• 02:46:13 am on August 22, 2008 | 20

    How steep is your mountain?

    UPDATED!!

    I debated with myself about sharing The Number that our 15 Finalists came up with … as, we will no doubt have a few more changes yet to come when we start to look at the 7 Millionaires … In Training! [stand by for an Announcement on Thursday!] a little more closely. But, I’m glad that that I did …

    You see, Lee commented on that post about the Value of Your Life’s Purpose:

    This is kinda like climbing the tallest mountain I’ve ever seen. I’m all packed and committed to make the trip but the closer I get to it the taller it looks. If I pay attention to where I’m walking it’s doable.

    Exactly, Lee! Like the old joke says: it’s not the drop that will get you, it’s the sudden stop at the end …

    … except, here, it’s not the size of the mountain (Your Number) but the steepness of the curve (Your Number/Date combo.) that will get you!

    We measure the ‘steepness’ of a financial curve by its Required Annual Compound Growth Rate – and, assuming that you were all starting with $50,000 in the bank, here is what yours would look like:

    [AJC: Since drafting this post, I updated it by starting with each of the Final 15’s actual starting Net Worth as provided by each of the finalists in a link to their NetworthIQ.com Profile rather than the assumed $50k each that I mention above; I won’t tell you their Net Worth – I will only start with ‘full disclosure’ for the Final 7MITs. For anybody with a negative Net Worth, I instead used a starting figure of $1,000. Also, I apologize in advance to any of the Final 15 for any calculation errors that they may find when they rerun for themselves 🙂 ]

    Finalist              Number              Date (# Years)               Growth Rate

    Lee                 $5,425,000                 10                               53%
    Deanna          $5,500,000                   5                               59%
    Andrew          $10,000,000                 9                               91%
    Luis               $4,000,000                   5                             130%
    Diane            $8,375,500                   5                             163%
    Mark             $5,000,000                 10                               36%
    Josh             $20,000,000                  7                              170%
    Ryan            $12,500,000                  9                                66%
    Jason           $10,000,000                  7                                98%
    Shannan         $5,500,000                 6                              320%
    Debbie           $8,250,000                17                               70%
    Scott            $10,000,000                 8                               216%

    You may not like what Michael Masterson says in his book Seven Years To Seven Figures (since I agree, I will be expanding on this in a future post on 7million7years.com):

    If your situation requires you to be generating extremely high returns – 50 percent or more – to reach your wealth goal … the only way you’ll be able to do it is by starting your own business.

    So, how prepared are you to take the entrepreneurial path to extreme wealth? After all, that’s effectively what each of you (except for Mark) has asked for.

    If you aren’t prepared to hit the ground running with the latest FaceBook or McDonalds, now’s a good time to lop a number of millions off [Your Number] and add a number of years to [Your Date].

    And, let me know before I select you on Tuesday (& announce on Thursday) if this is all too much to handle …

    Be honest … no shame in recognizing your limitations now, before they come rushing up to hit you in the face if you do happen to become one of my 7 Millionaires … In Training! and suddenly realize that becoming rich isn’t all that much fun, after all.

    Last chance to get off before this unstoppable millionaire-making train leaves the station 😉

     

Comments

  • Jason Dragon 4:28 am on August 22, 2008 | #

    I have always had my own business, I could not think about not having one. I don’t know how to work in a corporate environment. Well I don’t have 50k in the bank, so I guess my slope is much steeper. The good thing is that I will be using other peoples money to climb it so it is not as bad as one may think.

    I do totally agree that the only way to make this big money is by having a business, a real one, not a job that looks like a business. I also think it should be a real one, not a MLM, the chance of success in a MLM is too low unless you have been doing it for year and know about it.

