If your net worth is over $3 million, how did you do it?

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HomerJ
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Re: If your net worth is over $3 million, how did you do it?

Post by HomerJ »

The trick is to have TWO people making $80k each, and live on one salary.

Not everyone can do that, but it's not a 1%-5% kind of thing either.

Top 20%-30% can make that kind of money in their 30s and 40s and 50s, and saving $40k a year adds up. After 25 years, you'd saved $1 million, which has probably grown to $2 million.

Which is plenty really... $3 million may come for the couple above, but they don't need it.
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rascott
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Re: If your net worth is over $3 million, how did you do it?

Post by rascott »

mrspock wrote: Mon May 10, 2021 7:30 pm I'll throw this one out there: by moving.

I know people should optimize for happiness, and things are deeply personal, but it's been my observation than many people overweight the impact of moving for a job on their relationships and/or happiness they derive from family & friends.

In some cases -- when none of their family even lives where they grew up/live anymore! :shock:

IMO, it's difficult to make step function like gains in your prosperity unless you physically move yourself to a place where your talent and skills are maximally rewarded. I can't tell you how many friends I have who simply refuse to move anywhere beyond the city of their birth, even though quite obviously they'd make a lot more money, and retire far far sooner.

For the young people out there: I got news for you, once your friends start having families & kids, you will not see them nearly as much.... maybe not ever. As for family, many of them too might elect to move when an opportunity presents itself, so don't forgo the opportunities which come your way, only to be shocked when you are "abandoned" by your family when the same choice is presented to them.

In summary: don't be so tied down to where you grew up. Even Frodo Baggins went on an extended adventure or two.
I've thought of this often.... and in many cases it can make sense. But most typically when younger and earlier in career. Most moves for "better" jobs require going to HCOL areas. Which may or may not be best for raising a family, nor be helpful in actually raising your standard of living.
Bungo
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Re: If your net worth is over $3 million, how did you do it?

Post by Bungo »

Wannaretireearly wrote: Thu May 13, 2021 5:36 pm
Bungo wrote: Tue May 11, 2021 1:19 am
alderan wrote: Mon May 10, 2021 8:05 pm FAANG job. These companies pay extremely well and the RSU refreshers are awesome.
Yep, this was by far the biggest factor for me. I thought I was pretty well paid at my previous employer (a non-FAANG Silicon Valley tech company), but my total compensation made a huge leap when I joined a FAANG four years ago. Negotiating a big initial RSU package helps a lot, if you can make it happen by engineering a bidding war. Last year my gross income was nearly 4x what it was at my previous job, mostly due to employer stock. This supercharged my early retirement plan, and in fact I was able to retire ten days ago at age 52! Admittedly this will require cashing out of the Bay Area in the not too distant future, but that was always part of the plan.

The FAANG job was high-stress and not much fun, though. I wouldn't have wanted to do it any longer than I did.
Let us know if there is a Nirvana FAANG job/role/group which has great WLB. That would be a unicorn to chase! Maybe just the G in certain groups? Lol
That's the (three) million dollar question! I'm sure all of the FAANGs (and similar companies) have teams where the WLB is great, and others where it's horrible, and the average is somewhere in between. For two out of my four years it was pretty bad, and the other two, pretty good. But even on the best day, there was still some level of stress. And the WLB can shift from good (comfortable 40 hour weeks, partly from home) to bad (7 day/week death marches and months-long "war room" working conditions) rather quickly. Glad to be free from all that, even though it hasn't fully sunk in to my subconscious yet, two weeks after I pulled the plug.
Last edited by Bungo on Thu May 13, 2021 9:31 pm, edited 2 times in total.
Bungo
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Re: If your net worth is over $3 million, how did you do it?

Post by Bungo »

mrspock wrote: Thu May 13, 2021 6:29 pm
Wannaretireearly wrote: Thu May 13, 2021 5:36 pm
Bungo wrote: Tue May 11, 2021 1:19 am
alderan wrote: Mon May 10, 2021 8:05 pm FAANG job. These companies pay extremely well and the RSU refreshers are awesome.
Yep, this was by far the biggest factor for me. I thought I was pretty well paid at my previous employer (a non-FAANG Silicon Valley tech company), but my total compensation made a huge leap when I joined a FAANG four years ago. Negotiating a big initial RSU package helps a lot, if you can make it happen by engineering a bidding war. Last year my gross income was nearly 4x what it was at my previous job, mostly due to employer stock. This supercharged my early retirement plan, and in fact I was able to retire ten days ago at age 52! Admittedly this will require cashing out of the Bay Area in the not too distant future, but that was always part of the plan.

The FAANG job was high-stress and not much fun, though. I wouldn't have wanted to do it any longer than I did.
Let us know if there is a Nirvana FAANG job/role/group which has great WLB. That would be a unicorn to chase! Maybe just the G in certain groups? Lol
Reaching FI reduces the stress IMO, as the stakes of losing your job greatly diminish. If anything, you make MORE money when you are FI because the value of your time begins to climb higher and higher with your portfolio, so you demand more and get more.

