NWP Monthly Digest | August 2025
I was having a conversation with one of my clients this week, and it was mostly the usual stuff, but he asked me an excellent question at the end of our call, and it was powerful.
He said, “Jeff, when will all of the anxiety around money and the constant fear that I’m going to run out of it go away?”
(As an aside, I told him he was going to be featured in this month’s newsletter)
I chuckled to myself nervously and took a deep breath. This is truly the $64 million question, and I’m not sure I know the answer or if there even is an answer.
Let’s start with how I handled this version of the question, and then we’ll dive in a little deeper.
The majority of us at one time or another, I told him, have experienced some level of money related anxieties, and to various degrees. Most of the time, it happens early in our careers or when we’re trying to start a family - or, more simply put, at any major change in our lives. If you’re a business owner, it seems to never go away.
The biggest problem, to me at least, is that we are always moving the goal posts.
You start your career, you start getting some paychecks, and maybe even feel like you are getting rich. Then you buy a new car. You moved the goal posts.
As you get used to that new car payment, maybe you feel like renting your apartment isn’t worth it anymore. People all around you, maybe even your parents, continue to harp on you that renting is just “throwing your money away”, and you need to buy a house so you can start building some equity. So, you move the goal posts again.
Then maybe you get married. Then maybe you have kids or adopt some pets. More expenses, and goal posts moved even farther away.
Then that first house seems too small, so we need to upgrade!
You get the picture.
This phenomenon is called the Hedonic Treadmill, a phrase coined by Phillip Brickman and Donald Campbell in their 1971 book, “Hedonic Relativism and Planning the Good Society”.
According to this theory, as a person makes more money, expectations and desires rise in tandem, which results in no permanent gain in happiness.
Hedonic adaptation is an event or mechanism that reduces the affective impact of substantial emotional events. Hedonic adaptation is the supposition that there is a happiness "set point", whereby humans generally maintain a constant level of happiness throughout their lives, despite events they experience. The process of hedonic adaptation is conceptualized as a treadmill, since no matter how hard one tries to be happier, one will remain in the same place.
Or, as Grant and I like to call it, Lifestyle Creep.
Brutal stuff, to be sure.
The most important thing that you can do with a psychological phenomenon like the Hedonic Treadmill is to first acknowledge that it exits, and I can’t think of a more powerful reason to have a financial planner in your life than that one.
Once you acknowledge that something like this is sabotaging your ability to find peace with your lifestyle and your money, you can at least start to address it.
IT HAPPENS TO EVERYONE
I’m not here screaming from my mountain top that only you, dear reader, are susceptible to this while I am immune due to my great wisdom as a financial planner. This happens to me CONSTANTLY. It happens to everyone.
I vividly remember dropping my best friend off at the light rail station in March of 2002 after we got off work. We sat in the car discussing things about life. We were both 25 years old, and I was recently married and he was engaged. We looked at each other and said, “man, if we could just get to $50,000 a year, we will have some breathing room!”
(Spoiler alert: we did not gain any additional happiness or peace once we made it to that salary level)
Countless times since the inception of Noble Wealth Partners, I have shared with Grant that “if we can just get to <insert some number>, maybe we will start to <insert some random feeling>.” When you’re on a treadmill, there is no finish line.
It is not uncommon for couples as they prepare for retirement, where they’ve worked their entire adult lives to get to a day where they didn’t have to punch a clock, to find out they’re still on the treadmill. Maybe they’ve done an admirable job, saved some money, paid off their house, no debt, etc., yet, still, they will start thinking they don’t like their house anymore and maybe they need to move and get a new one.
My father-in-law told me the story of one of the gentlemen that retired about the same time he did and that the first thing he did was go buy a brand-new truck along with a big, shiny new car payment that comes with it on his first week of not having a paycheck anymore.
If you’re never satisfied, you will never get off the treadmill.
PRACTICAL NUMBERS AND SUCH
Given this backdrop, is there a practical amount of money that could, potentially, lead you to find happiness and peace? Of course there is! And, as is usually the case, you get to define what your enough is.
We can use math and rules of thumb all day long to give us a rough sketch, buy you have to start with reality and know how much money you will need to be happy, and that means being honest with how much you spend.
