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My Monthly Goal Reward Led to a Serious Talk

Since I hit my monthly goal of at least $10,000 for October, my husband and I went out for a scrumptious meal at Perry’s Steakhouse a couple of days ago.  While we were devouring $45 per person steaks (I literally cringed when we opened up the menus), we started talking about our future plans.

My Income Increased

For anyone just tuning in, I was making $35,000 a year at my old day job as a glorified customer service rep, which I had started at $26,500 in 2005 and left in July 2011.  After taxes and benefits, that came to just about $2100 a month.  Even with my blogging income in 2011, I was making just around $3000-$3500 a month until May 2011.  Then my blog advertising business really started to take off.  My income has even started to land in the 5 digits for the last couple of months – $11,900 in September and am already at $15,000 for October.  Even after fees, expenses, and taxes, my income has quadrupled in a matter of months.  So my husband and I have started re-looking at our future.

Our New Goals

We decided this week to throw a lot of the excess cash towards our mortgage (about 35% of any extra we have at the end of the month).  Our current goal is to have it paid off by the end of 2013, so 6 years from when we bought our house in 2007.  We also have decided to invest 25% of the monthly excess into individual stocks and mutual funds, so we will hopefully build up a portfolio that can cover our expenses from when we plan to retire around age 52 and when we can touch our retirement accounts (2 Roth IRA’s and my old 401k) at around age 60.  The other 40% of the monthly extra is split with 20% going to our vacation and travel account and 10% going to each of our fun money accounts.

Possibilities

But we haven’t ever really talked about re-evaluating our retirement age or looking to see if my husband really needs to work until age 52 as a school librarian (24 more years).  Honestly, if I can consistently bring in $10,000 a month or more year round, my husband could work from home too as a virtual assistant.  We could cut both of our work days down to 5 hours a week day or I could double my current client base.  Most likely, it would probably end up being something in between…

As for our retirement age, we both think that we could look at seriously cutting back when our cash on hand and Scottrade investments equal $3,000,000 or more.  That was our original retirement goal and it would still work for us.  We have more money to spend now, but we are still living on basically the same amount we always have and just save the rest.  If I wanted to be completely honest, we used to live on about $38,000 a year and now live on about $45,000 a year, but that isn’t too bad since we used to make about $80,000 a year combined and now make about $140,000 or more a year jointly.

Overall, our dinner and talk helped us wrap our heads around our new increased income.  No matter what, we are going to continue to try living on the same monthly budget and have made the conscious decision to try to stick under $60,000 annually for living expenses and basic savings goals.  That will leave us at least 50% of the rest of our income to throw towards our future.

Have you had any major lifestyle changes that you may need to really dig into?  How often do you re-evaluate your overall goals in life?

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34 comments to My Monthly Goal Reward Led to a Serious Talk

  • Congratulations on your success! You are a hard worker and are now reaping the benefits.

  • Wow! You guys are in a truly amazing position and you are being so smart about it. It’s nice to hear that you aren’t doing a huge lifestyle inflation. Your early retirement is going to rock.

  • It’s awesome that you’ve been able to increase your income by such a large amount, especially in difficult times.

    But it’s even awesomer(?) that you have the good sense to keep from seriously upping your lifestyle with your new found income. Most people that start making that much more money will have a tendency to go a little wild with it.

    Just beware of “lifestyle creep” (Increasing your lifestyle over time little by little because you’re not paying attention) which can happen easily.

    I teach people in my Celebrating Financial Freedom course that if you increase your income, you have to be very wary of using that extra just to get more stuff or more debt. Use it to finance your future.

    You should teach people how you increased your income so much and how you made that transition. I know I’d be interested to learn how you did it.

    Keep up the great writing! And remember…

    “When you help me with money, you help the world prosper.”- J.M. DuMont

  • David Hunter

    I’m still waiting for your theme song to pop up when I come to your site! :-D

  • Respect! A surprise on the upside of income is never a bad thing, even though it does carry some of the stress of redoing your plan. Next stop, $200,000 a year?

  • I love your success story. Plans continuously change based on your family situation. We were on the fast track to retirement, but then we moved my mom to town and had 2 kids. Those were both decisions we don’t regret, but have delayed some of our early retirement goals. I think it’s great that you’re proactively planning with your ups and downs.

    Yum..I want a steak dinner now too.

  • My goals are re-evaluated on an almost daily basis. Things change so quickly! My life is a mega lifestyle change, constantly, between internships, trying to get my foot in the door with my field of work, school, etc. My income fluctuates drastically from internship to internship, so I never really adjust to one particular lifestyle.

  • Your story overall is very inspiring. I hope people realize how much work you put into it. It doesn’t come easy! We don’t evaluate our goals very often. In fact I don’t think we talked about our goals for a long time. Maybe it is time now! :)

  • Sounds like you are definitely giving in to lifestyle creep, but hey, you earned it! I know that your expenses are still just a fraction of you income so I say go for it!

