Dream Save Do
by Betsy & Warren Talbot
Dream | Save | Do
Copyright © 2011 by Betsy and Warren Talbot
Design and layout by Shea McGuier
Edited by Angela Barton
Dedicated to Betsy’s brother Bo Gray and our close friend Maria Ross, who inspired us to take action on our dreams. We cannot imagine our lives without you in them.
A Note from the Authors
Hey there, you sexy dreamer. Yes, you! It’s great to see you here, ready to create the life you really want.
We’re writing this introduction to you from the gorgeous French Alps after a year of traveling in South America, Antarctica, and Europe, and we have the funds for four more years of travel. Yes, you heard that right. We used this exact method to amass enough cash to travel the world for five years. We know what we’re talking about, and we want to help you learn to fund your dream, too.
Maybe you’re planning on traveling the world, or creating something incredible like a novel or an invention, or even going back to school to be what you always wanted to be before you got sidetracked. There are as many dreams as there are people, but there are only so many ways to amass cash.
Frankly, most of them are boring or painful and therefore unlikely to work for you.
This guide will not be a run-of-the-mill plan for saving 10% of your earnings for a rainy day. Your upcoming accumulation of cash has a purpose, a mission, and a real job to do, for heaven’s sake. Instead, this guide is the rain maker strategy for gathering the momentum and steam you need to reach your dream in the shortest possible time frame.
And, we have to admit it’s more than a little bit fun.
You see, we used this exact same plan, cobbled together from our own experience chasing a dream of traveling around the world, and felt like we were already living our dream two years before it happened. Just taking action on a small part of your dream, like raising the money to do it, will give you a huge mental boost for all the other things you need to do to make your dream a reality. The minute you deposit your first bit of dream money you’ll see exactly what we’re talking about.
We’re so excited for you we can hardly keep ourselves together!
Your dream is right around the corner, and you just took the first step toward it.
Let’s get started.
Introduction
"You're so lucky!"
"I wish I could do that!"
"Must be nice!"
These are the phrases we often hear when we tell people we are traveling around the world, and they are all true. We do consider ourselves lucky to live this life, we know lots of people who wish they could do it, and yes, it is very nice.
But you know what? Luck comes from focus and action.
People want to know our secret, the magic recipe, the special power that helped us go from corporate drones to world travelers. They want to know a quick answer and we have one:
Spend less than you earn. Save what’s left.
(Okay, you can throw something at us now. We deserve it.)
With dieting, you know that eating fewer calories than you use will result in weight loss. Yet many of us are overweight. With such a simple concept, we should all be thin! But you know how that goes in the real world, and it is much the same with saving money. It takes more than this basic knowledge to set yourself on a path to amassing the kind of cash that can change your life.
That is where our guide comes in. You’ll get way more than a stern lecture to “spend less than you earn.” You’ll get step-by-step instructions on amassing serious cash with advice for challenges and pitfalls along the way.
We’ll show you how to:
- Automate your savings to bypass willpower issues (hey, why test it if you don’t have to?)
- Create some homemade porn to keep you motivated (but not the kind you think!)
- Build your first crappy budget and then make it into a great one.
- Combat peer pressure and possibly even make people jealous of your new thrifty lifestyle.
- Live large on a small entertainment budget.
This guide is going to show you how to stockpile loads of money in a relatively short period of time so you can create something amazing in your life. You will never, ever look at saving money as that boring old rainy day thing again.
The Big Question: How did we do it?
We know where you are right now because we’ve been there, too. We wanted to change our lives but we didn’t know how. It wasn’t until two people very close to us came down with life-threatening illnesses that we finally forced ourselves into action, and that’s when we learned the biggest secret of all.
Scheming and dreaming will only fill your time. Taking action will fill your bank account.
It doesn’t matter that you don’t know how something will turn out or exactly how you’re going to do it. It doesn’t matter that you don’t know all the answers (who does, by the way?) What matters is that you take the first step, begin action immediately, and continue taking action every day until you reach your dream.
