It’s been a long time coming, but we finally did it, we hit the million dollar net worth milestone.
Our million dollar journey started in 2006 with a family net worth of about $200,000. While that is a significant amount of money for a 27 year old, the balance sheet, or net worth statement, was full of consumer and student debt. My wife and I graduated in 2003 with about $45,000 in student debt. Of course, we needed a new car to celebrate our new degrees, so we racked up an additional $25,000 in car financing. To top it off, we threw a new mortgage onto our first house (a two apartment house) all in the same year. Although we both graduated with professional degrees, our starting salaries were relatively low, so our cash flow was very tight after debt servicing.
Despite this, I had ambitions of becoming financially free while I was still young – that is, to have enough passive income to cover our living expenses. To achieve financial freedom, aggressive goals had to be established. So, in 2006, I started this blog to keep me accountable and set a lofty goal of becoming a millionaire by the end of 2014 at the age 35.
There are many paths to financial abundance. Inheritance and winning the lottery are a couple, but reserved for the lucky. What about regular working guys and girls like you and me? In my mind, whether you are an employee on salary and/or a business owner, the only sure fire way to build wealth is, wait for it… to spend less than you earn. We’ve all heard that cliche a thousand times before, but it is tried and true. Living within your means helps generate positive cash flow which is a key ingredient to aggressively paying off debt and buying long term appreciating assets. With long term appreciating assets comes the power of compounding which can significantly accelerate wealth if used properly.
What really helped us accelerate our wealth is living a sensible lifestyle within our means and, at the same time, being open to ways to increase our means. As an example, when we graduated, we created a budget, found tenants for the basement apartment, I took a second job and my wife worked overtime when available to help build our cash flow. At that stage in the game, our focus was on debt repayment. We attacked the car and student loans which were repaid within 5 years. During this time, we purchased another rental property which further generated cash flow. In 2005, I stumbled upon financial blogs, and decided to start my own in 2006. While it initially started off as a hobby and online journal to share financial ideas, Million Dollar Journey started to attract readers and soon became a healthy side business.
To help grow the personal finance community further, in 2009, I partnered with Canadian Capitalist to start Canadian Money Forum which also grew into a robust community. With the success in the blog and forum, the online business expanded further with online consulting and web site strategy. All of this while maintaining a 9-5 job and attempting to spend quality time with the wife and kids.
With the career and side business going strong, we maintained our lifestyle which helped continue pushing our net worth in an upward trajectory. Finances were good, but the hours that I was putting into the business was not sustainable. I started to burn out, and being a Dad of two young children, my work/life balance was suffering. To help resolve this, I scaled back my online consulting business, and in May 2014,we made the tough decision to sell Canadian Money Forum. While I can’t get into the details of the sale, the proceeds from my share of the sale was enough to help meet the million dollar milestone a few months before the deadline. While I can happily say that we reached our net worth goal, there is still a lot of work to do before we can call ourselves financially free.
Readers have suggested to chart my net worth progress over time. Below are the net worth values since Dec 2006 with data points taken semi annually. If you cannot see the chart, please click here.
- December 2006: $198,500
- June 2007: $254,695
- December 2007: $279,300
- June 2008: $310,483
- December 2008: $309,950 (rough second half)
- June 2009: $355,850
- December 2009: $399,600
- June 2010: $456,910
- December 2010: $505,800
- June 2011: $558,713
- December 2011: $585,228
- June 2012: $631,400
- December 2012: $690,400
- June 2013: $766,300
- December 2013: $827,300
- June 2014: $1,000,000
If you are on a similar journey, or would like to start, my advice would be to set a big goal for yourself, then break up that goal into baby steps and you’ll be surprised at what you can achieve. Just make sure to keep that goal in front of you – whether it’s on your computer/smartphone wallpaper, or sticky notes on your mirror, constant reminders are key.
Right now, it feels like a big transition point in my life. Selling the forum and completing our million dollar journey has me asking myself – what’s next? A better question is, what direction should I take this site? As I’ve mentioned, reaching the million dollar mark was a financial milestone within the longer journey of financial freedom. My focus going forward will be building a portfolio of income producing assets to hopefully one day achieve financial freedom. Perhaps, rather than continuing net worth updates, I can share with you passive income updates and my journey towards financial freedom.
Since you are the ones who have kept me going over the years, what would you like to see on MDJ going forward?