Net Worth 1 Million in 5 years

[tripods68]

Now that we paid off all our DEBT except our mortgage. Our new goal is to reach 1 million Net Worth in 5 to 6 years.

The breakdown our Asset and Debt as of today 1pm Market Closed.
$7,907.0 CASH
$315,843.00 INVESTMENT/RETIREMENT
$334,632.00 PROPERTY
($226,997.00) MORTGAGE LOAN BAL
$431,394.00 NET WORTH

We are investing $30K in retirement contributions + ROTH this year.
We are also socking away additional $26K in CASH. Half of this will be achieve by end of the year.
We have 18 years remaining mortgage @ $1300 a monthly payment. Might sell in 2-3 years.

Last year, 2014 our AGI $156K. So our goal this year with 7 percent pay raise in July 1st is to be around $135K to $140K AGI towards increase in retirement contributions.

We can definitely achieve it in 10 years. But I want 5 years time horizon. Can we do it?

[scfr]

I think 7 years is more realistic.

[tripods68]

sfcr-- I agree. I think the first 3 years of this goal will determine if 5 years is achievable.

[snafu]

I understand and agree with a substantial cash saving but why $26K or do you mean laddered CB or Bond fund or some income producing product? [[something that can be converted to cash in two business days]

[tripods68]

snafu: This was the amount we were paying yearly or close to it when we had debts (car payment, credit cards, 2nd mortgage..) Now that we no longer have debt, we are saving all of it instead and paying ourselves (snowball effect). Once we get to about 100K-150K level we plan to buy rental property and pay cash for it.

[Goldy]

Well is looks like you are increasing your net worth by about 6k a month so after 5 years you will have an extra ~360k plus any growth on your investments whih should put you close to 850k. I agree that 7 years is more likely but 5 is not out of the picture just yet. Can you maximize the 401k's?

We are expecting to hit that milestone in September so I'm pretty excited about that.

[tripods68]

Well is looks like you are increasing your net worth by about 6k a month so after 5 years you will have an extra ~360k plus any growth on your investments whih should put you close to 850k. I agree that 7 years is more likely but 5 is not out of the picture just yet. Can you maximize the 401k's?

We are expecting to hit that milestone in September so I'm pretty excited about that.

Part of this equation is for the stock market to continue to go up. But we plan to contribute more and more on a yearly basis.

[LivingAlmostLarge]

Seems doable. Good luck.

[autoxer]

I certainly think you can reach your goal, but it seems kind of arbitrary. What happens when you reach your goal? Do you set a new goal of $2M and keep stashing or do you say that is enough and free yourself from the pursuit of more.

[tripods68]

I certainly think you can reach your goal, but it seems kind of arbitrary. What happens when you reach your goal? Do you set a new goal of $2M and keep stashing or do you say that is enough and free yourself from the pursuit of more.

I think if we do reach the 1 million net worth in 5 or 6 years will be the greatest "milestone" for our family tree--especially to achieve it without any debts. We'll be able to pay our kids college education without student loans while continue to work for additional 15 more years. We grew up very poor so 1 million to our family is HUGE! But that just the start. Ultimately we would like to retire with about 3.5 million by retirement age (while drawing two pensions and social security) and travel more during our golden years and able to give more to family members and charity giving.

[bjl584]

Now that we paid off all our DEBT except our mortgage. Our new goal is to reach 1 million Net Worth in 5 to 6 years.

The breakdown our Asset and Debt as of today 1pm Market Closed.
$7,907.0 CASH
$315,843.00 INVESTMENT/RETIREMENT
$334,632.00 PROPERTY
($226,997.00) MORTGAGE LOAN BAL
$431,394.00 NET WORTH

We are investing $30K in retirement contributions + ROTH this year.
We are also socking away additional $26K in CASH. Half of this will be achieve by end of the year.
We have 18 years remaining mortgage @ $1300 a monthly payment. Might sell in 2-3 years.

Last year, 2014 our AGI $156K. So our goal this year with 7 percent pay raise in July 1st is to be around $135K to $140K AGI towards increase in retirement contributions.

We can definitely achieve it in 10 years. But I want 5 years time horizon. Can we do it?

5 years is probably a stretch, but you'll get there soon enough. I'd think 7 to 9 years. It depends on the markets and where life takes you obviously. Either way, well done so far. Keep us posted on your progress.

[tripods68]

Update:

$46,805 Cash
$419,029 Investment/Retirements
$340,527 Property Value
$806,361 Total Asset
($218,187) Mortgage Balance

$588,174.16 NET WORTH As of 5/3/2016


I've been reading this guy's blog lately..got me really inspired!!

http://rootofgood.com/root-of-good-household-spending/

[rennigade]

Why do you include your property value?

Look at it this way...if someone has a house paid off worth $700k and they have $300k in retirement...do you consider them millionaires? I dont.

If thats the case then almost all of my coworkers are millionaires. They have very little saved but have expensive homes.

[disneysteve]

Why do you include your property value?

Look at it this way...if someone has a house paid off worth $700k and they have $300k in retirement...do you consider them millionaires? I dont.

This question comes up a lot. It depends how you calculate net worth - and why you are calculating it.

I agree with you, rennigade, that home value doesn't really mean much. Having a million dollar house and zero money doesn't make you a millionaire. It does, however, give you a million dollar net worth (assuming you own it outright and have no other debts). It's a somewhat meaningless designation but it's a way to track your progress.

[autoxer]

Why do you include your property value?

Look at it this way...if someone has a house paid off worth $700k and they have $300k in retirement...do you consider them millionaires? I dont.

That depends if they have mortgages or not. If you have tons of equity, then that is absolutely part of your net worth. It may not be the easiest to access, but you can certainly downsize and free that up if you were motivated to. If you are doing retirement planning and you intend to keep your house, then you shouldn't count that as available capital, but it certainly fits the definition of net worth. It doesn't matter if you put all of your money into the market, or put it all towards paying down your mortgage, both options will increase your net worth.

Update:

$46,805 Cash
$419,029 Investment/Retirements
$340,527 Property Value
$806,361 Total Asset
($218,187) Mortgage Balance

$588,174.16 NET WORTH As of 5/3/2016


I've been reading this guy's blog lately..got me really inspired!!

http://rootofgood.com/root-of-good-household-spending/

Excellent progress in the last year!!!