Today, I’m taking a pledge and – being one of the last to the party – to join J. Money’s Million Dollar Club. I’ve already unofficially been a member since I’m working towards $1M (well, $2M is my financial freedom money goal) but this makes it all more official. Plus, hopefully he’ll add me to his fancy list. I like lists.
I would like to become a millionaire by the time I’m 45 (or sooner) independent of any wealth my husband is accumulating. This puts me well on my way towards $2M+ in individual networth AND means that when my (hypothetical) children are in their pre-teen and teen years I can be more flexible with my career and actually see my kids before they’re out of the house, married off, and spending time with kids of their own (tear. boy do they grow up fast.)
In order for me, Her Every Cent Counts, to become a millionaire by 45, I pledge to do the following:
1. Invest an average of $5000 per month for the next 10 years (between taxable accounts and retirement accounts)
2. Max out my 401k each year for the next 10 years (or every year I have access to a retirement plan through work) even without match (because let’s face it I’ll never work for a company that offers a match.
3. Live in my 1 bedroom rented apartment with Mr. HECC for as long as possible (i.e. until our first child is two) even though I would much prefer to live in a 2-3 bedroom house. Only buy a house after I have $750k-$1M saved for retirement that I don’t need to touch, so it can grow to $2M by the time I retire.
4. Continue to drive my used 2011 car until it dies (but invest the appropriate amount into keeping it in good shape.) Never buy new cars.
5. When possible, increase my monthly savings beyond $5000 (for instance, I can save up to $7000 right now per month if I’m extremely frugal) but don’t let being “ahead” of my net worth goal at any moment in time change my savings rates.
6. Put aside any additional income (bonuses, tax refunds, extra income) into my investment accounts.
7. Find a career that enables me to consistently save $5000 per month for the next 10 years (which means that I can’t go back to grad school unfortunately so I likely have to stay in my current career and just learn to suck it up.)
8. Gain skills and keep up to date with latest skills to become highly valuable as a consultant in my industry so I can potentially earn more money working for myself and enjoy my life more.
9. If needed, move to an area of the country with a lower cost of living (but only if I can continue saving $5000 consistently per month for the next 10 years)
10. Invest in experiences only, especially travel before kids and family vacations after kids. Rotate cheap vacations (camping) with fancier ones (Hawaii). Any additional income (if income increases) should be split between savings, “life experience” fund and housing fund.
