Overcome Your Fears to Make Smarter Decisions – Net Worth: $145K (RecoveringCubicleGuy)

Overcome Your Fears to Make Smarter Decisions – Net Worth: $145K (RecoveringCubicleGuy)

Overcome Your Fears to Make Smarter Decisions

Many people struggle to make major career, personal, or other decisions and one of the primary causes of this indecision is fear. I believe that most of us spend lots of time finding reasons to be afraid of our choices. We often take the safer, more conservative route because the certainty is more palatable than the fear of the unknown involved in the riskier choice. If you can recognize fear, understand where it’s coming from, and think rationally about your choices without allowing fear to affect your decision-making process, you will liberate yourself to make decisions that make you happy instead of making decisions that don’t make you afraid. If you want to move past your fear, read on. Jim Koch’s story of founding Boston Beer Company (best known for brewing Sam Adams) offers a guide for how to understand your fears before putting them aside.

If you haven’t listened to How I Built This, an NPR podcast hosted by Guy Raz where he interviews entrepreneurs and founders, check it out. In an October 2016 episode, Raz had Koch on the show and the two spent the first segment of the show talking about Koch’s background.

After graduating from Harvard as an undergrad, Koch spent several years as an Outward Bound instructor for 3 years before returning to Harvard to enroll in an MBA-JD program. After earning his graduate degrees in business and law, he worked for six years as a consultant at Boston Consulting Group (BCG). On the show, Raz asks Koch why he left his high-paying job at one of the most prestigious consulting firms in the world, and Koch describes it simply:

I asked myself “Do I want to do this the rest of my life?” and the answer came back “No.” And the next sort of corollary to that was if I don’t want to do this for the rest of my life, I probably don’t want to do it tomorrow.

Later in the show, Raz revisits the topic. He asks Koch to describe his rationale for leaving BCG and founding a craft beer company at a time when the craft beer industry didn’t exist. Koch provides a framework that is powerful for anyone considering a major life or career change:

[I left BCG] because staying there was very risky. Leaving it was not risky. And it’s the difference in life between things that are scary and things that are dangerous. And there are plenty of things that are scary but aren’t dangerous. And there are things that are dangerous but not scary. And those are the things that get you…staying at BCG was dangerous but not scary and the danger there [was] continuing to do something that didn’t make me happy and getting to 65 and looking back and going “Oh my god, I wasted my life.” That is risk. That is danger.

Koch believes that it’s important to distinguish between scary and dangerous because things that are scary but not dangerous present an opportunity while things that are dangerous but not scary present a massive risk. He provides an example from his Outward Bound days as well:

  • Scary but Not Dangerous: Rappelling over a cliff. The rope holding you is designed to hold the weight of a car, so the actual risk of falling is extremely low.
  • Dangerous but Not Scary: Walking across a 35-degree angle snowfield on a May afternoon. It’s not scary, but it’s extremely dangerous because the snow is melting and the possibility of an avalanche is quite high.

Because I work as a consultant and therefore I’m only capable of explaining concepts with the help of a 2×2 grid, I plotted Koch’s scary/dangerous examples below:

 

If you’re considering a major career, relationship, or other life decision, try plotting your options on the grid above. Keep in mind that not all options will fall in Koch’s two quadrants. Things that are Not Scary or Dangerous are typically low-risk and many people do these things (e.g., eat healthy and work out regularly) while things that are Scary and Dangerous are high-risk and probably apply more to adventure junkies or extreme sports athletes (e.g., base jumping).

When you plot your options, try to avoid those that are Dangerous but Not Scary. These are the hidden risks lying under the surface, like wasting your life working at a job you don’t like or staying in a relationship that doesn’t make you happy just because it’s comfortable.

For me, purchasing our first investment property was Scary but Not Dangerous. It took me a few months to move past the fear involved, and during the process I had several moments of pause where I let fear control my emotions. However, thinking back to Koch’s examples helped me put the fears to rest and continue to pursue our real estate investment.

What decisions are you pondering? What are your Dangerous but Not Scary and Scary but Not Dangerous options? Leave a comment or shoot us a note – we would love to hear what you’re working on and the choices you’re considering.

