You May Already Be a Future Millionaire - REMIX | Series 10.3

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Welcome to the Enjoy More 30s Family Finance

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podcast. The only podcast dedicated to making life more

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enjoyable for young families by hitting on the financial topics

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that tend to weigh on us, stress us out, and distract our focus

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from simply enjoying life.

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Hello, and welcome to the Enjoy More 30s Family

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Finance podcast, REMIX for Rising Rates. In 2022, there

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have been significant declines across pretty much every major

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asset class through the end of October. With rates rising

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significantly for the first time in a long time, it can be a very

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unnerving experience. So what we're doing on this series for

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you is going to attempt to kind of help you with that difference

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in what we're experiencing, going back and re-mixing a

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number of the past episodes to help you emotionally navigate

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what have been turbulent times. Each week, I'll be re-mixing a

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different episode bringing what I would say are timeless

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concepts back into focus of the present day situation. As

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always, before I begin, please share and like please leave

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reviews. I'd love to reach and help as many young families out

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there that are just like you.

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Today's episode is a remix of the You May Already Be a Future

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Millionaire episode back in Season One. As parents, you

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know, there's a ton of packing, if you ever take your little

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ones on vacation. In our home, my wife, Lauren does 99.9% of

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the packing. She's fantastic. I would say if I put out that,

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hey, I do .01%, it could potentially be overshooting my

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actual contribution. My involvement really only comes in

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at the end. Lauren does all the packing, she organizes

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everything. And then I kind of look at everything with her to

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say do we need you know, five of these are what we could do with

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maybe three or four of those instead, because I'm going to be

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the one that you know, it's carrying most of the bags. Now

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I'd rather very much so carry 10 heavy bags and not be missing

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something that would prevent a meltdown from a child in the

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middle of the airport or the hotel. However, I also don't

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want to mule carry, you know, way more heavy bags that I

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necessarily have to. On vacation, we don't have that

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crystal ball. And we don't have that crystal ball when it comes

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to living our life either. But what we can do is still pause

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and take a look when it comes to finances just like Lauren and I

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do with that last luggage check. You know, what do we actually

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need, keeping things in perspective.

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So projecting where your investments are going, gives you

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an idea of where you're at. And a lot of times, you could be

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surprised that if you've been doing a good job saving already,

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you may have what could turn into $1 million down the road

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If you had say $250,000 in your 401(k) at the start of this

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year, you listened to my Episode 1.3 and you used the Rule of 72

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to see what it may be worth down the road, say 20 years from now.

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If we assume 7% growth, you would come up with roughly $1

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already in your account. How this pertains specifically to

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million. So again, the Rule of 72 says if you take the 7%

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interest rate that we're assuming long term and divide it

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into that number, that 72, you get roughly 10. So roughly every

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10 years, the money should double. $250,000 doubles to

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$500,000 for the first 10 years. Then doubles again, the second

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today's environment is that we've seen a lot of our accounts

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10 years in our example to $1 million, right? $500,000 doubles

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to $1 million. So for 20 years that 250 that we have today

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would end at roughly the $1 million, according to the Rule

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of 72. If your account though, is now down 20%, how does that

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change what the projections may be? So first, let's take an

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drop down obviously this year, sometimes substantially with

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assumption and say that it's going to take a full year for

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you to recover back to that same mark. That it would take full 12

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months for that 401(k) to get back up to the 250 that it

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started on January 1st with. So how does that affect our

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what has happened so far in 2022. And what that translates

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exercise's results? As the math starts to get a little bit more

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involved because you got some odd numbers going on. I'm gonna

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I'm gonna jump in and help you out and do it for you. Since it

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took a year to recover in our example now there's only 19

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years left for that same $250,000 to grow during our

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to subconsciously for us now, because it's not a good feeling

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total 20 year period of time that we set. So instead now

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we've arriving at $1 million with only 19 years to grow, we

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arrive at a lower number, obviously, around $940,000. So

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still not too bad by any means you're not winding up with

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nothing by any stretch of the imagination. $940,000 is nothing

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that we get from that. But let's let's go into why it's a bad

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to sneeze at. And when we do projections for people that I

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would say, it's likely not to have a significant impact on any

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retirement projections, most of the time, depending on the rest

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of the person's situation, obviously. And a mere $75 a

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month increase in savings would make up the entirety of the

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feeling is because that money is a sense of security. That money

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difference according to all the assumptions that we're making

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here. So extra $75 a month, 7% for that last 19 years, and you

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make up the difference anyway, so. So essentially, if we change

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the way we're looking at it, and we shine light on it in a little

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says hey, my goals need this money to be accomplished. So are

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bit of a different way, with our example, the goal that we have

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of retirement in 20 years, say, would be very substantially

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similar, if not identical, with that slight increase the savings.

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So again, is seeing your account go down fun? No, it's absolutely

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not fun. Is it enjoyable in any way? Of course not. It's quite

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my goals now as a result getting in possibly farther away? So

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unpleasant. At the same time, we do want to try to be keeping

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things in perspective. Yes, it's upsetting but it's upsetting

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because money is a tool that we're relying on to accomplish

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our goals. So let's frame it back into money being a tool

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back into the question of how will this ultimately impact us

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let's pause and jump into that a little bit further and just see

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achieving our goals. So if we can still very reasonably expect

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to be on a substantially similar path for our goals, if we can

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frame our mindset as such, then we can really look at all of

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this a little bit more as perhaps traffic on the highway

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to our destination. So we're still getting to the

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how true this statement may even be.

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destination. It's just slightly slower, instead of a situation

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where our car blew up, and we're never going to reach our

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destination at all.

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Thanks for tuning in today and join us for next week's remix

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episode, How To Talk With Parents About Money REMIX. So

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after today's episode, you may see that you may still be on a

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path to a million dollars. But what about your parents who are

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already retired that aren't earning anything anymore? Are

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you concerned about their retirement now with a decline in

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their portfolios? So join us next week and we'll help you

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bridge that conversational gap. As always, please remember to

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review and share for others and if you need any help, don't

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hesitate in reaching out. I probably have helped someone

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just like you. Until next week. Thanks for joining me today and

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I look forward to connecting with you again soon.

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The conversations on this show are

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Joe's opinions and provided for general information purposes

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only. They do not constitute accounting, legal, tax or other

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professional advice for your specific situation. You should

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always seek appropriate advice from a financial advisor,

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accountant, lawyer or other professional before acting upon

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any content or information found here first. Joe is affiliated

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with New Horizons Wealth Management LLC, a branch office

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of TFS Securities, Inc., and TFS Advisory Services an SEC

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Registered Investment Advisor, Member FINRA/SIPC.