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
via Flickr
Your eight code digits at first seem like “what”. After reading, I just found out it means and made me realize that you are strategic and that I have to make my own eight or nine digits. Thanks for the idea Pauline!
Thanks Jayson! You should create your own secret number.
$3K is a pretty ambitious bar to set for future retirement income. All the luck to you in trying to get there.
Hi MMD! Three thousand a month seems pretty reasonable, it’s only $36k per year after all. That could be achieved with less than $1,000,000 in pure financial assets. We’re also looking at getting into real estate investing, specifically an income property, so that $3,000 a month should be feasible and we won’t need even close to that $1M saved.
Writing it down definitely makes it real and sharing it on the internet creates ultimate accountability 😉
That’s true Stephanie 🙂 Now I have even more incentive to reach my goal. Good luck with your goal to make $4,000/month in 2015. I hope we’re both able to achieve our goals this year!
I like how that code means something to you and you post it around so its visible to you all the time.
Thanks Tonya. This is an idea I got from another personal finance blog a while ago but for the life of me I cannot remember who it was. I started using it and found it very motivating.
Pretty good idea – I like it 🙂
Thanks J.Money. And thanks again for sharing the post on Rockstar Finance!
This is a great way to keep you focussed on the way to financial independence. My first German teacher used to tell us to stick notes with our vocabulary all around our room, so it would become fixed in our mind, almost without trying.
I hope you achieve your goals, and here’s to a fantastic 2015!
Absolutely! It’s almost like it seeps into your subconscious. There’s also something fun about opening displaying a secret like this 😉
The secret number caught my attention. Definitely going to figure out how to incorporate it into my thoughts and use it too as a reminder.
Awesome Jason! You’ll find it very motivating I’m sure. Come back when you achieve your goal and let us know 🙂
I love this idea of having your secret code and number displayed in places as a constant reminder… what a great way to focus. I think maybe I will figure out my numbers and then write it in permanent marker on the front of all my credit cards – make me really think about my purchases!
Thats an interesting twist on the idea Mrs SSC. Anywhere will work, so long as it visible it will help keep you focused on your goals.
Such a great idea. I’m going to do something similar. My goal is to make $50,000 New Zealand dollars per year but as I already have some rental income I have to focus on growing my sites and freelance work.
Thanks for making me go work out my SWR which I’ve been meaning to do for a while.
That’s a great goal Emma. Good luck in 2015.
$3k outside of your day job seems like a huge amount. I am praying for you though and look forward to your next post when you tell us you’ve done it for at east 12 months.
I’d have to run the numbers but I bet mine aren’t too far off from yours.
Thanks! It is a big amount. Its not an easy goal but I’m willing to be a bit flexible on some of the values.
If I find that I can’t get there due to the time commitment required of both my regular job and side gigs then I might pull the plug before reaching $3k/mo or 12 months straight as long as I have enough emergency funds to bridge the gap for a while.
I’ve found that writing down goals definitely help me to achieve them. I also make it a point to keep them around in places I will notice them and see them often. One of my favorite places is my home screen on my smartphone. Every time I am on my phone, I see my goal and it makes me pause and think if there is anything more I could be doing to reach the goal.
I’m definitely liking this idea of establishing a number for yourself mentally, so that it’s not always just a struggle to surpass wherever you may so happen to be. I have yet to do this but can already see how much pf a stress reliever it can e, especially if you’ve surpassed certain levels that you’ve set for yourself on the way up. Rather than just establishing a retirement number, I think I’ll set up #’s for various points in my life, so that I can have somewhat of a life goal business plan set up at various stages along the way.