If you're in college and reading this,YOU ARE SMART! Not only for getting into college (naturally) but for wanting to get a head start on your finances. When I was your age the only thing I cared about was women & beer pong - and in that particular order. As long as I had enough to survive, I didn't want anything to do with financial management ;)

Unlike me though, you want a head start in life and you're doing something about it! So today's post is directed at you, along with a fellow student of yours looking for some help. We'll call her Miss Roxy for the fun it. Here's her dilemma, along with my thoughts on it:

"I'm 19, in college, planning on marrying in summer of 2012. I can't save much right now, but I know eventually I'll have a job and I want to put away for retirement. The problem is, I'm not sure how to. I know that sounds silly because there are posts about this all over the place. But the problem is, there is a chance that my future husband and I might be moving to a different country within the next ten years. How does that effect my retirement savings and can you help me?"

First off, good for you in trying to plan all this stuff out! I couldn't tell you what I was doing for lunch each day, regardless of planned weddings, moving, etc so good job. That being said, I think life is too crazy and will change when you least expect it - esp. in the next 10 years. That doesn't mean planning for retirement and the wedding shouldn't be done right now (it totally should!) but just that I wouldn't worry about having the *perfect* game plan at this point in your life. It'll always be a work in progress.

THAT being said (again, haha...) the answer to your question depends on a slew of variables. Here are a few things I wish I had thought about back in the day:

5 Financial Tips to Get Your Mind Right

1. Save save save! Every time you get paid, get cash presents, win the lottery, etc, stash at least 10% of it away. You do this for the rest of your life you'll have plenty of money, believe me. It's one of the simplest things anyone can ever do.
2. Find as many income streams as you can. Work side gigs while in college, get a good job when out (and if it takes a while to find one, at least work others in the meantime!), etc. Without income you can't do squat. This applies to both you and Mr. Roxy ;)
3. If you're looking for an investment vehicle, besides a saving account, try a Roth IRA. You can put in $5k a year that will grow TAX-FREE for the rest of your lives. As long as you don't hit the maximum income to be able to contribute (it's over $100k so you don't have to worry about that right now), it's one of the first places people usually advise to put money in.
4. Contribute at least up to your employer's match in your 401(k) plan. This doesn't apply now as you don't work full-time yet, but once you do make sure to contribute at least whatever they're matching as it's FREE money for doing nothing saving (which you should be doing anyways).
5. Create a simple budget and review it once a month. It's boring at first, but once you get into the habit you catch yourself spending more than you should be ;) Give free budgeting sites like Mint.com (affiliate) a shot, or see if any of the excel spreadsheets I gathered does the trick! As long it gets you to take action, it really doesn't matter which.
   

You & your man follow a few of these, and you'll be just fine :) People make this stuff a lot harder than it actually is. When it comes down to it, it's all about spending less than you earn, and saving the rest. That'll leave you with plenty of money for the wedding, retirement, and whatever else you're planning up.

Anyone want to add anything else? Maybe some tricks/lessons YOU learned in college?

Labels: advice, money management, one of my lists, reader mail, retirement

Maxing out your 401(k) or IRA is just plain awesome. And even more so, maxing out BOTH in the same year! For the first time in my life, I have done just that, and I can't tell you how excited I am (even though I sorta kinda already did in my last net worth update).

I was leery to blog about this in case it came off as too "look at me! look at me!", but a recent comment from Miel at Dinks Finance coaxed me to say a few more words on it - mainly to show that it is, indeed, possible to max out not only your 401(k) for the year, but also your Roth. And the "how" part of it all? Pretty much exactly what Miel left on the previous post of mine:

"...keep stretching yourself and adding on a bit at a time. Back when I first started contributing I thought it was virtually impossible to max out. After we got married I upped my contribution by quite a bit, and then realized I could still get by, so I upped it again. I kept doing this until I maxed out. I was surprised how quickly this happened. It was a great strategy for me and now I max out on auto pilot."

SO. TRUE. Once you get in the mindset and declare to yourself that YES, I WILL MAX OUT it's just a matter of time as to when you do. You start upping it a little here and a little there, and before you know it you're close to maxing-out-land! Now, obviously it requires some hard work and a pretty clean slate to get on this, so if you're not in the right mindset as yet you may want to backtrack a bit.

