Ah, don’t get too excited with the title of this blog….I’m not really there yet, although it is exciting to me to be joining a list of many others that have dedicated themselves to achieving this goal.
I recently came across a great blogger J.Money at Budgets Are Sexy that has really inspired me. He created a Million Dollar Club for people like myself that aspire to build some serious long-term wealth. Although, at times it seems like wishful thinking for most of us working-class stiffs to make this type of a goal, I see absolutely no reason why I won’t be there by the time I retire (or during retirement). Unfortunately for me, I started way too late in life and I did have a financially devastating divorce right in the middle of it all. Still, starting late is better than not doing anything at all.
Now, I’m not one to sit back and just hope to make this goal, I know it’ll take a lot of hard work and dedication. I’m also not naive to believe that reaching this goal will be the end-all for me and I’ll fade off in the glory of my riches in retirement. This is an excellent goal for me at this point in my life, plus I get to be a part of the “Club”, that’s the cool part!
In order for me to make this goal, I need to stay focused and listen to my own good advice…..at least I think it’s good advice! If I do the following things and make some smart financial decisions, I will make this goal. Hopefully sooner than later. For the most part, all I have is time, and time is what it will take to make it. With limited resources, time is really the only thing you have on your side. To build this type of net-worth, it’s going to take me some time, but I’ve already dedicated myself and this website to long-term wealth building, so let’s take this journey together.
Here’s my plan:
1. First off, build up my savings account to give me a healthy emergency fund to cover all my unexpected expenses. Ideally, I would like to have at least two or three months-worth of living expenses saved up.
2. Continue to live debt free. If I can stay away from debt, I’ll be way ahead of the game. All of my resources will go into achieving this goal.
3. Continue to aggressively fund my brokerage account, especially buying good dividend paying stocks. If I stay focused on this path, I will be able to build a solid income stream that will snow-ball my account year-over-year.
4. Finish out my current employment and earn the service credits it takes to lock-down a significant pension at my State job. I pay 10% (mandated) right off the top of my salary every month for my pension. If I can get 25 years of service, I will be able to secure about 65% of my three-year highest average salary for my pension income. I already have 14 years of service, so I’m not too far out now. This will be the life blood for me in retirement!
5. Build up my 401k and don’t take any loans against it (although this has been a great resource in a pinch). I just pay myself back with a low interest rate and it doesn’t show on my credit report. It’s has been a life saver in the past.
6. Build up my wife’s accounts: savings, Roth IRA, etc. Remember, it’s a team effort when your married! Ultimately, I want to make this goal with my accounts and investments, but we can get there twice as fast together.
7. Continue to fund my investment club with my co-workers. At this club we use a separate brokerage account with four of us contributing monthly. It’s been a nice pool of money building on the side. I really don’t think about this one, I just fund it with the other accounts and it continues to grow. It’s just another great way to build wealth on the side!
8. Look into purchasing rental properties. I’m especially interested in vacation condos at destination resort areas. I can rent the condo year around and occasionally enjoy it myself! I have a good friend that has successfully owned and rented condos for years. His guidance will be crucial and absolutely priceless when I get to that point.
9. Dedicate my spare resources to all of the above. Continue to make smart financial decisions as I go. Stay healthy and fit to hopefully avoid any health issues along the way. Eating well along with routine exercise will keep your body healthy for the long haul. I feel like I’m in better shape now than I was 20 years ago! Good health can keep you away from expensive doctor bills and medications. How many people do you know that rely on meds to get them by everyday? It’s sad, but true. Stay healthy, not only for your own life (and your kids, if you have any), and start to realize how much long-term health care could potentially cost you. It’s extremely scary to think about health care costs in retirement. I’ll take care of myself to try and avoid this hazard!
10. Last but not least, I should have a Social Security benefit as well. I paid into the system for many years, so I’ll take whatever I can get from this income stream.
If all goes well, I will wear the badge of the Million Dollar Club. Good luck to everyone else on the list!