RPF0401-Set_an_Hourly_Income_Goal_and_Plan
00:00:00.000 | The LA Kings holiday pack is back.
00:00:02.040 | The perfect gift for the hockey fan in your life.
00:00:04.380 | A three game pack starts at just $159
00:00:07.300 | and includes a holiday blanket.
00:00:08.880 | Buy today and you'll receive an additional game for free.
00:00:11.800 | Don't miss out, visit lakings.com/holiday today.
00:00:15.440 | - Welcome to Radical Personal Finance,
00:00:17.680 | the show dedicated to providing you with knowledge,
00:00:19.720 | skills, insight, and encouragement.
00:00:22.520 | You need to live a rich and meaningful life now
00:00:25.440 | while building a plan for financial freedom
00:00:28.360 | in 10 years or less.
00:00:30.900 | Yesterday we talked about goal setting for 2017.
00:00:33.700 | Today we continue on that theme
00:00:35.400 | with a discussion of your wage.
00:00:38.200 | Here's the deal.
00:00:41.000 | If you followed my advice, or if you're following my advice,
00:00:44.500 | very likely you are going to write down some income goals.
00:00:49.500 | You're gonna write down an amount of money
00:00:53.100 | that you want to make in the next year.
00:00:58.340 | Great, it's a good place to start.
00:01:00.140 | Many people don't start there.
00:01:01.560 | You'd be shocked at how few people have a goal
00:01:04.140 | for an amount of money that they wanna make.
00:01:05.860 | Now, hopefully that income goal is tied to something else
00:01:10.740 | because income goals that are just round numbers
00:01:13.240 | are probably not gonna have the teeth
00:01:15.400 | required to get you through the hard times.
00:01:19.820 | I know for me in years past when I would set an income goal
00:01:23.080 | that wasn't connected to something that mattered,
00:01:26.380 | beyond money, I've never hit one of 'em.
00:01:29.380 | But if an income goal was connected to something
00:01:33.680 | that mattered to me, I've done pretty well.
00:01:38.680 | So you set an income goal.
00:01:41.720 | Well, that's great.
00:01:42.920 | So what's your next step?
00:01:43.920 | Do you sit around and hang out in your easy chair,
00:01:47.420 | close your eyes, and imagine that amount of money
00:01:50.500 | in your bank account?
00:01:51.680 | Well, I guess you can do that.
00:01:55.140 | Some people do that.
00:01:56.720 | But the next step that I'm gonna suggest you take
00:02:00.760 | is, I believe, far more effective
00:02:04.340 | than you're sitting around and imagining
00:02:06.680 | that amount of money in your bank account.
00:02:08.720 | And that's to make a plan.
00:02:10.020 | You've gotta make an actual plan
00:02:13.020 | for how you are going to earn the income.
00:02:15.480 | And in today's show, I'm gonna share with you
00:02:18.140 | how to make that plan, and it might surprise you
00:02:21.220 | because what you need to get to
00:02:23.640 | is an actual hourly wage that you're going to earn.
00:02:28.640 | Because you get paid when you work.
00:02:35.340 | So you need to figure out how to transform
00:02:38.340 | your income goal into something tangible
00:02:41.480 | that you can put onto your to-do list and do.
00:02:46.480 | It's the topic of today's show.
00:02:50.600 | Before we get into that,
00:02:51.640 | couple of quick announcements for you.
00:02:54.140 | Announcement number one, I think many of you
00:02:57.260 | will be very happy to hear, and that is this.
00:03:00.980 | I am making major changes all around here
00:03:03.140 | at Radical Personal Finance in an effort
00:03:04.980 | to change my own personal business here
00:03:09.980 | to achieve my own personal goals
00:03:12.180 | and also to serve you effectively,
00:03:14.180 | because I'm only gonna be able to achieve my goals
00:03:17.220 | as I can serve you effectively.
00:03:19.440 | And so one of those changes,
00:03:21.320 | I'm announcing them little by little here and there
00:03:24.100 | over the next few weeks, but one of those major changes
00:03:26.860 | is that I am disconnecting
00:03:28.740 | our Radical Personal Finance Facebook group
00:03:31.740 | from patronage.