Some of you have bad health issues, or you're in $50k of debt, or you're spending more than you're bringing in. If this sounds like you, then scratch away the millionaire to-do list and start focusing in on the very basics. Go through all of your expenditures (or hopefully budget!) and pinpoint the areas of weakness. You may have 1 or you may have 5, but either way it's important that you find them so you can work on fixing them. Create a "life plan" and actively work on it! It's only when you clear up a lot of the bad stuff that you can concentrate on upping the good stuff - like your 401(k) and IRAs.

With everything, it all comes down to time and dedication. 3 years ago I couldn't care less about my retirement funds - I liked seeing my paycheck as full as possible, and I didn't have any plans on where it went at all. I had no budget, no real savings, and no ultimate desire to pimp my finances. I was just living and coasting along w/out a care in the world ;) It was fun and it worked for a while (26 years, actually) but sooner or later you have to man up and set things in motion. It's only then that you can really start concentrating on that financial game plan and increase your retirement accounts.

I'm not sure if I totally went off track here, but what I'm trying to say is that you CAN, indeed, max out both your 401(k) and IRA. I did it for the first time this very year, and I can only hope I'll stick with it and report with the same next year. So, if you really REALLY want to save more and work towards that golden retirement, start today! Up that % another point or two, and continue moving it up every few months. With a little time and patience, you'll get closer and closer to your goals :)

Labels: 401k, retirement, roth ira

Once you're contributing up to your company's 401(k) match, do you continue upping the % or do you jump to the IRA?

This is one of the questions I get asked the most as a PF blogger (the other is probably how to start blogging or the order to pay off credit cards), and it usually comes down to personal preference. Since I mostly respond back the same way all the time, I figured I'd copy & paste the question and my answer below and see if maybe YOU have some better advice on it this time around? That way I could refer them back to this post in the future :) Here's the question from Mr. Wants-to-take-advantage-of-retirement-plans:

"I'm like you, turned 30 this last year, and getting my finances in line (I'm in the black, which is a good thing, but I can do better)....got a question for you regarding 401k's and IRA's. I currently participate in my companies 401k program, but I am only contributing the amount that the company matches (i.e. 60% on my first 6%...). However, my 6% doesn't even get me close to my annual maximum ($16,500 or so... whatever it is...(J: Yup, that's correct!)).

Would you suggest hitting the $16,500 in my 401k before setting up a separate IRA account? Or would you just contribute to the 401k up to the employer match amount, and then max out an IRA each year?"

First of all, GOOD WORK on matching up to that 6% already - 90% of people never even consider it. Second, I like that you're asking this as a lot of people wonder the same thing (me too, at times) and to be honest it's a tough call. You're right in that I'm not a professional, so I can only tell you what I would do in your shoes :) And that would be to compare the funds available in your 401(k) vs. the IRA, or even better, Roth. The Roth is the bad boy these days and much more pimped out than the Traditional - but still do your research to make sure it works for ya.

But back to the funds. *Most* 401ks from smaller companies usually suck as the funds to choose from aren't as good as if you had the open-sea of EVERYTHING out there like you do with IRAs. My company has a great match at that 100%, but the funds are pretty shitty from what people tell me. So, if I were only getting the 6% match then I'd do that, or maybe even up it to 10% to keep it even (I always round up) and then work on maxing out my Roth. This way, you could pick much better places to put that money and in all types of products - mutual funds, stocks, bonds, whatever you want really. It might depend on which institution you go to open one up, but it's nothing Google can't help you with. I'd start at Fidelity or Schwab and go from there. (Or, USAA if you qualify - that's who I use for my Roth) .

Not only should your money get into better places this route, but you hit that max a lot quicker giving you that feeling of Awesomeness. The Roth & Traditional IRA max out at 5k this year, so you could break up the payments from now until the end of the tax year to make sure & evenly distribute the money until maxed. In all honesty, you've already gotten 80% of the smart investing part down as either route you take is bad ass :) But that's what I'd do - keep your 401(k) contributions to 6-10%, and throw the extras into an IRA. What would you guys advise?

