- Marrying a like-minded person who understands the value of money and does not over-spend
- Keep a budget
- Share your mint account so spouse gets notified when you are approaching or past monthly budget
- Investing early and often (I started investing at age 20, I am 40 years old now. 100% Boglehead-style for about 10 years now)
- Spouse does not understand investments very much, but understands the impact as she sees the networth chart in Mint
- Kid (10 years old) understands the significance of saving and investing, hopefully we can make him bogleheads-style when he is old enough.
- Hopefully the kid will not know our wealth until they are in the mid-20s. I don't want them to coast thinking they will inherit a fortune and don't need to work hard.
- Find a well-paying job (being in software engineering and silicon valley most definitely contributed towards it)
- Contrary to popular opinion, I actually think living in a high-COLA area helps since the cost-of-living increase is still usually lower than the salary/compensation difference.
- Buy a house you can afford (I pay less in mortgage than I would to rent an apartment)
- I re-financed as the rates kept sliding. Currently on a 1.75% 15-yr fixed loan, thanks to Bogleheads megathread on re-finance
- Have parents who paid most of my college tuition fees (very little debt after college)
- My networth includes ~100K in son's 529 account. I expect to get that to 200k by the time they are in college
- Expenses over 200K can be paid using part-time job that son can take during college, so they don't take money for granted
If your net worth is over $3 million, how did you do it?
Re: If your net worth is over $3 million, how did you do it?
I just crossed $3M mark, although the current stock market bull-run from the past ~1 year has definitely contributed towards it. For me, its hard to pin-point one thing that helped me, but its a combination of the following.
(AGE minus 23%) Bonds | 5% REITs | Balance 80% US (75/25 TSM/SCV) + 20% International (80/20 Developed/Emerging)
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Re: If your net worth is over $3 million, how did you do it?
There have been 2 bear markets during the 15 years you cited. That includes one only a year ago. Despite that your back testing showed strong savings over that relatively short period. There is no reason to think the next bear market will be any different.stocknoob4111 wrote: ↑Mon May 10, 2021 12:36 pm It was pretty easy for 2 dual earners contributing good savings in the last 15 years (2006-current) to accumulate $3M+.
For instance, I backtested 2006-current, 100% US Equities, contributing $5K/month inflation adjusted results in a current balance of $3.4M
It's going to get MUCH more difficult to replicate that starting now since we are at the possible start of a bear run. Those who were able to save consistently in the last 10-15 years had luck on their side.
"I would rather be certain of a good return than hopeful of a great one" |
Warren Buffett
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Re: If your net worth is over $3 million, how did you do it?
It’s pretty easy for you to say but until you’ve done it yourself-you will never know. I know plenty of dual income folks who made good money and never saved a dime. Backtesting is hypothetical but if one couple were so inclined to stay invested through two major jaw rattling financial events, no reason not to believe they would not stay the course for the third time around.stocknoob4111 wrote: ↑Mon May 10, 2021 12:36 pm It was pretty easy for 2 dual earners contributing good savings in the last 15 years (2006-current) to accumulate $3M+.
For instance, I backtested 2006-current, 100% US Equities, contributing $5K/month inflation adjusted results in a current balance of $3.4M
It's going to get MUCH more difficult to replicate that starting now since we are at the possible start of a bear run. Those who were able to save consistently in the last 10-15 years had luck on their side.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: If your networth is over $3 million, how did you do it?
Living below your means, means buying a $200,000 house when your peers are buying $400,000 houses, and buying a late model used car and keeping it for 10 years, while your peers are buying new cars and trading every 3 years, etc. You get the idea.
Re: If your net worth is over $3 million, how did you do it?
That's when "living below your means" is critical. It doesn't matter how much money you make, if you don't save, you can't build wealth.Grt2bOutdoors wrote: ↑Mon May 10, 2021 3:43 pmIt’s pretty easy for you to say but until you’ve done it yourself-you will never know. I know plenty of dual income folks who made good money and never saved a dime. Backtesting is hypothetical but if one couple were so inclined to stay invested through two major jaw rattling financial events, no reason not to believe they would not stay the course for the third time around.stocknoob4111 wrote: ↑Mon May 10, 2021 12:36 pm It was pretty easy for 2 dual earners contributing good savings in the last 15 years (2006-current) to accumulate $3M+.
For instance, I backtested 2006-current, 100% US Equities, contributing $5K/month inflation adjusted results in a current balance of $3.4M
It's going to get MUCH more difficult to replicate that starting now since we are at the possible start of a bear run. Those who were able to save consistently in the last 10-15 years had luck on their side.
Not sure our wiki has a definition, but it shows you how to live below your means:Leemiller wrote: What is living below your means?
https://www.bogleheads.org/wiki/Living_below_your_means
For me: LBYM means I save at least a dollar for every dollar spent. It's gravy if I can save more ($2 for every $1 spent).
Time is the ultimate currency.
Re: If your net worth is over $3 million, how did you do it?
I got to $3M by 40 and I did it by:
i) Dollar cost averaging into Vanguard funds
ii) Keeping some dry power free for black swan events. I was fortunate there were a few (2001 tech cash bought), 2007 sub-prime mortgage fiasco and 2008 Dow jones crash. COVID is another black swan event but I was above $3M by then.
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Re: If your net worth is over $3 million, how did you do it?
Find a business in an industry that has recurring revenue, start it, grow it to a $3m valuation.
Important to pick something that has value where you can sell out to a larger competitor.
Good example is an HVAC service company, a commercial landscape management company, a pest control company. Something like that.
Important to pick something that has value where you can sell out to a larger competitor.
Good example is an HVAC service company, a commercial landscape management company, a pest control company. Something like that.
Re: If your net worth is over $3 million, how did you do it?
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!
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 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!
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.
Re: If your net worth is over $3 million, how did you do it?
FAANG job. These companies pay extremely well and the RSU refreshers are awesome.
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Re: If your net worth is over $3 million, how did you do it?
