A $7 million, Big, Hairy, Audacious Financial Goal

Have you set your big goal yet?

A few weeks ago, I wrote about the need to continuously set new goals so that when you accomplish one (like paying off your credit card debt), you immediately move forward and avoid getting stuck.

My big goal, after paying off my credit card, was to stash away $25k in cash over the next 12 months. But after talking with a friend last week, I have to up the ante. For this, I'm stealing a phrase from one of my old bosses, who believed in Big, Hairy, Audacious Goals (BHOGs).

My friend, an attorney in DC, says her financial goal isn't merely to stash away a certain amount of cash, it's to be "independently wealthy". Her definition: having enough liquid assets (liquid = cash, as opposed to investments or property) that she didn't need to work, or could do so at her leisure. How much would that be for someone already making six figures, owning a home and living comfortably? About $7 million would be nice, she said.

Hmm. Out of reach for most working folks? Yep. But that's not the point. My friend dared to set a goal that was a stretch, but still within her own reach. It wasn't a small goal and it's notable that though there was a dollar amount attached, her primary motivation was being enabled to live the life that she wanted. The $7 million figure was the answer to the question "How much do I need to be able to do what I want to do without worrying?"

This has me rethinking my $25k saved goal. It's a good number, and having a decent amount of cash put away IS a good thing. But the number is arbitrary and didn't really come about because of any thinking about it's impact on my own lifestyle or what it'd enable me to do. So if you've set a big goal, maybe you need a BHOG instead.

I paid off the credit card! Now on to the next goal!

I'm a fan of big, audacious goals and try to live by this rule: if you shoot for the stars and miss, at least you get the moon. That philosophy was a big reason I was successful in paying off my credit card debt in less than one year. If I dedicated myself to paying off every last dime but didn't make it, at the very least I'd have much less debt than I started with.

And so it is that one day after I made the final payment and reached my $0 Balance Goal, I'm immediately planning my next big, audacious financial goal will be. My immediate thought was to beef up my emergency savings and investment accounts and that's certainly doable given the amount of free cash flow I now have (since I'm not making a credit card payment anymore). But why not think bigger than that, and eye something else that will push me to stretch for the stars again?

So I've decided that my next goal will be that over the next year, I'm aiming to save and invest at least $25 grand. That's right. At least that much. That means I'll have to push myself to do more than just stash a portion of my paycheck: I'll have to continue to limit spending, network and be creative enough to create new income streams and be diligent enough to live off only the money I make at my nine-to-five and stash any extras away. It'll also mean I'll have to figure out some new tax strategies so Uncle Sam doesn't come and take it all. Wish me luck.

In the meantime, I'm going to continue to write about eliminating credit card debt and keep up my $0 Balance Challenge push. If you've already eliminated all your credit card debt, great. Start thinking about the next goal (and post it here in the comments section so you can encourage others.) If not, think of eliminating that debt as your first big, audacious goal and get to work.

Good luck!

If I'm paying off my credit card; can Ann Minch bail out on hers?

This morning I made the penultimate (next-to-last) payment on my credit card, a $176.23 testament to beating the debt monster I've been carrying in my wallet since college. I'm quite proud of myself for the obvious reasons (a PF writer with a mountain of unsecured debt is not a good look; looking forward to that TV that's been at the top of my 'reward yourself' list for three years) and the not-so-obvious (freeing up cash flow for investments, savings and a sprucing up of the crib that is in great demand from certain quarters).

But my fortune at being disciplined and financially stable enough to pay off my Visa makes me consider the millions of people in the US who are neither as disciplined nor as fortunate; people like Ann Minch, who the HuffPost profiled for her refusal to pay off a Bank of America credit card because, she says, they've gone too far in jacking up her rates. Here's Minch on video talking about her "debtors revolt":


Is Minch right? Should we have the right to just say "screw you" to lenders who are treating us unfairly, or is this the rant of someone who made irresponsible choices with credit and needs to do what I did and just pay up?

How do your finances look right now?

I know, I know, I know. The first quarter technically ended in March. Still, if you haven't already done an assessment of where your finances are at this point, a week after tax time is probably as good as any.

So take a look at your money right now: how are you doing on saving? Have you built up more reserve savings or are you depleting it because of job loss? Are you sticking to a budget? What are your main financial goals for this year and how far are you toward achieving them?

Post your answers in the comments section.