The question “how much do you need to retire?” is pretty much standard. Conversely, “how little do you need to retire?” is extremely rare. Jacob Lund Fisker
Living your dream life without breaking the bank seem to look difficult to many considering the expenses that is made every month.
This is the concern of many who seek other ways to earn more and work from home jobs.
One major question many ask is how much do I need to earn to live the lifestyle of my dreams?
To know what you need to earn to live your dream lifestyle, you would need to look at your cash flow (Income and expenditures). Your income covers all avenues through which you earn and the expenditures are avenues through which you spend money.
Robert Kiyosaki explains this in his book cash quadrant. He claims
"financial independence is about having more choices." These choices however need to be made with the right information.
So feel free to take out your pen and do some calculating with me if you like or just read through. Even though I feel you can get a feel of how much you need to earn if you write along with me as you read.
All set?
Okay, let's do this together in a simple manner me using a method I learnt sometime back.
This method requires that you a list of what you essentially spend on depending on your kind of lifestyle. So let's start with a table highlighting what money is basically spent on like the rent for your apartment, groceries and the likes.
Draw a table with three rows. Label the row on the left monthly expenses, the middle row annual expenses and the last row to the right daily expenses.
Your figures do not need to match the one below, just replace these with what you spend to give you the true picture of what you spend and how much you would need to earn to enjoy a good life without financial worries.
Figures are calculated in naira, but you can easily replace them with the amount you spend in your national currency.
This table shows that you would to earn N6,378.07 (approx. $16.67) daily to be able to live a lifestyle that allows you to make all the listed expenditure every day.
You can also look up the exchange rate of the naira to the dollar if you would like to see how much you need to earn daily in dollars to maintain your current lifestyle.
For those in the united states where the monthly payments for rent range between $2700-3300, the table could possibly look like this.
This means all you need to earn daily to afford the good life is only $659.13. Instead of looking at the huge monthly total and turning away.
Why not set out to earn $659.13 daily if you are outside the shores of Africa and only N6,378.07 to maintain your existing lifestyle. You can simply increase the amount you earn daily if you want a flashy lifestyle.
This brings us to the next issue
Having looked at our expenditure, let's address some important
How much do you currently earn on a daily basis to be able to pay for that apartment that you love?
Do you want to increase your financial strength so you can live your dream lifestyle?
If your current earnings do not cover your expenses and leave room for savings then you need to find another stream of income especially
now that you have a clear picture of what you need to earn.
You can set out to working towards your goal.
Related post.
This is such an interesting post and a total eye opener about my life!
ReplyDeleteRosie
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