Woot! It seems like this day would never come. We are officially a quarter of a millionaires!
Yes, I know we have a long way to go but it is still pretty exciting. Our assets minus liabilities, for now, are worth about $250k. I wanted to take this milestone to join the ranks of the J Money’s Million Dollar Club.
Over at Budgets are Sexy, J. started the Million Dollar Club in order to push himself and others to that big milestone. For us, a million dollars means being financially independent and very close to early retirement. I have been changing and tweaking my early retirement spreadsheet for a few months now to lock down our tentative date and plan.
Max All the Things!
We plan to reach a millionaire status by following our goals:
- Maxing out Ms. Blue Ribbon’s Roth
- Max out my Roth
- ⅕ the way there
- Max out my 401k
- only a few years left
- Throw lots of money into brokerage accounts
- Pay off the house
What about Ms. Blue Ribbons 401k you ask? Well, that’s a tricky subject. I’ve looked at her options and they aren’t good and since we don’t know what her job prospects are over the next year I’m hesitant to start it up. Especially with her starting up a side hustle we could open up a self-employed IRA. By maxing out her Roth she is contributing 15%-ish of her income to retirement. I also don’t want to be overloaded on pre-tax money (hence the brokerage account too). After the kiddos move out of daycare we can start supercharging our brokerage accounts or start adding to a pre-tax account for her.
Math is hard
If you look in the upper right-hand corner you see the little box of “Target Rate of Return.” Yes, I am using a 6% rate for my estimates. I know it isn’t very low but it is the lower side of average. Like many things, it is sometimes better to set low expectations and then exceed them. I’d rather plan on my estimated FI date to be when I’m 43 than plan for it to be when I’m 40 and be very wrong.
Not to mention the other leaps of faith these projections are assuming. I have my property value increasing at 3% each year and the cars depreciating at $2500. I can almost guarantee we won’t be driving the same cars in 10 years (they will be hover cars!) and I likely will have another one (or two) for the kiddos. Finally, if you hadn’t heard we are toying with the notion that we will sell this house and move to another.
Ahead of the Pack
Finances are always in a state of flux (much like the capacitors you find in some hover cars #backToTheFuture). All I can say is this is the best guess I can make for figuring out when our FI date is. Are there flaws, DUH, will we get there, HECK YES.
Just by thinking about this makes our household all the more likely to get to that million mark and I can only assume that if you are reading this you also are a person thinking towards the future.
Are you in the Million Dollar Club? What are you doing to get to that milestone?