When I was younger, it was a goal of mine to one day become a millionaire. However, over the years, I've begun to come to the conclusion that this isn't likely to happen. It's not that I'm giving up completely, and it's not that I regret all of the decisions I've made that have led to this conclusion, but there are certain things that I've done that have furthered the demise of this dream and cost me a lot of money in the process.
I bought a home
Homes can be extremely expensive, even when you plan and budget for them accordingly. And homes can be even more expensive when you buy them right before the housing market implodes as we did.
Even though we did our research, bought with a 15-year versus 30-year mortgage to lower interest owed on the loan over time, made extra payments on our home, and tried to do lesser maintenance and upkeep projects ourselves when possible in an effort to cut costs, we still couldn't cut our losses enough.
All in all, we lost nearly $100,000 on the sale of our first home - a crushing financial setback to say the least. We may never fully recover from the blow, and it certainly is one of the most substantial reasons I'll never be a millionaire. If I could have that $100,000 back to invest at four percent interest compounded annually over 35 years rather than losing it in the housing market, I might have turned it into nearly $400,000. Even at three percent compounded annually, it would have built to close to $280,000, a huge bonus as compared to disappearing completely on a failed home endeavor.
I had kids
Given, I can't put a price on having children…well, actually I guess I could, but their value to our family can't be priced. However, just the birthing costs alone for our first child were about $5,000, and our second ran almost $2,500.
A CNN Money report notes that, "It will cost an estimated $241,080 for a middle-income couple to raise a child born last year for 18 years, according to a U.S. Department of Agriculture report released Wednesday. That's up almost 3% from 2011 and doesn't even include the cost of college."
We manage to keep kid costs down by doing things like buying resale for much of our clothing needs which keeps annual clothing costs around $300 and downsizing our living situation to a smaller home which took our home costs from an average of around $2,300 a month to about $800. My handling of the childcare duties, which saves us around $13,000 annually, and shopping discount groceries and utilizing meal plans to keep food costs for our family of four under $300 a month helps as well.
And while our price tag for raising kids might fall well below the estimate for a middle-income couple, it's hard to deny that it will still be costly and will certainly contribute to our never being millionaires.
I became a self-employed freelancer
I left my role in the hotel business more than six years ago to become self-employed. Don't get me wrong, there are plenty of benefits to being self-employed such as doing the type of work I want, when I want, and generally being my own boss, not to mention being home with the kids. However, the role comes with a number of downsides - many of them financial.
There's not only the lower pay involved, but the loss of many benefits as well. Combining things like employer-sponsored retirement plan, employer contributions to Social Security and Medicare (which as my own employer I must pay now), costs me additional tens of thousands of dollars each year, which means things like saving and retirement planning are even more difficult.
Therefore, while I may never be a millionaire, this doesn't mean I'm not reasonably happy. It just means that it's a goal that has been exchanged for others.
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The author is not a licensed financial professional. The information provided in this article is for informational purposes only and does not constitute advice of any kind. Any action taken by the reader due to the information provided in this article is solely at the reader's discretion.
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