We learned this lesson as we saved and worked toward our dream, realizing that all those questions we had at the start were magically answered along the way because we were forcing them to be answered. Now you’re going to learn to do the same thing.
The guide is set up in three sections:
- Dream: Really define your dream and know what a day in the life looks like so you can figure out what it will actually cost.
- Save: Save, sell, find, earn: We’ll show you all the ways you can amass the cash – more quickly than you thought – to finance your dream.
- Do: What you do is more important than what you say, and this section covers the pitfalls (and comeback strategies) as well as your new role as the Pied Piper to all your friends who watch you from the sidelines as you prepare to live your dream.
Throughout the guide you’ll read specific scenarios from our story to illustrate the lessons we learned from the experience as well as how we made it through the roughest patches unscathed. Wherever you see the Idea Generator sections you’ll find tips and questions to help you in both the creative and practical steps to the program.
We’ll also reveal the key components to our savings plan:
- The Vault is the account where you will keep your money. It is a one-way street. You can’t touch this. In fact, imagine a big guard dog in front of your Vault door, snarling and barking if you get close (though he will wag his tail and roll on his back for a belly scratch once you reach your goal). Money goes in, but it does not come out until you have hit your goal. Do not make your guard dog bark.
- The Roadmap is your budget, the guide along this savings journey. You will start out with a crappy one, and your job is to refine it over time, making adjustments every month to move you closer to your goal. We’ll show you how to do it, and we promise the only painful one will be the first one.
- Dream Porn is your big visual, the reminder you place in a prominent space to keep your goal front and center.
- Phrase to Save is the mantra you will develop to keep you on track with your daily spending and celebrate your savings. We’ll show you how to develop yours based on your budget numbers and your dream.
Finally, you’ll see a checklist item at the end of each chapter to remind you of the major steps needed to complete this plan. At the end of the guide, you can view the one-page checklist of all the steps for easy reference.
We recommend that you read the guide through once and then go back and perform the exercises and get started taking action on your dream. (Though we won’t penalize you for jumping right in.)
Does that sound like a good start on learning how to live your dream? We think so. Now let’s begin with putting your money where your mouth is.
Ready to get started?
Disclaimer: You know the drill. We can’t guarantee you’ll have the same level of success as we did, though we can’t rule out you having more success than us, either. We are not financial advisers or attorneys, and we can’t be held responsible for anything you do or do not do as a result of this guide.
But you already knew that.
As with most things in life, the outcome is entirely up to you.
Part I
dream
Or, more accurately,
turning your dream into reality
Chapter 1
Define Your Dream
“There
are some people who live in a dream world,
and there are some who
face reality; and then there
are those who turn one into the
other.”
— Douglas H. Everett
The Mile High Bar & Grill at Terminal B in Denver International Airport is not the most romantic setting for a date. Rumpled business travelers nurse their drinks slowly so they don't have to give up their cherished seats before their flights are called. An overhead speaker crackles every few minutes with an unintelligible announcement. The aroma of exhaustion and fried food hangs in the air.
This is where Warren and I met one weeknight as we were flying in opposite directions across the country. We had each left home from Boston a few days before, and it would be a few days more before we would be home together. We considered it lucky that we were able to coordinate our flights to meet for a meal.
It was the least romantic time in our lives.
Warren arrived first and snagged us a table. I clickety-clacked across the terminal with my high heels and trolley bag to meet him, wishing for just five minutes in a pair of slippers to relieve my aching feet.
We ordered our food and began catching up. We talked about clients, projects, coworkers, and hotels. Not only were these things keeping us apart on a regular basis, they were even the topics of our conversation when we were together. We were those annoying sound bite chatterers, talking in biz-speak, abbreviations, and lingo that only another cubicle dweller could understand.
At the end of our dinner we both sat staring numbly at each other. We were so damn tired, and we were tired of being tired all the time.