Close to $3mil, if not over. ~$2.4 million retirement portfolio, Home Equity ~$425,000, 529 ~$150,000.
Simple diligence, stay the course.
Two income household contributed max to 401ks and IRAs since 2005. Small inherited IRAs (when inherited 8 years ago combined under $100k, now worth about 150k) that I have not touched, except for RMDs but my brothers both spent theirs.
Simple diligence, stay the course.
Two income household contributed max to 401ks and IRAs since 2005. Small inherited IRAs (when inherited 8 years ago combined under $100k, now worth about 150k) that I have not touched, except for RMDs but my brothers both spent theirs.
Re: If your net worth is over $3 million, how did you do it?
Is the question for both singles and married folks? or do we consider the question to be $1.5M for singles?
Re: If your net worth is over $3 million, how did you do it?
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.
Re: If your net worth is over $3 million, how did you do it?
I’ve passed that threshold twice. First when married, second after divorce when single.
I’ve always been in Biglaw, though kind of a tortured career path and always a bottom tier partner. Back in the early associate days my firms didn’t have any kind of retirement plans - I heard of this thing called an IRA and opened one maybe 3-4 years after I started working. Until then every penny had gone to buying and improving our first house. I then maxed out every tax deferred option I could. Ex insisted on taking care of the taxable investing which meant we never made much there, he tried to pick stocks. We also made a significant chunk over time on a couple of fortuitous home renovations in the late 90s/early aughts (though subsequent transactions knocked a bunch off of that, we weren’t as gifted flippers as we thought). Finally the ex had a high 6 figure inheritance also. By the time of our split our net worth was over $5M - hodgepodge of mostly my work, some of spouse’s real estate vision (he was an architect) and luck but mostly the power of plain old tax deferred savings and compounding. And being a gay couple with no kids - I imagine the result would have been very different having to pay a lot of school bills.
When we divorced I was almost 59. The way we worked it out was everything went into a single pot, even things that were arguably sole property. I took all the retirement funds, which are mostly pretax - without a discount for tax - and little else. (Odd way of doing things but it worked for us, even though I know I could have “done better.”) They were at about 2.6M. Markets have helped a ton, obviously - with that and just keeping to the kind of savings discipline I couldn’t enforce as a couple I’m now at about $3.3M in my 401(k) and DCP, another $300K in back door Roth, HSA, taxable and savings, and about $270K in home equity (worth about $800K, owe $530K).
I’ve always been in Biglaw, though kind of a tortured career path and always a bottom tier partner. Back in the early associate days my firms didn’t have any kind of retirement plans - I heard of this thing called an IRA and opened one maybe 3-4 years after I started working. Until then every penny had gone to buying and improving our first house. I then maxed out every tax deferred option I could. Ex insisted on taking care of the taxable investing which meant we never made much there, he tried to pick stocks. We also made a significant chunk over time on a couple of fortuitous home renovations in the late 90s/early aughts (though subsequent transactions knocked a bunch off of that, we weren’t as gifted flippers as we thought). Finally the ex had a high 6 figure inheritance also. By the time of our split our net worth was over $5M - hodgepodge of mostly my work, some of spouse’s real estate vision (he was an architect) and luck but mostly the power of plain old tax deferred savings and compounding. And being a gay couple with no kids - I imagine the result would have been very different having to pay a lot of school bills.
When we divorced I was almost 59. The way we worked it out was everything went into a single pot, even things that were arguably sole property. I took all the retirement funds, which are mostly pretax - without a discount for tax - and little else. (Odd way of doing things but it worked for us, even though I know I could have “done better.”) They were at about 2.6M. Markets have helped a ton, obviously - with that and just keeping to the kind of savings discipline I couldn’t enforce as a couple I’m now at about $3.3M in my 401(k) and DCP, another $300K in back door Roth, HSA, taxable and savings, and about $270K in home equity (worth about $800K, owe $530K).
Re: If your net worth is over $3 million, how did you do it?
Even responsible dual income earners will be hard pressed to save 60K. Not everyone is a doctor, lawyer, or works in techGrt2bOutdoors wrote: ↑Mon May 10, 2021 3:43 pmIt’s pretty easy for you to say but until you’ve done it yourself-you will never know. I know plenty of dual income folks who made good money and never saved a dime. Backtesting is hypothetical but if one couple were so inclined to stay invested through two major jaw rattling financial events, no reason not to believe they would not stay the course for the third time around.stocknoob4111 wrote: ↑Mon May 10, 2021 12:36 pm It was pretty easy for 2 dual earners contributing good savings in the last 15 years (2006-current) to accumulate $3M+.
For instance, I backtested 2006-current, 100% US Equities, contributing $5K/month inflation adjusted results in a current balance of $3.4M
It's going to get MUCH more difficult to replicate that starting now since we are at the possible start of a bear run. Those who were able to save consistently in the last 10-15 years had luck on their side.
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Re: If your net worth is over $3 million, how did you do it?
This can certainly be a factor. This is a discussion we have had multiple times in the last 2yrs. My wife has had multiple opportunities to at least double her income, but we're unwilling to move back to California (where we are from). We're in the "enough" category right now (mid-late 30's, ~$1.3M net worth and currently saving >50% gross income); we'll probably hit $3M in the next 10yrs, but we've made a conscious decision that hitting some financial goals earlier isn't worth moving our family back to somewhere we don't enjoy living.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!
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.
Re: If your net worth is over $3 million, how did you do it?
Given a 30 year career starting 1990 (call it age 25) saving $12K a year (inflation adjusted) invested in VFINX (S&P 500) you end up with $3M.Ramjet wrote: ↑Tue May 11, 2021 7:25 amEven responsible dual income earners will be hard pressed to save 60K. Not everyone is a doctor, lawyer, or works in techGrt2bOutdoors wrote: ↑Mon May 10, 2021 3:43 pmIt’s pretty easy for you to say but until you’ve done it yourself-you will never know. I know plenty of dual income folks who made good money and never saved a dime. Backtesting is hypothetical but if one couple were so inclined to stay invested through two major jaw rattling financial events, no reason not to believe they would not stay the course for the third time around.stocknoob4111 wrote: ↑Mon May 10, 2021 12:36 pm It was pretty easy for 2 dual earners contributing good savings in the last 15 years (2006-current) to accumulate $3M+.
