January 25, 2012, 5:00 am

5 Years To Become Millionaire

by: The Financial Blogger    Category: Alternative Income,Assets and Net Worth
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When we first started our company back in 2008, we decided to name it M-35. To be honest, my friend wanted to name it M-30 at first…. But the  “M” stands for “millionaire” and the number stands for the age when we arrive. I thought that 3 years was a little too short ;-). So this is why we decided to use M-35 as our official name: because we think we can reach $1M in net worth by the age of 35.


As of my last net worth statement, I’m standing at $203,500 and for the record, I’m 30. Therefore, I have to multiply my net worth by 5 in order to achieve my objective. Out of all my personal and blogging goals, this is by far the most aggressive! But hey! Sometimes, you have to set the bar very high if you want to accomplish awesome things, right?


But setting high goals doesn’t mean anything if you don’t have a strong plan. On the other hand, growing your net worth by 800K in 5 years is a bit too much to swallow in one piece. So let’s take this elephant steak one bite at a time:


Employer stocks: + $43,000

I used to cash my employer’s stock once a year to pay off for different expenses. Starting this year, I’ll be keep them and hope to grow this part of my portfolio. Since I got a new job, I should be able to restrict my expenses. I invest $7,800 per year through my pay check in this stock and I only calculate a growth of 4% for the next 5 years. The growth is related to the DRIP plan where the dividend is around 4% at the moment.


RRSP: + $60,000

I intend to invest $10,000 in my RRSP every year for the next 5 years. Here again, my goal was to be conservative so I used a 4% investment return on my money. This should create another 60K. I will use my bonus to make my contributions.


Pension Plan: +37,000

This one is pretty hard to determine as I have no control over its value. I assume that the pension plan will grow by $6,000 per year with an investment return of 4%. This is how I got the + $37,000 number.


House: +75,000

I’m not counting on my house value to burst, but at 4% over the next 5 years, I would gain $75,000 on the value of my home. Since it is a fully equipped property in a nice area, I guess I should be able to expect to see it grow at this pace.


Debts: -$150,000


Here again, this is a fairly aggressive goal considering that I wasn’t able to pay down my debts efficiently over the past 3-4 years. On the other hand , controlling my finances is my goal for 2012. So if I want to make sense… I need to set my debt repayment plan in line with my goals. While my income will decrease in 2012 due to my job switch, this should only be temporary and I head back to 150K-175K starting in 2013. This is why I think I’ll be able to pay back about 30K per year in debts. It’s easier said than done, so we’ll see how it goes after a year ;-).


And… this makes only $365,000 to add to my net worth


Can you see how difficult it is to create a net worth of 1M$ in 5 years when you start from 203K??? Ouch! According to this plan, my net worth would be 568K at the age of 35. I can say that if I reach this level, I’ll be happy but I won’t be “proud”. However, I have one last Ace in my pocket: my online company! Still… I need the valuation of my shares to rise from $98,000 (as of today) to $432,000. Since I have a partner, I need to be able to claim that my company is worth 864K…. hmm.. is this possible?


Let’s take a closer look and we will see!


Our valuation model is quite simple for the moment: 3 times our annual income minus existing debts + cash. So if I need a value of $864K, I need annual income of $288,000 per year with no debts and no cash. If you divide this number by 12 to reach a monthly income target, we get the round number of… $24,000 per month! In 2011, we made a total of $114,158 or $9,513/month. So this represents a 152% increase over 5 years or an annualized growth of 20% over the same period.


I don’t know if it’s just me but if I break down the number as previously mentioned, it doesn’t seem that difficult. If I consider that my plan this year is to go from 9,5K/month to 15K, I’m already aiming at a 57% increase this year! The worst part is that I think it is quite feasible (not to make 180K this year but to get to 3 months in a row of 15K in 2012).


You can argue that my plan to become a millionaire by 35 is directly related to the valuation I give my online company. And I couldn’t argue with you. However, I will only smile thinking that while I have my day job paying me over 100K per year, I’m doubling my pay check through my online company.


So the race is now on… let’s see if I can make it!!

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Great plan, love the break down and I actually have no doubts that you will succeed, won’t be easy but shooting for the stars is the only way to get there:) Would love to hear how you will explode income from the web business so much?:)) Over 5 years I think it’s actually very possible.

by: The Financial Blogger | January 25th, 2012 (8:24 am)

Hey IS,

I’m going to start going from 10K to 15K/month this year and I’ll have a better idea if it’s possible or not. Worse comes to worse, I will still end-up with a solid net worth at the age of 35 ;-D

Having a plan is a requirement for success! So you’re on the right track there.

For the record, I am at 560K and I am 37. (House value went up again but it’s not included) Still have a little ways to go to reach 1M. It sure won’t happen faster just with a day job.

I would probably keep the house value lower to be conservative with regard to any market corrections that are speculated. In any case, you should be able to cover that with the dividends from your stocks or your online company 🙂

I am pulling for you buddy! I am excited to watch it all unfold – I have a LONG ways ahead of me for my goal (millionS).

Million dollar net worth by 35? I will accept that challenge. I am hoping for more than that as well actually. I would like to a million dollar net worth by 30.

That being said I am 19 right now, so I have about 10 years to do this. And I won’t be done with my schooling until maybe 26. So I feel I am being very ambitious. But like IntelligentSpeculator up there said, if you shoot for the stars even if you miss you will hit the moon.

I hope you reach your goals and will be keeping up on how you do to make sure.

[…] 4. 5 Years To Become Millionaire @ TFB. […]

[…] 4. 5 Years To Become Millionaire @ TFB. […]

You made almost $115k last year in online income?? Any tips on how to make anything even close to that? I think I hit $300. 🙁

Well, it seems to me that you will be at your destination faster than you think. All the best to you and your business. I am pulling for you!

by: The Financial Blogger | January 29th, 2012 (5:47 pm)

@Dividend Mantra,

you’ll have to dig up this blog to find out. I disclose pretty much how I do everything 😉

Start with the blog income report category!


those are goals… now I have to make them accomplishments!

[…] Financial Blogger presents 5 Years To Become Millionaire posted at The Financial Blogger, saying, “Time to become a […]

I believe that you can get there, Mike, especially with your rapid growth in online income. Good luck on the journey!

[…] is way too long to wait before enjoying life fully. I’ve mentioned a few times that I want to become a millionaire quickly in my life. My online company is the main factor that will determine if I will worth over $1M or […]