I reveal how to work out YOUR MAGIC NUMBER.... without it you will forever be on a perpetual treadmill striving for the unknown with whatever you choose to do.
I don't want that for you, and I'm sure you are sick and tired of just surviving. I will tell you about how I make extra money from home, but first let's see how much you will need.
Let's begin...
Find out how much you are spending this year on your current lifestyle. Be sure to include all the big items such as housing costs like rent or mortgage payments, insurance, clothing, food, etc. And make sure you include all other costs including occasional expenditures such as holidays, impulse purchases and emergencies.
Add to that the net annual cost of any extras that would bring you up to the lifestyle you want. For example if your car lease is currently $3000 a year for a Toyota and the Mercedes you want to drive in retirement is $10,000 of the year, add $7000 to your yearly budget.
Multiply the results by 20. THAT'S YOUR NUMBER, the amount of money you need to put away before you can quit your job and begin living off interest, dividends, businesses, or investment income. It's no wonder so many people are looking for a way to make extra money from home.
How does this work in real life..? Good question.
Say you're currently spending $70,000 a year to live as you are living. Say you've determined you need to spend an additional $70,000 a year to be really happy. The sum of those two figures ($140,000) multiplied by 20 is $2.8 million.
Important note; the multiplier of 20 is a little bit conservative.
I have raised the bar a little bit. The point that I am making is that if you set a goal to achieve this financial target, you will probably have more money than what you really need...
That's a good thing, don't you think?
You're probably thinking where does the 20 come from?
The 20 is an easy way to calculate a return based on 5% per annum. Understand?
To show you what we mean exactly, let me give you a quick example. If you had the entire $2.8 million right now you could put it in a fixed term deposit in and you could get back a return of 5%... That's an income of $140,000 per year. That is the same as I originally projected, right?
Some people may be questioning the tax implications; if you set this up correctly with asset protection you should only need to pay around 15-30% tax (Check your local tax laws to see what you are really liable for).
Now that's just having the money in the bank, pretty safe and passive.
If you took that one step further, and got smart about investing your money, you could do a lot better than that. This is what I do when I make extra money from home.
If you simply bought a well selected share portfolio, it should grow at roughly 6-8% annually. The average from the last 50 odd years is 11.3%, so I am going to keep it below the average for this example.
Add to that the dividend yields of let's say anywhere between One and five percent, your total return on your portfolio would be around 8% (Very average).
So going back to our $2.8 million, if we get 8% that would make our income now $224,000 (that's more like it).
Not into shares? Well, let's have a look at property.
This will depend on how well you buy property, how long you hold it, and how well you manage it. But we think it's safe to say that your real estate can give you on overall return on investment closer to 20%, which might bring up your average investment yield between 12% and 18% depending on how much real estate you do.
How we came up with 18%?
Let's assume you pick an area that has had consistent 12% growth over last 20 years, and add to that a rental yield of 6% that will give you about 18% (average). I am going to work on the figure of 10% for this example.
So if you've got $2.8 million, multiply that by 10% and that gives us now of total of $280,000 of portfolio income (now we're being very conservative!)
I know what you're thinking... It sounds all good, but how do I get $2.8 million..? Good question.
Now of course to get the 2.8 million, it's unlikely that you'll ever be able to save it.
The bottom-line is that you're going to have to understand investing regardless of whether you choose real estate, shares, business or network marketing. Personally I use a mix of network marketing and shares to make extra money from home.
My task is to get you to realise and figure out your number. Your task is to do something about it.
So what is your desired retirement lifestyle?
Let's take a look at the following.
MODESTLY COMFORTABLE ($150,000 a year) and you've got all you need. You and your wife live in a modest but comfortable house, drive late-model but not too fancy cars, go out to dinner at moderately priced restaurants several times a week, and you take several week-long or ten-day vacations (economy class).
To reach this lifestyle you'll need about $2.8 million.
QUITE COMFORTABLE ($500,000 a year) life is pretty easy.
You got most of what you want. You live in an up-market area, in a nice neighbourhood, you drive a luxury car, you dine regularly at the best restaurants, golf and tennis at the club, and a few business class vacations a year.
This lifestyle will set you back about $8 million.
EXTREMELY COMFORTABLE ($1 million a year) you got all, you live in a multi-million-dollar house, drive an expensive, nice luxury car, and never experience a winter: Six months in Australia/USA, six months in Europe. You fly first class six times a year just to the fun of it. These holidays are pretty much non-stop.
Choose this luxury lifestyle and your target is $18 million.
Did that help?
Which lifestyle did you choose?
You might be saying to yourself that you would be more than happy with option one, that's cool, it's more than achievable now that you know what that number is.
It's your choice what lifestyle you want and what lifestyle is going to make you happy.
You get to choose YOUR NUMBER.
I'll say this, if you don't have a number, you're unlikely to ever achieve a comfortable retirement where you can live a life on your terms and perhaps far better than what you currently experiencing.
Wouldn't that be amazing to actually live a better lifestyle in retirement then you're living right now?
For most folks that's almost a crazy thing to even suggest.
Set a target now and stick with it. Work out your number and start taking action to achieve that number in the next 5-10 years.
There's a saying that goes like this,
"Most people OVERESTIMATE what they can achieve in 12 months and UNDERESTIMATE what they can achieve in 10 years."
Begin now... the best way to achieve your number and a level of comfort you want when you retire is to accelerate your income as well as your wealth.
Now, I am really going to get you thinking. I just talked about it taking 5-10 years to reach the levels of 2.8M in capital.
Did you know that earning an additional $14000 a month from earnings is equivalent to having 2.8M in the bank earning 6% interest PA?
Amazing that 6-12 months of consistent, productive effort on your behalf during the next year ahead and you could make extra money from home that will allow you to meet the modestly comfortable lifestyle we discussed above- obviously these figures are hypothetical and what you really earn will be based on the efforts you put in and the plan you follow.
Would the figures and lifestyle above hit your magic number? Again, what is your number? Are you a little clearer now on your number and how to work it out for you?
Did you realize that the amount of 5000 a month is equivalent to having $1m in the bank at 6% PA return?
A small amount of consistent work today could be equivalent to something so much greater than you realize.
Are you beginning to realize that you don't have to have the large capital in the bank for you to live a quality lifestyle?
I would now like to invite you to claim your FREE instant access to my 14 day list building online instruction course. You will also get your hands on 3 brand new PLR ebooks for signing up. Click Here
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