*
Highly Recommended *
Nine
Ways To Explode More Profits
This
week my colleague Jay Abraham is practically giving away a
revolutionary business growth system for pennies-on-the dollar.
Jay
will send you a comprehensive business growth system, containing
some of his best money-making ideas, methods and concepts to
study, apply and prosper from... and he will only charge you
a modest processing fee to get it produced, packed and shipped
off to you.
Jay
receives $5,000 per hour for his consulting... and that's when
you can get him. A full day would run you $40,000! His tape
sets alone normally sell from $500 to $2,000, and live training
programs range from $5,000 to as much as $25,000 for a single
event.
If
you want to start making a ton more money and have a clear,
direct path to real prosperity and business wealth, you
owe it to yourself to look into this program.
-
Patrick Coffey
"The
trappings of lifestyle are often that - traps."
-
Thomas Leonard
How
Much Wealth Do You Need?
By
Michael Masterson
On
Monday, I talked about Lee Eisenberg's book The
Number, which asks the question: How
much money do you need to retire?
The
book is full of interesting data and some good ideas - but
it never provides a useable number. Instead, Eisenberg does
what most self-styled financial experts do when asked a direct
question: He hedges.
How
much you need to retire depends, he ends up saying, on all
sorts of economic, financial, and psychological conditions.
Only you can make that determination.
Well,
thanks a lot. Why did you write the book, then?
Let's
not play that game. Today, I'm going to tell you how to determine
exactly how much money you need to retire.
Here
is the "quick-and-dirty" formula I promised you on
Monday when I reviewed the book:
1. Figure
out how much you are spending this year on your current lifestyle.
Be sure to include all the big items, such as housing (rent
or mortgage payments), insurance, upkeep, taxes, clothing,
food, etc. And make sure you include all the costs, including
an allocation for occasional expenditures, for vacations,
impulse purchases, and emergences.
2. 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 $3,000 a year for a Toyota and the Mercedes
you want to drive in retirement is $10,000 a year, add $7,000
to your yearly budget.
3. Multiply
the result by 20. That's your number - the amount of money
you need to have socked away before you can quit your job
and begin living off the interest.
Say
you are currently spending $80,000 a year to live as you are
living. And say you've determined you need to spend an additional
$60,000 to be really happy. The sum of those two figures ($140,000)
multiplied by 20 is $2.8 million.
Important
Note: This multiplier, 20, is new for me. It's higher than
the one I set for myself when I began making money. And it's
higher than what I've suggested in past issues of ETR and even
in my last book, Automatic
Wealth for Grads...and Anyone Else Starting Out.
I've
raised the bar because I'm getting older and feeling more conservative.
If you set and achieve this kind of financial target, you'll
probably have more money than you'll ever need. But that's
a problem I'm sure you will be happy to have. It's much better
than ending up pinching pennies when you are 80 and thinking, "What
the hell was Masterson thinking?"
To
show you what I mean, let's do some arithmetic. If you put
your entire $2.8 million in municipal bonds at, say, five percent
(a little high by today's standards, but historically safe),
you'd have $140,000 in tax-free income to cover your lifestyle.
If
you got a 10 percent yield (the long-term stock market average)
on your money, you'd earn $280,000 a year, which would net
to $154,000 after 45 percent in taxes. (Though you shouldn't
be paying nearly 45 percent, because much of your investment
income will be taxed at the lower - currently 15 percent -
rate for capital gains.)
If
you incorporate solid, rental real estate into your investment
mix (as I urged and explained in both Automatic
Wealth: The Six Steps to Financial Independence and Automatic
Wealth for Grads), you can get a return on
investment (ROI) that's higher than 10 percent.
How
much higher? That depends on how well you buy property, how
long you hold it, and how well you manage it. But I think it's
safe to say that your real estate can give you an overall ROI
closer to 25 percent, which might bring up your average investment
yield to between 12 and 18 percent, depending on how much real
estate you do.
Keep
in mind that owning rental real estate involves some risk and
takes some work. But that's why you can get those better yields.
