I recently received a question that boils down to this: How do you know when you have enough money? And once you do, when is it time to shift from chasing excess returns to simply maintaining what you have?

There are several ways to approach this question, which I’ll explore in this post. I’ve come up with a framework that I think makes sense for those who think they truly have enough.

Here’s the question presented from a reader.

Hi Sam,

I just finished your piece on risk-free passive income—really well done. A very accurate depiction of the trade-offs between the two approaches.

I have a question for you: You illustrate the comparison using a $5 million portfolio. I’m curious—at what wealth level does the appeal of building more wealth start to fade, and when does preserving capital with 2%–3% returns plus inflation protection become the primary objective?

I fully agree that wealth building is still relevant at the $5 million level. But what about at $10 million? $15 million? Or does it take more? Let’s assume a 3.75%–4% yield and inflation-beating dividend growth (say, via SCHD). Real estate could match this as well, but I question whether it truly qualifies as passive.

At what point in the journey does playing defense and focusing on income stability outweigh the pursuit of more wealth? When is it time to stop chasing and just maintain?

Thanks,

Jim

The Elusive Concept of “Enough”

“Enough” is subjective. For some, there’s never enough money—enough is always a moving target, 2X more than what they think they want once they get there.

For others, it might mean having 25X to 50X their annual expenses in investments, multiples I think are appropriate for 80% of people to answer what enough is. Spend $50,000 a year? You have enough if you have between $1.25 million – $2.5 million in investable assets.

I personally like using the inverse of the FS Withdrawal Rate as a guide. If the 10-year bond yield declines to 3%, then you’d divide $50,000 by 2.4% (3% X 80%) if you use my FS withdrawal rate to get to $2,083,333. My safe withdrawal rate is a dynamic safe withdrawal rate that changes with economic conditions. It helps families build generational wealth.

However, I believe the best way to know you have enough money is this: you refuse to trade your time doing something you don’t fully enjoy for money.

What you enjoy is, of course, also highly subjective. But it should be something you like doing at least 90% of the time or you feel at least 90% of the activity is enjoyable.

The Real Test: Will You Walk Away?

The clearest indicator that you have enough money is your willingness to walk away from a job—or an activity—that drains you.

You can rationalize your way into staying. You might tell yourself: “I don’t need the money.” But if you’re still clocking in at a job you dislike, you’re not being honest. Time is more valuable than money, so if you really had enough, you wouldn’t be doing something you dislike.

Now, I know some of you who are financially independent on paper will say, “But I love my job.” And that’s awesome. Seriously—you’ve hit the career lottery. Keep going. Nobody quits or retires early from a job they dislike.

But I also know many more are saying that out of fear—afraid to let go of a steady paycheck, afraid of losing structure or identity. And if that’s the case, I challenge you: muster the courage to engineer your layoff or find a path out. That’s when you’ll know you’ve reached enough.

Questions to Ask Yourself If You Think You Have Enough Money

To help determine whether you have the courage to stop doing something you don’t enjoy just for the money, ask yourself:

• Would you rather take care of your baby during their precious first year of life, or sit in endless meetings every day?
• Commute during rush hour, or sleep in and read a good book?
• Work late for a month to finish a project, or spend that time playing with your kids or helping them with schoolwork?
• Travel for business for weeks at a time, or care for an aging parent with health issues?
• Meet monthly and quarterly sales quotas, or play pickleball in the late morning and take a nap after?
• Play corporate politics to get promoted, or enjoy the freedom to be your true self and only spend time with people you like?
• Fly out on a Sunday afternoon for a Monday morning client meeting, or travel the world with no set return date?

If given the choice, who with enough money would honestly choose the work option in any of these scenarios?

Your financial independence number is not real if you continue to subject yourself to displeasure after getting there.

When Is It Time To Stop Chasing More Wealth and Just Maintain?

Once you have enough money, logic would dictate that you no longer need to take financial risks. Instead, you could simply invest your entire net worth into risk-free or low-risk investments that at least keep up with inflation.

These types of investments that generate risk-free income include:

• Money market funds (though yields may not always match or beat inflation)
• Treasury bonds (yields are generally higher than inflation)
• AAA municipal bonds (nearly risk-free and usually yield more than inflation)

The reality, however, is that stocks and real estate have historically been the best-performing asset classes when it comes to beating inflation over the long term. Cryptocurrency—specifically Bitcoin—is also a contender. But as we all know, none of these are risk-free.