For instance, I backtested 2006-current, 100% US Equities, contributing $5K/month inflation adjusted results in a current balance of $3.4M
It's going to get MUCH more difficult to replicate that starting now since we are at the possible start of a bear run. Those who were able to save consistently in the last 10-15 years had luck on their side.
https://www.portfoliovisualizer.com/bac ... ion1_1=100
Median income with a bachelor degree in 1990 was $39K so dual earners would be about $80K. $12K (15% gross) doesn't seem "hard pressed" out of college since expenses can still be low.
https://www.infoplease.com/business/eco ... -1990-2010
If you earn less it does take longer but $3M isn't impossible for many college educated dual income families in their mid 50s given a moderate savings rate and the historical stock and housing market. No law, medical or RSUs required.
Hmmm...I feel a little behind but out of school I was only making $35K and my wife was still in graduate school. That and I started with the Couch Potato portfolio (50/50) for a good 10 years or so before ramping up to 80/20 later on. Despite staring almost 10 years later my wife's retirement savings looks like mine because she's been 100/0 the whole time.
$2M net worth was historcally pretty easy for most college educated dual earners saving 10% gross ($4K a year each) and using an 80/20 AA. Figure after 30 years you could also have your house paid off and using a median home value of say $300K you're up to $2.3M net worth in your mid 50s.
Using 3.5% WR for planning purposes you could have a gross retirement income of $70K or so if you had enough in taxable to carry you to age 59.5.
Whether kids today can manage to do this...man I sure hope so.
Re: If your net worth is over $3 million, how did you do it?
Last year was a blip. It certainly isn't in the same league as 2007.eye.surgeon wrote: ↑Mon May 10, 2021 3:04 pmThere have been 2 bear markets during the 15 years you cited. That includes one only a year ago. Despite that your back testing showed strong savings over that relatively short period. There is no reason to think the next bear market will be any different.stocknoob4111 wrote: ↑Mon May 10, 2021 12:36 pm It was pretty easy for 2 dual earners contributing good savings in the last 15 years (2006-current) to accumulate $3M+.
For instance, I backtested 2006-current, 100% US Equities, contributing $5K/month inflation adjusted results in a current balance of $3.4M
It's going to get MUCH more difficult to replicate that starting now since we are at the possible start of a bear run. Those who were able to save consistently in the last 10-15 years had luck on their side.
That there was a bear market in the beginning of the savings period is a benefit and not a detriment. Assuming you started saving in 2006 SOR was hugely in your favor.
Start saving $60K a year in 1993 and at the end of 2008 you had an ending portfolio of $1.3M.
If we do have a bear run in the near term that would be good for early savers.
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Re: If your net worth is over $3 million, how did you do it?
hmmm...(reading a few responses...) Don't move (even if you want to and can afford it)? Work your butt off? Scrimp and save? Don't retire too early? Drive a beater? Don't spend money?
Maybe all that will make you rich, but it sounds pretty miserable.
What is the point of being rich and miserable?
I would rather be middle class and enjoy life than rich and miserable, wouldn't you?
And if you live almost your entire life like an ascetic with the goal of enjoying a life of leisure when you hit your target (assuming you are still healthy enough to do so), do you really think you will be able to turn it off?
What is the point of being rich in that case? Just bragging rights?
Make money. Don't let money make you.
Maybe all that will make you rich, but it sounds pretty miserable.
What is the point of being rich and miserable?
I would rather be middle class and enjoy life than rich and miserable, wouldn't you?
And if you live almost your entire life like an ascetic with the goal of enjoying a life of leisure when you hit your target (assuming you are still healthy enough to do so), do you really think you will be able to turn it off?
What is the point of being rich in that case? Just bragging rights?
Make money. Don't let money make you.
Re: If your net worth is over $3 million, how did you do it?
I think most people do some of those things but not all. This isn't MMM. Life is all about balance and retirement savings are one part (albeit an important part). I drive a fancy sports sedan that I bought new but will keep it for 10 years. I have a big new house with a pool, home theater and exercise room, but I live in a supposedly less desirable exurb and commute by train. I eat and drink extremely well, but I like to cook so fancy restaurant nights out are limited. I take really nice vacations but maximize discounts and points usage. You get the idea.protagonist wrote: ↑Tue May 11, 2021 8:50 am hmmm...(reading a few responses...) Don't move (even if you want to and can afford it)? Work your butt off? Scrimp and save? Don't retire too early? Drive a beater? Don't spend money?
Maybe all that will make you rich, but it sounds pretty miserable.
What is the point of being rich and miserable?
I would rather be middle class and enjoy life than rich and miserable, wouldn't you?
And if you live almost your entire life like an ascetic with the goal of enjoying a life of leisure when you hit your target (assuming you are still healthy enough to do so), do you really think you will be able to turn it off?
What is the point of being rich in that case? Just bragging rights?
Make money. Don't let money make you.
Re: If your net worth is over $3 million, how did you do it?
$3 million is not out of reach. You can do it the same way that gets you $1M with the same idea of living below your mean. Some higher eaner can do it faster, low earners can get there too with a little more time.
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Re: If your net worth is over $3 million, how did you do it?
Have a spouse who works, we have always maxed out 401K plans.
Lived in an apartment that was cheap until late 30's when all my friends had mortgages. My father always told me to buy 25% less house than I could afford.
Invested all extra money I could with each paycheck.
Early 50's now with 4M+
It can be done
Lived in an apartment that was cheap until late 30's when all my friends had mortgages. My father always told me to buy 25% less house than I could afford.
Invested all extra money I could with each paycheck.
Early 50's now with 4M+
It can be done
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Re: If your net worth is over $3 million, how did you do it?
