While in my last year at school (16 years) I was asked to write my projections on where I thought I’d be later on in life. This, along with my school qualifications, went into a nice looking folder that was given to me as a gift on my last day of school.
I had completely forgot about this folder until my Mum dug it out a few months ago and told me what I had written for my projections: “I’ll be a millionaire by the age of 30″
It made me smile and chuckle, as I still believe I will do it.
In order to turn this dream into a reality before I’m 30, I know I need to stop long term travel. After 11 months of non-stop travel, I’ve come to the conclusion working while traveling is great for a lifestyle business, but it’s just not possible to grow a business to the next level while on the road. So the plan is to find a cheap place to live, work my arse off and sacrifice a lot – which I’m prepared to do.
However, this post isn’t really about if I’ll make it or not (I’ll write a post on my 30th b-day and let you know!), but 2 resources that I highly recommend checking out that have had a really positive impact on my way of thinking in regards to building a business with profit at the forefront of every decision I make.
The first is a talk by Jason Calacanis who strongly believes is suffering for a while to gain a lot in the long term.
I love this quote: “If you had a choice, to make $250,00 a year for 4 days per week, or work 7 days per week for 3 years and become a millionaire, which would you do?”
I highly recommend you watch this video which will give you a great understanding of the differences between lifestyle business and real business. One is not better than the other, it just depends on what you want to aim for.
The 2nd resource is by Jason Cohen. Jason goes into depth on what financial freedom means to him, why he sold his company at the time he did – and why crossing the line (as seen below) “changes your life fundamentally, giving you the freedom to do whatever makes you happy, forever.”
Many thanks to Jason for allowing me to use this image!
I also like how Jason goes into what profits mean for a company, which is an education as I always had the opinion businesses went for 1 years profit, not 3 times the yearly profit (obviously this has many variables).
Another valuable lesson for me here is building the company in a way that profit is the main focus. Every decision I make in the future I’ll be asking myself…. “will this effect the bottom line?” – A powerful tool that for some unknown reason, I’ve never used before. This will help me simplify and focus.
While on the topic of profit, if you break the figures down into weekly goals, which I am now aiming for, it doesn’t look as scary as it sounds. If you want to sell your business for a million bucks, you need to aim to have the following figures (again, this will have so many variables it’s no way set in stone):
- $333,333 per year
- $27,777 per month
- $6,410 per week
- $913 per day
So the magic number is to generate $900 per day in profit. Generating this number, as Jason points out, puts you in a great position in that you don’t need to sell out… but have the option to if the right deal is put onto the table. Yes I know, there are lot’s of things that can effect this figure – but the main aim here is to create yourself a target you can aim for…. $400 a week by the first year end, $600 for the following year, then $900
Hopefully these great resources will have the same impact on you as they have me in that you may see goals, aims, purpose, what it means to be financial stable and of course… what it takes to get there, a bit differently.
Good on you. First you take off round the world. Then you announce that you’re going to stop, put down roots, and make some sacrifices to build your business. So many other travellers keep travelling way past their sell-by date. Or they’re too ashamed to admit that they’re ditching it in and the blog just disappears. I hope you get the business firing on all cylinders and make those dreams come true. I’ll continue to watch with interest!
Different strokes for different folks as they say. I had a bad habit before not understanding why people don’t graft hard and want to make something of themselves… but the older (and wiser) I get, the more I understand that people want different things out of life…. there’s not a right way – just what’s right for the individual.
For me… I’m hungry to make something from nothing :)
Awesome post! I love Jason’s stuff, he gave a great interview recently on Adam Carolla’s podcast about the hustle of business. Looking forward to hearing more about this stuff.
Dan, What Jason are you referring to?
Hey Chris, was setting my goals for the next 6 months and revisited this post because I remember loving it so much. I was referring above to Jason Calacanis who did a great interview with Adam Carolla many months ago. Might not be on iTunes anymore it was probably over 7 months ago.
Chris,
Are you doing all this from my beloved Ubon?
@Darwin
I’m going to be splitting my time between Thailand and Bali for the year ahead. Accommodation options in Ubon are limited, although I have fallen in love with the place. I love how you can go driving in one direction for an hour and get into the rural parts… I can see many weekends just driving out and getting “lost” :)
Hey Chris,
How close are you from the $900 mark?
And also wondering: at the time of you projection, where you thinking in euro, pound or dollar? Depending on the currency you may have to work harder to get there! :)
@John I think you would be comfortable for the rest of your life if you had a million dollars transferred into any currency.
@chris
are you avoiding that one: How close are you from the $900 mark?
;-)
@john The post was aimed at getting you to think about what you want to earn :)
I don’t mind sharing this info with friends (if they really want to know), but I’m not prepared to disclose what I earn on the web… it just comes over as bragging.
@chris fair enough ;-)
And i know what i want to earn in the next 3 years: a million baht per month. :)
@John Better to start with smaller goals, but either way… I wish you the best of luck!
I did reach that first goal ;)
You can do it.. I think if anyone can.. it will be you !! :-)
I had the same goal, and achieved it, so more power to you.
The 3x multiplier is absolutely a rule of thumb. For example, if a business is growing quickly it would be higher. If it’s a business with large marginal profitability (like software) it’s much higher than a business with linear marginal profit (like consulting). If it’s a business where the leader is key to the business, it’s a lower multiple (like consulting where deals are won on reputation of the founder).
Most businesses are not profitable and are sold anyway; that demonstrates that the rule is not at all a rule.
Skype was sold for $2b to eBay while losing tons of money; same with YouTube; same with Twitter valuation. This demonstrates that really the value of the company depends on the goals of the acquirer.
Best goal: Make a truly wonderful, growing, profitable, smart business. Then you have lots of options for how to make a lot of money.
Note: I was a millionaire BEFORE selling the company because of the amount of profits. When you’re in that position, sell/no-sell is a different story. That should be your goal.
Thanks for the insights Jason – It’s much appreciated.
Unfortunately, my business is no way wonderful (Dating), but the niche converts well, it’s growing and it’s extremely profitable.
dating? or libido-related sites? ;-P
Thanks for the kind words Lillian!
Great post. Another point worth considering is once you’re at $900 a day you should certainly be in the position to take on a couple of extra hands to speed things up over the next two years.
Being a millionaire means very little if all you have to show for your life is money and relative assetts, its highly likely that most millionaires true NAV is far less than they would have people believe.
FYI most software developers I work with in London would not bother getting out of bed for $900 USD a day as after taxes, living close to the city etc etc it is not that much.
I was so impressed of your courage Chris. You have such an inspiring idea and your determination to hit your goal is very strong. I hope i could be like you too. You can do it to $900 a day. My best wishes for you….
Great post! Very inspiring, really makes you see that hard work really does convert into cash. And even if you have to work 20 hours a day for a while, you may only have to do it for ten years and never have to work again.