Divide Your Wealth Into Risk-Free and Risk-Required Buckets

If you truly believe you have enough money, the best strategy is to allocate a portion of your net worth into completely risk-free or low-risk investments. This bucket should generate enough passive income to cover 100% of your living expenses. In other words, ringfence a portion of your net worth that will take care of you for life, no matter what happens.

Once you’ve secured this financial base, you can then invest the remainder of your wealth in riskier assets for potentially greater returns, without the stress of needing those returns to survive. Think about this portion of your investments as playing with the houses money.

A Fat FIRE Example:

Let’s say your desired annual household spending is $400,000. You’re fortunate to have a top 1% net worth of $14 million. At a 4% safe withdrawal rate, you’d allocate $10 million ($400,000 / 0.04) into Treasury bonds yielding over 4% or similarly safe investments.

You can then invest the remaining $4 million into stocks, real estate, venture, crypto, or any risk asset you want. Even if you lose half—or all—of this risk bucket, your lifestyle remains fully supported by your safe assets. Thankfully, most investments don’t go to zero.

A Lean FIRE Example:

Let’s say you and your spouse have no children and are content spending $50,000 gross a year. Your net worth is $1.5 million. At a 4% safe withdrawal rate, you would allocate $1.25 million to risk-free or low-risk investments, and invest the remaining $250,000 in riskier assets for possible upside.

Now, of course, allocating 83.3% of your net worth to safe assets might seem extreme. But if you’re truly satisfied with what you have, then this asset allocation makes perfect sense. Especially when the Treasury yield is greater than inflation, as it often is—since inflation helps determine bond yields in the first place.

If you’re uncomfortable with such a conservative approach, then perhaps you don’t actually feel like you have enough. On paper, you might be financially independent, but emotionally and psychologically, you’re not there yet.

You’re still willing to risk losing money for the chance of having more that you want or think you need. Or you’re still encouraging your spouse to work or you’re still working hard on generating supplemental income.

And that’s OK. Just be honest with yourself about whether you truly have enough.

The Ideal Percentage of Your Net Worth in Risk-Free Assets

You might think the ideal situation is being able to allocate the smallest percentage of your net worth to risk-free assets while still being able to cover your desired living expenses. The lower the percentage, the richer you appear to be. But having too small a percentage in risk-free assets might also suggest you’re overly frugal or not generous enough with your time and wealth.

For example, let’s say you have a $10 million net worth, the ideal net worth to retire according to a previous FS survey, and only spend $40,000 a year. At a 4% rate of return, you’d only need to allocate 10%—or $1 million—into risk-free investments to cover your expenses. But what’s the point of having $10 million if you’re only living off 10% of it? You could have saved all the stress and energy slaving away when you were younger.

Sure, investing the remaining $9 million in risk assets to potentially double it in 10 years sounds exciting. But again, what’s the point if you’re not spending it or using it to help others? Money should be spent or given away before we die.

A More Balanced Approach: 20%–50% In Risk-Free Investments

Once you have enough, the ideal percentage of your net worth in risk-free assets is somewhere around 20% to 50%. Within this range, you’re likely spending enough to enjoy the fruits of your labor—say, $80,000 to $200,000 a year, continuing the earlier example. At the same time, you still have a significant portion of your net worth—50% or more—invested in risk assets that have historically outpaced inflation.

Even if you no longer need more money, it would be unwise to bet against the long-term returns of stocks, real estate, and other growth assets. And if your risk investments do well, you can always use the extra gains to support your children, grandchildren, friends, relatives, or organizations in need.

When in doubt, split the difference: 50% risk-free, 50% risk assets. It’s a balanced, emotionally comforting strategy that gives you both security and upside.

Nobody Is Going to Follow My Recommended Risk-Free Percentages

Despite the logic, very few people who believe they have enough money will follow this 20%–50% allocation guide. Why? Two reasons:

1. Greed – We all want more money, especially more than our peers.
2. An Unrealistic Fear of the Worst – We catastrophize worst-case scenarios that rarely happen.

Ironically, these two emotions often lead us to take more risk than necessary in pursuit of money we don’t actually need. The result is usually working far longer than necessary and/or dying with far more money than we can ever spend.