This was almost an epiphany for me. People that are paid a ton of money are paid not just because they are better at a given job — their time is worth way more because they are wealthy (which raises the “market rate” for a given level). This creates almost a feedback loop which creates perversely high comps at the upper tiers of my field. Partly based on value, but partly based on the fact these folks are inherently wealthy, so their time is worth a lot.
Good observation. I think there's a lot of truth in this.
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snackdog
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Re: If your net worth is over $3 million, how did you do it?

Post by snackdog »

Firemenot wrote: Thu May 13, 2021 5:31 pm
snackdog wrote: Tue May 11, 2021 7:04 pm Why $3 million? Why not two, five, ten, 100?
My guess is because a lot of people say $3 million is the new $1 million.
One million dollars in 1971 (50 years ago) inflated to today would be almost $30 million, not $3 million. But the term millionaire is much older and would be equivalent to billionaire today. This is a person who can buy and sell medium to large companies.
nigel_ht
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Re: If your net worth is over $3 million, how did you do it?

Post by nigel_ht »

snackdog wrote: Fri May 14, 2021 7:13 am
Firemenot wrote: Thu May 13, 2021 5:31 pm
snackdog wrote: Tue May 11, 2021 7:04 pm Why $3 million? Why not two, five, ten, 100?
My guess is because a lot of people say $3 million is the new $1 million.
One million dollars in 1971 (50 years ago) inflated to today would be almost $30 million, not $3 million. But the term millionaire is much older and would be equivalent to billionaire today. This is a person who can buy and sell medium to large companies.
What the heck? How hard is it to Google “inflation calculator” plug in $1M for 1971 and see the result is $6.6M?

https://data.bls.gov/cgi-bin/cpicalc.pl ... ar2=202101
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sunny_socal
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Re: If your net worth is over $3 million, how did you do it?

Post by sunny_socal »

I think 3 Million will soon be 'poor.' I'm aiming for at least 4M and if inflation continues it will likely need to be 10M. Trouble is, wages are not increasing...
Miguelito
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Re: If your net worth is over $3 million, how did you do it?

Post by Miguelito »

nigel_ht wrote: Fri May 14, 2021 7:23 am
snackdog wrote: Fri May 14, 2021 7:13 am
Firemenot wrote: Thu May 13, 2021 5:31 pm
snackdog wrote: Tue May 11, 2021 7:04 pm Why $3 million? Why not two, five, ten, 100?
My guess is because a lot of people say $3 million is the new $1 million.
One million dollars in 1971 (50 years ago) inflated to today would be almost $30 million, not $3 million. But the term millionaire is much older and would be equivalent to billionaire today. This is a person who can buy and sell medium to large companies.
What the heck? How hard is it to Google “inflation calculator” plug in $1M for 1971 and see the result is $6.6M?

https://data.bls.gov/cgi-bin/cpicalc.pl ... ar2=202101
Right. No way is it $30M. But actual calculation aside, $6.6M sounds about right for that span of time. As someone who was a kid in the 80's days of Miami Vice, etc., hearing of "$1M" then feels like about $3-5M in today's dollars.
Last edited by Miguelito on Fri May 14, 2021 7:40 am, edited 3 times in total.
nigel_ht
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Re: If your net worth is over $3 million, how did you do it?

Post by nigel_ht »

stoptothink wrote: Thu May 13, 2021 8:00 pm
cipriano wrote: Thu May 13, 2021 6:41 pm ITT: Get a job with a high salary and don't blow all your money.

This forum is a wonderful, informative place—I've been lurking here for a while now as my financial situation has stabilized and I can save more easily—but whew, it's amazing to me that many people on this forum seem to think that a $400k salary is modest and that the key to building wealth is buying an affordable house. I have exactly one friend who makes that much, and they're a critical care/research MD at one of the country's top medical institutions.

I got a late start saving for retirement, because I pursued a PhD in a humanities-related field. (I never did it for the money, obviously.) Now, in a tenure-track position at a good school in Los Angeles—the kind of job most academics would consider a dream, given that less than half of humanities PhDs land tenure-track positions and most are in rural America—I make $80k/year. Barring some kind of academic superstardom, I'll probably never make much more than low-mid six figures. Advice like "buy a $200,000 house when your friends are buying $400,000 houses" is laughable here, where 2BR houses that are literally falling apart push $700k.

This is all fine, but my point is that the demographics here skew older and wealthy, and sometimes it seems like not everyone is aware of it. I have to deal with this all the time at my institution, where older faculty don't understand why younger faculty complain about housing costs/cost of living, not realizing that home prices nearly doubled in the past decade (and more than doubled in my neighborhood)—which also means that they're paying pennies in property tax because of Prop 13.