Yes, I get it *smile*. You are living a balanced, happy life and living below your means. That works, regardless of how much money you eventually wind up with (which is largely dependent on the vicissitudes of the markets for investors and to an extent out of our control).chazas wrote: ↑Tue May 11, 2021 8:58 amI think most people do some of those things but not all. This isn't MMM. Life is all about balance and retirement savings are one part (albeit an important part). I drive a fancy sports sedan that I bought new but will keep it for 10 years. I have a big new house with a pool, home theater and exercise room, but I live in a supposedly less desirable exurb and commute by train. I eat and drink extremely well, but I like to cook so fancy restaurant nights out are limited. I take really nice vacations but maximize discounts and points usage. You get the idea.protagonist wrote: ↑Tue May 11, 2021 8:50 am hmmm...(reading a few responses...) Don't move (even if you want to and can afford it)? Work your butt off? Scrimp and save? Don't retire too early? Drive a beater? Don't spend money?
Maybe all that will make you rich, but it sounds pretty miserable.
What is the point of being rich and miserable?
I would rather be middle class and enjoy life than rich and miserable, wouldn't you?
And if you live almost your entire life like an ascetic with the goal of enjoying a life of leisure when you hit your target (assuming you are still healthy enough to do so), do you really think you will be able to turn it off?
What is the point of being rich in that case? Just bragging rights?
Make money. Don't let money make you.
But setting a target (like "I want $3M!") which becomes your prime motivation at all personal costs is, imho, a recipe for an unhappy life.
Many of us take your approach . But clearly, from reading some of the responses here (and in other Bogleheads threads as well), there are several others who take the latter approach. My post is meant for them.
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Re: If your net worth is over $3 million, how did you do it?
Agreed.Ramjet wrote: ↑Tue May 11, 2021 7:25 amEven responsible dual income earners will be hard pressed to save 60K. Not everyone is a doctor, lawyer, or works in techGrt2bOutdoors wrote: ↑Mon May 10, 2021 3:43 pmIt’s pretty easy for you to say but until you’ve done it yourself-you will never know. I know plenty of dual income folks who made good money and never saved a dime. Backtesting is hypothetical but if one couple were so inclined to stay invested through two major jaw rattling financial events, no reason not to believe they would not stay the course for the third time around.stocknoob4111 wrote: ↑Mon May 10, 2021 12:36 pm It was pretty easy for 2 dual earners contributing good savings in the last 15 years (2006-current) to accumulate $3M+.
For instance, I backtested 2006-current, 100% US Equities, contributing $5K/month inflation adjusted results in a current balance of $3.4M
It's going to get MUCH more difficult to replicate that starting now since we are at the possible start of a bear run. Those who were able to save consistently in the last 10-15 years had luck on their side.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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Re: If your net worth is over $3 million, how did you do it?
Yeah, I recently had a serious health scare at age 48, which reminded me the best laid plans for the future may never come to be for reasons outside your control. And not to be grim, but if it had gone the other way, I would not even be here to tell about it. In that sense, those who live for a future that never actually happens for them are naturally underrepresented in these sorts of forums.protagonist wrote: ↑Tue May 11, 2021 9:24 amYes, I get it *smile*. You are living a balanced, happy life and living below your means. That works, regardless of how much money you eventually wind up with (which is largely dependent on the vicissitudes of the markets for investors and to an extent out of our control).chazas wrote: ↑Tue May 11, 2021 8:58 amI think most people do some of those things but not all. This isn't MMM. Life is all about balance and retirement savings are one part (albeit an important part). I drive a fancy sports sedan that I bought new but will keep it for 10 years. I have a big new house with a pool, home theater and exercise room, but I live in a supposedly less desirable exurb and commute by train. I eat and drink extremely well, but I like to cook so fancy restaurant nights out are limited. I take really nice vacations but maximize discounts and points usage. You get the idea.protagonist wrote: ↑Tue May 11, 2021 8:50 am hmmm...(reading a few responses...) Don't move (even if you want to and can afford it)? Work your butt off? Scrimp and save? Don't retire too early? Drive a beater? Don't spend money?
Maybe all that will make you rich, but it sounds pretty miserable.
What is the point of being rich and miserable?
I would rather be middle class and enjoy life than rich and miserable, wouldn't you?
And if you live almost your entire life like an ascetic with the goal of enjoying a life of leisure when you hit your target (assuming you are still healthy enough to do so), do you really think you will be able to turn it off?
What is the point of being rich in that case? Just bragging rights?
Make money. Don't let money make you.
But setting a target (like "I want $3M!") which becomes your prime motivation at all personal costs is, imho, a recipe for an unhappy life.
Many of us take your approach . But clearly, from reading some of the responses here (and in other Bogleheads threads as well), there are several others who take the latter approach. My post is meant for them.
So yes, balance is absolutely key, and many happy lives have been led, in whatever time was allowed, without making it to $3M in a retirement portfolio. And also yes, I do worry about some of the people I see posting here, who have maybe lost the thread in the sense of understanding that the things we discuss here about financial planning are just tools, a means to an end, not the end itself.
That said, I do think there is a lot to be said for thinking seriously about what actually makes you happier, and avoiding the traps of FOMO, keeping up with the Joneses, and so on. As in, personally, I don't in fact really care about having the nicest car. I do in fact really enjoy travelling. So, "carpe diem" for me means not scrimping on nice family trips, but I still have no plans to spend more on cars. That sort of thing.
Re: If your net worth is over $3 million, how did you do it?
Working in tech over the past decade at the right level probably put a lot of people in this category. And it's not just the techies, it is also other functions working in tech (finance, marketing, sales, HR, etc.)
In my case, having 2 incomes and living on one for the most part got us there
In my case, having 2 incomes and living on one for the most part got us there
"It is not necessary to do extraordinary things to get extraordinary results"-Buffet| "Anytime that something is romanticized, you have to really question whether it exists"-Unknown
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Re: If your networth is over $3 million, how did you do it?
This....Big key to wealth, homes and cars seem to be the FI goal killers at all ages, even in retirement.
