This is my Get Rich Quick’ish Plan. The steps you need to take are easy, but actually taking those steps can be very hard. On this page you’ll find the plan I’ve outlined to keep me on track so that I can reach financial independence and retire early.
I’ve broken my strategy out into five categories, with ten total steps. Check out the detailed plan below and see if I’m doing anything that you can duplicate that will help you Get Rich Quick’ish too!
The formula to Get Rich Quick’ish is easy:
- Spend less than you earn
- Invest that difference
- Eliminate, then avoid debt
Like I said, simple. But not easy. The details within each of these three steps will change from person to person, and from situation to situation. What you’re reading here is my plan; it’s unique to my own situation. Your plan will look a bit different.
Keep in mind that I got a late start to the financial independence game, which means I’m probably doing things differently than the person who is just starting out and is in their early twenties, or from the person that might be older than me, but already has a great foundation built up.
Table of Contents
My Get Rich Quick’ish Plan
I’m don’t know many people have an actual plan, other than the cookie-cutter, one-size-fits-all strategy that society has defined for you. If you continue to read, you’ll notice that my plan doesn’t include the words “Social Security” anywhere in it. I’m sure that one day I’ll start collecting those checks, but if and when I do that will be nothing more than icing on an already delicious cake because Social Security is most definitely NOT a key part of my plan.
With that said, here’s my plan outline, with full details below:
- Avoid Lifestyle Creep
- Bank all financial gains
- Save half of all raises at work
- Save half of all bonuses at work
- Save one percent more than the year before
- Take advantage of free money
- Invest at least the minimum into 401(k) to get full employer match
- Increase 401(k) contribution until it’s fully maxed out
- Participate in ESPP program
- Increase participation in ESPP program until it’s maxed out at 15% of salary
- Put our money to work
- Invest all extra cash into a Roth IRA or a traditional IRA
- Avoid debt
AVOID LIFESTYLE CREEP
Lifestyle creep happens when you spend more money as you earn more money. Avoiding lifestyle inflation falls squarely under the category of “things I can control.” As such, if my expenses climb then that’s 100% my fault. Thankfully I think my family is already living a pretty good life and there’s no need to try and live a better life by adding more or better ‘things’ to it.
BANK ALL GAINS
Each year I can pretty much count on at least a 3% raise from my employer. And because the first step in our plan is to avoiding lifestyle inflation, that means I should be able to easily save alt least half of my raises, right? So far we’ve been able to do this without any issues, but I can envision a time where that might be difficult to do. Maybe we’ll get to a point where inflation kicks in, or the kids will become more expensive as they get older, etc. But for now we are saving and investing one half of all salary increases.
Lastly, we have one more rule in our plan that states “save 1% more than the year before.” Even though we’re already saving half of each raise and half of all bonuses, saving an additional 1% each year should be easy. That’s because the half of the pie I get to keep each year keeps getting bigger and bigger, so saving an additional 1% than the year before is more than doable.
TAKE ADVANTAGE OF FREE MONEY
Almost everyone has heard of a 401(k) program and knows they are valuable for two main reasons. First, you’re contributing pre-tax dollars into your account and second, many 401(k) programs offer an employer match. Thankfully my employer has one that offers a match, which means I’m getting free money simply by participating in the program. In my case, my employer will contribute the equivalent of 4% of my salary (using their money) if I’m contributing at least 5% of my salary. The amount my employer contributes is mine immediately; there is no vesting, or waiting period. This accounts for thousands and thousands of free dollars each year. The U.S. government caps the amount of money that you can contribute into your 401(k) at $18,000; my goal is to contribute this amount each year.
My employer also offers a very good Employee Stock Purchase Program. I’ve written about this in depth already so I won’t get back into that here, but a good ESPP is basically like free money for those that participate.
We’re not there yet, but we are trying to get into a position where we’re able to max our our participation in both the 401(k) and ESPP programs. Update: as of March 2016 we are there. I’m now able to fully participate in my ESPP and claim that free money!
PUT YOUR MONEY TO WORK
Again, the formula to Get Rich Quick’ish is simple, but the execution is not. It takes discipline and the development of good habits, but by following our plan, and assuming the market continues to deliver historical average returns of about 7% on our invested dollars, then I’ll be set to retire in 2026. I’ll be 49 years old at that time, and while the thought of being a 9 to 5 cube jockey for another 10 years is somewhat depressing, it beats the HELL out doing this until I’m 65!
AVOID DEBT LIKE THE PLAGUE
My 10 Point Plan to Get Rich Quick’ish
(1) Avoid lifestyle creep
(2) Save half of all raises at work
(3) Save half of all bonuses at work
(4) Each year save an additional 1% more than the year before
(5) Invest at least the minimum required to get a full 401(k) employer match
(6) Increase 401(k) contribution until it’s maxed out at $18,000 per year
(7) Participate in my employer’s ESPP
(8) Increase ESPP participation until it’s maxed out at 15% of my salary
(9) Invest our cash in a 401(k), Roth IRA, or Traditional IRA
(10) Eliminate, then avoid debt