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The First Million

July 5th, 2019 at 11:30 pm

In the forums, it was brought up that the first million dollars is always the hardest, and that things only continue to accelerate from there. The idea resonated with me, and below is my response to the OP. I decided that I wanted to save those thoughts for myself to remember later, so here they are.
I started investing around the end of 2006, but was negative net worth until sometime in the first half of 2009. As I mentioned elsewhere, I just hit $1M sometime in the last few weeks. So about 10 years to the nose for me to get from ~$0 net worth to ~$1M.

There's definitely alot of reassurance in those facts:
- Anyone can do it, and it doesn't really take alot of time if you work hard & focus on practicing good financial habits.
- Compounding is every saver's friend. I'm almost 33y/o right now. If I do nothing with my money and earn a decent ~8% average ROI, my net worth should double roughly every 9 years without saving another penny...which means I'm in a position to have ~$8M by age 60. That's not inflation adjusted, but even assuming 3% inflation, that's around $3.75M in today's dollars. Bottom line: we're in a good place.
- I'm not gonna quit saving anytime soon, which means those numbers will only get bigger, and grow even faster.

One thing that I don't think gets expressed well very often is our (or at least my) motivation for wanting to build that kind of wealth. Shoot, I don't think my own wife of 5 years even fully understood this until I sat down with her recently (after she recently took a medical retirement from the military) and I explained all of this. First and foremost, yes -- I want us to live a comfortable life & retirement, and provide a good standard of living for my family. I want us to travel whenever and wherever we want to. All of those things will be great, and alot of fun.

But beyond that, I really look forward to being able to be exceptionally generous with my time and money in helping the people around me to be successful in life. When I (hopefully/presumably) retire from the military in another 9 years (note -- net worth will have at least doubled by then), I want to be in a position that I can work in whatever job I want, and not have to worry about my income. That way, I can volunteer in communities to help teach people to learn how to improve their finances. I can work for (or start) a non-profit that focuses on helping students succeed from grade school up through college and beyond. My wife & I can serve missions for our church wherever we're needed. I can take on leadership roles (whether paid or unpaid) in my church, local schools/universities, and my community without concern for how I'll pay for our living expenses.

As I see it, we need about $2M-$3M (today's dollars) to be financially independent, and I plan to be there within the next 9 years. At that point (by my estimates), I'll have ~$1.1M in retirement savings growing on autopilot, ~$500k accessible in taxable investments, ~$500k in 2-3 paid off rental properties throwing off income, and our military pensions (~$6k/mo total, today's dollars) serving as a baseline income stream. All of our efforts over the last 10 years have made achieving those goals not only possible, but highly likely.

I'm a testament to this singular truth: deliberate efforts & sacrifice while young will, without fail, reap enormous opportunities and financial security in the long run.

4 Responses to “The First Million”

  1. creditcardfree Says:

    Nice work! I also believe the first $100K is the hardest for many. It's definitely working better after that. We had $25K in 2003 when I started tracking and our income was probably under $45K. The other day with we reached $600K in retirement income. We are older and had much lower income in our early married years. But we did save from the beginning. Anything saved for retirement is better than $0. Nice work!!

  2. Amber Says:

    Congratulations, thanks for sharing.

  3. Lucky Robin Says:

    That's great. I hope you reach your goals.

  4. terri77 Says:

    Congratulations on your first million!!! Enjoyed the blog entry.

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