Net Worth Update: Going forward, I’ll be including the value of our real estate investment in my net worth (at an estimated market value). My current net worth is $145K, which includes my share of our real estate firm (roughly $33K). While this is up from my last post ($140K), I should point out that I get reimbursed for business travel expenses before my credit card bill is due, which can sometimes inflate my net worth in the short term.

Posted by RecoveringCubicleGuy
The 1% Rule – Net Worth: $78.5K (CoffeeForTheBuzz)

The 1% Rule – Net Worth: $78.5K (CoffeeForTheBuzz)

The 1% Rule – Net Worth: $78.5K

I don’t know where I first heard this rule, but it is one that has stuck with me over the past couple of years. The 1% rule is a strategy for forced savings, that I have found to be more effective than any other strategy I’ve tried to employ in the past.

The 1% rule means that for every paycheck you receive, you should save 1% more than you did last time “until it hurts”.

I think I love this rule so much because of its simplicity and effectiveness. It aligns with my belief that you should always save first and spend what’s left over (Warren Buffett anyone?) rather than the other way around, and it allows you to build solid financial habits that will be easy to keep for the rest of your life. Additionally, this is an easy rule to stick to because you don’t have to start off saving 50%, 40%, or even 30% of your income. Saving too aggressively right off the bat can cause too much unwanted stress and actually have the opposite intended effect if you decide that saving is just too much of a hassle.

But if you start by saving 20% of your next paycheck and then increase your savings by 1% of your paycheck each paycheck, I guarantee you will get to a point where you are saving more per pay period than you ever imagined possible.

Assuming you get paid twice a month, let’s look at how this could add up for someone who gets paid $4,000 a month ($2,000 per paycheck) post-tax (roughly a $60,000 – $65,000 salary).

Paycheck 1: $400 (20% of your paycheck)

Paycheck 2: $420 (21% of your paycheck)

Paycheck 3: $440 (22% of your paycheck)

Paycheck 12: $620 (31% of your paycheck)

Paycheck 24: $860 (43% of your paycheck)

Saving an additional $20 each paycheck is not that hard. You will come to a breaking point, but along the way you will also learn that there are unnecessary expenses you’ve kept in your life that can easily be removed to allow you to keep bumping your savings by a percentage point each pay period. Challenge yourself to implement the 1% rule for an entire year – this would get you to saving 43% of your paycheck by the final pay period which would come out to $860 saved on your final check for the year.

Adding up all of your savings along the way would total $15,120 in savings for the year. Not too shabby. If you save like that for your entire second year, you’ll be able to save $20,640. And once you’ve learned what level of money you can live on comfortably (i.e. the difference between your current salary and your upper limit savings after implementing the 1% rule to your breaking point), you will be able to boost savings each time you get a raise or a bonus at work. This will help you stay disciplined and ensure you avoid succumbing to lifestyle inflation – the idea that you spend more money because you’re earning more rather than saving more money which is what you should do if you’re serious about achieving financial freedom at a young age.

What % of your paycheck do you currently save? Are you willing/able to save more than you currently do now? What do you think about the 1% rule? Will you give it a try? Leave your thoughts below!

Posted by CoffeeForTheBuzz
3 Easy Steps for Beating the Post-Work Drag – Net Worth: $140K (RecoveringCubicleGuy)

3 Easy Steps for Beating the Post-Work Drag – Net Worth: $140K (RecoveringCubicleGuy)

Readers: I want to introduce my friend and business partner who will be writing for the blog alongside me. He shares my dream of reaching $1M in net worth by the age of 30 and he will share his ideas on financial freedom and personal growth and will also update you on his journey to $1M. He’ll be signing his posts “RecoveringCubicleGuy” and will be writing regularly.

RecoveringCubicleGuy grew up and went to school in the Midwest and now lives in Chicago. We both work together at the same consulting firm and we’re also partners in our first real estate investment, a small multi-family property here in Chicago.


Net Worth Update: Since this is my first post, here’s an update and brief background on my progress towards $1M in net worth. As of today (age 26), my net worth is $140K. I was lucky enough to leave undergrad with no student debt and my parents generously gifted me roughly $60,000 over the last 5-6 years. I’m planning to crank up my savings by cutting back on big expenses like rent (I will be living in our investment property) and working to increase my income from side projects.

