Answer by Stephen Turner:
First of all you ignore the people who tell you you can't/you're crazy/you're lazy etc… They want you to fail because they're also failing.
Making $100'000 is not difficult but it requires dedication and a plan. You can do it without those things but it's not going to be easy unless you're incredibly lucky.
How to actually get your hands on the money!
Step 1 – Stop thinking of $100'000
First you have to stop thinking of $100'000 as your goal. A lot of people have jobs where they are promised salaries of $40'000 a year. Even if they never spent a cent from any of their pay checks and they worked everyday, they'd still never get their grubby little hands on $40'000 in a year. Why? Because of the taxman my friend. If you are successful in completing this guide and you don't pay any tax, you're going to jail anyway so you're not going to be able to enjoy it. Let's turn that $100'000 into $150'000.
Secondly you have to stop thinking of $150'000 as your goal. I know what I just said but in the real world no-one is going to give you $150'000 without expecting anything realistically in return. Let's turn that $150'000 into $300'000. That way we have $150'000 to spend on buying stuff to sell.
Step 2 – Stop thinking of one year
It's demotivating and awkward. A lot of teenagers today have to write five or six page essays when they're young. But what! They're only teenagers! How do they do that..? They change how they think about it. Twelve half page essays are a whole lot easier. Especially if you don't do them all in one go. Visualise the year as 12 months. That way you can track your progress and it won't feel so overwhelming.
Step 3 – Find time to work and earn
Now let's say your going to work 30 hours a week for 50 weeks a year. That's not a bad schedule and it gives you a lot of time to spend your new money!
You need to make $300'000 in 1500 hours/1 year. Or even $25'000 in 125 hours/1 month. Or even $6000 in 30 hours/1 week.
SPOILER ALERT: There's no job that requires no training that pays $200 an hour mate. You're not that special. If there is, you probably won't get it, it's going to require more work than you can give and it's going to be boring and long as well.
So don't bother looking for a job! Sell something.
Step 4 – Product NOT service
With a service; you or an employee (which don't come cheap) has to be physically present for each transaction to deliver the service. You can't sell in bulk and those in the high end (and high price) market segment have experience and brand names. You don't. You don't have time, expertise or a reputable brand name.
With a product, if all else fails you can still sell it without much effort, because in theory you or your supplier have already invested the time before hand in making the product. All you have to deal with is the aftermarket customer experience.
Step 5 – How much do you need to sell
What if you were to sell 300 units of a $20 product a week then you'd have $300'000 a year. What if you were to sell 1200 units, of a $5 product a week then you'd have $300'000 a year. What if you were to sell 600 units, of a $10 product a week then you'd have $300'000 a year. What if you were to sell 150 units, of a $40 product a week then you'd have $300'000 a year.
Step 6 – What do you sell
Anything. Anything generic. Anything that's been done before, tried and tested.
True you could invent and innovate and become a billionaire overnight, but let's be honest: if you could, it would have already happened. And it hasn't. With innovation comes risk. With risk comes failure.
Let's say you like cooking and made a special chilly sauce (or any product, that is non-seasonal and has a long life). Go to a local supermarket – arrange a product pitch interview. Pitch your product. Sell the supermarket 6000 units for $2.5 each, with a recommended retail price of $4 each and another supermarket 4000 units for $3 each with a RRP of $4.5 each. That's $27'000. Do that for every month for a year and you have $324'000. Say you spent $150'000 on packaging and production and you gave $50'000-75'000 to the tax man then you have yourself $100'000 a year.
It can be any product and it can be more than 1 product, but it's a proven method and it works.
Step 6 – Sources of finance
Share capital – selling and trading shares for Limited liabilities, and public limited liabilities. You don't have to pay this back, although it is considered polite to give out dividends at the end of the fiscal year.
Loan capital – bank loans, private loans, overdraft, trade credit, mortgage. These are not easy to get for a new business with no trading history.
Venture capital – private investor/s, usually high risk for high reward, but not recommended as they usually take more of the profits than you. They can take up to 100% of them although they usually only take 60%. This is agreed prior though. Dragons Den.
Other – personal savings, inheritance, retained profit.
Step 7 – Making a profit
A bit if algebra for you (and you told your math teacher you'd never need it)
Profit equals Total Revenue minus Total Costs
Total Revenue equals Sales Quantity multiplied by Sales Price.
Total Cost equals Variable Costs per unit multiplied by Sales Quantity plus Fixed Costs plus Tax
Variable Costs per unit equals the price of packaging, raw materials etc. Resources that deplete when more product is made.
Total Variable Costs equals costs to (you) the business that change when (Sales Quantity) output changes.
Fixed costs equal the price of rent, insurance, light, advertising etc. When the cost to (you) the business stays the same regardless of output.
Step 8 – Count your cash
Well you earnt it. Why not. While you're at it, think of those less fortunate.
P.S. I recommend reading my other answer on How to become a millionaire –