"So, where are you going next?" I sipped the last of my wine as I gathered my things.
"San Jose. You?"
"Philadelphia. It's gonna be cold."
"Maybe you'll have time for a Philly cheese steak from Jim's."
"And maybe you'll get an In-N-Out burger. It sure beats this airport food."
We gathered our things, gave each other a chaste kiss and a hug, and set off in different directions to catch flights to our next destinations for still more meetings. Anyone looking at us at that time would have considered us coworkers, and through circumstances that is exactly what we were becoming.
We're not marriage counselors, but since we had both been previously married and divorced, we knew the signs of impending doom. We were heading down that path.
This wasn't one of those "he doesn't understand me" or "I have to read her mind" kinds of situations. Even scarier, we both knew exactly what was going on and how far away we were from happiness either individually or as a couple.
A few days later we were both back home again. After awkwardly joking about the need to make a date 2000 miles away, we started the uncomfortable conversation about why this lifestyle just wasn't working. Something had to give, and if we didn't want it to be our marriage we had to do something about it immediately.
This is when we began taking our first steps toward a dream, even though we would not have called it that at the time. That conversation was perhaps the hardest of our relationship because we had to admit that things were not working, set aside the idea of blame, and work on a solution.
We asked ourselves the question: "Is this really how we want to live?"
The only other option was to wait for the steady decline to turn into a conversation about an exit strategy, and neither one of us wanted that.
The dream we are living now – exploring the world – started forming from this very desire to not work so much and have more time together as a couple.
The lesson in that story is simple but powerful. When you become disconnected from your dream, you become disconnected with life, and you’re just going through the motions. Nothing is really bad, but nothing is really good either. The inner joy just isn’t there.
Maybe you have become disconnected from your dream, and right now you’re trying to find a way back.
Perhaps you want to travel around the world, or maybe your dream lies in starting your own business. Some people want to buy a new house or car, and others want to start a family or give birth to a creative idea like a book or invention.
Your dream may also be more along the lines of something you *don't* want to do instead of what you do, and that's a great starting point. Being fed up with something is a great motivator for change, and as you move away from what you don’t like about your life you'll see new opportunities open up all around you.
No matter what your dream is – fully fledged idea or fuzzy notion or just the conviction that what you’re doing now is not working – you'll need money to get from where you are to where you want to be, and you’ve come to the right place.
Now tell us: What is your dream, exactly?
Start thinking in specifics as we go through the next section.
“Whatever
you do, or dream you can, begin it.
Boldness has genius and power
and magic in it.”
— Johan Wolfgang von Goethe
It wasn’t until 2007, when my brother Bo had a heart attack at age 35, that we got our first inkling of mortality. Then in 2008 our good friend Maria had a brain aneurysm in her 30s, and we were completely thrown. And you all know what happened with the mortgage crisis in the US and the global economic meltdown after that.
We had been spending all our time working and planning for a comfy retirement, and these three events showed us that so much was out of our control, most of all TIME. We did not have the guarantee of time to live out our dreams in retirement even if we worked and saved all our lives according to plan.
What’s the solution? Well, you take advantage of the most precious resource first. That resource is time.
It took a pitcher of margaritas for us to make that discovery.
We were at El Camino, our favorite Mexican food restaurant in Seattle, with two good friends enjoying our second – or maybe fourth? – Margarita on a long holiday weekend. We had been there for hours, talking about everything under the sun like good friends do when the weather is balmy and there is no work the next day.
Our mutual friend Maria was still in the hospital after suffering her brain aneurysm a month before. We couldn’t help but think of my brother and his heart attack a year earlier and how much it had changed his life. Our friends had similar stories in their families of sudden illness and death. We didn’t know what the future would hold for Maria.
In fact, we didn’t know what the future held for any of us. As the night wore on and the margaritas flowed, we became a little more reflective and open about our fears. Could the same thing happen to any of us? We were all approaching our 40s, with good careers, nice financial prospects for the future, and a “plan.”
