I worked this out by dividing the amount you want to take home by 60 then multiplying it by 100 to get the gross, after 40% tax has been deducted.

If you calculate that a business can afford to pay.....say.... 10% of it's profits to it's founder, then in order to pay you $450,000 gross per annum, then it must be making $4,500,000 ($4.5 million) per annum in pre-tax profits.

Now all you have to do is figure out which business to start that has that potential, and start building it.

The other, more attractive way, is to build up a business and sell it, usually for a multiple of turnover or profit - each industry sector is valued differently. Sometimes businesses are valued and then sell for x 5 annual turnover or x 10 annual profits for example.

So for you to pocket $1 million within five years, you need to enter a sector with good high valuations on sale, and then build your business to the levels when it becomes attractive to a potential purchaser.

If you are in a x 10 multiple of profit kind of sector, you need to build your turnover to profits of $100,000 per annum. Other factors are a good database of customers, repeat business ideally on some kind of automated marketing system and they really don't want the business to be dependent on you being there!

"Rich Dad's Guide to Investment" by Robert Kiyosaki is one of the best books I've ever read on this topic.

So that covers the stockmarket (not in detail but it's there) and the business Lanes of the Highway.

I will cover Lanes #3 and #4 in the second part of this article.

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