I know $1M isn’t the same as it used to be, but it’s a goal I set 10+ years ago for myself, so it’s nice to finally reach it. Nor was this overnight. It’s been a long, slow grind.
I didn’t come from money. Quite the opposite, as only one parent graduated high school and we sometimes lived paycheck to paycheck. (I remember a few drives with my mom to pay the electrify bill & get the lights turned back on.) I graduated college with >60-70k in debt. ( in today’s dollars, adjusted for inflation, it would be ~90k.)
I’ve learned a lot about money the hard way and a made lot of mistakes over the years. But I stuck with it, and figured each time, it was simply the price of learning each lesson. One of the great things is that I’ll be able to pass those lessons on to my kids (hopefully).
I also find that I’m motivated by others success stories, so I thought I’d share mine.
Even if you’re in the hole, hang in there. You may not get rich over night, but with persistance, you’ll get there!
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Avoid debt. Especially credit card debt. I took a long time to learn this one. Credit cards are fine if you can pay the balance off (in fact, can be a good way to earn miles), but if you can’t afford it without using a credit card, you can’t afford it. Period.
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Live below your means. Obvious, but the less you spend, the more you can spend.
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Save automatically. Have your savings automatically transfered from your checking account to a savings account. For me, seeing a large balance at the ATM makes me less careful with money, so I try to keep it to what I think I can spend.
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Look at ways to get "free" money. Passing on free money sounds crazy, but that’s what I tell friends they’re doing if they aren’t investing in their 401k, especially when there’s an employer match to be had.
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Be mindful of taxes! Invest in your Roth IRA & 401k early! When I was in my young 20s, it hurt to contribute to them, but thanks to compound interest, I’m glad I did.
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Avoid trying to out smart the market. (Something else I had to learn) I generally don’t own an individual funds. A low cost index fund is your friend. I can’t brag to friends about buying a stock low & selling high, but who cares? I invest to have more money, not stories. Read "A Random Walk Down Wall Street" and you’re set.
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Discuss your compensation openly with a close set of friends, especially if they work in similar fields. These are people you want to see do well, not really compete with. Your attitude should be whenever anyone in group does well, that’s great (not jealousy). It can be a big help. You’ll feel more confident asking for larger comp. (either in a new job or a raise) if you know others are getting.
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Learn to negotiate. This was also really hard for me. I hate negotiating, especially when it came to things like job offers. But I had a choice: Decide I didn’t want to do it & accept I would get paid less, or suck it up & try to get paid more. I’m glad I started to do the latter. This is also where the group of friends above can help. Being in the middle of negotiation is hard. Have people with your best interest at heart, but nothing for them immediately at stake, really helps with objectively, thinking things through, etc.