Where Do You See Yourself Financially in Eight Years?

Photo credit: John Nuttall, CC BY 2.0.

When I got my new Iowa drivers license and realized I had been randomly assigned a license that doesn’t expire for eight years, my first thought was “I wonder if I’ll even be living here, eight years from now.”

I could very easily see myself living here four years from now. Or five. That’s the kind of time range I’m familiar with, thanks to school and college and grad school. My MFA program was only three years, but when you add in the year I spent telemarketing and temping, you can divide my whole life into neat chunks of four and five years:

• Birth to pre-kindergarten
• Kindergarten and elementary school
• Middle school—ours was only 7th–8th grade, but I’m adding 5th and 6th in there as well since there was a distinct difference between what 4th grade felt like (we were all friends and learning was cool) and what 5th grade felt like (suddenly individual people were cool and learning wasn’t)
• High school
• College
• The telemarketing year and my decision to go to grad school
• Four years working as an executive assistant at a think tank in DC
• Being self-employed for one year in Los Angeles and four years in Seattle

So it’s really easy for me to think that I’d like four years from now to look “a lot like this but better:” more freelancing, more income, more savings, more books published, maybe a down payment on a loft-style condo. More involvement in the local arts scene. More teaching.

But eight years from now? Looking at how the past 36 years have gone, I feel like I have to expect some major life change to hit around the time I turn 40. Career seems like the obvious one, followed by marriage (though I’m not actively looking to get married) and health (either mine or a family member’s).

I’d like to say “well, financially it shouldn’t make a difference—just keep working and keep saving, and you can achieve your financial goals no matter what happens to the rest of your life,” but I also know that isn’t necessarily true. Some life changes take all the money you’ve got and then some.

If I were to state some financial goals for my life, eight years from now, they’d be along the lines of:

• Get to the “Freedom” level of personal finance, as defined by The Value of Debt in Building Wealth. This means having a net worth of five times my annual pretax income. (This is also the point at which homeownership and non-retirement investments become tools I can use to continue growing my net worth.) I could hit “Freedom” by 40, depending on how the next few years go, which means I might be part of the way towards the “Equilibrium” phase.
• HAVE A NON-RETIREMENT-BASED INVESTMENT PORTFOLIO instead of keeping all of my extra income in a savings account.
• Earn a significant percentage of my income (half? a third?) from book sales. (I have no idea how realistic this goal is, especially within a constantly shifting publication industry. I do know that the only way you get there is by writing more books.)
• Max out my Roth IRA every year and figure out what else I need to be doing to save for retirement.
• Probably buy a home or condo.

It’s really hard for me to articulate these goals because I only feel like I can plan the next four or five years—in fact, I’m kind of cheating re: the above because I’d list the same five goals for five years out. (What do you want to do between year 5 and year 8, Nicole? Hmmmmm?)

So I’ll turn the question around to you: where do you want to be financially, eight years from now? Is it also harder for you to think eight years into the future than it is for you to think four or five years ahead?

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