Month: May 2017

How I Got To Where I Am Today: $0 – $78K (CoffeeForTheBuzz)

How I Got To Where I Am Today: $0 – $78K (CoffeeForTheBuzz)

How I Got To Where I Am Today: $0 – $78K

To some people, the fact that I am 24 years and 9 months old with $78K in net worth is probably extremely impressive. To others, that piece of information doesn’t lend itself to the raise of an eyebrow. To me, it feels like I’m right about where I should be. I’ll credit myself for having made a few wise decisions in my very short professional career, but I realistically know that there are several jobs I could have gone after that would have made me more money than the one I have now. There are trips I could have passed on to save a little more money if I wanted to. All in all though, I’m happy with the amount of money I’ve been able to accumulate over the past 2 years. As you prepare to follow and join me on this journey to accumulate $1M in net worth by my 30th birthday, I wanted to catch you up to speed on how I compiled $78K from (nearly) the beginning.

Key Takeaways

  • This post isn’t meant to be used as a comparison for where you’re at today: plenty of you will have way more saved up than myself and plenty of you are probably in debt – that’s okay
  • There are a few key financial decisions that I’m proud of for getting me to the point I’m at today:
    • Saving a set amount of money each time I got paid, as soon as I got paid – and increasing that amount by 1% each paycheck until it hurt
    • Contributing the maximum to my traditional IRA and then Roth IRA (once I surpassed the traditional income limits)
    • Contributing the max to my 401k that my company will allow – but not a penny more
    • Living at home for a significant portion of time – you may take heat for this, but it’s a great strategy to get off on the right foot if your parents allow it

August 1992 – May 2015: Approximately $5K

In my first 22 years of life, I was relatively lazy and uneducated when it came to the value of money. I was a pretty smart kid, but never held a stable job save for one summer internship where I was able to stow away a few grand in the stock market and some excess cash I had accumulated one summer from caddying 10 to 15 times. Other than that, all of my time and energy was focused on playing sports, getting by in school, and (primarily) partying with my college buddies and trying to hang out with good looking girls. Accumulating wealth was something that began to crawl into my mind as I developed a habit of reading business books throughout college – namely The Millionaire Next Door, Think and Grow Rich, and The Power of Positive Thinking. I had never acted on what I learned about wealth, however, until after graduating from college in May of 2015. My parents let me ride their coattails through the first 22 years of my life and I can’t say I complained about it too much.

August 2015 (Age 23): $3,000

After taking a postgraduate trip to Asia with my best friend, I was finally prepared to make decisions that would allow me to begin significantly building my wealth. The first thing I did at my new employer was set up my 401k in one of the most aggressive funds the managing company offered. I’m not a huge proponent of 401ks, but I liked the fact that my company essentially gave me free money for the first 6% I contributed to the 401k. I highly recommend this approach to new graduates because it forces savings, effectively increases your pay, and it comes from pre-tax dollars effectively lowering your taxable wages. I don’t contribute anymore than what my company will match because I don’t want very much money tied up somewhere that I can’t access it until retirement without significant penalties. But I do enjoy tax breaks.

December 2015: $9,500

In my first year out of school, I believe I made 3 solid financial decisions that put me in a position to begin succeeding financially: 1) Found an apartment that was much cheaper than the apartments most of my friends lived in with similar salaries. Sure it wasn’t fancy, but I was with great friends and had plenty of great times there. 2) I contributed the maximum tax deductible amount of $5,500 to an IRA when my annual salary was still low enough to do so. 3) I began an aggressive saving habit that has stuck with me since the day I moved out of my parents house. I calculated my budgeted monthly expenses and then determined the amount that I felt was possible to save out of each paycheck. Each time I get paid, the first thing I do is transfer money to my savings account. And each paycheck I got, I would raise this savings figure by 1% until I got to a point that was borderline uncomfortable. Sometimes I was effectively living paycheck to paycheck and it wasn’t terribly fun, but I knew this was the discipline I needed to develop to set myself up well financially. I highly recommend this approach because it keeps you on your game when it comes to savings and should help you avoid lifestyle inflation – spending more rather than saving more as your income grows. My first bonus was only a couple grand, but it felt nice to begin padding the bank account.

May 2016: $27,521

With a raise in salary for the new year, I was able to begin saving more aggressively and received my first profit sharing payout in early May. That additional couple of thousand dollars went directly to my savings account along with the other savings I was piling up every two weeks. In addition, I really became serious about “side hustles” at this point in time with limited, though some, success. I bought lots of sporting and concert tickets that I sometimes turned a pretty profit on (though I have stopped doing that more out of personal beliefs as of late). Around this time, I began to learn how to build websites. I still had yet to charge any money on a website, but the knowledge was making me more powerful than ever before. I started realize that to really make it, I would need to figure out how to start making money outside of work. And that became my mission.

