Moving onto the question of "why" we have to consider the question of why you would want to become a millionaire?

Most people would answer one of the following:

1. Freedom

2. Choice

3. Peace

Freedom from a job they hate, to spend time with the kids, to travel. Choice of how to spend their time, whether to have another baby, where to live. Peace from worrying about money and from having to do things they hate.

Well, you don't need a million to achieve all that. I could not believe my ears when I found this amazing fact out!

You just need to create a passive income from your investments to be able to cover your living expenses.

If you are having a pretty nice life on say $2000 net pay a month, and you are working for that and having tax deducted from your gross pay, then you only actually need to generate about $2500 gross a month from your investments, as there are quite a few more tax breaks for business people and investors than there are for the employed. (A great book to explain this clearly is "Swimming With Pirahna Makes You Hungry" by Colin Turner).

So let's say a really great living would be $5000 a month and you don't need a million in the bank, then all you have to do is look at each "Lane of the Wealth Highway" and figure out which one is most likely to get you to a passive income of $5000 a month the quickest.

So what are those "Lanes" that I keep talking about, then?

1. Property Investment

2. Business

3. The Stockmarket

4. The Internet.

LANE #1 - THE STOCKMARKET

Now, I'm going to largely leave the stockmarket for now, as the learning curve involved is a bit steeper for most people, but briefly, in order to generate 12 x $5000 a month, you would need to be generating $60,000 per year from your investments.

If you assumed that a good investment was generating say 20% per annum (and I know of many simple strategies that do that and more) then you could say that you would need to have $300,000 invested to generate $60k a year at 20% return.

The other challenge with the stockmarket is that you have to sell, to realise the cash, and that incurs charges, and capital gains tax.

LANE #2 - BUSINESS

Business is the way many of the wealthiest people in the world have made their money. They then often put their money into property and I'll come to that lane in a moment.

So what would it take to become a millionaire from the business Lane of the Wealth Highway?

You have two ways, to create a business that can pay you, over and above the amount you need to live on, $1 million over five years. So say you need that $60k to live on every year, your business would have to pay you $60k x 5 = $350,000 plus another $1 million (or $200,000 per year).

Now that nasty thing tax kicks in again.

if you want $1,350,000 out of your business but you are on 40% tax again, that $1,350,000 represents 60%, so you will need to be paid $2,250,000 in total over the five years or $450,000 per annum gross.

Page 2 of 3 :: First | Last :: Prev | 1 2 3 | Next