Just How Much Is Enough?

Alexander Green
by Alexander Green, Chief Investment Strategist, The Oxford Club
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This past May, The Oxford Club led an expedition down the Danube River from Budapest to Passau aboard the S.S. Maria Teresa.

It was a delightful trip filled with historic sites, excellent food and fascinating excursions.

Of course, we also found time while afloat to discuss investment opportunities in world financial markets.

During the final question and answer session, a Member asked,

“We hear a lot of opinions about how to make money. But tell me this: Just how much is enough?”

It’s an interesting question. And I’ve heard some pretty interesting answers lately.

For example, earlier this year The New York Times asked several people how much money it would take “to cancel their worry and bankroll their dreams.”

Their answers were remarkably consistent.

Julien Mellon, a 32-year-old tour guide, said $20 million. That would buy a “beautiful” home with enough left over to provide annual income for the rest of his life.

Celeste Hilling, an executive at Skin Authority, also said $20 million. That would allow her to put her 17-year-old daughter through college, travel, pursue other interests and “give to philanthropy.”

Andrea Todd, a 51-year-old writer and teacher in Sacramento, said $65 million. That would allow her to travel “with immersion in mind” and buy a farm for animals, like Jon Stewart and his wife did.

It’s fun to dream. But these individuals have done something else: checked out of reality entirely.

No one needs $20 million - or $65 million - to feel financially secure and enjoy a full life.

That’s a good thing since few tour guides or schoolteachers accumulate enough to reach the eight-figure mark.

Some will say I’m being a spoilsport, throwing cold water on ordinary people’s dreams.

But fantasies like these can undermine realistic ambitions, chief among these being the desire for some measure of financial independence.

Don’t get me wrong. If you have highly remunerative skills, an incredible work ethic and a burning desire to achieve great wealth - not to mention a bit of luck - amassing a $20 million fortune is indeed possible in this Land of Opportunity, especially once you learn how to make your money work harder than you do.

But financial goals need to be SMART: Specific, Measurable, Attainable, Realistic and Timebound.

The folks in the Times article have specific and quantifiable goals, but they are short on realism and attainability.

That’s a shame because a lot of individuals could reach financial freedom if they thought about the subject rationally and developed a workable plan to achieve it.

Let’s consider the first step - and answer that attendee’s question:  Just how much is enough?

There is no single right answer, of course.

But it’s certainly possible to calculate an approximate sum that would generate the income you need to finance your chosen lifestyle.

Things you might consider to arrive at your personal number include...

  1. Your age and life expectancy (if you haven’t given this second factor much thought, click here)
  2. Your number of dependents (if any)
  3. Where you live (or want to live)
  4. Your current financial obligations
  5. And the annual cost of living your preferred lifestyle.

Granted, it takes a bit of time to formulate even rough answers to these questions.

But it’s worth the effort. How much is “enough” is a vital question. (And - as Yogi Berra told us - “If you don’t know where you’re going, you’ll end up someplace else.”)

Once you’ve got an idea what your “number” is, you have to determine how much you need to save - and what kind of return you need to earn - to reach it.

That will put you solidly on the path to financial freedom. And in my next column I’ll show you how to do it.

Good investing,


Thoughts on this article? Leave a comment below.

This Fund Has Put Many Subscribers on the Path to Financial Freedom

Alex’s Oxford Communiqué gives its subscribers a road map to having “enough” money - whatever specific number “enough” may be for them.

Alex’s short-term stock picks certainly help subscribers accumulate wealth. But so do the long-term holds in his Oxford All-Star Portfolio, like the Templeton Dragon Fund (NYSE: TDF).

The fund has handed longtime Members a 440% return since it was first recommended in 2002. Here’s Alex checking on the fund back in 2014...

History shows you shouldn’t invest based on geopolitical events. If you do, you’ll find yourself in a constant reactive mode. Great investors, by contrast, invest in an anticipatory mode.

So when you scour the globe for major macroeconomic events, be sure to take a look at China.

What’s happening there - 1.3 billion people enthusiastically embracing capitalism - is the biggest economic development story since the Marshall Plan. It’s only a matter of time before China’s economy overtakes our own. Dr. Jeremy Siegel, professor of finance at The Wharton School, calls what is happening there today “the greatest change the world has ever known.”

This is a positive. Chinese consumer and business demand will be a primary engine of world economic growth for years - or decades - to come. And one of the best ways to take advantage of it is with the Templeton Dragon Fund (NYSE: TDF), part of our Oxford All-Star Portfolio.

The Templeton Dragon Fund is managed by Mark Mobius. Based in Hong Kong, he is the world’s leading emerging markets fund manager, employing a disciplined, value-oriented approach.

There is still plenty of upside potential here. China is transforming itself from a world-class exporter into one of the world’s biggest importers.

China already imports nearly as much as it exports, over $1 trillion worth of goods annually. Chinese consumers now buy more automobiles than Americans do. Oil production there is massive - and it still meets only half the country’s needs. And China is also the world’s second-largest consumer of luxury goods.

Tens of millions travel abroad, too. It is estimated that over 55 million Chinese tourists vacation overseas each year.

Consumers in China are busy buying homes, computers, mobile phones, appliances, financial services and healthcare. Plenty of money will be made in those sectors in the months and years ahead.

- Samuel Taube with Alexander Green

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