“What do you see yourself doing five years from now?”
Granted, this isn’t really an ice-breaker question, but whenever I get to know somebody decently well, I like to bounce this off of them and see how they react.
Most of the time, their response starts with….
They have absolutely no idea!
People spend more time planning a vacation than they do planning their own lives!! Sad, but true…
What’s Your Five-Year Plan?
If you ever meet me in real life and want to avoid the *crickets*, then you’d better start figuring out your five-year plan!
More importantly than just not looking foolish though, realize that this is an incredibly important step to becoming financially successful. As Zig Ziglar always said, “If you aim at nothing, you’ll hit it every time.”
In other words, if you just wander through life, you’ll definitely end up somewhere, but is it really where you wanted to be? Probably not! I mean, think about what you’re doing today. Do you have the life that you’ve always dreamed of? If not, then it’s time to start living your life with some intentionality. Make a five-year plan and then start taking action on it today.
I’m going to help get you started:
My name is ________. I’m _____ years old and my net worth is _______. My yearly income is _______.
In five years, I plan to:
- Raise my income by $_______ a year.
- Increase my net worth to $________.
Still need some help? Here’s our five-year plan:
My name is Derek. I’m 32 years old and my net worth is $$$ (less than a million ;)). My yearly income is $$ (less than $100k).
In five years, we plan to:
- Raise our income by $40,000 a year.
- Increase our net worth to $$$$ (near a million dollars).
- Start putting Addi through private schooling.
- Move into a larger house with acreage.
Map Out a Plan For Each Goal
It’s great to say that you’re going to increase your income by $10,000, $20,000, $40,000 (whatever it is), but how are you going to do that? Can you achieve that increase within your current place of employment (ie. are there advancement opportunities)? Or do you need to either switch jobs or start your own business?
If you said your net worth was going to jump $500,000, how in the heck is that going to happen? Is that windfall coming your way through investment returns? Or do you plan to dump $500k of cash into your IRA somehow?
The point here is, it’s great to have a goal and write it down, but you also need to work your way backwards to make sure it’s attainable. Otherwise, it’s just a hope…not a goal.
Here’s a real-life example:
Two of my goals were to:
- Put Addi through private school,
- and move into a larger house with some property.
To make this possible, Liz and I have decided to keep living frugally still today and save up as much money as we can by the end of the year. If all goes well, we should have enough to make another rental purchase with cash. Those two rental incomes will produce more than enough money to put two, maybe even three kids through private school.
In the meantime (since Addi is only 1-year-old right now), Liz and I will stash away the rental income for the next three years (likely totaling $60,000). On top of this, by continuing to live frugally, we’ll be able to save another $75,000ish from my day job.
That gives us $135,000 plus the sale of our current house (probably $165,000 by then), which means we can buy a modest $300,000 ranch house on 7-10 acres of land in our area.
BOOM! Now THAT’s a five-year plan! Haha…if all goes as planned anyway. But even if it doesn’t, we’ll still be much better off than if we made no plans at all!
When Will YOU Start on Your Five-Year Plan?
Are you thinking about your future? Have you laid out your five-year plan and specified how it’s all going to happen? If you haven’t, what are you waiting for?
- an inheritance?
- a stroke of luck?
- someone else to do it for you?
None of these reasons (achhmmm, excuses…) are going to happen. If you want your life to change tomorrow, then you’re going to have to start doing something today.
Fill in the blanks, plan the details, and start kicking butt! Oh, and be sure to tell me all about it. I love to hear everyone’s success stories!
Have you figured out your five-year plan? Put it in the comments below!
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.