$100,000 Cash By Age 30 (Not Counting 401k or Pension)
For those who following my blog, you know that I roughly have $13,000 in my brokerage account (minus taxes I’ll have to pay at year’s end). An amount that I hope is quick to growth.
What’s my plan for growth over the next 4 years to break $100,000?
Save, Sell, and Invest.
I would like to save $7,500 to $10,000 a year. This is a very obtainable goal. $21 a day automatically deducted from my bank account would be $7,665 in a year. This is to start in 2013.
I’m not talking about eBaying my misc possessions (although I will do this), I’m talking about selling my house. I hope to sell my home in 2013 (depending on how personal things and how the market treats me). I’m hoping to get $155,000 to $160,000 for my home. I owe $117,000 and after the dreaded 6% selling fee, I should net roughly $30,000.
This is going to be one of the largest actions in the short-term. Combine my existing $13k (minus taxes) + $30k for home + $7k saved = $50,000 by end of 2013 (hopefully).
Hoping for a 25% Yearly ROI which nets 18.75% after taxes (ignoring that later could be slightly higher taxes). Currently my performance is in excess of 50% (double my goal).
(Below the average balances assume I save $7,500 and that the balance is received half at year’s start and half at the year’s end (to reconcile the yearly ROI), this table is also assuming 25% growth rate that is taxed at 25% for effective 18.75% net growth)
**Sale of home, mentioned above +$30000.
There you have it, my master plan to get $100,000+ by age 30.
Some people who read this might think that I’m insanely greedy, but you have to understand that I view it very important to get this foundation for future growth. A 25% growth for 10 years results in 9.31x your money. Starting with $20k or $100k results in $186k vs $931k (pre-tax). Both amounts large, but one much more life changing.
As I previously said, I’m in excess of 50% this year ROI. So I decided to plug 50% return into the equation as well to see what I got, and just for the record, don’t plan on getting 50% return for the next 4 years.
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