If there is one thing that gets me riled up, it is bucket lists. I recently was dragged to persuaded to visit a bookstore by a friend. Right under a “Books You Should Be Reading” sign was a book with 100 things you should do before [insert a certain age].
Since I was around [insert a certain age], I took a look.
I was appalled.
- Was owning a home listed? No.
- Was hitting $10k+ in savings listed? No.
- Was using a credit card to earn points listed? No.
Guess what was?
- Rent a convertible ($529.93 for two days in Denver)
- Go on a shopping spree ($$$)
- Attend Coachella (GA passes start at $429, and this does not cover travel, hotel, and car)
Let me address the facepalm by saying there is nothing inherently bad with a bucket list. The point I want to make is that you should achieve financial goals first so you can tick items off your bucket list without hurting yourself financially.
To provide background, my area of “expertise” is being frugal and saving money. Last year, I saved over 50% of my post-tax income and have consistently saved at least 33% of my income since the start of my career. Side note: I do not invest in real estate yet, but I will be a first-time landlord in the next six months. That being said, I am frugal. I’m frugal with food, clothes, cars, and general living expenses.
Now, getting back to bucket lists: When it comes time to check an item off my bucket list, it will not—I repeat, will not—impact my financial success. In fact, I’m counting on my financial success to support my bucket list.
What I propose today is that we create a new bucket list—a financial bucket list that isn’t unattainable, that doesn’t require huge financial expenses that you will never recoup, and that puts you on track for a lifetime of success.
How to Invest in Real Estate While Working a Full-Time Job
Many investors think that they need to quit their job to get started in real estate. Not true! Many investors successfully build large portfolios over the years while enjoying the stability of their full-time job. If that’s something you are interested in, then this investor’s story of how he built a real estate business while keeping his 9-5 might be helpful.
10 Bucket List Items to Complete Before [Insert Certain Age Here]
1. Save any raises or bonuses you receive.
Learn to live with less and to never count on a raise or a bonus. Learn how to do this early, and make it a habit to rely on the salary you have now. This way, everything else you earn and receive can help propel you towards financial security. Bonuses and raises will act as an accelerator instead of money that has already been spent.
For example, I have student loans from my MBA. My money makes a better return in the stock market than the interest I pay on my loans. So, for the time being, I pay my loan minimums. Once a year, I’ll take a bonus or extra money I’ve saved and put a lump sum towards my loans. I do this because that extra money isn’t money I’ve spent or plan to spend, and I do want to pay off my loans in the next two years.
2. Set up automatic investing.
There are many ways to do this! You can round your spending up to the nearest dollar and invest the difference, you can manually pull from your paycheck and invest, and you can set up automatic withdrawals, among other options. I selected these three, as they seem more traditional examples.
I used to subscribe to saving my money in a savings account that earns no interest, taking out a lump sum once a year to invest. Let me tell you, that does nothing to help accelerate your savings. I was missing out on months of return on investing in the stock market.
I personally prefer an automatic withdrawal every Monday from my checking account that goes straight into my index funds. Why? Because it plays the market as it increases and decreases. Also, I do not have to think about it. Vanguard sends me a transaction success email, and I’m done. I will say, in the past couple weeks, I’ve cut my weekly investments in half so that I can hoard some cash because a good market cannot last forever. Note: This is personal preference.
Related: Life Hacking in Pursuit of Financial Freedom: How I Add $1,500+/Mo to My Income
3. Establish how you want to pay for your retirement.
If you are reading this and it’s not your first time on the BiggerPockets blog, you know retirement doesn’t have to rely on a 401k. And you also know the decision on how and when you retire is entirely up to you and your risk tolerance.
Personally, I never want to rely on my 401k. I want more of a say in how my money makes me money, and I want access to my money, for the most part. I max out my Roth IRA and invest heavily in the stock market. Additionally, I’m focusing on rental properties for passive income in the next year.
4. Put money into your preferred retirement account and make sure it gets (a good) interest.
This is a supplement to…