When GME/AMC/NOK/DOGE blew up, I was riveted, and could totally understand it (though fortunately mostly stayed away after an afternoon of indulging a few hundred bucks). Some of it was stupidity, and some was greed. But much of it came from a real sense of futility among people who are getting crushed and are angry about rising inequality + talking heads telling them to bag their lunch.
You chose a specific field knowing it didn't pay particularly well, got an advanced degree that delayed your entrance into the workforce, and live in one of the highest COL areas in the country; your financial situation was largely a personal choice. I'm probably of similar age (late 30's), from LA (but got out after undergrad, thank heavens), with a STEM PhD, and don't make that much more than you do, but will likely hit $3M before the age of 50 and the LBYM principles you are making fun of (buy less house and car than peers, brown bag it, etc.) are a big part of that. You alone make more than the national median HHI just starting out in a profession with stability almost like no other, if you stay the course and LBYM it is possible that in due time you will be one of the individuals you are making fun of.
I don’t think he made fun of anybody…the reality is that living in a HCOL with only a moderately above average salary will make portfolio growth slower because even if you LBYM it won’t be as much below as it might be in a MCOL or LCOL area.

Given that many private higher ed institutions are under financial stress being tenured provides less security than in the past. It’s only as stable as your institution and how much they value your department.

https://www.insidehighered.com/advice/2 ... ng-faculty

https://www.forbes.com/sites/michaeltni ... a019f474d5
acegolfer
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Re: If your net worth is over $3 million, how did you do it?

Post by acegolfer »

ahmadcpa wrote: Tue Nov 11, 2014 12:41 am Hello..just curious for those of you who has a net worth over $3 million, what was the most significant source of those savings? Inheritance, real estate, business income, salary or just appreciate in your stock market investments?
We had 1 source of original income: 18 yrs of salary. No inheritance/gifts. My current net worth is greater than the cumulative salary. The average annual savings rate was 53% (ranging between 29% - 70%). If you do the math, you can see that my total investment income is greater than the contribution. Thank you, VTSAX.
minesweep
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Re: If your net worth is over $3 million, how did you do it?

Post by minesweep »

ahmadcpa wrote: Tue Nov 11, 2014 12:41 am Hello..just curious for those of you who has a net worth over $3 million, what was the most significant source of those savings? Inheritance, real estate, business income, salary or just appreciate in your stock market investments?
Time in the stock market. Been retired 20 years. Which is more than the time I contributed to my retirement plan during my working years. During my working years I was 100% in stocks. I contributed the maximum allowed by my 401K plan (and had a taxable account as well).
Time is your friend; impulse is your enemy - John Bogle | Learn every day, but especially from the experiences of others, it's cheaper! - John Bogle
ValuationsMatter
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Re: If your net worth is over $3 million, how did you do it?

Post by ValuationsMatter »

Credit card points!
vfinx
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Re: If your net worth is over $3 million, how did you do it?

Post by vfinx »

Getting incredibly lucky by avoiding unemployment and finding Bogleheads just as the great financial crisis started. I saved and stayed the course during what turned out to be an incredibly good time to do so.

I saw some earlier posts about the cliche high earners who overspend. I think it's dangerous to assume everyone is like that. "Stealth wealth" is so often just reverse snobbery. If you find yourself feeling good/superior based on the assumption that everyone else must be stretched financially, something's gone wrong.
Hannibal Barca
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Re: If your net worth is over $3 million, how did you do it?

Post by Hannibal Barca »

Work in an intense, no work-life balance field for a decade at the start of your career, and save a lot / live below your means. Because making and saving a lot of money at 25 makes a lot more difference than at 55.
gregwils
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Re: If your net worth is over $3 million, how did you do it?

Post by gregwils »

ESOP with 30 years of employment.
Bungo
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Re: If your net worth is over $3 million, how did you do it?

Post by Bungo »

Hannibal Barca wrote: Fri May 14, 2021 6:44 pm Work in an intense, no work-life balance field for a decade at the start of your career, and save a lot / live below your means. Because making and saving a lot of money at 25 makes a lot more difference than at 55.
Agree in principle, but for most people, their earnings and therefore the amount available for saving is a lot higher later in their career than at age 25. At age 52, at least 75% of my investment portfolio (excluding real estate) can be attributed to money I added after age 40. I've worked my entire career in an intense, no WLB field (software engineering) but the compensation in this field over the past decade has been absolutely insane compared with what it was when I started my career (salary + stock just nudged into seven figures last year, versus $70k/year in the mid '90s!)

Accounting for real estate makes things more complicated because the hefty downpayment came from pre-age-40 savings but most of the appreciation was in the past decade. An argument could be made that buying a house early should be prioritized over maximizing retirement savings before owning a house, but that depends on a lot of variables.
Last edited by Bungo on Fri May 14, 2021 9:03 pm, edited 1 time in total.
sambb
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Re: If your net worth is over $3 million, how did you do it?

Post by sambb »

Hannibal Barca wrote: Fri May 14, 2021 6:44 pm Work in an intense, no work-life balance field for a decade at the start of your career, and save a lot / live below your means. Because making and saving a lot of money at 25 makes a lot more difference than at 55.
this would work ...
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market timer
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Re: If your net worth is over $3 million, how did you do it?

