Path to UHNW

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
alfaspider
Posts: 4805
Joined: Wed Sep 09, 2015 4:44 pm

Re: Path to UHNW

Post by alfaspider »

Firemenot wrote: Mon Jan 17, 2022 3:29 pm
alfaspider wrote: Mon Jan 17, 2022 2:06 pm
Hannibal Barca wrote: Mon Jan 17, 2022 1:43 pm
nigel_ht wrote: Mon Jan 17, 2022 7:41 am The most reliable path to UHNW is to be born in it.

That’s not viable for most folks but you CAN try to help your descendants reach UHNW (as an aggregate) because all it takes is time.

Many of the paths described here say something along the lines of $2M invested for 30-40 years can get you there whether it’s real estate, stocks or whatever.

Hard to get that 30-40 years in a single lifetime unless you start with that $2M out the gate.

Hard for any individual to get to $30M even if you start with $2M out the gate because it still requires luck and work.

But for a family…over a couple generations, with a little luck, can Boglehead their way to UHNW status for the third. Call it 2 kids per generation, $2M inheritance from the founders, $4M from their 2 kids add 40 years of cook time and the 4 descendants of the original founding generation have a good shot at UHNW doing nothing more than passive indexing.

So that’s my plan. Took my small inheritance and put it into a family LLC to grow 20 years while we are alive (hopefully), then add our own own estate to that amount when we go and tell the kids they can start pulling 2% out a year and splitting that after it hits $15M and to pass it along to their kids…preferably adding to the pot when their time comes.

Individually they won’t hit UHNW but the family LLC will eventually get there unless they decide to dismember it. That’s up to them…I won’t care, I’ll be dead.
It's definitely doable to get to $2M by age 30, which gives you a 30-40 year investment horizon. One approach: Dual income couple who both work in professions that 1) don't require grad school, 2) have entry level incomes >$100k, and 3) have good promotion / income growth trajectories. So obviously medicine and law are out (because of grad school) and so is accounting (because the entry level income is well below $100k), but finance and consulting fields fit the bill. The couple just needs to have a high savings rate (not hard when one has very little free time).

Obviously there are plenty of downsides with this approach: High stress, little free time (you're basically selling your 20's), low career stability, up-or-out cultures, likely delayed family formation, etc. But the couple can always pivot to less stressful jobs once they've got the $2M snowball going and feel comfortable taking their foot off the gas.
I hit $2MM at 36 (spouse and I are both lawyers). I suppose if we were willing and able to work into our 70s and the markets continue on their trajectory of roughly 8% annual gains (real), it would be theoretically possible to hit $30MM in 2022 dollars before I die. But in practice, I’m not going to decide to work another decade at 60 to reach some arbitrary net worth goal. Heck, I will probably be done before 50 if the pace continues.
Going in-house somewhere with generous option grants where company has explosive growth will get you there at an earlier age. I know two lawyers who did this and achieved UHNW status in 50s — one worth several hundred million. For them, choosing the right small enough company with a long growth runway was key. They put a lot of thought into selection, but of course it was highly speculative in the end. Neither were in “Tech”.
That’s effectively the way the Zuckerburgs of the world made their money (to a lesser degree). Get on the ground floor with significant equity in a company that goes ballistic.
Livehard1234
Posts: 55
Joined: Thu Jul 19, 2018 10:33 am

Re: Path to UHNW

Post by Livehard1234 »

alfaspider wrote: Mon Jan 17, 2022 4:14 pm
Firemenot wrote: Mon Jan 17, 2022 3:29 pm
alfaspider wrote: Mon Jan 17, 2022 2:06 pm
Hannibal Barca wrote: Mon Jan 17, 2022 1:43 pm
nigel_ht wrote: Mon Jan 17, 2022 7:41 am The most reliable path to UHNW is to be born in it.

That’s not viable for most folks but you CAN try to help your descendants reach UHNW (as an aggregate) because all it takes is time.

Many of the paths described here say something along the lines of $2M invested for 30-40 years can get you there whether it’s real estate, stocks or whatever.

Hard to get that 30-40 years in a single lifetime unless you start with that $2M out the gate.

