How to make 1 million dollars a year

A million dollars is a lot of money but it isn't as much as it used to be.  Adjusted for inflation, 1 million dollars in 1985 is about 2.2 million today. Nevertheless, making 1 million dollars a year would be fantastic.

How do you do it? Most people would try and find a way to make it organically such as getting a good job and saving or trying to start a business. These are both great ways to make 1 million dollars. These will give you the capital to start your road. What most average people do is different from what most rich people do. Rich people invest their money and really rich people use calculated risk.

In order to make 1 million dollars a year you have to be lucky. This can be a business idea or just good luck on investments. Rich people manage their risk. You can make 1 million dollars a year by investing it and using compound interest to your advantage.

All you have to do is get 11% a month on your investments and compound it each month. You need about 300k to make this work. That is the minimum you need to make a million dollars a year. Let's take a look at a boring chart.

Month	Month Interest	Total Interest	Total Value
1	$33,000.00	$33,000.00	$333,000.00
2	$36,630.00	$69,630.00	$369,630.00
3	$40,659.30	$110,289.30	$410,289.30
4	$45,131.82	$155,421.12	$455,421.12
5	$50,096.32	$205,517.45	$505,517.45
6	$55,606.92	$261,124.37	$561,124.37
7	$61,723.68	$322,848.05	$622,848.05
8	$68,513.29	$391,361.33	$691,361.33
9	$76,049.75	$467,411.08	$767,411.08
10	$84,415.22	$551,826.30	$851,826.30
11	$93,700.89	$645,527.19	$945,527.19
12	$104,007.99	$749,535.18	$1,049,535.18

Here you can see the month and the interest accordingly. How do you get these kind of returns? Well, stocks can easily swing this amount within a month. Commodities can as well. You can invest in double leveraged ETFs. This way the commodity in question can sing 5-6% in either direction and you can make your money. Most commodities have a bear and a bull so you can make money either way. 

Once you make the million dollars you have to pay taxes on it. This differs from country to country but let's say you have to pay an average of about 20%. 

That means you have 800k left. The following year you can take another 300k and do it over again. Rinse and repeat. Out of all of the ways to make money, this is by far the easiest. You can be anywhere in the world and become a millionaire. 

How much do you really need to retire?

Most people don't get a retirement these days. If you do it's most likely in the form of a defined contribution plan. This means that you contribute to it through out your career and you take it out when you retire. How much money you get in that retirement is unknown. Some people get a defined benefit retirement. This is where they just pay you money for the rest of your life. These kinds of retirement plans are few and far between.

I asked myself the other day: what is the minimum amount you need to retire?

Most people would tackle this problem by taking the income that they need to live and then multiplying that by how many years they want to be retired for. This would give you a number somewhere in the millions and it doesn't account for simple compound interest and investing rules.

How much do you really need? The answer is actually quite a bit lower than you would expect. The answer is just 500k. This number would work for most people. Here is how it works.

If you invest your money in a diversified portfolio you should get at least 10% a year. If you invest 500k and get a 10% return, you will have 50k extra to live off of. Of course this is subject to tax but for a retirement, this isn't too bad.

You can actually make 6 figures in a year if you use your margin account. In most margin accounts you can borrow the same amount of money you have in your account. If you had 500k in your account, you can borrow another 500k. What poor people do is they see this and then they go buy a Tesla or some other fancy car.

What this means is that you can borrow 500k bringing the total amount of money to 1 million dollars.This gets interesting because 10% of 1 million dollars is 100k. Of course this is subject to taxes but this will give you a very comfortable income.

It seems that all you have to do is save 500k and you can retire for life. Next time we will talk about how you can make 1 million dollars annually.

Black on black

One of my favorite design techniques is black on black. I think I like the fact that it takes a couple seconds for your eyes to adjust. Check out this logo black on black.

While this gets to the point of black on black, if you are looking for a more practical example. Check out the image below.

You can see that the image pops a bit more. This is because of contrast.

Don't think technology will make you unemployed? Ask a musician how it is going for them.

 This video sums up how technology will affect jobs in the future. Most people think that this won't affect them that their job will either be protected by the government or the business they work for.

Think again.

A lot of areas are going to be affected by how powerful technology is going to get. I always say to people:

Remember that your job can be outsourced to a machine at any given time, for any given reason without warning.

Comparisons are usually drawn to the industrial revolution on how machines will take away jobs but there is a more recent and much more relevant example. The example is of course music. People may argue that the music industry is much better off because of the free downloading from Napster.

For the super stars it hasn't changed but for the everyday musician it has become worse, much worse. Music was never a good career choice for anybody but in the past it was possible to make a good living if you were smart about it. Most of the income would usually come from teaching but if you were motitvated and smart there were other ways to make money.

Technology made the distribution of music free and frictionless which was different from being paid and restrictive. The major difference between the two systems is that record companies use to constantly fund new music. Not everything would make money but they would fund new music. That means more jobs for the production process such as engineers, session musicians and even studio assistents.

With less money coming in the record companies could not fund new music. This new technology changed the way music was consumed. Of course the consumer didn't care at all. Free music, sounds great. What people didn't realize is that this new distribution model would not just simply make music free but completely change the social and business perception of music.

