How to Save $100K in 3-7 Years and 1-Million Dollars in 7-17 Years

Are you tired of not seeing savings accumulate in your investment account that you have access to? You may have a 401K you are growing but those funds are not truly yours until you retire. How does your liquid savings and investment portfolio look? Is it much more skinny that it should be? Join me in a journey to make your savings look fat in 3-7 years.

BTW, I'M NOT A FINANCIAL ADVISOR. I've only listened to many financial advisors and smart people on investing channels and podcasts. What I present here is my own unique plan, part of which requires earning annual investment returns of 6-12% annual yield. Our Savvy Saver U partners can point you in a great direction to accomplish this. Such returns are reasonable to achieve. OK, let's jump in.

Step 1 - Reduce Spend on Shopping and Entertainment to Save $5,000 to $25,000/Year

Maximizing savings on shopping and bills and cutting back spend for entertainment could save you $5,000 to $25,000 a year. That's where to start as for every $2-$6 saved an extra $1 is earned because you are paying for goods and services with post tax dollars. So there's $500-$2000 per month in savings right there! If you have not, be sure to read all our articles on saving money to maximize your savings. Most savings efforts will produce at rate of $25-$75/hour so it's time well spent. This is also easier and more fun than working. Right?

Step 2 - Go find that Side Gig that will pay you $500-$1500/Month.

I know you probably already work too much or have too many kids to care for and chores to do already but if you want to break out of the savings rut you are in you need to find a side gig to earn that extra income. You can only save so much money by saving money. Look hard at your schedule and figure out what hours of the day you could put in the extra 5-10 hours a week to produce $500-$2,500 per month. Note I am not listing an astronomical earnings rate here per hour. If you spend 5-10 hours a week to earn an extra $500/month that's $12-25/hour. I'd shoot for this goal as a minimum. This will weed out the gigs that simply won't pay $25/hour once you get good at them. Be sure to engage in work that will pay out an average of $25/hour and that could be increased to earn $50 or more once you get very good at the work. Unless you are already a sales all-star don't be thinking you will earn $50-$100/hour from a side gig. If you are a sales and marketing and website all-star then do shoot for $50-$100/hour being earned once you get up to speed in month 2, 3 or 4 and with potential to earn $150-$200/hour by the third of fourth year. So I'd try to limit your search for that side gig to 15-30 days. Do your research and make sure it's a match for you. Also, figure how much time and money you will need to invest and know your time to pay back from work. Of course if you can find a job fitting your schedule for $15-$25/hour grab it an go until you find a side-gig that has greater income potential and allows for you to set your own schedule.

Step 3 - Investing in Passive Investments that Earn Average of 10% Annually

There are many options to earn 10% annual yield on investments. Earning 10% is an achievable annual return on investment. According to an article by SOFI, the average annual ROI on investments made in the stock market is 10.72% from 1991-2020 (8.29% when adjusted for inflation). Earning that 10% a year ROI is not guaranteed and part of the Savvy Saver U education is diversification and always seeking to increase your investment IQ to invest more smartly to gain higher passive ROI and if you are willing to put in the work on finding higher ROI investing opportunities you must trade time for that. Finding these potentially higher ROI investments may require a lot of research time and increase risk. It may require options trading or trading crypto currencies or investing in startups via Equity Crowdfunding sites. Keep in mind we all only have so many hours in a week to devote to extra income. You will need to figure out what is the best use of your time that will produce the best ROI on your time and to best match your talents, passion and risk appetite. Some financial advisors, money managers have track records of earning 15-20% of this so you may want to place your money with them and pay them their fees. Keep in mind there's no guaranteed investments. Earning a solid 10% return on investment is no simple task but can be achieved most every year. Keep in mind there's no guaranteed investments. Also keep in mind our Number One Rule behind saving and investing money is to "Buy Low, Save High". You can substitute in the axiom of Buy Low, Sell High to reap a greater ROI on investments. We will soon post a plan to execute upon to reap high ROI and reduce taking 10-30% losses in years the stock market or real estate markets are in downturns. Though investing in real estate can always make sense in any given market condition other than during times of say another world war or early years of another great depression. We may be seeing the start of one or both right now. In times such as we now live investing in commodities and stocks that give away an annual dividend of 6-10% may may be the safest investment strategies. That being said leveraging other people's money or a banks money to purchase multi-door rental properties is very likely still going to be a sound ROI producer over decades. Though we are in residential real estate market bubble and may see rental property pricing drop by 10-15% in the next 2-3 years as single family residences may drop 20-40% in the same time frame. Though I'd say that markets in the top 10-15 Red states will see a lesser drop in real estate pricing or even continue to rise by 5% a year due to increased demand to live in a Red State that favors Free Market Capitalism, Freedom, Liberty and stand strongly for our Constitutional rights. Avoiding risk and shooting for obtainable goal of earning 10% is a sound and doable strategy. Now let's lay out a plan to save your first $100K in 3-7 years.

Reaching 6-Figures of Savings in 7-Years From Adding Side-Gig + Slashing Shopping/Bills So let's just be conservative and keep it simple and say you'll save $500/month after reading and applying my system to save on groceries and slash bills. And let's assume you'll earn $500/month working 5-10 hours a week. So in total you'd have $1,000/month average (minus 15% taxes = $850/month) to invest monthly over 7-years. Let's say you earn a 10% annual yield on investments over this 7-years. Look the at chart below to see you will have near $100,000 saved in 7-years. This 12% return would be a very good return that most people should be happy with earning. That would require finding a very good money manager or putting in an extra 5-hours a week to learn about how to earn such a yield and maintaining a solid investment strategy and ROI. Being savvy enough to manage your own investments encouraged, but it still has it's risks. You could even lose money. So tread carefully.

Now let's take a look at the what earning/saving just an extra $200/month will produce in 7-years with a 6% annual yield. That is, $600/month saved and $600/month earned from a side-gig and investing that $1,200 ($1,000/month after taxes) into investments for 7-years at a 6% annual rate of return. You'll see how the $200 extra of earning per month with just a 6% yield will see you have just over $100,000 in savings in 7-years. See the chart below.

Now if you are earning an extra $1,200/month from side-gig work of 5-hours a week at $60/hour, 10 hours a week at $30/hour or 15 hours a week at $20/hour then you can know in 7-years you'd have near $200,000 in savings. That is earning/saving/investing $2,400/month ($2,000/month after taxes) over 7-years at just a 6% yield.

If you saved/earned/invested $2,400/month ($2,000/month after taxes) for 3.5 years with a 12% yield you'd have near $97,000 saved up (minus taxes). See the chart below.

So there you have it. The path to having near $100,000 in Savings in 3.5-7 years has been laid. Now it's your job to put in the hard work and make it happen. All the best. And be sure to make good use of your membership to obtain savvy new ways to save, earn and invest money.