Question on the Lifestyle Equations

[Jcapuano]

I have a question on making my assessments for my Lifestyle needs (based off of MJ DeMarco's equations), and the money/business system incomes that will fund these lifestyle needs. His examples were similar in some sense and I was curious how he arrived at those numbers. He said 2k a month for his house, 1k for travel, etc... Here are my quantitative goals just as a basis for how much I want to make, if anyone has any clarity or more accurate corrections for the numbers I would appreciate it.

Lifestyle: TC: 1YR/M: 5YR/M:

Corvette ZR1 1969 Vette Lambo Aventador LP 700-4 Ferrari California Maserati GranTurismo Audi S5 Audi R8 FSI Quattro Corvette C7	$150,000 $75,000 $400,000 $140,000 $150,000 $70,000 $120,000 $200,000	$12,500 $6,250 $33,400 $11,700 $12,500 $5,800 $10,000 $16,700	$2,500 $1,250 $6,700 $2,400 $2,500 $1,200 $2,000 $3,400
Suzuki GSXR 1000 Ducati	$15,000 $30,000	$1,250 $2,500	$250 $500
6,000 Sq-ft house	$1.5 million	$125,000	$25,000
Small house in warm area	$750,000	$62,500	$12,500
Ability to travel 3 months a year	$120,000	$10,000	$2,000
Body Problems	$20,000	$1,700	$340
Yearly Health Products	$7,200	$600	$120
	Lifestyle Cost =	$312,400/Month	$62,660/Month
Allowances		$4,200

Gross Living Cost = $312,400/mo. (Lifestyle cost) + $4,200/mo. (Allowances) = $316,600/mo.
Gross Living Cost = $62,660/mo. (Lifestyle cost) + $4,200/mo. (Allowances) = $66,860/mo.

Net Living Cost = $316,600 / .60 = $527,700/mo. .60 = 60% for potential taxes
Net Living Cost = $66,860 / .60 = $111,500/mo.

Money System Target = ($527,700 x 12) / .05 = $126,648,000 .05 = 5%, the minimum
Money System Target = ($111,500 x 12) / .05 = $26,760,000 expected yield on a money system

Business System Target = ($316,600 x 5) = $1,583,000/mo.
Business System Target = ($66,860 x 5) = $334,300/mo.

First seek a business system that generates $334,300/month in passive income. Of this income, 40% goes to taxes, 40% goes to fund my money system, and 20% pays my lifestyle.
.

 

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[Jcapuano]

Also the formatting got a bit messed up, the 2nd column is the total cost, the 3rd is the cost per month paying them off in 1 year, and the 4th column is payments over a 5 year period. (Also, based on the general prices for a 6,000 sq. foot home it seems his cost was based on a 5 year plan, but another example for say travel was based off a monthly cost for a year.

 

[Ivo Alexandroff]

I have a question on making my assessments for my Lifestyle needs (based off of MJ DeMarco's equations), and the money/business system incomes that will fund these lifestyle needs. His examples were similar in some sense and I was curious how he arrived at those numbers. He said 2k a month for his house, 1k for travel, etc... Here are my quantitative goals just as a basis for how much I want to make, if anyone has any clarity or more accurate corrections for the numbers I would appreciate it.

Lifestyle: TC: 1YR/M: 5YR/M:

Corvette ZR1 1969 Vette Lambo Aventador LP 700-4 Ferrari California Maserati GranTurismo Audi S5 Audi R8 FSI Quattro Corvette C7	$150,000 $75,000 $400,000 $140,000 $150,000 $70,000 $120,000 $200,000	$12,500 $6,250 $33,400 $11,700 $12,500 $5,800 $10,000 $16,700	$2,500 $1,250 $6,700 $2,400 $2,500 $1,200 $2,000 $3,400
Suzuki GSXR 1000 Ducati	$15,000 $30,000	$1,250 $2,500	$250 $500
6,000 Sq-ft house	$1.5 million	$125,000	$25,000
Small house in warm area	$750,000	$62,500	$12,500
Ability to travel 3 months a year	$120,000	$10,000	$2,000
Body Problems	$20,000	$1,700	$340
Yearly Health Products	$7,200	$600	$120
	Lifestyle Cost =	$312,400/Month	$62,660/Month
Allowances		$4,200

Gross Living Cost = $312,400/mo. (Lifestyle cost) + $4,200/mo. (Allowances) = $316,600/mo.
Gross Living Cost = $62,660/mo. (Lifestyle cost) + $4,200/mo. (Allowances) = $66,860/mo.

Net Living Cost = $316,600 / .60 = $527,700/mo. .60 = 60% for potential taxes
Net Living Cost = $66,860 / .60 = $111,500/mo.

Money System Target = ($527,700 x 12) / .05 = $126,648,000 .05 = 5%, the minimum
Money System Target = ($111,500 x 12) / .05 = $26,760,000 expected yield on a money system

Business System Target = ($316,600 x 5) = $1,583,000/mo.
Business System Target = ($66,860 x 5) = $334,300/mo.

First seek a business system that generates $334,300/month in passive income. Of this income, 40% goes to taxes, 40% goes to fund my money system, and 20% pays my lifestyle.
.

Thanks so much for sharing these figures, I've been trying to find this formula everywhere

 

[MJ DeMarco]

and the money/business system incomes that will fund these lifestyle needs

Question...

What are your current life circumstances that have compelled you to make this analysis?

Do you have a business right now that generates $1,000/mo, let alone $1,500,000?

Because right now the community's reaction to your equations will probably be a lot of fairy tale, and not a lot of reality.

Not saying it isn't possible -- if any business framework can make it more probable is CENTS -- but creating a business that generates $1.5M/a month in profit is going to require an above average product with above average marketing and above average execution -- and a healthy payroll.

 

[G-Man]

Have you put together an analysis this in depth and well thought out for anything that could generate a sale, get a customer, or develop a product?