Setting Long-Term Financial Goals: Looking Back 5 Years

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

Some readers have noticed that I am no longer tracking the progress towards my long-term financial goal. That’s because I don’t have one! It used to be a million dollars by age 45, but I have dropped it since it doesn’t motivate me on a daily or even monthly basis.

I have come to realize that it is just stupid for me to plan out something 15 years ahead. Even looking back only five years, my life now is vastly different than I thought it would be. It’s an interesting exercise.

On February 27, 2004:

  • I was 6 months out of graduate school, and in working at my first “real” job. Although I had held several jobs earlier including being a student researcher and teaching assistant, the corporate world was completely new to me. Even then, I knew I didn’t want to do this for four decades.
  • My net worth was hovering around zero… I was just about done finally paying off my student loans from undergrad, but that was about as far as I was looking. Here’s an updated net worth history chart:
  • I was single. Although I was engaged at the time, I had never lived with my fiancee and had no idea what it would be like to completely share a life together. It’s been quite an adventure.
  • I didn’t have this blog. I don’t even know if I knew what a blog was. Who knew that it would provide a non-trivial chunk of our total income, and that I would continue to spend at least 20 hours a week of my time maintaining it, and often much more (although I’ve been working on better balance).
  • I didn’t own a home. I was still living in the same cheap, run-down, graffiti-covered apartment that I lived in during college. I would end up renting five different apartments in the next 5 years, before finally buying a house.

I’m actually really happy with how things turned out, but looking ahead there is still so much more uncertainty. Kids? Jobs? Economy? So I’ll have to keep that in mind when crafting a measurable, specific, and inspiring long-term goal. Are you surprised at where you’re at now, compared to five years ago?

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned. is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.

User Generated Content Disclosure: Comments and/or responses are not provided or commissioned by any advertiser. Comments and/or responses have not been reviewed, approved or otherwise endorsed by any advertiser. It is not any advertiser's responsibility to ensure all posts and/or questions are answered.


  1. I think that not having a meassurable and timed financial goal is very important. You will be much better off with 1 mil $ at 45 with or without kids.
    Granted, you may want to adjust your old goal for something like “1 mil in inflation-adjusted money” – as this should be more adequate meassure of the progress.

  2. As a fairly new reader it was nice taking a journey down memory lane with you. Plus it was enlightening to realize that in just five yours your life can change drasticaly, hopefully for mine it gets much better. I still have student loans to pay off, living with the parents, and out of college for 3 years now. Only recently I started to pay attention to my finances and not live paycheck to paycheck. Hopefully in five years I can look back like you and be sitting in a house I own, a wife, and have a fairly decent net worth.

    God-speed and here’s to another five good years.

  3. I definitely would not have guessed where I am. Five years ago, I was a year and a half out of college, working a lot of hours at my job, living with my parents, saving money. I think at the time, I was considering working up the ranks at my company, or completely changing or going to medical school.
    Now, I’m in business school looking for an internship in a tough economy, getting married in 8 days, have bought, lived in, and now rented out a two-family house, and now got a dog.
    Either way, I guess I’m not even going to bother worrying about where I will be in five years.

  4. I am a bit surprised at where I am today. Before I got married and had a surprise baby (surprise meaning not planned, I know how babies are made 😉 ) I had some pretty high aspirations for myself. I was running my own business and felt great about where I was and where I was planning to be in the future. When that test came back positive, my whole life was thrown into the blender. All my long term goals changed, not necessarily for the worse, but they were different. So I am surprised where I am now. Some things have turned out to be better, some worse. Mostly better though and I think because of that, I am even more inspired to press towards a better future for myself.

  5. surprised ??????
    who the heck thought we would be in this mess…..
    Im shocked. Unemployment here I come

  6. HS@OurDebtBlog says

    This is so true! you always plan but life always seems to be so much different.

    We’ve learned a lot from you, keep up the good work and best of luck in the future.

    Now on to kids… LOL


  7. Thanks for the perspective! I’ve been following you since January 2006, and it’s great to see all the progress you’ve made.

    Let’s see, 5 years ago for me I was newly engaged and just finishing school.
    Since then I got married, got my first professional job, bought a house and had two wonderful children who my wife stays home with. In that time we’ve paid off a lot of debt (although not nearly all of it yet), and have increased in net worth from -25K to about 65K.

