If you’ve been reading The Amateur Financier for the last year or so, you may remember that last year in December, I made a promise to myself to become a millionaire. At the time, I had just lost my job, didn’t have any prospects (at least, not any with much promise, as none of them panned out), and hadn’t even begun the process of applying to graduate schools.
In just a year, so much has changed, some things for the better, a few for the worse. Given the approaching New Year, when we look back at what we’ve accomplished and forward to what we want to do in the coming year, it seems an appropriate time to reconsider my approach to becoming a millionaire, see what progress I’ve made, and what I can do differently.
So, without further ado, let’s go onto my vows and see what progress I’ve made to completing them:
My Millionaire Vows and the Progress I’ve Made
1) Max out my Roth IRA every year:
Status: It’s still a good idea, although since making this resolution, I’ve come to consider that the case for Roth accounts might not be as clear cut as I thought, and thus, splitting up my contributions between Traditional and Roth accounts might be best. That said, trying to live off unemployment and a rather tiny graduate student stipend meant that I had less money than I was expecting (or at least hoping) to have this year, making the $416.67 per month to max out a retirement account an expense I couldn’t quite swing. I did put in about $600 this year, but that’s a far gasp from $5000.
For Next Year: Trying to bump those contributions back up is one of my top priorities; with luck, I can make $2400, if not much more, although that is dependent on getting my credit cards paid off before I go all out on investing for retirement.
2) Contribute 10% of my gross pay or up to the maximum match (whichever is more) to my 401(k)
Status: Still on hold; grad students don’t get a lot of ‘perks’ or ‘benefits’ like 401(k) plans, or that matter, not too much of that ‘income’ either. When I graduate in 2012, here’s hoping for a nice job with good benefits.
For Next Year: Pretty much maintaining a holding pattern on this one. Assuming I manage to max out that ol’ IRA, I guess I’ll have to go for investing in a taxable account for now. (Although, that’s definitely the sort of problem I’d like to have right now.)
3) Add $100 per month to my savings
Status: This one I’ve done especially bad on completing; not only have I NOT been adding money to my savings account, but I’ve been drawing it down to try to pay down my credit card accounts. Now, I don’t regret doing so (no sense in paying 30% interest to a credit card company while getting <2% interest from a bank, as I’ve said before), but I’m even further from my goal than I was hoping.
For Next Year: Well, as mentioned in the above post, I do intend to resume saving again next year, once I’ve knocked out the balance on the highest interest credit card. Of course, since I’m specifically saving to ensure I can make it through the summer (when I’ll make even less money incoming than I do right now), chances are that I will still not have much in savings come next year at this time.
4) Cut discretionary spending down to $500 per month
Status: Good news and bad news on this front. The good news is that, with the exception of this past month, I’ve definitely been spending less than $500 per month on non-necessities (and since most of my discretionary funding this month has been on gifts for other people, we could argue about how ‘discretionary’ it really was). The bad news is, after rent, utilities, food, gas and school expenses (my major non-discretionary spending categories), I rarely had any money left, let alone more than $500 dollars. So, this one was definitely overtaken by real life.
For Next Year: Well, keeping this goal shouldn’t be too hard; I’d have to be willing to continuously dig myself into a deeper and deeper hole to break this goal. I’ll have to sit down with my expenses for the past few months, see where I stand, and cut this down to a few hundred dollars (or less).
5) Add $50 per month to non-retirement investments
Status: As I’ve mentioned, it’s been a tight year, money wise, and what investment money I’ve had has been funneled toward my retirement accounts. I have been keeping an eye on my non-retirement accounts, though, and have tried to add at least a little money to them, here and there.
For Next Year: This is probably going to have to take a backseat to things like my normal expenses and my retirement accounts. If (or rather, when) I get enough income…incoming, I’ll be sure to put any investment money beyond the maximum for my retirement accounts into taxable accounts. On the subject of building up income…
6) Keep developing alternative sources of income
Status: Another mixed bag. On one hand, I’ve managed to do pretty well with this very blog, bringing in much more in 2010 than I did in 2009 (although, since I earned all of $0 via my blog in 2009, it would be hard to do worse). On the other hand, I’m still far from being able to live off the income this blog produces, and I haven’t had as much success generating income through other sources as I had hoped last year.
For Next Year: I’ve been trying to get my blog back up into fighting shape (particularly this past month), which is a good start, but there’s much more I can do, particularly when it comes to spreading the word about my blog and getting more publicity. I also need to do more about creating other sources of income, as blogging, I have learned, is not the source of an easy and work-free income.
So, there you have it, a look back at my experiences this past year, and a look forward to a few things I hope to improve this coming year. Here’s hoping this coming year is better monetarily, both for me and for you.