How much do you really need to achieve your ideal lifestyle?
It can be a confronting question, and one that requires deep thought – but getting clear on that magic number will enable you to reverse engineer a plan that ensures you’re set up for your ideal lifestyle in the not-so-distant future.
Having a clear picture around your number will help you design practical and manageable goals that you can follow to get there.
If you don’t know how much money you need to lead the life you desire, now is the perfect time to get started.
Grab a pen and a piece of paper – or if that’s too old school, the notes app on your phone – and start by answering the following questions:
1: Am I adapting my goals with each life chapter?
As we move through different life chapters our goals, financially and personally, change and grow with us. A person in their mid-twenties is likely to want different things in life to someone in their mid-forties.
Take a decade-by-decade approach.
How you define each chapter is up to you, but the more manageable the timeframe the better. Say you’re 32-years-old – do you have a solid vision around what you want to achieve by the time you are 40?
The goal is not to just ‘get by’ but to really live your life deliberately and keep moving the needle forward.
Questions could be, are you planning on starting a family soon? Great! So, what do you want to be able to provide for your family?
Will you still be going on holidays when your kids are young? Do you want to send them to a specific childcare and school? Do you want to continue having a date night with your partner once a week, fortnight or month?
Once you truly delve into these finer details, you’ll have a lot more clarity surrounding your ideal lifestyle, allowing you to create more clear and achievable goals.
2: What debt do I have and when will it be paid off?
It’s safe to say that nowhere in your ideal lifestyle are you still tied to bad debt – and I say bad debt because not all debt is bad. In fact, sometimes debt is required to make you rich! If you’re interested in learning more about this you can read about good debt here.
Of course, you are in charge of what kind of debt you’d be okay with having in the future. Certain kinds of debt however, like credit card debt, is not something any of us want to continue accumulating when we’re trying to live our dream life.
While for some people, in some circumstance’s debt is unavoidable, it’s crucial to get bad debt down and get it gone for good if we are wanting to live our ideal lifestyle.
3: Who else will I be supporting along the way?
There’s a growing group of people right now, likely between 35 and 55-years-old, who find themselves in a unique position funding three generations all at once.
Some households these days are made up of teenage or adult kids, parents and grandparents, all relying heavily on one source of support.
Whether they require financial support or another type of support (like physical care), it’s still an extra expense on the person at the centre.
While we can’t exactly plan for these kinds of situations, we can be prepared. Dependents – if part of your ideal lifestyle – absolutely need to be factored in when doing the maths.
4: Do I have enough funds set aside for an emergency?
If there is one giant lesson 2020 has given us it’s that the emergency fund account is essential. In fact, it’s non-negotiable. Like I mentioned above, there are things that unfold that we can’t plan for.
What happens if you finally get in a position where you’re living that ideal lifestyle, only for a pandemic to hit the world and everything stands still for weeks or months. Will you be fine? Or will you be taking six steps back?
I know in my ideal vision for life, I see myself being secure no matter what the current climate. It seems a waste for some to have that money sitting there and not being able to touch it – but you’ll be thankful when you do need it.
Consider following what almost every financial book recommends and setting aside three to six months of your net income required to maintain your lifestyle so you’re financially safe.
5: What does retirement look like for me?
Unless you’re in a position where you’re charging towards retirement, I don’t want you to consume yourself with this one too much. However, it is a fantastic example of how we let certain factors determine our lifestyle when we don’t really need to.
Let me explain.
Immediately when I bring up the idea of retirement with someone, they connect that moment to turning 65-years-old. It’s become a milestone defined by age rather than being a function of our wealth.
If you could retire early though, with enough in the bank to comfortably live the way you’ve always wanted, would you? For many people the answer would be of course!
Ok, well let’s come full-circle – what number would you need to do it?
Of course, this brings into play other factors, like if giving up work is something you’d even want to do, but the purpose of this whole exercise is to help you understand that having a clear vision and a well-thought-out plan is hugely important if you want to achieve that ideal lifestyle.
It starts with taking action.
Thought in isolation won’t get you far. You have to be willing to put the time and effort in to really dig deep and figure out what your number is.
From there it requires action.
Use these questions to start putting together the cost for your ideal lifestyle. Once you understand the numbers, you’ll understand how to take your current budget and forecast it to cover those wants.
Base this figure on your actual reality – not on vague ideas – and you’ll start seeing more effective and promising results.
If there’s a gap between where you are now, and your ideal number don’t be disheartened. There are a range of wealth creation opportunities you can harness that can lead you to your ideal lifestyle.
Property investing is one way this can be achieved.
For more information on how to invest smartly and create a genuine future of financial opportunity, join our free property investing seminar.
Here you’ll learn how to take advantage of the current market landscape, as well as the chance to have one of our property experts assess your exact situation and establish a property growth plan that’s right for you.
There are limited spots available, so to secure your seat use the form below.
Sue Irons
CEO – Positive Real Estate NZ
Property Investor Night – free tickets!