  8. Thanks for sharing the long view with us. I was also single and renting, maxing out my 401k, and a small owner of an employee owned tech startup. Now I’m married, own a home, barely put anything into my 401k and savings, have 3 loans, and the startup is now a $15M company but tight on cash flow. In general a lot more stress than 5 years ago and hopefully if we can pull through this slump things are bright around the corner.

  9. Jonathan, just because the economy has shifted and the market is retrenching, I would continue to strive for your goal of a million by 45. Mine was a million by 40, I’ve got only a few months to make 50% more return to achieve my goal. The best laid plans of mice & men, the thing to count is your blessings not always your net worth. I think if you have a goal and fall short, you should still be way ahead then if you did not have a goal in the first place. Keep saving and investing for the future. I would feel better about investing today then in the past for years as we are closer to a bottom then before, not to say this could be an L shaped recovery but you still have at least 3 decades to go. There will be more bubbles in the future.

  10. Wow we all have a lot in common. Five years ago I was newly engaged, finishing school and starting my first real job. And looking for the house that we bought that fall. Now we have 1 kid (second on the way) and my wife stays home. My goal was to be retired at 40, and that actually would have been achievable before the kids were thrown into the mix. That said, children add so much to my quality of life. My goal now is to be the best dad I can. And to just try to stay cash-flow positive. The rest will work itself out as long as you make more than you spend and invest the difference wisely.

  11. I enjoyed your story. However I think it is a good idea to have a plan for long term, even if you change it based on good new information. It could help you decide what do to in uncertain times or even help you when your brain gets old and feeble.

    For example, if you write out now your plan for stock/bond split over the years until you reach 100, you may realize that when you turn 55 you have to have XX percent bonds even if the market is going crazy up… sort of like a “note to self; you promised you would sell those stocks when you turned 55” – so many people I know and have heard of being near retirement were still in stock mutual funds even though they need the money in 5 years or even less.

    I am personally going to set a theoretical dollar goal, a stock/blend split number for now (39 years old) until retirement… however I don’t know what it is yet.

  12. Looks like you’ve done a great job in 5 years! I know we have come a long way in that time towards improving our financial situation, but like most of us, we still have plenty more to go. It was only 2 years ago that we really started even paying close attention to our finances and in that time, we managed to become debt-free except for our house!

    It makes me excited to see what the next 5 years bring!

  13. Just about 2 years ago I was at the million. It took me 55 years. So I retired from a co. after 34 years. For no other reason than to try something different. Well I have lost what you arrived at plus a 100k.

    So even when you make the goal there could be a hole in the net. Just in joy the moments. Looking back its the moments I would want back in my life. Your goal should be a happy and healthy family and to laugh at least once a day.

    I am working partime for 3x less than I was making but I love going to this job. I made a goal that I wasn’t really going for and that is having a job that I can’t wait to go to and a happy and healthy family.

    It is good sometimes to stopping trying to make the goal and just enjoy the game.

  14. A great post, and wise for your years!

    5 years ago we had our first child. We live in the same home; I work the same job. Not much has changed in that regard.

    I was 27 and I thought I had life figured out. I didn’t know my health insurance (family) would go from $100/month to $800/month in just a few years though. I think otherwise kids are less expensive than I thought they would be, overall. But that is a big chunk of the budget, and quite a shock at that. We live in California and always worked so hard to get a reasonable mortgage. Thank goodness because health insurance expense will surpass mortgage payments in just a couple of more years, at this rate.

    On the flip side, I actually have gotten a 50% raise in the last 5 years, which was also completely unexpected. Because of this we think we may be able to live on one income indefinitely. Originally it was, “Let’s see how long we can make it.” WE also can afford a lot more luxury than we had planned in those first years of having children.

    I wouldn’t have expected any of this. I think this is why I pretty much shy away from long-term planning. We have long-term goals, certainly, but they are very loose. It seems like a pretty futile exercise when you are only in your 20s and 30s. Retirement will be a constantly moving target for a long time. I think before I fancied early retirement. Now the idea scares me. I truly understand the risk now of jumping the gun too soon. It’s unrealistic for your expenses to stay stagnate for 50+ years, for example, no matter how frugal you are.

