When a million is not enough

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million is not enough

Fellow 10X’er…

Have you heard of Peter Thiel?

He’s the Venture Capitalist billionaire best known for co-founding PayPal.

Back in 2016, Thiel did a speech to the National Press Club in DC.

And in that speech he made a shocking declaration.

He said, “If you’re a single-digit millionaire… you have no effective access to our legal system.”

He meant that – even with a million in the bank – you’re not adequately prepared for something as simple as a lawsuit.

It opened a lot of people’s eyes to something I’ve been saying all along…

If you have a million dollars in the bank, you’re middle class.  And you’ll still worry about money.

A million doesn’t go as far as you think.

Let’s say you’re 50.  And let’s say you live to 90.

A million dollars will only give you $25K a year to live on.

And that’s not considering medical bills or putting your kids through college.

And if you live to 100 and run out of cash?

That’s most people’s worst nightmare.

I don’t want that to happen to you.

So, let me lay out…

Your 4-Step Financial Survival Plan

1 Set the Right Target.

I’ve already shown you why a million in the bank is no longer enough.  So, figure out how much you really need.

If I were you, I’d plan to live to 120.  I mean, with medical advances, you never know.  And you can’t afford to run out.

A good rule of thumb for most people is $10 million.

No matter where you’re at in life, you can do it.  But you have to start NOW.

2Store 40%, Pay Your Taxes, and Live on the Rest.

Let’s say the IRS takes 40%.  Should you live on the rest?  No!  

You need to store 40%.

Which means you’ll live off just 20% of your gross income.

So, if you make $10K a month… then you pay the IRS their $4K (because you have to)… you store $4K… and you live off $2K.

If you’re thinking $2K isn’t much money to live on… you’re right.  If you don’t want to live like that, you have to figure out how to make more money.  In a hurry.

3Invest Your Stored Money Wisely

While you’re storing 40% of your gross income, you’ll be looking for safe investments – investments that cash flow.

It’s critical you don’t lose money.   And it’s imperative the money you invest makes money.

That’s how you get out of the work-for-income trap.

4Rinse and Repeat Until This Happens.

The plan is pretty simple.  But not easy.  You keep increasing your income… paying the IRS, storing 40%, and living on the rest.

When do you stop?

When the passive income you’re making from Step 3 is bigger than the income you need to live on.

Let’s say you set your target at $10 million invested.

If you earn 8% on your money, that’s $800K a year – passive.

And if that sounds like “more than you need”, let’s not forget about inflation.

$800K a year might be worth a whole lot less in 30 years.

So, don’t stop until you’re sure you can live on the passive income from your investments for the rest of your life.

The good news is, if you do it right, you can live off the passive income… and never dip into the $10 million you have invested.  

So, it can look after you and your loved ones for a long, long time.  Even after you’re gone.

If you want help with this, grab my How to Create Wealth Investing in Real Estate book for free.

Keeping it real,

– Grant

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