Hard for any individual to get to $30M even if you start with $2M out the gate because it still requires luck and work.

But for a family…over a couple generations, with a little luck, can Boglehead their way to UHNW status for the third. Call it 2 kids per generation, $2M inheritance from the founders, $4M from their 2 kids add 40 years of cook time and the 4 descendants of the original founding generation have a good shot at UHNW doing nothing more than passive indexing.

So that’s my plan. Took my small inheritance and put it into a family LLC to grow 20 years while we are alive (hopefully), then add our own own estate to that amount when we go and tell the kids they can start pulling 2% out a year and splitting that after it hits $15M and to pass it along to their kids…preferably adding to the pot when their time comes.

Individually they won’t hit UHNW but the family LLC will eventually get there unless they decide to dismember it. That’s up to them…I won’t care, I’ll be dead.
It's definitely doable to get to $2M by age 30, which gives you a 30-40 year investment horizon. One approach: Dual income couple who both work in professions that 1) don't require grad school, 2) have entry level incomes >$100k, and 3) have good promotion / income growth trajectories. So obviously medicine and law are out (because of grad school) and so is accounting (because the entry level income is well below $100k), but finance and consulting fields fit the bill. The couple just needs to have a high savings rate (not hard when one has very little free time).

Obviously there are plenty of downsides with this approach: High stress, little free time (you're basically selling your 20's), low career stability, up-or-out cultures, likely delayed family formation, etc. But the couple can always pivot to less stressful jobs once they've got the $2M snowball going and feel comfortable taking their foot off the gas.
I hit $2MM at 36 (spouse and I are both lawyers). I suppose if we were willing and able to work into our 70s and the markets continue on their trajectory of roughly 8% annual gains (real), it would be theoretically possible to hit $30MM in 2022 dollars before I die. But in practice, I’m not going to decide to work another decade at 60 to reach some arbitrary net worth goal. Heck, I will probably be done before 50 if the pace continues.
Going in-house somewhere with generous option grants where company has explosive growth will get you there at an earlier age. I know two lawyers who did this and achieved UHNW status in 50s — one worth several hundred million. For them, choosing the right small enough company with a long growth runway was key. They put a lot of thought into selection, but of course it was highly speculative in the end. Neither were in “Tech”.
That’s effectively the way the Zuckerburgs of the world made their money (to a lesser degree). Get on the ground floor with significant equity in a company that goes ballistic.
So we just need to know which companies are going to 1000x ahead of time? Noted.
Firemenot
Posts: 1496
Joined: Wed Apr 01, 2020 8:48 pm

Re: Path to UHNW

Post by Firemenot »

Livehard1234 wrote: Mon Jan 17, 2022 4:21 pm
alfaspider wrote: Mon Jan 17, 2022 4:14 pm
Firemenot wrote: Mon Jan 17, 2022 3:29 pm
alfaspider wrote: Mon Jan 17, 2022 2:06 pm
Hannibal Barca wrote: Mon Jan 17, 2022 1:43 pm

It's definitely doable to get to $2M by age 30, which gives you a 30-40 year investment horizon. One approach: Dual income couple who both work in professions that 1) don't require grad school, 2) have entry level incomes >$100k, and 3) have good promotion / income growth trajectories. So obviously medicine and law are out (because of grad school) and so is accounting (because the entry level income is well below $100k), but finance and consulting fields fit the bill. The couple just needs to have a high savings rate (not hard when one has very little free time).

