The following is a guest post from
Thomas at i need money ASAP!
My secret number is… 3000 12 16. This number is actually written down in a few different places. Most prominently you’ll find it on my fridge at home and written on a post-it note stuck to my computer screen at work. No this isn’t my computer password. It’s not my social security number. It’s not my PIN code either. This number is a secret that only a few people know about. This number is a goal.
They say the best way to reach a goal is to write it down. Well that’s what I’ve done. I’ve turned my goal into 8 numbers that I can display anywhere. I know exactly what it means, but no one else does. For me it’s a daily reminder of my goal. To make sure I keep things on track and moving forward.
What is my goal you ask? My goal is to make enough money from home so that I can quit my day job!
My Secret Number Part 1: Monthly Income
The first part of my goal is to create a certain amount of monthly income. The FIRE (financial independence retire early) crowd uses their financial assets and a safe withdrawal rate (SWR) to estimate their monthly income. For example, $1,000,000 in financial assets and a 4% safe withdrawal rate will provide $40,000/year or $3,333 in monthly income.
My estimate is that I’ll need about $3,000 per month to quit my job. That’s equivalent to $900,000 in financial assets with a 4% SWR. But I don’t have even close to this amount of money in financial assets. So my plan is to create a few income streams to reach this monthly income goal. This is the first 4 digits of my secret number. Not a huge amount but still a pretty difficult goal to work towards.
My plan is to make this money a few different ways. Of course I have a website focused on helping people who need money.This produces income through advertisements, mostly Adsense, Media.net affiliate sales. There’s also my carpentry hobby which produces some small side income. Finally I’d like to start a small side business within the next year. These three sources of income will
hopefully let me earn $3,000 per month.
My Secret Number Part 2: Consistency
The problem with making money from home versus earning money from investments is that consistency becomes a greater concern. FI’ers can be reasonably confident in their SWR. Odds are that they’ll be able to withdrawal 3-4% indefinitely. But working from home doesn’t have the same level of consistency. So numbers 5 and 6 in my secret number are for the months. My goal is to make $3,000 per month for 12 months straight.
Once I’ve achieved this level of consistency I’ll be confident in quitting my day job and giving up my current safe & steady income source. This mental barrier is something I imagine FI’ers have to deal with before giving up their primary income source too.
My Secret Number Part 3: Target Date
My goal, like any good goal, is time bound. There is a clear date that I’m working towards. That date is Dec 31st 2016. By the end of 2016 I want to be able to quit my job. Because I want my income to be consistent for 12 months straight this means that by the beginning of 2016 I need to be making $3,000 per month. Then for the rest of the year I need to keep that income above $3,000 per month before I can quit my job. Not an easy task.
My Secret Number:
In general part two and part three of my secret number are a little more flexible. Because I’m already producing some money from home, I’m building a decent sized emergency fund. So even if I don’t have 12 full months of income above $3,000 by the end of 2016 I still might decided to pull the plug if my emergency fund could bridge the gap for a little while.
I’m very excited about my secret goal and working from home full time. I’d love to hear what you think about my plan, my goal and if you have any similar goals for yourself. I hope you enjoyed this post. Please come visit me at i need money ASAP!
PS. If you’re reading this and think you may know me and my secret number then please come by and say hello… but be discrete. I’d love to talk about personal finance and financial independence but still want to keep my goal a secret 🙂
Photo by Charles Dyer