Where’s Tara’s Money? A Breakdown of Long-Term, Mid-Term, and Short-Term Financial Goals

In today’s episode, I leaned into my edge around vulnerability on money and transparency. Like a game of Where’s Waldo, I dove into a conversation about where my money is going, the financial goals I have in the short-term, mid-term, and long-term, and what my target allocation percentages are in my business. This is an opportunity to hear how I do things, but it’s not meant to say it’s the right way. Allow the information to inspire you to think creatively about your own money.

Women are money hoarders. I’ve mentioned this statistic many times before, but research shows that 65% of women really hold onto their money and don’t put it to use for them. The reason for that is a combination of not knowing how, never being taught, or not understanding how money works. 

I must point out that I am part of a dual-income household. Both my husband and I are bringing in personal income. There is additional income from stocks, bonds, and dividends. That income is being reinvested, but it does exist. Wealthy people have around seven revenue streams, which has been a long-term goal for my husband and me to build more to offer a buffer from the ups and downs of our own businesses. 

My owner statement helps give a little insight into my perspective, I want to build a business that’s in service to my health while growing wealth for myself and others. Everything I do must be easy on my energy levels and ensure I’m not creating stress. 

Start With the Revenue Goal Calculator

If you haven’t already downloaded the Revenue Goal Calculator, now is the time. I always start there by plugging in my personal expenses. I look at my short-term, mid-term, and long-term goals and make sure they are reflected on my worksheet.

My husband’s salary covers the basics in our household, so we essentially live on one salary and then save and invest what’s left over. We are minimalists at heart, but that can be harder with teenagers. We’ve experienced financial hardship in our life, and we’ve learned to live below our means, but now, we allow ourselves to have some fun. The important thing is to remind ourselves that we are both small business owners, and there’s some unpredictability to that. 

Our Long-Term Goal: Live Off Investments

Long-term can mean different amounts of time to different people. I look at it as seven-plus years. That’s about how long your money will take to double in the stock market. Your long-term investment strategy will include stocks, bonds, ETFs, and dividends. Our goal is to be able to live off the income generated by our investments as soon as possible. 

The current economy isn’t growing as quickly as it has in the past, but we are hoping to reach the goal in seven to ten years. We are also trying to factor in health benefits and how we could cover those. It’s not a goal to be done working completely, we just want to take the pressure off of being self-employed people. 

Our Mid-Term Goal: Real Estate Purchase

Mid-term goals usually have a three to five-year range. The current goal is to purchase some real estate, but it’s still a little fuzzy right now. We need to learn more about it and decide if that’s something we want to take on. Owning property requires a lot of work, and I aim to make money without working for it. It’s definitely still a discussion, but it’s still out there as a possibility.

Our Short-Term Goals: College, Vacations, and More Fun

Short-term goals are mapped for the next one to three years. That’s where we have the most going on right now. Kids’ college, vacation plans, and an adequate peace-of-mind fund are all short-term situations we are actively working on. With the Revenue Goal Calculator, I can plug in all the information and find out how much money I need to ensure I’m covering our financial goals. 

My Approach to Money in Business

One thing you’ll learn with Profit First is the percentages, so I will give you mine. Revenue comes into my business and includes all the sales and money I receive into my business. Then I break it down like this:

  • 10% goes to profit
  • 35% goes to CEO compensation
  • 10% goes to taxes
  • 45% goes to operating expenses

I’m taking home 40% of my business’s revenue, and I aim to help you to do that when you join one of our programs. It’s all about structuring your business to pay you 40-50% of your business’ revenue. 

So why do you need profit? First, you will take that profit and pay off any high-leverage debt. You’ll be amazed how quickly you can pay off large chunks of debt with that profit. If you don’t have any debt, you’ll keep 50% of that quarterly as a cash cushion, let it grow, and take 50% of that and treat yourself to a vacation or another reward. 

The CEO pay covers all the ways I compensate myself through my business. I include my own personal development in that amount of money. This amount would add up just like a corporate job with perks on top of your base salary, so include any perks in that amount.

When I take my CEO pay and put it into my personal account, I make it start to work for me. With my husband’s checks, the 401(k) contributions are made, the mortgage is paid, and other obligations are handled, so when it hits the checking account, it’s money for groceries, dining out, a new pair of jeans, or whatever life throws at us. 

With my check, I portion money into a 401(k), a SEP, two Roth IRAs for my kids, and sometimes leftovers into the individual brokerage account. I also move some to a peace-of-mind account in a high-yield savings account with three months of fixed expenses for an emergency. If you are in a single-income household, having six months of living expenses in your emergency fund is recommended. Once our emergency fund hits the target number, we stop putting anything there. We also have a dog fund (for pet-related emergencies), a kid fund, and a vacation fund.

With operating expenses, the majority of that goes to my team. I want my business to run, but I value time over money. I have people that are better than me at parts of the business handling the work that is meaningful to them. I pay my team well over six figures, which was always a goal and dream of mine. 

Final Words of Advice

All of this is my spending plan. I portion off my money and give it purpose. These accounts all align with my Thrive List. I firmly believe in the practices introduced in the book The Millionaire Next Door and would recommend it. 

Even if you are not a small business owner, there is a lack of security in working for someone else. To be income independent, you must do the work and think differently about money. Many wealthy people don’t share all the flashy things, so try and avoid having someone on Instagram be the model for wealth. If you want to live more simply and free from stuff but rich with experience, hopefully, this breakdown helped you get some ideas.
Make sure to download the Revenue Goal Calculator and get started today!