This is what people do not realize when a task becomes outsourced to technology. Not only is the task outsourced but the social perception of the task will change forever. When autonomous cars hit the streets the profession of the taxi driver will not be even considered a job.

With music the biggest fallout of the downloading debacle is the fact that money and music and not even in the same sphere anymore. These two ideas do not mix. In people's mind. Here is the major fallout of what free music did to music's profitability.

Life could be better for musicians. Recently I realized that a lot of musicians reach a ton of people. I was watching a very niche music video and it had 2 million views on YouTube. This amount of views will give you only a few thousand dollars in revenue. Not a lot. If people could make 50k plus from 2 million views then you would see people hiring other musicians and supporting the production chain as it once was.

Now the argument that musicians can "Make their money somewhere else" is usually presented. Well, there are two problems with this. One, the fact that you have to "find a new monitization system" or "sell T shirts" means that the product itself doesn't really have a lot of profitability. Of course you could upload your song to youtube and get 10 million hits and maybe make a few bucks but to the average musician it won't matter.

Two, because music is associated with free people do not want to spend money anywhere, even concerts which is where a lot of money was made. Add to the fact that getting a DJ is cheaper and easier than hiring musicians and you see where this is going.

Your job could look like this very soon.

Free is a great tool to leverage business. Store give out free samples all of the time but they are only samples. What happens when your job can be done by a machine that costs virtually nothing? Well your job becomes outsourced.

How do you deal with this problem? Tune in next time and I will tell you how you can avoid this scenario.

Making a lot of small free to play games for mobile

Mobile games seem to be getting simpler and simpler. It makes sense, people don't play the game for very long and most of them are used as a distraction. 

What if, you made a lot of free to play games that took about 20-30 minutes to beat? It's free so most people won't care about the price and you get your app out the door. If you have links to your websites and links to more games, people will come back for more. 

On top of this your total app store download count goes up with every free game released. 

No matter who you are, start a blog if you want to improve

If you want to improve something, anything you should start blogging.

There are so many disciplines that benefit from blogging. Creative disciplines can greatly be improved. When you blog, you create something. If you blog everyday, you create something everyday. Creating something everyday is key to improving.

Back when I was a guitar teacher I told students to practice 15 minutes a day everyday. It was better than playing 30 minutes every other day. The students that practiced everyday got better. It is a very simple and effective way to get better.

If you blog everyday and producing something it can help you get better. The more your produce the better you get. Actually, the improvement happens in between projects. What happens is that you produce something and then you figure out what you can do better. The more you do this process the better you get at whatever you want to do.

If you want to become a creative writer then write a paragraph everyday
If you want to become a good illustrator then draw everyday
Want to learn how to use Photoshop then produce something everyday
Want to learn Illustrator then draw something everyday
If you want to get better at photography the take a picture and upload it everyday
If you want to make games, then make a small game everyday
If you want to make websites, make a small website everyday

There is another benefit to blogging everyday. You get in the habit of getting things done. This is something I had to learn and it was hard. I one summer in University I spent 12 hours creating. All day everyday. This lead to my first entrepreneurial product: 17 educational books.

After that I was ready and able to create more. If you want to create spend your entire day creating. You especially need to do this if want to do it for a living.

How do create a blog? Simply go do blogger.com and create a blog. It takes about 10 minutes to setup. After that star blogging an blog away!

Why write so many essays in school?

Most students write a lot of essays in high school. The only reason is that the government wants you to so they force it on you. It makes sense. You have to write a few pages and defend an argument. Writing essays is a great way to improve your writing.

The only problem is that you will most likely never write essays again after school. A while back on this blog I talked about how students can write blogs instead. The more a student writes the better (more on this later).

One other activity students can do is write sales copies. Email marketing is a lucrative field. I do it almost every day. Writing essays is another area where school hasn't caught up with reality. In reality, you could be training students to be effective members of the 21st century. To do that you have to select the practices of the past which are obsolete and discard them.

A great exercise would be to ask students to pick a product and write an email trying to sell it. It works out an entirely different part of writing and is really under utilized. With anything creative all you have to do is do a lot of it and you get better. It sounds contradictory but the more you produce regardless of quality the better you get.

The other activity that should be encouraged is to write a blog. This is the best way to get students to write. They can write about anything they want to. It would be very easy to mark this. The more blog posts and the more words the higher the mark. There has to be a few rules to this but essentially this is how it works.

You can even ask students to put their work into the Hemingway app. I will be doing that with this blog post.

The debate about writing specific content and reading specific content revolves around the quality. Well in the 1940s, there was a similar debate about comic books. The consensus was that if a person is reading then it is better than causing trouble or other non intelligent activities. Today a lot of teachers still scold kids to not read graphic novels. Who cares, they are reading.

The same thing happens with writing. All you have to do is give people a forum in which they find interesting and they will do more of that activity.

Writing essays is great but there is room for improvement. Instead of writing 100% essays that students hate, write something more interesting. Since this is an international blog. I am sure people from Europe are confused with this post. In North America, the school system is set with an 19th century attitude.

Simple adjustments can have a profound effect.