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Entrepreneurs: Why $1 Million Isn’t Enough to Retire

A yellow sticky note beside a calculator with "$1 million" written on it.

My lowest point as a gym owner didn’t come when I couldn’t pay the rent.

It actually came a few months later: I had a full book for personal training, I was covering my costs (barely), and I was taking home about $40,000 per year.

Things were “OK.” But then I started thinking about my future.

I had a baby, but she didn’t need much … yet. Eventually, she’d need school clothes. And more food. And someday she might want to go to college. And maybe she’d have a little brother or sister. And someday my old truck would run its last trip to the gym.

How would I ever pay for any of that?

Hell, how would I ever stop working 14-hour days and take a one-week vacation?

How would I ever retire from this?

I thought, “I bet someone else has already figured this out.”

So I started looking for examples of people who had worked as a trainer for 30 years, socked away enough to retire, bought a little place and learned to like golf—people who didn’t worry about money anymore.

Uh, oh: There were none.

I had to make my own plan, and that started with calculating how much I’d actually need to retire.

Tip: $1 million isn’t enough.

The 4 Percent Rule

This is a quick-and-dirty way to calculate how much you’ll need to retire:

Divide your annual retirement income goal by 4 percent. (Read more on Investopedia here.)

For an annual income of $80,000, you’ll need $2,000,000 in savings earning a 5 percent return. (That’s your $80,000 income goal divided by 0.04).

However, $2 million is still not enough. $80,000 today is a decent income, but 50 years from now, when you and I are cresting 90 and still going strong, that $80,000 won’t go far. Right now, inflation is higher than normal, and nobody’s getting 5 percent returns on stocks or Bitcoin or most investments.

You’re going to need more: To retire, you’re going to need real wealth.

In the next post in this series, I’ll share two strategies from my upcoming book, “Millionaire Gym Owner,” so you can skip the years of study and jump straight to building wealth right away.

Other Media in This Series


“What Is Wealth? (And Why Gym Owners Should Pursue It.)”
“Two Paths to Wealth and Security for Gym Owners”

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One more thing!

Did you know gym owners can earn $100,000 a year with no more than 150 clients? We wrote a guide showing you exactly how.