J. Money over at Budgets are Sexy has a Millionaire Dollar Club that currently has 153 pledges. Well I plan on being number 154! The only requirements to be in the club are that I create a millionaire to-do list that is realistic and that I check back every so often on it to make sure I’m on track. I’ve broadly discussed my savings goals in other posts, but it will be nice to get them here as I continue my journey to the double comma club! Here are my goals that I plan on achieving every year:
1. Max out my pre-tax 401k – This one is a no-brainer in the personal finance community. My current biweekly payroll 401k contribution rate should get this done during the month of November this year.
2. Max out my Roth IRA – I’ve already maxed out my 2014 Roth IRA during 2015 (since you have until April 15th of the following year) and it only took me three months. So now I’m onto my 2015 Roth IRA which I plan to max out as well.
3. Max out my HSA – My current biweekly payroll HSA contribution should get me close. Luckily my employer also contributes $500 to my HSA (which counts towards the employee contribution limit).
4. Pay off my student loans – I have less than $9k left, and the interest rate is only at 3%. I’m going to concentrate on funding my retirement accounts first, and worry about these later.
5. Never finance a car again – I currently do not even own a car, as I live in NYC. So I count that as a win for me! But I do know I won’t live in the city forever, so there will come a point in time where I will need to purchase a car again. And it will be a used car with cold hard cash!
6. Save at least 75% of every raise and bonus – I make quite a bit more now than I did fresh out of college, but I have tried not to let my spending increase as well. I do not subscribe to lifestyle inflation, and that has helped me funnel most of my raises and bonuses into retirement savings and the pay down of debt.
7. Once all tax advantaged accounts are maxed out for the year, begin funneling all savings into my after-tax brokerage account – I hope I run into this problem A LOT. I have an internal debate brewing right now about whether I should go the dividend producing portfolio route such as Dividend Mantra or go the more conservative, commonly accepted method of just dumping this money into Vanguard Total Stock Market index fund (but this debate is for another time).
Well there is my short, very attainable to-do list to become a millionaire. I’ve run the numbers and I should be able to get there by 40 if I stay in the same industry and career trajectory. This is a conservative estimate and if I can reach it any earlier, then SHABOOM!
Are you part of the Millionaire Club? If so, what are some of your more important goals to get there?