How much do you have to earn to reach the break-even point? Achieving the Ideal Salary is an indicator of Happiness and Success, which increases people's level of well-being. Money alone is also not a bad thing. It is needed and we have to realize that having money is GOOD. Much is said about this. I have researched a few things on the subject and came to some conclusions that are at least curious and that makes us think. It does not mean that they are 100% right, but they are certainly a good principle for a change in attitude towards Life. This is a terrible time globally and proves to be crucial for us to think deeply about this issue. So here is the result of this research. If you disagree, no problem, you can even make your contribution, because it will be very useful. That's the goal.. I ask for the collaboration of a Mathematician or a Specialist in the Financial area. There are several formulas and rules for reaching a more or less credible conclusion, having a sense of the accounts and how you should manage your money. If you come to the conclusion that your salary is not enough, then you already know the effort you must make until you reach the breakeven point. Speaking only of fixed expenses, one of the hypotheses is: (for 1 person) Assuming that at least 30% of your annual salary goes to the household income, the remaining 60% is for all other expenses. Multiply your gross salary 12 times and then divide it by 40 = 30% (Still having to deduct taxes). (12 x income / 40 = 30%) Now if you earn 1000 euros/$ a month and pay 500 euros/$ of rent, 500 income x 12 = 6000/40 = 150 In other words, probably from the remaining 500 euros of your salary, you still need to withdraw some (that is, you will no longer have 60% for the rest. In short, if you live alone, money will not reach you for everything else: eat, dressing, transport, energy, taxes, medical, telecommunications ...) I'm not even talking about having children, which is even more complicated there or if you are paying for a car or paying for your studies ...
That is where the temptation comes to resort to credit. I don't know if it will be totally correct, but I can already think ... In a perspective of the Search for Balance, some experts say that you should multiply your salary 40 times and divide it by 12 months to know how much you should earn. In other words: Imagine again that you earn 1000 euros per month net 1000 x 40 = 40 000/12 = 3333, 33 ... net
3333 euros was the salary you should earn in this case, that is, at least 2 x more than what you already earn to achieve true balance (the ideal). Another hypothesis: Imagine that you earn 12,000 euros a year (1000 euros a month) and about half go to taxes and / or other expenses, you get: 6000/12 months = 500 euros per month - 500 euros of monthly income(rent), you run out of money to eat, health insurance and everything. You either live with your parents or share your apartment with someone, otherwise you will starve to death and generate debt. If you earned 18,000 (about 1500 euros a month) and live alone, assuming that half goes to taxes and all other expenses, you get
9,000 / 12 months = 750 euros - 500 euros of income, you still have about 250 euros left. It is still not enough. We return to the same. You will have to live with your parents or share the apartment with someone due to the cost of living, The cost of living is still high in this case. You have several chances, or you will live with someone else that shares expenses, or with your parents, or the solution is to find a way to earn another extra (the formula of multiplying your net salary by 40 and then dividing by 12). Example: 1000 euros x 40 = 40 000/12 = 3333.33 ... Only then will you be able to breathe truly with relief and save some money for an emergency. With 3333 euros per month - 500 rent = 2833 (you can pay everything else and still add/save some money if you are ruled). Whoever is lucky enough to earn 2000 euros a month in Europe and lead a simple life without going crazy, with 2000 x 40 = 80 000/12 = 6666.66 ... (this is not, but it should be your goal). Enough, you can sleep peacefully, if you don't create extra expenses and want to save money.
Why? If by the same principle, about 60% of your salary is for everything else besides the 30% of income/rent:
If you earn 6666,66... a month,
2000 x 60/100 = 1200 is what you need for that remainder.
You still have about 5466.66. If that amount, you take another 500 euros for the rent of the house, you still have about 4966.66 left. You can buy a car, or buy a house, or make a nest egg or invest and profit, accumulate assets (preferably physical). And so on. Another situation: Imagine that you work 8 hours a day at 15 euros an hour x 365 days a year (which is basically less days, as many do not work on weekends or public holidays, which on average should be around 22 days per month x 12 = 264 days per year). In this case, 8 hours a day x 264 days a year = 2112 hours of work. 15 euros per hour x 8 h day = 120 euros per day, i.e.