In fact, having a “plan” is what comforted us all along, let us know that we had things under control and were responsible adults. We had retirement savings. We even had a small savings account. We didn’t have huge debt, and we both had stable, well-paying careers and a home. Our plan was to retire early and travel extensively. But now we were faced with the previously unseen problem of not knowing how much time we actually had on this planet. Time is the wild card.
As it neared midnight, we asked the question that was on all of our minds:
“If you knew you wouldn’t make it to your 40th birthday, what would you do differently now?”
As the question went around the table and we all laughed and groaned at each other’s comments and predictions, we could feel an energy swelling around us. There was something to this question, and it was scratching an itch we didn’t even know we had.
Warren and I looked across the table at each other and the electricity flowed. We had an entire conversation with our eyes in just a second, and we knew without a doubt that we were going to change our lives. I can’t explain how it happened or why, but I will never forget the spark of that moment, the second our lives changed completely.
In that instant, we knew we wanted to travel the world together, and sooner rather than later.
The rest of the night was spent joking and laughing about what we’d do on this imaginary journey, but as we kept stealing glances at each other we knew it was the start of something big.
The next morning we asked each other, “Were you serious about last night?” The answer was YES, and we started planning our trip around the world that very day (after the Alka-Seltzer, of course).
Let’s talk about your dream for a second. Is it an “I want to do” kind of thing or an “I don’t want to do this anymore” kind of a thing? Both are valid, and both probably require some big changes on your part along with some cold hard cash.
You can say you’re tired of commuting, being in debt, working at a job you hate, or having no free time. Those reasons are every bit as valid as wanting a big lump of cash to become a writer or travel the world, and by learning that you can change your circumstances, you’ll make dreaming – and achieving – a regular thing in your life.
The longer you invest in your current reality – with your time, attention, money, and habits – the harder it will be to pull up stakes and make the changes necessary to live your dream. Don’t kid yourself that you’ll do it later. A dream deferred is a dream denied, and a smarter person than me coined that phrase.
What is your dream?
Can you define it in such a way that someone else can visualize it, imagine you living a day in it, or snap a picture of it? Be very specific.
You can estimate cost and build a budget around specific dreams. A fuzzy dream will always have a fuzzy price tag and be out of reach.
“I want to travel the world” becomes “I want to take X time off to budget backpack around X countries” or “I’d like to take one really fantastic luxury vacation every single year and these are my top five destinations.” You can work with this kind of specific information.
“I want to live on an island” becomes “I want to live in Maui and have a recurring stream of income so I don’t have to work.” You can work out a timeline of living off your cash as you ramp up your recurring streams of income to live happily ever after.
“I want to be a successful author” becomes “I want to write full-time for X months to finish my masterpiece and get a book deal.” We can’t guarantee you’ll be a successful author, but we do know you have to finish the book to even have a shot. Negotiating a sabbatical from work or amassing enough money to quit can allow you to pursue this dream.
Think about it so you can uncover any hidden costs or timeline restrictions before we start estimating your overall savings goal.
Define Your Dream
What is your dream? C’mon, give us some detail here! The more specific you can be, the easier it is to make your dream a reality. Use the following questions to brainstorm your dream into a reality you can almost touch.
- What does a day in your dream life look like?
- Where do you live?
- What activities do you do?
- What kind of people do you know?
- What kind of work or creative pursuit do you do?
- Who is there with you?
- What is different about this picture from the life you’re living today?
- List the things that need to change in your current life to make this happen. This is called Bridging the Gap.
What happens next is usually one of two things if you’re a couple: either “I can’t wait to do this with you!” or “You want to do WHAT?”
Not every couple is on the same page when it comes to their dreams. In fact, we were both married before so we know what it’s like to be in sync as well as what it’s like to be on Mars and Venus. What we didn’t know way back then was how to travel through space to live a hot and happy life together on Mercury.