    For now our entire focus seems to be maxing out retirement savings vehicles and getting our health insurance under control (considering part-time job for my spouse with benefits, etc., for the long run). I can’t say for sure what our focus will be in 5 years. Maybe we will work out these kinks but there will probably be more kinks to come.

  15. Jonathan, I have been following your blog since around Jan ’06. Believe me, i found many of my goals to be the same except that I was never organized enough to put them on paper and think aloud about them.

    We are now getting ready to be parents and for the first time, i find the monetary goals do not seem as important (they are still important)

    Wish you all the very best for the next 5 years. Hope you’ll be able to get what you want!

  16. That’s pretty awesome…

    I guess I more or less saw where I would be 5 years ago… (Grad School) tho phD program scares me to death.

    I guess you could say I am like you a while back =) Good luck in the next few years! Hopefully I might have some of your success!

  17. Been reading your blog for awhile, and it good to see you finally realize that you cant really plan life.

    Long story short….. I worked with a guy just like you. Always penny pinching and saving his butt off. He died last week suddenly, never getting to enjoy what he had worked for.

    Also we are about the same age and probably have roughly the same income. I didnt realize the amount of time and money goes into maintaining a family house and kids. (Which I have all of) Daycare alone is expensive where you are located. I pay almost 20k a year for one child. You will see that sometimes you dont have to live so cheaply to enjoy life. As long as you budget and maintain a positive cash flow you will be happy.

  18. I told you that there was a lot of falling-knife catchers out there, and that “buy and hold” was dead. I said that on this blog last year. DOW 5,200, here we come!

  19. I can verify that Enzo is telling the truth. I remember when the Dow fell to 8000, everyone was excited about the possibility of earning huge returns in a short period of time….that is, everyone but Enzo.

    Look who’s laughing now….Congrats to Enzo in not following the crowd.

  20. I remember reading in someone’s blog about always chasing goals and never stopping to smell the flowers…or something to that extent. Now don’t get me wrong, goals are an excellent way to achieve success in life, but maybe some are unnecessary.

    Five years…well I am now 24, have traveled Europe a couple times, graduated from college with a degree in Psychology, currently live in Sweden (I’m from California) and have fallen in love with finance. Now looking into a Masters degree in Economics, specializing in financial economics. Tis’ an interesting road 🙂

  21. How ironic! Just last week I was wondering what I wanted 5 yrs ago and what my goal is now. Five yrs ago I was in business for 10yrs and had five yrs left on the lease with another five yr option. And five yrs ago I was praying and hoping my difficult landlord would agree on a five yr option. In 3 months, I must put my option in writing. I want out! I want a break (from the deli business). I’m negotiating a sale for 350K thats half of what someone offered me five yrs ago. And thats perfect! Because who I am today with 350K is a more responsible person (with money) than who I would’ve been with 700K. My 350K with go much further with the money knowledge I have now. And five yrs ago I would not have been confident enough to take a break and write. Today, I have the confidence to do what I want and pursue other businees ideas with great success. I used to think i didnt have what it took for business. On the contrary, i opened this deli when i was 22…been in business for 15 yrs. At 37, I’m ready for the best.

  22. It’s not whether Enzo was “right” in predicting a fall (wow that was hard to predict) it’s whether he made decisions on that prediction by say shorting stocks or selling real estate like I did. I’ve told everyone here if you want to buy a house and have a high quality of life move to Texas like I did. And I haven’t even bought a house here yet! I’m going for a superior deal before buying meanwhile paying ZERO state income tax on over 250K of family income, ZERO property tax by renting a new 1400 sq.ft. new apt.

    If I had listened to the pumpers in 2007 when we could have taken a different (higher paying) opportunity to move to California and buy an 800k-1.2m house in OC/LA area under their relo program (every real estate agent told us the market had bottomed then – HAHA), we’d be down, oh 300-500k on that house, paying over 9% in state income tax, 10’s of thousands in property taxes, while watching Obama today about to kill us with non tax deductibility on mortgage interest on a jumbo going forward and a tax on household income > 250k. YIKES! Well, at least you can drive to ocean (in about 1 hour if you live 2 miles away thanks to awesome traffic there).