Post by market timer »

I have finally earned the right to comment in this thread :happy

While ability and choice of career are important, one factor that I'm starting to appreciate more now is purpose. We can achieve remarkable results if we have a compelling reason to do so.

I had some unique, personal factors that drove me to pursue a high net worth. Now that I have achieved a high net worth, I feel a profound loss of purpose, and am observing the consequences across many aspects of my professional life.

I suspect this dynamic is common among high-achieving professionals in mid-life. We have been playing a game that we start to find purposeless as our future material desires are now met, however our identities are tied to this game. Do we continue playing the game, running up the score to $10M or $20M, or listen to our inner self that craves purpose but is likely to lead us to an unfamiliar place without a well-formed identity?
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Re: If your net worth is over $3 million, how did you do it?

Post by quadog »

sunny_socal wrote: Fri May 14, 2021 7:36 am I think 3 Million will soon be 'poor.' I'm aiming for at least 4M and if inflation continues it will likely need to be 10M. Trouble is, wages are not increasing...
I hope you’re wrong. I’m trying to hit 3.5 and then FIRE. Stop scaring me!
grettman
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Re: If your net worth is over $3 million, how did you do it?

Post by grettman »

vfinx wrote: Fri May 14, 2021 5:21 pm "Stealth wealth" is so often just reverse snobbery.
+1. There is so much of that stealth wealth snobbery…
1moreyr
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Re: If your net worth is over $3 million, how did you do it?

Post by 1moreyr »

$3.2M portfolio almost $4M Net worth. I'm at the top of my game now and making good money (not bay area money) but I built this during more reasonable times with a stay at home spouse and 2 kids that I put through college. No scholarships, no loans just on my dime leaving them with no debt.

DW had years where she would make $1K-5K a year while home with kids but now she makes 60K .
I spent the first 6 years after college in the army before there were no savings vehicles like 401Ks available there. When I got out at 28 , I had nothing saved for retirement. Joined Megacorp at the lowest rung making $10K less per year than when I left the Army. Worked my butt off. delivered for it and was rewarded for what I did. No RSUs just and promotions and raises. Stock options once or twice but none that were life changing. started getting annual bonuses after about 12 years into the company .

I moved a couple times in the beginning to gain experience and have been in the same location/home for the last 21 years.

recipe was the same and simple.
1. It wasn't what i made but what I spent (and saved)
2. Married a frugal woman. Sometimes I would call her cheap. We both grew up poor and never lost our bearings. We bought nice things but as an example, I have never spent more than $29K on a new car (off the showroom new). and am still driving it.
3. We stayed married and are still best friends. Divorce will kill any portfolio. I am blessed this worked out
4. We had 2 kids but I wanted 3. My wife won that one and we stopped at 2. I believe having one less child than you think you can afford plays in as well. Kids are much more expensive than you realize when you are having them.

5. Every year that I got a promotion or raise, I would ask myself "Did i need this money last year?" The answer was almost always no. I then maxed out 401Ks, IRAs and started contributing in taxables. I discovered back door Roths way too late but did get 6-7 years of max contributions in one.

Although I knew saving 100% of my raises was helping the savings, it didn't dawn on me until I got close to retirement that it helped me another way.
Since we were living on 40% of our income (she joined the workforce when the kids were in High school) I only needed to replace this amount. All those stories about needing 80% of your income were wrong. The answer was based on expenses.

I found Bogleheads late but realize I am one... I was investing in index funds before it was popular (not a surprise to this group why)
TheNightsToCome
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Re: If your net worth is over $3 million, how did you do it?

Post by TheNightsToCome »

snackdog wrote: Fri May 14, 2021 7:13 am
Firemenot wrote: Thu May 13, 2021 5:31 pm
snackdog wrote: Tue May 11, 2021 7:04 pm Why $3 million? Why not two, five, ten, 100?
My guess is because a lot of people say $3 million is the new $1 million.
One million dollars in 1971 (50 years ago) inflated to today would be almost $30 million, not $3 million. But the term millionaire is much older and would be equivalent to billionaire today. This is a person who can buy and sell medium to large companies.
$1M in April 1971 would be $6,659,700.75 in April 2021, according to this calculator: https://www.bls.gov/data/inflation_calculator.htm
smitcat
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Re: If your net worth is over $3 million, how did you do it?

Post by smitcat »

TheNightsToCome wrote: Sat May 15, 2021 6:46 am
snackdog wrote: Fri May 14, 2021 7:13 am
Firemenot wrote: Thu May 13, 2021 5:31 pm
snackdog wrote: Tue May 11, 2021 7:04 pm Why $3 million? Why not two, five, ten, 100?
My guess is because a lot of people say $3 million is the new $1 million.
One million dollars in 1971 (50 years ago) inflated to today would be almost $30 million, not $3 million. But the term millionaire is much older and would be equivalent to billionaire today. This is a person who can buy and sell medium to large companies.
$1M in April 1971 would be $6,659,700.75 in April 2021, according to this calculator: https://www.bls.gov/data/inflation_calculator.htm
Exactly - a millionaire in 1971 meant something.
CloseEnough
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Re: If your net worth is over $3 million, how did you do it?

