Setting goals to make money online
I think it’s important to have concrete goals. To even have the option of leaving my day job, I need to understand exactly how much income I’m going to have to replace. Answering that question actually drifts closer to financial or retirement planning than to developing a profitable online business. As luck would have it, though, I’ve spent a fair amount of time studying these areas. And while I’m certainly no expert, I’m comfortable with the basics.
How should I proceed? Traditional financial planning focuses on maintaining a certain percent of your income, even though a person usually has far greater control over their expenses than their income. As a result, the more important factor to consider is my expenses.
Estimating living expenses
So the first step is to estimate my normal living expenses. I’ve been using Quicken for years so getting that number takes all of a few clicks. Barring that, I could also have looked at my credit cards and my checking account to figure out a rough annual approximation.
Income shouldn’t be totally ignored, of course. Especially if I expect to maintain other sources of income, I can use those amounts to offset the money I’ll need to earn online.
Setting a concrete long term goal
Without going into gory details, the final number I came up with was $60K a year, or $5k a month. Starting from zero, I can tell you that seems like a pretty large amount! This would be a pretty short story, though, if I walked away at this point. To make that target more manageable, I’ll break it into smaller chunks.
As there’s a lot I need to learn, I imagine it will take me a while to get that first dollar in the door. Afterwards, hopefully I will have figured out the basics and will have discovered some ways to accelerate the process. Ideally I’d like to hit my $5k per month target in a year.
Break the long term goal into intermediate milestones
Being the corporate type, I’m used to thinking in financial quarters, so I’ll structure the goal around those milestones. To make things simple, I’ve set the following monthly goals: $5 at the end of 2Q07, $50 at the end of 3Q07, $500 at the end of 4Q07, and $5000 at the end of 1Q08.
Are these targets realistic? I haven’t a clue! But it’s a start, and at this point, a stake in the ground seems like a good first step.
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