Tuesday, July 9, 2013

Becoming a Millionaire: Giant Steps

Part 1: Set your goal
Part 4: Budgeting
Part 5: Budgeting, part 2

Sometimes baby steps bring baby results, just like setting small goals will only bring small accomplishments. Like getting rid of hulu plus or netflix. Yes, it will save you money, but it will only save you about $100 a year. Or investing in a penny-bidding get-rich-quick business. Maybe you'll be like those people who make $1000 a day, or maybe you'll make more like $20 a year, or even lose money on it.

Here are some of the BIG things we started or stopped doing to help us move toward our goal of becoming millionaires.

Buy a house

We had been married for just over two years when we decided we wanted to start looking for a place to buy. Both of us have parents who got in on the real estate game and have lived financially successful lives because of it, so we wanted to follow in their footsteps, save as much as we could, and buy as early as possible.

Honestly, we weren't even very good about saving (by we I mean I), but we managed to get enough for a down payment. The housing prices were extremely low when we got pre-approved, and there was more inventory on the market which kept the prices from hiking. We found a condo we liked, and with the help of a realtor, offered lower than the asking price, and escrow closed in 30 days.

Buy another house

We are now in the process of saving to buy again, and with our new budget system and the amount we're saving, we're hoping to be able to get something by the end of the year! There's honestly no secret to how we're saving. We work hard and we limit our spending.

Why buy multiple houses? We aren't planning on selling our current home; we plan to rent it out. This will not just help pay for part of the mortgage payment, but will cover all of it and leave us with a profit every month. In most areas, rental prices are higher than mortgage prices, which means that if you own a property and rent it out, someone is basically paying for your home for you and giving you a little extra on top of it.

Make huge budget cutbacks

I talked more about this in the Budgeting post, but basically we examined what was being spent monthly versus what was being earned, and it was about even (and some months, even negative), which was why we were having trouble saving. In November 2012, we decided we needed to be on a much tighter budget, and it has allowed us to save SO much more per month. Basically, we cut about $2000 out of our regular monthly spending, on average.

Make more money

Also in November, I got certified to apply eyelashes. I got pregnant about five seconds later, so gaining traction was difficult in the beginning. In May, I started making a bigger push for clients, and now I've paid off the investment of getting certified and paying for all my supplies. This is SO exciting for me, because it means that I've officially built a solid and growing client base and that I'm contributing to our household, which is always something that makes you feel good! Now, anything I make after this point is profit. My recommendation would be to develop a skill and turn it into something that can bring you money, even if it's only $100 a month.

I've even (in my nesting, crazy brain) considered going back to school so I could become a professor if Conrad was ever unable to work, or if we really needed the extra income. You may have to spend money to get started, but if you keep track of all your expenses, you'll see that you can pay it off relatively quickly, like with my eyelashes.

What are some life-hacks you use to get ahead?

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