I love the program The Apprentice. Its an excellent business program (even though it falls in the category of entertainment) as you can learn what a successful employer looks for from its top employees.
One part of the program captured my imagination. It was at the start when they said sir Alan is worth £800m. What does that mean? It got me thinking about what I want in life. Now obviously everybody wants to be happy, healthy and relaxed which as a matter of course I think we all try to achieve. But financially I have never sat down and broken down what I want from life financially. Yes I have set my own business targets like being worth £100m by age 40, being a billionaire by age 50 but I have never set my own personal financial targets.
So I sat in front of my computer, opened up Excel, and started compiling my list. So I put housing costs, car costs, holidaying, clothing, food etc. and I was surprised. My actual personal financial targets were quite low!
I realised that within 5 years I could invest what I have in high growth property investments, sell out in years 4 to 5, pay my tax at 28%, bank the cash in high interest accounts and live the life of a king.
So guess what. This is what I am going to do. I am going to buy 800 properties over this forthcoming 12 to 18 months with little or no money, work my butt off to manage and control these properties, wait for around 50% growth which could be 2 years or so and then consider selling the lot!
That’s the theory anyway. I do hate selling as your wealth immediately takes a dive, but it does reduce the stress levels.
For the mathematicians out there I am sure you are trying to work out my lump sum required to live the life of a king. Well its in the double digit millions but it is not as high as you think.
So my advice to you is ask yourself what you want personally. Then see how much it costs on a monthly basis, then work out the annual income required, divide by 0.06 which will give you the net capital required to give you this income. Then take the net capital figure and divide by 0.72 which give you the equity you need to create in your property portfolio.
This is then your target to achieve. Give it a timescale and then get to work!