When It Comes To Wealth, How Much Is Enough?

Seven figures means literally, $1 million to $9 million. For the purpose of this blog, net worth means the total of all your assets minus all your debts. So a seven-figure net worth means that if you sold everything you had and then paid off all your debts, the wealth you'd have left would be between $1 million and $9 million.

Let's take a look at the impact of having that kind of wealth. I've put together a few "lifestyle budgets" to show you how life would "feel" at several seven-figure net worth levels.

The purpose is to help you choose a specific goal for yourself - and hopefully help you realize that you may not need as much money as you think.

Of course, when you're setting wealth-building goals at the age of 40 or 50, you have to be realisitc. Creating a $9 million net worth in seven years is harder than achieving a million dollars of wealth. It's not nine times harder, but it's harder.

Now, let's figuree out how rich you are going to be. Seven figures, as I mentioned, means $1 million to $9 million. That's a pretty big range...to big to be useful as a target. Studies show that people who set specific goals have the greatest chance of achieving them. So let's make your seven-figure goal more specific. Let's pick a number - a nice, round, seven-figure number between $1 million and $9 million.

Four Levels Of Seven-Figure Wealth

To help you make the choice, let's narrow down your choices to four:

• 
  
  $1 million
• 
  
  $2.5 million
• 
  
  $5.5 million
• 
  
  $9 million

As you'll see from the following scenarios, each of these levels will give you a different lifestyle. You may find that you'd be content with a fortune of $2.5 million or even less. If you can be happy with a smaller number, you are better off because that objective will be easier to reach and maintain.

One final note before we compare the four seven-figure lifestyles: in figuring how much income each of these fortunes would provide, I used 10 percent of the entire net worth number. Obviously, a considerable portion of your net worth - the part that is tied up in your home - will not be earning income. It should be appreciating (making you more wealthier by becoming more valuable) but it won't give you an active income.

Coping With A Mere Million

To begin at the beginning, ask your self: "Would a net worth of $1 million be enough for me?"

A million dollars earning 10 percent yields $100,000 in annual income. Take away about $35,000 for federal, state, and local taxes. That leaves you with about $65,000 in cash. (The amount of tax you pay depends on where you live and what kind of deductions you have. )

What kind of lifestyle would $65,000?

Let's start with housing. You could spend a lot, but a good rule of thumb is to never spend more than 25 percent of your income on housing.

Twenty-five percent of $65,000 is $16,500, or about $1,350 a month. What kind of housing would that give you?

Transportation would be your next-biggest expense. Figure $600 a month for two medium-sized Toyotas.

Those are your major expenses. Do the math and you'll see that you are left with about $2,000 for things like travel, entertainment, dinners out, and other nonessentials. Those expenses vary greatly, depending on your personal preferences. If you can be happy with a good meal at a local restaurant, you my be able to budget meals for two people at $80. If you prefer fancier places, you'll have to figure on spending two or three times that amount.

The $2.5 Million Lifestyle

Living on a nest egg of a million dollars could be completely satisfying...so long as you are content with modest choices. If you have a family that is larger than two people or if you want to be able to live on a somewhat higher level, you may want to target your net worth at $2 million or $3 million. We'll pick a number in between: $2.5 million.

What will a net worth of $2.5 million buy you? Again assuming a 10 percent ROI and a tax burden of 35 percent, you'd end up with disposable, after-tax income of about $160,000 a year.

And again, figuring that 25 percent of that $160,000 will go to housing, ask yourself if you could be satisfied living in a house or apartment in your chosen neighborhood that would rent for about $40,000 a year or $3,300 per month.

Figuring, again, that you'd spend 30 percent of your housing budget on associated living expenses, you'd budget about $12,000 a year for utilities, repair, maintenance, and upkeep. Other associated expenses - food, clothing, and so on - might account for another $13,000 a year, for a total of $25,000.

Subtract the cost of housing ($40,000 a year) and associated living expenses ($25,000 a year), and you are left with about $95,000 to spend on luxuries.

Again, this budget is based on the assumption that you are a two-person family.

The Next Level: Living On A $5.5 Million Nest Egg

If you have a net worth of $5 million or $6 million, what would your life look like?

A $5.5 million net worth returning 10 percent is $550,000 a year, or $357,500 after paying 35 percent in taxes. Deduct $90,000 for your housing expenses, another $30,000 for upkeep and utilities, $27,500 for food, clothing, and miscellaneous...and you'd end up with $210,000 a year to spend on discretionary items.

Living like this takes of effort. Spending this much money requires diligence, determination, and imagination. For one thing, you must be willing to eat our four nights a week. You must devote nearly all your spare time to golfing, tennis, spa treatments, and professional basketball games. You would have to eschew low-cost leisure activites like reading, hiking, and fishing (except for deep-sea fishing in luxury spots), and you'd have to...

