Monthly Review, Personal Finance 

Goal Setting & Net Worth Updates

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I’ve been a little derelict in keeping this sort of information updated (publicly and privately, to be honest), which I admitted to in an interview with Scott of the Money Blogger Podcast, so to motivate and remind me to update it I’ll be putting up a panel very much like many of the other bloggers out there and put a list of my goals.

Here they are:
In 10 years (35):
Retirement accounts totalling $350,000 (revised from $200k, currently at $55,121.77)
Total net worth at $650,000 (revised from $500k, currently at $109,598.19)

In 20 years (45):
Retirement accounts totalling $750,000 (revised from $500k)
Total net worth at $1,500,000 (revised from $1M)

Are those numbers entirely out of whack? (Thanks for the numbers LAMoneyGuy, how do these look now?)

{ 26 comments, please add your thoughts now! }

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26 Responses to “Goal Setting & Net Worth Updates”

  1. LAMoneyGuy says:

    This is not at all out of whack. Here is the breakdown

    10 year goals:
    Retirement: in order to reach $200k without any contributions, you need a return of 12.96%. If, however, you make annual contributions of $15000, your return requirement goes to a negative 0.398%. This is because $15,000 x 10 = $150,000. That plus your current balance gets you to $200,000 without any growth.

    Total: Return required without any additions is 15.743%. With just the $15k Retirement contributions, your return requirement goes to 8.69%. Very doable, this just assumes current 401k max, not including an IRA, Roth IRA or any non retirement contributions.

    20 year goals:
    Retirement: Return required without contributions is 11.08%. With $15k annual contributions, it goes to 2.82%.

    Total: Return required = 11.11%, with $15k annual, 6.39%.

    Good luck.

  2. FMF says:

    What he said — I think you’re shooting low.

  3. jim says:

    My 401k contributions are approximately $5k a year now and I plan to always be maxing out the Roth IRA (the only two accounts I have for retirement purposes), so it’s about $9k a year into retirement… let me revise those numbers a bit.

  4. LAMoneyGuy says:

    10 year:
    Retirement: Assuming 9k annual contributions = 11.78%
    Total: 14.22%

    20 year:
    Ret: 8.30%
    Total: 10.50%

    Looks realistic. Remember that if you are able to increase your contribution at all it will make a huge difference. By increasing your contribution from $9k to $12k, your 20 year total goes up to $1.7 million assuming the same 10.5% return. Also, earlier contributions make a bigger difference than later ones. For example, if you were starting with zero today, and made the same $12k annual contributions, you would have $817,596 at the end of 20 years. You get double for having saved what you have saved so far!

  5. jim says:

    Yeah, I maxxed out my 401(k) the first two years I was working and it’s only been recently that I lowered it to accomodate my mortgage payment. It’s given me a significant boost, especially since I put a large portion in an emerging markets fund that has performed very well the last few years.

    Thanks for the calculations LAMoneyGuy, I appreciate it.

  6. FMF says:

    Yes, looks better.

    You better hide those numbers from your GF, though, or she’ll see a big diamond in them. 😉

  7. jim says:

    Quit bringing it up 🙂

  8. LAMoneyGuy says:

    Are you shopping for “the rock”? If so, did you read my post on this today? I just made the leap yesterday. I feel really good about it. Here you go: I bought an Engagement Ring!

  9. jim says:

    Not yet, but I did see your post which had, among other nuggets, this gem that I knew beforehand (but that everyone should know): “Rule Number One, do not buy it at a Mall Store or a major retailer…”

    But it is a good place to do research on styles.

  10. Tim says:

    Looks good. That’s about what I’m shooting for too. But I have a strong emphasis on building up my passive income, not just savings. LAmoneyguy really laid it out…that’s not too bad if you can sock away 15k per year. Once I’m out of college and working full time that should be cake.

    Good luck.

  11. denon says:

    Actually, after looking at dozens of stores, I bought my wife’s wedding ring at a “mall store” (Helzberg’s Diamonds). Anyone who tries shop for a wedding or engagement ring by looking for “good deals” is destined for a doomed relationship. 🙂 For me, it was about looking at hundreds of rings in dozens of stores, until one practically jumped out of the case and said “here I am!”. I’ve been very happy with Helzberg’s .. skilled, helpful folks, nice quality product, and happy to do free regular cleanings (as all stores do), but without trying to sell you other crap.

  12. Jim,

    I have a question for you.
    What other assets and investments are you incorporating into your networth targets?
    What are you appreciation assumptions for those assets?
    Real estate, passive income leading from investment real estate, side businesses (blogs?), out of retirement investments?
    What about your future wife’s assets and investments – would you count that too?

    BTW, when buying an engagement ring, you really might find the best experts in NYC – the actual importers that bring the diamonds into the country. Find the right one and they can make a custom ring like no other found in a store. Also, they are much more knowledgeable than most jewelers. The key to dealing with them is knowing what you want and being able to clearly describe it. You’ll also want to know if they are GIA (gemnological institute of america).