    Talk the talk – fine – even the sun shines on a dogs butt sometimes – walk the walk baby and now you can really talk.

    Instead of being down in net worth 500k in 2 years probably considering a bankruptcy and walking away from an OC/LA house, I’m up 300k+ just by some sound decision-making. And yes, that includes my 401k taking a 35% negative hit. The question is what to do with all this univested cash after a new BMW, every toy you can buy, and setting aside 75K of it to invest in 5k increments quarterly for the next 5 years for the kids college fund.

    LIFE IS GOOD and when you rent a nice place in Texas you can’t beat the tax advantage $24,000 SAVED with NO State income tax, $16,000 SAVED with NO CA property tax = oh, $40,000 thank you!

  23. As a few others have rightly suggested here, “since it doesn’t motivate me on a daily or even monthly basis” is a pretty bad call-out. It is important to have long term plans and if it is the right one, of course it will motivate you on a daily basis. My long term goal was to have $2M in savings by the time I was 40 and retire 🙂 Needed me to save $118K a year. I did subtly than I hoped for and had $950K in savings when I was 31, but the last 3 years have been terrible years for me, and I lost a ton in the market (looong story!). Now, here I am, 34 and with only $200K in savings. I was sad for a little, but got back on my feet and have now revised my plans and have a target of $2M by the time I am 45. More aggressive than the previous plan as this requires me to save $165K a year but I am still sticking to it, and on a “daily basis” think about how to generate the additional $47K a year this plan needs compared to the previous one, that I was tracking well against until I lost it all.

    Have a long term plan – your plan could be to pay off your house before you are 45 and have $2M by the time you are 55 and retire. How could that not motivate you on a daily basis? Develop a cash flow analysis on how to get to that goal on a monthly basis and track progress against it. Just my 2 cents…

  24. Mike Telesky says

    Just wanted to thank you for devoting so much of your time to this blog. I really enjoy reading the posts and it has even inspired my wife and I to start following our first budget, instead of “whatever is in the account”. Thanks again!

  25. Hi All

    I, like many, had the same $1mill savings target. The problem is that the target itself is not a fixed goal (value of $ going up and down etc) and as you have discovered neither is your life plan. So I recently created a different goal…

    % towards financial freedom 😉

    Based on the theory that you can withdraw 4% of your investment portfolio per year to live, it is pretty easy to calculate the point at which you could stop working (get fired) without it effecting your lifestyle…

    Annual living expenses x 25 = Savings target
    So if you live off a $40k income you need $1mill to live work free. As things change so does the savings goal.

    I made a very simple spread sheet where I put in my monthly expenses total. Based on the date it extrapolates the annual expense for the current year. From that it calculates the work free, savings target. Next I put in my networth and from that it calculates what % I am currently towards the goal. I do this once a month. For Feb 2009 we hit 67% I am 42 years old.

    What I like about this method is that it is very open. If you want to spend more money now, go ahead. It just makes you aware how much further you are pushing financial freedom into the future. If you want to become financially free sooner you can cut back on spending and see the target becoming smaller and more achievable.

    Presuming one day I get to 100% I can effectively stop work at any point without our lifestyle changing. I like my work and presume I will continue. As I continue to save we will go above 100% – which isnt allowed 😉

    As we go above 100% we will be forced to spend more money to bring it back down – That would be fun.


  26. That graph is insanely awesome sir. And a nice break from seeing all that negativity out there in the world!

    I’m too lazy to post my last 5 years right now, but i’m equally as pleased 🙂 Although I must admit my goal of hitting 1 million by 47 is still on my radar, even if it is silly.

  27. one thing that always gets me about Americans in general the idea of long term planning. A lot of people have called you out for your lack of motivation. But I am going to say good for you for not having one.

    You can plan all you want but no matter what your plans are, it’s what randomly happens to you on some idle tuesday that will cause all your plans to get messed up.

    Who is to say what will happen between now and when you are 45? 65? 70? Why waste the best years of your life squirling away money for a day that might never come or if does will be different than what you picture it to be. and it WILL be different not matter what.

