Whats My Action Plan to Financial Freedom?

A recent comment really got me thinking. The comment was straight to the point - what am I doing to reach my goals? On the surface I am doing what everyone else is doing - working, saving money, and investing. However, what is the plan that is going to make me financially free?

Let me recap what I think I have done so far that really defines my progress:
1) I lived like a college student for the first few years of my career
2) I save a high percentage of my income to build a financial base
3) I purchased my 1st house and eventually converted it into a rental property
4) I bought a 2nd house that I plan to convert to a rental property in the future
5) I have max out my 401(k) and Roth IRA contributions every year since I have been working.

So what else am I doing? Whats my master plan? How am I going to get to financial freedom?

Good questions to which I have been thinking alot about. Heres what I know so far:

I need to continue to expand my streams of income. I'll dig into this further in a future post, but so far I have some passive income and rental income.
I also need to become a better investor. The rate of return on my entire net worth last year wasn't pretty although my investments have done much better this year. The bottom line is I need to find ways to improve my consistency.
I need to continue to develop my career at my employer. Things have been going well so far and I am coming up on a key transition that could help me springboard to the next level which could mean more income and other benefits.
Most importantly I need to get my fiancee and myself on the same financial page. This is a big project and if we aren't aligned to the same goals all this work could be for nothing. More to come regarding this.

Tags: goal setting, net worth,

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Comments (9)

How do you plan to get your fiancee on the same page as you?

Posted by garrett | October 9, 2006 2:40 PM

Mind if I use the fiancee thing for a post?

Bill

Posted by Bill | October 9, 2006 3:24 PM

Go for it!

Posted by 2 million | October 9, 2006 6:43 PM

I commend you for thinking about your goals this way. By doing so, you are far ahead of everybody else and before long, you'll realize you've got your 2 million.

Posted by Curly Tree | October 9, 2006 8:24 PM

I think you hit the nail on the head. What is the BIG picture? Many people miss the forest for the trees. But more ot think about. What happens when/if you reach $2 million? What's the next stage?

I'll be curious as to how you work it out with your fiancee, given your past writings on her focus on the big diamond and wedding.

Posted by Jojo | October 10, 2006 12:14 AM

Reading your post inspired me to increase my 401K contribution to 20% for the rest of the year. I will probably stash away 7.5K this year in my 401K.
I was only contributing about 9% early on in the year

Posted by Midas | October 10, 2006 9:29 AM

$2M,
You're certainly on the right track.
I think aligning your goals with your fiancee is certainly critical to future happens and success in pursuing these goals.

I read somewhere a few interesting things:

1. re: Fiancee - Most couples fight about money
2. re: your job - the greatest increase in your net worth at your current age will not be derived from investment income, but from increases in your employment earnings. The most critical effort is to live inexpensively and save as much as possible, while you strive to increase your annual compensation. The result will be a fast growing investment base.

I think #2 came from Bert Whitehead's book.

Regards,
makingourway

Posted by makingourway | October 10, 2006 9:45 AM

Hi 2mil,

Sounds like a very similar action plan to my own. I'll be interested to watch your progress.

I'm just wondering, how well is your current rental property doing? What is the market like in your area (e.g. who do you rent to, what do you charge, etc.)?

Thanks,

Posted by NLG | October 10, 2006 9:46 AM

You have a great goal of 2M. Personally I think your net worth growth rate is a bit slow. How about more stock exposure?

-Bob

Posted by Bob Dole | October 22, 2006 11:48 AM