Marriage Can Help

. July 19, 2011
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We've already discussed how you can reach your dream by (1) saving money, (2) investing wisely, and giving yourself (3) time. If you can fund your dream on $14,000 a year and save $500 a month, you could reach that goal in as little as 18 years.

What if you want to get there faster? If you're young and married, you may have an advantage.

Out of College

Take James and Jean, a typical working couple just out of college. They want to reach $200,000 in investments, which throws off $14,000 a year at a 7% inflation-adjusted return. If they live on James' salary and save Jean's, they'll reach their goal sooner.

To find out how long it will take, use this calculator. I assumed that after taxes and tithe, Jean will save $25,000 a year, or $2083 a month. With a 7% inflation-adjusted return (enter 0% in the "inflation" box), they can reach their goal in only seven years.

Big Dreams
Using the numbers above, a young couple with no debt eventually gets a $200,000 investment portfolio throwing off $14,000 of passive income ever year. They'll be in their early thirties by the time this happens. What does it buy?
  • It's enough for a family to live overseas in some countries. Since they're not drawing from their investment portfolio, but just living off of the return that it generates, they can stay abroad indefinitely if they manage their money wisely.

  • Two children could attend private Christan school. Again, it would fund their tuition indefinitely.

  • It could replace part of Jean's income. This will make it easier for her to stay at home with the children if she wants to.
The Marshmallow Test

In every season of life, we're faced with hard decisions. Should we play or study? Have fun or wait for marriage? Watch TV or do our taxes?

Saving money is a test of commitment. Do you want your dream badly enough to sacrifice for it today, tomorrow, and for the next seven years?

Stanford researchers did an experiment in the 1970's testing children's ability to delay gratification. It's called the The Marshmallow Test. Watch the experiment in the video below.

I smile because I recognize myself in those children. I struggle with the same conflict every day.

How badly do I want my dream?