F.I.R.E. Blogger

[fireblogger]

Questions Welcome!

Hey everyone, I just want to let you all know that you're more than welcome to ask questions about finance, money, budgeting, investing, etc!

I'm not claiming to be an expert, but I've been working in finance for a few years now and am currently going through law school. I also enjoy researching and learning new things!

If you ask about something that I'm not sure about, or something that I had to look up I will tell you in my answer too.

[fireblogger]

Small Life Update

Hello everyone!

I just got married, and moved to a different state!

Both decisions were financially motivated (no I did not marry him for the money - I mean, I did. But not his money. I wrote us a prenup that made it clear his money was his and mine was mine).

I've mentioned in the past the potential tax benefits of getting married. Especially the increased HSA contributions and the potential reduced tax burden. Well, my dropping to part time and his getting a way better job meant that filing jointly would actually save us several thousand on our federal tax bill. Not counting his ability to contribute $7k to his HSA pre-tax!

Beyond that, I've left the state I was born and raised in. And have instead moved to a gorgeous state with no income tax, this will save both of us about 7% of our incomes. And we are renting here (and renting out the duplex we own) so we don't pay the higher property taxes. Win win! In fact, the rent for half our duplex is almost exactly what we will be paying for an apartment in the new state, so our net expense change will be almost neutral.

Honestly, the best part is being around trees again. I've always lived in a desert, and my favorite vacation was driving about four hours to the nearest national forest. Now I live in a tree filled city, that's actual trees rather than flower only fruit trees carefully placed by the city.

[fireblogger]

Mid-Life Slog

Okay - the title goes wayy too far, but I’m an impatient person, alright? 

Here’s what my FIRE perceptions are:

Learn about FIRE, and decide which (if any) FIRE you want to pursue.

Take the first steps, budget, reduce spending, etc. 

Increase your income, side hustles, job hunting, etc. 

Invest, invest, invest. This is brokerage accounts, tax-advantaged accounts, real estate, etc.

?????

Start on your Roth conversions, and other money movement so you’re optimized to retire. 

Retire.

So, here’s my problem. Step 5, I’m pretty sure, is just the slog. The time you spend actually saving once you have the knowledge you need to work towards your goals. (Now, I’m not saying you’re never going to learn anything again - because that’s ridiculous. Just that the bulk of the basics are done.)

Now, I’m sort of floating around the 3rd and 4th steps. I’ve slashed my expenses as far as I can without giving up things I value. (Like, I could stop spending on some things if I needed to survive, but I don’t think it’s worth it just to retire faster.)

I’m sort of working on step 3 because I’m currently in school to move to a better paying career. But because I still work, and because I’m going to school full time, it feels like I don’t have any time for a side hustle. And if I did have more time, I’d just put them towards work (I’m hourly and basically set my schedule) to where I’d get a guaranteed and immediate benefit of more pay. 

So, it feels like I’m step 5 because I can’t seem to do anything else. But I haven’t progressed that far - so I keep going back to step 1 because it’s the only other step I can reach and take action on. (Already reduced my budget, already saving and investing every dollar I can, and simply do not have the time to try and start an additional income stream without a total breakdown). But, I don’t know where to go to learn more. I’ve been listening to podcasts, reading blogs, but it’s all basics - things I already know because I go to where I’ve been. I don’t know where to find new places to learn new things. 

It feels incredibly frustrating, because it feels like I’m making no progress (and I basically am not between reduced work and school expenses) unless you consider 100% reinvestment progress. And, I should consider progress, I’m just a good two years from seeing the payoffs. And. . . I’m impatient. 

So, anyway. Incredibly frustrating, because it feels like I’m making no progress and that I can’t do anything to start making progress again. Even though logically I know that in two years, my salary will (hopefully) double and potentially quadruple depending on the practice area I go into. 

[fireblogger]

Finding New Rental Markets

So, my current goal is to find a new rental market. And honestly, I don’t know if there’s much point to this goal because my income is only slightly higher than expenses right now. So the likelihood of me getting a down payment saved is low. But, I still want to find one for the sake of finding it.

In other words, I have no real idea how to go about finding a rental market with a good cap rate. My current property was purchased from a local pool, because I wasn’t planning on moving anywhere. So it’s not great for cash flow, but it was a good option compared to others on the market at the time.

I do actually plan to move in the next 6 months or so. Specifically to Washington, because it has no income tax. My partner and I haven’t decided if we want to buy there or not though. Property taxes are higher in Washington than my current state - but it would still be a net gain. I’ve started poking around, looking for duplexes in various parts of the state. But so far the cap rates have been horrible.

