When Will You Have Enough to Retire?
I spend 80+ hours a week, 52 weeks a year helping others become financially free. The human potential inspires me and I become elated when I get a glimpse of what people are truly capable of. I do this through helping my clients acquire sources of passive income. Ultimately, there is not an amount that is considered “enough”. How many people do you want to help? If your answer is “more”, then the amount of passive income you must earn must also always be “more”.
Here are some starters that I give my clients for passive income. How much per month do you need to earn in passive income to be able to stop working? Not to make all your dreams come true, but to simply stop working. Do the math and find out what it costs you to live right now. Don’t clamp your expenses down just to make the numbers lower. Be honest and look at what you really require in order to live your life. Many times, I hear a figure around $5,000/mo.
Now that we have enough income to quit working, we need to ask ourselves another question. How much additional income would you need to create a life by design? You’re done working and now you have lots of time every week devoted to nothing right now. 168 hours to be exact. Even if you sleep 9 hours a night, that is still 105 hours remaining. So how much additional income would you need per month to live 168 hours to the fullest potential? Ask yourself what you would do with your time? What is something you could do 40–60 hours a week on a very regular basis that would fulfill you? Also, what kind traveling, giving, eating, experiencing, creating, etc. would you like to do? Often this may be an additional $5,000/mo.
$10,000/mo. This is what we need right? Not quite! There are still two other things we must plan for. The first thing is taxes. You made money. That means your government has the right to take a nice cut of your income away from you. Because this is investment income, it will be significantly less than if it were earned income, but still theft is theft. It’s not fun and we do have to plan for it. So, let’s say we will pay 25% in taxes. In addition to that, you need to keep growing your wealth so that you do not run out or plateau. The wealthiest save 40% of their monthly pre-tax income to reinvest and then pay taxes and live off the meaning 60%. Take your total income goal ($10,000 was our example) and divide it by 35% (25% taxes + 40% savings = 65%. 100%-65% = 35%. 35% is the amount we get to live on.) $10,000/.35 = $28,571/mo. in gross passive income.
We’ve been taught the myth that we should save a bunch of money so that we can draw 60% — 80% of our currently monthly income off it. You could and you probably could skimp by for a few years before inflation kills your purchasing power. But even if you do manage to make it, would that really be life by design? Is that really what you want to do with your potential? I don’t think you do.
We’ve been mis-taught and mis-educated by those who have good intentions and poor data and also by those who have great data and very poor intentions (banks, our government, wall street, etc.) If you’re ready to learn the right data, uncover your goals, and own your potential you should schedule a complimentary consultation with my team of Wealth Coaches.
If you’re a follower and have not read my book “The Blueprint to Financial Freedom” yet, that is the place to start. This book covers the specifics for each level in the various chapters, and you can grab the book for free as my gift.
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The Blueprint to Financial Freedom by Jerry Fetta
To Purpose, Wealth & Freedom,
Jerry Fetta
Jerry Fetta is the CEO and Founder of Wealth DynamX. He is a nationally recognized financial expert featured in Forbes, Yahoo Finance, Fox, Chicago Weekly News, New York Finance, interviewed on over 45 podcasts with world renowned experts, earning endorsements and affiliations throughout his career with names like Kevin O’Leary, Grant Cardone, Dave Ramsey, and Pamela Yellen.
Jerry’s mission in life is to help create millions of financially educated and solvent families achieving greater financial freedom and sharing the truth about money with those around them.
Learn more at www.WealthDynamX.com
(DISCLAIMER: The information in this content should not be considered tax, financial, investment, or any kind of professional advice. Only a professional diagnosis of your specific situation can determine which strategies are appropriate for your needs. Wealth DynamX can and does not provide advice unless/until engaged by you.)