00:03:34.520 | A major way that I focus on earning money from the show
00:03:37.280 | is through the use of the patron program
00:03:40.480 | that's set up on a website called Patreon,
00:03:43.280 | which is a crowdfunding program
00:03:45.140 | where individual listeners of the show
00:03:47.020 | voluntarily go and sign up for it.
00:03:48.980 | They go and sign up and say,
00:03:50.060 | hey, Josh, we like what you're doing,
00:03:51.180 | we like the content you're putting out,
00:03:52.680 | so please, here's a few bucks
00:03:54.480 | just to support what you're doing.
00:03:56.440 | And that's super, super helpful.
00:03:58.020 | Right now, I have about 2,000 bucks a month
00:03:59.600 | coming in from that.
00:04:01.140 | Now, one of the challenges I face with the Patreon program
00:04:03.640 | is figuring out how to actually set it up,
00:04:06.020 | and there's been great successes with it
00:04:08.440 | and there's been major failures with it.
00:04:11.060 | And one of the ideas that I had in the past
00:04:13.520 | was to make access to a Facebook group
00:04:17.400 | dependent upon patronage at a certain level.
00:04:21.060 | A lot of reasons for that,
00:04:23.060 | I'll talk about that another time,
00:04:25.900 | probably when I talk more about Patreon.
00:04:27.780 | I've still got to do some updates around there,
00:04:29.980 | but lots of reasons for that.
00:04:31.140 | But at the moment, I am canceling that.
00:04:33.740 | And what that means is that you can come and join
00:04:36.480 | the Radical Personal Finance Facebook community.
00:04:39.560 | The idea is this, as you are working your way
00:04:42.400 | through your own personal planning process,
00:04:45.780 | as you're working on building your knowledge
00:04:50.200 | and your skills in order to live a rich life now,
00:04:53.200 | while also working on your plan for financial freedom
00:04:55.480 | in 10 years or less, which is the goal of that topic,
00:05:00.480 | as you're doing that, I want to make sure
00:05:03.400 | that you have the ability to connect with other people
00:05:06.480 | who are like-minded.
00:05:07.660 | Now, there are many communities of people
00:05:09.320 | out there on the internet.
00:05:11.200 | There is a very active Reddit financial independence boards
00:05:14.940 | where people are interacting on Reddit.
00:05:17.400 | There are a few different forums,
00:05:19.280 | the early retirement forums.
00:05:21.820 | For Jacob Lundfisker has his early retirement
00:05:24.320 | extreme forums.
00:05:25.900 | Mr. Money Mustache forums on his websites are very active,
00:05:28.780 | and there are others as well, different forums.
00:05:31.740 | I'm sure there are some Facebook groups,
00:05:33.620 | but I don't want to try to compete with any of those
00:05:37.400 | because Radical Personal Finance is a little bit unique.
00:05:40.100 | I have a different approach than many other people do.
00:05:43.100 | And so I'd like to provide for you a way to interact
00:05:46.480 | with other members of the audience
00:05:47.900 | in a way that's more interactive
00:05:49.020 | than commenting on the blog posts.
00:05:51.140 | So oftentimes that comes down to either a forum
00:05:54.280 | or a Facebook group.
00:05:55.860 | Now, forums have many unique advantages.
00:05:59.140 | They also have significant disadvantages.
00:06:01.640 | Probably my biggest beef with various forums
00:06:04.480 | is that they're simply difficult to use.
00:06:06.260 | They're not particularly well integrated
00:06:08.140 | into the modern world.
00:06:10.320 | Most forums have this antiquated look
00:06:12.980 | where they wind up with threads
00:06:14.540 | and many different posts and et cetera.
00:06:17.100 | They're very non-multimedia friendly,
00:06:19.560 | they're text only, et cetera.
00:06:21.980 | And that, again, there are some major advantages to forums.
00:06:25.540 | There's huge advantages from someone like me
00:06:28.540 | as a content creator.
