Start Investing by 26, Retire a Millionaire by 67

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 :)

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Sometimes you have to just grow a pair, and ask.

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 ;)

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My millionaire to-do list!

Welcome to the newly-founded "Million Dollar Club"! Total members so far - 1. haha...but hey, i can use some more. Can you imagine how bad a$$ it would be to log into your accounts one day and see a cool million in there? I'm all over that, starting today.

And you're welcome to join! Come up with your own "millionaire to-do list" like i did below, and you're half way there. It doesn't have to be much, just make sure it's pretty realistic so you'll actually go through with it.

After that, just keep Motivated! "The Automatic Millionaire", and "The Millionaire Next Door" books are great for this. And if that doesn't do the trick, just eat a butt-load of chocolate...the morphines should get you ready! All this plan really entails is time, and habits. Once you master those, the rest is easy breezy. Besides finding the money to invest of course ;) Either way, i'm starting now.

In order for me, J. Money, to become a millionaire, I pledge to do the following: *list will be updated as necessary

• Max out my 401(k) every year.
• Save/invest 1/2 of all future bonus's.
• Continue investing in my brother's condo.
• Keep up "a dollar a day" (work days)
  
• To be frugal, but not hardcore-insanely frugal ;)

If i follow the above, as it stands today, my net worth will increase the following each year:

• $15,500 invested, $15,500 matched!
• $2,500 (after taxed)
  
• $1,700
• $240
• TOTAL: $35,440/yr
  

Using CNN-Money's millionaire calculator with a conservative 6% interest, and stripping away taxed vs. non-taxed money along with inflation, I will see a cool $1 Million in approx. 15 years and 2 months!

This means I will become a millionaire by the time i'm 43! (hotness)

Of course $1M won't actually be $1M thirty years from now, 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 this strategy will cover that :)

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I want to be an Automatic Millionaire!

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

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