A question that I often get from my colleagues is “Is there a such thing as enough money?” Unfortunately, this question stems from a mindset of scarcity instead of a mindset of abundance. It comes from a feeling of worry about lack of money instead of a feeling of assurance in factual calculations and a healthy financial state. There is a calculation that can be done to produce a solid answer. When an answer is calculated for the individual, he/she can work toward financial freedom.
Making financial calculations and having the right numbers to stand on are imperative because they make for better planning and financial stability, and they create a positive belief about money. Below, I have shared a formula for calculating how much money will be enough for comfortable living.
Calculate your monthly budget, including the following:
- Home/Car/Renter’s insurance
- Entertainment/Fun (movies, eating out, Netflix subscription, etc)
- Car Payment
For demonstrative purposes, let’s set your monthly budget to $5,000. That’s your survival number (the minimum amount needed to live currently). However, a higher amount is needed for your comfortable dream life. The dream life amount is 10% in addition to the survival number. In this case it will be: $5000 x 0.1= $500. This would make the dream life number $5,500.
In this example, if your monthly income is $5,500 or more, you are all set. No need to fret (that was an accidental rhyme). If you should need more, you can work overtime or pick up extra shifts. Otherwise, you can relax as long as you’re making your dream number [or more!].
In my case, I decided that working in real estate, and direct sales are the best way to get passive income outside of my day-to-day job.
Now, it’s time to get you in a mindset of financial abundance and find your freedom number! How much will it take for you to live comfortably? I encourage you to put what you have learned from this blog post to the test. Self-experimentation is the key to opening up new possibilities in your life. Give it a try and you might be pleasantly surprised!
PS: I help physicians get out of debt and live wealthy lives faster using the magic of personal finance and multiple streams of income. Does that sound of interest to you? If so, be sure to click this link to book a wealthy living consultation. I hope to talk to you soon!