Post by CloseEnough »

As in much of life, luck plays a substantial role.
cbs2002
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Re: If your net worth is over $3 million, how did you do it?

Post by cbs2002 »

stoptothink wrote: Thu May 13, 2021 8:00 pm
cipriano wrote: Thu May 13, 2021 6:41 pm ITT: Get a job with a high salary and don't blow all your money.

This forum is a wonderful, informative place—I've been lurking here for a while now as my financial situation has stabilized and I can save more easily—but whew, it's amazing to me that many people on this forum seem to think that a $400k salary is modest and that the key to building wealth is buying an affordable house. I have exactly one friend who makes that much, and they're a critical care/research MD at one of the country's top medical institutions.

I got a late start saving for retirement, because I pursued a PhD in a humanities-related field. (I never did it for the money, obviously.) Now, in a tenure-track position at a good school in Los Angeles—the kind of job most academics would consider a dream, given that less than half of humanities PhDs land tenure-track positions and most are in rural America—I make $80k/year. Barring some kind of academic superstardom, I'll probably never make much more than low-mid six figures. Advice like "buy a $200,000 house when your friends are buying $400,000 houses" is laughable here, where 2BR houses that are literally falling apart push $700k.

This is all fine, but my point is that the demographics here skew older and wealthy, and sometimes it seems like not everyone is aware of it. I have to deal with this all the time at my institution, where older faculty don't understand why younger faculty complain about housing costs/cost of living, not realizing that home prices nearly doubled in the past decade (and more than doubled in my neighborhood)—which also means that they're paying pennies in property tax because of Prop 13.

When GME/AMC/NOK/DOGE blew up, I was riveted, and could totally understand it (though fortunately mostly stayed away after an afternoon of indulging a few hundred bucks). Some of it was stupidity, and some was greed. But much of it came from a real sense of futility among people who are getting crushed and are angry about rising inequality + talking heads telling them to bag their lunch.
You chose a specific field knowing it didn't pay particularly well, got an advanced degree that delayed your entrance into the workforce, and live in one of the highest COL areas in the country; your financial situation was largely a personal choice. I'm probably of similar age (late 30's), from LA (but got out after undergrad, thank heavens), with a STEM PhD, and don't make that much more than you do, but will likely hit $3M before the age of 50 and the LBYM principles you are making fun of (buy less house and car than peers, brown bag it, etc.) are a big part of that. You alone make more than the national median HHI just starting out in a profession with stability almost like no other, if you stay the course and LBYM it is possible that in due time you will be one of the individuals you are making fun of.
A person can do some of these things:

Work for love not money

Buy a decent house in a HCOL area

Travel a lot

Have kids without going in debt

Invest enough to get to seven figures in 20 years

Consume nice things regularly

But most people cannot do them all. A few get lucky or are special situations, but mostly you have to choose.
TheNightsToCome
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Re: If your net worth is over $3 million, how did you do it?

Post by TheNightsToCome »

smitcat wrote: Sat May 15, 2021 7:23 am
TheNightsToCome wrote: Sat May 15, 2021 6:46 am
snackdog wrote: Fri May 14, 2021 7:13 am
Firemenot wrote: Thu May 13, 2021 5:31 pm
snackdog wrote: Tue May 11, 2021 7:04 pm Why $3 million? Why not two, five, ten, 100?
My guess is because a lot of people say $3 million is the new $1 million.
One million dollars in 1971 (50 years ago) inflated to today would be almost $30 million, not $3 million. But the term millionaire is much older and would be equivalent to billionaire today. This is a person who can buy and sell medium to large companies.
$1M in April 1971 would be $6,659,700.75 in April 2021, according to this calculator: https://www.bls.gov/data/inflation_calculator.htm
Exactly - a millionaire in 1971 meant something.
Yes, but it didn't mean $30M.
dan7800
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Re: If your net worth is over $3 million, how did you do it?

Post by dan7800 »

Nobody here has said "slinging rocks", so I guess that is good.

No kids does seem to be a recurring theme here.
Sleepydoc99
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Re: If your net worth is over $3 million, how did you do it?

Post by Sleepydoc99 »

market timer wrote: Fri May 14, 2021 11:03 pm I have finally earned the right to comment in this thread :happy

While ability and choice of career are important, one factor that I'm starting to appreciate more now is purpose. We can achieve remarkable results if we have a compelling reason to do so.

I had some unique, personal factors that drove me to pursue a high net worth. Now that I have achieved a high net worth, I feel a profound loss of purpose, and am observing the consequences across many aspects of my professional life.

I suspect this dynamic is common among high-achieving professionals in mid-life. We have been playing a game that we start to find purposeless as our future material desires are now met, however our identities are tied to this game. Do we continue playing the game, running up the score to $10M or $20M, or listen to our inner self that craves purpose but is likely to lead us to an unfamiliar place without a well-formed identity?