Labels: 401k, advice, reader mail, retirement, roth ira

Hah! My original "Millionaire To-Do List" before I digitized it :) I came across it when flipping through my "idea book" the other day. This one actually made it to fruition, but unfortunately a good 25-50% are still in the works or on hold. But hey, that's what keeps us going, right? Our dreams and visions for the future!



PS: If you don't do something similar already, you should totally give it a shot. Increases the odds of accomplishing your goals, while at the same time helps to hold yourself accountable :)
PPS: Writing down your accomplishments each day is also a great idea.

Labels: goals, million dollar club, millionaire love, retirement

My #1 financial goal each year is to max out my 401(k). It's the one thing I strive for more than any others, no matter what's going on w/ the world. Some years it's easy and I bask in my glory, and other times I want to carve my eyeballs out with a rusty spoon. If I can complete just that one goal each year though, poppa J is happy :)

He knows that socking away $16,500 every year (or whatever the current limits are) will bode well in the future and allow him to sip long island iced teas on the beach some day! Plus, the fear of working himself to death is just too much to bear in his old age.

Regardless of what it is though, I believe everyone should have a major financial goal to complete each year. Whether it's saving up $5k in an emergency fund, wiping away an entire credit card, or just taking a new financial course every year. Whatever it is, strive for it and make it happen no matter what it takes. You'll be amazed at what you can actually pull off when you push yourself.

In fact, I had to cut down my average 401k contribution to 1% for a while due to some accounting issues that were outside of my control. Because of this, my total contributions thus far is hovering around $3,700 instead of the $8.5k it should be at now that '09 is halfway over (scary!). You know what that means? If I still want to reach my goal of hitting $16.5k, I have to bump up my contributions like crazy to catch up! And let me tell you, it's a lot more fun having 30% taken out than 90% which it's currently at (we're talking a drop from $1740 every 2 weeks to $69 and change!). Wha???

The point is, willpower's a beast when put to good use. Focus your energy into a specific goal and make it happen. If you accomplish more? Great! But at least have that major win in your pocket. Saving and investing isn't hard in itself, it's just a matter of doing something about it. So get that game plan in action and tell us what you're working on! What is YOUR #1 financial goal this year?

Labels: 401k, advice, challenges, goals, retirement

Because when it comes to investing, Warren Buffett's the freakin' man! Why start from scratch analyzing and trying to pick the very best stocks out there when I know absolutely *nothing* about the industry?

Don't get me wrong, I'll still be doing my best to learn and see why, exactly, he picks what he picks, but when it comes down to it I trust his opinions over anyone else's out there - obviously including my own ;) After all, it was Buffett himself who said he doesn't invest in anything he's not familiar with! And since I'm not familiar yet, I shall copy him :) haha...

Actually, I should say I'll be copying his stock choices minus some financial ones that have been causing him trouble lately. I wish I could remember which personal finance mag I got this idea from [got it: May,09 ed. SmartMoney - "Buffett, Half Off" by Jack Hough], but either way it's genius. Especially while everything's so freaking LOW! We'll never be able to compete w/ Warren in getting the absolute *best* rates of going stocks, but while things are 1/2 off right now we can get damn close. In fact, I'd venture to say that now is the only time we can beat him if we pick up the same ones he did last year when they were much higher!

Okay, so now that you know what i'm up to over here, WHICH stocks do I plan on getting? Well, I've already picked up 3 of the 6 recommended by that same pf mag that I can't recall, and all 6 are owned by his Berkshire Hathaway company. In an effort to keep things simple for me, and not go TOO overboard, I've decided to invest $500 in each stock over time:



So far so good! Another way to "be like him" would be to just invest in one of his Berkshire funds, but considering one goes for $92,000+, and the other for $3,000+, I figured this is the better way to go ;) Again, mainly because how cheap they are at the moment.

And if you missed it, these new friends of mine will be living in my Brokerage Roth IRA. I'll continue to max out my 401(k) every year with a handful of diversified mutual funds and all, but this is my "play account". Even IF it's a bit excessive - I'd much rather spend my extra money investing & learning a bit over material stuff I don't need at all.

