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Wednesday, May 20, 2009

Asset Equation











Hi Propsects & Friends,

Wanted to quickly share an asset equation I use when I analyze my assets needed for my age. This equation will work for anyone, and is greatly needed to determine where you need to be with your financial assets. Meaning what you would need in assets based on your age and income. See equation below and examples:

Yearly Income X Age/10= Assets needed

So let's say I'm 49 and make $125,000/year. Equation would be $125,000X49/10=$612,500. So you would need at least $612,500 worth of assets to satisfy this equation. So if your 49 and make $125,000/year and don't have $612,500 worth of assets, your in deep trouble!

Lets say I'm 25 and make $25,000/year. So $25,000X25/10=$62,500. So if your 25 and don't have $62,500 worth of assets then your in deep trouble!

It's recommended you take equation seriously, and start making it a habit to calculate your numbers ASAP. I have equation on my refrigerator and calculate my asset worth once a month to see where I stand with numbers, as well as what I need to do, if I'm not close to what equation says I should have in assets for my age. A trick I like to do with this equation is calculate futuristically my age and asset worth and act on it at current age so when reach futuristic age, the assets have been already accomplished and may have alittle more than planned since it was orginally calculated futurisitcally from beginning. See example of my trick:

So if I make $150,000/year at age 33, but calculate using age 55 instead, I would need $825,000 worth of assets to satisfy equation. So if I'm 33 this will be a no brainer since this is being calculated on being 55 instead of me calculating the equation based on being 33. So I know at 33 I got 22 years to gain $825,000 worth of assets to satisfy asset equation for 55. This trick just makes you work harder in the years you don't need too, because if I calculate on being 33 I would only need $495,000 worth of assets, but if I'm 33 and calculate as if I'm 55 I would need $825,000, get my point? (you get ahead faster thinking this way, well for me anyway) Also remember to don't let the asset equation scare or discourage you if number you get is no where near what you already have acculmulated in assets. Treat equation like it is a state test you have to pass (attorney/real estate broker/teacher/nurse/doctor/etc) you know if you don't pass state test you won't get license to practice, and you also know if you fail by a merely 2 points you have to retake whole state exam again, not just questions you missed. So treat this equation like that, and good luck. Check with my online store regulary to see if I've posted a book for sale about the asset value equation.

PS- Assets can be liquid or non-liquid or a mixture of both, when trying to figure out once get asset value where to start. **If like clock picture, actual clock is for sale in my A.C.H.P., LLC online store, click link and check it out on right part of my blog***

2 comments:

  1. Hello April,

    i saw that you are a new member of fantastic EntreCard network. Congratulation!
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    ReplyDelete
  2. Hello again April,

    now you have only to aprove the ads on the EntreCard Dashboard (on the right side). Afterwards you will get a part of the advertise price in your account. When you reach 1000 ECs, you can cashout the ECs (at the moment it would be 1 $ worth).
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    Good luck on your business journey!

    PS: Beautiful Picture!

    ReplyDelete