How Much Money Is Enough? – It May Be Less Than You Think

How Much Money Is Enough?

A hot topic these days among the FIRE (Financial Independence Retire Early) community is financial freedom.


  • How much money is enough?” or…
  • How much money do I need to stop working and enjoy life?”

To answer this, it depends on who you ask.

What do you think?

Have you ever thought about your “magic” number?

Most of us have at some point but don’t really have a rhyme or reason how they came up with it.

Let’s dive deeper and try to find out just how much money is enough….

How Much Money Is Enough?

We all know that having boatloads of money isn’t going to make us any happier, but if I were to choose between lack of or abundance, I’d choose the latter.

If I’m going to be unhappy either way, well at least I can buy stuff! 🙂

We’ve already discussed this topic in detail in several previous articles:

What do other people say?

According to research, if you ask someone about their “magic” number that recently graduated dental/medical school, their answer is going to be higher such as:

  • $12 million – $20 million dollars

With student loan debt continuing to rise, doctors starting off older in practice and insurance reimbursements declining, being able to attain this amount is going to be very tough.

But if you asked someone closer to retirement, say 55-60 years old, they’ll usually stick closer to the $6 million to $8 million dollar range. Yes it’s doable but not probable.

When these same people are asked, “How did you come up with your number?” they’re not sure.

I had a number in mind when I first started practicing and can’t remember how I came up with it either.

Some people recall a conversation with a financial planner in the past while others may state they remember reading an article about it.

Look, I’m all about setting goals, both personal and financial. But the problem is when goals are set that aren’t well defined and have a clear road map of how to obtain them.

Take losing weight for example. Most that set weight loss goals don’t reach them because they don’t have a specific plan to achieve them.

Yes, exercising and eating right is important, but specifically, what types of exercise and foods need to be eaten? It’s got to be precise to work.

Unfortunately for doctors, we start behind the eight ball after our training is completed. Most of us begin with six-figure student loan debt in our 30’s.

Because of this timetable and circumstances, accumulating $12+ million dollars during our working careers is tough.

And that’s a problem. A significant problem.

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What Can You Do?

The uncertainty that the traditional financial planning model creates is the very reason that most dentists/physicians work MUCH longer than necessary.

Sometimes working even while suffering from physical pain because in the back of their mind, they really don’t know how much money is enough.

Recently I read about a dentist in his mid 30’s that had built a practice collecting $1.8 million annually within four years of starting it. Impressive!

Unfortunately, he stated that even though he’d achieved this in such a short time span, it was ALREADY beginning to take a mental and physical toll on him.

He was already having thoughts of selling his practice and taking time to determine what he wanted to do…all before the age of 40.

The problem this dentist was facing is not uncommon….most don’t know how to create sustainable cash flow income from investment assets.

He ONLY knows how to generate revenue from laboring (with his hands) like most of us. Focusing on active/earned income instead of passive income.

Start With The End In Mind

This dentist above is a perfect example of someone that should “start with the end in mind.”

I’ll never forget when my cousin (attorney that retired before 50) visited us when I first started practicing.

His first suggestion was to develop an “exit” strategy and start with the end in mind. I’ll admit, back then as a green 31-year old, I thought he was nuts.

Exit strategy? I was barely into my first month of treating patients and this guy was already talking about exiting. What did he know?

Reflecting back reminding me of an old Shania Twain song, “Don’t be stupid.”

Yes, I was stupid back then, but at least I remembered the story sooner rather than later.

What this dentist and all of us should do, is reverse engineer our situation.

By that I mean to take your monthly income and figure out how much in capital assets (passive real estate investments) that is needed to replace it.

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A Simple Example

Let’s run a few numbers to see if we can get you to realize that your “magic” number might NOT have to be so large after all.

Instead of the $12+ million number, let’s look at what having only $3 million dollars in passive real estate syndication investments could produce.

At an 8% cash flow rate, $3 million would produce $240,000 per year or $20,000/month virtually tax free.

How? The benefits of depreciation offsets most of the monthly income.

Question: Could you live off of $20,000/month tax-free? I bet I know the answer.

If you had a mutual fund worth the same $3 million, you’d have to pay capital gain taxes with each distribution taken.

Also, depending on the stock market, you may start to dip into the principal.

Not with a syndication. Your $3 million original investment would continue to appreciate even while you take the tax-free monthly distributions.

At the end of a typical five year hold period, that $3 million would be worth much more.

Are you ready to start building real wealth?

Join The Passive Investors Circle to get started today.