    Also NYC Money had a nice discussion of engagement rings at her blog.


    Making Our Way

  13. jim says:

    I only have retirement investments and they’re included into my networth targets. I have no appreciate assumptions for my assets. As for passive income, perhaps I’ll dabble in RE when the market cools off but realistically I won’t. I do generate income from the blogs and that flows into my liquid assets which is included my networth. Perhaps when my future wife is my wife, I’ll include her assets but currently I do not.

    Thanks for the tip on rings… I’ll keep that in mind.

  14. Jim, good luck on reaching your goals!

  15. Andrew says:

    Putting your money into a Roth and 401k are great for building your networth and retirement assets. I just want to bring up several things to be aware of. If you are planning to retire in 20 years at age 45 then I hope you will have other monies saved or a passive income source to live off. As I’m sure you know you will not be able to utilize the money in your 401k or Roth at the age of 45 without paying taxes and or penalties. There are of course some exceptions but by and large you can not access that money without some repercussions. You could save money in a Muni Bond Fund or other less tax beneficial liquid funds and use that money to live on. Or you can keep on writing a blog, assuming they are still popular in 20 years.

  16. Ryan Cassidy says:

    IF anyone is interested in having me diagnose thier current financial situation I would be more than willing to do so. I have been working at Morgan Stanley roughly 4 years now, and welcome anyone to a free asset scan and plan review. The worst case scenario, you walk away with something you didn’t know previously, and the best case scenario you actually implement something we found in the process. I can be reached at 415-444-1235. My name is Ryan Cassidy. Look forward to working with you.

  17. I think your 20 year goal is low, particularly for retirement. If I understand your goals correctly, you’re going to aim for $650,000 in ten years, then only save another $100,000 the next ten years?

    With the average market return for stocks, you’d double your savings in just over seven years. Why not shoot for a much higher number? I agree with other posters that you really need to look at passive income. It’s likely that blogs will only last so long before Web 3.0 comes out and shuts us all down. Real Estate will likely be the best investments for passive income and is something that you can sell in retirement to get some extra cash. However, try to buy it with a minimal mortgage, or you wind up negating part of your returns.

    Also, when you look at inflation, you will likely need well over 2,000,000 in retirement to hold out at a decent income over 30+ years. Of course, Wal-Mart will probably still be around, so there’s always room for the front door greaters (which are more “Did you steal anything today?” greaters).

    Good luck!

  18. jim says:

    Hi Jonathan,
    The 10 year goal of 650k is a total net worth target, the 750k ten years later is only for my retirement accounts. I think a 650k target retirement value is a little too aggressive considering my current accounts total around 60k.

  19. Jim, I see what you’re doing. Often it’s best to have stretch goals like the 650 in ten years. Jack Welch proved that as CEO of GE….you often get better results if you have a stretch goal as long as you don’t beat yourself up when it just doesn’t pan out. I know how tough it is to save a lot for retirement! Maybe you could consider the 650 a “challenge”. Spend time periodically thinking of ways to make some extra money through tranditional investments like real estate, but also by writing, an invention, etc. You never know if a hobby may turn into a serious money-maker. J.K. Rowling did it with Harry Potter. I also love the principles of the One Minute Millionaire, where their novela tells the story of a woman committed to making one million in 90 days. While that is a huge stretch goal, it is entirely possible for anyone who gives it a shot.

    (btw, this is a suggestion for everyone! I have a goal of 1,000,000 in five years and I’m nowhere close!)

  20. Twenty years is a long time. I’ve found that I didn’t really start earning good money until my 30s. Now, my wife and I are socking away a lot more than $15k a year. I’d say if you make your 10-year goals (which should be achievable) then your 20-year goals should come easily.

  21. Willy Chin says:

    Hi, I just found this blog…and some interesting reading. Thanks.

    I just want to know what you are planning on doing retiring at 45? I am there now and certainly can’t see being finished working whether I could afford it or not.

  22. jim says:

    Hi Willy, welcome and glad you’re enjoying it. I don’t plan on actually retiring at 45, I just merely set my goal to have that much in assets by the time I’m 45.

  23. I noticed that your numbers for some pages on the top right seem a little odd:

    # 10 Yr – Net Worth (2016) – $650,000 (details)
    # 20 Yr – Retirement (2026) – $750,000 (details)

    You’re only going to save $100,000 in 10 years!? yet you want to save $300,000 from now till then? Is that right? Or are you counting each number differently?

    On this page: you state –
    In 20 years (45):
    Retirement accounts totalling $750,000 (revised from $500k)
    Total net worth at $1,500,000 (revised from $1M)

    Looks confusing to me…

  24. OK, I got it. They are different numbers! Still confusing.

    Suggestions: include one set of numbers on the top right or BOTH sets of numbers.

    Otherwise it looks like your comparing apples and oranges!

    Best Wishes for Chinese New Year.

  25. FlyFisher says:

    Good way to look at things. Got to love compound interest and how money grows!

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