Stage 4. VISION - what's your number?
From Vaqueiros to Cachopo - 14.9 km
If money was the first of my two priorities, I had first to quantify what it meant. I had to know my number, i.e. how much money expressed as sustainable income or wealth was I aspiring to?
When asked how much money they seek from a job or venture, most people respond ‘as much as possible'. This does not mean much. You would not build a business on these terms. You would establish clear objectives with quantifiable numbers and a strict timeline. You would know full well that things may change, and that the objectives or the timeline may need to be adjusted, but at least you would have a road map.
And a road map is critical. The journey is not the same when you try to make $5,000 or $50,000 per month. It implies a different scale, risk profile, investment, business model, etc.
My wife and I thought a lot about the lifestyle we were seeking for our family, our needs (house, education, old age...), the activities we enjoyed doing (dining out, sports, traveling), the things that were not important to us (shopping, cars,…). I ended up defining my financial goals as $5M of tax-free wealth (not including the house) which would give us a sustainable net income of $200K per year for 25 years. If I were to secure this amount of cash, I would hopefully have a chance to extend its longevity with wise placements and by being more active in my 50s.
Why limit myself to $5M? Potentially the same thinking could apply to a higher financial target. I felt that this amount was the right compromise between what I needed to transform my life and the probability to achieve the goal in a timely fashion. Aiming higher would probably have lowered the probability of success and extended the time to achieve it. It seemed harder and longer to make $20M than $5M while seeking free time, but I may be wrong on this (see insights on business models in a later blog).
This amount may sound extravagant to some or a lack of ambition to others. It is irrelevant. It was my number.
This wealth target is an objective I would have eventually achieved with a high probability in my corporate career but that would have taken me another 20+ years. Was there a way to reach it faster?
Naturally, there would be a transition period during which I would have to work very hard, with little income. My workload was already heavy so it would not change much on that front, but I would have to adjust our lifestyle. I gave myself about three years to go from where I was to where I wanted to be.
This transition seemed worthwhile if it helped me reach my goal sooner compared to the certainty of another 20 years of stressful work and many lost family experiences. I always felt that time, not money, was the most precious asset I have.
TRAVEL UPDATE - STAGE 4
Distance: 14.9 km
Cumulative Elevation: 676 m
Time: 3.5 hours
Weather: Overcast / colder