Two Sides of a Dime (00:00)
Welcome to another episode of the Surplus Stack Podcast. In this episode, we're going to look at the five milestones that everyone should hit in their financial journey. I know that a lot of times you see multiple things that people tell you you need to do with your money. And a lot of times it's hard for you to figure out which of these you should do first. So in this episode, I'm going to tell you all the milestones that you should hit and what you should be doing during each stage before you hit that milestone. So you know exactly what goals you should focus on.
what milestones to look forward to, and just overall gauge where you are in your finances, see if you're making progress, and see if you're on track to become financially independent. Okay, so let's get started.
The very first milestone that everyone should aim for is getting to 30 % Surplus in their net income. So this is the amount of money that you take home every month. You want to be able to have 30 % of that net income left over after you've paid all your bills, covered all your living expenses. I know that out there, it is very popular for people to aim for a six figure or a hundred thousand dollar income, but
If you're someone that is probably earning $100,000, you've probably gotten to that stage and realized that, it's still not enough. So the question becomes, what is enough? What level of income do I need to get to in order for me to live comfortably, in order for me to not feel like I am financially strained? Well, you always need to make sure that there is a gap between your income and your expenses. And that gap needs to be 30%.
because we've seen people where you continuously increase your income, but because you increase your expenses to match your income, there is never a gap and there's never really that wiggle room for you to feel that relief of the financial strain or the financial stress. That's why we see people that are earning high income, like 200K, 250K.
and they're still living paycheck to paycheck. They're still telling me that they're feeling the strain. so in order for you to get to a place in your finances where you're no longer strained financially, you are no longer stressed, you don't have that financial anxiety, you feel a little bit of breathing room, a little bit of freedom,
you need to work towards getting to 30%. It's not just about getting to an income because different people at different levels of income can still have that 30 % and it's all based on your cost of living. So let me break it down. So before you start, you wanna figure out where you are today. what is your current Surplus? And to do this, you take your total net income and figure out what your expenses are.
and then you take your expenses out of your income to figure out what your Surplus is. And then you wanna calculate that percentage. So with that percentage, now you wanna ask yourself, what is the issue right now? Is it that I am not making enough money or is it that I am spending too much money? So you need to be able to make that investigation or come to that conclusion for yourself.
because I've seen people that are living on a $70,000 salary and they're still able to keep more than 30 % of their income, and it's all based on the type of lifestyle that they have. Meanwhile, I've seen people that have a $250,000 salary and they're not able to keep 30 % of their income because all of that money is going towards their lifestyle because they have a very high
high lifestyle, their expenses are equally high and they're not able to keep anything extra. So if something were to happen where they have a small emergency come up or something was to go wrong in terms of their paycheck coming in, it will completely disrupt their entire lifestyle or their entire livelihood. So getting to that 30 % is where you need to be. And in the next episode, I'm going to really break this down a little bit further and teach you
how you can calculate this number, teach you what to do based on each percentage and figure out how you can increase your Surplus. But for now, just know that what you should be aiming for is 30 % Surplus. Without a 30 % Surplus, you will not be able to work towards most of the goals that you have. So if your goal was to save for a down payment or you wanted to travel more or you want to save for an emergency fund or you want to start investing,
you will need a significant Surplus in order to get to your goals. One of my favorite things to do with the women that I work with is to calculate how much do we need to invest every month to get to their comfortable retirement number. And they're always shocked to see what that number is. lot of people think that $500 per month is good or $1,000 per month is good. And don't get me wrong, if that's all you have right now and that's where you can start from, that's great. But if you're telling me that you want to retire in your 40s,
$1,000 is not going to get you there unless you started investing when you were 15 years old. So you need to come to terms with the fact that if you want to hit some of the big goals that you have, you need to be keeping more of the money that you're making. You're not just spending it all on whatever you want to get today. You also have to think about the future and some of the things that you want to achieve. And I'm not talking about the distant future. We're talking about the near future. So 30 % is your first milestone.
start tracking your Surplus every month. so once you've paid all your bills, you've taken care of your food, transportation, personal care, like everything that you would spend money on, you want to have around 30 % left over for goals. So things like saving, investing, and paying off debt. So that's where your Surplus will go to. And if you have a really good tracking system, it should be able to tell you what that percentage is.