3 Easy Steps for Beating the Post-Work Drag

Some days all you want to do after work is drain a few beers or zone out to some Netflix or meaningless regular season baseball. I get it. There are times when my day is so mentally draining that I struggle to maintain a conversation with my roommates.

When I first started working a full-time job, I gave in to this urge constantly. It wasn’t all bad (I crushed all five seasons of Breaking Bad in three weeks) but I soon realized I was cheating myself of valuable time to improve myself, have fun, and pursue my side projects. I made all kinds of excuses: I’ll work on it tomorrow night, I’m too tired to think about it right now, I have more important things to do (usually not the case), the list goes on.

The excuses I made usually weren’t true and they held me back from pursuing things that made me happy, like working out, learning Spanish, or planning my next trip. If you want to stop making excuses and start making progress on your goals, try these three steps.

1. Find Your ‘Why’

To beat the urge to crash after work, you need a ‘why’. It could be a specific goal to cook a healthy meal each night or get in a workout, or it could be a long-term pursuit like learning a new skill, building a business, or planning a trip. Find something that motivates you enough to take action even if it doesn’t sound like fun when you’re exhausted at 7PM after a long day.

2. Plan Your Next Move

When you wake up in the morning, write down one to three specific next steps you’re going to take that night to make progress on your goal or pursuit. If you don’t define your next steps, you’ll find yourself making excuses like “I’m still thinking about what to do next”.

3. Don’t Sit Down

This is the most important step. When you get home, don’t sit down. Don’t sit at the kitchen table. Don’t sit on your bed. And most importantly, don’t sit on the couch. Put your stuff down and keep moving. If you sit down you’re more likely to get sucked into your phone, the TV, or whatever else is going on around you. Even better than not sitting down: getting out of the house. If you’re working on a new blog post or book, head to the coffee shop or library. If you’re planning on going for a run, lay out your running clothes in the morning and change into them immediately when you get home.

What are you working on after work? Leave a comment below or drop us a note – we’d love to hear about what you’re pursuing when your day job ends and your side hustle begins.

Posted by RecoveringCubicleGuy
How to Optimize Your Travel Planning (While Working a Full Time Job) – Net Worth: $79.7K (CoffeeForTheBuzz)

How to Optimize Your Travel Planning (While Working a Full Time Job) – Net Worth: $79.7K (CoffeeForTheBuzz)

Net Worth Update – $79.7K

Another day, another dollar. I have saved up a bit since my last post due to having a received a paycheck. The most pressing update I have is that I have finally committed to making my side hustles a reality. I am compiling an informational product on how to purchase a multi-family investment property for first time buyers and have been continuing to design websites for a few clients. The level of effort that it takes to make your side hustles successful is no joke – it’s hard work. But I am excited to keep grinding on these things so that someday I will not have to work a 9 to 5 job. That’s the dream that I’m working to make a reality.

How to Optimize Your Travel Planning (While Working a Full Time Job)

If you ever studied abroad in college or have been on a backpacking trip at any point in your life, you probably know how it feels to catch the travel bug. The first time I ever flew overseas to study abroad in London, I knew the experience had me hooked for life. Seeing the way others lived their lives and having the realization that there is so much more to the world than the things that occupy our daily lives was a life-changing experience. I enjoyed those few months so much that I knew I had to keep exploring the world whenever I had the chance: Japan, Southeast Asia, and Colombia are just a few of the places that I have had the pleasure to experience over the past few years and I have no plan to quit exploring until the day I die. My ultimate goal (insert link) is to visit 100 different countries before I die.

Someday, I’ll be able to take my dream tour of the world where I am able to travel for several months with nothing but a backpack of clothes and my laptop, but for now I’m constrained to making trips that allow me to stay within my company’s guidelines. I know many of you are in the same position so I wanted to share with you how I maximize the vacations I take when holding a full time job.

Step 1: What is the most amount of time you can possibly take off?

This is probably the most critical boundary of what kind of trip you can take. Some companies only give their employees 10 paid vacation days, while some (like mine) have an “Open PTO” policy which essentially sets no limit on the amount of PTO you can take. In my case, it is usually expected that you will take no more than 25 days in a given year, but there is some wiggle room. Generally speaking, the longest trip you can get away with taking is two full weeks of time off. So that is how I am going to base my trip (10 days of PTO to work with).

