I remember listening to an interview with Mark Cuban, which he talked about in his 20s his goal was to be a millionaire by 35.
Being 25 or so at the time, the idea really resonated with me. As I was just getting into personal development–I have memories of writing down the affirmation, “I’m financially independent by age 35” in my journal.
How would I get there? I really didn’t know at the time. But I do know now, knowing the milestones I would have to achieve along the way certainly would have helped.
While never say never, with less than two years to go, I’m not sure I’ll achieve millionaire status by 35. There’s also no one way to accomplish this goal. But hopefully these milestones taken from my own life and those I’ve worked with will help guide you to success.
#1. The Day You Said “No”
Your budget is pretty stretched.
You get invited to go on a trip. A destination bachelor/bachelorette party.
You can go. You can get the time off.
Looking at your budget however, the only way you can afford this trip is by putting it on your credit card.
You think hard about it.
At the end, you just say no.
Living a debt-free life, placing freedom first, won out.
#2. The Day You Learn How Interest Works
“Oh crap. Why would anyone want to go into high interest debt?”
That’s your thought after noticing that your debt balances are not going down. Yes, you’re making the payments but the debt is still there.
So, you Google “Debt Repayment Calculator.”
To your amazement, you learn how much that debt is costing you. Making the minimum payment of $383 on your $35,000 of student loans, at a 5.7% rate, means you’ll pay $46,014.
On your high interest debt — it’s even worse.
So, you take some massive action and start cutting down your expenses. Then, you login to the debt account with the highest interest rate and make an extra payment with the savings.
In addition, you learn how important your credit score is. Specially, how much a good credit score can save you. So, you signup for a site like Credit Sesame that provides credit monitoring and personalized tips to increase your score.
#3. The Book You Can’t Put Down
You have some momentum going in your financial life. At the library, you find yourself in the 332s (the personal finance section).
A book catches your eye. You read the back cover. Scan a couple of chapter titles. You check it out.
That night you start reading it and can’t put it down.
You think to yourself, “Wow. If I really get this whole personal finance thing — I can get pretty wealthy.”
You pick up a few tips here and there that allows you to pay off your debt faster. But the big change this book brings is in your perspective. You want to learn more. Do more.
*For me, that book was The Bogleheads Guide To Investing.
Other books that can help shape your perspective:
(They’re all good. Read them all).
#4. You Pay Off a Debt Early
It’s evening. Today was payday.
After getting home from work you login to one of your debt accounts.
In the box that says, additional principal — you insert a number that will payoff that debt in full. You click submit.
You look around the room. Make a little, “woohoo” sound then head out to celebrate.
Yes. You know guacamole is extra but you get it anyways. It’s a good night.
A month later it feels good not to have to make a payment.
#5. Personal Finance Is Becoming Fun
Your system, while simple, is starting to see results.
High interest debts are paid off. Cash is starting to accumulate.
You’re actually having to decide what to do with money leftover.
#6. You Build an Emergency Fund
That money that’s leftover, you decide the first thing you’re going to do is build an emergency fund.
Things have been going well. However, there are a few things that could happen that could cause momentum to stop.
To protect yourself, you build a 3-months emergency fund.
You put this money in a savings account. You’re not going to touch it.
You sleep better that night.
#7. You Start Contributing to Your 401(k)
With your high-interest debt gone, you start contributing to your 401(k).
At first, you decide to contribute up to your employer’s match. You login a month later and realize that “free money” is a good thing.
Without much investment experience, you use a site like Blooom that helps you pick the funds that will optimize your returns.
But you don’t stop there. You set a calendar alert for three months to increase your savings rate by 1%.
#8. You Start Tracking Your Net Worth
When you’re paying yourself first, then spending less than you earn each month — your net worth can grow fast.
So, you use a free app like Personal Capital that helps you track your net worth overtime.
You pop in once or so a month to review how things are doing.
#9. You Start Thinking Strategically About Your Career
Things are going pretty well in your career.
You’re doing simple things right. On most days, this is doing good work and being friendly. You learned how important being friendly was after reading an article from Harvard Business Review you found on Social Media.
This lead you to read the book How To Win Friends and Influence People.
Yet, friends are starting to change jobs. You wonder if you should follow.