So if you do your number today and let's say you are around 25%, your goal will be to get to the next 5%. So that's a milestone that you'll be working towards is getting to your 30%. Because once you get to that 30%, every other milestone I'm gonna talk about down the line, it's gonna be so much easier for you to get there. If you find that you are finding it really hard to pay off debt, it's because you don't have enough Surplus or you're finding it hard to stay consistent with saving because sometimes you send money to your savings
And then three business days later, you have to take the money out because something came up. You're not able to keep that money and leave it alone. It's because you don't have enough Surplus to handle those day-to-day inconveniences that come up. So you need to have adequate Surplus, first of all, to get you to that place of financial freedom where you no longer feel the strain, where your money feels at ease. And then it will help you to work towards a lot of your short and long-term goals.
The next milestone you should work towards is getting fully funded emergency fund. Now there's always the question of how much should I really be saving for an emergency based on my situation? I believe that that number should be different for different people based on your lifestyle, based on your family size, based on what your expenses currently are. So that's what you should really be looking at.
in order for you to determine how many months you should be saving. So first of all, you want to look at what does it take for you to survive? So we're not really looking at what it would take for you to live comfortably or live a really lavish lifestyle. But if it came down to the bare bones, down to the wire, you were not making any money and you just had to survive, right? We had to pay the mortgage. We had to keep the lights on. We had to make sure that the kids are fed, the pets are fed.
We need to make sure that we have enough money to cover things like our deductibles on our insurances. Those types of things are what you will add when you're doing your calculation for your emergency fund. So at this point, you're not necessarily ordering takeout every single day. You're not really going to concerts if you don't have a job because you're just trying to survive and you're trying not to run out of your savings. So that is what you want to calculate is what it will take for you to survive.
So let's say it takes your family to survive on $6,000. So $6,000, that's the first thing you wanna figure out is what is the number that we need to survive each month. Then you wanna figure out how long it would take you to recover to full income. So if you were a double income household and one person lost your job, so you still have one income to survive on, maybe with that one person's income, you can still cover the entire household without
falling behind on bills. So with this necessarily need many months in order for you to recover, right? Because you already have a backup. So in this case, you would need anywhere from three to six months of living expenses. but if you're single, it might take you a little bit longer. And also given the climate that we're in right now,
it might take you recover. So in this case, you will want to have at least six months of expenses saved. Now, if you were somebody that was a freelancer, you never really know what's going to happen with the market or depending on the type of job you have, you might have a really, really volatile job where there's always layoffs. And sometimes when you get laid off, it takes you a while for you to get another job.
We've been seeing a lot of people on LinkedIn that are getting laid off and they've been complaining and saying, hey, I've been in the job market for over six months. It's never taken me this long. So you also need to adjust because I know a lot of people say they have job security, but yes, you can have job security, but do you have market security? Those are two different things. Your job could be secure, but is the economy secure? Because if the economy is not secure, nobody's job is ever secure. So don't you ever for a second think that you have job security.
because given the climate that we're in, we're seeing all kinds of things happening. We wake up in the morning and the news is disaster after disaster after disaster. So there's no such thing as job security in this year. So you need to make sure that you are protecting yourself. Now, some jobs are a little bit more secure than others, especially if you're an essential service. So some jobs are a little bit more essential than others. So you need to evaluate your job and figure out how long is it gonna take you to come back into the job market.
adjust and start getting full income. So if you're in a volatile situation, you want to aim for a minimum of around nine months. Now, if you're an entrepreneur, you want to be targeting around 12 months of expenses. And that is my goal as I've been a full-time entrepreneur for over five years. And even though I haven't really had any month where I haven't made any money, there are some months where I didn't make enough to cover my bills.
