Thursday, June 28, 2012

A Million Dollar Plan

Yes, it’s true; another day and NOT SO another dollar! It seems that no matter what you do the behinder you get and playing catch-up is not all that fun.

The dollar you make today has a difficult time giving you 80 cents tomorrow and somewhere in the back of your mind you question if it is really worth it. The entire struggle that is…. If you are struggling today, then what is going to make the difference in “not having to struggle” tomorrow? Ok, I know --- tomorrow never comes so you’re just stuck in a revolving door of today. That’s Ok if it is where you want to be. Its crises management and sometimes that can translate into day to day living; the daily grind of existing but not the excitement of building and growth.

We can all find various explanations for why it is and they are as varied as snowflakes in a Winters Storm. We can also identify what it is NOT. It is not managing change as we have talked about earlier nor is it desire for something different, such as a more stable financial future. It may be HOPE but it is not DESIRE. Similar yes, but different.

Reduced to its essence, HOPE is something we project as we wait for someone else to make it different. DESIRE is something we project but are moved into to doing something ourselves. Desire creates energy for change. Hope accepts where we are and wishes for something else. One is “proactive” and the other “inactive”…. I know, it doesn’t seem like it but it is true. While in a “crises” state we are busy reacting to what life throws our way. We are not “desiring” something different but “hoping” what is happening will not crush us. Until we get our mind focused and switch thought processes we continue to stay in the pattern, the rut and HOPE things will be different tomorrow. We do nothing about managing “change” today. We hock what we got yesterday in the HOPES of it being better tomorrow and put our energy into wishing for the Lottery to break our way. We get ourselves in deeper debt by hoping for a better tomorrow but in reality do nothing to change the pattern we find ourselves in today. We try so hard to cover our ASS and in turn lose our ASSETS.

Ok, I know I am being a little hard here. Yet, all it takes is a little infusion of DESIRE and your future changes. Not right away but through DESIRE one gets the strength to do what it takes, not what is HOPED for… or just wanted.

So how does this play out in real life…. Well, how about the Desire to retire at age 65 with $1,000,000.00. You can HOPE. Hope that Great Aunt Hilda leaves you the inheritance, or hope you win the lottery or hope you meet someone who will share their financial freedom with you or hope it will someday get better or you can, through desire build a plan and sick with it. A workable plan... A plan is proactive and it is about implementing “change”. Remember, if you continue to do the same things today as you did yesterday you will get exactly where you are.

So, a million dollar plan? Here is an example. NO, I can’t take credit for it but it is sound advice.


You've JUST STARTED and Saved: $0 – Not much different than most of the population only you have STARTED.

To reach one million by age 65 you need to save $286 per month.

Ask yourself is it a DESIRE, a HOPE, or just a want? One of those three words will drive your actions, or inaction.

So what about Successful Savings Strategies

You're just starting your career and getting a hold of your life, so this is your chance to build a solid financial foundation. Time is on your side. Use it to your advantage.

Your first goal is to contribute enough money to your company 401(k) plan to capture your employer match. If you don't have a retirement plan at work, fund an IRA. The key is to START NOW!

You'll be investing for 30 years or more, so you can afford to keep 100% of your account in stocks.

Pay down credit cards and other high-interest debt. If you don’t have any debt GREAT! But if you do, pay it down. That will free up money to save for a house but remember a house should not be your only investment as you will always need a place to live.

Set up an emergency fund. This fund should equal three to six months of your take-home pay. Place it in a readily accessible account in an online bank that pays interest of 4% or more. Like an “Orange” account.

If you are married, look at putting the lower income away for savings and investment. Many times this is not possible but if it is do it. It will pay huge dividends in the future and worth the sacrifice.


Life as got in the way and you have still Saved: 0$ - More difficult but still manageable.To reach one million dollars by age 65, you need to save $671 per month.

A little tough but still doable…. DESIRE, HOPE, or want?