We may also just rent, but it seems like a lost opportunity. Personally, I lean towards renting a cheaper place and saving up for a duplex, triplex, etc. in a different part of the country with good cash flow. Which brings me back to the title of this post.

How do you find new rental markets to invest in? Right now I’m just brute forcing the question in a limited market (Washington). But beyond that I expect I will need to do a base average home value compared to average rent comparison. Then, in areas that look promising, do some additional research about local industries, population, growth projections, etc. to see if the investment will likely still be sound in years.

This is all going to be learning as I go though, so if you have any tips I’d be happy to hear them!

[fireblogger]

New Plan

January this year I spent $5,000 to pay off my under-grad student loan. 

July this year I got a $5,000 student loan, the first semester’s distribution.

My plans have changed. Originally I was going to work part time during school and pay for it out of pocket. But then this fall I got into a bunch of extra-curriculars that I really want to participate in - and that are nice lines on a resume. 

My new plan is to pay for school with student loans, and quit my job to focus on school. I’m really not happy about being in (non-mortgage) debt. But, if I pay the loan off in 5 years (which should be feasible) then it’s basically a $3,000 fee to be able to be a full time student without the stress of work. 

Fingers crossed it works out!

[fireblogger]

LOL plans changed again. I refinanced my house which required keeping my job until halfway through the semester. Then I turned in my notice, and my company decided they didn’t like that.

I have since rescinded my notice and am crossing my fingers they can set up an externship in the legal department for me. And if they can’t I will try to resign again (for the third time …)

[fireblogger]

So, as you may have noticed - I have not been posting as much as I previously had. The basic reason is that nothing has really changed. (Well, that and I've been slammed doing all those extracurriculars and work since I didn't quit).

I did actually end up getting the externship, so I am still working part-time. Generally, my expenses are very close to my income since I am only working around 20 hours a week.

The major change to my plans has been the student loan I took out. The initial plan was to use it to pay for my school and living expenses after I quit my job. However, I didn't quit - and I did take the loan before I realized I wouldn't be quitting. I could, of course, turn around and immediately pay it back while taking the hit on the 1% distribution fee. However, federal student loans have been at a 0% interest rate. Sooo - I've been living off the loan and moving 100% of my income to a high yield savings account (specifically yotta because I've been getting ~2.57% APY) to earn some income in a 0 risk environment.

(When the student loan starts accruing interest again I will pay it off, because taking out a loan to invest is generally not a great idea.)

[fireblogger]

New Plan

January this year I spent $5,000 to pay off my under-grad student loan. 

July this year I got a $5,000 student loan, the first semester’s distribution.

My plans have changed. Originally I was going to work part time during school and pay for it out of pocket. But then this fall I got into a bunch of extra-curriculars that I really want to participate in - and that are nice lines on a resume. 

My new plan is to pay for school with student loans, and quit my job to focus on school. I’m really not happy about being in (non-mortgage) debt. But, if I pay the loan off in 5 years (which should be feasible) then it’s basically a $3,000 fee to be able to be a full time student without the stress of work. 

Fingers crossed it works out!

[fireblogger]

LOL plans changed again. I refinanced my house which required keeping my job until halfway through the semester. Then I turned in my notice, and my company decided they didn’t like that.

I have since rescinded my notice and am crossing my fingers they can set up an externship in the legal department for me. And if they can’t I will try to resign again (for the third time . . .)

[fireblogger]

How to Actually Start Investing (With Fidelity)

Scrolling through Reddit today I realized something, there is simultaneously too much and too little information out there on the nitty gritty. My own posts include information on how to invest, but that information is information about what a stock is or what types of accounts exist. There isn’t one describing how to create a brokerage account.

 So that’s what this is.

 How to open a Brokerage account, specifically through Fidelity because I like their platform and investment options.

See step by step instructions (and pictures) below the break

 1.     Go to this site: https://www.fidelity.com/open-account/overview

2.     Click on open a brokerage account, (this is the free account that I use).

3.      Decide if the account is going to be individual or a joint account. I suggest individual, but if you’re married and want to share an account you can choose joint.

4.     You may have a 401(k) through your work with Fidelity. If that’s the case select existing Fidelity customer. Otherwise pick no.

