The dollar amount that makes you feel safe

Do you worry about running out of money? Is it the number one fear stopping you from making a change in your work life?

If so, you have some advantages over others: you’ve already identified that you want to make a change; you have some idea of what that change should look like; and you are motivated to make that change. Nice!

But you won’t make that change until you reassure yourself—not on a surface level but deep inside—that you can make a change and be just fine financially.

If this is your situation, you have a clear goal to head towards: build up enough savings to feel comfortable to pull the trigger. But how much money is “enough”?

There exists a number of euros or dollars or rupees that would reassure you if you had it sitting in your bank account. I can’t tell what that number is, but I can tell you that, say, $25 million is enough. It would probably take a while to save that much, of course, so you want to shoot for something more practical.

One way to help you decide on a number that’s “enough” is to calculate your monthly living expenses and then to decide that you want, say, two years worth of expenses saved up. Another way is to pick a round number that seems sufficiently big, such as $50,000.

There is no “right” number. There is only a fuzzy region of net worth in which your fears can dissipate.

What’s your ballpark number?


— Peter

P.S. If you’re having trouble deciding, or if you’ve set a net worth goal in the past, but you’ve kept raising the bar as you approached it, you might need to approach this problem from a mindset angle instead. If that’s you, let me know and let’s work on your mindset.

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