I first started got started with eCommerce after reading The Four Hour Workweek by Timothy Ferris and one of the concepts he covers in the book is setting your Target Monthly Income (TMI).
So how do you calculate your target monthly income? I do it by creating a list of everything that I want to do in this coming year.
Ask yourself some questions now:
Do you want to go on any vacations? Where to? For how long?
Do you want to move? Where do you want to live? What is the average cost of rent?
What will your day to day life look like? Do you want to join a gym? Get a personal trainer? Do you want to go out to dinner nightly? How much would you spend?
What kind of car do you want to drive? Can you finance it?
This list should include anything and everything that you want in the next year. Don’t worry about how you’re going to pay for it yet, that is not the point of this exercise. The point is to determine how much your DREAM life will actually cost you per month. You can then look into the different ways making money money online and choose which one you will use to achieve this goal.
Here is an example of setting your Target Monthly Income;
Make a list of things you want within the next year:
- Own an Audi R8
- Spend a month traveling through South America
- Take golf lessons from a Pro
- Workout with a Personal Trainer
This is just an example, you list can include anything and everything that you want.
Now that you have your list of things that you want in the next year, you need to figure out what they are going to cost you.
I find used Audi R8s on eBay selling for about $100K. I check and see I can finance one for with monthly payments of $1,548.16
I speak to a friend who spent a few last year traveling through South America and he tells me how it can be done for about $2,500 including activities, food and lodging. I look up flights from Toronto to Buenos Aries and see that I can go round trip for around $1,800. That’s $4,300 total which calculates to $358/month.
I look up golf lessons with a pro in Toronto and see that I can get lessons a local club for $50/lesson. I think it’s best to go 2x week, which equates to $400/ month in lessons. I think I’ll need to go for 2 months to achieve the results that I want so it would cost me a total of $800, which is $66.67/month.
I find a good personal trainer in Toronto and they recommend I go 2x/week and the cost is $50/session. That is $400/month.
I then calculate other expenses such as food and local entertainment and find I will need about $1,200/month to be able to do everything that I want to do.
So what is my Target Monthly Income?
Audi R8: $1,548.16
Month in South America: $358
Golf Lessons: $66.67
Personal Trainer: $400
Food & Entertainment: $1,200
That’s a grand total of $3,572.83. I add on 30% for overspending and savings and it bring my TMI to $4,644.68.
That is EVERYTHING I want in life this year, leaving my dream lifestyle. No holding back, no limiting myself AND saving money.
Doesn’t seem all that impossible, does it? It’s not. It’s actually quite simple to follow my techniques and achieve this level of income and beyond while not even putting in full time hours.
Do you this exercise yourself. You will most likely see that you do not need to be a multi-millionaire to have everything you want in life. You do not need to win the lottery or start the next Facebook. You just need to know your number and to take action that will lead you towards it.