Okay, I'm kidding - or at least half-kidding - to make a point. You don't need $5 million or $6 million in the bank to enjoy a very good lifestyle.

But since this blog is called Seven Years to Seven Figures, let's pust on and describe the sort of lifestyle you'd have to maintain to be able to spend the income generated from a nest egg of $9 million.

The Ultimate Lifestyle

Again, $9 million at 10 percent will yield an income of $900,000. After paying 35 percent of that to Uncle Sam, you'd have $585,000 to spend on yourself and your spouse.

If you spent 25 percent of that (or $146,250 a year) on housing, you'd be living in luxury even in California, Florida, or Manhattan.

figure $45,000 a year for upkeep and utilities, a whopping $50,000 a year for food and clothing (let's stick to Italian designers, please), and you're left with about $345,000 a year.

How could you get rid of $345,000 a year? Here are just a few ideas to get the point:

10-day Hawaiian vacation for two: $10,000

10-day London vacation for two:   $10,000

10-day Istanbul trip for two:           $15,000
4 four-day weekend in NYC:         $24,000
52 very fancy meals at $500 each:  $26,000
52 semi-fancy meals at $200 each:  $10,400
104 meals local meals at $100 each: $10,400
lease upgrade on two Mercedes:      $14,400
way overboard holiday party for 100: $20,000
ultra-extravagant Christmas gifts:       $10,000

So far, we are only up to $150,200!

As you can see, you can live on reasonably well - without working - on a net worth of a million dollars. Having $2 million or $3 million in the bank makes life easy. If you target the $5 million to $9 million range, you'll be able to enjoy all the luxuries you have ever imagined...and still have money left over that you won't know what to do with. (Of course, if you decide to target the higher end of the seven-figure range, you'll have to work harder and take more risk to achieve your goal.) $


[Ed. Note: If you're not happy with your financial situation, you're in the perfect position to change it for the better – right now. Ray has just released a special video that covers an online business system that you can use to start growing your wealth. To watch this short video, click the following link: http://www.raybuckner.com]

Are You Ready For Wealth?

This blog is all about creating a seven-figure net worth in seven years or less. That may sound outrageous...even impossible. But it can be done.

Making a decision to achieve a goal won't do you any good if you already decided to achieve a dozen other goals. The best way to guarantee that you will accomplish an objective is to make it your number one priority.

Compound interest is an amazing thing, but waiting for your compounded savings to reach seven figures can take decades...even if you're getting excellent returns. That is why I'm not recommending a pinch-and-save-and-wait program. Why? Because inflation, taxes, and time make it hard to build a fortune. Yes, those programs work well for college graduates and other young people who are just starting out, but they make no sense for baby boomers or anyone who doesn't want to scrape and save for 40 years.

Take your first step toward financial Independence...right now.

The first step on my own road to wealth began with a promise - the promise I made to myself on that fateful day when I decided to get rich. And that's something you can do right now. Make yourself a promise that getting wealthy is going to be your top priority.

By top priority, I mean top priority.

One of the fundamental principles I believe in is the importance of having a full, balanced life - one that includes not only work but also friends, family, and community involvement. That means you should think in terms of four categories when setting goals:

• Your health
• Your wealth
• Your social life
• Your personal life

Seven years from now, for example, you might want to have:

• Attained and maintained your high school body weight
• Achieved a seven-figure net worth
• Become your town's mayor
• Written and published your first novel

These are all reachable goals, but they are also ambitious. If you give them equal weight, chances are you will not be entirely successful. You might become mayor, and maybe even get down to that perfect body weight...buy you'll more than likely be struggling with the novel and disappointed by your wealth-building accomplishments.

There's only one way to be absolutely sure that you'll achieve your financial goal (having a seven-figure net worth in seven years): you have to make it your top priority. That is, you have to elevate it to the status of first among equals. Yes, your other three main goals are extremely important to you, but wealth building always has to come first - every year, every month, every week, and every day.

If you aren't willing to make seven years to seven figures your top priority, you can still greatly benefit from this blog...but your chances of hitting your financial target will be diminished.

Let's assume that you are willing to make wealth building your top priority and that you recognize this means devoting the first hour or two every day to the specific suggestions outlined in this blog. Next, we will determine just how much wealth is right for you. $

[Ed. Note: If you're not happy with your financial situation, you're in the perfect position to change it for the better – right now. Ray has just released a special video that covers an online business system that you can use to start growing your wealth. To watch this short video, click the following link: http://www.raybuckner.com]

Seven Years to Seven Figures: Is It Really Possible?

Becoming financially independent requires a balanced system that is based on a multi-tierred approach:

• Increasing your income
• Saving most of that extra money
• Investing it in a combination of real estate, stocks and bonds
• Using your spare time (and some of your spare money) to start your own business

To get rich in less than 40 years, you have to radically increase your income.