00:06:29.580 | It's many, many pages of relevant content,
00:06:32.260 | which helps tremendously
00:06:33.940 | with the search engine optimization of my site
00:06:37.220 | and the findability.
00:06:38.140 | That's one of the biggest benefits of forums.
00:06:40.300 | It's also benefits that on a forum,
00:06:42.120 | you can have a good deal of anonymity.
00:06:44.580 | You can just simply join with a username.
00:06:46.460 | You don't have to give out your personal name.
00:06:49.620 | That can help people to feel very comfortable
00:06:51.900 | doing things like publishing personal financial data.
00:06:54.420 | Many people you'll see in personal finance forums
00:06:56.500 | do things like maintain a public journal
00:06:59.940 | of their personal finance progress,
00:07:02.140 | what they made, what they spend.
00:07:03.900 | And they can do that
00:07:04.780 | because there's some level of anonymity granted
00:07:08.260 | by the simple username from a forum.
00:07:11.500 | I think that's great.
00:07:12.880 | At the moment, I don't wanna manage and moderate a forum.
00:07:15.760 | And the biggest downside of a forum,
00:07:18.320 | my opinion is simply it's not user-friendly.
00:07:20.640 | There's not really any good phone software.
00:07:22.880 | Most forums integrate with an app called Tap a Talk.
00:07:26.400 | If you are a user of forums,
00:07:28.420 | you probably have tried that app.
00:07:30.440 | I find it clunky and non-useful.
00:07:33.200 | And the Facebook is fantastic.
00:07:34.800 | Facebook app is great.
00:07:36.840 | And the Facebook even has its own standalone groups app.
00:07:39.380 | So I've decided to just stay on the Facebook platform
00:07:42.200 | using the Facebook Radical Personal Finance group.
00:07:45.000 | So again, up till now, that group was behind,
00:07:47.840 | it was only available to patrons.
00:07:49.920 | And so the link was a little bit hidden.
00:07:51.720 | I didn't advertise it here on the show.
00:07:53.160 | At this point in time, I'm opening it up.
00:07:54.680 | And I'm inviting any of you who would like to participate
00:07:58.000 | in the Radical Personal Finance Facebook community
00:08:00.120 | to come and to join the Facebook group.
00:08:02.920 | The Facebook group is a really great place
00:08:05.080 | for you to build some relationships
00:08:07.240 | and build some friendships
00:08:08.320 | with some of your fellow listeners,
00:08:09.960 | people who might enjoy similar things like you.
00:08:12.240 | I know many of these relationships
00:08:14.000 | that have happened throughout
00:08:15.180 | the Radical Personal Finance community,
00:08:16.460 | some of them have led to in-person relationships.
00:08:18.800 | I'm aware of a number of community members
00:08:20.520 | who've built friendships based upon first getting connected
00:08:24.040 | through the Radical Personal Finance community.
00:08:28.040 | So that Facebook group is now open
00:08:29.700 | to any of you who would like to join.
00:08:32.320 | And I hope that many of you will.
00:08:34.560 | Again, with it being right on your phone, it's fantastic.
00:08:37.300 | It's right there where you are anyway.
00:08:39.200 | And I'm pretty excited about it.
00:08:42.720 | It's easy, good multimedia integration.
00:08:44.520 | You can share pictures,
00:08:45.360 | you can share all the normal Facebook stuff, videos.
00:08:47.800 | I'll be doing some stuff in there, trying to keep it good.
00:08:50.640 | I'll be involved in there to some extent,
00:08:52.980 | to some extent that I'm able.
00:08:55.840 | But it's a really, really great resource for you.
00:08:58.320 | And I want you to use that resource.
00:08:59.720 | If you'd like to ask questions of other people,
00:09:01.440 | there are some really smart people
00:09:02.920 | already in that Facebook group.
00:09:04.640 | And I think there'll be even more smart people here now.
00:09:07.900 | In a multitude of counsel, there's great wisdom.
00:09:09.740 | That's what the Bible teaches, one of the Proverbs.
