>Wealth! I find that it’s a three step process:

    1. Come up with a ‘real’ (i.e. important/meaningful) life goal/purpose

    2. Calculate how much money you will need to live that life … this is Your Number

    3. Share Your Number – don’t be shy … sharing is a great way to make mutually beneficial connections!

    I used EXACTLY this method to go from $30k in debt to $7 Mill. in the bank in just 7 years, so I know it works … well, at least it did for me 🙂

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