How much is enough?

Carl Richards is a Certified Financial Planner™ and creator of the Sketch Guy column, appearing weekly in The New York Times since 2010.  The following article is reproduced with permission from his weekly newsletter and his website can be found here.

Greetings, Carl here.

We don’t know when to stop.

At least, I sure don’t.

Sometimes, on the way home from work, I’ll swing by the grocery store, buy a pint of ice cream, and eat it.

That’s right. The whole thing.

Yes, I know. That’s a LOT of ice cream.

I’ve noticed that a very interesting thing happens when I do this:

Bite 1: Best thing in the world, ever.
Bites 2-10: Really good.
Bites 11-15: Good.
Bites 16-20: Meh.
Bites 21+: OK, now I’m sick.

I learned this lesson the first time I ate a pint of ice cream in a single sitting.

And yet, for some reason, I still occasionally repeat the experiment.

Of course, this phenomenon doesn’t only occur with ice cream. This is a well-documented economic principle called Marginal Utility, and, you guessed it, it applies to money, too.

Beyond a certain point, having more money will not lead to more security, freedom, and happiness.

Because security, freedom, and happiness do not come from more money (at least, not beyond a certain point). They come from knowing when to stop.


P.S. As always, if you want to use this week’s sketch, you can buy it here.