One popular tool that the FIRE (Financial Independence, Retire Early) crowd likes to use is to have 25x your annual expenses saved up and able to access in various retirement, bank, and brokerage accounts. This is, of course, just a variation of the 4% safe withdrawal rate.
So, you can create a simple monthly budget, annualize it, and then see if you have at least 25 times more than that number in your accounts. Here’s an example…
NEEDS
Homeowner’s Insurance, Property Taxes (house paid off) = $8,100 per year
Groceries for 2 people = $600 per month ($7, 200 per year)
Bills, Utilities, other insurance = $810 per month ($9,720 per year)
Medical = $10,000 per year
WANTS
Travel = $12,000 per year
Dining Out = $6,000 per year
Gifts to kids/grandkids = $2,500 per year
OTHER
Taxes = will vary, but we’ll go with $8,000 per year in federal and state taxes
Charitable giving = $1,000 per year
Misc (home repair, car repair, other unexpected items) = $7,000 per year
This example is pretty bare bones, to be honest. We’re assuming no car payments, no debt at all, and a pretty low amount of variable expenses and “WANTS”. I’ve also intentionally taken out Social Security as a form of income that would more than certainly offset a portion of their ~$72k per year of expenses (because maybe your not old enough to take social security, yet). Given that backdrop, however, this couple would need $1,788,000 saved in retirement to live without any worries or cares about their finances.
If we reduce the spending by $36,000 per year in combined social security payments, then the number is reduced to $888,000 needed in savings.
So, mathematically, it is possible to define your number. In reality, it is a much different practice to define what enough actually is.
Remember, if you’re on a treadmill, there is no finish line. You need to define the finish line if you’re ever going to find peace. There is something pretty powerful, but simultaneously terrifying, that we have that much control over it.
WE ARE NOT ROBOTS
While robotics and artificial intelligence continue to make amazing leaps forward, we humans will have to continue to live with being far from perfect.
Our monthly expenses change over the years, and we make impractical and impulsive purchases all the time. Our bodies fail and result in added medical care as we age. And, most of all, none of us are equipped with a crystal ball telling us when the next big expense is going to come from or how long we have to live.
Planning and preparing for these things will make us much less wrong even though we can never be 100% right.
As a financial planner, if we boil things down to what really makes a difference for our clients, it is helping answer the one question, “Are we going to be OK?”
How do we do that? We define, in real terms, the following:
How much do you have?
How much do you need?
How much do you need to save to get there?
And, more importantly than anything else that we do, we help our clients execute on that strategy by acting as a coach and personal guide along the way.
As the great Ezra Klein said on a podcast interview this week with Scott Galloway, “advice is mostly bullshit. The only thing that matters is execution.”
Things We’re Reading and Enjoying
Abundance - by Ezra Klein and Derek Thompson
I find the concepts in this book to be so incredibly profound, practical, and obvious, yet Klein and Thompson have managed to whack the hornet’s nest with this one. If you’re on social media, chances are you’ve seen the backlash they’ve received. Although I’m just getting into it, the laws of supply and demand remain undefeated. If you want lower home prices or lower healthcare costs, you need to increase the supply of those things. I find it hard to see why this is controversial, but it is.
#1 NEW YORK TIMES BESTSELLER
From bestselling authors and journalistic titans Ezra Klein and Derek Thompson, Abundance is a once-in-a-generation, paradigm-shifting call to renew a politics of plenty, face up to the failures of liberal governance, and abandon the chosen scarcities that have deformed American life.
To trace the history of the twenty-first century so far is to trace a history of unaffordability and shortage. After years of refusing to build sufficient housing, America has a national housing crisis. After years of limiting immigration, we don’t have enough workers. Despite decades of being warned about the consequences of climate change, we haven’t built anything close to the clean-energy infrastructure we need. Ambitious public projects are finished late and over budget—if they are ever finished at all. The crisis that’s clicking into focus now has been building for decades—because we haven’t been building enough.
“There is nothing noble about being superior to your fellow man. True nobility is being superior to your former self.” - Ernest Hemingway
