Choose Your Language Of Preference Below
There are several myths about how one can make life more bearable and fun to live. However, most of us tend to over look two areas of basic importance on which a lot other pillars of life are built.
One such area has to do with relationships of every kind but that is a totally different article for another time all together. The other area has to do with finances and that’s what we are going to serious look at today.
Well, let me start by saying that I have never seen any one who received a check (cheque) written in their name delivered in the mail, even for as little as $50.00 refuse going to the bank to deposit it.
Image if you received a check (cheque) written in your name worth $1,000, 000.00. Yes, a million bucks and it came from an anonymous philanthropist just for you. Imagine receiving a personal check (cheque) from Bill Gates written in your name for $100,000,000,000. That’s right, a hundred million dollars.
You will be heading out of your house all the way to the bank, asking your personal banker for special clearance. Why am I saying this? Because it is true that even those who pretend to be indifferent actually would love to have a fat bank account. If not just for themselves, at least for their loved ones or just for the sake of financial security.
In other words, money is very important to all of us. It is an important resource we all need. In fact, the big black book has more verses written in it about money than it has those written in it about salvation.
The Good Master spoke more parables about money than he spoke about any other subject. The Wise Man wrote more verses about money and wealth than he wrote about vanity of vanities. Conversely, the same big black book actually says that one of the real tests of a wise man is his ability to leave an heritance for his children and children’s children.
So come on guys, be real; because if I sent you an email and said, “… hey dude, I just deposited a hundred thousand dollars in your bank account” your first question won’t be “why?” Your exclamation would “thanks a trillion!!!!”
Money is so important that we wake up every morning going to jobs we don’t like, working for bosses we privately repudiate, leaving behind spouses we love, trading our precious time for it, disciplining ourselves while studying for careers we choose, working as hard as we do; just so we can earn more of it at the end of the day.
So please don’t you tell me you really are as indifferent as you pretend to be about it … in fact, every one of us can do with a little bit more of it. My dad once told, “… son, always make a little more money if you can and always save a little more of it, if you can”. Words of wisdom, I might add … thanks a trillion, dad.
Given a chance we all would actually love to be millionaires. But why don’t we really get to be? We really work hard, most of us do. We really improve our skills, most of us do. We really plan hard, most of us do but only few of us attain.
Well, the real secret lies in working smarter and knowing the magic numbers. I would have loved to leave “working smarter” for another article all together and concentrate on the magic numbers, but it is almost impossible. These numbers are target figures that smart financial, productivity and managerial consultants usually use to arrive at desired results.
Pay attention to these numbers and you will be shocked how prevalent they are. They are all multiples and or derivatives of the number $347.76. This number and or its approximation is very common. If you have taken your car for any repairs, however nominal for that matter, your mechanic will mostly charge you something within that price range. Go pull your most recent bill and check me out on these facts …
Your bank has always been ahead of the curve on this one. Do you realize that your credit card account easily carries over-limit and late fees strategically calculated to reach that figure when multiplied by 10 give or take? Look at your overdraft and non-sufficient funds fees, multiply those by 10 and you will reach those approximations.
If you jump on a plane for a continental flight for an average return airfare, your price range will be right within that figure for an economy flight, give or take. Your dentist will charge you or your insurance company an average fee within that range with adjustable margins of error. When you are stopped by a cop, your traffic ticket will be half that figure knowing the police officer can issue at least two such tickets a day at the bare minimum.
Most high priced electronic items, hi-fi stereos and TVs when they reach a clearance level are sold for approximately that price, go to your nearest electronics store and check this out. Average household utensils are sold in equal parts adding to that figure because selling more of these arrives at that price using CVP (Cost, Volume, and Price) ratios.
In fact, you will be shocked how even small ticket items that cost less are sold in multiples consolidating towards that number. Well, what then is the main reason behind this magic number, one might ask? The answer is … $347.76 is the magic number for a six-figure income at an annualized IRR (Internal Rate of Return) of 8.5%.
Okay!!! So, what’s the big deal about this? Easy … the big deal is any of us, including you reading this memo can earn a six-figure income and eventually become a millionaire so long your gross margin or earnings before taxation are at that magic number.
Here is how this works … you make a total of $347.76 at margin a day from your daily sales, revenue or other forms of income for 6 days a week and for 52 weeks in a year you have made $108,500.00. The $8,500.00 is that rate of 8.5% internal rate of return (IRR) above.
You will be surprised to learn that 8.5% is also the average sales tax rate in most industrialized nations. If you have deferred taxation, you might be allowed to keep that amount until your tax liability has accrued such that after taking care of your sales tax, you would still remain with $100,000.00 – a six figure income.
Wow, you might yell. Wait a minute, it actually gets even better … using the same internal rate of return for 8.5 years, you will be a millionaire, voila … Oh no, this is incredible!!! Not yet, pal; I might add. Duplicate the same effort by leveraging yourself tenfold either through your employees or franchising, you now can make $1,085,000.00 and in 8.5 years, make over $10 million.
You see, it is so much easier than we are made to believe. Just know what numbers to work with, plan around them – anything in multiples and or derivatives of $347.76. I love numbers. Numbers don’t lie … try it. Start by opening a small business just making daily gross margins or earnings before taxation (EBT) of $347.76 for 6 days a week and you will have made $100,000.00 for yourself this time next year.
Extra income brings more joy than extra poverty does, imagine how many other people that would help; imagine how financially secure you would feel. You already work hard, just work a little smarter, and just know the numbers to work with.
The same holds true when you start thinking of cutting down on wasteful spending. A dollar saved is a dollar earned. Imagine if you can save $347.76 a day for 6 days a week for 52 weeks, this time around you would be paying yourself that 8.5% Internal Rate of Return on top of what the bank would pay in earned interest income.
You would not be worrying about paying sales tax but capital gains tax instead. Paying capital gains tax is better in a sense, even though they are both liabilities. Herein lays the principle of financial engineering and reversibility producing the same resultant whether you earned it or simply saved it.
You see, your mechanic, your bank, your airline, your dentist, your sheriff and the local stores know these numbers by either commission or omission, they work with them every day. Your time is now … Why am I divulging such highly converted info for free? I love you humanity, I wish that you all prosper and be in good health. I wish that you all be wealthy; the world would be a better place.
A lot more crimes are committed not because of sheer greed, but because of lack. A lot of relationships are broken due to lack. I remember my high school girlfriend telling me, “… no finances no romance, Mumba” – highly debatable but she had a point nevertheless.
Sometimes it is not possible to achieve those strides single-handedly. The Europeans realized this a long time ago. They started by creating co-operatives, moved to family businesses and then eventually corporations. They worked smarter using synergy and realized the importance of knowing the numbers.
One of Africa’s biggest problems is our inability to coherently work together. The PhD (Pull him Down) mentality makes us work against each other instead of otherwise.
When opportunities present themselves, when it gets to be time to work together, work smarter and know the numbers we tend to lose it …
Its February already and the year has seen the first month spent, you can’t afford to lag behind anymore; you just have eleven months left now …
Working hard alone is not enough – yes work hard but also smarter and, know what numbers to work with …
And don’t forget to Live Long & Prosper; that’s this week’s memo from us at the Zambian Chronicle … thanks a trillion.
Brainwave R Mumba, Sr.
CEO & President – Zambian Chronicle
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