I was chatting to a friend last night and was amazed at his reaction to what I had to say.
The conversation went something like this:
Me: Did you see that article about the guy who can’t live on $350k a year?
Him: What guy?
Me: Oh, some guy written up in the Wall Street Journal the other day.
Him: I didn’t see the article. What about him?
Me: He’s a lawyer or law professor or something who earns $350k a year and can’t make ends meet.
Him: Yeah, I know people like that. Remember Elton John nearly went broke?
Me: Yeah [laughs]. But, that’s not what I’m talking about. He says he can’t even afford to own a house because he lives in New York … in Queens or Brooklyn or somewhere like that … and between his taxes … I think he pays nearly half in taxes … and his rent, he is really struggling.
Him: Poor him [laughs]
Me: [laughs]. Yeah I guess it seems funny. But, I actually know where he’s coming from. I own my house and my cars outright. OK, I have two kids in private school, so that’s expensive. But, we struggle to stick to our $250k a year spending budget.
Now, here’s the weird part: my friend didn’t seem surprised at all …
… like NOT being able to live on $250k a year (before taxes) when you have NO mortgage, NO car payments – in fact, NO debt at all – is nothing unusual.
I made $7 million in 7 years so, for me, spending ‘only’ $250k a year is probably being frugal.
What’s his excuse?
And, how much annual expenditure are you banking on your Number being able to produce?