If You Live in the US – You Are Very Likely to Make Over $1 Million in Your Life Time
I debated what to call this post several times and ultimately went with the catchy title to drive home the point that almost everyone in the US is going to generate a significant amount of income over time even though it might not always feel like enough at times for certain households.
A simple example – If you make $50,000 a year and work for 35 years you will generate $1.75M of income over your working years (50,000 x 35). Making $100k a year on average over your work history? Double it to $3.5M. This simple calculation excludes inflation, raises, and all sorts of assumptions on how long you will work but it helps illustrate your household has ALOT of money coming in.
It All Starts With Revenue (Income) – Why You Have To Grow It If You Want to Build Wealth
So what’s the point? If you were given $1.75 million – how would you save it or spend it? Does that align with how you are actually saving or spending it on today? Is that enough?
If you are at this site I suspect your answer is – no I don’t have enough. So if that is the case we need to reframe ourselves on how to grow our wealth.
To reframe: Your personal P/L just like a corporation’s P/L starts with Revenue. No revenue, flat revenue growth, or shrinking revenue for a corporation is not good!! So why would that be ok for your personal p/l?
If you want to grow wealth you need to need to grow your top line to overcome expenses that definitely rise over time due to inflation and lifestyle (kids, healthcare, etc) so that you generate more profit for savings or lifestyle investment.
If you don’t have enough now it will only get harder over time and hence the need to grow your revenue. A profitable personal p/l is a healthy p/l just like a corporation is focused on growing profit. (Please see my post on your life as a p/l here for more discussion: Here!).
Yes you can cut expenses but if it was easy you probably would have already done it / at some pointing it’s not worth pushing too much further.
Too much of today’s financial advice relies on “save early and let compounding do the work”…. while I absolutely agree with that concept, everyone doesn’t always have the profit to save anything.
How to Grow Your Revenue
Expanding on our example above: generating an extra $100 a month doesn’t sound like a lot of money but if you can generate this for your entire 35 year career that is another $42,000 which is a big deal to most people (100 x 12 x 35).
I can’t possibly address all of the ways to grow revenue in one post so I will address the answer to this in the next series of posts. The posts will focus on the following:
- Wage and tip income growth for you
- Wage and tip income growth from your spouse or partner if they work
- Investment income – interest or dividends
- Passive income from another investment – such as rental income
- Rebates/cash back from your credit card if you use them
- Selling things in your house or as part of a business
- Evaluating side hustles
