$1 Million by 2017. What’s Your Financial Goal?

By Pinyo, on July 30, 2007

Before I started this blog, I did not really have a good financial goal. Actually, my financial goal was similar to 99.9% of other Americans…I wanted to be rich. But what is rich? In “Are you wealthy? Here’s a test,” I defined wealthy as: “…when income from my assets can cover all my family living expenses and a few luxuries“. That was a good start, but now I want to put together a specific and achievable goal and plan.

Goal: Build a $1 million investment portfolio by 2017 (excluding home equity)

10 years may not sound very sexy, but I don’t know any get rich quick scheme that works. So, I have to work within my capability and 10% should be achievable. I am currently at 23% of my goal. In fact, I consider myself lucky to have accumulated this much wealth without any financial goal or plan for the past 10 years.

So how did I get to $230,000?

Well, it actually was $250,000 a few days ago before the stock market went south. Anyway, I started working in 1996 with about $20,000 debt in my name (mostly student loans and some credit card debt). I was able to save a large portion of my income each year, thanks to my Thai-Chinese culture where it is typical for the oldest son to live with his parents. This really helped me get an early start on my financial situation.

I also started to invest in the stock market soon after my first paycheck. This turned out to be another good thing for my finance. Sure, I made a few errors along the way, but it was a small price to pay for what learned. In 1998, with considerable help from my parents, I bought a house. Although I went from paying almost no living expenses to paying for everything but food, it was another good financial move in my favor.

Overall, I did well for someone with no financial goal. If I had been more serious about personal finance, I think I could have done much better.

So $1 million by 2017 is the goal, here is the plan…

My plan is simple, but will be challenging to execute. To get to $1 million, I will attempt to grow my investment by 10% a year and add about $20,000 more to the portfolio each year. Here is a rough map (updated 1/1/2008):

$1 million goal

Reaching this goal may not make me wealthy by my own definition, but I now have a road map that I can measure my progress on a regular basis. Setting a SMART goal is the key to success:

Specific – knowing exactly what I want – i.e., $1 million investment portfolio
Measurable – having the ability to track progress – i.e., I can come back to the spreadsheet above and see how well I am doing
Actionable – knowing the steps needed to achieve the goal – i.e., by saving $20,000 per year and investing that money
Realistic – being in the realm of possibility – i.e., investing for a 10% annualized return is possible
Timely – knowing when the goal will be achieved – i.e., 2017

Here are what other bloggers say about goal:

Financial Dominance: Why Defining Your Investment Goals is So Important.
The Simple Dollar: A Guide To Setting And Reaching A Net Worth Goal.

What is your goal?

Get free updates

via Twitter

via Facebook

via RSS or Email

Share this article

Pinyo is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

All posts by Pinyo

37 Comments

Michele
July 30, 2007, 14:04

Sounds like a reasonable goal – good luck!
Pinyo
July 30, 2007, 15:38

Michele – welcome to Moolanomy and thank you for the assurance.
Mark Andersen
July 31, 2007, 7:15

I have more modest goals, mainly to have the debt paid off in 2 years, own a home in 3-4 years, and have 2-4 children by 2012
Pinyo
July 31, 2007, 7:52

Mark – thank you for sharing your goals. These are all good goals. Wow, 2-4 children, that’s a lot of kids.

The point is to think about what you want, make sure they are realistic, have a timeframe for each, and write them down!

The $1 million is just one goal. I also have to save for my baby college fund, have another baby (??), buy a bigger home (??), etc.
Jason
July 31, 2007, 14:27

Goals are important. Did I read that right are you at $250,000 now?
Pinyo
July 31, 2007, 15:12

Jason – I was. Last week knocked me down to $230k, but I didn’t pull any money out.
Jason
July 31, 2007, 20:28

Do you have an account on NetworthIQ? Or, perhaps, does one of your other articles tell a little more about you, and how you got to this point?
Pinyo
July 31, 2007, 21:10

No NetworthIQ account — I will have to check it out. I think this is the most revealing post so far. The biggest contributors for accumulating $230k are: (1) always pay off my credit cards (never pay late or finance charge since 1991), (2) max my 401k since 1999, (3) max my IRA since 1996, (4) learn to invest, and (5) be frugal.
Vincent Liu
August 4, 2007, 19:35

Hi Pinyo,

I’ve found your blog through blogcatalog, and it’s really nice to know that you have written out your financial goals so clearly.

