I have spent the last four years working post-college, and the last fifteen years dreaming about being a millionaire. Prior to actually working for a living, I would calculate when I would become a millionaire constantly. Did you know that if you make up a bunch of numbers based upon a skewed world-view you will be a millionaire when you are thirty? Apparently, my younger self would call my current self a deadbeat, as I am way below his mark. Well, that guy was a dick anyway. I wouldn’t work for him if he paid me. Well, maybe if he paid me. Wall Street, have you invented an investment vehicle for that yet?
Why I Want to Become a Millionaire
Currently I am obviously much more patient. If I wasn’t, I would have thrown myself out a moving car by now. If you aren’t worth a million by the time you’re thirty, life just isn’t worth living, right? Truth told however, becoming a millionaire hasn’t lost its luster to me. As I when I was into Jncos, I still recognize the freedom a million dollars brings. Off interest alone, a modest life could be achieved. Work where and when you want; or at all. Stress over things on your terms, not forced agendas. Become a Republican.
The Millionaire Calculator
I recently read a few postings by other finance bloggers (do we get hats?) tracking when they will become millionaires. Apparently the millionaire calculator on cgi.money.cnn.com is popular, because it allows for both taxed and tax-differed savings and growth. I tried it out. I will be a millionaire in nine years, at age 37. I sat and looked at the screen, thought about it and realized this is nonsense on a multitude of levels. As some of my readers know, kids change more than just your sex life: they are expensive too. Since pesky child labor laws won’t let them chip in, you have to flip the whole bill. Furthermore, the calculator doesn’t take into account future pay raises and thus future increases in savings, or the occasional “stand out” year of returns, where this “stand out” year takes place in your ach towards becoming a millionaire, and so on. The calculator has some issues, is what I am getting at.
A true millionaire calculator would:
- Take into account future savings and expenses increase
- Passive income increases, and what is done with this passive income (invested, spent, laundered, whatever)
- Alternative investments, such as real estate or businesses
- Pre-and post-tax accounts
- Future tax rates
- More things I am not smart enough to think of right now
I decided I would try to create such a calculator in excel, and give it to everyone who “likes” Snarkfinance on Facebook and joins the email list. Well, I suck because I haven’t done that yet. If nine years is considered the “baseline” for me here, my gut tells me I can do better. I have real estate investments currently and in the future that should perform, and a fiancé who just started working and who’s salary should be increasing rapidly over the next five or so years (mine as well). I should be on track to besting nine years, or at least reaching a passive income level that affords me financial independence, although I clearly cannot put any exact figures on anything. I guess I am overconfident and under calculated. My Jncos wearing former-self would approve.
Would a calculator such as the one described be useful to you? Let me know by dropping me a line via email or leaving a comment below.