# Frugal Trader's journey to financial freedom



## CanadianCapitalist (Mar 31, 2009)

We all know the secrets to health and wealth. The problem is having the discipline to put what we know into practice. Maybe it will help when we hear stories of others who have made it or well on their way. Frugal Trader shared with his how he got started on his family's journey to financial freedom:

*How did we Get Here?*

*Net Worth Updates*


----------



## ethos1 (Apr 4, 2009)

CanadianCapitalist said:


> We all know the secrets to health and wealth.


I wish that I did

FT, I've follwed the milliondollarjorney thread and was wondering if you've actually made it yet to the million net worth. I shouldn't really say net worth but more the $1-million dollars in cash that you could call at anytime?

Has the journey been easier or more difficult than you had first imagined given the state of the markets, and has the journey slowed down any for you?

At what point do you think that you would have the million bucks, no debt (includes family home and cars + any toys all paid for)?


----------



## FrugalTrader (Oct 13, 2008)

ethos1 said:


> I wish that I did
> 
> FT, I've follwed the milliondollarjorney thread and was wondering if you've actually made it yet to the million net worth. I shouldn't really say net worth but more the $1-million dollars in cash that you could call at anytime?
> 
> ...


Hey Ethos,

One of my financial goals is to reach a million dollars in net worth by the age of 35 - I'm currently still in my late 20's. 

The state of the market has certainly stalled net worth growth a bit, but with that, I expect larger gains in the future.

In terms of debt, we should have our regular mortgage paid off in 3-5 years or so, but we'll have a large investment loan remaining.


----------



## The Financial Blogger (Apr 4, 2009)

FrugalTrader said:


> One of my financial goals is to reach a million dollars in net worth by the age of 35 - I'm currently still in my late 20's.


Nice stuff! My latest plan will bring me to a 1M$ at the age of 45.... I still have to work on it to make it happens in 7 years (already turning 28 this year... aaahhhh).

It will be hard to get it with only one income (we plan that my wife will stop working within the next year)...


----------



## moneygardener (Apr 3, 2009)

*$1,000,000 by 35*



FrugalTrader said:


> Hey Ethos,
> 
> One of my financial goals is to reach a million dollars in net worth by the age of 35 - I'm currently still in my late 20's.


FT, What compounded annual rate of net worth growth do you require in order to get there?


----------



## Rickson9 (Apr 9, 2009)

CanadianCapitalist said:


> We all know the secrets to health and wealth. The problem is having the discipline to put what we know into practice. Maybe it will help when we hear stories of others who have made it or well on their way. Frugal Trader shared with his how he got started on his family's journey to financial freedom:
> 
> *How did we Get Here?*
> 
> *Net Worth Updates*


That's a great website and information! Thanks for sharing!


----------



## Rickson9 (Apr 9, 2009)

FrugalTrader said:


> Hey Ethos,
> 
> One of my financial goals is to reach a million dollars in net worth by the age of 35 - I'm currently still in my late 20's.
> 
> ...


This is a great goal and definately one that is attainable! My wife and I started out in our mid-20s with nothing.

This is a great time to start on your goal, with stocks in ruin, there are a lot of bargains out there! (did I mention that there are a lot of bargains?)


----------



## FrugalTrader (Oct 13, 2008)

moneygardener said:


> FT, What compounded annual rate of net worth growth do you require in order to get there?


Hey MG,

I just did a CAGR calculation, and it looks like i'll need a compounded annual net worth increase of 23.16% to reach $1 million by the age of 35 (5.5 years).


----------



## Sampson (Apr 3, 2009)

Although the % sounds very high, in reality - I think as your posts on your net worth show, most of the increase is coming from your new savings - so still a very achievable goal.

Good luck!


----------



## Mockingbird (Apr 29, 2009)

CanadianCapitalist said:


> We all know the secrets to health and wealth. The problem is having the discipline to put what we know into practice. Maybe it will help when we hear stories of others who have made it or well on their way. Frugal Trader shared with his how he got started on his family's journey to financial freedom:


Very impressive journey, FT.
Always looking forward to reading your blog.


----------



## MoneyEnergy (Apr 5, 2009)

I was just talking about this the other day on Twitter - I read the retirement book "The Number" at some point last year I think and did the calculations - figured out that to have the lifestyle I want (which wasn't extravagant - one vacation a year!), I'd need $26 mill to retire! I'm still in my very early 30's, so I have a good 40 years before I'd be in that place.

My thinking now though isn't networth but cashflow. I could have only $100,000 networth in the form of 3 months' worth of expenses, but if I'm able to bring in more cashflow than I need per month, that's practically already retirement if it frees me from having to do one job only (instead of whatever I want).


