The Math Behind Making $100,000 a Year

The simplest thanks to making $100,000 a year is one that we all already know:
Find employment that pays $100,000 a year.
Of course within this one strategy, there are multiple sub-strategies including trying to find jobs with a high starting pay and dealing your high the ladder.
But there are other ways to travel about it also. Here are three different approaches to putting together a $100,000 income:

Get “X” Number of individuals to Pay You “Y” Dollars:
Get 1 person to pay you $100,000
Get 2 people to pay you $50,000
Get 10 people to pay you $10,000
Get 100 people to pay you $1,000
Get 1,000 people to pay you $100
Get 10,000 people to pay you $10
Get 100,000 people to pay you $1

Fundamentally, making money is about selling. It’s about creating or doing something valuable enough that folks pay you for it.

It doesn’t really matter if you're offering a product or a service, it just has got to be something the customer wants enough to spare their money to urge it.
How many people you would like to pay you may be a function of what proportion you're charging. There’s a tradeoff between value and scale.
If you’re only offering one dollar worth useful, you would like a massive scale to hit your number. If you simply have one customer, you had better provide massive value.
Of course, value and scale are only con if we are talking about hitting a particular amount of income. actually, you'll pursue both these goals at an equivalent time.
Chances are, you'll start with no scale, and tiny ability to supply value and can got to work on increasing both. the likelihood is that you’ll reach $100,000 somewhere within the middle, moderate scale and moderate value. But it’s helpful to believe what it wishes to pursue massive scale and large value:

Delivering Massive Value
One of the issues with suggesting that you simply get someone to pay you $50,000 dollars is your knee-jerk reaction that “no one would ever pay me $50,000.”
That’s simply not true.
Very few people would be willing to pay you that much, but only a few aren't an equivalent as zero, and it seems only a few is strictly the range you’re trying to find.
First of all, they might need to be ready to afford it. Second of all, they might need to highly value it.
Let’s do a touch thought experiment of how you would possibly make $100,000 a year by getting two people to pay you $50,000.

To start, you’re watching targeting wealthy people. Even better would be obnoxiously wealthy people, people that are so busy making money they don’t even have time to spend it all.
So maybe overworked but highly compensated CEOs of tech companies? seems like an honest start.
Next you've got to work out what they need, what would make their life better. Since they’re overworked, maybe they need an opportunity, some rest and relaxation. Maybe a retreat of some kind? Great, let's accompany that.

So here’s the plan: you design a retreat for five folks that involves bonding, relaxation, solitude, learning new things, and potentially doing something very different from their normal intellectual labor. Maybe building a treehouse together, be creative.
How much may be a unique experience designed for the precise needs of somebody who has extra money than they will spend worth? I don’t know. Can we discover five people willing to pay $50k? It won’t be easy, but we probably can.

Why five people? Because we'd like some money to truly create the experience. 5 people times $50,000 is $250,000, which suggests if you would like to form $100,000, you've got a $150,000 budget to figure with.

With one year and $150,000, could you create a singular experience that five people with an excessive amount of money to spend would pay $50,000 for? I feel you'll.
Acquiring Scale

Unfortunately I don’t think there's much of how around this one: the simplest way of acquiring scale is slowly, consistently exposure over time.
If you would like, you'll attempt to “go viral” and have many subscribers and customers flock your way, but there’s a big amount of luck at play thereupon strategy.
The best thanks to growing are to supply value where you'll, to be generous and help others selflessly, and to stay around long enough for word of mouth to spread.
The Hidden Insight

Both value and scale are hard to create, but a key insight is that you simply maximize the mixture of the 2 by offering multiple levels useful at multiple price points.
Let’s say you go the route of trying to urge 1,000 people to pay you $100 — but only find 500 customers.

First of all, congrats on making $50k, but believe this: a number of those people that paid $100 would have paid $1,000 if you had something for them worth more.
So here’s the maths (assuming 10% would have purchased a premium option if it had been available): 50 x $1,000 = $50,000, 450 x $100 = $45,000.

