As we research information about home based businesses, the questions that come up usually include, “Why start a home based business?”. Typically, we see all sorts of answers about helping people, changing lives, having an impact, etc… and all of these are good answers. Some of them are even true on some level. But let’s break it down. We enjoy the freedom of running a home based business, the challenge of running a home based business, the rewards of running a home based business, but what we were really thinking about when we filled out that registration form was the money we could potentially make from our home based business.
Do I enjoy helping people improve their lives? Absolutely! And money is one of the ways we can do that.
Do I enjoy helping dads be able to stay home with their kids and be connected with their families? Very much! And money makes that available to them.
Do I like helping people escape the 9 to 5 hamster wheel they call a job? Without a doubt! And money makes that possible!
Is it rewarding to help people enjoy a healthier lifestyle? Undoubtedly. And if they are making more money, they can purchase healthier food and make better quality lifestyle choices.
Ask someone why they took a particular job and at least part of that answer will include the salary. We take jobs to make money. Even when we LOVE the job and get the other personal rewards that come from a job well done, if the pay check stopped, we’d be looking for another job.
So, let’s all admit that part of the reason we love the idea of a home based business is the money that is available if we are successful at building that home based business.
What we do with that money will come down to a number of personal decisions motivated by our own goals. Some folks want a better lifestyle. Some want more time freedom. Some want to travel more. Whatever your motivation, money helps make it possible.
So now let’s break down the concept I’ve come to know as “Millionaire Math”. This is the term I use to break down what it takes to make a million dollars per year. First, we need to get rid of the “8 hour work week” mindset. Financial wealth comes from leveraging time and energy. With the internet and the ability to build your home based business on a global level, this concept is very feasible. We can literally create or tap in to system that let us generate revenue every second of every single day.
So let’s start with breaking down the idea of making $50,000 annually from your home based business and what it looks like when you learn to leverage your time and energy to create revenue literally every second of every day.
We know there are 12 months in each year, so breaking down $50,000 in to a monthly income goal is very simple. We divide $50,000 by 12 and get $4,166.67 per month. We need to be generating $4,166.67 every month to earn $50,000 annually in our home based business.
So let’s break that down by week.
If we ask Google, “How many weeks in a year?”, we get: 52.1429. I’m going to round that down to 52.14.
So, $50,000 divided by 52.14 weeks means we need to generate $958.96 on a weekly basis to reach $50,000 per year.
So far, most of us can think like this and we don’t really struggle with the concept. For some, this may be more money than you are used to. For others, this may not be enough to get you excited. Stay with me for a bit.
Let’s break this down by day. What is the daily income we need to generate in order to be making $50,000 per year? Remember, we are not talking about linear income where you punch a clock. We are talking about leveraging systems that allow us to generate income 24 hours per day, 7 days per week. So $50,000 per year, broken down by the day comes down to $50,000 divided by 365 which equals $136.99 per day.
This same figure comes down to an hourly income (generating revenue 24 hours per day) of $5.71.
We get this figure by multiplying 365 days by 24 hours in each day which gives us 8,760 hours per year. Most of us wouldn’t walk across the street for a job paying $5.71 per hour. But learn how to leverage your time and energy to generate $5.71 per hour 24 hours per day, and things start looking better.
Let’s break it down by the minute. I promise you, millionaires know what their time is worth. They don’t waste a lot of time because they are aware of what their time is worth and they know that time is the one thing they cannot make more of. So let’s break it down.
There are 525,600 minutes in a year. So $50,000 broken down by the minute comes to $0.96 (96 cents per minute).
You can check all these figures here.
This sort of thinking really helps me dial in to how I am spending my time. When I have successfully set up and utilized systems that allow me to generate income literally every minute of every day, I can enjoy my time much more and make better decisions about how I spend my time.
So let’s break down a few more income levels with this same formula.
Let’s look at earning $100,000 per year. That comes down to:
$8,333.33 per month
$1,917.91 per week
$273.97 per day
$11.42 per hour
$0.19 per minute.
Let’s look at earning $250,000 per year. That comes down to:
$20,833.33 per month
$4,794.78 per week
$684.93 per day
$28.54 per hour
$0.48 per minute
And now it’s time for Millionaire Math. To be earning $1,000,000 per year in your home based business, your income numbers break down like this:
$83,333.33 per month
$19,179.13 per week
$2,739.73 per day
$114.16 per hour
$1.90 per minute
$0.03 per second
These formulas are designed to give you a way to gauge your own progress toward reaching your goals. Whether you are shooting for the $50,000 mark or the Millionaire mark, I think it’s important to know how to measure your success. With the internet, technology, and a fair amount of work, I believe we can all participate in systems that allow us to generate revenue 24 hours per day.
Of course, we also have the option of living by the 8 hour work clock where someone else decides our income, but that system doesn’t work for me. Personally, I’ve set a goal to live out the top side of this chart. Why? Do I want to help people? Absolutely. Having more money available will allow me to help more people. I also want to live a very nice lifestyle, drive cars I enjoy and enjoy experiences that make me say, “Wow! Let’s do that, again!”
And all of that takes money. For me, a home based business is the best way to make it happen.
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