Elon Musk, founder of Tesla, estimates it would cost around $200,000 to travel to Mars. The privatization of space travel means that this could become a reality. On March 30, his space exploration company, SpaceX made a breakthrough when it successfully launched and landed the first ever reusable orbital rocket, the Falcon 9. Refurbishing and re-launching rockets is a key part of SpaceX’s plan to make space travel cost-effective.
The first thing I thought was how cool it would be to travel to Mars before I die. If so, is the $200,000 ticket price worth saving for? I personally would love to have this opportunity before I die. So it immediately got me thinking about how to start saving for such an endeavor.
You have probably heard us talk about automated savings buckets before. I think saving for a trip to Mars is no different. Here are 3 tips for how to increase your odds of achieving your goal, whether space related or not…
- Start Early- Returns compound over time, so the earlier you start saving for a goal, the less you’ll have to save. Here’s an example of the monthly savings needed to get to $200,000, depending on whether a person starts saving 5, 10, 15, or 20 years in advance, assuming a 5% annual return. FYI, Musk says it will take about 10 years for the first mission to Mars to be feasible.
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- Automate- The more you can automate in your life, the more likely you are in achieving your goals. Set it and forget it. We are busy individuals. Just like your payroll deductions for 401k savings, determine the amount that you need to save each month and automate the contribution. Trust me, you will thank me later.
- Match your allocation to your time frame- When your time horizon is long, say 10+ years, you have a higher tolerance for risk and volatility. As a result, your allocation can be made up of mostly equities (stocks). As your time horizon decreases and you start to approach your desired end date, your allocation should gradually become more conservative through an increase of fixed income (bonds).