For accurate financial planning, calculate your net worth today and then subtract that amount from your long-term financial goals. Divide the results by the number of years you intend to spend to achieve your financial goals. In this way, you will know exactly how much you have to save, invest, and accumulate each year in order to become a millionaire.
Determine Your Hourly Rate
If you want to earn more money and become a millionaire, the first step you take is to sit down and determine exactly how much you are earning right now. How much did you earn last year and the year before? How much will you earn this year? How much are you earning each month?
The best measure of all is how much you are earning each hour right now. You can determine your hourly rate by dividing your annual income by 2000, the approximate number of hours that you work each year. Even better, you can divide your monthly income by 172, the number of hours you work, on average each month.
How to Make Money and Improve Performance
The tighter and more accurate your calculations regarding your income, or any other area, the better and faster you can improve in each one of them. For example, most people think in terms of monthly and annual salary. This is hard to analyze and increase. Conversely, the high performer thinks in terms of hourly rate, which is amenable to improvements on a minute-to-minute basis. Since you are the president of your own personal services corporation, you should view yourself as being on your own payroll. Imagine you are paying yourself by the hour. Be just as demanding of yourself as you would be of someone else who was working for you. Refuse to do anything that doesn’t pay your desired hourly rate.
Become a Millionaire: Know Your Current Net Worth
If you have set long-term financial goals, the next step is for you to determine exactly how to make money and how much you are worth today in financial terms. If your goal is to become a millionaire in the years ahead, you must calculate exactly how much you have accumulated as of today’s date. Most people are confused or dishonest about this calculation. Your true dollar net worth is the amount that you would have left over if you sold everything you own today at what the market would pay and then paid of all your bills. Many people place a high value on their personal possessions. They think that their clothes, cars, furniture, and electronics are worth a lot of money. But the true value of these items is usually not more than 10 percent or 20 percent of what they paid.
What is Holding You Back From Your Financial Goals?
If you want to earn a certain amount of money, ask yourself, why am I not earning this amount of money already? What is holding you back? What is the major reason that you are not already earning what you want to earn? Again, you must be perfectly honest with yourself.
Do a complete financial analysis of your life. How much are you earning today, and how much are you worth? What are your goals in these areas?