I would say that as a long-term business owner, you probably need to pay at least $500,000. It depends on the market. In my lifetime, I have spent more than any other person in the history of the world on buying and selling my own stock.” We now turn to the second question: if you have a business of your own, how much do you have? Here’s a simple equation that will give us a rough estimate:
$1 million = 300,000 shares
$200,000 = 150,000 shares
$150,000 = 30 shares
$10,000 = 5 shares
If a business of your own needs $50,000, you now have $1,500,000. That is very far from $1,000,000 on the market. However, when your sales increase and your expenses fall, your net worth will rise at an estimated rate of 15%.
What is your net worth?
If you have a business of your own and you sell your first shares (at current prices), you will still have a net worth of zero.
Your net worth will not increase over time, however, if you sell these shares. Your net worth is the amount you have left after deductions.
In my next book, I will teach you the fundamentals of saving and spending to make your net worth grow, and we will also use this formula to estimate your net worth from day one of your business.
Save More Money!
Don’t underestimate the importance of saving money. It all comes from the same place. If you are reading this, chances are you are already well-off and can afford most purchases.
If you are on a budget, that usually means saving money on your basic expenses. This includes food, transportation, clothing, housing, etc. There is also more. If you are married, you may need to save on certain things; there could be tax consequences later.
The amount you spend in each month will vary widely, and often the exact amount you spend is unknown. That is why it is important to make your investments wisely.
For example, if your expenses are $10,000, you can probably reduce your spending if:
Food costs $1 a month,
Transportation costs $10 to $25-$50,
Utility costs $50 to $100, and
Housing costs $500-1,000.
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