If you and your partner have different dreams, or even the same dream but with different scenarios, then you have a bit of work to do before we move on. There is no simple answer to “how can I make my spouse share my dream?” because you’re not in love with a robot. Your partner is human, just like you, with wants and needs and fears and motivations.
The key to lining up your dreams is to simply talk about them. But first you have to take out the judgment, the manipulation, the guilt, the fear, and the anger so you can have a logical discussion to learn what will eventually bring you together on an idea.
- State your specific dreams out loud to each other or write them down and read them to each other (if you’re nervous).
- Think about what your partner is saying s/he wants overall: less work, more time with you, more time to explore an interest, more excitement in life, less stress, etc. Confirm what you think s/he is saying (this is no time for guessing games).
- List all of the overall similarities in your dreams, ignoring the specifics (you both want more free time or a change in location or travel).
- start discussing where your differences lie and how they can be resolved. Maybe one of you wants to take a year off to travel the world via backpack while the other wants an extended luxury vacation every year. Those goals are not as far apart as they seem, and a little honest conversation – it is the same overall goal of exploration and enjoyment, isn’t it? – will bring you to a solution that makes you both happy.
Even though Warren and I are on the same page when it comes to traveling around the world, we are not always on the same page about how to do it. We structure our trip to meet both our needs, “roughing” it for awhile and enjoying some luxury now and again to balance it all out. Even on a day-to-day basis we balance giving each other what we want in experiences, exercise, food choices, and methods of travel. It’s all part of being partners, and there’s no better time to learn that lesson than now if you haven’t already. This is probably not a conversation that will bring a resolution in 10 minutes, but it is one that will open up the lines of communication to find that perfect solution for you if you keep at it.
You love your partner. Your partner loves you. You want to be together and make each other happy. There is a solution somewhere in all of that. (We’ll talk more about aligning your goals as we create the budget Roadmap.)
When you have a specific dream in mind, it is time to start fleshing out the details.
If you have a partner or supportive friend, it’s best to work together on this next section. Sometimes you need a slightly different perspective to help you see available solutions. Be a little crazy with this. Remember that it’s just an exercise to get your mind working on your dream, and saying that you’ll do something extreme like quit your jobs and sell all of your possessions to travel the world with a backpack doesn’t necessarily mean you have to do it. (Though we can recommend it.) Give yourself permission to think crazy thoughts, suggest outlandish scenarios, and let your stream of consciousness thinking lead the way. Your solution is buried somewhere within the answers to these questions, and it will only come to the surface if you work at it.
Digging a little deeper
- Do I keep my job?
- If so, does it change in any way?
- Can I take a sabbatical?
- Can I work part-time?
- If not, do I need another source of income?
- For how long?
- Where will it come from?
- Will I be returning to my career at some point?
- How do I plan for that?
- What will I do about my credit card debt and outstanding loans?
- Can I pay them off?
- How?
- Can I negotiate for better interest rates?
- Can I get a deferment on paying back my student loans?
- What happens to my home and belongings?
- Will I still live there, or do I need to sell or lease?
- Should I downsize? Upsize?
- Should I store my belongings or sell some of them?
- Do I need my car(s)? Or a better/different one?
- Will I need health insurance, life insurance, trip insurance, or any other type of coverage for my dream?
- How will I finance it?
- What will happen to my pension or retirement accounts during my dream?
- What will my family or dependents be doing?
- What do I need to do to prepare them?
- Do I need to improve my health and fitness before embarking on my dream?
- How will I do that?
- How long will it take to be physically ready?
- Do I need to purchase special equipment or supplies?
- How soon do I need them?
- Can I space out the purchases over time?
- Can I buy them secondhand or barter?
- Do I need/want the help of other people to make this happen?
- Who specifically do I need?
- What specifically do I need from these people?
- How will I get their help?
