Retirement Finance Versus Financial Freedom
I’ve written about how much I think I need to retire and what my financial goals are. However I’ve had a serious re-think about this.
I was binge watching Grant Cardone on Youtube over the weekend and I realised that I am thinking way too small.
I had worked out that I needed $1,250,000 saved to retire on $50,000 a year. I had then adjusted that to $1,875,000 so I could retire on $75,000 a year. Now I have decided that this is way, way below what I actually need.
I had done my maths to come up with my original $1.25m but this amount does not give me financial freedom which is what I am really after. I don’t just want to retire. I want to have financial freedom and there is a huge difference in both these concepts and numbers.
It used to be that $1.25m would be enough. It is if you want to survive and can survive on $50,000 a year. But as I dug further into my maths I realised that this is nowhere near enough. For example, one medical procedure can cost you anywhere from $5,000 to $35,000 even with insurance. I don’t have medical insurance anymore, so the out of pocket costs will be virtually my entire year’s budget if I only save $1.25m.
As I get older, even though I’m looking after myself and doing mostly all of the right things, my body is going to need some type of maintenance. My dentist for example costs me at least $300 a month at the moment, and these costs will continue to rise as my teeth start to give out over time. That’s just teeth. If I get sick or need a procedure, these costs could easily eat into my principal and thus start a downward spiral into poverty in my older age.
I was watching a discussion with Grant Cardone and his colleagues and came to understand that the true minimum figure for financial freedom is $10,000,000 and beyond. This is the figure where you meet critical mass. This figure gives you a safe withdrawal rate of $400,000 a year which puts you well into the top 1% earners around the world and provides for all expenses plus enough left over to re-invest and continue the upward trajectory into wealth, rather than the downward spiral into poverty.
I was already shaking in my boots about accumulating $1.25m and now I’m absolutely quaking because my new goal is $10,875,000.
Yes you read that right. $10,875,000.
I adjusted my goal / to do sheet that I stare at throughout the day and the first thing I read every morning. This is now the figure I have to save up.
So now the websites have to earn a hell of a lot more to achieve that goal and I still have to work out how I’m going to achieve that but I’m sure of one thing.
As I was binge watching Grant Cardone I also came across Dan Lok and watched some of his material as well. I got re-affirmed from both of them. My plan is solid. Yes actually solid. I’m doing everything (more or less) that they recommend except I’m doing it on steroids.
Instead of one thing I’m working on three things. Instead of starting one Youtube channel I’m starting three. Can I give each project the quality it deserves? Won’t that take up a huge amount of time? I’ve got nothing but time.
What I am finding though is that my mental capacity sometimes lags so I’m using my early morning hours to write every day. This is when I am most productive and fluent. I now have a backlog of articles on one of my sites so I’m scheduled a few days in advance. This is where I want to be on all of the projects. Scheduling posts and videos so that each one comes out each day. There will be one site that will be a slow burn because I just can’t read books fast enough but as long as I’m getting at least one book up a month and continue that it will continue to chug along. It’s already earning $200 a year with only a few articles so I’m happy for that to grow more slowly and organically. The rest are on supercharge.
That’s the other steroid plan. Instead of doing one video a week and starting my Youtube channels slowly, I’m doing one a day straight off the bat. I am batch recording and editing on the weekends and then scheduling them through the week. This is the plan going into 2020.
I also have a product that I have wanted to launch for the last 3 years. My stumbling block has been finding a manufacturer and then coming up with the money to pay for the first run. So I think I’ve found a local manufacturer in Brisbane. Now I just have to come up with the money for the first run of 1000. So over the next two months I will be spending a lot of time on ebay and boosting my sales and clearing out a lot of stock so that I can get the $5,000 together to get the first run of 1,000 products.
So in summary, I have a few irons in the fire at once. This, for me, is the only way I’m going to get to my over $10M mark. I would love to say that I’ve given myself 10 years to get there, but I haven’t. I will settle for three, but the actual deadline I have on my desk is much tighter and one I won’t share until I reach it or miss it. Either way, I’m heading to a spot where I know financial freedom awaits and even if I only get halfway there, my kids will have a good foundation of money from where to start.
Post Script
Before you judge me for binge watching Youtube and saying yeah this is why I’m broke, Saturdays are my strategy and strength days. It is the day where I review what I’ve done, where I’m going, am I still on track, and just think and reflect and relax and get my strength and energy back. I let my mind relax and my subconscious time to breathe and have a breakthrough. The rest of the week I’m head down and bum up working towards my goals. Every successful guru will tell you to allow time to just think and reflect. I’ve done this all my life anyway so even though you could argue that this habit has got me to where I am, it’s still a habit I believe in.
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