I sat there with kind of blank stare on my face. It was a tough question and honestly one I hadn’t really considered.
He asked me again, “So why exactly do you want to make one million dollars a year?” The person asking was a very successful ‘new lifestyle’ friend of mine named Dave who was mentoring me.
I dont know, I stammered, I guess if made a million a year I would have enough to cover the lifestyle I want and still not have to worry about money?
He shook his head slowly. So magically one million dollars is the exact number that gives you the lifestyle you want?
Look he explained, lets say you make roughly $1,000 to $2,500 per month per client right? On your side business you are currently making about $5,000 – $7,000 a month, which is $60,000 – $84,000 a year.
If you wanted to make a million a year income that would be about 35 clients x $2,500 (high end) which is just over 1 million a year.
I got where he was going with this. I was able to manage 2-3 clients at a time even with my full time job but not many more.
When I quit my job I would of course have more time to get more clients and make more money.
But the main reason I wanted to quit my job in the first place was to have more free time! If I were to go from 2-3 clients a month to 35 I would be swamped and it would totally go against the lifestyle I wanted!
Now of course I could hire people and scale up as I go but I’m not really interested in managing dozens of employees as that also goes against my ideal lifestyle.
This conversation is when I first realized you really need to get detailed and specific to the type of lifestyle you want so that you can be in total alignment with it in your work and goals.
I have since had this conversation with many people and have realized I wasn’t alone in my lack of planning in this area.
Some people I know are already doing really well financially but they really don’t know what their destination is. In other words they make more money just for the sake of making more money.
When they make more money they spend more money.
There really is no end to it.
On the other hand I’ve also talked to people who like me are exploring this Internet Lifestyle but they are not detailed on what they want and how much they need to make to get them there.
So what about you? Have you figured out your exact ideal lifestyle and what it is going to cost you to get there?
I promise you that once you know exactly what you want it will be easier to achieve it because all of your energy and goals can now be in alignment towards it.
Since being woken up on this Ive done a LOT of thinking about it.
Below are some techniques and exercises that I have used to give me more clarity on this.
I hope you can use some of these techniques in your own life. Id recommend it be something you do sooner rather than later or you may end up working really hard for years to get somewhere you didn’t want to end up being in the first place.
Imagine Your Ideal Day
One great way to truly know the lifestyle you want is to imagine your perfect day. If you had a really, really great day what would it look like?
And I don’t mean a day when your on vacation in Hawaii.
I mean what is your average day like? A typical Monday/Tuesday work day. Why not strive to make your typical, average day amazing?
So Im going to get a little new age with you but calm down this is totally worth it.
Close your eyes and imagine yourself waking up to your ideal reality.
What kind of bed are you in?
What does your bedroom look like?
What neighborhood do you live in?
Do you have a view from your house?
Who are you waking up next to?
Now think about the clothes you are picking out. What do they look like?
Now you are out in your garage. What kind of car is there?
Are you commuting to your office?
What type of office do you own? Or maybe you work from home?
How many hours do you work and what are you doing?
Do you work solo or have employees?
Now work is over and you are heading home for dinner. Imagine your perfect evening from dinner to bed time and everything in between.
So that exercise was the typical work day. Do the same thing for your perfect weekend.
My Ideal Day Example
Here is my perfect work day.
I wake up around 7AM and wash my face and brush my teeth. That is followed by 5-10 minutes of mindful thought and positive affirmations of how I want my day to go.
I then do 30 minutes of my daily P90X or some other similar exercise.
Next I shower and get dressed in my extremely nice outfit that I laid out the night before. I go out to my backyard in the Burbank Hills that has an amazing view of the city.
I relax on a chair and do a few minutes of reading or play with my son before he goes to school.
Now its time to go to work. I actually dont like working from home so I go out to my garage and climb into my BMW. Its a BMW X3. I know not the flashiest car in the world but I have a kid and wife so need to have some practicality with what I drive.
I take the short commute into Los Angeles and go to one of my favorite trendy coffee shops. After a few hours there I head up to the Penthouse of the office I share with my brother (luckily this penthouse office part already exists.)
It has a rooftop view of Los Angeles. I work from 9AM-12PM and then its time for lunch. I either go with people from the office out or eat the healthy lunch I brought from home.
I go back to work from 1:00PM to about 3:00PM. I then go out and hit a new, different spot in LA. One of my hobbies is to explore new places in the city so Im always looking for more time for this hobby.
