September 17, 2014

How much money do you really need? By: Niel Patel

Here is a great post written by Niel Patel from his website QuickSprout

Everyday I run into to new entrepreneurs who tell me about their “business venture” and how they are going to change the world. After they tell me this, I immediately ask them this one simple question:

Why are you an entrepreneur?

And you can probably guess what the most common response is…

I want to be rich!

Then, when I start digging deeper to find out why they want to make a lot of money, it’s almost always because they want to live a comfortable lifestyle so they don’t have to worry about money.

That’s usually when I always think to myself, “how much money does one really need to live comfortably”?

Don’t get me wrong, I am also an entrepreneur because I want to make money, but I quickly learned that you don’t need as much money as you would think to live comfortably.

How much money does Neil need?

I’m not going to tell you how much money I make each month, but I’ll tell you that I live a pretty comfortable lifestyle without stretching myself thin. Just for a moment, lets look at my monthly expenses:

Life insurance: $225
Mortgage (includes property tax and home owners dues): $3000
Cable TV: $186
Electricity: $15
Gym: $50
Food: $1000 (I eat out a lot)
Partying: $1000 (I work hard and play hard)
Miscellaneous: $500
Total expenses: $5976

Some of you may think that I live a lavish lifestyle and some of you may think that I live a frugal lifestyle. I personally think I am somewhere in the middle.

I’m not married, I don’t have kids, I am currently single and overall I think my expenses are pretty low compared to my income. I know if I got married and had kids my expenses would shoot through the roof. I don’t know what those expenses would entail, but I am assuming that I would need a bigger house and obviously everything else would double if not triple in order to support a family (except the partying of course).

But overall, how much money do you really need? When I was younger I quickly learned that anything above $15,000 in monthly income for me didn’t change my lifestyle. As long as I am single, I can easily live within my means and have a good amount of savings after taxes assuming my income never dips below $15,000 a month. And if it does dip, I can cut back on my expenses to $3500 a month.

How much money do you need?

By no means am I saying that it’s easy to make money, but what I am saying is that you don’t need much to live a comfortable lifestyle. And if you do, it’s because you are putting the added pressure on yourself by buying fancy cars, a really big home, and materialistic objects that you don’t need.

Making millions of dollars is never an easy thing to do. It’s a lot harder to make money than it is to save it. For this reason I am a big believer in living below your means so that you don’t have to stress out about making more and more money each month.

Heck, I even somewhat regret paying $3,000 a month for my home. I probably would have been better off paying $1,000 a month living in a 275 square foot motel room (which I did for 6 months).

Conclusion

The point I am trying to make is that you don’t need much money to live a comfortable lifestyle. If you are trying to be an entrepreneur to make millions of dollars, that’s great! But if you only need to make $10,000 or $20,000 a month to live a great lifestyle, there are much more easier ways to make that money.

If you still want to go through the entrepreneurial path, by all means do so and I’ll even help you along the way. But if you are trying to just live a chill lifestyle here are some ways you make a good living:

  1. Get a college education – I hate to say it, but it really does help with getting a good job. A person with a college education on average will make a million dollars more throughout their life than someone who doesn’t have one.
  2. Network, network, network – the people who tend to get paid the most are the ones with big networks. Go to industry conferences that are close to where you live. By doing this you’ll start to meet decision makers who are able to write big checks, and potentially hire you for a lot of money.
  3. Work hard – I know this point is obvious but you’ll be surprised at how many hours 9 to 5 employees really work. 63% of people work less than 6 hours a day, so if you can start working more efficiently and for 8 hours a day you’re more likely to rise to the top.
  4. Connect with recruiters – recruiters not only know about hot jobs, but they know about lucrative ones as well. Even if you have a job it’s good to connect with recruiters because they can lead you to a lot of future opportunities. An easy way to connect with them is through LinkedIn.
  5. Blog – whatever industry you are in, make sure you blog about it. By starting a blog you’ll be perceived as an industry expert. And once you are one not only can you demand higher wages, but you can also take advantage of consulting gigs on the side that will pay a nice hourly wage.

Like I mentioned above, if you want to shoot for the stars and try to become a millionaire, by all means go for it. If you just want to live a comfortable life, you don’t need to be an entrepreneur, you just need to find a high paying job. ;-)

And if you are wondering why I still keep on working, it’s because:

  • I have nothing better to do – I really don’t know how to do anything other than being an entrepreneur.
  • I suck as an employee – If I were a 9 to 5 employee, I probably would be fired within a few weeks because I suck at dealing with bosses and being stuck in meetings all day.

So how much money do you really need? And why do you need it?

How much money do you really need?.

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About Hillary

Hometown is Richmond, VA. politics, social media, internet, green technology, and other random stuff.

Comments

  1. hi hillary! wow! an eye opener for me. I don’t need much money, but I just want to at least contribute to the household so I try to earn from anything I am capable of doing. now, i’m trying my hands to cakery and hopefully i make this a good business.

    thanks again for always dropping by and leaving really wonderful comments. cheers!

  2. No Problem AC I got the article from Niel Patel At quicksprout.com he is definitely a guy to keep an eye on, he is always putting out great article I strongly suggest checking him out.

    Good luck in the Cakery Business, Cup Cakes have been hot lately ever where I have gone, not sure if that is your direction but Good Luck all the same in your new Venture. Thanks for keeping an eye on my blog, it’s always great to hear from you.

  3. Hello Hillary,
    Very nice post you picked up from Quicksprout. I like the conclusion session because I would like to be an entrepreneur and the points which Niel specified are really interesting and have caused me to rethink some of the thing I am currently doing.

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