This is the single most important hack I’ve used to build wealth. It’s easy.

I break down ALL of my money goals into daily goals. I still deposit money every day into my investment accounts and track my net worth for free using Personal Capital.

Our minds are built to think about today. Our ancestors weren’t able to comprehend years into the future. This is one of the reasons it’s so hard for us to save money.

BUT SERIOUSLY WTF? Who can save $1,272,000 dollars? I was barely able to buy a burrito.

These numbers are so large, they seem impossible to reach, don’t resonate with us, and actually discourage saving. But, backed by academic research, a lot changes when we start thinking about money in daily increments. Learn how I used this hack to transform my savings and reach financial independence.

If are nerdy like me and want to go deeper on this topic check out the research of USC professor Daphna Oysterman.

There’s an easier way to retire early and reach financial independence.

You’ve probably tried those retirement calculators or have used the retirement projector at Personal Capital. Most of the calculators come out with a number you will need to “retire” based on your inputs and current progression. The numbers are usually big and run into the millions.

When I had $2.26 in my bank account I used one and it told me I would need $1,250,000 to retire. My annual expected expenses are about $50,000, so this also hangs with the common idea that you only need to save 25 times your annual expenses to live off the interest forever.

IF I COULD SAVE JUST $50 EVERY DAY I WOULD REACH EARLY RETIREMENT (AT 55)

 

I did some calculations and determined I needed to try and save approximately $50 a day in order to reach financial independence in 30 years. It can’t be a coincidence that I needed to save a Grant a day!

It’s a simple calculation I did using a basic compounding interest calculator. In order to get to $1,250,000 I needed to save $50 a day and have an expected 5% annual compounding rate (a pretty reasonable expectation over a 30 year period). Thinking about it in annual terms I needed to save $18,250 a year. Max out that 401K!

But 30 years? Forget that.

Then I started really thinking.

IF I COULD SAVE EVEN $51 A DAY THEN I COULD FAST TRACK MY FINANCIAL INDEPENDENCE. THIS WAS A MIND-BLOWING MOMENT FOR ME. I WAS HOOKED.

 

I started depositing as much money as possible every day into my investment accounts. I downloaded the Vanguard app and literally make deposits every single day directly into my investment accounts. Some days it was only $5, but I rarely missed a day. When I started side hustling I put 100% of what I made directly into the same Vanguard account. I barely let deposits clear my bank account. The minute I saw the money in there I put it into an investment account.

I got really stoked when I was able to pass the $50 a day deposit threshold. I started to feel in control. I knew that I was ahead. Every day that I deposited more than $50 I was ahead in my retirement savings.

Then I started trying to make as much money as possible every day so I could invest it. I stopped thinking long term and thought every day about making that $50 threshold. When I got a bonus or new client those we just bonus points. BOOM, right into my investment account.

Do your own calculation – you might need a lot less.

Here is how much you need to save per day to reach your number. (Stay tuned – I am turning this into an early retirement calculator and will post here soon).

DEPOSITING MONEY INTO MY INVESTMENT ACCOUNTS EVERY DAY FELT, AND STILL FEELS, LIKE A GAME. I STARTED CRUSHING IT.

 

$50 went from being my daily goal to being my daily minimum. I started depositing $70, then $80, then $100 dollars a day. Then as my side hustles started really taking off I started deposit $500+ a day. Every check I got I put as much in as I could that day, but still kept my daily $50 deposit goal. Then I put $5,000 in a day, then $20,000 and the rest is history.

 

USING THIS EARLY RETIREMENT HACK I WAS ABLE TO REDUCE MY 30-YEAR SAVING PLAN DOWN TO JUST 5 YEARS AND REACH FINANCIAL INDEPENDENCE!

 

I still do this to this day. Now I automate most of it and simply have the money pulled out of my account and put into vanguard. My current minimum threshold is $200/day.

But you can start at any level that is comfortable for you. There are a ton of ways you can take this idea and run with it. Try depositing $5/day to start and then increase it $1/week. Trust me you probably aren’t going to miss that extra dollar.

There are a ton of apps you can use like Acorn and Digit to do this for you, but good old fashioned manual depositing via your investment app (Betterment, Vanguard, Personal Capital, or any others) all make it super easy to deposit. I find that doing it manually is A LOT more fun and will get you motivated to escalate your limits.

So that’s it. Start thinking about investing as a daily goal. Then crush it.

This article was originally published in Millennial Money