I don't recommend this game plan for everyone, but for me it's on like Donkey Kong!

Labels: investing, retirement, stock market, Warren Buffett

Yup, just opened up my very own Brokerage Roth IRA with USAA today! And, as usual, it went swimmingly. They answered all my questions, took the time to explain everything to me, and even opened it up 1-2-3 over the phone for me. Total call time? 14 mins. 37 secs. (hotness!)

They even helped me to xfer my target mutual funds from my regular Roth into this new Roth, allowing me to keep everything into one account! I'm telling you, I really should work for that place - I've now technically got 13 accounts opened with them! haha....although i'll drop the other Roth here shortly to keep things nice and clean.

So, why the big move now? To purchase those stocks I was talkin' about the other day! Yup, I figured the only way I'll be able to play the game correctly is to consider these new stocks as "retirement" funds. That is, I pick them up and then keep them for a while instead of buying and selling all over the place. And for ME, that means having them live in my Roth IRA.

Up until the other day, it never dawned on me that I could purchase individual stocks and keep them in my Roth account. I was just so used to thinking about mutual funds when it came to retirement accounts (cuz that's what the media and every other person out there talks about). But, with a Roth IRA, You can invest in anything you'd like! Mutual Funds, individual stocks, cds, money markets, you name it. The Roth is just your vehicle to get you there, sorta like a "catch all" account for investing.

The thing was, however, was that the original Roth I initially set up was only made for mutual funds, so I had to change it over into a "Brokerage Roth" in order to have trading capabilities as well now. From this one account, I can now choose whatever my heart desires :) All under the same imposed Roth Limits of course.

But what's even MORE awesome is that I don't have to worry about the taxes from it all!!! I don't know about you, but the idea of dealing with taxes in itself is enough to steer me away from investing sometimes :( But since the money flowing into this account is already taxed by Mr. Obama & crew, the need to hit 'em up again goes away! When it's time to cash out 30 years from now, all deposits & gains will be 100% tax-free :)

Needless to say I am one excited little puppy over here. I've got the game plan all set up, the mechanism now in place, and now all I need are the right stocks! haha...that's all.

---------
PS: In case you're wondering, and I know a few of you are, the cost for each trade placed with this Brokerage Roth @ USAA is $11.95 - a lot higher than Sharebuilder, E*Trade, and some others. Since I'll only be placing a few trades each year though, it's not that big of a deal for me. I'd much rather have all my accounts in one place and easily accessed :) Oh, and I pay no monthly fees.
PPS: Here's a pimp list of the "best brokerages" out there if you're interested in checking some out.

Labels: retirement, roth ira, stock market, USAA

You all know how much I LOVE my 401(k), but what about our friend the Roth IRA? Both investing vehicles are sexy in their own way, but how do you know when to use one over the other?

The answer to these questions always lies within the situation at hand - and it just so happens we've got one today. The odds? ;) A fellow reader hit me up recently and wanted to know what we thought about her dilemma. Here's what she sent:

"I graduated from college in December and am in my first "real" job with benefits. I am a teacher. I am required by the union to contribute to the teacher's pension. In addition to this, I have the option to have a 401(k) and the employer does not match contributions. My thought is to skip the 401(k) and simply open a Roth IRA. Is this a good thought? In any circumstance would I want to pick a 401(k) over a Roth IRA? (Besides the obvious employer matching) What made me start thinking this path was an article I read on Kiplinger about Roth IRAs and one of the benefits is that you can use it to help save up for a first home, and this is another goal in the somewhat near future of my life."

First off, I'm impressed you are already thinking of this at a young age! Good for you. This topic has been debated like crazy amongst the finance world, but it really comes down to your goals here. Both 401(k)s and Roth IRAs are awesome as hell, and both have their pros and cons. For anyone who's not familiar with them, here they are in a nut shell:

401(k)s - All money that goes here are pre-tax, meaning not taxes come out while investing. This is great in that you have MORE money to invest and accumulate over time because you have that additional 25% (or whatever your tax rate is) earning money for you. 401(k)s are also great in that your employer will usually match you up to a certain % (as mentioned in your email) meaning you get FREE money. On the flip side, you have to pay taxes on this once you start drawing out the money in retirement. You will also get charged up the a$$ if you take any money out before you're eligible. There are some sneaky ways here and there where you could, potentially, take out some money w/out incurring this wrath, but I wouldn't advise it.