The max number of days you can take off is obviously a very company-specific number, but a couple good ways to benchmark your trip include monitoring how long other co-workers have taken off for a single trip as well as how long your manager(s) would generally go away for. Once you have determined how long is the “longest” you can take off, I say why not push the button and ask for a little bit longer? The worst thing they can say is no right? 

Key Takeaway: Figure out how many vacation days you can possibly take consecutively so that you have a baseline to frame your trip around.

Step 2: What is the best possible time of year you can take that trip?

 Once you know the maximum amount of vacation days you can take away from work, it’s time to find the time of year that is best for you to optimize the trip. A big key in this step for me is to look for times that I’m already getting days off due to holidays or special company events. For example, the 4th of July, Thanksgiving, and Christmas/New Year’s are always a great time to consider taking your trip because sometimes you can squeeze in up to a whole extra week of travel without having to take any additional vacation days.

This year, I’m likely going to get promoted in November in the days just before Thanksgiving and likely won’t be expected to come into the office on that Wednesday. So that right there will give me 3 days off that week for free, the weekend, and then two full weeks of vacation days and weekends to travel. So by taking 10 PTO days at the right time of year, I am now going to have 18 days to travel and explore – not a bad trade off. I should mention that my family often celebrates Thanksgiving the weekend before the actual holiday which makes this plan possible because many of you would not want to miss holiday time with the family. So now I know how many days I can take off, and have determined that late November/early December will be the best time for me to go travel.

Key Takeaway: Figure out what time of year is best for you to go as far as getting extra travel days due to holidays when the office is closed, special company events, or slow season for your industry. 

Step 3: Based on the combination of amount of time you can take off and time of year you can go, where is the best place in the world to go?

 Now you have determined the length of your trip and the dates that you’re going to go. But the biggest question now is “Where should I go?”. Let’s look at the key considerations that you should look into when determining the best place to go. Every time I plan a big trip like this, I’ll print out a map and start making a list of the places I’m going to consider going to.

What Will the Weather Be Where You Are Going?

 If you live in Chicago like me and can’t stand winter, you really have no option but to go somewhere where the weather will be at least above 60 degrees in December (unless you’re going skiing). That cuts out a lot of options right away. So, I start listing warm weather places that I haven’t been: Dubai, Hong Kong, Southeast Asia (Vietnam/Cambodia), Australia, New Zealand, South Africa. Just typing out the names of these places makes me excited for December.

What Types of Things Do You Want to Do?

 Are you a skier? Golfer? Interested in adventure sports like bungee jumping or skydiving? Or do you just want to hang out on the beach for a while (not a bad option either)? This one is totally up to you, but you’ll have to do your research on the places that can accommodate your desired activities.

How Much Time Do You Need for the Places You’re Looking At?

Depending on how many days you have laid out for your trip, there may be some places where it just doesn’t make sense to go if you don’t have enough time. For example, to go somewhere like Australia or New Zealand you should probably have two full weeks at the very minimum if you’re traveling from the U.S. On the other hand, 7 to 10 days in Europe is a very doable period of time due to its relative proximity. This one is pretty much common sense, but just don’t make the mistake of traveling across the world without enough time to do all the things you’d like to do. 

Set Google Flights Alerts to Be Notified of the Opportune Time to Buy Flights (Also see Hopper, Skyscanner, StudentUniverse, Contiki, etc.)

Once you do decide on a place (or a few options for places) to travel to, start setting Google Flights alerts so that you will be able to keep an eye on the prices for flights to your desired destinations. Google will then email you with tips on the best times to purchase flights for given trips and will give you a good sense for whether or not you can get a lower fare if you wait until a certain time to buy your flights.

Other great sites to check out for purchasing flights for big trips include Hopper (just an app), Skyscanner, StudentUniverse, and Contiki. They all have their pros and cons so I highly recommend checking out all of them.

Key Takeaway: Come up with a list of the places you would consider going based on weather, activities, and projected flight prices, and then set Google Flight Alerts for all potential destinations so you can get a better idea of which trip makes the most sense to take.

Step 4: How to Maximize Your Budget Regardless of Where You Decide to Go

Traveling doesn’t have to be expensive if you do it right and are willing to take the time and effort to plan ahead. With AirBnb gaining popularity and constant hostel availability, it likely won’t be that tough for you to find lodging for quite cheap no matter where you go in the world. The four considerations below will make a world of difference for the overall cost of your trip.

