Roughly a year ago (August 10th 2016) we decided to join J.Money‘s Million Dollar Club. The purpose of the club is to commit to a list of habits and a plan to bring you to the first million. Since your chances of success increase dramatically when you surround yourself with like-minded people, we decided to join the challenge. This is the updated version of our pledge to the Million Dollar Journey!
I already mentioned that I wanted to retire by age 35 and that did not change. When joining the club, I am publicly committing to becoming a millionaire by age 35.
So far, our plans are right on target; we are about 2.5 years in our financial freedom journey and have 26.78% of our required nest-egg saved up and invested. If we did our math right, we should be at 100% by year 10. Our financial freedom number is not a million dollars but, so far, we are on target to retire in 10 years. We’ll see about that million dollars…
I want to retire in 10 years. (With a million dollars)
With the power of compound interest and a high savings rate, we have every tool in front of us to achieve financial independence and early retirement in a very, very, short amount of time. Any Western standard would qualify 55 years old as an early retiree, but we are planning to reach our financial freedom number 20 years before that! From there on, we will have the freedom to stop working at our 9 to 5 jobs and choose what we actually want to do with our time. The goal is certainly not to sit on the beach and do nothing all day (well OK, that is our goal for most of the winter months!) but to spend our time on meaningful, captivating, projects. This might include side hustles that will generate some income or part-time work, but it will certainly not include 40 hours a week working for Mega-Corp.
To achieve financial freedom, we sacrifice a little today to benefit a lot later.
We pledge to:
- Always save at least half of our income. On target, we even reached 60%!
- Always max out our RRSP every year. (401k) On target, (Portfolio)
- Always max out our TFSA every year. (Roth IRA) On target, (Portfolio)
- Always pursue multiple income streams. On target, currently have four.
- Always remember to enjoy the journey! On target.
We live below our means and try to automate most of our savings to save and invest at least half of our income. As of June, we had a 60% savings rate but this has slightly dropped since. We invest systematically, every paycheck, into low-cost, diversified, index funds to maximize long-term wealth potential.
Within our investment strategy, cutting taxes is one of our biggest priority. We pledge to max out the registered accounts available to us and again, invest them into low-cost, diversified, index funds. We have not completely maxed out both of our TFSA (Roth IRA) when considering the carryover limit, but we are getting close. You can see our actual portfolio in our Open Book series.
In addition to savings, We are committing to constantly work on multiple income streams. we pursue multiple hobbies that might (or might not) become profitable one day and we never want to stop trying. Increasing our income is part of the formula to financial independence and we are committed to staying active in the side hustle world. So far, we had a nice steady income from a few apps built two years ago, we started generating income from this blog, and we hosted Airbnb guests in our guestrooms.
Finally, a new pledge we added was to remember to enjoy the journey! Having a million dollar net worth is great but it is certainly not worth sacrificing our happiness and enjoyment of life. The whole goal of this exercise is to reach financial freedom but ultimately, it is to be happy. If we forget this crucial part of the equation, it is not worth it. We do sacrifice some material things in order to reach our goals such as owning older cars, barely shopping for new clothes, or writing this blog on a 5 years old laptop, but all these things are just things. They are not what brings happiness to our lives. Freedom is the goal.
Thank you and best of luck to everyone in the Million Dollar Club!
Mr. and Mrs. Xyz.