Some areas of the country, you can have a have a home and several acres for under a 100k, have a well paying and secure job, low COL and ability to save half your income.
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Re: If your networth is over $3 million, how did you do it?
Yeah, homes can be a tough conversation. We've really enjoyed our path of owning a couple nice old homes we could work on together (first a "starter" and then our "all we could want" home), in a nice walkable neighborhood with reasonable commutes. But in the city where we live, particularly at the times we were buying, it didn't take a ludicrous multiple of our joint incomes to manage that.Fierce Escape wrote: ↑Tue May 11, 2021 9:52 amThis....Big key to wealth, homes and cars seem to be the FI goal killers at all ages, even in retirement.
Some areas of the country, you can have a have a home and several acres for under a 100k, have a well paying and secure job, low COL and ability to save half your income.
I completely understand that in other cities, and at specific times including now, it can be prohibitively expensive to buy a nice home in a nice neighborhood.
Obviously one possible solution to that problem is to move to a different location, but that may or may not make sense in any given specific personal circumstances.
So, what was easy for us--both saving a lot of our incomes in diversified investment portfolios AND having nice houses to own which we didn't even need to treat as important savings--is not easy for others. And that creates a much more pressing tradeoff issue, and potentially a lot more risk.
Re: If your net worth is over $3 million, how did you do it?
I've not read all the posts, but I will state the obvious and say that a $3M goal may be doable for most, but it is far easier for some. Most who frequent this board are well off or very well off and for these folks a $3M goal is very doable over time, but not all here are in that boat. Perhaps most who aren't could still get to $3M with enough time and/or sacrifice, but a lot of comments here are somewhat judgmental of those who see it as a lofty goal.
That out of the way, and as a staunch believer of enjoying life while balancing financial responsibility, I do see people spend more money than they ought to in my HCOL town.
I think a lot of higher income households (say those in the $200-300k range) spend more than they should because they feel they make a "lot of money"
- and they do. Many times they are not necessarily going to go broke, and in fact they may feel they are saving "plenty," but the reality is that they could be saving a lot more while still living well. Things like vacation homes and fancy cars changed often come to mind. Also, a lot of services and kid-related expenses. I just think a lot of these folks just look at 62-65 as their target retirement age and they feel as long as they are putting money away in their 401k and not deficit-spending, all is well because they are spending on what they feel is "necessary."
Nice cars on credit/lease, HELOC's for home improvements, 2nd mortgages for vacation homes, even having bought too much house for their primary home, etc. Those are the kind of things good incomes can fool one into thinking "you can afford it" because there is money left over at the end of the month. It's just that there could be A LOT more leftover while living pretty well and not have to bank on "I've got 20 years left to retirement" when you are in your 40's. They see the 401k's, the nice house is getting paid, so "all is well."
That out of the way, and as a staunch believer of enjoying life while balancing financial responsibility, I do see people spend more money than they ought to in my HCOL town.
I think a lot of higher income households (say those in the $200-300k range) spend more than they should because they feel they make a "lot of money"
- and they do. Many times they are not necessarily going to go broke, and in fact they may feel they are saving "plenty," but the reality is that they could be saving a lot more while still living well. Things like vacation homes and fancy cars changed often come to mind. Also, a lot of services and kid-related expenses. I just think a lot of these folks just look at 62-65 as their target retirement age and they feel as long as they are putting money away in their 401k and not deficit-spending, all is well because they are spending on what they feel is "necessary."
Nice cars on credit/lease, HELOC's for home improvements, 2nd mortgages for vacation homes, even having bought too much house for their primary home, etc. Those are the kind of things good incomes can fool one into thinking "you can afford it" because there is money left over at the end of the month. It's just that there could be A LOT more leftover while living pretty well and not have to bank on "I've got 20 years left to retirement" when you are in your 40's. They see the 401k's, the nice house is getting paid, so "all is well."
Re: If your net worth is over $3 million, how did you do it?
Great post.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!
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.
A lot of people, for whatever reason, refuse to do the things that lead to success. Chase the opportunities.
Re: If your net worth is over $3 million, how did you do it?
I don't think there are many people here eat bean & rice all year to save $3M. So your perception is off in my opinion.protagonist wrote: ↑Tue May 11, 2021 8:50 am hmmm...(reading a few responses...) Don't move (even if you want to and can afford it)? Work your butt off? Scrimp and save? Don't retire too early? Drive a beater? Don't spend money?
Maybe all that will make you rich, but it sounds pretty miserable.
What is the point of being rich and miserable?
I would rather be middle class and enjoy life than rich and miserable, wouldn't you?
And if you live almost your entire life like an ascetic with the goal of enjoying a life of leisure when you hit your target (assuming you are still healthy enough to do so), do you really think you will be able to turn it off?
What is the point of being rich in that case? Just bragging rights?
Make money. Don't let money make you.
First, your income should be high enough to build wealth. Once your income is over the level of necessity, you should not be miserable because your needs aren't met because of your income level. It could be other reasons than money that make you miserable.
Second, I believe it is mostly about lifestyle choices for many people here who achieved $3M portfolio. If you read the book "Millionaire next door", you will get a sense of how self-made multi-millionaires build their wealth. They don't buy new fancy car every 3 or 5 years. They don't keep buying bigger and more luxurious house every 7 or 10 years. They don't need to show off their wealth and keep up with the Joneses. Those material things don't contribute to their happiness. Quite the opposite, building wealth and achieving FI will give them more options in life. They can choose to do more things in life that it would not be available for them if they still need to work 40-60 hours a week to put food on the table.
It's not about the how much money they have. It's about how many options they will get with the level of wealth they have accumulated.
Time is the ultimate currency.
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Re: If your net worth is over $3 million, how did you do it?
Spouse and I have built significant net worth without driving beaters and living in $200,000 houses. We've blown so much on incredible vacations, second properties, nice cars, etc. Never forgot to make investing in our futures the number one priority though. And being debt adverse. Toys and expensive vacations must be paid for with cash and only after maxing investment accounts each year. Worked for us, great memories, never suffered and wealth is growing rapidly.
