When I was at FinCon 2013, a financial blogger conference in St Louis, I met a guy named J. Money who is the founder of BudgetAreSexy.com. Now, I had been familiar with J.and his site, however, I will be honest I hadn’t spend much time at it before going to FinCon. One day I was perusing his blog and I came across his Million Dollar Club. He had a list of things that he pledged to do every year and if he was able to do this consistently he would be a millionaire. Could it be that easy? Can one just set financial goals, make a plan action to achieve them, and then become a millionaire? J’s goal is to be a millionaire by the time he is 42 years old and from the looks of it, he is on track.
Is the Million Dollar Club legit?
To make sure that this was a club worth joining, I decided to run some numbers using teh CNN Money Millionaire Calculator. According to J. Money’s site he has over $360,000 in assets in various IRA accounts. If he puts $22,000 into his SEP IRA and maxing out both he and his wife’s Roth IRA’s at 11,000 per year, they will have $1 Million is 9 years and 10 Months!
So if J. Money can do it, why can’t I? Now I don’t have as much invested as he does because we are putting most of our excess cash into paying off our mortgage. However, once our mortgage is paid off we will have about $2,000 extra dollars each month to invest. With that in mind, let’s see how long it will take for us to have $1 Million. When we start investing $24,000 per year at a conservative 6% return, we will hit our first million in 14 years and 3 months. Not too shabby, right?
What is the point of being a millionaire?
For many people it is the idea of Financial Independence: having enough money that you can continue your lifestyle and not have to work if you don’t want to. We have enough financial resources to do what we want when we want, but I do still have to work. Having a million dollars will give me the ability to work less and hire people to do the aspects of my work that I don’t enjoy as much. Now I don’t necessarily need a million dollars to achieve this, however, it will be helpful in making this possible.
Each person has to make a pledge of what they are going to do in order to hit the million dollar mark. Here is my pledge:
- Pay off our mortgage by the time I am 35
- Max out my Roth IRA each year
- Invest $24,000 per year into tax favored accounts once mortgage is paid off
- Drive used cars and never have a car payment again
Want to join the club?
At this point there are 126 people who have joined the Million Dollar Club, 4 of which have become millionaires since they joined. Check out the details for each of the success stories below:
Debt Digger (private – must have permission to access)
If you want to join the club all you need to do is make your own pledge and then link back to Million Dollar Club or leave a comment on his page and he’ll add you to the list.
Do you want to be a millionaire? What steps are you taking to make it happen?