There’s also a positive reason many of the multi-millionaires I consult with give for why they keep grinding: the simple challenge of making more. They see it as a game—running up the score through productive efforts like building a business, gaining more clients, or conducting investment research and taking calculated risks.

My Reason to Take More Risk: A Clear Forecast for Higher Expenses

I left corporate America in 2012 because I believed $3 million was enough for my wife and me to live a modest lifestyle in expensive cities like San Francisco or Honolulu. And it was as we could comfortably live off $80,000 gross a year, the amount my investments were producing. The actual courage to leave was helped by negotiating a severance package that covered at least five years of normal living expenses.

But instead of putting my roughly $2.7 million in investable assets (excluding home equity) into Treasury and municipal bonds, I chose to invest 98% in stocks and rental properties. At 34, I knew I was too young not to take risk—especially since we appeared to be recovering from the global financial crisis. I even dumped my entire six-figure severance check into a DJIA index structured note.

My wife also wanted to leave her job by age 35, which added more pressure to grow our net worth. I also knew that having children would cause our annual expenses to balloon—especially if we stayed in San Francisco. Unsubsidized healthcare and preschool tuition alone could run an extra $4,000–$5,000 a month after tax. With a second child, our monthly costs could easily rise by another $3,000–$4,000.

Putting the 20% – 50% Into Risk-Free Investments To The Test

With a $3 million net worth, my recommended percentages into risk-free investments would be between $600,000 to $1.5 million. At a 4% rate of return, that would generate $24,000 – $60,000. Unfortunately, we wanted to live off $80,000 a year.

At 34, I simply wasn’t rich enough to comfortably retire. Covering $80,000 a year in pre-tax expenses through risk-free income at 4% would require allocating $2 million. That means, at a 20% allocation, I would’ve needed to retire with at least $10 million! So it seems that the low-end of my risk-free investments range is still quite extreme.

In hindsight, the most reasonable allocation to risk-free investments would have been 50%. To do that, I would have needed an extra $1 million in capital—raising my target net worth to $4 million.

This makes sense because one of my biggest regrets about retiring early was doing so too early. If I could do it over again, I would have tried to transfer to another office and worked until age 40—just 5.5 more years. If I had, I would’ve reached at least a $4 million net worth by then, especially given how stocks and real estate continued to rise. But then again, I forget how miserable I was.

Ah, being able to back up what I felt I should have done with objective math is a wonderful feeling! Instead of accumulating a $1 million greater net worth, I just spent time earning online income to make up for the risk-free gross passive income gap of $20,000 – $56,0000 a year. It was an enjoyable and effective process, especially since I had the security blanket of a severance package.

This 20%–50% risk-free allocation range is another way to calculate your financial independence number. With $80,000 in desired annual spending and a 4% safe withdrawal rate, my FI target ranged from $4 million to $10 million.

Fear Of A Difficult Future Pushes Me To Continue Taking Risk

Today, I could sell a large portion of my investments and move the proceeds into risk-free Treasury bonds to cover our desired living expenses. But the tax bill would be immense.

Instead, I’d much rather allocate the some of my new money I earn toward building up our risk-free investments. Of course, with my relatively low income, that will take time. So the first step was to sell one rental property and reposition some of the tax-free profits into Treasury bonds.

While our investments are worth more than 25 times our annual household expenses, only about 5% of our net worth is currently allocated to risk-free or ultra-low-risk assets. Witnessing AI displace jobs and seeing kids with 1,590 SAT scores and 3.96 unweighted GPAs get rejected from nearly 90% of the colleges they apply to paints a bleak picture of the future for my children. As a result, I continue to take risks for them.

Now that I’ve written this article, I should aim to increase that allocation to 30% by the time I turn 50 in 2027. Based on our current expenses and realistic net worth projections, this percentage feels achievable and appropriate. Having 70% of my net worth exposed to risk assets is more than enough to participate in greater upside potential.

If I can make the asset allocation shift, I’ll let you know whether I finally feel 100% financially secure. Please run your own risk-free percentage allocation as well!

Readers, how do you measure whether you truly have enough? Do you think people who say they have enough but continue working at a job they don’t enjoy are fooling themselves? What do you believe is the ideal percentage of your net worth to allocate to risk-free assets in order to confidently cover your living expenses for life? And why do you think we still take investment risks—even when, on paper, we already have enough?