Obviously there are plenty of downsides with this approach: High stress, little free time (you're basically selling your 20's), low career stability, up-or-out cultures, likely delayed family formation, etc. But the couple can always pivot to less stressful jobs once they've got the $2M snowball going and feel comfortable taking their foot off the gas.
I hit $2MM at 36 (spouse and I are both lawyers). I suppose if we were willing and able to work into our 70s and the markets continue on their trajectory of roughly 8% annual gains (real), it would be theoretically possible to hit $30MM in 2022 dollars before I die. But in practice, I’m not going to decide to work another decade at 60 to reach some arbitrary net worth goal. Heck, I will probably be done before 50 if the pace continues.
Going in-house somewhere with generous option grants where company has explosive growth will get you there at an earlier age. I know two lawyers who did this and achieved UHNW status in 50s — one worth several hundred million. For them, choosing the right small enough company with a long growth runway was key. They put a lot of thought into selection, but of course it was highly speculative in the end. Neither were in “Tech”.
That’s effectively the way the Zuckerburgs of the world made their money (to a lesser degree). Get on the ground floor with significant equity in a company that goes ballistic.
So we just need to know which companies are going to 1000x ahead of time? Noted.
My social circle isn’t that big and I know two. Dumb luck? Maybe. Both in boring economic sectors. Consistently growing companies over time with options can result in crazy wealth. And to be clear, these are annual options grants. Both stayed 15+ years at their companies. The truly wealthy one almost 30.
alfaspider
Posts: 4805
Joined: Wed Sep 09, 2015 4:44 pm

Re: Path to UHNW

Post by alfaspider »

Firemenot wrote: Mon Jan 17, 2022 4:33 pm
Livehard1234 wrote: Mon Jan 17, 2022 4:21 pm
alfaspider wrote: Mon Jan 17, 2022 4:14 pm
Firemenot wrote: Mon Jan 17, 2022 3:29 pm
alfaspider wrote: Mon Jan 17, 2022 2:06 pm

I hit $2MM at 36 (spouse and I are both lawyers). I suppose if we were willing and able to work into our 70s and the markets continue on their trajectory of roughly 8% annual gains (real), it would be theoretically possible to hit $30MM in 2022 dollars before I die. But in practice, I’m not going to decide to work another decade at 60 to reach some arbitrary net worth goal. Heck, I will probably be done before 50 if the pace continues.
Going in-house somewhere with generous option grants where company has explosive growth will get you there at an earlier age. I know two lawyers who did this and achieved UHNW status in 50s — one worth several hundred million. For them, choosing the right small enough company with a long growth runway was key. They put a lot of thought into selection, but of course it was highly speculative in the end. Neither were in “Tech”.
That’s effectively the way the Zuckerburgs of the world made their money (to a lesser degree). Get on the ground floor with significant equity in a company that goes ballistic.
So we just need to know which companies are going to 1000x ahead of time? Noted.
My social circle isn’t that big and I know two. Dumb luck? Maybe. Both in boring economic sectors. Consistently growing companies over time with options can result in crazy wealth.
Probably unusual luck. I know you said “not tech”, but it’s probably most common there.

I’m in-house as well, have met literally hundreds of in-house lawyers, and don’t know anybody who amassed that sort of wealth through their in-house comp package. Perhaps the GCs are in the $30MM bucket, but almost certainly not $100MM+.
Firemenot
Posts: 1496
Joined: Wed Apr 01, 2020 8:48 pm

Re: Path to UHNW

Post by Firemenot »

alfaspider wrote: Mon Jan 17, 2022 4:40 pm
Firemenot wrote: Mon Jan 17, 2022 4:33 pm
Livehard1234 wrote: Mon Jan 17, 2022 4:21 pm
alfaspider wrote: Mon Jan 17, 2022 4:14 pm
Firemenot wrote: Mon Jan 17, 2022 3:29 pm

Going in-house somewhere with generous option grants where company has explosive growth will get you there at an earlier age. I know two lawyers who did this and achieved UHNW status in 50s — one worth several hundred million. For them, choosing the right small enough company with a long growth runway was key. They put a lot of thought into selection, but of course it was highly speculative in the end. Neither were in “Tech”.
That’s effectively the way the Zuckerburgs of the world made their money (to a lesser degree). Get on the ground floor with significant equity in a company that goes ballistic.
So we just need to know which companies are going to 1000x ahead of time? Noted.
My social circle isn’t that big and I know two. Dumb luck? Maybe. Both in boring economic sectors. Consistently growing companies over time with options can result in crazy wealth.
Probably unusual luck. I know you said “not tech”, but it’s probably most common there.