If You've Already Saved: $50,000

To reach one million dollars by age 65, you need to save $304 per month.

This is better yet as you have dollars working for you already. You have been proactive, made good choices and are looking towards your future.

Successful Savings Strategies

You may be starting a family or preparing to buy a home. Balance you short-term needs with long-term savings goals. Here you have to differentiate between needs and wants. This is easier said than done and how do they support your long term GOAL? Or do they?

Although you have added responsibilities, don't neglect retirement. Responsibilities don’t have to mean “crises”. Remember to “manage change” not get caught up in “controlling process”.

Aim to save 15% of your gross income (including an employer match in your 401(k). If one parent leaves work to care for the kids, consider opening a spousal IRA.

Shift your assets to 90% stocks and 10% bonds.

Invest in a 529 college-savings plan. Many states offer a tax deduction for your contribution, and qualified distributions are exempt from federal taxes.


You've Saved: 0$

To reach one million by age 65 you need to save $1,698 per month. This is tougher as time is not on your side; consequently you have to invest more.

If You've Saved: $50,000

To reach one million by age 65 you need to save $1298 per month.

If You've Saved: $100,000 To reach one million by age 65 you need to save $861 per month. As you can see the more you have saved in the past the less you have to invest now.

Successful Savings Strategies

You may be juggling the needs of a growing family and aging parents, but don't take a break from retirement savings. Now is not the time to “manage processes”. They take the focus away from your GOAL.

You can contribute up to $15,500 to a 401(k) or similar workplace-based retirement plan this year or $5,000 to an IRA. Roll over retirement savings from previous jobs into an IRA.

Adjust your asset allocation to 80% stocks and 20% bonds.

Your kids can get grants or loans for college, but there's no financial aid for your retirement. Don't put your kids' college costs ahead of retirement.


You've Saved: 0$ To reach YOUR one million dollar goal by age 65 you need to save $5,466 per month. Now that is quite a chunk of change but lets say you have already saved $200,000.00 and you have wanted to slide out of your family business to reduce stress and retire early. $200.000 now will not let you retire comfortably for 20 more years. Yet, working for 10 more years and saving around $3,000.00 a month will reach your million dollar goal…

If You've Already Saved: $50,000

To reach your one million dollar goal by age 65, you need to save $4,859 per month.

If You've Already Saved: $100,000

To reach your one million dollar goal by age 65, you need to save $4,253 per month.

If You've Successfully Saved: $200,000

To reach your one million dollar goal by age 65, you need to save $3,040 per month.

Successful Savings Strategies

Take advantage of your peak earning years to top off your savings. Don’t blow it, use it.

Add an extra $5,000 in catch-up contributions to your 401(k) savings and an extra $1,000 to your IRA.

As you near closer to retirement, reallocate your portfolio to 70% stocks and 30% bonds.

Now is the time to estimate your retirement expenses and your projected income. If you're coming up short, consider working a few more years.

It is all about DESIRE, HOPE or want…..

Yes, I do understand that for many this is a concept that seems too far in the future and way too BIG. Yet, if taken a little a time and with the infusion of DESIRE, you can DO anything! All it takes is CHANGE, the DESIRE to dream and the WILL to DO.

Ok, its here I say it’s a choice. It really is….. even the $1,000,000.00 and it is all about change. Sounds like a political speech doesn’t it? Yet, I am not talking about the HOPE for change or even change bringing about HOPE. I am talking about the action and responsibility of DESIRE; the motivator of activity; the energy behind taking that step toward reaching for that STAR. It’s all about walking the walk and paying the price of admission. It’s about showing up for practice and walking onto the field to play the game. It’s about being the best you DESIRE to be. It is about making a plan so big that it will scare you and sticking to it. It’s about excellence not perfection. It’s about YOU. Now go out and make your Choice. I’ve made mine…. Don’t you think it’s time to make yours?

Until later…. Walk with your head high and carry a big stick… There are others out there who don’t want you to succeed….

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