You pickup a book like The Startup Of You at your library. This book gives you some good ideas to advance your career.
Another book you read is So Good They Can’t Ignore You. This has you thinking about building valuable skills, doing work you love.
After a few conversations with friends and mentors — you decide to make a career move. Maybe that’s a talk with your boss about a new position, a new job, or even to start a lucrative side hustle.
#10. Your Debts Are Gone
Just like that, you’re debt free. No credit card, no car loan, no student loans.
It wasn’t exactly easy at first. But once you got momentum on your side, you couldn’t stop.
It’s an amazing feeling.
You tell your friends by sharing this video on Facebook:
#11. You Start Thinking About The Future
Up until recently, it was all about the past and present. You were trying to make and save enough money to pay your bills.
Now, you’re thinking about the future.
You start to look at potential expenses in the next few years. A car, a wedding, a down payment on a home.
It’s not like money is going to appear to pay for these things. As a responsible person, you decide to take matters into your own hands.
With that in mind, you start setting money aside for these short-term goals.
#12. You Have “The Talk”
Your financial system was a finely-tuned machine. Money was coming in. Bills were getting paid. Money was being invested.
Then, it all came crashing down.
You got married.
Now, you’re two, not one.
You decide to combine your finances.
Your finely-tuned system needs some adjustments. A lot of adjustments.
You’ve read now over a dozen personal finance books. You even keep up with a few blogs.
Your spouse? Not so much.
So, you tell your spouse about your optimized, finely tuned personal finance system. You’re both excited.
Related reading: How to Budget on One Income – Succeeding as a Single-Income Family
#13. You Have Another Talk (And This Time, You Actually Listen)
After the “big” talk last month, what changed?
You realize that you have certain beliefs about money. Your spouse then has entirely different beliefs.
Instead of talking about the tactical details behind managing your money (let’s use this budgeting app, let’s set this budget for food, etc…) this time you focus first on setting a vision together.
This leads you to set financial goals together:
You end the discussion agreeing it’s a good idea to set a time to talk about finances once a month.
#14. You Pay For Your New Car In Cash
With two incomes and no kids, things are going quite well.
Yes, you’re still learning about each other’s money management style but things have improved.
One of your first big purchases as a couple is coming up — a new car.
Instead of asking yourself the question, “How much car can I afford, you know the budget best for you.”
You research which cars have the lowest cost of ownership. Then, head to a dealership.
When the salesperson asks about financing, you casually mention, “Oh. No. We don’t plan on financing.”
It feels good.
#15. You Learn About Financial Independence
An article about how a couple retired in their 30’s on a major media site has you intrigued.
While most in the comments section start making excuses why that’s impossible, you ask yourself, “How is that possible?”
You learn, it’s actually not that difficult. That couple saved about 65% of their income over 10-years.
You’re a long way off to saving 65% of your income, yet, the idea of financial independence won’t leave you.
#16. You Reach 16% Savings Rate In Your 401(k)
Over the last few years, you’ve gradually increased your savings rate.
At first, you thought there wasn’t enough room to save up to the employer match.
Now, your savings rate in your 401(k) is equal to the average savings rate of 401(k) millionaires.
#17. You Buy a Home
One lesson you learned when buying a car was that it was important to buy a car in YOUR budget.
You could have bought a more expensive car. However, you chose the car you could afford.
You’re now applying the same concept to your home.
With no debt, you can qualify for a pretty hefty mortgage. However, you go with a home you can absolutely afford. You use a good rule of thumb such as:
Limit your mortgage payment (including insurance, HOA fees and taxes) to 25% or less of your monthly take-home pay on a 15-year fixed-rate loan.
Just as you did on your other debt, when you go to setup automatic payments, you also fill in the “additional payment” box.
#18. You’re Kinda Rich
You don’t feel rich. But after over a decade of full-time employment and smart investing, your net worth has grown.
You may not be a millionaire but you’re on track.
Once a year you login to Personal Capital’s Retirement Planner and learn how long you are from retirement. As you continue to increase your savings rate, pay off your mortgage, and excel in your career — financial independence isn’t that far off.
You ponder what life would be like not having to work. It would be different, but most importantly, allow you to start optimizing your life more towards happiness and less towards money.
That feels good.