For most of my life, I was really good at answering one question.
How much more money can I make?
I loved investing. I still do. I loved watching money compound and knowing a dollar invested today could become several dollars down the road.
Every dollar had a name. I was so tight with money that I squeaked. If I had extra money, I invested it. If I was deciding whether to spend or save, saving won almost every time.
The math was easy. More money invested. More compounding. More wealth.
It was simple.
But somewhere along the way, I started asking a different question.
How much is enough?
The Lake House vs. The S&P 500
Let’s say you’re considering a $500,000 place. (Round number, just for the example. Whether you pay cash or finance it, the math points in the same direction.)
You have two choices. Buy a cottage on the water here in Wisconsin. Or put that same money in the S&P 500 and rent a really nice place for a couple of weeks every summer.
Let’s do the math.
The cottage doesn’t just cost $500,000. There are property taxes. Insurance. Utilities. Maintenance. Furniture. The dock. A new roof someday. A furnace. Something that breaks five minutes after you pull in for the weekend. Over 20 years, that adds up to hundreds of thousands of dollars.
Let’s be generous and say the place appreciates 4% a year. In 20 years, it’s worth about $1.1 million.
Now put that same $500,000 in the S&P 500 at a hypothetical 8% a year. In 10 years, it’s about $1.1 million. In 20 years, it’s more than $2.3 million.
And you still get the lake. Rent a beautiful place every summer. No mowing. No repairs. No property tax bill. And you’d probably still come out way ahead.
Run it any way you want. The S&P 500 wins by a mile.
If I had to grade the cottage as an investment, it would fail.
We bought one anyway.
What Is the Money Actually For?
This was never really a question about real estate. It was a question about money.
Let me be clear. I’m glad I spent so much of my life saving and investing. It gave me options. It gave my family security. It still does.
But at some point you have to ask what all that accumulation is for.
When I hit my first million, I expected something to feel different. It didn't. Food tasted the same. My pants still went on one leg at a time. Later, when the number got bigger, same thing. More zeros. Same me.
And there will always be another number waiting. $2 million. $5 million. $10 million. At every level, there’s someone ahead of you.
Here’s the trap. If you never decide what enough is, every purchase has to compete with an imaginary future number. And the future number wins every single time, because it’s always bigger.
That’s how people end up at 80 with a big account balance and a long list of things they were going to do someday.
Security and Freedom
I used to think the goal was to accumulate as much as possible.
Now I think the goal is to accumulate enough to give yourself the freedom to decide what matters.
Enough isn’t the same number for everyone. For one person, it’s being debt free with six months of expenses in the bank. For someone else, it’s $5 million. The important part is deciding what yours is.
Because once you do, your money gets two different jobs.
Think of enough as a line.
The money below that line is security. Its job is to protect you, and the spreadsheet is the boss.
The money above that line is freedom. Its job is to give you choices. The spreadsheet still gets a vote. It just doesn’t get the only vote.
Below the line, you ask, What’s the best return?
Above it, you ask, What’s the best use?
So before any big decision, ask yourself.
Which side of the line is this money coming from?
If it’s below the line, protect it.
If it’s above the line, use it for the life you want.
The Cost of Waiting
A few weeks ago, I wrote about how we have the wealth curve backwards. We spend our best years saving for a future that isn’t guaranteed.
The cottage is that idea put into practice.
We spend our investing lives asking what our money could become if we wait. We almost never ask what waiting costs.
My kids aren’t always going to be 10 and 8. They won’t always want to spend a weekend at the cottage with Mom and Dad.
We looked for over two years. We bought the cottage because right now, everyone still wants to go.
Could we have invested the money instead? Absolutely. Would the S&P 500 have produced a better return? Probably.
Do I regret it? Not for a second.
My wife and kids were ecstatic when we got the place. It’s all we talk about. The summers. The weekends. The meals, the lake, the walks, the friends who will come visit.
Once you have enough, maximizing the number isn’t the same as maximizing your life.
So, How Much Is Enough?
I don’t know. I’m still figuring it out. Maybe that’s the point.
I spent the first half of my investing life asking how much more I could accumulate. Now I’m asking what I want that money to actually do.
None of this means I’ve stopped caring about money. I still love the stock market. I’ll probably obsess over stocks for the rest of my life.
A lake house probably isn’t a better investment.
But I don’t want every dollar working for some distant version of me.
Some of it can work for us now.
Maybe the spreadsheet says we should have bought the S&P 500 instead.
I just don’t think the spreadsheet knows what it’s investing for.
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