Still,
even if you don't invest a single nickel in real estate, a
multiple of 20 will almost certainly provide you with all the
income you'll ever need. So that's your number: 20 times what
it would cost you right now, this year, to live your desired
retirement lifestyle.
To help you choose a "desired retirement lifestyle," take
a look at the following:
-
Modestly
Comfortable ($150,000 a year): You have all
you need. You and your spouse live in a modest-but-comfortable
house, drive late-model (but not fancy) cars, go out
to dinner at moderately priced restaurants several times
a week, and you take several weeklong or 10-day vacations
(economy class).
-
Quite
Comfortable ($500,000 a year): You have all
you need and most of what you want. You and your spouse
live in a modest-but-luxurious home in a nice neighborhood,
you drive luxury cars (but not brand-new), you dine regularly
at the best restaurants, golf and play tennis at the
club, and take three business-class vacations a year.
-
Extremely
Comfortable ($1 million a year): You have all
that you need and more than you really want. You and
your spouse live in a multimillion-dollar house (or townhouse),
drive very expensive luxury cars, fly to Le Cirque in
New York for weekend dinners, belong to several golf
clubs and resorts, and vacation pretty much non-stop.
Did
that help?
Okay,
now it's time to choose. What kind of lifestyle will make you
happy? Modestly comfortable? Quite comfortable? Or extremely
comfortable?
And
now you can choose your number:
All
things being equal (and they never are), it's better to have
modest ambitions. If you can learn to be happy on an income
of $150,000 a year, it will be that much easier and faster
to hit your number and retire.
One
thing to watch out for: As you hit one target, don't set another,
higher one. I did that. Not just once, but twice. And so did
most of the multimillionaires I know. Raising your wealth target
is a natural impulse when business is booming and you're feeling
strong, but it can become a sort of addiction. At some point,
you end up like some stereotypical rich guy in a B movie -
all drive and no heart. You don't want that to happen to you.
It
takes courage and wisdom to set a target and stick with it.
I admire the few people I know who were able to do that. They
kept their spending habits in check and stuck to their original
goals. They got off the train when they reached their stop.
[Ed.
Note: The best way to achieve your "number" - and
the level of comfort you want when you retire - is to increase
your income. There's no better place to learn how to do it
than at this year's Information
Marketing Bootcamp. Meet Michael in person October
30 - November 2, 2006 in Delray Beach, FL. Sign up now to reserve
your spot - and then look forward to rubbing elbows with the
many experts who will be there.]
* Highly
Recommended *
One-Time
Only Rebroadcast Announcement
Get
all the Money You Need - Without banks or credit cards...
There's
no limit to how much or how often you can borrow to fund your
real estate investments if you use the techniques Alan Cowgill
spells-out during his powerful teleseminar on Private Money
Lending.
Private
money is a great opportunity for anyone with questionable credit
or job history to overcome those financial hurdles... but it's
just as interesting for active investors who are ready for
larger amounts of more flexible and accessible cash - at lower
costs than other sources.
I
recommend that you take a moment to sign
up now for our one-time only rebroadcast of Alan's call -
the perfect introduction to using private money in your investments:
Kam
Weiler
Contributing Editor, Main Street Millionaire
Italian
Sales Secrets, Part 3: Make Every Purchase Beautiful
By
Yanik Silver
Last
Monday and Tuesday,
I shared two sales secrets that I picked up on a recent
trip to Italy. Here's another one...
I
couldn't help but notice how every Italian retailer took great
care with packaging my purchases. This was a small detail,
but it greatly enhanced our shopping experience. For many of
the items my wife and I bought, the salespeople wrapped them
so nicely they would have been suitable as gifts. Even when
we went to a pharmacy to buy Advil because my back was hurting,
the pharmacist wrapped it up like a present.
So
think about it. What can you do to make your customer feel
that his purchase is even more special than he thought it would
be?
[Ed.