For a while I have been pondering whether if would be considered obscene to write about their wealth, which I’m glad that you did.

It is inspiring to read about your goals, which I have written a bit about mine as well: http://blog.vinceliu.com/2007/.....-life.html. It’ll be nice if I can get some feedback!

Another thing, is if I may link you up to my blog if like? I do enjoy the the topics and the way you write approach financial management, straightforward and down to earth.

Cheers,
Vincent
Pinyo
August 4, 2007, 22:50

Vincent – welcome to Moolanomy. Thank you for such a thoughtful comment. I was and still am struggling with the decision to share my net worth. However, if I was able to inspire one person to secure a better financial future, I think I made the right choice.

I took a look at your site and it seems like you got a good head start being under 30 and all.
Vincent Liu
August 5, 2007, 11:34

Pinyo,

Thanks for the feedback, really appreciated you giving me a review. Likewise, I’m also struggling with my own decision to be open about my wealth, but I agree that you have made the right choice, for there is no shame in showcasing the fruits of your hard work and financial prudence.

Will keep reading your blog, and thanks for being an inspiration!
Pinyo
August 5, 2007, 12:26

Thank you for your words of encouragement.
macewan
August 17, 2007, 19:32

I’m currently socking away 30% of my net.
Pinyo
August 17, 2007, 19:48

Macewan – welcome to Moolanomy. 30% is very hard to do. I think that’s awesome.
GoalGuru.com
August 29, 2007, 15:33

What you are doing is awesome and you are inspiring a lot of people. There are many ways to reach the same destination and you are doing it in a way that you are passionate about.

You are also showing people the enormous value in long term perspective. Way to go!

Live Your Dreams,

Jill
Founder and CEO, GoalGuru.com
Pinyo
August 30, 2007, 5:40

Jill – welcome to Moolanomy and thank you for the words of encouragement.
Eric
August 30, 2007, 20:27

I really admire you for telling us about what appears to me to be a very ambitious but achievable goal. I haven’t read through your entire site yet, but I’m curious and interested to see if you are changing things in your life, and what those things are, in order to help you save 20,000 a year. I’m making some of those changes in my life now and it’s been an interesting and eye-opening experience.
Pinyo
August 31, 2007, 4:51

Eric – thank you! It is ambitious, but if the stock market historical growth rate of 12.5% is still achievable, I should be safe with my 10% target.

My saving method is to pay myself first. Historically, I have been able to fully contribute to my 401k and IRA, although it is increasing harder to do so. Anyway, I believe I can manage $20,000 a year which is still a lot of money.

I think once you have a goal and put together a plan, you can achieve make your dream comes true also. Good luck. I look forward to read about your goal too.
Jake
September 3, 2007, 16:50

Great way to lay out your goal. When you write it down like this it increases the chances that you will make your goal by many times!

So happy million!
Pinyo
September 3, 2007, 20:06

Jake, thank you for the reassurance. That’s one purpose of this blog; to keep me on track. I hope this will all work out.
Jeff
September 26, 2007, 6:17

You have hit the nail on the head:

1> Have a written plan (share with others)
2> Long Term Perspective
3> Stay focused
4> Pay yourself first

Well done on the article and good luck.
Yves
September 27, 2007, 14:07

Thank you for writing this blog. I look forward to reading more about your suggestions and successes!
Pinyo
September 27, 2007, 18:02

@Jeff and Yves – Welcome to Moolanomy and thank you both.
Money Blue Book
October 30, 2007, 20:58

Inspiring most definitely – Save as much as possible and invest in the market and let compound interest do its magic. Time is definitely our friend!
-Raymond
Ruth
November 1, 2007, 9:07

It’s great to read your chart. I have a similar one. My goal is to have $400,000 by age 42 so that I can “retire” (which might mean work part-time on and off).

I’m 35. $400,000=$16,000 a year at 4% withdrawal rate, and currently my spending is a little less than that. So far I am at $160,000, not including my house, and I invest ~$30k a year, which is about 1/2 my salary. I can do this because I pay myself first and more important have followed the principle of not changing my lifestyle as my income increased–although I have, but not as much as most people.

