A little history on where we've come from...

When I first started saving and investing, the advice from investment professionals was to just start saving - anything - on a regular basis. The advice usually told me to start off with a 401(k) - max that out. Then if you have more money you can sock away, send it to your Roth IRA.

If you're just starting out and don't earn a big salary, this advice might leave you feeling a bit left out in the cold. Nevertheless, the advice is sound - save as much as you possibly can, starting as early as you can. Frankly, if I had heeded this advice starting in my late teens or early 20's, there is no telling how much I'd have now!

What the professionals are saying, I think, is that constant, month-to-month saving is the first key to financial success. The way I look at this: aim for a certain PERCENTAGE increase in your net worth, each and every year. If you're just out of college, and you end up with $5,000 after a year, your percentage increase is tremendous! If after year 2 you have $10,000, that's a 100% increase! Yes, it's only a $5,000 increase - perhaps not something to feel good about. Wrong, in my opinion. That's the very attitude that keeps young people from saving.

My goal has always been a constant 20% increase in my net worth. Of course, 20% is easy to eclipse during those early years. But run a spreadsheet - if you hit 20% each and every year, you end up a millionaire.

My wife and I bought our house in October 2000, cashing in a bunch of mutual funds in order to make the down payment. That left us a bit poor at the end of 2000.

Here is what my wife and I have done since then:
End of 2001: $28,725
End of 2002: $39,630, a 38% increase over 2001
End of 2003: $76,082, a 92% increase over 2002
End of 2004: $110,149, a 45% increase over 2003
End of 2005: $131,493, a 19% increase over 2004 (not 20%, dang)
End of 2006: $187,426, a 42% increase over 2005

Steady growth wins the race.