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What is Your Financial Plan for Your Life?

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I have already warned my girlfriend… I think about money… a lot. Because of my overactive brain, it shouldn’t surprise you that I already have many investments mapped out for my future. Do you ever think about your financial future? What is your financial plan for your life?

My Crazy Life

When I was 23 years old, my debt load was up to about $12,000 from student loans and an engagement ring. When I got married, my debt load was joined with my wife’s and grew to nearly $20,000. Thankfully, we aggressively paid off the debt in about 14 months and built up quite a lot of equity in a foreclosure we fixed up. Unfortunately for me, my wife didn’t want to stick around any longer and I was back in debt to the tune of $21,000. By avoiding sleep and television, I was able to pay this off in 6 months.

Financial Plans

This is definitely not the way I planned my life, but you know what, life will never be as you planned it. This however, does not mean that you should have no plans for your life. While I know that my financial plans will not work exactly as I design them, I am miles ahead of my friends financially because I have constantly had financial goals and aspirations. I challenge you to do the same.

My Future Financial Plans

hundred dollar billsI currently work for a great company and am wrapping up my MBA at Grand Valley State University. With my new degree, I hope to move up into a managerial position and get a bump into the next pay bracket. Factor in the meager amount I make from this website and I’ll have quite a few dollars available at the end of each month. This will allow me to pay off my mortgage by the end of 2014, and then it will be time to save up and invest in real estate.

A multiplex will be the first investment on my radar – most likely a 4-unit complex. With my work and website income, and the $2,000 a month from rent, this investment should be paid for within three years, and then it’s on to the next one. With this method, I will be able to acquire 10 properties in 18 years. At the age young age of 46, I will have 10 complexes valued at over $1.5 million and will have a cash flow of over $20,000 per month. At that point, I will have plenty of options in life don’t you think? I could do about anything I want, and I’d only be 46 years old!

As I stated before, life doesn’t always happen as planned, but what if 50% of it came true? That means I have $750,000 in properties and $10,000 coming in each month. Still pretty good right?

What Is Your Financial Plan?

So here is what I am most interested in – what are your financial plans for the future? Are you investing in a 401(k) through work? Do you own a business of your own? Are you investing in gold? Let me know in the comments below! I would love to hear about it!

Money

AUTHOR Derek

My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.

20 Comments

  1. Good luck with that MBA, you must be finishing up soon! My financial goals for life are to get completely debt free in the next 5 years. Right now, my only debt is my house but wow is it hard to pay off a mortgage early! And maybe the hardest part is finding the motivation to keep paying hundreds or thousands of dollars extra each month. I put an extra $250 per month on my mortgage but than I add any extra money that I have each month too. It’s working slowly!

    • I’ll be done with my MBA in April. I can’t wait! I will probably miss the learning though, since I do enjoy the challenge. As for paying off the house. I know how difficult that is. But, with my mortgage just below $55k now, it is getting easier to see the difference when I make an extra thousand dollar contribution here and there.

  2. For us is to save money and be able to provide for our family. And maybe retire one day in a nice seaside place.

    • I hope your plan isn’t that general dojo! Hopefully you have a specific amount of money that you plan to retire with and an specific plan on how to get you there – whether it be with a business venture or consistent contributions to your 401(k).

  3. I’ve always wanted to own properties after looking up to a family friend who has quite a few. After reading your blog for awhile it’s making me more and more excited to make that dream a reality. I’m working towards buying my first house to move out if my parents house in the next few months. I’d like to work aggressively to pay off that house and use it as rental income and move into a different house to eventually be able to start buying rental properties as my retirement fund!

    • I thought the same way Ryan and am hoping to pay off my house by the end of next year. However, I’d much rather own a multiplex than a single house because it would allow me to diversify my income and receive from 4+ different sources on the rentals rather than just one. So, either I just keep living in my house and I buy a multiplex, or I sell my house and buy a multiplex and live in one of the units. I haven’t decided yet… I do really like my house, but I know that I could really launch my real estate career faster if I live in one of my own units.

  4. I am investing in my 401K and working toward being able to max it out. I also invest a lot in my side businesses that will hopefully one day make enough money to help me invest in more in my retirement and investment accounts. It is a slow process but it is happening.

    I would love for my businesses to earn enough so that I can sit at home and just work on them all day while watching my favorite shows on TV. Until then I will just work, work, and work some more.

    Another part of the plan is to avoid any expense I possibly can. Isn’t always easy but I eat cheap, no cable, air conditioner only on when it is amazingly hot, and save all I can.

