Today I turned 25. To me, its a scary number. Even if I were to live to be 100, that’s 25% of my life behind me. Despite my relative youth, I feel like time is running out. Its safe to say that time is the most precious commodity individuals have. Its not replenishable and unless futurologists make significant advances in my lifetime it is finite. I’ve been thinking a lot about what I want to do with the rest of my life. What do I enjoy doing? What do I want to do? The things I always come back to are: read A TON of books, continue my video game hobby, collect/play TCGS, travel, and spend more time with family. I think that’s in line with most Americans. Most of us have hobbies, and most of us want to spend more time with family and continue to pursue what really makes us happy. While thinking about all of this, I’ve also realized that there is so much I want to do, play, see, and experience that I will never be able to do so without becoming extremely financially independent.
I’ve always made it known that I don’t plan on working a day over 50, and my soft target has been retirement at age 45. I think most people find it weird for me to say that. After all, how many people do you know who have retired so young? Additionally, I’m only one year into my full-time career. Don’t get me wrong, I love my job and the people I work with. But between my passion for running, reading, and all my other leisurely activities I promise you I could spend my time better than working 40 hours per week minimum. So I’ve decided to take action. I’ve crafted a few spending plans and below I’m going to lay out my current financial status and the goal I want to hit when I turn 30. I’ll probably only update you on my progress once a year.
So, without further ado…my INSANE goal is…
Goal: Have a net worth of $1 million by age 30.
Where I’m starting: I have about $38,000 in student loan debt. I have a tiny emergency fund and just over $11,000 in my 401(k). I also have ~$1200 in my company stock.
1. Liquidate assets to pay off debt as quickly as possible. By my calculations, I should be 100% debt free by age 27.
2. Continue to invest in my 401k, and my companies ESPP (stock plan).
3. Open an IRA, contribute the max each year.
All of this sounds fantastic on paper, but even if I were to max everything out, achieve 15% returns each year (obviously never going to happen) and essentially dump every dollar I make into investment accounts, I’d never make it to that lofty number of one million buckaroos. So I will need to take further action…
4. Develop additional website, mostly static, to generate advertising revenue.
5. Execute my eBook publishing plan.
6. Dump some money into alternative investments.
Developing additional website (which I already have plans for) will open me up to further advertising opportunities. The handful of ideas I have will translate to mostly static web pages that hopefully will become passive income streams for me. As for the eBooks, I have tentative plans for more than twenty books. I will write some personally, and contract out the others to ghost writers. I expect that the only way I reach this goal is if I have success with my new websites and eBooks. That being said, I expect the significant increased in my net worth to come from ages 27-30. These first two years will be focused on paying down my debt and developing web site traffic. I don’t expect to publish any eBooks until 2018 at the earliest. As for the alternative investments, I will reveal some of my investing choices when I’m closer to my goal, I bet they surprise you!
A big component in this is that I can completely control my spending. I still live at home, so my financial obligations are essentially my debt. My current vehicle is old, so there is medium to high risk that I will need to replace that in the coming years. I want to acknowledge how dificult this journey will be. The average American’s net worth at age 30 is a mere $6000 according to the Motley Fool. Many people that age have multiple forms of debt: credit card, student loans, vehicle, mortgage, etc. I plan on having none of those. We’ll see how it all turns out.