Getting rich involves three components:

• How long you invest
• How much you invest
• What rate of return you achieve on your investments

How long you will invest has already been figured out: seven years.

How much you will invest is largely dependent on your income.

Pinch-save-and-wait programs are based on making small investments, which means they are based on the assumption that you aren't going to have a high income.

Theoretically, you can become wealthy by increasing any one of these three components. And so, theoretically, you could develop a seven-figure income in seven years just by getting a very high rate return on a modest investment.

For example, let's assume you and your spouse have a combined income of $70,000 a year (which is actually about $9,500 above the average). If you saved 10 percent of that, or $7,000 each year, it would take a return on investment (ROI) of 82 percent to reach a million dollars in seven years.

There is no investment I know of that can give you that sort of return.

Most financial planners will tell you that you can't reliably achieve more than a 6 percent or 8 percent ROI over any length of time. As I'll explain in future blogs, that is ridiculous.

But even if you calculate in the higher ROIs that I believe are possible, your average rate return on your savings will still be in the 15 percent to 20 percent range - hardly enough to turn $7,000 into a million in seven years.

To achieve a seven-figure net worth in seven years, it helps to get a higher ROI...but it is absolutely necessary to radically increase your income.

This blog will help you do just that!

[Ed. Note: If you're not happy with your financial situation, you're in the perfect position to change it for the better – right now. Ray has just released a special video that covers an online business system that you can use to start growing your wealth. To watch this short video, click the following link: http://www.raybuckner.com]

PLAN TOGETHER…WIN TOGETHER

PLAN TOGETHER…WIN TOGETHER


Failing to Plan Is the Same as Planning to Fail Together



Unfortunately, most couples do not plan together. Rather, they just let their financial life happen to them. Letting your financial life just happen to you is like getting on an airplane with no clue as to where it’s heading.



There Are Three Fundamental Truths of Financial Planning



1. You can’t plan your finances if you don’t know where you’re starting from.

2. You can’t plan your finances if you don’t know where you want to end up.

3. In order to stay on track from your starting point to your destination, you have to monitor your progress.



So…Do You Really Know Where the Two of You Are Right Now?



If I were to ask you and your partner right now to describe your current financial situation, could you tell me your net worth? Do you know what your assets and liabilities and expenses are? Could you easily list on a piece of paper what investments you own, how much equity you have in your home, and on what and to whom you owe money? Is all of this information neatly organized in some easily accessible place? Could you quickly get your hands on it if you needed to? Or would getting your records together be an impossible project? If you’re like most couples, you probably didn’t score as well as you would have like to. That’s okay. In fact, it’s normal. The goal right now is to start addressing those problems.



The first step is to give yourself a financial cleanup. Getting yourself organized, a financial cleanup, is the first thing that you need to do when you decide to get serious about financial planning. You have to clean up the mess before you can move forward.



Next, design a purpose-focused financial plan. A purpose-focused financial plan is nothing more than a list of things to do (your goals) to enable you to live a life with the values that are most important to you. Here are seven tips on how to define those goals.



1. Make sure you goals are based on your values. The clearer you are about your values, the easier it is to base your goals on them – and the more you base your goals on your values, the more likely it is that you will achieve them.

2. Make your goals specific, detailed, and with a finish line. It is very important that you make your top five goals as specific as possible. Many couples want to be wealthier. Practically all of us want something we don’t currently have. In order to achieve a goal, you must know precisely what it is that you’re going after.

3. Put your top five goals in writing. I know it’s a cliché, but it also happens to be true: people who write down their financial goals get rich. It’s a fact. It does something to you subconsciously that often brings the goal to you.

4. Start taking action toward your goal within 48 hours. Anthony Robbins says, “It’s not enough to write down your goals. You’ve got to act on them.” His rule of thumb is that you should never leave a goal just “sitting there” without taking some action toward achieving it within the next 48 hours.

5. Enlist help. There’s a huge myth out there: the myth of the “self-made” person. The truth is that there is no such thing as a “self-made” person. No one ever reaches a really important goal without some sort of help from some other person. No matter what the situation is, human beings need other human beings to help them move forward.

6. Get a rough idea of how much money it will cost to achieve your goals. As you define your top five goals, you’re going to find that some may have nothing to do with money, while others are all about money. If a goal is going to cost money, and you don’t start planning and saving for the cost, you are not going to achieve it.