Roth IRAs - Another investing tool that allows you to save for retirement, and sorta like the opposite of 401(k)s in that you get taxed UP FRONT, but you never have to pay a tax again down the road! So say you drop in $5k and then leave it alone. In 30 years that $5k can become $20k and you don't have to pay a cent on that $15k of earnings :) On the flip side, you can only put in a certain amount each year ($5k for 2009 if you're under 49 vs $16.5k for 401ks ), and you can't make over a certain amount of money (a bit over $100k)

But back to your question. Whether you choose a 401(k) or a Roth IRA comes down to your future plans. If you want to invest for RETIREMENT, meaning you won't touch it for 30+ years, then I'd open up both a 401(k) and a Roth and leave it alone (you can add more to one over the other, but I always suggest having both).

In your case, it looks like you will probably need this money for a down payment on a house sometime soon. So dropping $ in a 401(k) is def. not the way to go (after you contribute up to your employer match to get that FREE money). In fact, I probably wouldn't even go with a Roth either since its main use is for retirement funds as well. If it were me, and I were definitely getting a house in 3-5 years, I'd throw the main chunk of extra money into a high-earning savings account like ING or another online bank since you'll be dipping into it soon.

That being said, you'll probably end up opening up a retirement account anyways cuz it looks like you really want to ;) In that case I'd recommend going with a Roth. While it's not designed to be used like that, at least according to my accountant when I asked her last year, you *can* take out any $ you have contributed at any time w/out incurring any fees or taxes - you just can't take out any interest earned. (there are certain situations where you CAN take out all of it - like a home or hardship - but you have to make sure the account's been open for at least 5 years. I'd talk it over w/ a professional)

So if you want to save save save and then take out the contributions when you need that down payment, the Roth is the better option here between the 2. Would you all agree?

Labels: 401k, reader mail, retirement, roth ira

It's been a long time since I've owned individual stocks (6 years), and I'm feelin' lucky! The market's down, our savings are up, and I'm ready to give it the ol' college try again. Plus, I'm a lot better off financially and emotionally than I was the last time I gave it a shot.

6 years ago I was just rollin' the dice and doing my best to outgame the system. Sometimes I won (bought XMSR @ $20 one day, and then sold it months later @ $29), while other times I crashed and burned (bought Sirius @ $2.25, then sold it weeks later for $1, only to watch it go right back up). The reality of it all was that I just didn't have a game plan. All I knew was that I a) wanted to be a baller and "trade" stocks, and b) wanted to make some fast money with no effort ;)

Needless to say I was a financial loon, and certainly no baller. Although I'm sure E*Trade loved me! They tend to like it when you drop $10 a trade every other day, haha...even worse, I was losing a sizeable chunk of money right from the get-go! If you're only playing with $100 or $200 of stock to begin with, you're automatically giving away 5-10% every time you hit that buy or sell button. I was seriously smoking something, and it wasn't the good stuff either! (not that i know what the "good stuff" is or anything)

But if you're gonna play the game, you've got to have a plan. And this time I have one :) You ready for it? It's gonna blow your mind I just know it! Okay, here we go....drum roll please....bah-buh-bah-bah, alright, here it is! My plan is....I'm going to invest it for the long haul. Sexy, huh?! haha....well, it may not SEEM all hot & juicy, but it's a lot better a plan. You see, I'm not in the business of making quick cash anymore. Nope, I'm ready to kick back, be patient, and watch it grow over time while I earn my wrinkles.

I've also decided to give myself an allowance for this, and it's all money I can live without. That way, if my repeat performance sucks again I'm not gonna lose any sleep over it. No siree, it'll be just like taking a trip to Vegas, except with better odds. In Vegas, I bring $200 bucks to "play" the tables, and when I lose (because I always do) I'm cut off - no hitting up that ATM again. In this new venture, I bring that same $200 and when it's spent it's spent - no going back and xfering in more money to "break even". This way I get to have a little fun, but at the same time I don't go overboard.