Suggestions To Build More Wealth

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Since 2003, ConsumerDirect has helped consumers take control of their finances, maturing into a massive fintech platform that earned over $100M in gross revenue last year alone¹. And it all happened without relying on venture capital or private equity.

Now the company is preparing for a potential public listing*, having already reserved the ticker symbol CNDR².

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The technology powering ConsumerDirect’s growth

At the center of ConsumerDirect’s platform is SmartCredit®, a suite of tools that lets consumers track and maximize their credit in real time. And behind SmartCredit® is Max AI™, a proprietary intelligence engine that analyzes up to 9,000 data points⁴ per user to deliver personalized credit-building strategies.

This is what makes the platform different: it’s an intelligent system that adapts to each person’s unique financial picture. And because MaxAI™ is deeply integrated into the platform, ConsumerDirect monetizes this engine through a diversified model:

• Direct-to-Consumer Subscriptions – Monthly fees for SmartCredit® access
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This high-margin, recurring revenue model has made ConsumerDirect profitable and scalable – a rare combination in fintech.

Traction that deserves credit

Since launching SmartCredit®, ConsumerDirect has helped its more than 300,000 monthly active users take control of their credit and financial health. That amounts to roughly $3 billion⁵ in combined savings through more informed lending decisions and personalized credit strategies.

That’s produced $102 million¹ in revenue and $10 million+ in EBITDA¹, but what makes those figures even more impressive is their 88% gross margins¹.

Of course, just as important is their business-to-business reach. More than 3,800 active partners⁶ now use ConsumerDirect’s platform through white-label or co-branded integrations, providing high-margin, recurring revenue and extending the company’s influence far beyond direct-to-consumer sales.

This mix of profitability, consumer demand, and B2B adoption positions ConsumerDirect for continued success.

Why investors are circling June 13

ConsumerDirect recently reserved the ticker symbol CNDR² in preparation for a potential direct public listing on a national securities exchange.

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Secure your ConsumerDirect shares before June 13 to maximize your stake in their growth.

This is a paid advertisement for Consumer Direct’s CF offering. Please read the offering circular at https://invest.consumerdirect.com/

^{1 The financial information presented herein is derived from audited financial statements for the year ended December 31, 2024. Readers should refer to the full audited financial statements and accompanying notes for a comprehensive understanding.}

^{2 Reserving the ticker symbol is not a guarantee that the company will go public. Listing on a national securities exchange is subject to approvals.}

^{3 See our Form C for important details regarding the investment deadline.}

^{4 This number reflects the maximum potential insights generated per member and may vary by individual usage, data availability, and engagement levels as of April 2025. All data is derived from internal methodologies and is unaudited. This information is provided for illustrative purposes only and is subject to change without notice.}

^{5 Calculation Methodology: Our savings calculations are estimates using historical internal data. It is based on analyzing subscribers credit reports that had an increased credit score, while a current subscriber, for two categories: new auto and new mortgage financings. The calculations assumed precise credit score reporting, a consistent correlation between score ranges and financing rates, uniform loan terms except for interest rates, and steady interest rates over the loan’s term, along with unvarying borrowing behaviors among users. It’s important to note that our calculation estimates rely on accurate credit reporting, average loan data and current interest rates, but may not account for an individual subscriber’s interest rate variations, if any, or significant shifts in users’ borrowing and repayment habits, if any. Additionally, there was an assumed conversion from VantageScore® v3.0 to FICO® v8.0 and then verified by an official FICO® v8.0 calculator to determine savings from starting credit score to credit score before the above mentioned financing occurred. Our calculation is subject to change without notice.}

^{6 Based on internal company records as of March 2025. It reflects partners who engaged in qualifying business activities during the specified reporting period, as determined by internal criteria. This information is provided for informational purposes only and does not represent a guarantee of current or future partner activity. The definition of “active” may vary, and the active partners count is subject to change without notice.}

We’ve all heard the saying “Love what you do and you’ll never work a day in your life.” There is a lot of truth packed into this statement. Passion typically lies at the foundation of every successful business. For many business owners, choosing entrepreneurship meant escaping the dull, soulless corporate jobs that simply didn’t make them happy. Instead, they wanted to get up every morning and engage in work that was exciting, challenging and meaningful.

