THE MILLION DOLLAR GOAL – PART 1
There was a time in my life where I would have anxiety about checking out at the grocery store. Every time I would swipe my card, I would be engulfed in fear. I would stand there, wondering if the transaction was going to go through or get declined.
It was a horrible feeling.
Thankfully, that was just my adolescent years. At 25 years of age, I founded my first company and created my first six-figure income stream. I would like to say everything was sunshine and rainbows, but it wasn’t. My financial house became more complicated. While I was making a good income, I wasn’t keeping much of it. The IRS took their cut. The state did, as well. I also had payroll, employee taxes, property taxes, the cost of doing business, rent, overhead, and so on.
The more I made, the less I kept. It was upsetting.
Eventually, it became unacceptable. I had to master this game of money. Over the years, I started a financial practice. I learned how the most successful people built wealth and kept it.
Before I share with you the mechanics of what it takes to build a million dollar cash cushion, you need to understand and believe four basic concepts. Skimming this material won’t help. You need to read it and then understand how it applies to you. Ask yourself questions. Throw out the answers. Then ask yourself more questions.
1. Get out of the rat race
Every year, hard working people bust their ass, working 40, 60, even 80 hours a week. They wind up with almost nothing to show for it all. At the end of each month, their paycheck is already spent.
We’ve all heard of the term “rat race”. But what is it exactly?
It doesn’t matter whether you’re making $40,000 or $400,000 a year. A rat race is where you go to work, make money, spend money, just have to go back to work to get more money.
It always comes back to “go to work.”
If you are spending everything you make, or worse, you’re spending more than you make, you are subjecting yourself and family to a life of stress, fear, and a gut-wrenching feeling of uncertainty and debt.
If you’re on this treadmill, you need to get off as fast as you can.
2. Avoid lifestyle inflation
“If I could only make more money, I could start saving”
Do you know how many times I have heard that? Too many.
People spend close to what they make every year. It’s known as lifestyle inflation. Whenever people get a raise or bonus, they increase their spending. They buy bigger houses, get more luxurious cars, and go on exotic vacations.
Lifestyle inflation keeps you in the rat race. The increased spending makes it perpetually difficult to get out of debt and save. Do you know someone that got a raise, bonus, severance, or a nice tax refund? Ask them if their savings increased.
Making more money doesn’t mean that you can or will start saving.
3. Small things add up
I used to enjoy picking up a cup of coffee and breakfast sandwich on the way to my office in the morning. I would say it cost me about $6 each morning… Monday thru Friday. Occasionally, this habit would follow into my weekend routine.
Do you know how much this was costing me?
You might say, okay $6 x 24 days a month… that would be about $1,872 a year -give or take. No, that’s not what it was really costing me.
It was costing me one of my long-term financial goals, buying a beach house.
If only invested the $6 that I was spending for my little “breakfast to go” routine, I would have saved close to a half of a million dollar. If I doubled that savings, I’d have close to a million dollars.
That could have been used for the beach house that I want to get when I retire.
What if you’re married or have a partner? What if instead of $6, what if you saved and invested the first hour of every day that you worked? You could build a substantial saving for yourself. To keep the math simple, let’s just assume that you could find $18 a day to save or invest. This could come from a number of sources. How much money would you have in 35 years?
You would be sitting on close to $1,482,743
People have a hard time believing this is actually possible. They argue that saving $6 a day isn’t possible in the real world.
I just laugh. They usually have a $5 cup of Starbucks in their hands.
I’m not saying that you can’t have your specialty coffee drinks.
I enjoy going to Starbucks. I love a good roast. You might not even like coffee and that’s not the point.
Over time, the small things we buy can add up to huge numbers. If you’re looking for money to save, you can find it in the details of your spending.
4. A Money Cleanse
If you feel that you can’t save at least $5 a day for yourself, you might need a financial detox.
When I need to free up some cash, I play a game called a Money Cleanse. We are creatures of habit and over time we can pick up some bad ones. You will never be able to build wealth if you’re bleeding money every month.
The Money Cleanse is a fun game where I go through my online bank and credit card statements. It’s designed to find leaks in your budget, and plug them up. I highlight all the miscellaneous spending I’ve been doing. It all adds up. And to tell you the truth… sometimes, it’s scary.
A Money Cleanse will help you redirect money to more important goals.
Sneak peak to Part II
Before you get your paycheck, a number of things happen. For starters, you’ll notice that state and federal government already took their money. It wasn’t always like this. There was a time where people didn’t pay their taxes until Tax Day.
Can you guess what happened?
The taxpayers didn’t have the money.
Today, the IRS is a money machine because they take their money in advance. You can create your own personal money machine, too.
In Part II, I will share with you the mechanics of how to build simple and inevitable wealth. I will walk you through where your money should be going every month and how to do it in such a way that doesn’t require discipline.
I have personally used this system for years and it works. If you’ve ever been overwhelmed with all of the bills to pay, student loans, college funding, retirement, savings, debt to keep up with, stay tuned.
The Million Dollar Goal
If you are serious about saving a million dollars, join The Million Dollar Goal. It’s free to join and you get access to state-of-the-art financial software to organize your financial house. Connect all your student loans, bank and investment accounts. I’ll send you weekly progress emails.