09 Jul Millionaire Math
Everybody wants a little extra income. Even more people want to be a “millionaire.” That’s an arbitrary moving target, of course; people who get that first million always want to aim for $10 million, then $100 million, then that $1 billion bullseye.
Here’s some millionaire math I just picked up today listening to Craig Ballantyne’s podcast: Take any hourly rate, and double it. That’s the approximate full-time salary you get for the year.
For example: $20 x 2 = 40, so $20 an hour is approximately $40,000 a year (assuming you work 40 hours a week, 50 weeks out of the year).
If you made $115 an hour, which sounds AMAZING to most people, you would simply double it: $230,000. Even that doesn’t sound too bad.
To make a million a year, trading time for money, you would have to earn $500 an hour, working a full 40 hours every week, for 50 weeks a year. That’s not a business or a calling; that is, in fact, simply a job. A high-paying job, of course, but a job nonetheless. You step away, and the dollars stop flowing.
A business, by contrast, creates revenue whether you’re there or not. It’s a matter of systems, not exchange. And it will create revenue whether you’re at the helm or not. This, in turn, frees up time to work on other projects. It’s why multi-billionaires have 5 to 10 income streams going at a time, in addition to long-term growth investments.
We refer to this as “working ON your business” as opposed to “working IN your business.” Working in your business is simply self-employment. It’s a job; just, one you’ve created for yourself, and in which you would most likely still trade time for money.
Instead, what the wealthy do is create a system that delivers what people need or want without their direct input. A $100 recurring product sold to just 1,000 subscribers will produce $1.2million in revenue per year, potentially with no time output from you yourself (unless your product is content, of course). Convert a portion of that revenue into growth, marketing, and investment, and you have the potential to repeat this process almost without limitation.
Of course, you can be the boss; the CEO; of an enterprise like this. You can also have a great job. For that matter, you can keep the job you currently have. Once you figure out how to align those concepts and create a product that can produce revenue month after month, the earning potential is totally up to you. For future reference, this is how many sales it takes to make a million bucks:
- $1 x 1,000,000 sales = $1,000,000
- $10 x 100,000 sales = $1,000,000
- $100 x 10,000 sales = $1,000,000
- $1,000 x 1,000 sales = $1,000,000
- $10,000 x 100 sales = $1,000,000
- $100,000 x 10 sales = $1,000,000
- $1,000,000 x 1 sale = $1,000,000
Find a sweet spot for sales and pricing. Decide if it needs to be sold all at once, or spread over a repeated revenue stream. Then make it happen. There are plenty of problems that need solving. Get out there and solve them!