and I've had to fall back on my savings. So for me, I need to make sure that I have at least one year of expenses saved. This will not only allow me to cover my expenses if I ever went to a month where I didn't make enough to cover my bills, but it will also give me that breathing room where I feel like,
I don't have to like hustle, hustle, hustle, hustle every month because I have savings. And if worse comes to worse, I have something that's going to cover me as opposed to not having any kind of fallback plan. And you're just hustling, hustling, breaking your back, taking on clients and projects that you would not necessarily take on if you had a backup plan. So you need to assess your situation and also the size of your family as well.
If you have kids, a lot of things still need to be covered regardless of if you are making income or not, as opposed to if you were single. For me, I always say I can survive on $10 a week if it came down to that. I know how to rough it up. Gary and survive. It's fine. We'll be good. But if you have kids, you will not want to put them through that. So you will want to beef up your emergency fund just to make sure that your family is still comfortable.
Now in coming episodes, I'm gonna talk more about how to build your savings and the different stages. But for now, you wanna figure out what is your target that you're working towards. Regardless of how many months you should be saving, the barest minimum that everybody will need is at least three months. So you wanna start from three months. That becomes your first milestone that you wanna get to.
and then figure out what it would take you to get to a fully funded emergency fund. So your second milestone when it comes to your financial journey is getting to at least three months of emergency savings.
The third milestone is paying off all your debt completely. So getting to zero debt.
And this milestone will cover any type of debt excluding your mortgage. For a lot of people, your mortgage is something that they're going to be paying off for 20, 25 years. And that could be another milestone that you can add as years go down the line. But for now, you want to focus on paying off all of your credit cards, line of credits, student loans, financing loans, whatever type of loan that you have. You want to make sure that you are completely debt free.
I highly recommend you get to this milestone because as someone that paid off $47,000 of debt, there is a very different level of freedom that comes with being debt free. It allows you to take on more risks. It allows you to pursue your passions. It allows live freely because a lot of people live in fear. They're stuck in a job that they hate. And one of the reasons is because, ⁓ I owe all this money. And if I don't have a job, how am going to pay for all of this stuff that I owe?
So you need to really get to a point in your life where you tell yourself, if I cannot afford something, I wanna be able to delay this thing and save for it, rather than getting into that mindset of always putting things on a credit card, or line or credit. It's just, no, we cannot afford it, but we it right now, so we're just going to take on debt for it. and that debt just continues to pile up, and after a while, it becomes unmanageable. So getting to a place where you are debt free,
And after you have paid off your credit cards, all of your debt, want to stick to that debt freedom for at least a year. Because I know we live in a society where debt is almost inevitable and there's going to be circumstances where you might just have to take on loans again. For me, that is what happened after I paid off my debt. About three years later, I had to use my credit cards again because
there were months where I wasn't making money and I was using it to fund my business. So there's going to be times where you're like, you know what, this just has to happen. But you want to get to at least one year where you're completely debt free. Or if you can actually have multiple years where you just stay debt free, then that is a worthy milestone for you to achieve. So after you have completely paid off your debt, the next milestone you want to work towards is getting to $100,000
invested or one year of your annual income, whichever of these is the first that you get to. So I work with a lot of women that have gotten to their first $100,000 invested. And one of the things that these women have in common is that they all have a consistent money routine. So they're always telling their money what it needs to do and where it needs to go. And the average timeframe
for people to get to their first 100K is around three years. Now, depending on your income and depending on your Surplus, it might take you a little bit longer to get there. $100,000 investment because ⁓ 100K is that threshold that you get to in your investments where you really start to see the magic of compound interest.
plot your numbers into a chart and you put in your monthly investment contribution, you will notice that in the beginning stages, you are actually putting more of your money into that investment. So your first 100K will probably be 90 % of that will be money that you put in. But once you reach that 100K, You start to see that over time, the returns that you've made
with those investments actually supersedes the amount of money that you have put into your investments so far. So you really wanna work as hard as possible to get to your first 100K as fast as possible. So if it's going to take you, let's say 10 years to get to 100K, you wanna figure out how you can shorten that timeframe. And a good way to do this would be to first of all, again, look at your Surplus.
see how much you have going towards your investment. You can get to maybe two years where you're just aggressively, aggressively sending money towards your investments and making sure that you are front loading your investments as much as possible. This is something that I highly recommend for a lot of people to do, especially if you are in your 20s, you don't have a lot of bills coming up, you don't have a lot of expenses, you're living at home.