    On the other side, do you worry about putting all your eggs in one basket? If both of you worked at home in the same business, do you think you’d get nervous about this wild ride ending? That’s been my biggest concern, I’m doing really well now but it’s far from guaranteed that this business will stay as lucrative as it is right now. For me, I like a backup option (even if that means starting more side businesses), but I’d love to hear your thoughts!

  • Congrats on killing it crystal! A little lifestyle creep never hurt a soul!
    I’d have to second daniels concern – While I love the potential to earn money online, there’s no real historical precedent. Will it be the same in 3 years? No one can say, unfortunately.
    Also, I was wondering if you were considering rental properties as an investment? With houstons low prices and your sky-high earnings, you could probably buy a house outright in 4 months to invest in

  • Wow – congratulations on your goal, and your blog income. That is super impressive, and I’m sure, the result of a great deal of hard work.

  • YFS

    Great post. My wife and I are experienced the same life changing opportunities via increase income and maintaining spending. What we decided to do with the extra money at the end of the month was develop and aggressive real estate income property portfolio. Then after 5 years take our salary+income property money and pay off our home and look to retire extremely early.

  • Congrats Crystal! You both worked hard for it! After the situation with your husband’s job I can see that you want to be conservative with your money. While our kids were in college we lived on $30,000 a year with the rest going to college expenses. Now that we’re retired and no more college expenses, we stay close to living on $30,000. It means we don’t have to touch our 401K for a while and we still have extra money to do what we like.

  • Congrats on the fantastic results thus far. I am with Daniel I am afraid of getting the rug pulled out from underneath me. I think that is why I invest a lot of my proceeds into income producing assets – in an attempt to build a stream of income with this stream of income…

  • Fig

    I agree with everyone else. Your story is inspiring and it’s exciting to see you be wise with the new income!

  • Congrats to you!! Our income tripled about 2 and half years ago and we did the same thing you guys are doing. We socked all the extra away in hopes of paying off our mortgage with a lump sum. The upswing in income didn’t last however. Which we were worried about and why we saved the income instead of sending money to the mortgage as we got it, I wanted to make sure we were doing the right thing and the total amount we were going to end up with was a factor. We ended up paying off all our non-mortgage debt and making an investment instead.

    I wasn’t one bit sorry we didn’t live off that extra money. I KNOW we did our best with it.

  • What a great success story! Congrats to you and your hubby!

  • My wife recently got a promotion and we decided to live on the same budget that we were… it was nothing like your huge increase, but the same idea nonetheless. I love you success!

  • I tink you are making prudent decisions with your increased cashflow. Congratulations on your well deserved success.

  • Congrats on your success Crystal! It’s been amazing to follow your progress over the past few years!

  • Congratulations on your success, which definitely comes from hard work and providing a service that people need.

    However, I am unsure why you need $3 million. If you simply build a portfolio of dividend growth stocks yielding 4% today, you will need $1 million. The portfolio will throw off $40,000 in dividend income every year. Chances are this portfolio will increase dividends faster than inflation, and would be able to double your gross dividend income every 10- 12 years.

    And if you start socking away $3600/month for 10 years in dividend growth stocks yielding 4% and growing dividends by 6% annually, while reinvesting dividends, you will be able to generate $3000/month in dividends by 2021.

  • Keeping the same lifestyle definitely helps leave more room for additional savings or paying down debt (your mortgage) a lot sooner! That’s a great feeling. Congrats!

  • That’s awesome! I can never get around to putting enough time in on the side to totally blow out my online income, but it sure is nice having at least the 4 figures each month. You’ve done a stellar job in making the leap in no time flat – congrats!

  • Congratulations. It sure sounds like you have worked hard and deserve whatever you earn.

  • Congratulations! You are now reaping the fruits of your hard work. You deserve all these!

  • Congratulations! I am glad to see that you are now way off your day job salary. Isn’t working for yourself a lot better and more rewarding?

  • I know that my crazy schedule has made my commenting completely suck. For what it is worth, I read and smile at every single comment as their notifications pop up on my phone. That said, I will attempt to get back into the game. Plus, anytime any of you’d like to hear from me personally, please just email me and I answer them all!

    @PKamp3, lol, $200k a year would be sweet!

    @Daniel, yes and no. If we both worked at home, it would be frightening if they money ever dried up, but we are saving so much that we’d have a good 2 year cushion to find new jobs if need be. :-)

    @Jeff, our current home will probably be our rental property in the future, but we weren’t planning on getting any others since landlording seems super stressful (but we are keeping it in mind). :-)

    @Maggie, on behalf of your kids, thank you. :-)

    @Evan, good idea, Jesse and I are trying to develop passive income streams from other sites.

    @Ashley, you two did awesome!

    @DGI, we always budget on the safe side. We figure that $3 million will be more than enough no matter what inflation does to us…

    @The College Investor, YES! ;-)

  • Congrats! Increased earnings definitely can open doors and alter futures. :-) Great job.

  • ODWO

    Over all goals: For us … once a year (more or less). And we leave plenty of room for any changes.

    Besides the “Death and Taxes” train of thought, the only real constant in life is “Change.” (IMO) Change is Gooooood.

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