00:09:11.500 | And so you should always seek out as much input
00:09:16.460 | and as much diverse counsel as you can find on a question.
00:09:19.820 | The full quote of that Proverb is this,
00:09:23.060 | "Without counsel, plans fail,
00:09:25.300 | "but with many advisors, they succeed."
00:09:28.380 | And so it's always useful to gain from other people
00:09:30.940 | who've been in different situations,
00:09:33.220 | who've been in similar situations,
00:09:34.700 | who can help provide insight into your situation.
00:09:37.740 | So come on over to Facebook
00:09:39.060 | and search for Radical Personal Finance.
00:09:40.900 | Remember that there's a Radical Personal Finance
00:09:42.500 | Facebook page, and then there's
00:09:44.620 | Radical Personal Finance now Facebook group.
00:09:47.220 | So the page you like, the group you request to join,
00:09:50.020 | and I will approve you to join that.
00:09:52.120 | One little tip for those of you
00:09:53.580 | who are properly wary of social media.
00:09:56.860 | I think there are tremendous dangers in social media,
00:10:01.740 | tremendous dangers from a lack of privacy.
00:10:04.320 | I just think they're tremendous dangers.
00:10:07.280 | If I were not running Radical Personal Finance
00:10:09.820 | at this point in time, I don't think I would have
00:10:12.140 | any social media accounts because they are so invasive
00:10:16.380 | from the perspective of privacy
00:10:18.500 | and they're incredibly invasive to your life.
00:10:23.500 | They add some, something to some people,
00:10:27.620 | but even just, you look at some of the data
00:10:30.500 | on social media use and social media use
00:10:34.580 | and its impact on depression, levels of dissatisfaction,
00:10:37.700 | you have to be very careful being an excessive consumer
00:10:40.220 | of social media because what you are seeing
00:10:42.620 | is a very carefully curated image
00:10:46.020 | that somebody wants you to gain.
00:10:47.800 | We only post the positive stuff about us
00:10:49.820 | and that will lead you to the assumption
00:10:51.980 | that everybody else's life is just great.
00:10:54.900 | That's where, you know, sometimes I feel bad
00:10:56.880 | about how many of the negative things I tell you
00:10:58.900 | about my own personal challenges here on the show,
00:11:02.140 | but I do it because I want to break
00:11:04.260 | some of these misconceptions.
00:11:09.180 | I want you to understand that no matter who you are,
00:11:12.800 | if you respect me and look up to me in some way,
00:11:15.740 | it ain't easy.
00:11:16.860 | There are very difficult times, there are difficult days.
00:11:19.240 | We all fail, we all make mistakes.
00:11:21.180 | And so I try to do that, but even me, just like we all do,
00:11:24.960 | I curate the things that I share.
00:11:26.640 | I share the happy pictures.
00:11:28.580 | I post when I'm feeling exuberant about something.
00:11:31.020 | I don't post a note on Facebook and say this.
00:11:33.940 | So I think the benefit of social media is mixed.
00:11:38.940 | There are significant benefits and significant challenges.
00:11:42.460 | On the net, I think it's a win, but I think,
00:11:45.620 | anyway, be careful.
00:11:47.620 | Point of that was to say that if you want to participate
00:11:51.060 | in something like the Radical Personal Finance Group,
00:11:53.380 | but you don't have a Facebook profile, set up a fake one.
00:11:56.780 | I strongly encourage you to do that
00:11:58.300 | because there's a lot of great info in Facebook communities
00:12:02.700 | where even if you don't want to have a personal profile,
00:12:05.100 | you can go in and set up a fake profile.
00:12:06.860 | Now, Facebook will require you to use a real name.
00:12:09.420 | So you are welcome to be either John Smith or Susie Smith,
00:12:13.260 | and you can post any kind of picture that you want.
00:12:15.140 | The only requirement is that you have to post something
00:12:16.940 | that sounds like a name,
00:12:18.380 | but you can call yourself anything that you want to be.
00:12:21.620 | So Susan Jones, John Smith works great,
00:12:24.340 | or whatever version of that you want to be.
