• 02:20:05 am on July 27, 2008 | 1
    Tags: , , , ,

    The $550,000 a year lifestyle …

    Even though Michael Masterson also talks about a $900,000 a year lifestyle in his book, when you consider that you will need $11,000,000 to $22,000,000 ‘just’ to live at this level, I think we need go no further.

    Besides, if you really expect to build a $20,000,000 to $40,000,000 (something that I haven’t achieved … yet) minor fortune, you can afford to buy Michael’s book yourself!

    So, what does a sustainable income of $550,000 a year buy you? Here’s what Michael Masterson has to say:

    $550,000 a year [is] $357,500 after paying 35 percent in taxes. Deduct $90,000 for your housing expenses, another $30,000 a year for upkeep and utilities, $27,500 for food, clothing, and miscellaneous … and you’d end up with $210,000 a year to spend on discretionary items.

    Let’s see how $210,000 pans out:

    10-day Hawaaiian vacation for two    $10,000
    10-day London vacation for two    $10,000
    10-day Istanbul vacation for two    $15,000
    2 four-day weekends in New York City    $12,000
    52 very-fancy dinners at $500 each    $26,000
    52 semi-fancy dinners at $200 each    $10,400
    104 meals at the local place at $100 each    $10,400
    Lease upgrade on two Mercedes    $14,400
    Overboard holiday party for 100 friends    $14,000
    Extravagant Christmas gifts    $5,400
    Golf membership for two    $5,000
    “Spoil ’em” presents for eight grandchildren    $4,000
    100 spa treatments    $10,000
    10 percent charity/church tithing    $21,000
    “where did that money go?” money    $15,000
    2 season tickets for an NBA team    $8,000
    Tennis club membership/lessons for two    $5,000
    Slightly used Ski-Doo snowmobile    $3,000
    120 lessons with a personal trainer    $11,400
    TOTAL    $210,000

    Keep in mind the comments that I made yesterday about the costs of children and their education, and the comments that I made about housing before you start signing up for those seasons tickets and memberships.

    What would I do with this information?

    use the ‘menus’ that Michael Masterson has created to help you pick and choose what you think you may want (need?) and build up you own little spreadsheet. Keep the housing acquisition out (but, keep the running costs in) and deal with those in the manner that I outlined in this post …

    … and after adjusting for inflation and applying the Rule of 20 (better yet, the Rule of 40) you should have a great idea of The Number … for you!

    That’s it for the fun stuff guys …. now we get serious: next comes the final application process (more on that soon), then I will be announcing who I have selected as my 7 Millionaires … In Training!

     

Comments

  • Jason Dragon 7:23 am on July 28, 2008 | #

    This is getting there where I want to be. Of course I would spend the extra money quite different. This sort of spending on housing would allow me at least 3 nice ones. One here in the city, one in asia for the extended family and for when I want to visit there, and another in montana for when I want to get away from it all.

    I would hire a nanny/maid so that the house could always be taken care of. And I would give much more away. I think I would pay much less than 35% on taxes due to my international status and large gift giving so some of that would come out of the tax number. But this does make me think that $500,000k a year may be just about the right money for me to live on.

    Of course I need more for my business so that it can help, and change the world.

    Jason Dragon
    http://blog.capitalactive.com/


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