  • Di Eats the Elephant 8:17 am on August 22, 2008 | #

    Good thing to think about, Adrian. I have always considered that I would have to start a business and have been trying to find the one (at least the first one) to start, and really enjoyed some of your posts recently which talked about starting from zero. Like Josh, I will have to be creative in financing. But then, Les Wexner (Victoria’s Secret) was, so I know it can be done. And the internet and its many uses will probably be just the tool to help make a lot of this affordable starting out. Have you heard about these women in India who started their own businesses with less than $20 loans? It’s an incredible story in a book called “Influencer,” by Kerry Patterson. Here’s a link to read more about that, if anyone’s interested: http://www.amazon.com/Influencer-Change-Anything-Kerry-Patterson/dp/007148499X/ref=sr_1_2?ie=UTF8&s=books&qid=1219414553&sr=1-2

  • Shannan 9:44 am on August 22, 2008 | #

    I am a little confused. For instance, looking at my growth rate compared to Deanna’s, I would expect mine to be smaller, if we are both starting with the hypothetical $50,000. Our Number is the same, but she hopes to achieve hers one year sooner than I do. To the contrary, her growth rate is 59% while mine is 320%, a substantial difference in the opposite direction. How do we calculate the growth rate?

  • AJC 11:00 am on August 22, 2008 | #

    @ All – aah … apologies, I will update the post with a comment; but, since writing the original post, I decided to do the right thing and start you all off with your current Networth (except, if negative I started you off with $1,000 because my brain couldn’t handle negative starting figures!). To do you own calc’s, try this simple online calculator:

    http://www.investopedia.com/calculator/CAGR.aspx

  • Deanna 11:18 am on August 22, 2008 | #

    I am completely on board – Like Di said, I have always thought I would run my own business – and I do….but I realize my freelance business is actually a J.O.B. (oops) But I took some big leaps to get that running, and I have no doubts that I have it in me to do that again (and again and again)!

  • Shannan 7:06 pm on August 22, 2008 | #

    Thanks for the clarification. Looks like I’m about to climb K-2!

  • AJC 7:44 pm on August 22, 2008 | #

    @ Deanna – A ‘freelancer’ is somebody who has a J.O.B. with a S.O.B. as a boss 🙂

    @ Shannan – You’ll need some ropes and a pick-axe …

  • Deanna 8:39 pm on August 22, 2008 | #

    HEY!

  • Debbie 5:18 am on August 23, 2008 | #

    oh man. I need to update my networth page to reflect the major changes since I posted that. My growth number is going to be closer to Shannan’s I think!

    That’s alright. I’ve always wanted to climb a mountain.

  • Debbie 5:32 am on August 23, 2008 | #

    Hmm. I guess saying my “date” is 17 years from now is what’s keeping my growth rate lower. I was expecting to see mine closer to Shannan’s.

  • Scott 7:19 am on August 23, 2008 | #

    Woah Adrian, ya got me reaching my 10mil in 8 years instead of my goal of 10 years. That’s ok, I would be much happier getting there 2 years quicker at 41 years old instead of 43 😉 That’s definitely what good coaches are for!

  • topekac1 10:44 am on August 23, 2008 | #

    Yesterday I picked up Michael Masterson’s book “Seven Years to Seven Figures”. Thanks for recommending it, some of the things I have heard you “say”, when seen in print sink in better.

  • AJC 12:08 pm on August 23, 2008 | #

    @ Deanna – c’mon, who’s going to work you harder? Some corporate ‘shlepper’ with a manager’s ‘uniform’ (sports trousers, open-necked shirt, slip on work shoes), or yourself? Who’s the one ‘making me’ write three blogs; create an e-book; start 2 major internet ventures; during “retirement”? Me, of course!

    @ Debbie – Yes; we are learning about the power of the Date … my research (thanks to all of you) is showing me that it is almost more important than the Number.

    @ Scott – Typo? I’ll have to go back and check … what does adding 2 years do to the reduction in growth rate?

    @ Topekac1 – Thanks for the quick review; do you agree that the first 40+ pages contain the most ‘meat’ and most of the rest is ‘stuffing’?

  • Scott 12:46 pm on August 23, 2008 | #

    Brings it down to 151%, still academic if you think about it. Either way it requires a great business idea in addition to passive income streams from multiple practices with the majority of profits being re-investing in high-yield real estate purchases.

  • AJC 1:17 pm on August 23, 2008 | #

    @ Scott – we’ll revisit both the numbers and your strategy if you make the Final 7MITs 🙂

  • topekac1 1:59 pm on August 23, 2008 | #

    Yep. But then again I just scanned everything after page 41.

  • Josh 3:32 pm on August 24, 2008 | #

    The growth rate I need to achieve isn’t as bad as I thought it would be. 170% is definitly do-able.
    byw, great post Adrian.

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