You’re not going to be happier at 10MM or even 20MM. Happiness comes from purpose, like you said above. You already know this. Don’t pursue incremental wealth as a means to greater happiness. Find your new purpose.
ad2007
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Re: If your net worth is over $3 million, how did you do it?

Post by ad2007 »

market timer wrote: Fri May 14, 2021 11:03 pm I have finally earned the right to comment in this thread :happy

While ability and choice of career are important, one factor that I'm starting to appreciate more now is purpose. We can achieve remarkable results if we have a compelling reason to do so.

I had some unique, personal factors that drove me to pursue a high net worth. Now that I have achieved a high net worth, I feel a profound loss of purpose, and am observing the consequences across many aspects of my professional life.

I suspect this dynamic is common among high-achieving professionals in mid-life. We have been playing a game that we start to find purposeless as our future material desires are now met, however our identities are tied to this game. Do we continue playing the game, running up the score to $10M or $20M, or listen to our inner self that craves purpose but is likely to lead us to an unfamiliar place without a well-formed identity?
Maybe.

A lot of friends and family thought I would have this very problem in retirement. There were bets on how long before I un-retire and "do something." Luckily I found that my identity was not tied to my professional title, income level, achievements, goals ect. There was no reason for me to run up the score. But there are a couple friends who are still killing themselves trying to reach a number that even they admit is stupid.


To the OP: business/professional job income and then investment growth, with boring index funds.
Hannibal Barca
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Re: If your net worth is over $3 million, how did you do it?

Post by Hannibal Barca »

Bungo wrote: Fri May 14, 2021 8:55 pm
Hannibal Barca wrote: Fri May 14, 2021 6:44 pm Work in an intense, no work-life balance field for a decade at the start of your career, and save a lot / live below your means. Because making and saving a lot of money at 25 makes a lot more difference than at 55.
Agree in principle, but for most people, their earnings and therefore the amount available for saving is a lot higher later in their career than at age 25. At age 52, at least 75% of my investment portfolio (excluding real estate) can be attributed to money I added after age 40. I've worked my entire career in an intense, no WLB field (software engineering) but the compensation in this field over the past decade has been absolutely insane compared with what it was when I started my career (salary + stock just nudged into seven figures last year, versus $70k/year in the mid '90s!)

Accounting for real estate makes things more complicated because the hefty downpayment came from pre-age-40 savings but most of the appreciation was in the past decade. An argument could be made that buying a house early should be prioritized over maximizing retirement savings before owning a house, but that depends on a lot of variables.
I agree, most fields don't enable this strategy because you have to work your way up the ladder, which usually starts pretty low. Going down the big law, high finance, or big-tech software engineer paths could. I'm sure there are a few other options I'm missing.

Personally, I had no work life balance and wasn't married, so a studio apartment suited my needs just fine. What's the point of renting or owning something nice when one only uses it to crash late at night? Plus I was pretty mercenary about my compensation; I jumped around firms a few times. But assuming you have the stability and family needs (i.e., kids on the horizon), then prioritizing buying real estate may make more sense.
Hannibal Barca
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Re: If your net worth is over $3 million, how did you do it?

Post by Hannibal Barca »

I didn't do this, but it's a legit option: Marry a wealthy spouse, or a spouse with wealthy parents. Chances are that money is going to make its way to you some day...
ronocnikral
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Re: If your net worth is over $3 million, how did you do it?

Post by ronocnikral »

Hannibal Barca wrote: Sat May 15, 2021 7:24 pm I didn't do this, but it's a legit option: Marry a wealthy spouse, or a spouse with wealthy parents. Chances are that money is going to make its way to you some day...
You can marry more money in a minute than you can make in a lifetime.

Unfortunately i always dated, and subsequently married, a poor girl.
1moreyr
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Re: If your net worth is over $3 million, how did you do it?

Post by 1moreyr »

ronocnikral wrote: Sun May 16, 2021 12:12 am
Hannibal Barca wrote: Sat May 15, 2021 7:24 pm I didn't do this, but it's a legit option: Marry a wealthy spouse, or a spouse with wealthy parents. Chances are that money is going to make its way to you some day...
You can marry more money in a minute than you can make in a lifetime.

Unfortunately i always dated, and subsequently married, a poor girl.
If you are going to marry a poor girl, at least make sure she's a frugal one!!!
you will still get to the $3M :sharebeer
Colorado Guy
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Re: If your net worth is over $3 million, how did you do it?

Post by Colorado Guy »

1moreyr wrote: Sun May 16, 2021 5:55 am If you are going to marry a poor girl, at least make sure she's a frugal one!!!
One of my many mistakes on this journey. She was addicted to living in the moment, credit cards, hidden bank accounts and loans, living beyond our means, keeping up and surpassing the Joneses, etc. Ended up starting over at 40 with a net worth of $0 or less. An expensive learning experience.
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sunny_socal
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Re: If your net worth is over $3 million, how did you do it?

