Brian Tracy walks through calculating your net worth and hourly rate, then explains how to reach your retirement goal through annual savings targets. He argues most income problems come from within, not circumstance, and that lifelong learning is essential to earning more.
70% of adults
10 times
2000 hours per year
172 hours per month
About 10%–20% of what was paid
Hello. I want to talk now about developing long term financial plans. For accurate financial planning, calculate your net worth today and then subtract that amount from your long term financial goal. How do you calculate your net worth is? You add up all the assets that you have and imagine that you were leaving the country and you had to sell them for the very best price, very much like a garage sale. That will tell you how much money you have. And then you add up all the bills and the debts that you have of all kinds and subtract it from that number to get your current value or your current net worth. Once you have that number, you subtract that amount from the amount that you want to have when you retire. You divide the results by the number of years that you intend to spend to achieve that financial goal. In this way, you will know exactly how much you have to save, invest and accumulate each year in order to become financially independent. This is called your number. And what they have found is that 70% of adults have no idea the number or the amount of money they will have to have to stop working. The very fact that you determine this number for yourself increases your likelihood of achieving the number by 10 times. If you want to earn more money, the first step you take is to sit down and determine exactly how much you are earning right now. How much did you earn last year and the year before? How much will you earn this year? And how much are you earning each month? The best measure of all is how much you are earning each hour. Right now. You can determine your hourly rate by dividing your annual income by the number 2000, which is the approximate number of hours that you work each year. Even better, you can divide your monthly income by 172, the number of hours you work on average each month. The tighter and more accurate your calculations regarding your income or in any other area, the better and faster you can improve income each one of them. For example, most people think in terms of monthly and annual salary. This is hard to analyze and increase. Conversely, the high performer think in terms of hourly rate which is amenable to improvements on a minute to minute basis. Since you are the president of your own personal services corporation, you should view yourself as being on your own payroll. Imagine that you are paying yourself by the hour. Be just as demanding of yourself as you would be of someone else who was working for you. Refuse to do anything that doesn't pay your desired hourly rate. If you have a set long term financial goal, the next step is for you to determine exactly how much you are worth today in financial terms. If your goal is to become a millionaire in the years ahead, you must calculate exactly how much you have accumulated as of today's date. As we talked about before, most people are confused or dishonest about this calculation. Your true dollar net worth is the amount that you would have left over if you sold everything you own today at what the market would pay and then paid off all your bills. Many people place a high value on their personal possessions. They think that their clothes and cars and furniture and stamp collections are worth a lot of money. But the true value of these items is usually not more than 10% or 20% of what they paid in the first place. If you want to earn a certain amount of money, ask yourself, why am I not earning this amount of money already? What is holding you back? What is the major reason that you are not already earning what you want to earn? And again, you must be perfectly honest with yourself. What we have found is that 80% of the reasons why you are not earning the kind of money you want to earn are within yourself and they're not contained in the situation around you. I hope you enjoyed this video. If you did, please subscribe to my channel by clicking on the button that appears on the screen and dedicate yourself to lifelong learning.