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Re: If your net worth is over $3 million, how did you do it?
You begin by criticizing those being judgmental and then you become judgmental of your neighbors.Miguelito wrote: ↑Tue May 11, 2021 10:58 am I've not read all the posts, but I will state the obvious and say that a $3M goal may be doable for most, but it is far easier for some. Most who frequent this board are well off or very well off and for these folks a $3M goal is very doable over time, but not all here are in that boat. Perhaps most who aren't could still get to $3M with enough time and/or sacrifice, but a lot of comments here are somewhat judgmental of those who see it as a lofty goal.
That out of the way, and as a staunch believer of enjoying life while balancing financial responsibility, I do see people spend more money than they ought to in my HCOL town.
I think a lot of higher income households (say those in the $200-300k range) spend more than they should because they feel they make a "lot of money"
- and they do. Many times they are not necessarily going to go broke, and in fact they may feel they are saving "plenty," but the reality is that they could be saving a lot more while still living well. Things like vacation homes and fancy cars changed often come to mind. Also, a lot of services and kid-related expenses. I just think a lot of these folks just look at 62-65 as their target retirement age and they feel as long as they are putting money away in their 401k and not deficit-spending, all is well because they are spending on what they feel is "necessary."
Nice cars on credit/lease, HELOC's for home improvements, 2nd mortgages for vacation homes, even having bought too much house for their primary home, etc. Those are the kind of things good incomes can fool one into thinking "you can afford it" because there is money left over at the end of the month. It's just that there could be A LOT more leftover while living pretty well and not have to bank on "I've got 20 years left to retirement" when you are in your 40's. They see the 401k's, the nice house is getting paid, so "all is well."
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Re: If your net worth is over $3 million, how did you do it?
Right.NiceUnparticularMan wrote: ↑Tue May 11, 2021 9:44 amYeah, I recently had a serious health scare at age 48, which reminded me the best laid plans for the future may never come to be for reasons outside your control. And not to be grim, but if it had gone the other way, I would not even be here to tell about it. In that sense, those who live for a future that never actually happens for them are naturally underrepresented in these sorts of forums.protagonist wrote: ↑Tue May 11, 2021 9:24 amYes, I get it *smile*. You are living a balanced, happy life and living below your means. That works, regardless of how much money you eventually wind up with (which is largely dependent on the vicissitudes of the markets for investors and to an extent out of our control).chazas wrote: ↑Tue May 11, 2021 8:58 amI think most people do some of those things but not all. This isn't MMM. Life is all about balance and retirement savings are one part (albeit an important part). I drive a fancy sports sedan that I bought new but will keep it for 10 years. I have a big new house with a pool, home theater and exercise room, but I live in a supposedly less desirable exurb and commute by train. I eat and drink extremely well, but I like to cook so fancy restaurant nights out are limited. I take really nice vacations but maximize discounts and points usage. You get the idea.protagonist wrote: ↑Tue May 11, 2021 8:50 am hmmm...(reading a few responses...) Don't move (even if you want to and can afford it)? Work your butt off? Scrimp and save? Don't retire too early? Drive a beater? Don't spend money?
Maybe all that will make you rich, but it sounds pretty miserable.
What is the point of being rich and miserable?
I would rather be middle class and enjoy life than rich and miserable, wouldn't you?
And if you live almost your entire life like an ascetic with the goal of enjoying a life of leisure when you hit your target (assuming you are still healthy enough to do so), do you really think you will be able to turn it off?
What is the point of being rich in that case? Just bragging rights?
Make money. Don't let money make you.
But setting a target (like "I want $3M!") which becomes your prime motivation at all personal costs is, imho, a recipe for an unhappy life.
Many of us take your approach . But clearly, from reading some of the responses here (and in other Bogleheads threads as well), there are several others who take the latter approach. My post is meant for them.
So yes, balance is absolutely key, and many happy lives have been led, in whatever time was allowed, without making it to $3M in a retirement portfolio. And also yes, I do worry about some of the people I see posting here, who have maybe lost the thread in the sense of understanding that the things we discuss here about financial planning are just tools, a means to an end, not the end itself.
That said, I do think there is a lot to be said for thinking seriously about what actually makes you happier, and avoiding the traps of FOMO, keeping up with the Joneses, and so on. As in, personally, I don't in fact really care about having the nicest car. I do in fact really enjoy travelling. So, "carpe diem" for me means not scrimping on nice family trips, but I still have no plans to spend more on cars. That sort of thing.
The last I checked, I believe the median net household worth of American retirees is around $200K. That is about 1/15 (~6.6%) of $3M.So yes, balance is absolutely key, and many happy lives have been led, in whatever time was allowed, without making it to $3M in a retirement portfolio.
FWIW, if you believe this reference, "About 60 percent of retirees are very satisfied with their retirement, with another third considering their retirement moderately satisfying. Approximately eight percent are not satisfied with their retirement." https://crr.bc.edu/wp-content/uploads/2 ... 28_508.pdf It is actually close to what other references I have seen claim.
~92% are very or moderately satisfied with retirement and only 50% retire with over ~200K (6.6% of 3M).
QED.
(And really, I would think that at least 8% of people are unhappy no matter what...INCLUDING those with over $3M...)
Last edited by protagonist on Tue May 11, 2021 6:46 pm, edited 2 times in total.
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Re: If your net worth is over $3 million, how did you do it?
Seriously? That is "the obvious"???
There is another point that is lost on the lucky ones (like myself) who were born in the post-WW2 era in the USA, when Europe was recently left devastated by two world wars leaving the USA virtually unscathed as an economic bohemoth, and America has experienced perhaps the greatest 75 years of prosperity and freedom (and relative freedom from epidemics , freedom from wars on its soil, freedom from political upheaval) in the history of mankind.
What makes you think that 1945-2020 will repeat itself from 2021-2096?
