Hi, looking for a clarification...
Question: What's the "real" mathematical formula for knowing your Money System Target?
In Chapter 37: Give Your Road A Destination @MJ DeMarco states
To calculate your money system target, multiply your Net Living Cost by 12, then divide by .05, or 5%. Five percent is the minimum expected yield on a money system.
So, based on this formula, if my monthly Net Living Cost is $10,000 per month then my Money System Target would be $2,400,000.
Thank you!
Question: What's the "real" mathematical formula for knowing your Money System Target?
In Chapter 37: Give Your Road A Destination @MJ DeMarco states
To calculate your money system target, multiply your Net Living Cost by 12, then divide by .05, or 5%. Five percent is the minimum expected yield on a money system.
Money System Target = ($10,000 x 12)/.05 = $2,400,000
But doesn't this assume you get paid yearly from your Money System?
I'm new to investing, but I know using some apps (like Wealthfront) I can withdraw earnings each month.
So then doesn't this mean my Money System Target is really $200,000 and NOT $2,400,000 (granted I still get 5%+ returns each month)?
I'd appreciate any clarifications or insights to the accuracy of my thought process.But doesn't this assume you get paid yearly from your Money System?
I'm new to investing, but I know using some apps (like Wealthfront) I can withdraw earnings each month.
So then doesn't this mean my Money System Target is really $200,000 and NOT $2,400,000 (granted I still get 5%+ returns each month)?
Thank you!
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