I used to have 3 roommates, now I have one; I used to not have a car, now I share one with my roommate and bicycle to work; I used to live without health insurance, now I have it through my job. I don’t know if my plan will work, especially due to health care costs, but then I don’t want to sit around after age 42, I just want to have more flexibility to work part time and in the nonprofit sector, etc. I don’t have any dependents, which helps, but if I did I don’t think it would be very different–my parents brought me up in a frugal way and it just seemed natural to me to wear hand-me-downs and drink powdered milk and work my way through college.

Now I enjoy being creative and frugal because I know it’s helping me toward my goal. I’ve never felt deprived; but then I also happen to enjoy things that are free anyway, like nature and reading and drawing. I feel very normal, but when I look around it seems that I’m not. Maybe if people had goals they believed in they would have an easier time making choices that are healthier for them. Or maybe having free time is just more important to me than it is to other people.

Thanks for having a place where I can write this. One of the hardest things about being a saver is that you can’t talk about it–it’s more okay to tell someone you got laid last weekend than that you’ve broken the $150k mark 3 months early. Why is that?
Pinyo
November 1, 2007, 9:22

@Raymond – yes, compounding is great.

@Ruth – welcome to Moolanomy. I really enjoyed reading your comment, so if you ever feel the urge to write about your finances and frugality, I would welcome you as a guest writer.

Living off $16,000 per year and saving $30,000 is an incredible feat, and your plan is so well thought out that I am sure it can be done. I would certainly love to hear about how you manage to do these things in more detail.

By the way, I would prefer living frugally and retire at 42, than having to work the rest of my life for all the goodies.
Tommy
November 3, 2007, 23:50

Wonderful goal! Mine are a bit more modest. However, I may up the ante after your inspiration. Good luck.
Ruth
November 4, 2007, 16:35

Thanks–and I’m flattered! I would be happy to be a guest writer sometime if I can find a way to be honest without revealing too much about myself. One problem with my plan is that if my employer found out that I’m itchin’ to leave it would cause a lot of bad feelings. You’d think people would be happy for you . . . and they would be, on the one hand. On the other hand, they’d be sad/hurt. It’s also harder to argue for raises if they know you’re trying to retire early . . . although again it’s your money so it shouldn’t matter. But it does.

BTW, when I lived on the West Coast in my early 20s I lived on $425 a month, and I was quite happy. So now living on $16k feels luxurious! But it depends on what you’re used to, how you feel about yourself, and even who your friends are. I hope all these PF blogs help “freaks” like me know that we’re not alone, and we’re not crazy!

Lastly, anyone looking for more inspiration: Thoreau, “The Good Life” by the Nearings, “Your Money or Your Life,” and “A Reasonable Life” all have been very helpful to me.
Pinyo
November 6, 2007, 7:20

@Tommy – welcome to Moolanomy. Great to hear. I am sure you can do it, as long as you have a SMART plan.

@Ruth – You’re welcome. Yeah, leaving a job is always a sweet sorrow, but if you can do it, why not.

Trust me, you are not a freak — I think PF bloggers cover the whole gamut — rich/poor, spendy/frugal, in debt/financially free, etc.

I read Your Money or Your Life. I will have to take a look at others. My reading list is quite long.
Double Journey
November 25, 2007, 12:00

Good Luck to you in your journey. I have similar goals. I am a few years younger and have a little bit more saved, but hope to get to a million in relatively short order. I plan to get there like you, saving diligently and investing wisely. For a little fun however, I took some money aside and am going to “try and get rich quick”. I’m talking about it on my blog. We will see how that goes.
David Carter
March 14, 2008, 8:37

I don’t mean to be rude or anything, but 10% is pretty optimistic. I think you should up your contributions each year as well. Maybe by say 3%, the going rate of inflation, otherwise I think it might be hard to hit 1Mill in 2017. I hope ur a good investor! gl
Pinyo
March 14, 2008, 9:16

@Double Journey – Thank you. Good luck to you as well.

@David – Not at all. The 10% was based on historical performance of S&P500. It might be a little optimistic considering the weakness that started since year 2000. If I miss my target at the end of 2008, I will most likely revise my plan to reach the $1 million mark.