August 2016: $39,373

This was a big turning point in my financially “independent” life. My lease had just expired at the end of July and I became determined to make an investment in a multi-family real estate property as soon as possible. In order to do so in Chicago, however, I knew I would need to save a ton more cash than I currently had on hand. My wonderful parents agreed to let me move home to save as much money as I could until I was ready to complete my goal of investment property ownership. With no rent and limited living expenses due to work travel, I was able to more than double my savings each month. My only new cost was time – the commute to Chicago from my suburban home cost me 3 hours per day whenever I wasn’t traveling for work.

At the same time, I sold my first website to a paying customer. It was only for $100, but I learned that I had the power to make money outside of the 9 to 5 and that was a very powerful and motivating feeling. All the while I kept my eye on multi-family properties in the city so I could accomplish my real goal.

January 1, 2017: $57,764

After another bonus from work, rapidly increasing savings from home, and well performing investments in my retirement accounts (traditional and now Roth IRA as well as 401k), I began to feel pretty happy with my overall net worth. My cash on hand was getting to a point where I seriously started to consider trying to purchase my own multi-family property. I realized that to live in an area I liked, however, I would need wayyy more money than I had to buy a mult-family property. So my big idea began to form – buy a property with two friends who shared the same ambition for making their money grow and getting into the real estate investment game. They were quickly on board and we started planning and searching relentlessly.

April 2017: $68,000

I continued saving and saving. We didn’t have a ton of luck finding properties right out of the gate, so I decided it was time to move back to the city – I would sublease an apartment for a few months while we continued looking for a multi-family property to purchase together. It was a great experience living at home, but I was ready to be living near all of my friends again so I moved into a small studio apartment in a great location. Eventually, we found a property that we wanted to buy, but the deal fell through – we couldn’t come to terms with the seller of that property. Shortly thereafter, we found another property, made an offer, and it was accepted. There was some tense negotiation back and forth, but we came to a deal and that just about brings us to today.

My biggest leap in net worth was due to a $10,000 loan from my dad to support the purchase of our multi-family property. I have counted it into my net worth because I constantly pay him back a decent portion of each paycheck I receive and will continue to do so until that debt is gone. And that just about brings us to today.

End of May 2017: $78,000

I continued saving like hell, sold a bit of website work, and had my second profit sharing payment from work to get me to where I am at this present moment. In the near future, I will have some significant cash outflows into my portion of the real estate investment (the deal is set to close on June 23rd), but will finally have something real to show for it. My motivation is only getting stronger as I begin to witness the reality of one of my biggest dreams up until this point coming true. I’m excited to share this journey with you, inspire you to become as successful as you can (not just financially), as well as be inspired by you to become as successful as I can.

So What?

You’re probably wondering what this means for you – and the answer is – nothing, really. I am proud of where I am today, but have my sights set way higher for the future and regardless of your current situation, I think that should be the goal for you as well – always keep pushing for more financially, healthwise, and in your relationships. I hope that setting the tone for how I got where I am at this present moment will provide more context for you as I continue to realize successes and failures over the coming days, months, and years.

What are your thoughts about how I’ve lived the past few years of my life? Have you made some of the same decisions? Better ones? Worse ones? I’ve chosen to highlight the decisions that I’m happy I made the past few years, but there are plenty of bad ones that occurred as well so I’m curious to see what your experiences have been if you are a young professional/recent college grad.

Posted by CoffeeForTheBuzz
The “Beginning”: $78,574 (CoffeeForTheBuzz)

The “Beginning”: $78,574 (CoffeeForTheBuzz)

Welcome to MillionBy30.com. I have always had the dream of being a freelancer/entrepreneur who could travel the world while making more money than I could ever imagine pulling in my excruciatingly boring 9 to 5 gig. But now, I am finally taking action. I want to document every step of my journey from day 1 so that you can see what it really takes to be a millionaire by age 30. I’ll give frequent live updates of my net worth so you can track my progress with me and hopefully be inspired to track yours with the same near obsessiveness that I have about mine. I’ll talk about the various business ventures I’ve embarked on, my new ideas, and what is working along the way. I promise to post no less than once a week and hope to post even more as time goes on.

