How Much Do You Need? | Pocket Byte #17

In today’s episode of The Wealth Effect, we’re asking a question most people run from: How much is enough? Not what society says. Not what social media flaunts. But what you truly need to feel free, secure, and in control of your life.

This isn’t about chasing millions. It’s about redefining wealth on your terms. We unpack the psychology of “enough,” explore lifestyle tiers, cost of living, and how geography, mindset, and values shape your financial needs. Whether you’re chasing FIRE or simply want peace of mind, this episode helps you rethink what financial freedom really looks like. Not just in dollars, but in how you live.

If you’ve ever wondered what your freedom number is, or felt like wealth is always just out of reach, this conversation might change how you see the game.

Episode Transcript

(00:00):
Welcome back to

(00:00):
The Wealth Effect.
Today, we're talking about one of
the questions that most people avoid.
How much is enough?
Not what society tells you, not what you
see on Instagram, but what you actually
need to be free, to be comfortable,
to be content, and in
control of your life.
Financial freedom

(00:21):
isn't just a number.
It's knowing what you value and
how to build a life around that.
Not around appearances, not around
someone else's idea of financial freedom.
Today's episode is about reframing wealth,
reclaiming your time, and create a vision
of success that doesn't just

(00:42):
look good, but feels good.
Let's fill
your pocket.
Section 1.
The Concept
of Enough.
At the heart of the money
question lies a philosophical one.
What is enough?
Psychologists warn of
the hedonic treadmill.
The idea that as people earn more,

(01:03):
their expectations rise, leaving them no
happier than
they were before.
A minimalist might need only $25,000 a
year to be happy, while someone else might
feel deprived on living
anything less than $150,000.
The tension between minimalism
and materialism is profound.

(01:25):
Minimalism finds wealth in simplicity,
while materialism often
equates money with status.
Neither is inherently
right or wrong.
They are simply a reflection
of different values.
But understanding your relationship to
these mindsets is critical to finding your
own financial

(01:46):
needs.
We live in a time
of abundance.
Yet we feel broke.
Why?
Because we often confuse
comfort with consumption.
Security
with status.
Freedom isn't about
how much you have.
It's about how
little you need.

(02:06):
The modern world
sells a dream.
That being, work hard, make millions,
retire young, and buy everything you've
ever wished for.
But that's
not freedom.
Section 2.
Core Lifestyle
Categories.
Whether you're aiming for basic comfort
or luxurious freedom, the pillars of daily

(02:28):
life determine how
much you'll need.
Housing.
The largest expense
for most people.
Owning a modest house in a rural area
might cost you between $100,000 to
$200,000, while renting a luxury condo in
New York City could run you a minimum of
$8,000 a month.

(02:50):
Transportation.
A used car and public transportation
may be sufficient for some, while others
require multiple vehicles and
even air travel to get around.
Food.
Home-cooked meals often keep your
monthly food costs under $1,000 a month,
while dining out regularly, eating organic

(03:13):
may push that to over $1,500 a month.
Healthcare.
With rising premiums, a family might
spend $10,000 to $20,000 a
year, even with insurance.
Education.
Private schooling or college funds require
six figures alone depending on the major.
Travel and

(03:33):
entertainment.
Annual travel costs can range from $2,000
a month if traveling domestically to over
$30,000 a month if going on
a luxury vacation abroad.
Insurance and
emergencies.
Financial freedom
requires a safety net.
Life, health, property,
and liability insurance.

(03:53):
Let's compare lifestyle
costs in the U.S.
A frugal lifestyle would only require
between $25,000 to $40,000 a year.
This is where your
basic needs are met.
You use public transportation and maybe
you own a car, but
there is minimal travel.
A middle-class comfort is around
$50,000 to $90,000 a year.

(04:14):
This is where you have a modest home,
a car, savings, dining out often,
and occasional
trips.
The upper-middle class, which ranges
between $100,000 to $200,000 a year,
is high-quality schooling, home ownership,
premium healthcare, and regular travel.
A luxurious or wealthy lifestyle would be

(04:37):
over $250,000 a month with multiple homes,
private schooling, luxury cars,
regular global travel, and hired help.
Geographic impact.
Where you live can double
or halve the cost of living.
A couple in living in Bali might retire
around $30,000 a year comfortably.

(04:57):
While in LA, that might
not even cover rent.
While in small towns or other countries,
those earning a lot less live where money
has more buying power,
work, time, and autonomy.
One of money's most unappreciated
powers is the ability to buy time.

(05:17):
If you no longer need to work to cover
your expenses, you're free to pursue what
fulfills you.
This is the core of the FIRE movement,
which stands for Financial Independence
Retire Early.
Let's say your annual
expenses are $60,000.
According to the 25x rule, you'd need $1.5

(05:38):
million invested to retire early and never
work again, assuming
a 4% withdrawal rate.
But FIRE isn't about
quitting work forever.
It's about reclaiming choice,
inflation, longevity, and risk.
Comfort today doesn't
guarantee comfort tomorrow.
A retirement plan must

(05:58):
account for the following.
Inflation.
2-3% annually on average, or even more
in 2025 and beyond, as it erodes the
purchasing power
of your money.
Longevity.
A 65-year-old today might
live another 25-30 years.
While if you were in your 20s, you

(06:20):
still got over 60 years left to live,
and you might have
to plan out for more.
Market volatility.
Returns are
not guaranteed.
Unexpected
healthcare needs.
These can wipe out savings accounts
without proper insurance or planning.
Thus, the number you need
is not just a snapshot.

(06:40):
It needs to be
future-proofed.
Family, children, relationships, and
adding family members to the equation
changes everything.
The USDA estimates the cost of raising
a child to be over $300,000 in the U.S.,
not including
college.
Dual-income households may earn more,

(07:01):
but childcare costs, time constraints,
and emotional labor
must be considered.
Financial freedom also means planning for
aging parents or leaving behind a legacy.
How much is enough when you're
caring for more than just yourself?
Mindset, values, and
personal definitions.

(07:22):
Beyond spreadsheets, the
most important factor is you.
A millionaire might still feel insecure
while someone with modest means may feel
content and free.
Your financial goals must
reflect your core values.
Do you crave travel or
do you love your house?
Do you prioritize
experiences or stability?

(07:45):
True financial comfort is found at the
intersection of money
and the right mindset.
If you define your needs clearly and
align your money choices with your values,
you'll reach a place where life feels
fulfilling even if your net worth isn't a
million dollars.

(08:05):
Conclusion.
So how much money
do you really need?
Well, it depends.
Not just on where you live or
how you live, but on who you are.
To find your FIRE number, you can
simply calculate your annual expenses
realistically, multiply that number
by 25, and adjust for inflation, risk,

(08:28):
or any other things you might
come across in the future.
And that will be
your number you need.
Then ask, what does
freedom mean to me?
Financial comfort isn't
always about having more.
Sometimes it's
about needing less.
When your lifestyle, values, and finances
align, you'll feel rich in every sense.

(08:49):
And you'll have enough to live, enough
to love, enough to walk away from
things you wouldn't want to be
doing for the rest of your life.
Thank you for
tuning in.
Until next time.