Post by sunny_socal »

Hannibal Barca wrote: Sat May 15, 2021 7:24 pm I didn't do this, but it's a legit option: Marry a wealthy spouse, or a spouse with wealthy parents. Chances are that money is going to make its way to you some day...
Or not. My wife and her sister are the logical heirs, yet her niece has found a way to get them both written out of the will. Said niece has convinced Grandma that she's "poor" and needs the money. (In reality, she makes 80k/year and she's merely broke due to unfettered credit card spending and trips to Vegas.)

I'm raising my kids to never, ever count on a handout from anyone, especially relatives.
eldinerocheapo
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Re: If your net worth is over $3 million, how did you do it?

Post by eldinerocheapo »

We got past this figure by using two of the most valuable resources known to Man.........compound interest, and time.
"Dream, Dare, Do."
j.click
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Re: If your net worth is over $3 million, how did you do it?

Post by j.click »

I am reminded of the sage adage, "No one works harder for his/her money than the one who marries it".
mw1739
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Re: If your net worth is over $3 million, how did you do it?

Post by mw1739 »

Hannibal Barca wrote: Sat May 15, 2021 7:24 pm I didn't do this, but it's a legit option: Marry a wealthy spouse, or a spouse with wealthy parents. Chances are that money is going to make its way to you some day...
My wife and I joined this club thanks to a gift from her parents last year, although we would have hit this figure on our own within the next 5 years or so.
Normchad
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Re: If your net worth is over $3 million, how did you do it?

Post by Normchad »

eldinerocheapo wrote: Sun May 16, 2021 7:42 am We got past this figure by using two of the most valuable resources known to Man.........compound interest, and time.
This is the way. Just be patient and go live your life. Go out and enjoy your life while your money pile starts to snowball in the background.

It seems the forum is seeing a lot more posts from people looking to get there over night. If you want it bad, you’ll get it bad....

And if you’ve got $3M, and stay patient, you’ll get to $5M fast.....

For me, I think it took 17 years to get to 1M. Then 5-6 to get to 2. Another 2-3 years to get to 3M.

This is all from W2 earnings. No crazy RSU millions or anything like that. Wife didn’t earn a lot. Had a kid and a nice house, 2 cars, went in vacations. I make good money now, but the money that is growing great for me is the “old money”.

Time is money. If you’re young, you have lots of time to let investing and compounding make you rich.
stoptothink
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Re: If your net worth is over $3 million, how did you do it?

Post by stoptothink »

ronocnikral wrote: Sun May 16, 2021 12:12 am
Hannibal Barca wrote: Sat May 15, 2021 7:24 pm I didn't do this, but it's a legit option: Marry a wealthy spouse, or a spouse with wealthy parents. Chances are that money is going to make its way to you some day...
You can marry more money in a minute than you can make in a lifetime.

Unfortunately i always dated, and subsequently married, a poor girl.
When I met my wife, her net worth was negative, and her parents will never be as wealthy as she was then. Without a doubt the biggest marriage stressor we've had is her parents' finances, and the fact that they have off-and-on had to live and be financially dependent on us. To be fair, my parents have essentially nothing outside some home equity, but they are self-sufficient. I guess we both screwed this one up, but we'll still hit this mark before I hit 50 (her, 45).
ronocnikral
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Re: If your net worth is over $3 million, how did you do it?

Post by ronocnikral »

1moreyr wrote: Sun May 16, 2021 5:55 am
ronocnikral wrote: Sun May 16, 2021 12:12 am
Hannibal Barca wrote: Sat May 15, 2021 7:24 pm I didn't do this, but it's a legit option: Marry a wealthy spouse, or a spouse with wealthy parents. Chances are that money is going to make its way to you some day...
You can marry more money in a minute than you can make in a lifetime.

Unfortunately i always dated, and subsequently married, a poor girl.
If you are going to marry a poor girl, at least make sure she's a frugal one!!!
you will still get to the $3M :sharebeer
my wife would have done well in the great depression. One her more admirable/annoying qualities.
SQRT
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Re: If your net worth is over $3 million, how did you do it?

Post by SQRT »

vfinx wrote: Fri May 14, 2021 5:21 pm

I saw some earlier posts about the cliche high earners who overspend. I think it's dangerous to assume everyone is like that. "Stealth wealth" is so often just reverse snobbery. If you find yourself feeling good/superior based on the assumption that everyone else must be stretched financially, something's gone wrong.
Agree. I’m pretty sure most people (not all) can afford what they buy. There is a lot of wealth out there.
SteadyOne
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Re: If your net worth is over $3 million, how did you do it?

Post by SteadyOne »

1moreyr wrote: Sun May 16, 2021 5:55 am
ronocnikral wrote: Sun May 16, 2021 12:12 am
Hannibal Barca wrote: Sat May 15, 2021 7:24 pm I didn't do this, but it's a legit option: Marry a wealthy spouse, or a spouse with wealthy parents. Chances are that money is going to make its way to you some day...
You can marry more money in a minute than you can make in a lifetime.

