My Mountain's too steep! – Part 1
My Mountain’s too steep! – Part 1
Well, we have looked (again) at the size of the mountain i.e. our Number, and – if you are anything like me or the 7MITs – it seems huge.
What to do?
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That’s exactly the question that Ryan (who is one of the 7 Millionaires … In Training!) posed:
The previous number I sent you was without taxes. I’ve included the revised table with taxes which pushes my number to 19million. YIKES!!! That new number seems astronomical, but I don’t feel like I’m trying to live like Donald Trump! Is there something I’m missing?
Spooky, huh? 
If you share Ryan’s ‘issue’ (i.e. what seems like a super-high Number) you’ll probably notice a couple of things:
1. Whether you buy a $2 Million house or a $4 Mill. house (today’s dollars) doesn’t seem to make a lot of difference to your Number e.g $19 Mill. or $17 Mill. – who cares?!
2. But every extra dollar that you spend ANNUALLY really takes a chunk i.e. x 20 for inflation AFTER you stop working x Inflation Adjustment BEFORE you reach Your Number/Date) …
… which really means that every recurring dollar that you spend costs 20 to 40 times more in ‘Number costs’.
So, it’s logical to start by cutting annually recurring expenses: e.g.
- Do you really expect to eat out every night and incur $40k per year of ‘Meals’ expenses?
- Do you love golf enough to spend $20k a year on it?
- Spa? I guess with all that golf, you’ll need the massages
- And, so on …
Also, keep in mind, the bigger the house, the bigger the maintenance, etc. expenses … so, I guess the size of house really does matter – but, not for the obvious reason.
But this IS your Life, so make sure that your Number is EXACTLY as big or small as you NEED it to be.
There’s nothing wrong with reviewing things now …
Of course, if you’ve looked at your Number objectively – and filtered it through the only lens that matters: your Life’s Purpose – and, it still scares you then you can either accept it, or do something else …
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… something that’s so simple, yet powerful, that you will kick yourself for not thinking of it sooner.
But, more on that tomorrow 
And don’t forget that if you have $100,000 in annual expenses you will need at least $135,000 annually to pay your expenses after your taxes. Then you multiply by your 20-40 for inflation!
To look at it another way, if you want/need a vacation every year that in 10 years will cost say $15,000/year, you will need at least $23,000/year of before tax income. Take that $23,000 * 20 (the MINIMUM multiplier for inflation) and you get almost half a million dollars!!!
Adrian’s very right about annual expenses adding up!