You don't have a mortgage yet. You don't have all these high expenses that are draining your income. You want to aim towards getting to your first 100K. And this is one of the things that we do inside of the Surplus Stack Society is to help you aggressively get towards those savings goals that you have. There's multiple ways that we do this. One of the ways that I help you stay accountable is every single month, you will send me your numbers. So when you start out, you tell me what your goal is.
Let's say your goal is to invest $40,000 this year. And then every single month you tell me how much you've invested so far. So let's say this month you did $1,000. Well, if you're only doing $1,000, you're not going to get to 40K by the end of the year. So we're able to look at it and say, okay, so what is hindering you from actually getting to your goal?
and then we can work through those challenges together. but we make it a little bit competitive where everybody gets on a leaderboard and you get a position on the leaderboard based on your progress. So not just the amounts that you've invested. So let's say your goal was to invest 40K and so far you've made,
50 % progress and you're the highest percentage progress, you'll be on the top of the leaderboard. And there might be somebody else that their goal is to do 10K, but they've already reached 100 % progress. So we're measuring you based on your progress, not just the amount, because different people have different incomes and not everyone will be able to invest such a high amount every single year. And in 2024, when I did an investing challenge,
there were women that invested $100,000 in just one calendar year. And it's such an exciting way for you to stay motivated when you see what people are doing with their money, how they're staying dedicated, how they're consistently putting money aside. It unlocks a different part of your brain where you're just like, oh wow, people can really do this and they're all women and they're really, really doing this. I can do it as well. So that's one of the things I really love about
being in a community where other people are working towards the same goal. So many people have already surpassed their $100,000 milestone and now they're working towards the next stage, which is financial independence. So financial independence is like the peak of where everyone is finally wanting to be. And financial independence is when your investments...
have gotten to the stage where it can completely replace your annual income without you ever having to work a job or work a business or work anything ever in your life again. So this is a place that we all want to be because at the end of the day, no one's gonna work till they die. We all want to get to a point where we are no longer working. And even if we genuinely say we wanna keep working, our bodies are not designed to work forever. Our bodies are going to shut down and tell you, down my friend.
So you wanna get to a point where you have that security, where you were putting your money aside in your investments and your investments are continuing to grow until you get to financial independence. Inside of Surplus Stack Society, I have a spreadsheet that allows you to do your entire investment planning. so in there you can put in your age, you can put in what your retirement age is, tell you exactly how much you need to achieve financial independence.
It will also tell you how much you should be investing every month. And it will actually compare what you need to be investing every month to get to financial independence versus what you're doing right now. And that is one of the things that a lot of are always shocked to realize is that, oh my gosh, I am not even doing nearly as much as I should be doing to get to my goals. So that's really an eye-opening session that I usually have with a lot of people when they're like, oh, okay, I need to increase my investments by almost a thousand dollars. Okay, let me get to work. But when you don't have those numbers, you might just be...
going in blind and not even knowing what you're doing. But it's always important for you to have that number when you're starting so you know what your target is and you also know what age that you're working towards. And then when you get there, you wanna start making a plan. So inside of Surplus Stack Society, I have the Surplus Method, which is a course. So it teaches you everything from how to create a budget, how to create your 30 % Surplus, how to build your emergency fund, how you can pay off debt and how to reach.
