Building a Six Figure Income Money Machine
The good thing about having a set goal is that you know the direction where you are going. If it’s for your retirement fund, you have to know the amount that you want to receive monthly as your target. You will then set how long you will have to build the capital that will allow you to receive that monthly income from your retirement fund.
For example, you decided to have an income from your investments an amount of P100K monthly during your retirement, assuming that you will get a 10% annual returns, your capital should be P12M. That’s P12M x 10% divide by 12 months.
This P12M capital is your money machine that you will build to allow you to live with financial freedom, a passive six figure income that will take care of you month after month during your retirement years until heaven will call you.
With that P12M, you will then calculate how much you are going to invest on a monthly basis until you reach the capital you need. Try a simulation depending on the monthly amount, years to invest and rate of return. Below is my calculation to arrive at P12M:
The assumption is that you will invest monthly (Cost Averaging Method) an amount of P30K and 10% growth returns, 15 years of accumulation, you will arrive at your desired capital of P12M.
If you will achieve your goal, that’s the time that you can say that you have the financial freedom. You don’t have to worry about money even you don’t have to work; it will be your money to work for you. That means you can have the freedom to good things without being bothered on what you will eat, what you will drink and what you will wear. You made your money your slave, not your master.
Investing your money, you must have a good strategy. You should leave your investments to grow over time, so you have to protect it that you will not touch it when unavoidable circumstances arise. Here are the things that you need to consider:
– Basic knowledge in the field of personal finance
– Your earning capacity
– Insurance for protection
– Debts and liabilities should be eliminated
– Emergency Fund (at least 6 months of expenses – that’s about Euro 10,000 – 20,000 for me)
Once these things are taken cared of, you can be assured that you won’t be disturbing your investments.
I’d love to share my goal for the Money Machine I’m building.
Good luck in building your six figure income money machine!
If you are planning your retirement fund this big, I invite you to join me. I need to associate with people who have audacious dream like me. We learn together as we move forward to our dreams and desire to build our money machine.