5.     You will then be asked to fill in details such as your name, social security number, and address. This is so Fidelity can verify who you are. (This process is very similar to opening a bank account). This is where my screenshots pause because I’ve already opened an account.

6.     Once you open an account you need to link a bank account so you can fund it. https://digital.fidelity.com/ftgw/digital/bank-setup. Expect it to take 2-3 weeks for Fidelity to confirm your bank account.

7.     Once your account has money in it you will be asked to choose a ‘core position’ it literally does not matter. You’re investing your money in a money market fund, with each share worth a dollar. It’s basically cash ready to invest, don’t worry about it just pick the default.

8.     This is when you start buying things like stock. Or, if you do what I recommend you will just buy Fidelity zero-fee index funds.

9.     To actually buy index funds find the Accounts & Trade tab in the upper right, and pick Trade from the drop-down.

10.  Change the Trade to Mutual Funds (to get the index fund) then paste your Symbol (ticker) in the Symbol box

11.  I have some dividend money, so I’m going to use that to buy some Fidelity Zero Total Market Index Fund. (Goes to show how little money you need to actually start investing)

12.  Hit Preview, then Place order to actually make the trade.

13.  The total number of shares you receive may vary slightly since index funds are valued daily rather than having a real time market price.

14.  Congratulations! You’ve made a trade.  

[fireblogger]

Have you ever wanted to win the lottery?

Not going to lie, I have daydreamed about winning it sooo many times. Planned exactly how I would invest all the money, how I would retire on it. How I would be able to help my family out financially, etc.

But, it’s impossible for me to win. Why? Because it doesn’t make sense to buy lottery tickets. Your return on investment is going to be extremely low unless you’re extremely lucky.

However, I recently found a “bank” (its a pass through bank like Chime where your actual money is under a different bank but you use their app to access it) with a weekly prize drawing. Prizes up to 10 million dollars.

You get a ticket per $25 in your account. And can get bonus tickets for setting up recurring deposits and direct deposits.

The beauty of it is you don’t have to spend anything to get tickets and chances to win. The money you have deposited is FDIC insured. What you are paying with is the opportunity to make more money elsewhere, for the chance to win here.

The bank is called Yotta, and it pays 0.2% interest (compared to a 0.6% high yield savings account you can get elsewhere). However, depending on your winnings your returns might be higher. Think of it like a slightly riskier and slightly more rewarding investment than a regular high yield savings account is, with no risk regarding your principal (the money you deposit) the only thing you stand to lose is that extra 0.4% interest rate!

One last minor perk! If you sign up with my link you get an extra 100 tickets - but they aren’t applied to your account immediately. They apply at the beginning of the next week (or current week if a number hasn’t been drawn) to maximize your possible return!

Im seizing my chance to play the lottery! And I’m going to continue to do it until high yield savings accounts start offering rates a bit better than 0.6% 😁

Hey - Join me on Yotta using my referral code AMANDA9374 and we’ll both get 100 tickets. Yotta is an FDIC insured savings account recently featured in Bloomberg and Forbes where you can win prizes up to $10M every week. https://join.withyotta.com/AMANDA9374

Yotta Savings

With Yotta, you save money and unlock the chance to win prizes up to $10m every week. The best part is you can't lose. Even if you don't win

[fireblogger]

An update here, so far my APY is about 1.5% which is 3 times my normal HYSA with a 0.5% so I’m pretty happy with the account!

It’s always exciting to watch and see if you can earn more too ☺️

[fireblogger]

New Plan

January this year I spent $5,000 to pay off my under-grad student loan. 

July this year I got a $5,000 student loan, the first semester’s distribution.

My plans have changed. Originally I was going to work part time during school and pay for it out of pocket. But then this fall I got into a bunch of extra-curriculars that I really want to participate in - and that are nice lines on a resume. 

My new plan is to pay for school with student loans, and quit my job to focus on school. I’m really not happy about being in (non-mortgage) debt. But, if I pay the loan off in 5 years (which should be feasible) then it’s basically a $3,000 fee to be able to be a full time student without the stress of work. 

Fingers crossed it works out!

[fireblogger]

Advice to a Coworker

A coworker reached out to me today, he said that he recently had the opportunity to buy a home, and wanted to try renting it out! Since he knew I had a rental he asked me what my list of advice was, and for an explanation of capital gains on investment properties.

I’m copying that advice over to this blog, hopefully it will be useful to anyone else who’s out there and thinking about investing in real estate.