Hostels (Hostelworld.com) and AirBnbs

This day in age, unless you have a ton of hotel points racked up, it doesn’t make sense for the 20-something traveler to stay in hotels. The comfortable lodging options that are available to you through Hostelworld and AirBnb are plentiful, affordable, and fun to stay in. With hostels you can expect to pay less than $10 a night in many parts of the world and you will have a built-in community of people to socialize with which is great if you plan to travel alone. AirBnbs offer the unique experience of being able to live like a local in the cities you are visiting which adds a great element to any trip. If you have been skeptical on AirBnb in the past, I highly recommend you give it a shot this time to see what the hype is all about.

Take advantage of free breakfasts

Many hostels will provide free breakfast and this can be a great way to save money on your travels. If you stock up on breakfast in the morning, you’ll be set for the better part of the day and can get away with a light lunch and have more money to spend on nicer dinners. Most places you’ll go make dinner their featured meal so I think this is one of the best ways to approach your eating schedule while on a trip.

Research in-trip flights and public transportation before you go.

Public transportation is a huge asset if you’re going to a large city. You will save a ton of money by using public transit rather than Uber or Taxis. You’ll just want to make sure you do your research ahead of time especially in the event that you’ll be traveling to a place where you don’t speak the language. Additionally, do your homework on in-trip flights between cities in a country or continent. Some airlines have special passes that are made specifically for people who will be taking a few short flights over the course of a vacation and this can be a great way to save money.

Plan tours/activities ahead of time to lock in any potential deals

 You can save money on any tours and activities, almost without exception, if you purchase tickets ahead of time. For example, the price of visiting Machu Picchu is a minimum of 20% higher if you try to buy the ticket the day or two before the tour and sometimes they will sell out. Putting in the extra leg work up front will ensure you get the best possible deal and have a guaranteed spot to be able to do what you want to do.

Key Takeaway: Stay in hostels/AirBnbs and do your homework when it comes to transportation and activities that you’ll be doing on your trip in order to find the best possible deals.

Budgeting Tip: Take Off 1 Night Per Week of Going Out With Friends and Put That Money Into Travel Fund Account

 You might be asking yourself, how am I going to afford this? One strategy I frequently use for going on big trips like this is to take off one night per week of going out with friends (I usually will go out both weekend nights, but I cut back on Fridays in this situation). You should take the money you would have spent (say $50-$100) and put it in a special bank account just for saving up for your trip. In a few months, you will have built up a sizable nest egg that can be used to supplement the money you’ll need to spend for your travels (and you’ll probably feel healthier for it too).

 

What travel tips do you have for planning a big trip? Have an exciting vacation lined up? Share some details in the comments below!

Posted by CoffeeForTheBuzz
The Importance of Planning Your Upcoming Week on Sunday – Net Worth: $77.2K (CoffeeForTheBuzz)

The Importance of Planning Your Upcoming Week on Sunday – Net Worth: $77.2K (CoffeeForTheBuzz)

The Importance of Planning Your Upcoming Week on Sunday – Net Worth: $77.2K

When you’re a young adult it’s easy to get overwhelmed trying to balance a career, social life, personal finances, and staying healthy. But being successful in all of these areas is what it takes to live your happiest life. I believe that the best way to become successful in all areas of life is to do everything you do intentionally. This might sound obvious, but so many people skate through life day in and day out without really questioning what they are doing – and then they’re nearly retired wondering how they just wasted the last 30 years of their life. One small thing I do every week to ensure that this doesn’t happen to me is to deliberately plan out my upcoming week so that I make sure I create the time to get done everything that I want to get done.

So, each Sunday, usually at night, I sit down with a notepad and paper and write the name of each day of the upcoming week on seven consecutive sheets of paper. The first thing I plan out is my exercise plan for the week – I believe exercise and fitness is a critical component to success so I always make sure I make time for working out no matter what. Generally, I build in 2 to 3 days of running, and 3 to 4 days of weight lifting. I usually take 1 or 2 days off per week as well.