I’m in-house as well, have met literally hundreds of in-house lawyers, and don’t know anybody who amassed that sort of wealth through their in-house comp package. Perhaps the GCs are in the $30MM bucket, but almost certainly not $100MM+.
I’m not Tech. I’m in an industry most would consider super boring. If I stayed until 60-65 (another 15-20 years), I’d most likely be in excess of $30 million — mostly off my options — if the company keeps slowly and steadily growing like it has the last 30 years. There’s still lots of global runway and industry consolidation.
visualguy
Posts: 2988
Joined: Thu Jan 30, 2014 12:32 am

Re: Path to UHNW

Post by visualguy »

GP813 wrote: Mon Jan 17, 2022 3:26 pm The United States is home to 101,240 ultra high net worth (UNHW) individuals worth at least US$30 million and 927 Billionaires according to 2020 statistics collected by WealthX

so UHNW is already so rare it's only .03% of the U.S. population. Billionaires are .00028% of the U.S. population.
No sure how they know it - how would this information be obtained? There is no wealth tax in the US, or any other reason for people to compute and declare their wealth or net worth (at least not until death).
gogreen
Posts: 393
Joined: Fri Feb 26, 2021 3:38 pm

Re: Path to UHNW

Post by gogreen »

Hannibal Barca wrote: Mon Jan 17, 2022 1:43 pm
It's definitely doable to get to $2M by age 30, which gives you a 30-40 year investment horizon.
Why do you need 30M by age 60-70? I'd rather stop in late 40s than keep working just to claim 'I did it' :annoyed Time is waaaay more valuable imho :sharebeer
Californiastate
Posts: 1516
Joined: Thu Feb 04, 2021 10:52 am

Re: Path to UHNW

Post by Californiastate »

gogreen wrote: Mon Jan 17, 2022 5:08 pm
Hannibal Barca wrote: Mon Jan 17, 2022 1:43 pm
It's definitely doable to get to $2M by age 30, which gives you a 30-40 year investment horizon.
Why do you need 30M by age 60-70? I'd rather stop in late 40s than keep working just to claim 'I did it' :annoyed Time is waaaay more valuable imho :sharebeer
Some people enjoy their jobs. It stimulates them and keeps them vibrant. Some retire to play golf, fish, travel or work on old hot rods. Others don't feel productive unless their hair is on fire. Who is to say what's the right path?
GP813
Posts: 1231
Joined: Wed Dec 11, 2019 9:11 am

Re: Path to UHNW

Post by GP813 »

visualguy wrote: Mon Jan 17, 2022 4:58 pm
GP813 wrote: Mon Jan 17, 2022 3:26 pm The United States is home to 101,240 ultra high net worth (UNHW) individuals worth at least US$30 million and 927 Billionaires according to 2020 statistics collected by WealthX

so UHNW is already so rare it's only .03% of the U.S. population. Billionaires are .00028% of the U.S. population.
No sure how they know it - how would this information be obtained? There is no wealth tax in the US, or any other reason for people to compute and declare their wealth or net worth (at least not until death).
They're a research and marketing firm. There are all kinds of companies that track the wealthy population and sell that info and research to interested parties like wealth management firms, luxury goods and services providers, charities and non-profit fundraisers, etc. I suspect they obtain the information from a mixture of publicly available data like the Census Bureau, IRS provided data, court records and private research obtained from banking institutions.

https://www.wealthx.com/approach/our-specialist-focus/
Last edited by GP813 on Mon Jan 17, 2022 6:08 pm, edited 4 times in total.
gogreen
Posts: 393
Joined: Fri Feb 26, 2021 3:38 pm

Re: Path to UHNW

Post by gogreen »

Californiastate wrote: Mon Jan 17, 2022 5:21 pm
gogreen wrote: Mon Jan 17, 2022 5:08 pm
Hannibal Barca wrote: Mon Jan 17, 2022 1:43 pm
It's definitely doable to get to $2M by age 30, which gives you a 30-40 year investment horizon.
Why do you need 30M by age 60-70? I'd rather stop in late 40s than keep working just to claim 'I did it' :annoyed Time is waaaay more valuable imho :sharebeer
Some people enjoy their jobs. It stimulates them and keeps them vibrant. Some retire to play golf, fish, travel or work on old hot rods. Others don't feel productive unless their hair is on fire. Who is to say what's the right path?
Enjoying the job and chasing the number are the orthogonal things :sharebeer
Freefun
Posts: 1237
Joined: Sun Jan 14, 2018 2:55 pm

Re: Path to UHNW

Post by Freefun »

I think that a lot of people can attain this by a little bit of luck and a whole lot of hard work. I think people discount the fact that many self-made wealthy people got that way by working extremely hard.
Remember when you wanted what you currently have?
MaxDakota
Posts: 30
Joined: Fri Apr 23, 2021 11:21 am

Re: Path to UHNW

Post by MaxDakota »

What I tell most people: hard work and a lot of luck.

