A while ago, I wrote about what I would do if I happened to receive a million dollars. It was fun thinking about the endless possibilities of what I would do with all of that money.
Then I thought, wouldn’t it be funner if I actually had a million dollars? You know, instead of just dreaming about the possibility of winning or inheriting it, I could actually put a plan in motion so that I can really get there!
I know you’ve probably dreamed of having a million dollars, too. But I’ve decided to stop dreaming and to start doing!
That’s why I’m joining J. Money’s Million Dollar Club!
The Million Dollar Club is a group of soon-to-be millionaires who are all working toward that goal of having SEVEN FIGURES in their accounts one day! We’re all at different parts of the journey – some are still in debt, some are just starting to invest, and others are a few months/days shy of having the bragging rights of being called a millionaire.
Obviously, I am still in debt (hence Lisa vs. the Loans if you didn’t catch that). But I’m not letting my loans get in the way of me being a millionaire! The key is to work on increasing my cash flow. Without further ado, here’s my Millionaire List!
1. Contribute to 401(k) up to match
I’m sure you’ve heard me say it, but I’m going to say it again! My employer matches 100% of my contributions up to 3% of my salary. Basically my employer will throw in 3% of my salary into my 401(k) if and only if I throw in 3% or more myself. Which basically means free money, y’all! At this point, I am only contributing enough to get the employer match and nothing more. Eventually, I’ll be maxing out the entire 401(k) (see #6).
2. Max out Roth IRA
In 2014, the maximum an individual can contribute to their Roth (or Traditional) IRA’s is $5,500 per year. Which means that every month, I am contributing around $450 towards my Roth IRA. I do this automatically. This trains me to learn to live without that $450 each month.
3. Get rid of non-mortgage debt
My credit card debt was the first to go. Next up will be my student loans and after that will be my car loan. The more debt I get rid of, the more money frees up each month since I would no longer be paying for those debts. This extra money will come in handy.
Why won’t I be getting rid of my mortgage right away? There are two sides to this issue: one is to pay off your mortgage right away and the other is to pay it off as planned. Honestly, I’m not quite sure which side I’m on yet. I see benefits to both. So I’ve decided to cross that bridge when I get there.
4. Decrease expenses
One of these days, I’m going to have to track my spending to really see where each of my dollars are going. Right now, I’m postponing it because, quite frankly, I’m scared of the findings But once I actually do track my spending, I will have a better picture of what items/services I spend too much on. Off the top of my head, I’d like to decrease my car insurance expenses, possibly downgrade my cable, and stop eating out so much.
5. Increase income
Currently, I’m looking for a better paying job. Not only will this increase my income immediately, but the extra money makes a huge difference in the long run. I won’t bore you with the mathematics of it all, but just trust me that the sooner you ask for a raise, the better (hint: compound interest)! On top of my regular 9-5, I’ll be looking into other side hustles such as secret shopping, doing surveys, eventually monetizing this blog, or even becoming a virtual assistant. Every extra dollar helps!
6. Max out 401(k)
In 2014, the maximum an individual can contribute to their 401(k) is $17,500 a year. That’s about $1,458 per year! By getting rid of monthly debt payments in #3, decreasing my expenses in #4, and increasing my income in #5, I should be able to throw enough at my 401(k).
7. Diversify investments
Not only will I be diversifying my investments in my 401(k) and Roth IRA, but I’d also like to invest in real estate. I haven’t determined whether I would be a house flipper or a landlord, but I do know that I’d like to try my hand at real estate in one way or another. I’d also like to look into peer-to-peer lending such as Lending Club (not affiliated).
There you have it! As you can see, I don’t really have a timeline for when I would actually achieve the coveted seven figure accounts balance. Instead, I’ll be focusing a lot more on my yearly goals. In fact, my 2014 goals are pretty much in line with this Millionaire List. You can track my progress in my monthly net worth updates. I’ll also be revisiting this list once in a while to keep myself accountable.
Will you be joining the Million Dollar Club anytime soon?