Consider the property manager. For some investors (such as myself) a property manager isn’t worth the money because you are near the property, and have the time to manage it yourself. In addition, the duplex I purchased was not done at the rate needed to get good cash returns, I did it to get a house at the same price I had been renting at and to build capital. If you buy a house or duplex that has a better rent to mortgage ratio then you may be able to spare 5% of your rent in exchange for the convenience of a property manager. 

Think about the market, and your expectations. What happens if the home you just bought increases substantially in value? At what point are you willing to just sell rather than continue to rent? Decide now, rather than trying to make a spur of the moment decision down the line. 

Don’t rent to family or friends. I’m sure you’ve heard this before, but in the best of circumstances renting to family/friends can be uncomfortable. And in the worst circumstance it can destroy relationships. It’s better to rent to strangers so you can enforce your rights as a landlord, and not deal with the pressures of “I’m your best friend, surely rent can be a week late.”

Make sure your lease is sound. If you aren’t hiring a property manager (and honestly even if you are) you should make sure your lease is legally enforceable and includes everything it should include. This is best done through a lawyer, but lawyers are expensive (unless you can find a pro bono lawyer willing to help) so you may need to find examples online. (Make sure they’re from your jurisdiction).

Regarding capital gains

You realize the gains when you sell.

If you live in the house for two of five years you can ignore a decent chunk (likely all) of the gains.

The house will be depreciated over 27.5 years most commonly, but you can pick a different schedule when you file your taxes. 

That depreciation may also let you operate at a loss despite rental income. 

Mortgage interest can be written off.

Expenses going towards rental property maintenance and repairs can also be deducted from your taxes. 

[fireblogger]

Have you ever wanted to win the lottery?

Not going to lie, I have daydreamed about winning it sooo many times. Planned exactly how I would invest all the money, how I would retire on it. How I would be able to help my family out financially, etc.

But, it’s impossible for me to win. Why? Because it doesn’t make sense to buy lottery tickets. Your return on investment is going to be extremely low unless you’re extremely lucky.

However, I recently found a “bank” (its a pass through bank like Chime where your actual money is under a different bank but you use their app to access it) with a weekly prize drawing. Prizes up to 10 million dollars.

You get a ticket per $25 in your account. And can get bonus tickets for setting up recurring deposits and direct deposits.

The beauty of it is you don’t have to spend anything to get tickets and chances to win. The money you have deposited is FDIC insured. What you are paying with is the opportunity to make more money elsewhere, for the chance to win here.

The bank is called Yotta, and it pays 0.2% interest (compared to a 0.6% high yield savings account you can get elsewhere). However, depending on your winnings your returns might be higher. Think of it like a slightly riskier and slightly more rewarding investment than a regular high yield savings account is, with no risk regarding your principal (the money you deposit) the only thing you stand to lose is that extra 0.4% interest rate!

One last minor perk! If you sign up with my link you get an extra 100 tickets - but they aren’t applied to your account immediately. They apply at the beginning of the next week (or current week if a number hasn’t been drawn) to maximize your possible return!

Im seizing my chance to play the lottery! And I’m going to continue to do it until high yield savings accounts start offering rates a bit better than 0.6% 😁

Hey - Join me on Yotta using my referral code AMANDA9374 and we’ll both get 100 tickets. Yotta is an FDIC insured savings account recently featured in Bloomberg and Forbes where you can win prizes up to $10M every week. https://join.withyotta.com/AMANDA9374

Yotta Savings

With Yotta, you save money and unlock the chance to win prizes up to $10m every week. The best part is you can't lose. Even if you don't win

[fireblogger]

The last couple months have been an absolute whirlwind for me.

But, excitingly and terrifyingly, my current company has confirmed that I can work part time starting this fall. Which means that my income will be cut in half, and all my benefits (including my 401(k) match) go bye-bye, the upside is an extra 20 hours a week for studying and homework!

I’ve been really worried about trying to save for retirement while cutting my income by so much, but I was able to chat with a (free) financial professional through school. And unlike the consultations I could get through work, this call resulted in actual financial advice from a certified individual. Yay!

To make a long story short, here’s my game plan:

Scrimp for the next few months while I’m still getting full salary.

Put a small portion in a high yield savings account (about two months worth of expenses).

Put everything else into a brokerage account. I’m planning on retiring early, so I will need retirement savings in a non tax-advantaged account so I can access the funds before I’m 60. And before I’m 60 could mean six months from now if a major expense appears.

Save for the bar exam and potential moving expenses. Though this can come out of the brokerage account if I’m willing to accept higher risks.

