Before wanting to be rich and looking for accumulating more money and increase your wealth, you have to determinate what “rich” means for you? How rich you want to be?
I think that we are rich enough when we can do what we want with the money we have.
Of course, being rich is personal to each of us. It depends of the life we want to live. For example, someone who want to live in a peaceful countryside place in America latina will need less money than someone who want to live in a big apartment in Paris and travel all the world. So the first thing you should do is to decide the life you want. Answer those questions below and write it on a paper:
- When do you want to retire?
- Where do you want to live?
- What do you want to do?
- With how much money you want per month you can live?
By answering these questions, you will start to calculate the amount of money you need to “be rich”. Let’s take an example. I want to retire at 40 years old. Let’s say that I gonna live until 100 years old (better to take more than not enough, and who knows!). So I will retire during 60 years. I want to live in an apartment in Madrid (Spain). I found apartment enough good for me at about 300.000€. There I can live comfortably with an annual salary of 24.000€ (without paying rent). And I want to travel every year during one month in a different country until my 75 years old, so 25 times. Let’s say 5.000€ per travels in average. So here I can know how much money I need to be rich enough. Let’s calculate:
300.000€ + 60 x 2.000€ + 25 * 5.000€ = 1.865.000€
Watch out: I didn’t take in consideration the interests from saving account because it depends of the rates of your country and the moment. But this will considerably reduce the amount of money. I let you do a simulation.
You thought you need hundreds of millions to be rich? I thought it too until I did it. I am 26 years old. With this example, I would have to accumulate a wealth of 1.865.000€ at my 40 years old. And you need to know it because now you know what you want to get. Now you have a goal, a real one with time notion and financial figures.
From here you will start to plan your next years of work and investment to reach this final goal.
THE MONEY TIME 