Building a business from the ground up requires a ton of blood, sweat and tears. The entrepreneurial journey isn’t for the faint of heart. Despite the headwinds of starting a new business, passion can be a powerful driving force that propels early growth. There are countless stories of entrepreneurs who created world-class brands by simply chasing what they love.

While passion is a critical ingredient in any successful business, it can present challenges when it’s the founder’s sole focus. At the end of the day, a business must be profitable to survive. This doesn’t mean that passion should be cast to the wayside. Instead, entrepreneurs need to be aware that too much passion can create blind spots that hold the business back from achieving strategic growth and maximizing their personal well-being.

Related: Passion Alone Is Not Enough to Open a Business

1. Identify your passion traps

As humans, we’ve evolved to desire the pursuit of things that bring us joy and pleasure at all costs. For this reason, it’s easy for business owners to selectively focus all of their time, attention and energy toward parts of the business they are most passionate about. The challenge is that not every product or service provides the same amount of value to the business. If your business isn’t as profitable as you think it should be, it may be that you are falling into a passion trap.

To solve this, create a matrix of all your products and services. Next to each item, rate them on a scale of 1 to 5 in two categories — passion and profitability. Your rating in the passion column should be based on how much you enjoy working on this product or service or how much fulfillment it brings to your life. The other rating indicates its profitability, scalability and long-term potential from a financial perspective.

The items on your list with the highest combined score should be where you double your efforts, since they achieve both objectives. However, products or services that are high on passion but low on profitability are likely passion traps. These might be better reserved for a hobby in your free time rather than a part of your business.

2. Change your financial mindset

Unfortunately, too many entrepreneurs fall into the endless cycle of aimlessly trying to capture more and more revenue. While this can be great for the bottom line, it can create a lot of stress and pressure on the business owner. They end up focusing entirely on the financial side of the business and neglect the side of the business that builds excitement and purpose for the entrepreneur, which can lead to stress, burnout and loss of motivation.

Instead of the mindless pursuit of money, reframe your business’s financial goals in terms of supporting your desired lifestyle. This gives you something more tangible and rewarding that’s tied to the financial success and strategic growth of your business.

For example, maybe you started the business with the intention of having a better work-life balance, but the growing business now demands that you work 80 hours a week. An alternative mindset would be to focus on allocating some of your growing revenue to hiring a general manager to take work off your plate so you can spend more time with your family. When you tie your increased profit to your personal lifestyle goals, it makes achieving them more meaningful.

Related: What Part Does Passion Play in Your Success as an Entrepreneur?

3. Strategic delegation and outsourcing

Many businesses are started because they leverage the strength or passion of the founder. This can be a powerful driving force in designing amazing products and building excitement with customers around the brand. The challenge is that this can also be a distraction for the business owner. There are numerous critical tasks that must be completed in order to keep the business in operation, such as accounting, payroll processing, record keeping, legal compliance and inventory management. If the entrepreneur is too focused on only the tasks that bring passion, the business could struggle operationally.

The real test is when the business has grown so much that the entrepreneur no longer has any time left to work on the exciting parts of the business. This can cause the business owner to lose their passion entirely or begin to resent the business. To solve this, it’s a good idea to outsource or delegate non-passion tasks to others. This is a win-win as it ensures the business operates smoothly while also freeing up the founder’s time to do more of what they love to do.

4. Segment your schedule

Passion and profit are two very important sides of the same coin. Focusing too much on the business operations itself can stifle creativity and the passion that allows for the creation of new products, keeping the business owner engaged and driving excitement within the team. On the other hand, leaning too heavily into passion can damage your ability to operate the business effectively and stunt your growth. It’s a catch-22. As a business owner, you have to be mindful to balance your time carefully between the two. A good practice is to schedule intentional blocks of time dedicated to CEO activities and others for more creative outlets.

Related: Why We Balance Passion With Reason

Passion is a must-have attribute for any entrepreneur. However, unchecked passion can be a recipe for disaster. When used correctly, it can be an amazing catalyst for growth. As an entrepreneur, it’s important to strike the right balance to avoid unintended consequences of burnout, financial instability, stress and lack of joy from blindly chasing passion projects.