Then, I’ll plan out what key items I need to get done for my personal businesses – for example, I schedule out my blog posts, the creation of my weekly newsletter, any websites that I’m currently building, and work for my real estate company. I think it’s important to note that I plan out what I’m doing for MY businesses before I move onto planning what I’ll be doing for my career (other people’s business). You need to think about your business(es) as the top priority in your professional life or you will not get very far with them.

Next, I move on to planning any key tasks or deliverables I’ll need to do at work for the upcoming week. This tends to shift frequently, but I also find that this aspect of my life doesn’t need to be as well planned out since the very nature of having an office job means you have planned hours that are scheduled for you to get any work-related items accomplished. When I travel for work, however, I plan out specific tasks that I may only be able to do at our home office in Chicago rather than at a client’s office.

On the weeks that I get paid, I plan out some time to evaluate my personal financial situation, pay bills, research investments, and assess how my budgeting has been going. Setting aside dedicated time to investigate my financial situation allows me to make the best decisions I can possibly make and come up with a plan to make sure I keep ending up in a better position at the end of the day than I was at the beginning. From there it’s all about execution, but most people don’t even have a financial plan to execute on.

Once I have all of the above planned out, I also schedule any social plans I have made in advance just so I know that those are things I will need to work around. I don’t go over the top as far as setting periods of time for “hanging out” – I think that’s a bit of a psycho move and takes the fun out of life. But I just like to keep myself conscious of things that I have already committed to.

So, let’s take a look at an example of my plan for the week (I’ll leave out the details of my work life for obvious reasons):

Monday

  • Lift @ 6
  • Work
  • Dinner w/ Work Team
  • Finish Client A Website
  • Work on Personal Real Estate Company Website
  • Continue Building Out Blog Site

Tuesday

  • Run 5 Miles
  • Work
  • Meet w/ Real Estate Business Partner
  • Build Blog Email List

Wednesday

  • Lift @ 6
  • Work
  • Build & Complete Weekly Newsletter
  • Paycheck: Evaluate Financial Standing

Thursday

  • Run 3 Miles
  • Distribute Weekly Newsletter
  • Work
  • Investigate Process for Becoming a Real Estate Agent on the Side
  • Begin Writing Next Blog Post

Friday

  • Lift @ 6
  • Work
  • Website work
  • Finish Next Blog Post

Saturday

  • Post Blog Post, Build Email List
  • Lift @ 7:30
  • Website work & Real Estate Work/Planning & Research
  • Golf

Sunday

  • Run 5 Miles in Morning
  • Brainstorm Next Blog Post/Begin Writing
  • Build Email List
  • Evaluate Budgeting for the Week
  • Personal Business Work Time

Once I take the time to plan out my week like I have above, I have a much better sense of clarity and focus going into the upcoming week. Everything seems attainable since I now have a plan for execution. If you don’t yet plan your week out on Sundays, make this week the first time! If you already do this, leave a comment below on how it has positively impacted your life. If you don’t do this yet, comment on whether or not you’ll consider starting and why or why not. Have a great week everyone. Life is good.

Posted by CoffeeForTheBuzz
Re-Evaluating The Way You Budget – June 1st, 2017: $77.2K (CoffeeForTheBuzz)

Re-Evaluating The Way You Budget – June 1st, 2017: $77.2K (CoffeeForTheBuzz)

June 1st, 2017: $77.2K

Update on Path to $1M by 30: My overall net worth has decreased a bit over the past few weeks due to some initial cash outflows as I begin my real estate investment business. There have been legal fees, appraisal fees, inspection fees, etc. even though the close on the first property will not occur until the end of June. This cash outflow may continue the next month or so as associated fees and moving expenses are incurred until we are able to begin collecting rent from tenants on the property and are all settled in.

Re-Evaluating the Way You Budget Money

Budgeting is a major topic in the personal finance world that many people my age find hard to do efficiently – or at all. But it doesn’t have to be that hard. I’ve noticed that over the past few months, my spending has gotten a bit out of hand because I have effectively gotten to the position I’ve been chasing the past two years – the ability to buy my first real estate investment property.

Being that my goal is to repeat this process as soon as I can, however, I decided to take a step back and budget out my life the way I did when I first moved into my first apartment two summers ago.