    Save some money for a rainy day but if you over plan your life, you are going to miss out on a lot of stuff. Don’t make having money be your end goal. You can’t take it with you when you die. Use your money to let you live life. You can save for 45 but what happens if you die at 44? Or what happens if the market crashes worse and you lose it all.

    Don’t put off tomorrow for what is best done today

  28. “It’s not whether Enzo was “right” in predicting a fall (wow that was hard to predict) it’s whether he made decisions on that prediction by say shorting stocks or selling real estate like I did.”

    I did sell my home in 2005, for a nice profit, and I’ve been renting since. I bought property overseas (small organic farm and small flat) with part of the money, and the rest I’m holding to buy another home for cash in the US, for pennies-on-the-dollar. Regarding shorts, I don’t play casino with my retirement money. The stock market is a rigged casino, manipulated by a bunch of Madoffs. I bought physical gold instead, and moved my money to “cash” in 2007. My portfolio has been returning 7% for the last three years. My emergency fund is in savings account that pays 5% at my Credit Union (used to be 6% until last Fed rate drop). No debt whatsoever. I’ve been warning folks about this crisis since 2004, nobody cared or listened.

  29. financePHI says

    Thanks for sharing with us! Five years ago I was still a junior in high school, thinking my financial aid check was huuuuuge! How the times change. One good thing is that I still live like a college student. No fancy dinners, cars, or clothes.

  30. Mississippi Mike says

    Question for Enzo

    Hi Enzo. Good call.

    What is obvious to you, is not obvious to all of us though, (baa baa…ah hem…).

    How did you know a year ago we were catching “falling knives”? And please explain where the 5200 comes from in “Dow 5200 here we come”.

    Many thanks in anticipation.

    Its too late tonight, but later this week Ill post my dads goals, and how they turned out. Its not a story you come across too often.

    And as usual, many thanks to Mr. “My Money Blog”.

  31. Five years ago, I was a few years into my first job, married with no kids. Since, I moved across the country for my 2nd job and started having kids. I didn’t enjoy that job, so moved to a 3rd job in another town. We took a big hit with the sale of our last home, and had to make two house payments for the past year. In that time, I haven’t saved a dime. We have two kids with a third on the way, and my wife has always stayed home with them. We’ve made the choice to forego the extra income and spend more time watching them develop.

    Kids really change things. I could care less about climbing the corporate ladder. I would rather be spending more time at home on nights and weekends. Our kids are young, and have no concept of our net worth. And while having a bigger family is expensive, from our kids point of view they will have a much richer life with their siblings.

  32. Vern it’s all about quality of life. That’s a main reason I ran away from CA after 2 months there. It seemed like unless you had a house from the 80’s or passed through the family you’d be in for a huge mortgage, having to work 8-9-10 hour days with an hour+ commute each way? Come on man. That’s not living. That’s a joke.

    My goal now that I’ve made so much in the past 2 years is go back to telecommuting, 50-70k/yr, hang with the kids, learn photography, get in even better shape physically/spiritually.

  33. @ Mississippi Mike

    “How did you know a year ago we were catching “falling knives”?”

    Dismal fundamentals, over-optimistic “E” on P/E is a lie, mass unemployment, Baltic Dry Index charts, too many cheerleaders calling bottom every other day, historical shift in consumer behavior in the US, too many cultists thinking that the Messiah had arrived to make everything tip-top with his magic teleprompter, etc. Easy call, really.

    “And please explain where the 5200 comes from in “Dow 5200 here we come”.

    Almost there Mike, just another 1,000 points to go as of 03/06/09. Get the popcorn.

  34. Wow, looks to me like you’ve done a FANTASTIC job in just five years. Most everyone would be envious at your achievements.

    Me? My quest has led me down a lot of paths in the last five years, but I would have to say that I’m both surprised and much happier than I was five years ago. But, I could have accomplished more. I’ve been a bit of a slacker the past couple of years, but that’s about to change.

    The NEXT five years will be even better.

  35. Hi,
    Have been enjoying the quality of your blog for a while now.
    You say your blog provide a non-trivial chunk of your total income.
    I’d be curious to know more about how you get income from your blog. A post (without revealing too much) would be great!

Speak Your Mind