Note: Yanik Silver will be revealing one of the most profitable "hidden" Internet
income opportunities around in the Secrets
of Easy Internet Money teleconference series.]
The
Quotable Mr. Franklin: On Life, Liberty, and Property ...
"The
important ends of civil government are the personal securities
of life and liberty. Private property is a creature of society
and is subject to the calls of that society whenever its necessities
shall require it. He that does not like civil society on these
terms, let him retire and live among savages. He can have no
right to the benefits of society who will not pay his dues
toward the support of it."
(Source: The
Compleated Autobiography, by Benjamin Franklin,
compiled and edited by Mark Skousen)
Getting
Back to a Natural, Healthy Diet
By
Al Sears, MD
Yesterday,
I explained why it's a mistake to believe that Americans eat
an abnormally high-fat diet. Still, conventional advice to
avoid fat whenever possible is very widespread.
That's
too bad. Your body needs fat. It's essential to life. The real
problem is that our modern world changed the character of fat.
For
millions of years, red meat has been humankind's primary source
of fat and protein. But today, nutrition "experts" tell
you it's deadly. How can that be? Did our bodies change? No.
The red meat has changed. Commercial cattle are fed grain because
it's cheap and it fattens them up quickly. Substituting grain
for their natural diet of greens makes the animals abnormally
fat and leads to a deficiency of the heart-healthy fats still
found in wild animals.
For
meat to be healthy, it needs the right balance of natural omega-6
and omega-3 fats. Studies show that omega-3s prevent irregular
heartbeat, reduce arterial plaque, decrease blood clotting,
lower blood pressure, and minimize inflammation. But too much
omega-6 fat interferes with the functioning of omega-3s and
leads to inflammation and heart disease.
That's
the problem with commercial beef. You get about a 20 times
greater ratio of omega-6s than you need and a deficiency of
omega-3s. And that's bad news.
But
there is a solution. To get back to the healthy diet of our
ancestors, eat
grass-fed red meat, which mimics the high ratio
of omega-3s in our natural diet. (It even has a higher ratio
of omega-3s than wild salmon!)
[Ed.
Note: Dr. Sears, a practicing physician and the author of The
Doctor's Heart Cure and 12 Secrets to Virility,
is a leading authority on longevity, physical fitness, and
heart health.]
It's
Good to Know: Staying Connected
By
Suzanne Richardson
One
of the best parts of my job is that I can take it anywhere.
All I need are my cellphone, computer, and access to an Internet
connection.
Of
course, that little necessity - an Internet connection - can
be difficult to find. So before you set off for places unknown
- to bring your work with you or just to keep up with your
e-mail - check out JiWire.com. (Similar sites include WiFinder
and Yahoo! Mobile.) Just type in your vacation location and
the site will list available wireless hotspots in the area.
JiWire allows you to narrow down your search by location type
(want to surf the Net from a bus station or car wash, anyone?),
distance from the city, wireless provider, or access fee.
I
used JiWire prior to a recent trip to Seeley Lake, Montana
(where trees, mountains, and sky fill every vista, but cell
service is limited to about a five-mile radius) - and I found
free wireless access at the Seeley Lake Historical Museum.
* Highly
Recommended *
Turn
Your Mind into a Cash-Generating Idea Machine
Imagine
sitting in a meeting...a seemingly unsolvable problem is before
the group.
Everyone
is silent and stuck for ideas. But you come up with the thought
that saves the day!
Everyone
wonders why they didn't think of it. But only you know the
answer to that question. It's because they didn't know HOW
to look at the problem.
Ideas,
not money, are the true currency of business and personal success.
Now
you can discover a simple, step-by-step technique that
will give you a guaranteed source of powerful ideas and
solutions to call on any time you need one.
-
Charlie Byrne
Word
to the Wise: Tractable
"Tractable" (TRAK-tuh-bul)
means easily managed or controlled.
Example
(as used by Mary Wollstonecraft in A
Vindication of the Rights of Woman): "I
have always found horses, an animal I am attached to, very
tractable when treated with humanity and steadiness."