31 680 euros per year / 12 months = 2640 euros per month. It's not bad anymore, but is it enough for all your expenses? It depends, but it is quite possible. You should never spend more than you can afford. 8h day x 264 days year x 10 years x 15 € hr = 316 800 € (in 10 years). 316 800/10 = 31 680/12 = 2640 It will give you 2640 euros a month. However, if you really want to be very Rich and fatten up your savings, experts say you should never spend more than 10% on extras (travel, vacations, unnecessary clothing, etc ...). For some even less. That way you will certainly be rich. And when your money makes more money (i.e., your money already works for you), then you can now afford to lose your head a little in a luxury car or something else. Always with a safety pad based on this logic, supposedly. According to some experts, any investment that does not give you at least 3% to 4% of gains will not be worth it, because less than that can be risky and will require you to do a lot of gymnastics in mathematics and is not guaranteed.
The old 50/30/20 rule (in a lifetime of useful work) today doesn't make much sense either. It is almost a myth. This rule is based on the fact that
50% of your earnings must be for housing/rent / home mortgage...,
30% for Fun and others
and 20% for Retirement Savings, after clear fees.
This means that you need at least 5 years to have 1 year of retirement guaranteed !!!! Is it worth it? In other words, to have the guarantee of 30 years of retirement, would you have to work for about 150 years? !!! It does not make sense... If I earn $ 1,000,000 a year and have to pay 35% tax per year for example, I get 650,000. If in the 50/30/20 perspective of a working life I have to spend 50% in Housing = 325,000 30% in Others and Entertainment = 195,000 20% in Retirement Savings = 130,000 It still doesn't make much sense. It is better to save and invest well to win. On the other hand, The chances that sometimes seem to you that you can already pay something more than what is necessary (a luxury car for example, that will not bring you revenue, only expense), because you have already won for example 200,000 euros, will probably be the reason that you may not be able to pay nor should you pay. Crazy, isn't it? It is not just a matter of saving money, but of knowing how to invest, earning, creating uninterrupted monthly earnings - cash-flow. Knowing how that wealth can create you more wealth, how to maximize it. Saving money alone has never made anyone rich. A saved euro or dollar is not the same as a won euro or dollar. The idea is not just to save, it is to multiply. Invest in yourself and your business. This is the Philosophy of a Millionaire Mind. Another is to think Positive no matter what the situation, use the positive part of the brain and self-motivation for one goal, and then another, and so on. This helps a lot. Many claim it works. The fact is, they are rich. Therefore, in everything that a Millionaire Mind invests, it must guarantee gains based on this perspective. They are not at risk in any way or thoughtlessly. Everything is calculated. However, this does not mean that they are not disappointed either. But this is also part of the growth and evolution of the Mind, it is Learning. The greatest frustration of a rich person is certainly not to be poor again, but to have failed. However, if this person knew how to get there and is strong, he will surely know what he will have to do again to get up, again and again, as often as necessary. He or she already knows the way.
The ideal amount of a salary must always be calculated according to age. Another situation: So what is your ideal salary? I discovered a possibility resulting from a research by Nature Human Behaviour. It depends on how much you spend and what they call Relative Wealth. Source: https://www.nature.com/articles/s41562-017-0277-0
To achieve your ideal salary we have to understand how much 1 hour of work is worth. If you are part of a company it is simple to do the maths. You can estimate the value of your hour according to your ideal salary. From this perspective: Divide your monthly salary by the number of hours worked in the month. Imagine you earn 1500 euros, work 6 hours a day for 5 days a week. Your hourly rate is 12.50 an hour, since you work about 120 hours a month. So how do you achieve your salary goals? Knowing what is your ideal assets for your age, what is your ideal salary according to your goals and how much is your hour of work, to achieve your goals, what do you need to do? 1st Have a Career Plan
You must know where you want to go and start creating a career path. It is very important that you understand well in which companies you would like to work and what positions you would like to take. You must then cross-reference that data with a deadline to achieve those goals and structure an ideal path to meet those goals. 2nd Invest in your Qualifications and Skills The market is looking for qualified and capable professionals, mainly at this moment due to the crisis. Companies need capable people to help them recover faster. Invest in yourself and look for resources and experiences that can generate relevant learning so that you can achieve the ideal salary in your career.
3rd Look for companies that meet your expectations You have to be realistic and understand which companies are enabling you to achieve your ideal salary. This means that you should look for organizations that you identify with and that allow you to grow. 4th Improve your CV Your CV will always be your business card for the “wave of dreams”. Therefore, invest in the creation of this document to stand out in front of the other candidates in the selective processes. For that, you must always count on the collaboration of Career Specialists who can assist you in the Creation of an Impact Curriculum. Achieving the Ideal Salary can be challenging, but with planning, persistence and the right partnerships, you will probably be able to reach the Top of the Career more easily.
A Millionaire mind will always be a Millionaire Mind. Courage! Be Strong!
P.S. - Please do not be shy about commenting and giving your contribution. Thanks!