Updated September 8th, 2023
To achieve financial freedom and stability, you need to know a few critical money numbers.
If you search online for money numbers you need to know, you will find some fascinating and even out-there topics. Some of the most interesting included:
- Angel numbers for money
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- Midas touch (Even the Midas touch was on the list!)
As you may know, I love practical manifestation and some of the more woo-woo sides of wealth.
I also know that you need a plan with real numbers and facts. When you combine the practical side of abundance and manifestation with solid numbers, your odds of success dramatically increase.
If you struggle with money or need help with your money mindset, click here to download our guide:
Today, you will learn three key numbers that wealthy people know.
In this blog, I share additional money numbers you should ideally know.
Disclosure
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This information is for educational purposes only. It is not intended to replace any advisor or specialist or provide any investment, financial, tax, retirement, planning, or healthcare advice.
By reading this, you agree to hold MillionaireSeries.com® and its affiliates harmless for results achieved or not achieved.
Additional Money Numbers That Are Important
Net Worth Calculation:
Calculate your net worth by subtracting your total debts (including loans, credit card debts, and mortgages) from your assets (such as your home, retirement accounts, investments, and savings).
This will give you a clearer picture of your overall financial standing. If you owe more than you own, your net worth will be negative, indicating potential financial difficulties.
Lifetime Income:
One of the most important assets that wealthy people have is guaranteed lifetime income. I refer to this plan as “Guaranteed Certainty in Times of Uncertainty.”
Guaranteed income pays you regardless of what happens in your business, career, or life. It diversifies your assets and gives you peace of mind.
For many of us, knowing we have assets and income regardless of what is happening in the world is priceless, and it can’t help but reduce anxiety and worry.
Guaranteed contracts are offered through insurance companies. They are referred to as annuities. If set up correctly, they will pay you for as long as you live.
There are many different types of annuities, and all are not created equal.
For that reason, it is important that you consult with a qualified independent advisor before purchasing an annuity or any other investment vehicle.
If you need support from an advisor or have questions about lifetime income, click here:
To determine your income, add up your annual earnings, including any other sources of income like gifts, inheritances, investment income, pensions, side hustle earnings, or government benefits. It’s acceptable to use estimates for certain sources if needed.
Social Security is another source of lifetime income.
To review your lifetime earnings history and assess your income, you can access your Social Security statement at https://www.ssa.gov/myaccount/.
Understanding Full Retirement Age and Expected Social Security Benefits
Your full retirement age is when you become entitled to receive 100% of the Social Security benefits you’ve earned.
Your checks will be permanently reduced if you apply for benefits before reaching this age.
If you want to confirm you have considered all your options, click here to download our Retirement Plan Checklist:
On the other hand, delaying your application until after full retirement age can qualify you for delayed retirement credits, increasing your benefit by 8% each year until you reach 70 years old when the benefits max out.
Please note that the full retirement age has been gradually increasing over the years. And the odds are that this trend will continue.
To better plan for your retirement, it’s crucial to know how much you can expect from Social Security. Your Social Security statement provides estimates of your potential benefits.
Despite potential shortfalls in the Social Security system, it’s expected to collect enough taxes to pay at least 75% of promised benefits, even if Congress doesn’t take action to address its finances.
That said, laws are constantly changing, so it is imperative that you do not rely solely on social security.
Calculate your debt-to-income ratio.
Determining your debt-to-income ratio is critical to improving your financial situation.
This calculation requires that you add up everything you owe. Examples include credit cards, mortgages, and loans. Then divide your total debt by the amount of money you earn. The goal is to lower this number until it is zero.
Many financial advisors do not recommend that you pay off your mortgage. And while you may be able to make more money by not paying it off, the peace of mind you experience by living debt free is priceless.
Over my career, I have seen firsthand the lives of people with and without debt. Those without debt had more joy and peace. And living debt free is one of the best decisions I have personally made.
A debt-to-income ratio of 36% or less is generally considered good by most lenders, while a percentage exceeding 50% could make it challenging to secure new loans.
If your ratio falls between these points, paying off some debt can improve your chances of qualifying for loans and provide greater financial security.
If you do one thing, consider paying off your debt as quickly as possible.
Request a credit report.
A credit report provides valuable information. A friend of mine found that one of her co-workers with bad credit had applied for a credit card in my friend’s name and used it to make purchases.
Thankfully, my friend resolved the situation before it wreaked havoc on her credit score. Other clients have found issues that a simple letter resolved, raising their credit scores.
As of this writing, Investopedia identified the three top credit bureaus as Equifax, Experian, and TransUnion.
In today’s episode, Money Numbers You Need To Know, you will learn:
- What is a P&L, and why is it so important to your financial health?
- How to track your monthly debt and income from different sources, such as credit card debts, loans, etc.
- The two key components that create a balance sheet.
- How to calculate your net worth (and why this is so important).
- How a balance sheet can save you from losing assets (This is a significant insight.).
- The different strategies successful people use to manage their money and financial plan.
- Why there are $7 trillion dollars of unclaimed assets (and how to avoid losing your assets).
- The most critical discovery I learned from advising wealthy clients. Specifically, you will learn how to make financial planning and money numbers fun. As a result, you will not dread the task.
- The one daily action that will change everything. This is something that almost all wealthy people do!
Click here to download the Financial Freedom Guide:
Conclusion: “Money Numbers You Need to Know”
To achieve financial freedom, you must know some essential financial numbers. In today’s podcast, you will learn three important ones.
In the blog, you will learn about additional numbers, such as calculating your net worth, the importance of lifetime income, how to get the most from social security, your debt-to-income ratio, and how to access your credit report.
Understanding these money numbers will give you a solid foundation on your wealth accumulation journey.
Click here to get your free financial checkup:
To your fulfilled and wealthy life!
Annette