Look at that! You had an equivalent 500 customers, but rather than only getting halfway to your goal, you came within five percent of it with $95,000.
Build Income Streams That Average “X” Dollars Per “Y” period of time
$100,000 a year
$8,334 a month
$1,924 a week
$274 a day

Unlike the previous section, these are all just alternative ways of expressing an equivalent thing.
These ways of dividing it up to don’t account for any day off, but I’m not expecting you to figure 24/7, I’m expecting you to make income streams that aren’t hooked in to continuously working.
The New Assets

I have bad news and excellent news. The bad news is that you’re probably not getting to become an overnight viral sensation beginning a lucrative career as an influencer.

The good news is that if you’re smart about how you employ the new media, you'll create assets that are working round the clock to create your money.

There are videos that I put out on YouTube in 2016 that are still making me money every single day. I even have Medium posts from last year that are still making me money every pay period.
What I’ve found to be the case is that I even have no idea beforehand what's getting to resonate. I publish much content on many platforms and most of them bomb majorly, but a couple of connecting with people and do really, rather well.

The nice thing is that even the content that bombs can still bring me value, because blog posts, podcasts, and videos never get tired and take an opportunity. they're working round the clock to realize subscribers and earn money.

At a particular point, these income streams start clicking and making money on autopilot. Sometimes it’s not tons, but any amount of income may be a good start line to create off of.
Trading Time For Money

You can absolutely trade time for money on your thanks to acquiring $100,000 in one year, but you've got to understand that you simply only have such a lot of time. With the purchasers vs price tradeoff that we checked out earlier, you'll get more customers to offset a lower cost. you'll only work more hours up to some extent.

This means that you simply got to skills much to charge for some time to form it worthwhile.
I suggest using the numbers from the bullet points above as your start line . as an example, if someone wants you to try to employment that you simply think will take each day, you ought to quote a minimum of $274. If they need you to try to employment that you simply think will take the entire week, you ought to quote a minimum of $1,924.
Build a $2.5 Million Dollar Nest Egg

You can also call this strategy “retirement” of “financial independence.”
Personally, I prefer the term “financial independence” (or FI). To me, FI means your money is taken care of, and whether or not you're employed and what you are doing for work are completely up to you. Retirement means you pack up, which I feel may be a really bad idea.
The 4% Rule

The 4% rule may be a rule of thumb derived from a 1998 study called The Trinity Study. In analyzing the rates at which a portfolio can survive a 30-year retirement, the researchers found that you simply could withdraw 4% in year one and increase your withdrawal to regulate for inflation every subsequent year and still have a huge chance of your portfolio surviving — and in man cases, even growing! — during the 30 years.

Of course, it’s just a rule of thumb, but it gives you an honest idea of what you would like to retire comfortably.

$100,000 is 4% of $2.5 million, so if you would like a portfolio that features a strong chance of surviving which will spit out $100,000 a year in passive income, $2.5 million may be a good target.
You might be thinking that $2.5 million is an insane amount, and you’re right. But the great news is that if you start early, you've got the facility of interest on your side.
Assuming a 40-year career and a 7% yearly return, it might take about $11,750 a year to succeed in $2.5 million. Of that final balance, but $500,000 would be money that you simply put away, and over $2 million would be through investment returns (you can see the maths on the google sheet I created here).

Charting Your Own Path
Maybe you would like to climb the company ladder and level up your skills within the business world. Maybe you would like to explore your entrepreneurial side and supply value to customers directly. Maybe you would like to take a position within the stock exchange and have the publicly traded companies of America exerting on your behalf to form you rich.
Maybe you would like to experiment with all the various strategies.
Whatever you are doing, it’s getting to take tons of diligence and stepping out of your temperature.
Getting Your Money Right

The brilliant Naval Ravikant has commented that cash won’t solve all of your problems, but it'll solve your money problems.
Since money is such a crucial part of our civilization, solving your money problems may be a big win.

To become an income-generating machine, specialize in saving, serving, and selling.
Getting your yearly income up over $100k isn’t necessarily easy, but everything is “figureoutable” if you’re willing to maneuver forward within the face of uncertainty.