No additional real estate investing until I have a more established/larger cash base. I have a place to live now, so buying a pure investment property would tie up a lot of funds into an illiquid asset. Plus the market is high right now, not a buyer’s market at all.

Hopefully everything works out and I’m not about to drive myself into larger mental breakdowns fueled by fear of money + stress. But I’d like to think that the logical part of my brain will successfully point out the math that works out in my favor :)

[fireblogger]

WallStreetSurvivor

If you're interested in investing in the stock market, but aren't quite ready to make the leap with your own money yet, there are many free stock market games online such as https://www.wallstreetsurvivor.com/ that give you $100,000 and let you invest in whatever you'd like. Your investment values then go up or down depending on how the real stock goes up and down.

It's a fun way to experiment with investments, and can be a fun competition if you get a few friends in it too!

[fireblogger]

Stock Market 101 Free Course!

https://investing101.net/product/investing-course/?fbclid=IwAR1gjdFCOnypDTd9pMTra0ezdmt_9Sqv8G2-kY6XTA4YJVMdYisnW2cjL0k_aem_AVT0ayeRlPmjfdOgABsZ6KOi5wkPPN5Kl8aQ3NkmLG8-F-Mfu8xfh-5Jl8Ln4acu_lCqYY8W8LVp7PpDsDkk4yRFbRfzan-io5e9u8INf0CySpJNhX1w3zANOhcxcDdGRcw

Beginners Investing Course - How to Invest Money - Learn To Trade

Investing 101 Beginners Investing Course was designed to provide investing simulations to universities to teach how to invest money and lear

[fireblogger]

Children & Finance

You may think that this post will be similar to yesterday's post about evaluating the cost of a child before you have one. You'd be wrong.

Sure, I may do a post like that in the future, but today I'm going to discuss some fun ideas for how to teach your kids about money. Growing up no one taught me about money, my entire approach to money was "oh god I don't want to be homeless" which led to me saving relentlessly. So it worked out. But I can't help but wish that I had been taught about money.

Give them an allowance. But you can't stop there. Take that allowance and treat it like a salary. Teach them about taxes, employer matches (by matching a % that the child chooses to save), budgeting, etc. Just giving kids some money won't teach them much, you need to use it as a learning activity.

I love the idea of "you get a dollar a week (or however much you want to do), for every 10 cents you save I will match 10 cents." so they can spend a dollar a week, or save two dollars a week, or whatever combination the kid wants.

Or if they have a saving goal, they want a new book for $30. If they save $20 you can match the other $10, something like that.

I'm not as big of a fan on this one, but you could also use a system where they get $5 a week. But you keep $1 for taxes, $2 for rent, and $1 for other bills. Bringing the actual allowance to $1. This risks making the relationship with money more negative as the kid watches the amounts dwindle, but it may work better for older children.

Teach them the importance of work and earning their own money too.

On that note, I can be very spiteful, I hate being blamed for other people's mistakes, and I don't like cleaning up after other people. The result was child me hating chores because I saw it as cleaning up after other people, and my parents telling me that I would never move out because I wasn't willing to work. . .

Well, spiteful me, as soon as I got a job I started working every possible hour. It's amazing how much more motivating work became when I was being paid to do a job instead of being told to clean up after myself (while the parents pointed at my siblings mess). Anyway, my point is spite motivated me to become a bit of a workaholic (and honestly I still am) but teaching kids the value of work will lead to a healthier relationship with work while still motivating them to put in the work.

In general I had a better work-ethic than most of my coworkers too. And frankly, that's not a hard standard to hit when you're young and still working in retail & food. So many teenagers barely even put in the minimum at their jobs, just do your job and you're already in the top 50%. Do it well and you'll be in the top 1-10% get good reviews, more responsibilities, maybe even raises.

I'm wandering off my topic now. But my point was teach your kids about money, teach them about working and good work ethics. Prepare them for the world!

[fireblogger]

Pets & Finances

I love cats, and dogs are okay, I guess.

I bring it up because a friend got two kittens, and they are just adorable!!! Also, well, because there are many people from work who have adopted and are just constantly sharing pictures of their new animal companions.

What they aren't sharing is the increase in bills that they all surely have!

Animals can be expensive. Money-wise, a small dog can cost almost $750 a year to care for, a larger dog can get past $1,000 (Take a look at this chart). They can be expensive time commitments too. And they are long-term.

So, what can you do to get ready for a pet?