Like Warren Buffett said, most of us have won the "ovarian lottery". We have no right to gloat over our financial accomplishments. Really, for most of us, they came ridiculously easy from being born in the right demographic in the right place at the right time (eg: quadrupling of the DOW in the past decade alone).
Last edited by protagonist on Tue May 11, 2021 4:51 pm, edited 9 times in total.
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Re: If your net worth is over $3 million, how did you do it?
NW $3.2 mil.
- A large part came via MegaCorp thru lump-sum pensions and 401k plan:
My pension and 401k yielded $1.2mil.
DW's pension and 401k added $300k.
-My life insurance and accident settlement added $344,000. Nice thing is I didn't have to die to collect 50% of my life insurance, $125,000.
- Inheritance from father added $275,000.
- Remainder came from investment growth. The pension lump-sum was added in 2015, so growth has been pretty good, even though short time frame.
We never maxed our 401k plans, though we always captured maximum match from employer. We were not uber savers at all. Never drove beaters, and we have lived in a 2,800 brick home since 1989. Our kids grew up in our current home. Taxes are capped somewhat, so no desire to down-size at this time.
My LTD plan and SSDI provided us with the same standard of living as we had prior to my accident. My pension grew as if I were working, and I was never in danger of being riffed, unlike some of my peers. MegaCorp provided all our insurance free since 1999, now as a retiree.
Truth is, financially my accident left us in a better position than if I had been able to continue working. Not a plan I would recommend, but it worked for us.
Broken Man 1999
- A large part came via MegaCorp thru lump-sum pensions and 401k plan:
My pension and 401k yielded $1.2mil.
DW's pension and 401k added $300k.
-My life insurance and accident settlement added $344,000. Nice thing is I didn't have to die to collect 50% of my life insurance, $125,000.
- Inheritance from father added $275,000.
- Remainder came from investment growth. The pension lump-sum was added in 2015, so growth has been pretty good, even though short time frame.
We never maxed our 401k plans, though we always captured maximum match from employer. We were not uber savers at all. Never drove beaters, and we have lived in a 2,800 brick home since 1989. Our kids grew up in our current home. Taxes are capped somewhat, so no desire to down-size at this time.
My LTD plan and SSDI provided us with the same standard of living as we had prior to my accident. My pension grew as if I were working, and I was never in danger of being riffed, unlike some of my peers. MegaCorp provided all our insurance free since 1999, now as a retiree.
Truth is, financially my accident left us in a better position than if I had been able to continue working. Not a plan I would recommend, but it worked for us.
Broken Man 1999
“If I cannot drink Bourbon and smoke cigars in Heaven then I shall not go." - Mark Twain
Re: If your net worth is over $3 million, how did you do it?
Well stated.protagonist wrote: ↑Tue May 11, 2021 4:26 pmSeriously? That is "the obvious"???
There is another point that is lost on the lucky ones (like myself) who were born in the post-WW2 era in the USA, when Europe was recently left devastated by two world wars leaving the USA virtually unscathed as an economic bohemoth, and America has experienced perhaps the greatest 75 years of prosperity and freedom (and relative freedom from epidemics , freedom from wars on its soil, freedom from political upheaval) in the history of mankind.
What makes you think that 1945-2020 will repeat itself from 2021-2096?
Like Warren Buffett said, most of us have won the "ovarian lottery". We have no right to gloat over our financial accomplishments. Really, for most of us, they came ridiculously easy from being born in the right demographic in the right place at the right time (eg: quadrupling of the DOW in the past decade alone).
I’d love to claim membership in the $3M+ club as solely the result of careful planning and my own hard work.
But the truth is that my parents paid for a state university education that opened many doors. And mentors and business associates helped me steer a good and financially rewarding course. My main contributions were showing up for work and recognizing good advice when it was given.
Re: If your net worth is over $3 million, how did you do it?
Since a young age I had a passion for science. I was lucky enough to have very supportive parents who nurtured my inclination and put me through college at no cost for me.
As I started working as a young TA at Bryn Mawr the importance of living below my means and low-cost investing was apparent to me. I managed to save 12% of my salary, which I invested in Vanguard's total stock and total bond market funds, equally apportioned. My employer did not have a 401k match, but I put $250 monthly in the plan, while also maxing out my IRA year after year.
I moved to Seattle in 2011 for a teacher job at an elite private K-12 school. Mr. Abram, the Head, used to make a little fun of me because of my car, a very used corolla. Arguably the worst looking vehicle in the staff parking lot. Yet, by saving on car payments and also on food and lodging, I saw my Mint networth plot climb almost inexorably: $20,000, $30,000, $37,000... the sky was the limit!
Imagine my joy when in 2016 I got a better paying job at another private school. The $320 extra monthly income (after tax!!) allowed me to bump up my saving rate by a whopping 62%. Others may have wasted that windfall on high fashion or Michelin starred restaurants, but not me !
By the end 2020 my invested worth (not that there was much else; I definitely went all in !) had climbed to over $93,200, covid notwithstanding.
Then I married this lady, MacKenzie, whom I met at the PTA and I'm now worth 54 billions. Who's laughing now, Mr. Abram ???!!!
As I started working as a young TA at Bryn Mawr the importance of living below my means and low-cost investing was apparent to me. I managed to save 12% of my salary, which I invested in Vanguard's total stock and total bond market funds, equally apportioned. My employer did not have a 401k match, but I put $250 monthly in the plan, while also maxing out my IRA year after year.
I moved to Seattle in 2011 for a teacher job at an elite private K-12 school. Mr. Abram, the Head, used to make a little fun of me because of my car, a very used corolla. Arguably the worst looking vehicle in the staff parking lot. Yet, by saving on car payments and also on food and lodging, I saw my Mint networth plot climb almost inexorably: $20,000, $30,000, $37,000... the sky was the limit!
Imagine my joy when in 2016 I got a better paying job at another private school. The $320 extra monthly income (after tax!!) allowed me to bump up my saving rate by a whopping 62%. Others may have wasted that windfall on high fashion or Michelin starred restaurants, but not me !