Good idea about adjusting contribution up each year.
MV
March 16, 2009, 18:15

I’m really glad to see your blog and the blogs linked to your site.. I found it as I was trying to invest for education for my 3 yr old son. Have been reading other links from then on.. Please keep up the good work.. and thank you.

It would be great if you could update plan for your son’s education. These days with nothing fetching a good return, how do you suggest to proceed.
Pinyo
March 16, 2009, 20:45

@MV – Thank you. Yes, I should update the plan, and I will…thank to your encouragement. In term of changes, here what I would do.

1. Adjust long-term return on investment to 8% instead of 10%
2. Assuming 16 more years to go, start the portfolio at 20% fixed-income and increase this ratio by 5% per year so that I’ll be 100% fixed by the time he’s ready to get into college.
3. Lower the long-term return on investment by approximately 0.2% for each 5% increment in fixed-income — assuming 100% fixed-income returns approximately 4%

It’s not perfect, but I think this is closer to reality than the original plan.
intrigued
March 27, 2009, 10:44

I am tired of thinking it is time to do “thinkers think and doers do. but if thinkers dont do and doers dont think then its just something else talkers talk about.” it has never been more clearer I am a smart man but growing up i never had someone to guide me i have had a rough life. I will be going back to school, but have been so afraid because i have a bad criminal background and when i am done with school who would trust me. I will be taking business managment. My entrepneur spirit has been tugging at my mind and heart for sometime now. I thank you so much for showing me your journey i will take everything you have said into account. Honest opinion: Do you think a Person with my background and my debt can get out and become successful and provide all i never had for my 2 wonderful boys and wife? regardless i am embarking on this journey regardless of my situations and outcomes just would like some assurence. thank you
Jill (Staff Writer)
January 21, 2010, 21:23

Hey Pinyo – I just ran across this and was wondering if you would share an update on how you’re doing!
Pinyo
January 22, 2010, 21:35

@Jill – This probably won’t happen as planned. About 3.5 months ago, I got a job offer in Virginia and moved from NY. However, I am still paying all of NY house expenses for my parents who stayed behind. In the mean time, my wife and I bought a house in VA. So the money that normally go toward investments are now going toward house payments.

Please share your comment:

Comment Rules: Constructive criticism is welcomed. Please use your PERSONAL name or initials and not your business name or URL, as the latter comes off like spam and I'll most likely delete your comment. Have fun and thanks for adding to the conversation! Here's our comment policy and guidelines.

5 blogs that link to this article:

If your trackback does not show in 24 hours, please resend to this trackback URI.

Free Q&A Service

See More Questions

Best Bank Rates

High Interest Savings Accounts	1.51%
High Yield CDs (1-year)	1.75%
High Yield Checking Accounts	1.46%

Best Credit Cards

Best Credit Card	TrueEarnings®
0% APR Balance Transfer	6 mo
Lowest Interest Rate	9.75%
Best Cash Back Reward	5%

Your Credit Score

Featured Reviews

Affiliate Relationships

As required by FTC regulations, please note that we have a financial relationship with many of the companies mentioned on this site. We occasionally review products or services that we have been given access to for free. However, we do not accept compensation in any form in exchange for positive reviews and the reviews found on this site represent the opinions of the author.

Important Notice:

The information found on Moolanomy is provided and intended for informational and entertainment purposes only and does not constitute financial, legal, or other advice of any kind. The information contained on this site is aimed at a general audience, and does not attempt to offer specific advice to your specific circumstances. If you are looking for professional advice, you should consult with an independent financial adviser.

This site contains information about third party products and services, such as credit card offers, online banking, discount brokers, and credit score services. While we endeavor to ensure that the information presented on this site is accurate at the time of publication, any offers and rates shown on Moolanomy can and do change without notice. Visit the official site of the offer for up-to-date information.

For additional information, please review our Terms and Conditions.

Archives By Year

2007, 2008, and 2009

Additional Resources

CheapLoans.co.uk - A simple way to find cheap loans. For a hassle free quotation, apply now!
Mortgage Refinance - FHA lender offers fixed rate mortgage refinance loans for consolidating adjustable rate debt and loans, getting cash back and financing a new home remodel.