00:12:26.500 | And that allows you to interact with other people,
00:12:28.220 | but still retain some degree of your privacy.
00:12:30.500 | So my hope is that by giving you that advice,
00:12:32.780 | we can mollify some of the concerns
00:12:34.300 | about the lack of privacy with a Facebook group
00:12:36.900 | as compared to a forum.
00:12:38.620 | And I hope it will be a great resource to you.
00:12:41.580 | So come on by facebook.com or search on your phone,
00:12:43.900 | Radical Personal Finance.
00:12:45.740 | It's a group and request to join,
00:12:47.540 | and I will approve you for that.
00:12:49.200 | Those are enough of my announcements
00:12:52.220 | on that topic for today.
00:12:53.300 | Let's get to it.
00:12:54.140 | With regard to Patreon,
00:12:56.140 | we'll talk about Patreon more another day,
00:12:58.060 | but for today, I would just welcome you,
00:12:59.540 | if you find value in this show,
00:13:01.540 | take a couple bucks a month and sign up as a patron.
00:13:04.180 | That's hugely influential to me as a creator of this project.
00:13:09.180 | You can find those details
00:13:10.980 | at radicalpersonalfinance.com/patron.
00:13:13.740 | radicalpersonalfinance.com/patron.
00:13:16.620 | Now, your hourly wage.
00:13:17.980 | Here's the simple gist.
00:13:21.100 | In our world, in a capitalistic economy,
00:13:23.980 | you get paid what you're worth.
00:13:27.460 | So in order for you to get paid more,
00:13:29.220 | you have to become worth more.
00:13:32.420 | It's as simple as that.
00:13:36.700 | You say, well, I'm not getting paid what I'm worth.
00:13:38.060 | Well, don't worry.
00:13:38.980 | You probably are, but if you're not,
00:13:40.860 | somebody along will come along and pay you what you're worth.
00:13:43.060 | That's how it works.
00:13:44.220 | If you're working a job and you're getting paid $10 an hour,
00:13:46.940 | but you're worth $20 an hour,
00:13:48.460 | one of your customers or a friend or a coworker will come
00:13:51.580 | and they will steal you away.
00:13:52.980 | Or you can go out into the job market
00:13:54.340 | and go get yourself a job.
00:13:55.180 | So just for today, even if you disagree with me,
00:13:57.260 | just stick with the concept.
00:13:59.060 | You get paid what you're worth.
00:14:01.300 | So if you want to get paid more,
00:14:02.660 | you've got to become worth more.
00:14:05.260 | Well, what do you have to contribute to the world?
00:14:10.260 | For most of you, it's primarily your human capital,
00:14:16.940 | your time and your energy.
00:14:18.740 | Whatever you do, you're going to be paid more.
00:14:23.740 | Whatever you can actually do,
00:14:26.740 | that's what you have to contribute.
00:14:28.940 | Your contributions are largely,
00:14:33.900 | for most of you, going to be related to your time.
00:14:36.980 | And so if you want to figure out
00:14:38.300 | how you're going to hit that income goal,
00:14:40.260 | you need to figure out what you're going to do
00:14:41.780 | with your time.
00:14:42.860 | We all have the same 24 hours a day,
00:14:44.540 | the same 168 hours a week.
00:14:46.540 | So it's what you do with those 168 hours a week
00:14:51.220 | that will determine your results.
00:14:53.660 | Some people make a few pennies a day.
00:14:56.020 | Some people make millions in a day.
00:14:58.060 | And it's all based upon what you do
00:15:02.180 | with your 168 hours a week.
00:15:04.100 | So to get some clarity around this,
00:15:07.620 | let me give you an example.
00:15:08.580 | Let's say that you set yourself a very excellent goal,
00:15:13.460 | which is to earn a six-figure income in 2017.
00:15:17.780 | You have a goal of earning $100,000 in 2017.
00:15:22.940 | That's a great goal.
00:15:26.020 | That will put you at about double the median wage
00:15:28.940 | in the United States of America.
00:15:30.820 | And that'll move you into a great,
00:15:32.820 | that's a great goal, good round goal.
