My road to £1 million
I am currently 22 years old and am hoping to have the option to retire by the age of 30.
This is exceptionally ambitious. However, I don’t do things by half and think that, with enough effort, this is completely possible.
Determination is great and all, but how am I planning to meet this amount in such a short space of time?
My plan:
Side Hustles
I set myself a target of earning £500 per month throughout 2021, and it is looking like I will meet this quite easily. With this additional income that I am making, I will begin to invest it.
Business
This website and The Bank Engine, as a brand, is currently treated as a side hustle. However, I plan to turn this into a fully functional business within the next three years.
My projections are that we will reach over £100,000 in income in the next five years and hopefully can scale upwards from there.
Of course, income is no indicator of profitability or value but when I re-do my projections later this year I will update you.
If this business becomes worth £1 million, I plan to sell part of my stake within it whilst retaining some involvement.
Other Businesses
Alongside growing this business, I plan to look into other areas of business. Perhaps looking into some of the following:
Bookkeeping services (automated so little time required)
Accountancy training (education in finance is key to me)
Property renovation & development (have always been interested in this)
Property rentals (of the above, cash-flowing assets are great)
Plenty more…
Investing
Of course, alongside all of this, I plan to invest as much as I possibly can, whenever I can, and will not stop until I reach £1 million!
Why £1 million?
There is something called the 4% rule which means that you can withdraw 4% of your investment portfolio every year without seeing the value of your investments decrease (because it grows at a higher rate than 4%)
By having £1 million in an investment portfolio, this will allow me to withdraw £40,000 a year as an effective salary. This will also be tax-free in most cases as you only pay Capital Gains Tax on gains over £12,300 every year!
Therefore, this will be a lovely sum for me to retire on and I am determined to get there!