    • I’m glad to hear that you’re investing in multiple places Levi. That is very wise of you. If I remember right, you’re interested in real estate too, which I think it awesome! Best of luck on your future plans!

  5. Real estate is a great way to build wealth. We have a goal of adding a property every couple of years until we have 10. That must seem like the magic number. Like you said, even if you only achieve half of your goals, that’s pretty sweet. We have one residential and one commercial right now and there is another one I have my eye on of the price drops. I am always looking!

    • That’s awesome that you’re already investing Kim! I can’t wait till I get there and can start writing about it!

  6. My financial plan has not changed for years. We continue to put all extra savings toward retirement. That includes a taxable investment account. Assets are allocated across all accounts in a tax efficient manner. Buy and hold low-cost passive index funds, that’s me.

  7. I have a pretty boring, but well thought out plan. Additionally, I feel we are on track (for the most part. 1) I want to have the house paid off at 55 (17 years). With a 3.75% interest rate, I honestly don’t see the value in paying it off earlier. With what I have saved outside retirement, we could do it in a few more years, but I believe we can earn more with that money invested properly. 2) Pay for 100% of college education for my 2 kids (4 and 7). 3) Retire at 62 with about 8-10 million in the bank plus my pension. If something were to happen and I either was forced out of the workplace early or decided I wanted out at 55 or so, I would have the house paid off and somewhere around 5 million at that time.

    • Sounds rock solid to me. I understand your point about waiting to pay off the house. I plan to aggressively pay mine off because I want to invest in more real estate, and I’d really rather not have more than one mortgage.

  8. As soon as I started earning right after graduation, I started saving up for my retirement. It wasn’t a big amount at first, but it was a good start and now I guess I have saved quite more already.

    • It’s good to hear that you started putting money away early. You will never regret that decision. Just be sure not to invest blindly from here on. Always have a plan.

  9. I have read many of the posts on paying off the mortgage early and just feel keeping the loan works for us. I get there is a “guaranteed” return of whatever your interest rate is, but a 3.75% rate actually translates to about 2.75% when you subtract the mortgage interest for income tax purposes. I understand the stock market is a gamble, but beating 2.75% is a risk I am willing to take (gets closer to the actual 3.75% the closer you are to paying off the loan). The way I see it is that paying off the mortgage looks great when the market takes a dive like in 2008 and 2009. You would have looked extremely clairvoyant had you been doing this at the time. However, it doesn’t look as wise when the market is going gangbusters like it has the last few years. As long as you are investing that leftover money, then to each his own I guess. The problem is that most people don’t invest the extra money, so paying off the mortgage is definitely a positive for those that would fall into that camp! Here’s a question for you. From the posts I have read, it looks like you have about 40K or so left on your loan. If you had that extra 40K available now to pay it off, would you do that or invest that 40K? Would it make a difference if your loan was 100K, 200K or even more? If you had that cash, would you invest its or pay off the loan? I have the cash outside of my retirement, but it would still be too tough for me to pull it out of investments to pay off the house.

    • You’re really trying to stump me aren’t you Brian? As an aside, through my work I am investing 16% of my income (this includes my company match), so I do have plenty of money tucked away into my 401(k) already. My next investment will be in real estate. Before I take on another debt load for a multiplex, I really want to get rid of my personal debt first. So yes, my answer is 100% – if I receive a sum of money that is equivalent to my loan amount, I am using that to pay off the home loan. I will then quickly save a down payment and purchase that multiplex. Since I no longer have a personal mortgage, my cash flow should be plenty in the event that some of my renters decide not to pay.

  10. I was just wondering and it makes sense as you want to then possibly take out another loan to invest in a property. At this time, I have no desire to own real estate. Just as you will be using “other people’s money” when you get a loan for a duplex, I feel I am using “the bank’s money” to invest in the market. I have the cash to pay off the mortgage, but rather have the the few hundred thousand working for me. With a risk profile that is a little higher than some, 3.75% is like free money to me. Now, if the rates were like they were years and years ago where you had a rate of 7%+, then I would rethink my plan!

  11. You can say that again about life not happening as planned.
    My financial plan (am trying to keep it really simple for now)
    a) Go back to school get a professional certification.
    b) Grow and expand my business and look for other streams of revenue.
    c) I also have investing in the real estate somewhere in the plan though thats later on when am more settled.
    d) Continue and increasing my retirement savings fund.
    e) Save enough for travel from time to time.

    • Sounds like a pretty good plan to me! When you say “grow your business”, are you talking about your website? Or do you own a company for your main source of income?


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