Plus, I'm not counting on becoming a millionaire off it or anything. I just want a little more investing experience while I have the means to do so - and while the market is still so freakin' low... and I'm not gonna sell it every time it takes a dip either. This time around it's all about buying it low and holding onto it baby! I doubt I'll pick the right stocks at the right times, but you know what? That's okay. It's just time daddy gets a new toy to play with ;) I love my mutual & money market funds, but every now and then ya gotta spice things up a bit. And for me, that time is now.

Labels: investing, retirement, stock market

Man it was hard getting up this morning! I think i overdosed on hazelnutt coffee yesterday while sitting in 9-hour beach traffic...which is sad, considering i'm sipping on MORE as we speak ;) Addicted much? haha...

At any rate, I came across a link for the Motley Fool in my inbox the other day, and think you might enjoy it. It's one of those "million dollar calculation" type articles, which are always fascinating to me - especially considering i'm working on my OWN millionaire plan!

The stats, themselves, never change of course, but the way people write about them sure do. This particular article states that if you do the following ONE TIME ONLY in a year, you could be ritch b*tch! (in the voice of dave chappelle on james brown):

• Max out your 401k contributions for the year
• Max out your IRA contributions for the year
• Earn historical average returns of 10%
• And do so by the age of 26.

You will become a millionaire by the time you retire!

Sexy, right? Sure thing, but as cool as it sounds (anything to do with a million dollars is cool to me!), it's not as simple or easy to do. A lot of the variables are discussed in the article, but to reach the above, for example, it means you'd have to come up with that initial $20,500! Y-I-K-E-S.

Compound interest is your friend, but it sure doesn't perform miracles ;) Plus, there's the whole "inflation" stuff, but that's another story. The Fool also adds:

In order for most 26-year-olds to save $20,500 in a single year, they'd either
need to find a fabulously high-paying job or a rent-free room in their parents'
basement. Either way, they'd probably be living on a strict diet of ramen
noodles.

Haha...agreed. Of course, saving a butt-load early on is killer for any goals you might have. Just because you can't be superman and invest a huge lump sum like that, by all means keep plopping those dollars into your account!

And if your goal is to indeed reach that $1 million dollar mark, then create your own plan and stick to it (I used this millionaire calculator to get started on my personal goal). You'll be that much closer either way you look at it.

And be sure to holler back too so we can track your progress and learn :)

Labels: 401k, Ira, millionaire love, retirement

Seriously, sometimes you have to just step up to the plate and ask for what you want. It might not be easy, but the only person looking out for #1, is you.

Want that raise you've been working hard for? Want that date with the chick you've been stalking eyeing lately? Ask for it! No one else will for you.

Personally, i had been waiting for some missing 401k deposits to hit my account. My patience was growing ten-fold, but my sanity wasn't going to last any longer. It really isn't easy for me to have money floating out there in "la la land", and i wanted it to finally come home where it belongs.

I wish i could explain all the twists and turns over the past year regarding it, but it's way too complicated this early in the morning. Plus, i really don't want to bore you to death ;) Let's just say it had been going on for way too long, and something needed to finally be done about it.

That's what today's post is about - asking your way to the solution.

When things go wrong, it's easy to point fingers. But flashing them everywhere seldom gets you answers, so let the other's flash! If the issue affects you, then what you need to do is find a way to get what you want. This usually takes a lot of questioning.

So, when i first realized these 401k deposits went missing, I started throwing questions (not fingers). I talked with a few co-workers first, then the 401k firm, and then HR. All of whom answered my questions, but didn't resolve the issue at hand - plopping my money into my account.

A few months went by (i just thought they'd "magically" appear after a while), but still nothing. At this point i realized that either:

a) I'm out my money, or
b) I have to bring it to the master of the domain - my CEO.