7. Make sure your goals match your values…as a couple. I can’t stress enough the importance of making sure your goals reflect what both you and your partner want. Don’t keep your top five goals to yourself. Share them with your partner. If you’ve got kids, share your dreams with them, too. Ask them what they’d like to see the family doing over the next three years. Ask them about their values, and then work together on a family list of five things that you all want to accomplish together.$

[In his latest training series, Ray reveals simple ways to start a business... find a retirement career...make extra money in your spare time... and more. These are the routes to wealth the rich employ. Click here to learn more about them.]

6 Vacation Spots to Stretch Your Dollar

6 Vacation Spots to Stretch Your Dollar


Consumers looking to stretch their dollar farther may want to leave the country.



After plunging in value some 40% between 2002 and 2008, the U.S. dollar is on the rebound – since April of last year, the U.S. Dollar index has climbed more than 20%. Meanwhile, the global recession has weighed heavily on other currencies across the globe, including the Euro, peso and pound.

Combined with slashed international airfares, the more favorable exchange rate is allowing travelers a chance to visit destinations that were prohibitively expensive in the past, such as England and Western Europe, and creating downright bargains in places where the currency has traditionally been weak in comparison to the U.S. dollar, like South and Central America.

But these great deals may not last long. As the U.S. government continues to print money to fund its $787 billion stimulus plan and the country's debt continues to grow, the dollar is sure to start losing its value. “The dollar is probably going to get weaker against the Euro and other currencies in future years, so now is the time to travel, rather than in a year or two,” says Michael Woolfolk, a currency specialist at the Bank of New York.

Here are six places to get the most bang for your U.S. buck — and some sample deals worth taking advantage of.





Buenos Aires, Argentina

Often called the Paris of South America, Buenos Aires is a much cheaper version of its European counterpart. And, after six years of growth, Argentina’s economy is slowing down, says Woolfolk. The exchange rate has recently climbed to 3.8 Argentinean pesos to the U.S. dollar from an almost one-to-one exchange in November of last year.

Sample deal: Fly on Delta Airlines to Buenos Aires from Washington, D.C. in mid-July and stay in the four-star Park Chateau Hotel for five days for $973 a person when you book on Expedia.com.



Cancun, Mexico



Last year, 100 U.S. Dollars would have bought you just 98 Mexican pesos. Today, you get 135 pesos — almost 40% more. In addition, hotels and airlines are eager to get tourists back into the country, so they're offering all sorts of deals, says Tom Parsons, CEO of Bestfares.com, a discount airfare site.

Sample deal: Liberty Travel is offering a three-night stay at the four-star Fiesta Americana Condesa Cancun hotel for $379 per person including round-trip airfare,. (Must book by April 27. Kids under 17 eat and stay for free).



Dublin, Ireland

The U.S. dollar now has 25% more buying power in Europe than it did last year. And, in Ireland the airlines have dropped their fuel surcharges, making it among the cheapest places in Europe to fly into from the U.S. Round-trip tickets to Dublin from New York City cost just $315 in April and May on Delta right now. Last year, that airfare would have cost $1,141, says Parsons. Irish discount airline Ryan Air makes trips from Ireland to other destinations like London and Scotland affordable as well. A round-trip ticket from Dublin to Glasgow can cost just under $20 on this no-frills airline.

Sample deal: On Travelocity.com, we found a seven-night stay in the four-star O’Callaghan Davenport Hotel and airfare on Delta for $781 a person, taxes and fees included. (Travel dates are between May 1 and May 9.)



London, United Kingdom

Traveling to England and Scotland is cheaper than it's been for generations, says Woolfolk. The U.S. dollar has increased in value 36% to the British pound since last year, making it a great time to visit the normally pricey London. Puddle jump from Dublin to take advantage of great fares if you’re flexible, sug

gests Parsons.

Sample deal: Those traveling from Boston to London can book a five-night stay at the four-star Hilton Olympia during mid-May and a round-trip flight on American Airlines for $835, including taxes and fees. (Package offered on Travelocity.com).



Reykjavik, Iceland

Previously one of the most expensive countries to visit, the collapse of Iceland's banks has turned the country into a bargain-seeker's paradise. Last year, the Kroner traded for about 74 to one U.S. dollar. Today, that exchange rate is 128 — up more than 70%.

Sample deal: Iceland Air is offering free stopovers in Iceland on your way to other destinations in Europe. Match that with a three-night stay at the Hilton Reykajavik Nordika, a four-star hotel, for only $115 a night.



Sydney, Australia



Last year, just flying to Australia from Los Angeles would have set you back close to $1,800. Now you can fly there and stay five days for under $1000. "These are some of the best fares and packages to Australia we've seen in years," says Parsons. To top it off, the U.S. dollar is 40% stronger compared to the Australian dollar than last year, so you'll have a lot of buying power when you're there.

Sample deal: Fly from Los Angeles to Sydney on Qantas Airways and stay five days in a four-star hotel for $949 a person, including taxes and fees. (Package offered on Bestfares.com.)