My Millionaire List

For fun, I decided to join J. Money’s Million Dollar Club.  In order for me, Anonymous Lawyer, to become a millionaire, I pledge to do the following:

• Contribute $16,500 to my 401(k) every year
• Contribute $5,000 to my IRA every year (and convert to Roth IRA, if allowed)
• Save $65,000 in cash every year and invest my age-10% in low-cost bond ETFs and the rest in low-cost stock ETFs/dividend-paying stocks
• Move to a less expensive rental with a roommate (saves $20,000 a year, which is included in $65,000 above)
• Try to give more thoughtful gifts, rather than expensive ones (a big weakness of mine)
• Cook at home more often and save the lavish restaurant visits for special occasions, e.g., once a year

If I follow my pledges, I can add $87,000 to my net worth every year.   Using CNN-Money’s millionaire calculator, I will reach $1 M in six years @ 6%.  I assumed all of my taxable gains were taxed at the 15% capital gains rate.

Well that’s fine, but a lot of that “net worth” is trapped in tax-deferred accounts.  When I re-run the calculator for just my taxable accounts, it says I can reach $1 M in 8 years and 10 months.  Well that’s too long at my job, so I’ll settle for a mid-to-high six figure net worth for now.