When you’re single, live in a big city, and don’t have any responsibilities other than a job, your expenses are pretty straightforward. For me, all monthly expenses fall into the following categories:

Savings
Rent and Utilities
Gym Membership
Web Hosting
Food and (a bit too much to) Drink
Golf (during the summer). You can substitute your major hobby if it costs money.
Transportation (Ubers and the commute to work)
Miscellaneous – all cash that I have leftover. This is the category that I have the most control over since I operate under a save first mentality.

If you are feeling like you are spending a bit too much money or just want to save more in general, it is a truly eye opening exercise to break down your budget in this way. My strategy during this most recent evaluation of my budget was to put side by side my past month’s spending habits next to my goals for next month. This gives me a targeted method for focusing on areas that I may have allowed to get a bit out of hand in the past 30 days.

For numbers sake, let’s say I earn $4000 in post-tax money per month. You may make more or less, but this should give you an idea of how to allocate your budget based on your income. Based on the 8 categories above, my post tax cash was distributed in the following manner:

  1. Savings – it is imperative to pay yourself first each time you get a paycheck. I believe you should be saving at least 20% of your post-tax earnings and probably more when you’re in your 20s. I was still able to accomplish this goal last month even with higher spending than normal. May savings: $800. $3200 remaining.
  2. Rent and Utilities – $950. This is my cost for living in a small studio in a great part of Chicago. If you want to find a deal bad enough, you can, no matter where you live. $2250 remaining.
  3. Gym Membership – $90. I currently belong to an awesome gym with all the bells and whistles that I probably don’t need – nothing beats a steam room after a great workout though… $2160 remaining.
    Web Hosting – $30. Small expense that won’t change. Need this to keep my site and my clients’ sites running. $2130 remaining.
  4. Food and (a bit too much to) Drink – $800. This is a category that I will focus big time on cutting back on. Though it’s fun to have great meals and go out with friends, we all know how much a weekend of being hungover drains your productive energy and your bank account. $1330 remaining.
  5. Golf – $180. Not bad. Since this is a major hobby for me, I try to play once a week at $50 or less per round. I only got out 3 times, but at more expensive courses so I came in under budget. $1150 remaining.
  6. Transportation – $200. This includes all Ubers I take and commuting to and from my Chicago office. My saving grace in this category is that my company pays for most travel during the weeks if I am going to a client site. All in all I’m not too upset by this figure – it will likely rise as I stop traveling for work next month. $950 remaining.
  7. Miscellaneous expenses – $950. After accounting for all of the categories above, that means that I spent $950 on a bunch of other stuff that is largely unnecessary. This is a category that can be heavily influenced to bump up my figure in category 1 next month. For example, miscellaneous in May included over $150 in clothes, $200 on 3 pairs of shoes, and more on several sporting events. In the past, I have been good about not going overboard on these categories and will look to get back to that trend next month.

Now that I’ve seen how I allocated my money in May, I can make an actionable plan for allocating my money in June.

  1. Savings – $1600. In reality, my goal has always been to save 40% of my post tax dollars. $2400 remaining.
  2. Rent and Utilities – $950. Unchanged, but will be lower in July. $1450 remaining.
  3. Gym membership – $90. Unchanged, but will also be lower in July. $1360 remaining.
  4. Web Hosting – $30. Unchanged. $1330 remaining.
  5. Food and Drink – $600. I should be able to cut this by 25% easily. Part of this decrease will include bringing lunch to work 3 days a week and only going out one night per weekend. $730 remaining.
  6. Golf – $200. Happy with this budget even if it goes slightly up next month. $530 remaining.
  7. Transportation – $250. Expecting this to increase as I won’t be traveling on the company’s dime for work in June. $280 remaining.
  8. Miscellaneous – $280. This will be a massive cut for the month of June. I will need to be diligent about tracking my expenses in 5-8 so that my budgeting will eventually come naturally.

As you can tell, I will need to make some lifestyle changes over the course of the next month to achieve my budgeting goals. But I’m a firm believer that the hardest part of the process is understanding the areas where it makes the most sense for you to cut back on your spending. Once you understand where your money is going, you can change your behavior to address the problem areas. It’s common sense, but so few of us do it and it’s easy for the habit to slip even if you have done it before as was the case for me.

How does your budget look right now? Do you agree with the way I have structured my budget and go about approaching a re-evaluation of my spending habits?

Posted by CoffeeForTheBuzz
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