Friday, 30 November 2012

Why $1 million?

I have to admit I get a twinge of jealously when I read articles in the press about millionaires.  They seem like a special class unto themselves.  But what have they done?  In most cases they’ve just carefully saved their earnings until they hit the magic number.

To get out of my financial malaise, I needed a goal, a SMART goal, a big hairy goal.  So I decided to join the class of the millionaires within 10 years.  I don’t have a flash financial plan yet; that’s on my agenda for early January.  So in the meantime, I did some back-of-the-envelope calculations to test out the reasonableness of this hypothesis.  I added up my current balances across my cash, shares, and superannuation accounts to get a baseline.  Then I projected the value of each of these over time assuming some growth in each asset class (5-6%), some growth in my salary (2%), and regular contributions to savings out of my salary.  I tried to be a bit conservative, given the performance of all of these asset classes over the last three years.  I excluded the value of my home because that seems to be excluded from the official definition of a millionaire (I guess with the value of property in Sydney, they need to; otherwise everyone would be a millionaire). 



Welcome to the Millionaire on Heels blog.

This blog is intended to fill a niche in between the "scrimping and saving" frugal-type blogs and the testosterone-fuelled "quadruple your earnings in a day"-type share tipping forums.  It's for the professionals out there who earn a good income, but need to present well without spending all their earnings on snazzy suits and Italian shoes.  It's for those singletons who work long hours and have difficulty finding the time and energy to meal plan for one when takeaway (or toast) will suffice.  It will have a female focus, seeing as how I am female, but of course everyone is welcome. 

More specifically, the purpose of this blog is fivefold:
  • To test the hypothesis that it is possible to become a millionaire in less than 10 years
  • To do so without undue risk taking or illegal or immoral activities
  • To do so while maintaining a lifestyle in line with my core values
  • To share the saving and investing advice I learn throughout my journey
  • To entertain along the way with some examples of my own trials and tribulations
Each month or so I'll work my way through a saving or investing-related topic of interest, interspersed with real-life commentary on my progress.