The Next Dollar Roadmap Intro
Geometry shows us that the shortest distance between any two points is a straight line.
This isn’t just theory, it’s a fact.
But, anyone who has ever traveled very far in any one direction knows that it can be challenging to walk very long without having to stray from your line.
You’ll encounter mountains, valleys, rivers, lakes, structures, and various other obstacles that do not cooperate with the straight-line approach.
Likewise, the best-made financial plans encounter obstacles.
Large expenses, job changes, moving, illness, taxes, kids, and on and on, all take their toll on our path to financial success (whatever that is).
Even so, we all know that we can’t allow these changes to our plan to completely offset us from our ultimate goal.
We just need to know how to get back on track.
Or maybe you’ve never even had a plan and are just taking life as it comes. Looking for a good reason to set an objective? To have a goal? We can give you that.
Over the years, I’ve read and heard countless approaches to financial planning, to building wealth, to securing retirement.
If there’s one infallible thing I’ve learned it’s that there are many paths to success, but underlying all of them are some basic principles that must be observed.
These principles were used to construct the Next Dollar Roadmap.
So, what is The Next Dollar Roadmap?
The Next Dollar Roadmap is a plan; better yet, it’s the optimal plan.
If you’re trying to travel from any place to financial independence, the Roadmap will help you use your next dollar in the best possible way to get you to FI as soon and painlessly as possible.
You can’t get there in a straight line, but the Roadmap will guide you around life’s many obstacles so you can eventually get there and arrive in great financial shape.
Money Optimizers
Naturally, we want to use our money as efficiently and wisely as possible, but optimizing those decisions is unique to everyone.
For example, the financial goals of my 8-year-old daughter are vastly different than mine, which are vastly different than those of my 70+-year-old parents.
And not only are the options for using money unique but so is the timing.
Your financial priorities will move constantly throughout your life.
One day you’re focused entirely on saving a down payment for a house and the next you’re trying to figure out how to get your kids through college.
At one moment, trying to pay down debt, and at another trying to pick the right retirement account.
Should I buy new or used? Name brand or bargain brand? Pay cash or put it on credit?
And with every decision comes an opportunity to doubt, second guess, and dwell on what we should have done.
Well, there’s no way to navigate the financial road perfectly, but we might as well have a plan so we can confidently say we’re doing our best.
In order to make this planning process as simple as we possibly can, we created the Next Dollar Roadmap to walk you through the process of mapping your own monetary plan to financial independence.
The Next Dollar Roadmap
What we are proposing isn’t anything revolutionary or secretive. Its purpose is for anyone seeking financial independence to take the best possible route there, no matter where you’re starting from.
- Just stepping out of your parent’s house and into the world on your own? There’s a place on the Next Dollar Roadmap for you.
- Up to your eyeballs in debt? There’s a place on the Next Dollar Roadmap for you.
- Have a high income, but not sure where to invest it? There’s a place on the Next Dollar Roadmap for you.
- Not sure how much you should be saving for retirement? There’s a place on the Next Dollar Roadmap for you.
- Financially comfortable, but want to learn about giving efficiently? There’s a place on the Next Dollar Roadmap for you.
- And anywhere else you might be, there’s a place on the Next Dollar Roadmap for you.
No matter the circumstances life presents to you, you’ll always be asking yourself how you can best use your “next dollar”.
The Next Dollar Roadmap exists to help you with that decision, and do so with the flexibility for whatever comes next on your journey.
Here’s a summary of our Milestones on the Next Dollar Roadmap, each with a brief explanation of what we’ll cover.
Starting Point: Creating Your First Budget –
We’ll walk through budgeting. Why do you need one? How do you make one? What sorts of categories should you track and why? Ultimately, we’ll illustrate why this tool is so critical to your financial success.
Milestone 1: The Uh-oh Fund –
“Uh-oh!” isn’t something we utter joyfully, but things happen. In this first Milestone, we’ll talk about what an uh-oh fund is (a small emergency fund) and why it’s so important to preserve your journey to financial independence.
Milestone 2: Take Advantage of Your Employer Match –
Employer matching dollars are a powerful force for building and accumulating wealth. We’ll take a look at where these dollars normally come from and how they can act as a tailwind to your wealth-building journey.
Milestone 3: Pay Off Toxic Debt –
One of the most obstructive forces to financial success is debt, but sometimes it can be a very useful tool for building one’s quality of life. We’ll talk about the potential benefits and the more common dangers that are associated with different types of debt.
Milestone 4: Full-Sized Emergency Fund –
The Uh-oh fund was a good start, but it isn’t robust enough to handle all the unexpected events life will throw your way.
In this post, we’ll talk about how much a fully funded emergency fund should have in it, as well as where you should keep that money for a rainy day.
Milestone 5: Save 15%-25% of Your Income in Tax-Advantaged Retirement Accounts –
Now that you’ve built a solid financial foundation, it’s time to get hyper-focused on accumulating wealth.
There aren’t any places better to do that better than within a tax-advantaged retirement account. We’ll talk about the different types and why you should use them to boost your net worth.
Milestone 6: Save for Flexibility –
Even though building wealth with tax efficiency is nice, many times that money can be difficult to access before retirement. Saving for flexibility gives us options to use wealth for various goals without being financially careless.
Milestone 7: Prepay Kids’ Expenses –
For those of you who want to help children get a head start in life, we’ll talk about different options for helping them with school or just transferring wealth to other generations.
Mostly, this section will cover education savings opportunities and which ones are right for you.
Milestone 8: Pay Off Remaining Debt –
It’s time to cast off any remaining low-interest debts and be completely in control of your assets.
In this post, we’ll discuss why it may be time to pay off even low-interest mortgages to help you optimize how you use your money in this financially secure period of life.
Milestone 9: Total Financial Independence –
This is the ultimate destination of the Next Dollar Roadmap. In this section, we’ll discuss “good problems” like estate planning, insurance, and how to give away your wealth efficiently.
Along the way, we’ll provide links to our more detailed content in each of the primary roadmap posts. This will give you the option to really dig into the details of financial concepts relevant to your circumstance.
Decisions, Decisions…
Hopefully, you’ve read our first post, where we explain why we decided to start a finance blog. One of our key desires for martinmoney.com is to provide decision-making tools to help you navigate choices related to personal finance.
So many financial websites shower readers with facts and details but fail to take the next step and actually provide guidance to direct readers how to evaluate a decision.
In our opinion, there’s a need here that’s not getting met.
Sure, we want to give you information. But we also want to walk through how we evaluate each option so you can be empowered to make the best possible decision for yourself.
For example, in our post evaluating HSAs vs FSAs, we walk through not only the details of each savings plan but also an example with details from a time when we evaluated this very decision several years ago.
We illustrate how each component of each plan factors into the decision, walk step-by-step through calculations, and present an optimal result.
This step-by-step walkthrough is where we hope to provide value to you the reader.
Most of the time when faced with a financial decision, these choices will lead to questions that start with phrases like, “How much…” or “Which is better…”. Much of our content seeks to answer those questions specifically and in great detail.
Let the Journey Begin
We encourage you to start with the next post about budgeting and browse through each Milestone until you find your place.
Hopefully, the information you find is helpful. If there’s anything you want to know more about and don’t see here, send us a comment and we’ll try to add posts to address specific requests.