By the end 2020 my invested worth (not that there was much else; I definitely went all in !) had climbed to over $93,200, covid notwithstanding.
Then I married this lady, MacKenzie, whom I met at the PTA and I'm now worth 54 billions. Who's laughing now, Mr. Abram ???!!!
Re: If your net worth is over $3 million, how did you do it?
Why $3 million? Why not two, five, ten, 100?
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Re: If your net worth is over $3 million, how did you do it?
Since this line spawned from my quote...GoFish wrote: ↑Tue May 11, 2021 6:19 pmWell stated.protagonist wrote: ↑Tue May 11, 2021 4:26 pmSeriously? That is "the obvious"???
There is another point that is lost on the lucky ones (like myself) who were born in the post-WW2 era in the USA, when Europe was recently left devastated by two world wars leaving the USA virtually unscathed as an economic bohemoth, and America has experienced perhaps the greatest 75 years of prosperity and freedom (and relative freedom from epidemics , freedom from wars on its soil, freedom from political upheaval) in the history of mankind.
What makes you think that 1945-2020 will repeat itself from 2021-2096?
Like Warren Buffett said, most of us have won the "ovarian lottery". We have no right to gloat over our financial accomplishments. Really, for most of us, they came ridiculously easy from being born in the right demographic in the right place at the right time (eg: quadrupling of the DOW in the past decade alone).
I’d love to claim membership in the $3M+ club as solely the result of careful planning and my own hard work.
But the truth is that my parents paid for a state university education that opened many doors. And mentors and business associates helped me steer a good and financially rewarding course. My main contributions were showing up for work and recognizing good advice when it was given.
I'll start by pointing out that my post was meant in the context of people in this forum and on this thread in particular. Secondly, this thread is not "how can you make $3M?", but rather "how did you get there?" So it is fair game to reflect on the good returns the market has provided to those who made it. I made no assumptions or projections about the future.
As for me personally, I was not born in this country. I was poor and bet on myself by taking on a massive amount of college debt (cosigned by a family friend because I had no access to federal loans), worked hard, and married a smart woman who also comes from humble beginnings and worked hard to have a good career. We had to work for everything we have. It took years to pay 6 figures of college debt. We had no connections and got no favors. Just credentials, hunger, and making the must of opportunities often created out of thin air.
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Re: If your net worth is over $3 million, how did you do it?
This is how I did it starting at age 27
1. ZERO debt by age 32.
2. Saved and invested 85% of my pay check.
3. Maxed out Roth and 401K.
4. Took risk in all stock portfolio with no bonds until age 50.
5. Took risk in real estate but did not chase real estate bubbles.
Final Result: Retired, age 51 and I blew away the 3M number with a NW of 138x my annual spending.
1. ZERO debt by age 32.
2. Saved and invested 85% of my pay check.
3. Maxed out Roth and 401K.
4. Took risk in all stock portfolio with no bonds until age 50.
5. Took risk in real estate but did not chase real estate bubbles.
Final Result: Retired, age 51 and I blew away the 3M number with a NW of 138x my annual spending.
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Re: If your net worth is over $3 million, how did you do it?
Atlantic City
Actually I invested in Dave55 hedge fund. Dave is a modern Gordon Gekko!
Tony
Actually I invested in Dave55 hedge fund. Dave is a modern Gordon Gekko!
Tony
John C. Bogle: “Simplicity is the master key to financial success."
Re: If your net worth is over $3 million, how did you do it?
So you live on $22,000(ish)?carminered2019 wrote: ↑Wed May 12, 2021 1:02 am This is how I did it starting at age 27
1. ZERO debt by age 32.
2. Saved and invested 85% of my pay check.
3. Maxed out Roth and 401K.
4. Took risk in all stock portfolio with no bonds until age 50.
5. Took risk in real estate but did not chase real estate bubbles.
Final Result: Retired, age 51 and I blew away the 3M number with a NW of 138x my annual spending.
Re: If your net worth is over $3 million, how did you do it?
If 5, I'll have to wait for a few years
If 10, I may not reach there
If 100, I definitely will not reach there
Time is the ultimate currency.
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Re: If your net worth is over $3 million, how did you do it?
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? LolBungo wrote: ↑Tue May 11, 2021 1:19 amYep, 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.
“At some point you are trading time you will never get back for money you will never spend.“ |
“How do you want to spend the best remaining year of your life?“
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Re: If your net worth is over $3 million, how did you do it?
Answering the op, two decent W2 incomes. Nothing spectacular. Buying one reasonable house/mortgage, investing in retirement accounts and a smaller amount in taxable. Been a good ride so far, plenty of fun had and def not in the frugal category. My credit card bill proves that each month!
Looking forward to having $3M in investable assets, hopefully next few years. That may be one key signal to hang up the spurs...
Looking forward to having $3M in investable assets, hopefully next few years. That may be one key signal to hang up the spurs...
“At some point you are trading time you will never get back for money you will never spend.“ |
“How do you want to spend the best remaining year of your life?“
Re: If your net worth is over $3 million, how did you do it?
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.Wannaretireearly wrote: ↑Thu May 13, 2021 5:36 pmLet 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? LolBungo wrote: ↑Tue May 11, 2021 1:19 amYep, 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.
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.
Re: If your net worth is over $3 million, how did you do it?
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.
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.
Last edited by cipriano on Fri Jun 11, 2021 8:54 pm, edited 2 times in total.
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Re: If your net worth is over $3 million, how did you do it?
I can see your points! Thanks for the insights. Fascinating stuff.mrspock wrote: ↑Thu May 13, 2021 6:29 pmReaching 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.Wannaretireearly wrote: ↑Thu May 13, 2021 5:36 pmLet 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? LolBungo wrote: ↑Tue May 11, 2021 1:19 amYep, 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.
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.
“At some point you are trading time you will never get back for money you will never spend.“ |
“How do you want to spend the best remaining year of your life?“
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Re: If your net worth is over $3 million, how did you do it?
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.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.