00:15:35.940 | Set that goal, $100,000.
00:15:37.940 | Well, what do you actually need to do per hour
00:15:41.580 | in order to earn $100,000?
00:15:45.380 | First thing you got to do is you got to ask,
00:15:46.980 | is it $100,000 gross or $100,000 net?
00:15:49.780 | Is it $100,000 pre-tax or is it $100 post-tax?
00:15:54.220 | Always a big question.
00:15:57.660 | For today, let's just assume you actually wanna have
00:15:59.900 | $100,000 to spend, which is how most people actually mean it.
00:16:04.900 | That means you're gonna earn, you're gonna need to earn,
00:16:06.740 | let's say you're gonna pay about a 25% tax rate, $125,000.
00:16:11.740 | Always calculate that in.
00:16:12.820 | Now, if you have a more specific knowledge
00:16:14.780 | of your tax rate, great.
00:16:15.980 | But for now, let's just say 25% of income tax.
00:16:19.500 | You're gonna earn $100,000.
00:16:20.780 | That means you actually have to earn $125,000
00:16:23.580 | to net $100,000 to spend.
00:16:26.100 | Next, you calculate and ask,
00:16:27.380 | how many hours are you willing to work per week?
00:16:31.000 | Let's say that number is 40.
00:16:34.780 | Standard 40-hour work week.
00:16:36.300 | You say, I'll work 40 hours a week.
00:16:37.820 | And then the next question is,
00:16:39.140 | how many weeks will you work per year?
00:16:42.060 | Let's say that's 50.
00:16:43.700 | 52 weeks in a year, you take two weeks off for vacation.
00:16:48.460 | Now you've gotta work 50 weeks per year.
00:16:50.660 | That means that in a year, you will work 2,000 hours.
00:16:54.080 | 40 hours a week, 50 weeks a year is 2,000 hours.
00:16:58.580 | So if you take the number that you need to actually earn,
00:17:01.940 | which is $125,000, in order to net $100,000,
00:17:06.940 | you need to produce at least $62.50 of value
00:17:12.600 | per hour that you work.
00:17:15.660 | Every single hour in a 40-hour work week,
00:17:19.340 | every single week for 50 weeks out of the year.
00:17:21.660 | $62.50.
00:17:24.600 | Now if we were just saying $100,000 gross,
00:17:28.340 | and you weren't accounting for the 25% of tax,
00:17:30.900 | the number would be $50 an hour.
00:17:32.580 | The people who are gonna earn $100,000
00:17:36.820 | are those who produce at least $50 per hour of value.
00:17:41.820 | $50 per hour of value.
00:17:44.140 | So if you are not earning $100,000,
00:17:52.380 | it's good to set a goal of earn $100,000.
00:17:58.400 | But you gotta go on to the next step and say,
00:18:02.940 | how can I produce at least $62.50 worth an hour of value?
00:18:07.940 | $62.50 worth an hour of value.
00:18:11.040 | And this concept is applicable
00:18:15.580 | whether or not you're an hourly employee,
00:18:17.960 | whether you're a salaried employee,
00:18:20.020 | whether you're a business owner,
00:18:21.780 | whether you're a professional, doesn't matter.
00:18:24.380 | The point is that you need to produce value at this rate.
00:18:29.300 | So when you go into work on Monday morning,
00:18:32.300 | and you're sitting there, and as many times I do,
00:18:34.860 | and you're sitting in front of the computer,
00:18:35.900 | and you have the temptation to say,
00:18:37.560 | well, let me open that time-wasting website,
00:18:39.980 | all of a sudden, that's gonna make it much harder
00:18:43.740 | for you to earn your $50 an hour,
00:18:46.380 | or your $62 an hour.
00:18:49.860 | Now let's say you wanna earn $100,000,
00:18:55.980 | but you don't wanna work 40 hours a week.
00:18:58.060 | Well, you can put in any number that you want.
00:19:00.380 | Let's say you wanna work 30 hours a week.