How
does your dream look now? Can you see it
taking on a bit of
reality?
Rewrite your dream
again in more detail. This is the version you’ll
use to
estimate costs and start your savings plan.
Work through the questions, give some real thought to your dream and how you want to make it happen, and we’ll show you, step-by-step, how to amass the cash to do it.
Chapter 2
Create Your Dream Porn
"You must have long term goals to keep you
from being frustrated by short term failures."
~Charles C. Noble
Visual reminders are important. It is why we leave ourselves Post-it notes, set the things we don’t want to forget to take with us by the door the night before, and even put our exercise clothes at the foot of the bed to encourage us to work out when we first get up. (Well, I’m sure at least a few people do that last one.)
Dream Porn is your big visual, the reminder you place in a prominent space to keep your goal front and center. You will need this reminder on the days when you’re weak, tired, or getting a lot of peer pressure to spend.
This huge reminder of your dream, what you’re going to spend the near future working toward every single day, is a big motivator to stick to your savings plan. You don’t necessarily have to be cheeky and call it “Dream Porn” like we do, but you do need to indulge in this mental bit of self-pleasure on a regular basis to keep yourself focused on your main desires while all those nagging little wants – which are easier to get – are begging for your attention.
We put a giant map of the world on the wall of our den. This is the first thing we saw when we came home each day and the main point of interest in the room we used to stage our little “Craigslist shop” as we sold all of our belongings. (Note: Getting rid of everything was part of our dream. Don’t worry: this isn’t a necessary part of the plan to amass the cash.)
It sent a message to us as well as every person who came to our house, whether to socialize or to pick up an item they bought online, that we had a big goal. It was a regular, everyday reminder of why we were doing this thing, what we could look forward to in a relatively short period of time, and serve as a deterrent for continuing habits that would keep us mired in our current situation.
What kind of dream porn do you like? There are tons to choose from, depending on your goal and your sensory desires:
- Smell A friend loves Maui and wants to live there eventually. When I think of Maui, I think of the specific scent of gardenias. I smelled it everywhere, and when we returned to our rental at the end of each day I smelled it on the soap in our bathroom, too. I can never smell gardenias without thinking of Maui. Get yourself a scent-sual reminder of your dream.
- Hear Music, anyone? After traveling in South America, we can be instantly transported back there with the right kind of music. You may feel the same way about the music of a location, the songs of a happier time in your life when you were actively following your dreams, or the type of music that helps you create more of what you hope to do when you reach your dream. Consider a Dream Porn Soundtrack (and not the “boom chicka wow-wow” type) to keep you motivated every day. Perhaps the music to wake you with the alarm every morning or to send you off to sleep at night?
- See Pictures and maps are great reminders of what you want. You could even get really specific and create a vision board for your dream or drive by and take a picture of the exact location you want to live in or the place you want to locate your new business. Put it on your wall, your refrigerator, your desk at work, and your bathroom mirror. Make sure you see it every day.
- Taste Food can transport you to another world – perhaps even your dream world. If you want to live in another place, regularly cook those foods and use those spices. If you want to open a restaurant, prepare the kind of meals you want to serve in the way you want to serve them. You will be literally eating your inspiration.
- Touch Sometimes you need to hold it in your hand. When I was writing my first book, I created a mock cover for it with a blurb on the outside that said “New York Times Bestseller!” and a back cover with my photo and bio. I wrapped it around a “real” book and kept it propped up on my desk to see as I wrote. It helped me finish the book and – more importantly – start thinking of myself as a writer. This could also work for your invention, product, or idea. A friend who wants to move to Vienna in a year uses a planner with a Viennese theme so she can see it every day. Seeing it in real life – even as a mock-up – can be a huge motivator.
The idea here is to create a bit of realism to anchor your dream-ism. It will work as a subtle reminder every single day of why you’re working so hard to save and denying yourself those little pleasures that do nothing to bring you closer to your dream.
