Traveling the US as I write this, my husband and I are full-time RVers, hiking and living the life we dreamed of several years ago when we use to blog.
Lots of state parks, national parks, and national forests under our belt with no plans to stop traveling until we’ve ticked off all the items on our bucket list:
- Visit all the US states (visited 39/50 so far)
- Visit all of the US national parks (visited 26/63 so far, my favorite pictured below)
- Visit every country (visited 3/195 UN-recognized countries so far)
Where I’m located
Palm Springs, CA area
What’s on mind
Personal finance challenges for 2021
New Year, New You!
I LOVE resolutions, restarts, start-overs, reboots…whatever you want to call them. I love each new day because with every sunrise, there’s an opportunity to try again.
With the start of this month, I’ve been reflecting on our own personal finance journey to date and the last goal we created for ourselves before we killed our personal finance blog: to be able to pay our expenses solely through $1MM in dividend investments that generate $3,000 each month in passive income (i.e. income that’s not derived from work as a W-2 or W-9).
We haven’t achieved that passive income goal yet. In fact, we’re hundreds of thousands off the mark.
With our personal finances having taken a backseat to other goals in 2020, I decided to get that one out of the back of the broom closet, dust it off, and reconsider what we really were trying to accomplish by having passive income.
We thought that by having enough passive income to cover our expenses that we’d be able to travel, which we really the only thing we wanted to do. And since we’ve been traveling as self-employed people since 2019, passive income has become an afterthought.
Does that mean we should abandon the goal? Nay!
Today, I started to wonder if maybe Grant Cardone is right — maybe we were thinking too small. (If you’re not familiar with his book, you can read about The 10X Rule here.) Maybe what we should do is set a goal that is 10X what we think we can achieve.
Let’s say that our new goal is $10,000 each month in passive income so that we can buy a home in a new-to-us city or pursue an expensive hobby like flying lessons.
If we focused once again on dividends, then we’d need at least $40MM, which would take an estimated 45 years. Ain’t nobody got time for that!
What if we applied to 10X rule to both our goal and the time in which we have to achieve that goal? (Another grave mistake we made in the past — not setting target dates!) What if we had only 4 or 5 years to achieve a goal like making $10,000 a month from our investments? What would be required to make that happen?
- Change our assumptions about what’s possible.
- Consult experts who have achieved similar or better results.
- Gain knowledge that those experts have to be able to replicate their results.
- Implement.
- Learn from implementation what works and what doesn’t.
- Repeat what works.
Since my s.o. and I haven’t discussed our passive income goals in a while, I’ll have to come back and update this page in the near future when we settle on a number for our passive income goal.
In the meantime, I created some challenges for those who are intrigued by the 10X rule and also aspire to the pursuit of earning $10K+ each month. Enjoy!
Challenge #1: $100 in a month
If you want to save $100 in one month, you can do it in one day. Seriously! If you’re like the average American, you spend an average of $237 a month of subscription services like Amazon Prime, Netflix, and Audible, according to this survey. All you have to do it cancel those services you don’t really need because you know you’re spending too much time on that stuff anyway, at least according to another study.
If you want to make an extra $100 in one month, you can also do this in one day by selling stuff you don’t need. With Facebook Marketplace, eBay, Poshmark, and countless other marketplaces, I’ll bet you can get rid of $100 worth of stuff now. Clean out your closets on your day off, get out your smartphone, and start snapping photos. Your life will be less cluttered and you’ll be $100 richer.
Challenge #2: $1,000 in a month goal
If you want to save $1,000 a month, you’ll likely need a bit more time than with your previous goal to save $100. Here are some ideas to help you continue making progress:
- cancel more (if not all) cable and subscription services;
- change your cell phone plan to something less expensive or find another company to work with like Red Pocket Mobile (use my referral code B670F34FED53A483 to get up to $25 off your first month!);
- shop your car insurance, renter’s insurance, or homeowner’s insurance policy to find lower rates with other providers; and
- move or get a roommate.
If you skipped over the savings section to get tips for earning, then I recommend you return to the previous section on saving $1,000 a month first.
Why? Because you can’t outearn a spending problem.
Now, I’m not saying that YOU have a spending problem, but based on all the research I’ve done and what I know about personal finance, many people start with trying to earn more money without considering their spending habits, so they end up spending all that extra money.
Remember that the time you spend on trying to save money is money you save each and every month hereafter, so it’s worth it to invest this time now.
However, I caution you to avoid making the same mistake I did early on: spending too much time on trying to save every nickel. At some point, you will have exhausted all the avenues you have for saving and you will need to change up the goal.
Have you exhausted your avenues for saving? Great! If you want to make an extra $1,000 a month, you have some options:
- Sell the rest of the stuff you don’t really need. You will run out of stuff, so you won’t be able to make an extra $1,000 a month every month this way.
- Ask for a raise or a promotion. If you’re working now and have been with the same company for a while, ask for a raise. Every extra dollar makes a difference, so it’s worth asking.
- Learn a new skill like coding to get a new job or to start a side business.
- Sell stuff you create. Make sure the thing you want to create is something that people want to buy. Not sure what people want to buy? Start with the very marketplaces like eBay and Etsy where you might have sold your own stuff to see what else people might buy.
- Sell your time. Not sure what I mean? Read my guide, $0 to Start. Depending on the kinds of services you offer, you could easily make extra money every month this way. When I took this step, I was able to increase my income pretty quickly.
Challenge #3: $10,000 a month goal
When we had tons of debt, the idea of being able to make $10,000 a month seemed unattainable, which was really quite limiting and likely the reason why we spent more time than we should have on trying to save every nickel.
If making an extra $10k a month sounds crazy, then stop reading now and work through the two prior challenges. If you want to build that personal finance muscle, you have to start small and work your way to this point — thoughts can change behaviors, behaviors result in actions, actions create habits.
This challenge is all about earning more money, specifically $10,000 or more each month. Here are some ideas to consider:
- Look for another job. If you’ve been with this company for a while and you can’t get a raise or a promotion, see what else is available in your industry.
- Get a second job.
- Keep selling stuff you created in Challenge #2. Sell only the most profitable things that people want that you sell through and stop trying to sell stuff that’s been sitting around.
- Keep selling the services you started selling in Challenge #2. Sell only the most profitable services that people want, the services for which you’ve developed a waiting list and then raise your rates for new customers.
- Do two or more of those ideas in this list at the same time. So long as your employment contract allows, you could have a lucrative side business cleaning commercial buildings outside of your day job, for example.
Good luck this year as you work to make progress on your personal finances!
What I’m reading
Harry Potter and the Chamber of Secrets
What I’m listening to
What I’m watching
The legacy of the Flint water crisis
Last updated January 16, 2020