Interview with Million Dollar Journey

Our next interview is with Frugal Trader from MillionDollarJourney. This newer blogger has been on a roll with some great posts and an aggressive goal to obtain a net worth of 1 million by the time he turns 35. I was lucky enough to get a hold of him to ask a few questions.

CD: First off I have to ask about your goal to get to a million dollars. You state in your 2007 goals that you want to get a 12 to 15% rate of return in 2007. Based on the fact that the average stock market rate of return is 10%, do you think can really beat the average for the next 8 years to make your goal at 35?

FT: Bold statements, I know. Most people say that it's a fool's dream to try and beat the market every year. However, you have to think big in order to achieve big. Looking forward, I think that 12-15% return on my savings is achievable through a combination of my stock and real estate portfolio.

CD: Ok, let’s say you keep betting the markets. To date you are doing a great job of building your net worth as you indicated in a December post that your net worth was at $198,500 and you were saving $1830/month. Even if you use your current net worth as the start point and keep the same savings rate at a 15% rate of return you would have $990,957 in 8 years. So that's not giving you a lot room for error on your rate of return and/or savings rate. So do you still think your goal is reasonable and are you willing to adjust that goal as things change from the current plan?

FT: If things change from the current plan, loss of major income etc, then I'm definitely going to have to consider changing my $1 million dollar goal by 35. However, if things go as I plan, with our annual increases in salary and alternate income sources, I plan to increase our savings amount every year. All net passive income will go to savings. I also plan to increase our real estate holdings, which will also bulk up the net worth.

CD: I know you mentioned you don’t have any kids on your blog, but have you considered what impact having kids could have on your plan?

FT: From what I've been hearing from young parents is that kids aren't that expensive until they get a bit older when they get into activities OR if they need daycare when they're young. We're fortunate that our parents live in the same city as us and they'd be more than happy to look after the kids while we're at work. Another issue is when my wife takes maternity leave, that year will be tough as well as she brings in half of our income. However, if we maintain a frugal lifestyle and get our passive income sources up, I believe that we can maintain a high savings amount. We don't have any kids yet and don't plan to for the next year or two. So by the time we're 35, they should be just about ready to start school and other activities.

CD: Well it looks like you’ve thought about your plan a fair amount, so when you reach your goal of a net worth of $1 million do you intend to retire?

FT: That is a great question. My goal for $1 million was never about retirement, it's about financial independence. It is goal I have set for myself so that I will constantly learn about and improve my finances. In my opinion, by the time I'm 35, I don't think that $1 million will be enough for my wife and I to retire on.

CD: Ok, so when you do you want to retire and what do you want to do in retirement?

FT: When I do retire, which will probably be in my 40's, I plan to spend more quality time with my wife and future kids. I will most likely continue investing/trading and look for other ways to supplement my income without working for the man. I guess what I consider retirement is leaving the 8-4 office job, not necessarily stop working.

CD: Speaking of work, your blog is fairly new the blog sphere and many bloggers seem to burn out in a few months. What do you plan to do to help prevent/avoid this?

FT: I see my blog as a personal outlet for my personal finances. It helps me solidify some of my financial thoughts and ideas. I also enjoy the discussions that start from my readers based on my articles. As long as I stay motivated with my finances, I can't see myself stopping my personal finance blog/diary.

CD: Great to hear your got some motivation, so how many hours do you spend blogging in a week?

FT: I admit, I'm a computer/web junkie. It started in my early teens and it has continued until now. When I was setting up the blog, I spent at least 3 hours / day on the blog. Now, it's more maintenance and researching new ways to improve the blog. So, the past few weeks, I've probably dedicated around 1.5hrs / day which equates to 10.5hrs / week. If I could, I would blog all day long. Alas, I have a full time job that requires a bit of my attention. :)

CD: Well that was very enlightening for me Frugal Trader. Thanks for your time and I’ll be back with the third blogger interview tomorrow.