where you're $100,000 invested. I tell you exactly what you should have in your portfolio at different stages. So your first 25K, your first 50K, your next 25K, and even up to $100,000, what should your portfolio look like? Because you don't wanna start investing from scratch as though you ⁓ had $100,000 already in your bank account. So you wanna slowly increase your risk.
as your portfolio size increases. I also teach you about financial independence. I talk about the different types of FIRE, which is financial independence, retire early. So I talk about things like CoastFi and the different strategies, how to calculate those numbers and how to actually plan your exit from the workforce. So if your goal is to retire, what would you need? You would need to build a cash cushion. You would need to stagger your investments and your withdrawals at different stages. What accounts should those money be in? All of that.
is in there for you in the Surplus Method. So these are the five milestones that everyone should hit. And we actually designed the Surplus Method and the Surplus Stack society to actually follow step by step through these milestones. So Surplus, the S starts for strengthening your Surplus mindset.
because we cannot get to budgeting and all of those things without first understanding our relationship with money. So that's the very first thing that we work on is strengthening that mindset. And then we get to you, which is uncover your 30 % Surplus. And then we, in this stage, you are working on creating a budget, creating a money system, creating your banking setup, automating your cashflow, and then looking at money leaks. So...
What is stopping me from getting to 30 %? Do I need to increase my income? Do I need to fine tune my expenses? I even tell you how to reduce your expenses. So things like bill negotiations, reducing your housing costs, insurance, all of that stuff is in there for you so that you can get to your 30 % Surplus within the first 30 days of joining.
And then we have the R which is reach three months of emergency savings. So R in this stage, you are working on your emergency fund. So your goal is to get to at least three months of emergency fund. And once you get to your three months, you can now kind of like slow down the pace. You're still going to be putting money into your savings until you get to your fully funded emergency fund. But at this stage, you can be putting money towards other goals.
And in this milestone, there are so many other things that could support you to get in there. And I believe is in June, we have a challenge called the save one paycheck challenge. This is a challenge to really motivate you to save as much as possible that month. be able to save one entire paycheck. So if you get paid bi-weekly, you want to save one paycheck from that month and put that towards your savings. And for some people, they use it towards their investment or other goals.
The next stage will now be the P, which is pay off all consumer debt. So this is where you're working towards paying off your We also talk about how to pay off your debt, how to choose a debt payoff Method, which debt should you pay up first? How can you reduce your interest rate?
How can you refinance your debt? We talk about all of that as well as increasing your credit score. And we also run a challenge called the Debt Detox Challenge. So one of the things I always encourage people to do is to stop using their debt in order for them to see progress. So we do a Debt Detox Challenge so that you can go multiple months without having to rely on debt. and then we have the L.
which is to land one year salary and investment. So this is where you're working towards getting to your first 100K or your one year income. So we talk everything about investing here. So we talk about what is investing, how to open up a brokerage account. We compare multiple brokerage accounts in Canada and what to look for when you're investing in an ETF. And then we also talk about things like dividends, what to look for when building your dividend portfolio. We talk about how to invest in single stocks. We cover like
analysis of stocks, everything. It's so detailed. the Stack My Dime Blueprint, a lot of the modules that I talk about there are also in this, but with this you also get additional things like debt and savings and budgeting and all of that. And then once you completed that, you go to the next one, which is the U.
which is utilize your Surplus for your kids future. So this is where we talk about how you can start investing for your kids, setting up an RESP, setting up a trust and all of that stuff. If you want to set your kids up for a financially free future, this will be the module for you. And then we have the last stage which is the S, secure financial independence. So this is where we go into detail talking about
financial independence, what that means, all the different types of financial independence and how you can plan for each of those stages. So this is how you work through those different milestones inside of Surplus Stack Society. Everything is really to help you get to the end, which is secure your financial independence. But for a of people that would take them almost a decade to get there. So one achievable milestone that we look to work towards is getting to our first
hundred thousand dollars invested. And one of my goals is to help a thousand women reach that $100,000 invested because I explained earlier, that's like a key milestone that you want to hit in your investing journey. So everybody that comes into the Surplus Stack society, that is one major goal that you'd be working towards to get to your first hundred K invested. And for those that have already achieved that stage, their next goal is to work towards getting to financial independence. And I've broken everything down into what I call Surplus seasons.