00:19:02.180 | And let's say instead of working 50 hours,
00:19:04.460 | excuse me, 50 weeks per year,
00:19:06.000 | you wanna work 40 weeks per year.
00:19:08.580 | Well, if you wanna earn $100,000,
00:19:10.740 | you need to produce $104.17 per,
00:19:13.700 | you know, I'm gonna, hold on a second.
00:19:16.120 | Built this little calculator,
00:19:17.400 | a little spreadsheet real quick on Google Sheets
00:19:20.020 | that I'm gonna share in the notes
00:19:21.800 | so you can go and put your own hours in.
00:19:23.660 | But I built it with this tax rate built in.
00:19:26.820 | It's too confusing to talk about the taxes.
00:19:29.120 | We're gonna skip taxes for a moment.
00:19:30.440 | And from now on, we're just gonna use just the number,
00:19:32.560 | gross income, $100,000.
00:19:34.480 | So if you wanna earn $100,000 per year
00:19:37.040 | and you're willing to work 30 hours per week
00:19:39.880 | for 40 weeks a year,
00:19:40.880 | now you need to produce $83.33 per hour of work.
00:19:44.800 | It's as simple as that.
00:19:47.480 | So you need to apply this just like I need to apply this.
00:19:53.920 | This is something that I am applying
00:19:56.080 | as I consider my 2017 financial goals
00:19:59.120 | and I put in my numbers of what I wanna earn
00:20:02.560 | because my numbers are connected,
00:20:04.220 | not to a big round number,
00:20:06.320 | none of anyone else's business what that number is.
00:20:10.080 | I don't plan to tell anybody.
00:20:11.260 | My numbers are connected to specific goals,
00:20:14.120 | specific level of lifestyle
00:20:15.360 | that I wanna make for my family,
00:20:16.760 | specific amounts that I wanna earn
00:20:18.380 | for certain consumption goals, certain investment goals.
00:20:21.120 | As I put that number in there
00:20:24.240 | and then I think through how many hours I wanna work,
00:20:27.680 | how many weeks per year,
00:20:29.360 | it gives me a sobering reality.
00:20:31.680 | Let's just make an example.
00:20:33.120 | Let's pretend that I wanna earn $250,000.
00:20:36.920 | Let's ignore taxes.
00:20:38.200 | And let's say that I'm willing to work 40 hours per week
00:20:41.000 | and I'm willing to work 40 weeks per year.
00:20:45.680 | One of my personal goals, I'm not there yet,
00:20:49.080 | but in the future, I don't know if,
00:20:52.200 | it's not gonna be 2017.
00:20:53.120 | I'm not making this plan in 2017,
00:20:55.080 | but maybe 2018 I'll be in a position
00:20:57.200 | where I'm ready to go ahead and do it.
00:20:58.680 | But I wanna work three months at a time.
00:21:01.040 | Work three months, take a month off.
00:21:02.920 | I wanna work January, February, and March,
00:21:05.240 | and I wanna take April off.
00:21:06.760 | I wanna work May, June, and July, I wanna take August off.
00:21:09.680 | I wanna work September, October, November,
00:21:11.280 | take December off.
00:21:12.540 | That's been for years a dream of mine.
00:21:14.640 | And I've taken a month off at various times,
00:21:17.100 | but I haven't gotten to the point
00:21:18.280 | where I've been able to have everything
00:21:20.360 | running smoothly enough
00:21:21.720 | that I could actually follow through with that.
00:21:24.120 | But that's a goal of mine.
00:21:25.400 | So that means that I need to plan
00:21:27.040 | on about a 39-week work week under that schedule.
00:21:29.640 | It comes out to about 39 weeks.
00:21:31.920 | Well, let's say I wanna earn $250,000.
00:21:34.480 | I'm willing to work 40 hours per week
00:21:36.600 | for 39 weeks per year.
00:21:38.240 | That leaves me with 1,560 hours per year to work.
00:21:43.080 | That means I need to produce for every hour I work
00:21:47.000 | at least $160 per hour of value.
00:21:54.240 | $160 per hour of value every single hour.
