In theory, I should be able to obtain at least 1 million dollars 10 years from now. As long as I stay frugal, and invest using principal of dollar cost averaging, and occassionally rebalance my portfolio (this is currently my biggest weakness), then I should be able to conquer that million dollar milestone.
How did I start believing that I could achieve financial independence?
I started by reading “The Millionaire Next Door” when I was young and just starting college. The problem with the book (at least the edition that I read), was that the numbers were a little dated, but the principals still rang true!
What is helping me focus on my goal of becoming financial independent?
- Automated investments. Using this technique, I’m saving for my Retirement and my kid’s future college expenses.
- Statistics on the rich and the bell curve distribution of wealth in American… This feedback helps me gauge whether I’m behind or doing okay.
- Spreadsheets to track my progress. Today, there are online site that can accomplish this now, like www.mint.com and www.networthiq.com. I also keep a milestone spreadsheet just for motivation.
- Quality books like “The Millionaire Next Door”. Examples of the wealthy in “The Millionaire Next Door” gave me hope. After reading this book, I realized that one don’t have to be born into wealth to achieve it. In the past, I read about the exceptions, but I always thought that I’d have about as much a chance of getting rich that way as I would getting rich via winning the lottery…, pretty slim. “The Millionaire Next Door” gave me hope and enabled me to Believethat in it was possible after all!
- Picking the perfect risk model for my core investments (especially those in my 401(k)). Although, I still do play with a little bit of cash in speculative investments.
- Saving more than 20% of my salary. It takes a little bit of sacrifice now to payoff later.
What tools are you using to obtain the financially independent goal?
-MR
Apart from reading and increasing my financial savvy, i read the bible and see what God has to say about this very important aspect of life. There is a lot in that book about money and wealth. I dont find budgets so practical because i am for the opinion that they are for those with too many commitments or lack discipline with their cash
this is a helpful article. I’m trying to reach financial independence within the next 8 years but my low salary is my biggest hurdle. my friend recently sold his blog for over $1 million and that has gotten me some hope (perhaps false hope but still hope). good luck in reaching your goal.
What may help my family become financial independent is the fact I think about money a lot. I don’t obsess, but it is in the back of my mind in every purchase I make. I strive to get all my purchases the cheapest way possible, which does take planning. But hey, I have time to do it.
We also maximize our free money, as in 401k and a stock purchase plan where my husband works.
Also, we take good care of our vehicles and our home to hopefully ward off catastrophic expenses. Paying a little money here and there will hopefully avert paying big money down the road.
Finally, we have always put aside a certain percent of our income so we would never become dependent on it, therefore we would never miss it.
@Money Green Life
I think if I had a very low income, I’d do some teaming up with friends. Rent a house together, maybe even share a car… I think I’d also buy a lot of used stuff (instead of just cars…) and then with the saved money, I would put it all in investments.
@Everyday Tips and Thoughts
Thanks for the good sounds advice! I especially appreciate the comment about having time to look for deals when doing purchases! Most of the time, we do the same. A lot of people say it’s not worth their time, but it’s better than sitting in from of the tv…
Focusing on long term goals and not short term solutions. Plus, I had really great financial role models growing up.
@Jenna
Thanks Jenna, Having great financial role models can make a huge difference. With not role models, if it wasn’t for “The Millionaire Next Door”, I would have been stuck not believing.
@KT
Sound advise! I don’t follow a set budget either. I have a review process at the end of each month that takes me a minute or 2, but not a formal budget.
I really need to read that book, The Millionaire Next Door so many PF bloggers swear by it. I’ll have more time this summer for reading, and it’s definitely a book I’ll be picking up (at a used book store! 😉 )
@Little House
I’d even recommend getting it at the library, it’s not as fun as a book like “Rich Dad Poor Dad”, but the content is incredible and comes from real data. That book changed my perception of what rich means, and gave me hope that I could accomplish such a goal.
While I’m not rich yet, I’m much better off than had I not read the it.
When I do become financial independent, it’ll be because I was more like the Scottish type of rich, where I was very frugal and lived far beneath my means.
I love ‘Rich Dad Poor Dad’!
@Everyday Tips and Thoughts
So did I, it was a great read (actually I think I read it once and listed to an audiobook version of it later).
After reading the info at John T. Reed’s site about Robert Kiyosaki (google John Reed Rich Dad), I sincerely question Roberts credentials.
That said, it’s still a very inspirational book, and gets people both excited and moving! I believe that half the battle in being successful is trying, and Robert does a great job of stimulating people into doing that.
IMHO, the rest of his books, are just average. So I personally don’t get as much value of out them. But Rich Dad Poor Dad should be read at least once!
Oh, Mr. Kiyosaki’s Cashflow games are pretty good too (at least the Cashflow for Kids one that we have is). They are a bit pricey though!!!
I had heard that Kiyosaki had taken some ‘creative license’ in his book, and had been deemed a fraud by some. But, I did like how he emphasized ‘incorporating yourself’ in a sense and starting your own business.
Some of his views are nuts, but I take away some ideas from Rich Dad Poor Dad. It is also written in a way that kept my attention.
I just went to Reed’s website. He does make quite the case against Kiyosaki. One part I liked is where they were questioning Kiyosaki’s net worth. Kiyosaki said it was 50-100 million, but it is reported it was really ‘just’ 9 million. Well, at this point, I would be happy with 1 million!
Thanks for the reply.
@Everyday Tips and Thoughts
I think the key about Robert Kiyosaki is that he does work for a small highly motivated “Type A” subset of people.
I just don’t think his message will work for the masses that are “Type B”.
I think if you believe in his message, and work at it as hard as you can, then his books do have value.
Motivation is a peculiarly funny thing, if you believe in it strongly enough, anything is possible.
@Money Green Life: Now I’m curious. How to create a blog that’s worth $1 million?
@ Money Reasons: I no longer rely on my net worth number to signify my financial independence. I focus on maximising my cash flow through property and shares and not getting into big debt even though it’s investment debt.
I look at it this way, I’d rather have $300k with 10% cash flow than $600k with 5 % cash flow.
It takes longer to save for $600k and 5% is quite a lazy return. And 10% return is realistic if you know where to look (hint: think global).
@Bytta
I’ve got to start to focus harder on my investments and other opportunities! Right now, I’m kind of in transition period. I’m not sure what to invest in, but I’ll figure it out…