----------



## Rickson9 (Apr 9, 2009)

MoneyEnergy said:


> My thinking now though isn't networth but cashflow. I could have only $100,000 networth in the form of 3 months' worth of expenses, but if I'm able to bring in more cashflow than I need per month, that's practically already retirement if it frees me from having to do one job only (instead of whatever I want).


I don't see how you could have solid cash flow without a significant net worth - at least the people I know haven't been able to achieve that way.


----------



## steve41 (Apr 18, 2009)

> to have the lifestyle I want (which wasn't extravagant - one vacation a year!), I'd need $26 mill


$26M. Isn't that the cost of a ride in that one-man commercial tourist space shuttle?

$26M should about cover it. I don't know if they would take you every year though.


----------



## Dividend Growth Investor (Apr 3, 2009)

FrugalTrader said:


> Hey MG,
> 
> I just did a CAGR calculation, and it looks like i'll need a compounded annual net worth increase of 23.16% to reach $1 million by the age of 35 (5.5 years).


That's a very high goal if you ask me. Of course if the stock market goes up to its 2007 levels by the end of 2015 you still might come up short. In 2008 your networth rose by 11% after rising by 25% in 2007.

Even if you save most of your salary I think it would be tough to hit the million dollar mark in 5.5 years.

I guess I would have to keep reading MDJ to track your progress


----------



## FrugalTrader (Oct 13, 2008)

Dividend Growth Investor said:


> That's a very high goal if you ask me. Of course if the stock market goes up to its 2007 levels by the end of 2015 you still might come up short. In 2008 your networth rose by 11% after rising by 25% in 2007.
> 
> Even if you save most of your salary I think it would be tough to hit the million dollar mark in 5.5 years.
> 
> I guess I would have to keep reading MDJ to track your progress


No one said it would be easy! 

Yes, I agree, it will be challenging but I've found that good things happen when you set high goals and take action.


----------



## The_Number (Apr 3, 2009)

MoneyEnergy said:


> I was just talking about this the other day on Twitter - I read the retirement book "The Number" at some point last year I think and did the calculations - figured out that to have the lifestyle I want (which wasn't extravagant - one vacation a year!), I'd need $26 mill to retire! I'm still in my very early 30's, so I have a good 40 years before I'd be in that place.


I don't know why you need that much (Of course, the point in "The Number" is that everyone's number is different ) I also did a calculation, and I apparently only *need* about $1.5 mil. (about $.5 mil. in today's figure), and I can certainly make multiple trips a year without ever running out of money (My retirement is also 40 years away). Unlike FT, I can't make it to $1 mil. by 35 (I think we are exactly the same age... possibly only a couple of months apart), but I was quite relieved to find that $1.5 mil in 40 years looks like a piece of cake (My goal is much more ambitious now though.)


----------



## steve41 (Apr 18, 2009)

> I was just talking about this the other day on Twitter - I read the retirement book "The Number" at some point last year I think and did the calculations - figured out that to have the lifestyle I want (which wasn't extravagant - one vacation a year!), I'd need $26 mill to retire! I'm still in my very early 30's, so I have a good 40 years before I'd be in that place.


Uhh.... you might consider either getting your money back on the book, or perhaps suing the school board where you recvd your education (math).

$26 M??? $2.6 million maybe. (those pesky decimal points have a habit of jumping around when they shouldn't)


----------



## krackerjack121 (Apr 4, 2009)

steve41 said:


> (those pesky decimal points have a habit of jumping around when they shouldn't)


I would love to get paid with a misplaced decimal so long as it was in my favour of course.


----------



## Cal (Jun 17, 2009)

Personally I am a little less concerned about my actual net worth...as that can fluctuate...but more so about what kind of cash flow I can produce. 

Such as a rental property valued at 400K but rented for $1500 a month, vs a rental property valued at 300K rented out for $1500 a month.

Or in the case of the stock market, a dividend paying stock, vs non dividend paying....especially if our market may go sideways for a period of time.

And yes I do keep track of it monthly, which I think is a great idea. It keeps everything current for you, and you get to give yourself small goals to achieve.

However anyone who does achieve 1M in net worth at 35 will have significant cash flow, and more importantly time.


----------



## moneygardener (Apr 3, 2009)

As far as market investments go, the sustainability of the income would depend on the capital available to invest. For example you can easily generate an income of 8% or so through dividend paying stocks, income trusts etc., I just don't know how sustainable it would be. Whereas an income of 4.5% can be generated in a more sustainable way with room for more capital appreciation.


----------