As it stands today, I am 24 years and 9 months old with a net worth of roughly $78K. Definitely not bad, but that only gives me about 5 years and 3 months to compile an additional $922K of net worth. Not impossible, but certainly not going to be easy. I’m constantly reading books about how to accumulate wealth and how to do it effectively. The 10x Rule by Grant Cardone. The 4 Hour Workweek by Tim Ferriss. Think and Grow Rich by Napoleon Hill. Rich 20 Something by Daniel DiPiazza. The list goes on and on. I love reading and I think there’s nothing better for your personal development and self-education. But 2 years into my full time job after graduating college, I don’t have much to show for my knowledge in the form of side income. I’ve made a bit of money on the side designing websites or selling minor informational products, but I’m beginning to realize that it’s time to cut the shit or I’ll never achieve the lifestyle that I dream about when I read these books. It’s time to act on the things I’ve learned. I hope that my journey inspires you to question the way you are living your life, to ferociously go after your goals, and to realize a level of wealth that you never before imagined impossible.

I am a huge proponent in writing down my goals on a dry erase board somewhere in my apartment where I will be able to see them every single day. Sure, some people might think you’re a little crazy if they see all of your goals written down, but I’ve found that nothing is more motivating than seeing that list everyday. For example, one of my major goals in life is to be a successful real estate investor. So I have a section on my board dedicated to real estate investing with a list of 3 goals related to that topic. I once had a mentor advise me to go about goal setting in a very specific manner. He told me to write down at least three goals per area of your life that you are interested in improving upon. The first goal should be something that certainly feels achievable, but that you haven’t been able to accomplish yet. The second goal should also be achievable, but a bit more difficult to achieve than the first goal (or something that cannot occur until you have achieved the first goal). The third goal should be a goal that feels impossible at the time, but will be more manageable to go after in the future. Let’s take a look at how this model of goal setting works with respect to my real estate investing dream:

  1. Buy a Multi-Family Property: This is something I have never done before, but I have done a ton of research on and have saved up the necessary money from working my 9 to 5 in order to be in a place where I am able to do so (in a partnership). If all goes well, I will be closing on my first investment property on June 23, 2017 with two business partners. This is a goal that is not currently in reach, but will be soon.
  2. Force Appreciation on My Investment by $25K: This is pretty clearly a goal that I can’t achieve until I have purchased my first property, but is still one that will be attainable once I have done so.
  3. Buy a 2nd Multi-Family Property by June 23, 2018: This is a goal that feels next to impossible right now, but will likely feel more and more attainable as I gain experience and am able to cross off the two goals that are above on my list.

Once you are able to cross off your first goal, the 2nd and 3rd items on your list of goals become your 1st and 2nd. It is then important to come up with a new 3rd goal that stretches the limits of what you previously imagined possible. This method of setting goals for yourself will always keep you pushing yourself to the limits and will allow you to achieve more than you ever dreamed was possible as long as you put in the work.

Let’s look at one more example of this type of goal setting as it relates to my goal to be a Millionaire by 30. In this case, I am going to set 4 goals that are related in order to illustrate that this doesn’t need to be just a 3 step process:

  1. Make $1,000 outside of my Full Time Job: This is pretty self explanatory. Something I have not done before, but certainly not something that is impossible to do. If I really wanted to, I could start washing people’s cars on the weekends and get to this point.
  2. Make $1,000 in a month (outside of my Full Time Job): This gets quite a bit tougher. This means that I will need to find a way to consistently provide value to people in a timely manner. Seems tough, but still in the realm of possibility after making my first $1,000.
  3. Make $5,000 in a month (and quit my full time job): This is the type of goal that feels like a long shot right now. It almost feels impossible based on the current state my life is in. But it’s not. And once I achieve goals 1 and 2, it will be inevitable. Achieving this goal would allow me to chase my dreams of traveling the world while working and being a true entrepreneur. And it will send me well on my way to my major goal of:
  4. Have a net worth of $1M by age 30: Of course there will be plenty of steps between 3 and 4, but I believe it’s extremely important to have written down your most major goals at all times. Let’s say I achieve goals 1 and 2, and am working on achieving goal 3. Nothing says I can’t make a new goal 2 to fall in between making $5,000 in a month and having a net worth of $1M by age 30. Maybe my more achievable goal will be to make $10,000 in a month, and I can keep my more distant goal of $1M net worth on the horizon.

There are plenty of ways to structure your goals, but I find that this method is the best way to keep myself focused because it allows you to break your real goals and dreams down into something much smaller and real.

In a future post, I’ll list out all of the other goals I have made for myself and eventually hope to dedicate a page on this website to tracking the goals that I have made for myself. Hopefully this will be exciting and inspiring for your to follow along and implement in your own search for success outside of the rat race.

If you’re like me and you can’t stand the thought of living your whole life doing the same thing day in and day out, then I’m excited to have you follow my journey and hope to help you achieve the same type of success that I am looking to achieve for myself.

Posted by CoffeeForTheBuzz