Build a budget. When you're planning on getting a pet you will need to consider all of the costs, including feeding, exercising, and caring for the animal. How much food will they eat, how much will that cost? While it's important to budget for all the recurring bills you also need to be aware of period bills or one-time expenses: neutering costs, a leash/collar, a scratching post? Is your chosen pet breed prone to health problems that will skyrocket end-of-life care for the animal? How much will you need to spend on vet bills and 'do it yourself' treatments like flea medication?

Think of equipment. I briefly mentioned one-time costs like leashes or collars, but what if you want to get a fish or a reptile of some kind? The initial setup for those kinds of animals can be high since you have to purchase vivariums/aquariums, UV lighting, heat lighting, humidity control, water filters, the little scuba guy for the tank, etc.

Look for resources at your local animal shelter. Not only is adopting far cheaper than purchasing a new animal many animal shelters will also spay/neuter your cat/dog for a low price. Depending on your area they may also offer vaccinations.

Think about pet insurance. There's rent insurance, home insurance, life insurance, car insurance, why shouldn't there be pet insurance? Medical bills can get expensive, and it's no different for vet bills. If you have pet insurance then you will have some peace of mind regarding any potential medical emergencies that may arise. Additionally, end-of-life care can be more affordable.

Be active! This is especially true for dogs, you should exercise with your pet. Things like taking them out for a walk, playing fetch, or engaging in other activities with your dog can reduce stress (yours and the dog's), improve health (yours and the dog's), and reduce behavioral problems! Cats also (obviously) benefit from interacting with their human! Playing with them increases their activity levels and thus exercise levels helping them maintain healthy weights, it also gives them breaks from boredom which will offset potential lethargic or depressed behaviors, and it improves their bond with you!

[fireblogger]

SMART Financial Goals

Specific

Measurable

Achievable

Rewarding

Trackable

SMART goals are great to use in all aspects of your life, and that includes your finances.

SPECIFIC:

When you set goals you want to be specific, sure “I want to be rich” sounds nice. But what does that mean? If I could get $40-50K in passive income a year I would consider myself very rich, but some people aim for $200k in passive income a year! It depends greatly on the life you want to live, and where you want to live it.

Similarly, “I want to retire early,” I want to retire early! But I’m not sure exactly when. Do I want to work until I’m 30? 50? My savings rate should reflect my retirement plans, as should my allocation between 401(k) accounts and personal brokerage accounts. (If I plan on working longer, I should put more in the 401(k), if I plan on working less I should put more in my brokerage account so it’s accessible before I turn 60)

MEASURABLE

Measurable goals can be difficult in other aspects of your life, but when it comes to personal finance most goals are measurable! The benefit of working with money and numbers is that you can track growth and extrapolate future values to see if you’re on track to hit your goal. (For example, there are a huge variety of online calculators & tools that will let you input your current savings, your savings rate, and estimated rate of return to see how much your portfolio will be worth in 10, 20, 50 years)

ACHIEVABLE

It’s a really nice feeling to make progress towards your goals, it’s even nicer if your progress is on track! Sure, it may be nice to max your 401(k), IRA, and HSA – but if you only make $30,000 a year that’s just not an achievable goal. Take a look at your financial situation and your goals, then figure out how long it would take to reach your goal. Or if you want to get to a specific amount by a specific date figure out what amount is achievable.

REWARDING

If you really enjoy your job, and have no desire to leave it – is it rewarding to be able to retire early? Your goal should be something you want, not what other people say your goal should be. And honestly, it should be a little difficult to achieve. If I set a goal to save $10 a month it wouldn’t be rewarding because saving $10 a month isn’t difficult for me. Stretch goals – think of something that will be hard but possible to achieve and achieving it will likely be more rewarding.

TRACKABLE

This ties into the idea that your goals should be measurable. But you should have a timeline as well as a dollar amount that you’re aiming for. To quote Antoine de Saint-Exupéry: “A goal without a plan is just a wish.” I want to have $1,000,000 in my retirement account. If you work until the average retirement age, and you actively contribute to your retirement accounts, then you are basically guaranteed to get that $1,000,000. If you start when you’re 25 and save $522 a month with a 6% rate of return, then you’ll hit the million in 40 years. If you get a 10% rate of return you’d only need to save $179. If you want to his a million in 10 years then you will need to save $1,382 assuming a 10% return. At 6% you will need to save $2,195 per month! (Check this out if you want to see how long it will take you to save $1,000,000)