The Financial Oracle

Young and inspired striving for financial freedom and all the perks that come with it, all while still having fun before I die and leave all of my hard earned money to my unborn children.

Thursday, January 04, 2007

Goal Outlook For the New Year

To give myself a good chance to reach my financial goals for 2007, I thought I'd look into how I am actually going to try to accomplish them:

In order to reach a net worth of $100,000, I must depend a lot on the market return of my 401k. I'm sure most people with net worth goals depend on the market, so that wasn't supposed to come across as a naive comment! I'm contributing the David Bach recommended 10% of my gross income to my 401k already, and I hope to increase that to 11% by mid 2007, once some of our debts are paid off. That brings me to my next avenue of increasing net worth:

Pay our credit cards down by 50%. This will increase our net worth by a nice chunk, with the biggest chunk of debt to be knocked off in the final 2 months of the year, after our cars are paid off (which also increases our net worth because we won't any money on them anymore!). They're scheduled to be paid off in October, but there's a chance we might be able to pay them off a month or two ahead of time.

Contributing to my 401k and reducing our debts are the two biggest factors (the we are in control of) in increasing our net worth. Smaller factors include contributing to our emergency saving account and paying down the mortgage (with bi-weekly mortgage plan).

Setting up an additional account to use for "fun" stuff will be easy...I just have to do it! It's not the biggest priority right now because 1. we just bought a house and we've been buying a lot of stuff for furnishing and decorating, which falls into the "fun" basket (although I could think of things to do that way more fun than that), and 2. funding the emergency account and paying down debts are much more important.

All in all, I'm excited to start 2007 off with a bang, and I'm really looking forward to trying my best to reach my goals for the year!

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