And a season is kind of allowing you to figure out, which of these different milestones should I focus on based on where I am? So when you come in, you take a quiz that tells you what your season is. And then based on that season, you now know which of these different milestones you should work on. So the very first season is a debutant and the debutant is somebody that is just starting out their journey. They're still figuring out how to create a budget. They're not even sure what their Surplus is.
So at this stage, you're working on getting to your 30 % Surplus. So once you've reached that stage, you go to the next stage, which is the baroness season. The baroness season, you're working on two things, getting to your three months of emergency savings and paying off all consumer debt. these are the only two things that you'd be focusing on in this stage. Once you've reached those two milestones, you can go to the next season.
which is the Viscountess With the Viscountess, you'll focus on investing. So at this stage, you've paid off your debt, you've built your emergency fund, you have a 30 % Surplus. So with the Viscountess, your goal at this stage is to get to your 100K invested or your one-year annual income. So inside the Surplus Stack Society, we do have a lot of Viscountesses. A lot of people that have paid off debt, a lot of people that have built their savings and they're working towards...
that first 100k invested. And there's so many other people in all the stages, the debutants and the baroness as well. So the good thing is that you can be paired with the people that are already in your season and you all can work together, set meetups, co-budgeting sessions, in-person meetups as well. And you can form connections where you don't feel like everyone is ahead of you. There's so many other people that are doing the same thing as you and you can connect and work together. And then we have the next.
season once you've hit your 100k invested you go to the next season which is the Duchess season and the Duchess is working towards financial independence. So this is another stage where you will find that you might be here for a while because your goal is to get to financial independence and that takes almost a decade to get there.
So you're also there with other women that are working towards their financial independence and you guys can compare strategies. There's some people that are working towards coast fire. There's some people that are working towards lean fire. Some people are working towards fat fire. And you can compare strategies and figure out how to get there together. These are the things that I really love about the Surplus Society is that it's really guided for you. You don't come in there and feel like, my gosh, there's just so much to do. I don't know where to start. You know exactly where to start. The first thing we do is go through a quiz once you
figure out what your season is, I send you all the resources. I tell you which course you should focus on. You don't even need to watch the entire course because nobody has the time to do that. So you go to the exact modules that you need for your season and that's what you're focusing on. And once you've hit that target, then you know the next thing to work towards and the next thing and next thing. So you're never feeling overwhelmed or feeling like, my gosh, I have a lot to do. So these and many more are inside Elizabethan Society. And if you're someone that is working on your money milestones,
I really encourage you to come into the Surplus Stack Society where everything is already out there for you. You have a course, you have a community. You also get coaching from me. you get one free monthly audit where you can send me whatever thing you need and I can review it for you and give you feedback. We also have a private messaging where you can send me messages, you can send me screenshots, whatever things that you need me to look at, especially if you don't have time to attend calls.
you can definitely use the private messaging for us to interact together. this sounds like something that you're working towards in your financial journey, I am inviting you to join us at the Surplus Stack Society. You can just go to the surplusstackssociety.com and you can find all of that information to join us. And if you ever have any questions, please reach out to me on Instagram at two sides of a dime or Surplus Stack Society. We have an Instagram page or you can send me an email at contact at Surplus Stack Society.
Looking forward to seeing you and really seeing where you are in your journey and getting to those different milestones. And ⁓ we also have another fun way that we track our progress. I have like a bingo card that allows you to track all of these different milestones in between. And we also do prices. you've unlocked one season or one milestone, you also get,
there's recognition for those that are topping the that are hitting bingo under bingo cards and they're hitting milestones. I do want it to be a place that encourages you to continue to stay focused and hitting your goals. if all of this sounds like something you want, you're welcome to join us at the Surplus Stack Society. See you in the next episode.