What will you use for motivation every day?
Don’t discount the power of Dream Porn. And for goodness’ sake don’t hide it under your bed.
Step-by-Step Checklist
Create your Dream Porn
Chapter 3
Determine the Cost of Your Dream
"By recording your dreams and goals on paper,
you set in motion the process of becoming
the person you most want to be."
~Mark Victor Hansen
Congratulations, you have defined your dream and packaged it up nicely in a tasteful display of Dream Porn. That and $4 will buy you a nice cuppa joe at Starbucks.
That's not me being a jerk; that's me being a realist. Your dream won’t go far – in fact, won’t go anywhere – without some action on your part.
Now that we’ve gotten the woo-woo portion of the guide down, it’s time to roll up our sleeves and get to work. This dream isn’t going to build itself, you know. (You’re starting to get the idea that “action” is a key part of this guide, right?)
Let's start with the dream you stated before. Maybe you want to travel, create something, start a business, or buy a car or a house. Maybe you even want to start a family or go back to school.
Whatever the dream, you know it will cost you some money, either in the cost of doing it or purchasing it or by paying for your living expenses while you pursue it.
Do you know how much this dream will cost? If it’s buying a car or home, you can pretty easily figure out what you need in terms of purchase price, maintenance, insurance, and fuel or utilities.
School, traveling, or writing a book might be a little trickier because you'll need to figure out your living expenses along the way. Starting a business will require a bit of research to come up with a number.
Figuring out the cost of your dream is the first potential sinkhole in your path to saving.
Oh, we know what you're going to tell us. Your dream is really complicated and you need time to figure it all out. Or you’re different from everyone else because you have X, Y, and Z to consider. Or you don't have any spare money at the moment so it doesn't make any sense to figure this out until you do.
Bullshit.
That was us calling you on it before you even have time to get the excuse out of your mouth. We do this out of love, of course, and because we know human nature. We did the same things, and because we've already been down this path we’re pointing out the potholes to you.
You’re welcome.
If you aren’t ready to make some real change, you may not be ready for the rest of this guide. Make your decision now, because it’s only going to get harder. Before it gets absolutely fantastic, of course. But you won’t get to fantastic until you make it through harder.
Got it?
Getting in the Ballpark
In order to avoid the first sinkhole, we’re going to set a timer: 15 minutes. Yes, 15 minutes. You quickly map out the estimated expenses for the dream you defined and come up with a nice round number at the end. Don’t worry if you’re not right; you won’t be. But you also won’t be right if you spend weeks working out every single line item.
(If you’ve ever taken a vacation or done a home remodeling project, you know what we mean.)
The important thing right here is to get a good starting number, something in the ballpark of what you need, so you can start taking action on your dream. Once you have that down, you can go back and revise the numbers to your heart’s content – but not before. Trust us on this.
Remember, any activity that keeps you from taking action on your dream is the enemy.
Let us repeat: Any activity that keeps you from taking action on your dream is the enemy. Fire at will.
So, what kind of research are we talking about?
Do you need to save 10% of the purchase price of a home for a down payment?
Do a quick scan of the real estate ads to find a home in your desired area and in your price range. It doesn't have to be the perfect home with the right light fixtures, just an average home in your desired budget and location. Calculate from there to get your 10%. Done.
Are you planning to go back to college?
Plan for what you need based on the stated rates, not what you think you might get in scholarships or government funding. That's an adjustment you'll be happy to make later. University websites and catalogs make this pretty easy to calculate. Done.
Would you like to travel long-term?
Defining the area of travel makes it pretty easy to calculate a cost. You know that South America will be cheaper than Europe and peak season means higher rates everywhere. You can even cheat a little on this one since we publish a monthly expense report of our travels (http://www.RTWExpenses.com). Come up with your ballpark number and refine it later.
You can continue doing this for your new business, an invention, setting aside time to write your novel or start painting/photography as a full-time pursuit. You can even map out your savings goal for starting a family.