Unfortunately i always dated, and subsequently married, a poor girl.
If you are going to marry a poor girl, at least make sure she's a frugal one!!!
you will still get to the $3M :sharebeer
She might have been poor because she wasted all her money. Same for other gender. It is very very hard to save and invest for years to make to even $1 million on W2 paycheck. It is very very easy to spend it all in a few years.
“Every de­duc­tion is al­lowed as a mat­ter of leg­isla­tive grace.” US Federal Court
SQRT
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Re: If your net worth is over $3 million, how did you do it?

Post by SQRT »

When I met my current wife almost 30 years ago, I was going through a financially disastrous divorce. For the first few years of our relationship she helped support me financially. Within a fairly short time my career took off and our combined net worth increased exponentially.

She currently has well in excess of $3million and expecting a few more from an inheritance. She was quite a catch in every way. I am so lucky.
WyomingFIRE
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Re: If your net worth is over $3 million, how did you do it?

Post by WyomingFIRE »

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Last edited by WyomingFIRE on Sun May 16, 2021 4:08 pm, edited 2 times in total.
lostdog
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Re: If your net worth is over $3 million, how did you do it?

Post by lostdog »

sunny_socal wrote: Fri May 14, 2021 7:36 am I think 3 Million will soon be 'poor.' I'm aiming for at least 4M and if inflation continues it will likely need to be 10M. Trouble is, wages are not increasing...
What alternate reality do you live in?
mikejuss
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Re: If your net worth is over $3 million, how did you do it?

Post by mikejuss »

market timer wrote: Fri May 14, 2021 11:03 pm I have finally earned the right to comment in this thread :happy

While ability and choice of career are important, one factor that I'm starting to appreciate more now is purpose. We can achieve remarkable results if we have a compelling reason to do so.

I had some unique, personal factors that drove me to pursue a high net worth. Now that I have achieved a high net worth, I feel a profound loss of purpose, and am observing the consequences across many aspects of my professional life.

I suspect this dynamic is common among high-achieving professionals in mid-life. We have been playing a game that we start to find purposeless as our future material desires are now met, however our identities are tied to this game. Do we continue playing the game, running up the score to $10M or $20M, or listen to our inner self that craves purpose but is likely to lead us to an unfamiliar place without a well-formed identity?
If you've reached financial independence, and no longer feel purpose at your job, why keep doing it? Pursue other purpose-driven interests.
nigel_ht
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Re: If your net worth is over $3 million, how did you do it?

Post by nigel_ht »

vfinx wrote: Fri May 14, 2021 5:21 pm Getting incredibly lucky by avoiding unemployment and finding Bogleheads just as the great financial crisis started. I saved and stayed the course during what turned out to be an incredibly good time to do so.

I saw some earlier posts about the cliche high earners who overspend. I think it's dangerous to assume everyone is like that. "Stealth wealth" is so often just reverse snobbery. If you find yourself feeling good/superior based on the assumption that everyone else must be stretched financially, something's gone wrong.
If you have to worry about expenses beyond some minor tweaks (like fewer vacations) during a downturn or temporary job loss then yeah, you’ve been overspending because you’re under saving.*

Doesn’t matter income or wealth level. You can’t just plan for the nominal case and assume that you aren’t actually financially stretched.

* this is untrue for early accumulators…they simply haven’t had the time to build a decent amount of financial security.
nigel_ht
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Re: If your net worth is over $3 million, how did you do it?

Post by nigel_ht »

lostdog wrote: Sun May 16, 2021 10:10 am
sunny_socal wrote: Fri May 14, 2021 7:36 am I think 3 Million will soon be 'poor.' I'm aiming for at least 4M and if inflation continues it will likely need to be 10M. Trouble is, wages are not increasing...
What alternate reality do you live in?
Bay Area? (Yes, joking)
vfinx
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Re: If your net worth is over $3 million, how did you do it?

Post by vfinx »

nigel_ht wrote: Sun May 16, 2021 10:48 am
vfinx wrote: Fri May 14, 2021 5:21 pm Getting incredibly lucky by avoiding unemployment and finding Bogleheads just as the great financial crisis started. I saved and stayed the course during what turned out to be an incredibly good time to do so.

I saw some earlier posts about the cliche high earners who overspend. I think it's dangerous to assume everyone is like that. "Stealth wealth" is so often just reverse snobbery. If you find yourself feeling good/superior based on the assumption that everyone else must be stretched financially, something's gone wrong.
If you have to worry about expenses beyond some minor tweaks (like fewer vacations) during a downturn or temporary job loss then yeah, you’ve been overspending because you’re under saving.*

Doesn’t matter income or wealth level. You can’t just plan for the nominal case and assume that you aren’t actually financially stretched.

* this is untrue for early accumulators…they simply haven’t had the time to build a decent amount of financial security.
Sure but I'm not going to assume everyone who has a luxury car/watch/ house is like that. There's a lot of real wealth out there too, held by thoughtful people that have financial resiliency. And they're not all on Bogleheads.
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