I ran with b), which isn't an easy thing mind you. We get handsomely rewarded here, like WAYYY more than others in our industry, and i'd continue to work here regardless of getting that money back (aka I love it here). So when you're basically telling the head honcho that he "owes you money", you gotta be careful, especially if you're lower management. But i HAD to ask - we're talking about $4,000 here.

And asked I did. I set up a quick meeting, explained the situaton in detail, and showed him the respective statements. And can you guess what happened? He gave me the money!!!

Well, not yet actually, but very very soon. The point is, i got what i asked for cuz i ASKED for it. Sure it was already owed to me, and was legally enforcable anyways, but had i not asked I'd still be stewing here in my seat wondering where the hell it's been all my life. and that's no fun for anyone.

Truth be told, my CEO hadn't even realized they were missing, so it was a problem that could have been resolved months ago! Lesson learned. I'll throw that little nugget in my pocket for later ;)

Labels: 401k, advice, career, retirement, speaking up

Welcome to J's "Million Dollar Club"! If you've ever dreamed about becoming a millionaire - and you actually want to DO SOMETHING about it - you're in the right place!

Can you imagine how killer it would be logging into your accounts one day and seeing a cool million there? I've been all about it the past couple years and there's really nothing stopping me now. I've got the desire, the patience, and more importantly the game plan! (what this post is all about).

And I'd love for you to join! Check out my "millionaire to-do list" below and then create one for yourself. It doesn't have to be much, just make sure it's realistic so you'll actually go through with it. Then review it every once in a while to remind yourself WHY you're saving so much more than all all those crazies around you ;) After that, just keep Motivated! "The Automatic Millionaire" and "The Millionaire Next Door" are excellent books for this. All the plan really entails is time and habits. You master those and it's easy breezy my friends! (besides, of course, finding the money to invest). But regardless, you have to start NOW.

In order for me, J. Money, to become a millionaire, I pledge to do the following:

Max out my 401(k) every year. Max out my Roth IRA. Save/invest 1/2 of all future bonuses. Sell unwanted stuff on eBay/Craigslist. To be frugal, but not insanely frugal ;)

$16,500 invested + $16,500 matched! $5,000 invested --> stocks, funds $2,500 *currently frozen... $500 est. $1,000 est.

That would mean a total of $39,500/yr if I could pull that off! Using CNN-Money's millionaire calculator with a conservative interest of 6%, and stripping away taxed vs. non-taxed money along with inflation, I will see a cool $1 Million in approx. 13 years and 9 months!

This means I will become a millionaire by the time I'm 43!

That $1 million might not actually be *worth* $1 million by then (and I can't predict future returns), but to be honest that's not what it's about for me. All I want is the ABILITY to retire happily with no concerns about money at all. And I'm pretty damn sure being a millionaire would cover that ;)

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So what do ya say - ready to join the club? Get your own pledge jotted down, and then link back or leave a comment and I'll add ya to the list! Here are the current soon-to-be millionaires:

1. James @ DINK's Finance
2. Ginger @ Ginger Won't Snap
3. Erica @ Erica's Funny Farm
4. Brian @ My Next Buck --> Brian's Millionaire List
   
5. Brad @ Enemy of Debt --> Brad's Millionaire List
6. Paul @ Fiscal Geek
7. Shawanda @ You Have More Than You Think --> Shawanda's Millionaire List
8. Financial Samurai --> Financial Samurai's Millionaire List
9. Brandi @ A Life Change: My Journey To Happiness --> Brandi's Millionaire List
10. Yellow Piggy Bank
    
11. Michelle @ Penny and Nickel to Wealth --> Michelle's Millionaire List
12. O1SP03 @ Five Girls Ditching Debt
13. Megan @ Student Charade --> Megan's Millionaire List
14. LuLu @ How I Save Money --> LuLu's Millionaire List
15. Lisa @ Cents To Save --> Lisa's Millionaire List
16. Jayde Moss @ Making Me a Millionaire --> Jayde's Millionaire List
17. Broke M.B.A. @ The Broke M.B.A --> Broke's Millionaire List
    
