My $1M networth goal is far away, yet also, it appears, achievable. “All I need to do” is keep my job. That’s it. It helps a lot if my company continues performing strongly, but I don’t need to get a raise in the next four years. I just need to remain employed at the same exact rate. Based on my calculations, if I do just that, the following is a reasonable outcome:
If the stock market crashes, all bets are off. This is assuming a reasonable growth of 5% year over year on average. If that doesn’t happen, I won’t get anywhere near this goal. But, I’m operating under the assumption that 5% YoY growth is reasonable. It could also be higher, and I could get there faster.
The $1M goal feels a bit pointless, since even with that amount of networth it will be impossible to afford to buy property without dedicating the rest of my working life to a similar job. But, something about that $1M in the bank will make me feel relatively financially stable, for the first time in my life. If that $1M can make $50k per year, that’s enough to live on while supplementing with a job I love that pays much less.
This whole plan does require a few things in my control:
- Keep my job for 4 years – no raises or bonuses required, or asked for!
- Spend no more than $3000 per month on all expenses (my 50%)
- Stay in current 1 bedroom apartment until kid 1 is 3 or 4
Out of my control…
- Company continues to perform strongly, so I can keep my job and stock value stays the same or goes up
- Overall stock market goes up at average of 5% YoY for next 4 years
- No unexpected medical conditions for anyone in my family
The good news is that this is a rather conservative plan, and it’s possible with the right amount of luck, and potential raises/bonuses that could be earned in the next four years (but never. ever. asked for) I can exceed this plan significantly as well.
Regardless, all of this requires me to not buy a house/ condo/ townhouse for the next four years – but that will free us up to make a call on what to do once this mega goal is achieved. Either the growth is even higher than this (in which case perhaps we opt to stay here and I take out enough money for a downpayment- maybe even in a year I don’t work if I have a second child, so I can have lower taxes on taking that money out?) or it is not quite this strong and we opt to move to another state where we can actually afford a house. The great news is that either way, this gets me into a house / condo of some sort in time for baby A to start school.
The bad news is, I’ve never held a job this long. It’s going to be very hard. It might be achievable but four years is a long time – especially with a kid on the way. It makes me sad that the four years I’ll be working is the four years when baby will be home and growing up… but it will all be worth it in the end. I hope.