(Funny side note: we have a few friends who have either adopted or done in-vitro fertilization to start their families. We've heard them each joke that their children are not priceless; they know exactly how much it cost to get them!)
You can also use the estimating tools at Smarty Pig (http://www.SmartyPig.com) or Mint (http://www.Mint.com) or MoneyDashboard (http://www.MoneyDashboard.com) to help you come up with your figures. All three services are free to join and take just minutes to organize your financial details and budget projections. We love using tools like this to plan because they are quick and allow users to try various scenarios easily and get to the action phase much faster.
We’ll be talking a lot about these 3 free services throughout the guide:
SmartyPig is a free online piggy bank for people in the US and Australia saving for specific financial goals.
Mint brings all your financial accounts together online or on your mobile device, automatically categorizes your transactions, lets you set budgets, and helps you achieve your savings goals. Mint is available in the US and Canada.
MoneyDashboard is a free online dashboard for UK users to access all your accounts in one place and manage your money.
How did we do our research? Well, it didn’t take 15 minutes initially, and we quickly got bogged down and almost lost our momentum altogether. That’s why we won’t let it happen to you.
The morning after we made our decision to travel, we brewed a big pot of coffee and sat down at the kitchen table to start our research. We had no idea what it would cost, how much we could get for renting our house, or the expense of storing all our things. Like you, we had a million questions and very few answers.
As we read more travel blogs and looked up flights and hotels online, we became more worried and confused. One person could travel in Asia on $5US per day and another in Europe on $250US per day, and both considered themselves budget travelers. Were they really traveling in the same style and the difference in price was solely due to location? Were we more like $5 guy or $250 guy?
Another couple spent $70,000US for 10 months of travel, but their blog showed pictures of them at resorts quite a bit and they made a couple of trips back home to the US during their travels. We weren't going to do that, so how would that number change for us?
- How much would we rent our house for?
- Would we have enough left over to help fund our travel, or would we be paying the difference?
- How much would it cost to store all of our stuff?
- Man, is it better just to sell the whole lot of it?
We spent a couple of days knee deep in research, and finally we had enough.
There is no magic formula out there to tell you exactly how much your dream will cost just like there is no magic formula for living happily ever after.
There is only a suggested guideline based on other people's experience and then refining it for your personal tastes. Get comfortable with ballparking it, because you’re on uncharted territory, mapping out the path to your own brand of happiness.
We did just that by calculating the costs of the cheapest place we were likely to stay and the most expensive place we were likely to stay and a reasonable amount of transportation thrown in. We then came up with an average as a ballpark figure for traveling each year. Add in the expenses for maintaining our house and possessions or getting rid of them, and you come up with the figure you need to make this thing really happen.
The figure came in at $36,500 per year of travel, or $100/day, well below the “don’t we have to be millionaires to do that?” number we had in mind at the beginning. It is pretty scary how “on” we were with that quick calculation. Even now, well after our first planning session and long into our trip around the world, we are still working off that same “daily average” number of $100/day we came up with at our final 15-minute planning session.
People instinctively know when they’re getting the right info about their dream, and they only continue researching to either confirm it enough so there’s no risk left (which will never happen) or because they cannot believe it is within reach.
It is.
Idea Generator
Reources for your 15-minute Research session
Google your dream
- Someone out there has done something similar to what you want, and you can learn from him or her.
- Note what is similar and dissimilar in your dreams.
- Scan for information instead of reading every word. You just want the costs, not the details on - living the dream. Bookmark all the relevant websites to review in detail later.
Tally the numbers
- Always round up. Not everyone keeps a close tally on spending, so the figures you research are probably low.
- Do you have additional costs based on your personal situation? Throw those in, too.
- Do you have any savings or extra income that can be applied to your dream? Great. Figure those in, too.
Refer to your “Day in the Life” Idea Generator exercise from Chapter 1