00:21:59.240 | That ain't easy.
00:22:02.360 | It's not easy for any of us.
00:22:05.960 | The reason it's not easy is not
00:22:15.000 | because it's hard to earn $160 hourly wage.
00:22:18.720 | It's very doable to earn $160 an hour hourly wage.
00:22:22.520 | That's a, I mean, I don't have the data
00:22:25.720 | for someone like a billable rate
00:22:27.520 | for an entry-level attorney,
00:22:28.560 | but I wouldn't be surprised if $150, $200 an hour
00:22:31.760 | is a current rate there.
00:22:33.400 | You get up into an expert attorney
00:22:34.840 | and your billable rate turns into 500,
00:22:36.400 | 1,000 to plus dollars an hour.
00:22:38.200 | So it's not hard to do that.
00:22:41.360 | What is hard to do is to do that 40 hours a week
00:22:47.080 | for 39 weeks of the year.
00:22:48.760 | It's the consistency.
00:22:52.080 | See, all of us have some things that we can do
00:22:54.480 | that produce at a very high level.
00:22:56.600 | And the higher you go in the income scale,
00:23:02.280 | the more likely it is that your income
00:23:04.000 | is not actually so consistently punched out.
00:23:07.360 | Meaning you're not just getting paid
00:23:08.840 | on a strict hourly rate.
00:23:10.360 | Rather, you're getting paid for projects.
00:23:12.240 | You're getting paid for bursts
00:23:13.640 | of very high output productivity at very high rates.
00:23:18.200 | You're getting paid in bursts for work,
00:23:20.640 | doing work that's $1,000 an hour work
00:23:22.640 | for these 20 hours here,
00:23:24.320 | and then the next couple weeks just simply
00:23:26.960 | trimming up the pieces, et cetera.
00:23:29.320 | But the way you move up the income scale
00:23:30.880 | is by constantly having this in the back of your mind.
00:23:33.840 | If I'm gonna be at work, I need to work.
00:23:36.280 | And I'm going to produce at a high hourly rate.
00:23:41.280 | Action step for today.
00:23:45.440 | Calculate your hourly rate that you need to produce
00:23:51.000 | based upon your numbers.
00:23:53.360 | Figure out your income goal.
00:23:54.920 | Take that income goal.
00:23:57.360 | I'm gonna link a quick little Google sheet.
00:23:59.080 | I think it'll work for you.
00:24:01.040 | I've frozen two of the cells so that you can,
00:24:04.760 | I'm gonna simplify it, pull out this tax line
00:24:08.120 | just so it's simple.
00:24:08.960 | I've frozen just the result cell.
00:24:10.600 | You can go in and you can change the numbers.
00:24:12.760 | That should work for you.
00:24:13.920 | I don't think there'll be a big problem.
00:24:16.700 | So I'll link that in the notes for today.
00:24:19.140 | But go in and put your number of how much you wanna earn.
00:24:23.080 | Go in and put in how many hours per week
00:24:25.100 | you're willing to work.
00:24:27.060 | Put in how many weeks per year.
00:24:29.240 | Now here's the magic of this.
00:24:30.560 | Let's say that you wanted to earn $100,000,
00:24:33.620 | but you're not earning at a high hourly rate yet.
00:24:37.520 | Well, that's okay.
00:24:39.320 | Go ahead and put in 60 hours per week
00:24:41.280 | and put in that you're willing to work 50 weeks a year.
00:24:44.320 | Or 50 weeks a year.
00:24:46.440 | If you're willing to work 60 hours a week
00:24:48.940 | for 50 weeks a year, you only need to earn $33.33 per hour
00:24:53.580 | in order to produce $100,000.
00:24:55.580 | So you can do this no matter what your numbers are,
00:24:58.680 | but go in there with your actual numbers.
00:25:01.220 | And remember, if you wanna produce big numbers
00:25:04.540 | on the income side, it's gonna come down to consistent,
00:25:09.540 | highly productive, focused, high value work.
00:25:16.080 | That's how you earn your money.
00:25:20.080 | [BLANK_AUDIO]