18. Ryan @ Planting Dollars --> Ryan's Millionaire List
19. Roger @ The Amateur Financier --> Roger's Millionaire List
20. The Financial Blogger --> Financial Blogger's Millionaire List
21. Money Wise 24 --> Aleks' Millionaire List
22. BudgetBabe @ Lean with Green --> BudgetBabe's Millionaire List
23. Sabrina @ Freedom 45 --> Sabrina's Millionaire List
24. Clayton @ Just Good Financial Advice
25. YoungAndThrifty --> Young And Thrifty's Millionaire List
26. Jeff Kosola @ Deliver Away Debt --> Jeff's Millionaire List
27. Money Handler @ Money Handler's Millionaire List
28. Broke by Choice @ If I Were a Wealthy Girl--> Broke by Choice's Millionaire List
29. Money Reasons --> Money Reasons' Millionaire List
30. Jane @ See Jane Get Rich --> Jane's Millionaire List
31. Barbara Bryn Klare @ Upside of Money
32. Meghan Fife @ Thoughts on the Real Life --> Meghan's Millionaire List
33. Ciawy @ Run, Work and Save
34. Benjie @ Zordane --> Benjie's Millionaire List
    

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Labels: goals, million dollar club, millionaire love, retirement

BOOK: The Automatic Millionaire
AUTHOR: David Bach
SEXINESS: To the max!

The fastest book i've ever read! And this is super impressive as a) i'm a sloooooooow reader, and b) it wasn't even a fiction book! haha... of course, i did just come back from a 4 hours plane trip :) But still, there was no way i'd finish it if it wasn't interesting in the least.

Was i impressed? Y-E-S. I give it an A+ overall! SUPER easy to read, SUPER easy to follow, and SUPER easy to act on. I'm a big fan of action over theory (most times), and the author listed simple step-by-step items to follow after each chapter. Which also makes it easy to put down, and pick up at any time. And unless you're already a millionaire, i'd recommend at least skimming it at the bookstore.

The general concept: Save at least 10% of all income for yourself, and automate EVERYTHING. he breaks it all down nicely, and even gives out the names and contact info of those he rates as pretty high.

According to Bach, there are only 3 things you REALLY need to do:

1. Decide to pay yourself first 10% of what you earn - We've all heard it, but not everyone follows it. Pick a % that works for you (he recommends at least 10%, but even 2% is a start), and let it build. automate it.
2. Make it automatic - Set up direct-deposits from your paycheck into your retirement fund. Automate cash xfers into your "rainy day fund" (3 months of expenses). Automate bill payments through your checking acct. Basically, handle all financial transactions automatically.
3. Buy a home and pay it off early - A MUST in his eyes. While this step is the hardest of the group, he's pretty adamant that if you rent you'll almost never become a millionaire. No matter your current situation, buying pays off in the long run. Once you own, use the "bi-monthly" payment plan to pay off the mortgage 7-10 years earlier.

There's a TON of other good information in the book, like how to get rid of credit cards faster, and finding your "latte factor" (daily expenditures that could easily cut in half), but I really enjoyed the stories on how people have actually followed this! These days, it's easy as pie to automate everything. As long as you have a steady stream of income, you're golden. Even if you don't, following the main rules will still guide you nicely.

To be honest, it's just nice reading something that is not only do-able, but extremely easy! And you know what? I actually believe i'm going to be a millionaire! Not 100% because of this book, although the motivation is killer, but because if you can learn how to save it's just a matter of time. It won't happen next week, or even 5 years from now, but I'll tell you one thing - when i'm leaning into the mid-life stage, you better believe i'm not gonna have a crisis!

The only thing i didn't like hearing was that "you don't need a budget". Psshhh, come again? I think all he's trying to do is to get you to focus on the 3 main points above, and basically forget all else you've tried & failed at. I see his point, but i'm not listening. Doesn't he know budgets are sexy!

At any rate, take what you will from all of this. Everyone's different, but i'm fairly confident you'll at least get one thing out of it. I personally put my stamp of approval on this bad boy, and about to pick up another copy for my bro. $4.15 used on Amazon?! Shoooooot....i'm keeping mine ;)

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* You can buy the book here: The Automatic Millionaire
* And you can check out other book reviews here: Book Reviews

Labels: book reviews, millionaire love, retirement, saving