One of the very first questions I ask all my money coaching clients is “what are your goals?” Quickly followed by “how bad do you want them?”
The first one is an easy one because any of us can rattle them off at any point (have a million dollar net worth, retire early, be the #1 personal finance blog in the world!), but the second one is the one that matters the most.
Most people want to become a millionaire or never have to work again in their life, or hell – have a banging body – but very few care enough to actually pull them off in the end. It’s not that they don’t know how to reach them (save a ton of $$$, invest it smartly, work out/eat healthy/work out even more), it just takes an extreme amount of willpower to pull them off. And, frankly, most of us don’t have it.
Extreme goals take an extreme amount of effort.
At least in the amount of *time* we actually want to achieve them. All of us can become millionaires in our lifetime and retire at some point if we continue staying on top of our game, but most of us think of “dreams” in terms of awesome $hit happening right NOW. And preferably without lifting a finger (why do you think the lottery is so popular?). You don’t hear people saying, “I wish I was a millionaire…. in 40 years” Or, “I’m gonna buy my dream home/car/vacation…. when I turn 70!” All do-able stuff, but not as motivating as reaching these goals sooner.
I got a random email last week that reminded me of this. I’d never talked with this person before, but he had a lot of questions he wanted answered and I was feeling a bit chatty (ie. I was drinking beer).
Here were some of his questions and my answers:
How were you able to save up so much/month? I’m referring to this specifically: https://www.budgetsaresexy.com/net-worth/
I aggressively poured money into Roth IRAs and my 401(k) when I had one (I literally maxed it out to $16.5k every year, and some of those years my company matched me too). I also cut out all debt besides mortgages, saved all my extra money every month, and hustled hard to bring in more money every month outside of my normal 9-5 job. So, pretty much I just worked my ass off :)
I’m not sure how old you are so I’m not sure what types of jobs you held in those early years, but putting away $3,000-$7,000/month is a lot of money for anyone even if you are living at home. How much money from your paychecks were you saving and how much of it was from your investments?
Here’s a list of all the jobs I’ve ever had that I can remember: https://www.budgetsaresexy.com/2012/10/all-30-jobs-ive-ever-done/
I haven’t lived at home since I was in college 10+ years ago. I just hustled as much as I could to bring in money and then invest money. When I was maxing out my 401k I literally had a paycheck of like $90.00 every two weeks until it maxed out and I lived off my side hustle money. It’s extreme, but it was great to do when I was able to (I can’t now because I have kids and I’m self-employed).
Also I started investing in 2008 which was when markets were low so that also plays a part as well. Not as big as earning the money in the first place (since you can’t make money without investing first) but it was definitely a variable.
Holy shit, $90 every 2 weeks!? You really were going after it hah. Out of curiosity, was there any reason why you were that aggressive? I’m totally with you in that I want to be financially free and all that, but 90 every 2 weeks seems extreme. Was there anything motivating you in particular? You must’ve given up going out, going on trips, etc… to do that.
Yes, I wanted to hoard as much money as possible so I don’t have to work for the rest of my life :) Plus, my employer was matching 100% of it all and I wanted to make sure I got it while times were good (the company later cut the matching and then soon after completely went under). I did have to give up some parts of my lifestyle, but it wasn’t that bad because I had savings and just pulled from that to cover expenses for a while. Plus, my side hustle at the time (this blog) was also generating income. Which is another reason to have something on the side going on if you’re trying to reach a goal faster!
I’m not always extreme with my money…
The reason I haven’t accomplished goal #1 yet – becoming a millionaire? I haven’t been very hardcore about it. I can be as lazy as everyone else at times, and I tend to hit the turbo button in spurts. Like when I find something incredible to take advantage of such as my ex-employer’s 100% 401(k) matching . I would have been a DUMMY to not max that out. That move alone will be paying dividends for the rest of my life – quite literally.
The reason I’m not retired early yet? My kids. Haha… Just kidding. My wife! (Somebody stop me!). Truthfully, I just haven’t done the things I need to do to get there. Am I relatively good with my money? Sure. Do I invest it? Yeah. Am I trying to shave expenses wherever I can? Of course. That’s what I’m doing with the Challenge Everything project.
But with all that I still don’t come close to the numbers I need to get to in order to not worry about money for the rest of my life. I ain’t no Extreme Jacob or Mr. Money Mustache, I’ll tell you that much. You have to be pretty extreme to live off $7,000 a year! Which goes to show I obviously don’t want it *that* bad despite what I may say and think to myself … I mean, I want it, but my actions are saying I’m okay with waiting much longer to receive it.
And the same holds true for making this blog the #1 spot on the planet too. I very well know the tips, tricks and SEO maneuvers to help get it there faster, but a lot of them suck ass and just don’t jive with my mojo here. I do enough of them to help this site grow and to be happy with my success, but I could be doing a lot more with my efforts if I was indeed racing to grab that ultimate spot. You get what you put in, right?
In fact, this guy asked me about my blog too (in case any bloggers are interested):
How did you go about getting your blog popular and how do you make money?
I just poured my heart into it and tried coming up with things other bloggers weren’t doing. And of course it helps that I’m super transparent and my style is different than most too, though that also hurts me (I had 5 people unsubscribe to my blog last week cuz they said I cursed too much – hah! And with “sexy” in the title it also can be an obstacle, or even blocked at certain locations). I also love networking and community, so I made a point to become friends with other bloggers I liked as well as all my readers too. I’m really big into commenting and interaction which have all played a part.
And don’t forget I’ve been going it for almost 7 years now – it’s not like it was an overnight thing.
RE: The money – here’s how I make it now on my site. The game always changes though and there’s tons of stuff I don’t do as well that I could to make more…
Remember, extreme actions yield extreme results
It doesn’t mean it’s the only way to accomplish a goal, but it certainly gets you there quicker than taking your time. I think of my friend Maria who killed $157,000 of debt in 3 years when she got on a mission, or people like retired blogger Brad Chaffee who wants to pay for a house in all cash. Hardcore goals require hardcore action.
I’ll leave you with the last question this guy sent me… I think it sums things up perfectly.
For those out there who just simply don’t make enough or have loans or in grad school, how would you tell them to start preparing for future savings? Most my friends unfortunately aren’t in the position to put away any money, so when they ask me for advice, I have no idea what to say.
Well, there’s only two real ways to grow your wealth – earn more or spend less – so ultimately it comes down to how bad someone really wants it. “Simply not having enough” isn’t an answer (or true). There’s ALWAYS more someone can do, it’s just they don’t prefer to do it. Whether that’s taking on more jobs (or a better job), cutting expenses, giving up a car, moving to a new area, taking on roommates, etc etc. Now it’s not always easy, or fun, for that matter, but it’s certainly *do-able*.
So I’d tell your friends what I tell all of mine – how bad do you want it? If they say “bad”, I give them a short list of stuff to try and leave it up to them. More often than not it’s usually the last time they bring it up ‘cuz they just don’t care enough to make it happen. It’s not for everyone, ya know?
[Killer sunset pic by Zach Dischner]
Jay loves talking about money, collecting coins, blasting hip-hop, and hanging out with his three beautiful boys. You can check out all of his online projects at jmoney.biz. Thanks for reading the blog!