In December, I reached out to some Facebook friends…
and gave them the “hey I’m starting a blog on money! You should read my crap.” sorta thing.
My college friend Jess responded back saying she’d check it out, and we also emailed a bit about her life in Chicago. (she founded http://www.tipsycooks.com)
Here’s how our conversation went:
Jess: “I’m about to share on FB that my husband and I have been saving to take a backpacking trip around the world. We’re leaving January 8 for Colombia.”
Me: Nice! Jealous! That’s super cool.
Jess: “and we’ve saved $75,000 in the last year and a half.”
Me: **jaw drops**
Jess is not uber rich.
In fact, Jess and Nate had $15,000 in credit card debt, two student loans, $10,000 cash between them…
And 18 months later they’ve successfully saved over $75,000 and just left on the adventure of a lifetime.
How did they do this? Dumb luck?
- They STARTED with the END in mind. (travel the world for a year)
- They sat down and assessed their current situation.
- They found a specific number that they would need to achieve.
- They reverse engineered a plan.
- They motivated themselves and worked their asses off.
(Also, It’s a LOT easier to give up small luxury purchases when you can PICTURE how that money is going to look buying a wine in an Italian cafe, etc.)
Today, I’m going to show you….step by step…how to follow Jess and Nate’s example in your own life.
Reverse engineering is an incredibly powerful tool for accomplishing things you never thought you could.
And it doesn’t take HOURS, a high IQ, or require a CPA or CFP.
What is “IT” that you want out of money? Whether you are…..
- planning retirement at age 65,
- planning retirement at age 35,
- planning to buy a house in 5 years,
- planning on being a multi-millionaire by age 40,
- or planning a vacation next July,
Brainstorming and reverse engineering is the single best way to create a roadmap to accomplish these goals. $10k or $10MM.
And I’m going to walk you through this step-by-step.
How to build a wealth roadmap.
1 – Sit down. By yourself (or with spouse). With a pencil and paper.
—OR…here is a free template to use: WEALTH ROADMAP TEMPLATE.
—This is an important step. If you don’t dedicate the time, energy, and brainpower to planning…how do you ever expect to maintain and accomplish your goals?
- You’re not as smart and capable as you like to think that you are.
- You do not have the memory of an elephant.
- Sit your butt down, turn off your phone, and THINK THINGS THROUGH for once. Stop being busy.
2 – Think through, in great detail, EXACTLY what you want.
—What do you want? A specific amount of money by XX date? WHY?
—What are you REALLY aiming for with this amount of money?
—Why do you want to retire early at 35?
—Want “more money?” Really? Why?
—Answer these questions.
Here’s an example:
3 – Summarize everything you wrote down into ONE SENTENCE
—Boil these “wants” and “whys” into a single sentence that can help remind you, motivate you, and even keep you accountable.
—Sum up WHY you want the things you want.
—Note the basic format: “I want [insert what you want] BECAUSE [insert why you want these things].”
4 – Using this, set an uber-specific goal:
—EXACT amounts. EXACT dates. Do not set dreams, or vague wishes.
—Set an exact, reasonable goal,
—and then add 20% – 30%. Dream bigger.
—For example: I want to have a separate savings account with $10,000 in it by January 1st, 2017 —> I want to have a separate savings account with $13,000 in it by January 1st, 2017.
—(Commit to being a bit more aggressive, so that even if you FAIL and only reach 70% of your goal….you’d still have $10,000)
5 – Write down the exact time between this very moment and your uber-specific goal.
—Use this to get a mental and visual image of your current situation…
—and where you’re headed.
6 – Reverse engineer your goal into a brainstormed plan.
—”Reverse engineering” just means that you start with the END in mind first, then work backwards to figure out WHAT STEPS you will need to take.
—THIS IS NOT EASY. It was never going to be easy.
—You’re going to have to get creative, and actually use your brain.
- Do NOT worry about it being perfect.
- Do NOT worry about writing neatly.
- Do NOT worry about putting things down in the right order.
Here is an example format:
- Here’s what I want my life to look like at XX date, etc.
- Here’s my timeframe (from the previous step)
- Here’s what I ultimately have to save each year (ex. $4,000)
- Here are some ways I can save $4k a year.
- Here are some actions that I can do to START those ways.
- Here are some things I can do TODAY to prepare for those actions.
7 – Dig deep into the brainstormed plan, and break out the very first step
- What needs to happen over the span of my timeframe?
- What needs to happen this YEAR?
- What needs to happen this MONTH?
- What needs to happen this WEEK?
- What steps can I realistically take now, in my current condition?
Now is the time to ORGANIZE your brainstorming a bit more, and start coming up with a list of DETAILED, ACTIONABLE steps that you WILL take.
8 – Make a list of 3 ACTIONS you will take THIS WEEK to begin your wealth road trip.
—Make these baby steps as small and reasonable as they NEED to be.
—The important part is NOT what they are….the important part is that you DO THEM, no matter how small and seemingly insignificant.
—The goal here is to get the ball rolling on your plan, but also to start building confidence WITHOUT getting overwhelmed and lost in the details.
9 – Set up a simple method of holding yourself accountable for this first step.
—If you don’t wish to have your mother hold you accountable (like on the template)…
—set up recurring reminders in Google Calendars, or text/email yourself reminders using IFTTT.com Here’s how to do that in 5 minutes
Let’s be completely honest with yourself:
- You are a smart, capable human being.
- You can freaking get ANYTHING you want our of your life…
- You really, really can achieve your financial goals
- You’re going get lazy sometimes,
- You’re going to lose faith and confidence sometimes,
- You’re going to get overwhelmed, ESPECIALLY at the beginning.
Do NOT leave your success to chance.
CONTROL your thoughts and actions, and CONTROL your plan.
Set up reminders, and put systems in place to hold yourself accountable. For your own sake, please do this.
Example from the template:
10 – Use passion to fuel action
Let’s face it. 95% of people who read this entire blog post will never, ever actually plan a road map to their financial dreams, and actually follow it.
Everyone wants to be a millionaire. Very few actually want to do the work to become a millionaire.
What kind of person are you?
Do you lack the belief and self-confidence that you could ever accomplish what you actually want out of life?
—Do NOT, UNDER ANY CIRCUMSTANCE, allow yourself to start skimming your goals….and get lazy….and put it off.
—constantly remind yourself of WHY you are saving towards your goals.
—What truly motivates you to stick to your plan, and consistently work on ways to achieve your goals?
Planning is incredibly beneficial, and doesn’t require as much elbow grease as you’d think.
Just WISHING and DREAMING about more money, nicer things, no debt, a bigger house, etc…isn’t going to get you ANYWHERE.
1 – Think through what you want. What you REALLY want.
2 – Reverse engineer a plan
3 – Start with small, actionable baby steps and hold yourself accountable
4 – Build wealth. Dream big. Live the life you want. [Insert other cliches].
This was a lot to take in. Don’t get overwhelmed.
I’ve actually compiled these 10 steps into an easy to read, step-by-step PDF that you can download and take with you.
Literally. Print it out and staple it to the roof of your car.
Oh, and there’s also a pretty little video of me yelling at you to STOP DREAMING and START DOING.
Also, don’t forget to check out the “round the world couple” right here.
They are amazing people, and their story is incredible.
(Thanks to Jess and Nate for allowing me to briefly use their story as an example!)