Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Have Big Dreams? Here's How to Pay for Them

Personal_Finance / Financial Education Jan 08, 2021 - 01:46 PM GMT

By: Jared_Dillian

Personal_Finance

I'm a big fan of setting financial goals, working toward those goals, and realizing those goals.

My dream is to build an amazing house. I'm buying a big piece of land for it right now.


What Are Your Financial Dreams?

A good friend of mine always wanted a Porsche. He finally got one. It's 20 years old and he paid $20,000 for it, but he did it.

The kind of car—or home, vacation, jewelry, or fancy meal—you can afford is based on how much money you make… and save.

  • You can pay 15% of your income for your dream item. If you want to have a $300,000 Lamborghini, you need to make $2 million.
  • You should also have 10X its value in savings. If you want to buy a $500,000 home, you should have $5 million in savings.

Same principle applies if you want to buy a $60,000 truck. You should have $600,000 in savings.

Your dreams may more modest. If you want to go out for a $300 dinner, first you have to save up $3,000.

Now, how fast do you want it?

Give Each Dream a Timeline

If you want the car in three years, and you already have $1 million, you need to come up with another $1 million in three years.

Or maybe you want to take a $10,000 vacation. If your income is $75,000, you can probably get to your goal in three years if you save. If you have $50,000 saved, you need to get to $100,000 before you take this trip.

So, get to work.

Delayed Gratification

Maybe you want to go to grad school. Have you ever thought about saving the money first and then applying?

Ninety-nine percent of people do it in the wrong order. They want to go to grad school now, so they borrow a lot of money.

What if you work for five years and save so that paying for school won't be a stretch?

Stupid but Awesome

There's a watch I want to buy, and it's expensive. I can buy it right now, but I set financial goals.

Whenever you want to buy something extravagant, totally stupid but awesome, you want to save 10X the cost of the item. When I save 10X the price of the watch, I will buy it.

The reason you do that is because, when you do buy it, it will be completely painless. It will not be a stretch.

People stretch to buy things. Just like with a house.

I don't plan to start building my house for two to three years, and I'm saving up for that.

If you do have to take out loans to buy a house, make it your goal to pre-pay your mortgage. And for an idea to make home ownership a little cheaper, listen here.

Whatever your financial dream is, set your goal, work toward it, and realize it. You might enjoy even more if you don't have to stretch to pay for it.

Jared Dillian writes the free investment newsletter The 10th Man for Mauldin Economics. Subscribe here.

By Jared Dillian

© 2021 Copyright Jared Dillian - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in