Around 5PM I head home. After decompressing, I hang out with my son and wife and see how their days went.
After a clean, healthy dinner I spend an hour watching TV or doing some other activity with my wife and son. They go to bed about 8:30 and I jump back online and finish anything I missed during the day or plan out my one most important work task for the next day.
From 9:30 PM to 10:00 PM I read in my room or office. I then lay out my outfit for the next day and get ready for bed and off to sleep by 10:30 PM.
That to me is a perfect workday schedule and much different to what I have now.
Now I am forced to get up earlier than I want, rushed through the morning to die slowly in 45 minutes of LA traffic and sit at a desk for the next 9 hours.
Only to be followed by an over an hour commute in miserable LA traffic back to my house.
Do The Math On Your Ideal Lifestyle
OK now it’s time for you to do the Math on your Perfect Lifestyle. How much is your dream life going to cost you?
If there is a neighborhood you want to live in go online and look at houses that just sold recently. Pick out the absolute best house for you. How much did it sell for?
Now you know what you need to earn to achieve this major piece of your perfect day.
Do some research online for the cost of that car you pictured yourself driving? How much to buy it in cash?
What about your family vacations? Will you be taking 1-2, or maybe 3 a year? Estimate all that cost.
Now you figure out how many clients you need to pay for this lifestyle.
You will be able to achieve these things if you know what you want and how much it costs. Because once you know those two things you will know exactly what it takes to achieve it.
Just dont stop getting clients/selling products etc until you have that magic number you need to pay for your lifestyle.
My Lifestyle Math
So with a little bit of work and thought I already roughly know the cost of most of my ideal lifestyle. This is very important!
If you want to own a luxury car or a nice house dont just think to yourself “maybe someday”. Do some research, put pen to paper and figure out the cost of this life so you know exactly what you need to do to reach that ‘someday’.
The neighborhood I want to live in is called ‘The Burbank Hills’. I already live in Burbank so I know this is an expensive area.
So what you want to do is find a house you want to live in that’s for sale in the neighborhood you want to be.
Here is my example in Burbank
Now my actual dream home would probably be with an Ocean view but I want to be realistic.
When I say realistic I dont mean what Im capable of affording I mean this isn’t just a fantasy for myself but a place I could realistically live with my family as well.
We already know we love Burbank, CA as a place to raise my kid so I wouldn’t force them to move to the Beach just because that is what I want (and could now afford)
So it looks like the kind of house I want in the neighborhood I want to live in is between 1.2 and 1.7 million. So lets call it 1.5 million. That is about 3xs the cost of my current place. My mortgage is roughly $3 grand a month so that x’s 3 = $9,000 a month!
Now of course Ill be paying a crap load of taxes with this being California and other costs so lets go up to $10,000 grand a month.
Not going to lie this sounds mind blowing to me to pay that much money every month. BUT my average client is $2,500 a month. So that means I only need 4 clients to pay for my dream house.
What if I wanted to buy the house outright? Id hate to be stuck with monthly payments that big.
Well at $2,500 a month and $30,000 a year per client that would be a whopping 50 clients I would need to pay it off in one year.
I already know that is more clients than I want so I would likely save for a year and put a huge down payment down first lowering the monthly payment.
(note: I believe in not overpaying for things even if you have the money so I might consider renting this place and investing the money instead but for the purpose of this exercise we will say I’m buying it)
Now with my car I already have a BMW X-1 so I’m familiar with this cost. A BMW X3 is only one model above what I drive now (again not a big car guy) and is roughly $40 grand.
So 5,000 x 8= $40,000 which means I could buy the car with 8 months of payment from 2 clients.
Or to buy it outright in 2 months I could do (8 clients x $2,500 for 2 months = $40,000.)
I would do this for everything in my ideal lifestyle.
For example my ideal lifestyle on vacations is 4 a year.
3 locally and 1 international.
The same process of breaking down roughly how much that costs for a 4 a year. Figuring out how many clients/products are needed to pay for it and work towards that.
RECAP
Can you see the power in this method? Most people just stagnate once they hit a certain level in their business.
Others do the opposite and keep working hard to grow and make more and more and more without ever thinking about what all the money should be going to!
It should be going to the ideal lifestyle you want. And I assume that includes lots of free time.
So if you do the math on your ideal lifestyle and it includes too much time investment in work you may need to re calibrate.
Either lower the expense of your life or find a way to expand your business and make more money without devoting all your free time to it.