What I tell my kids: make your own luck by working harder than you ever imagined, then work harder still. Marry someone with the same mindset and work ethic. Start your own business. If you think you’re automatically inheriting the business I built from nothing, think again.

From what I’ve seen, Ivy to consulting or PE to entrepreneur has been the most likely path to 30M.
codfish
Posts: 22
Joined: Sun Apr 12, 2020 9:36 am

Re: Path to UHNW

Post by codfish »

gtrplayer wrote: Sat Jan 15, 2022 10:20 pm
Billionaire is really an incomprehensible amount of money and the ones who have tens of billions have incomprehensible wealth.
It really is. I find that time is a useful comparison tool.

1 million seconds is about 12 days.
1 billion seconds is about 31 years.
250 billion seconds is about 7,927 years.

The scale is hard to comprehend.
irr
Posts: 95
Joined: Thu Aug 19, 2021 10:01 am
Location: Carolinas

Re: Path to UHNW

Post by irr »

Start a business, be an early employee at a unicorn company, commercial RE development/investor, or top 0.01% in a variety of fields.
Real estate, where even the most mediocre can become wealthy.
gtrplayer
Posts: 843
Joined: Sat Dec 08, 2018 3:13 pm

Re: Path to UHNW

Post by gtrplayer »

codfish wrote: Mon Jan 17, 2022 6:13 pm
gtrplayer wrote: Sat Jan 15, 2022 10:20 pm
Billionaire is really an incomprehensible amount of money and the ones who have tens of billions have incomprehensible wealth.
It really is. I find that time is a useful comparison tool.

1 million seconds is about 12 days.
1 billion seconds is about 31 years.
250 billion seconds is about 7,927 years.

The scale is hard to comprehend.
Right, so the definitive path to UHNW - earn $1 a second for 31 years straight.

Definitive path to richest man in the world - earn $250 a second for 7927 years.
H-Town
Posts: 5876
Joined: Sun Feb 26, 2017 1:08 pm

Re: Path to UHNW

Post by H-Town »

gogreen wrote: Mon Jan 17, 2022 5:08 pm
Hannibal Barca wrote: Mon Jan 17, 2022 1:43 pm
It's definitely doable to get to $2M by age 30, which gives you a 30-40 year investment horizon.
Why do you need 30M by age 60-70? I'd rather stop in late 40s than keep working just to claim 'I did it' :annoyed Time is waaaay more valuable imho :sharebeer
Many younger folks have not yet realized time is the ultimate currency. At some point, we grow up have so much more money than we could spend. And at that point, we wish we have more time.

See my signature.
Time is the ultimate currency.
User avatar
expecting_unexpected
Posts: 30
Joined: Tue Jan 16, 2018 8:40 pm

Re: Path to UHNW

Post by expecting_unexpected »

H-Town wrote: Mon Jan 17, 2022 6:54 pm Many younger folks have not yet realized time is the ultimate currency. At some point, we grow up have so much more money than we could spend. And at that point, we wish we have more time.

See my signature.
Love your signature. A busy life is a wasted life.
Last edited by expecting_unexpected on Mon Jan 17, 2022 7:55 pm, edited 1 time in total.
Expecting the unexpected
gogreen
Posts: 393
Joined: Fri Feb 26, 2021 3:38 pm

Re: Path to UHNW

Post by gogreen »

H-Town wrote: Mon Jan 17, 2022 6:54 pm
gogreen wrote: Mon Jan 17, 2022 5:08 pm
Hannibal Barca wrote: Mon Jan 17, 2022 1:43 pm
It's definitely doable to get to $2M by age 30, which gives you a 30-40 year investment horizon.
Why do you need 30M by age 60-70? I'd rather stop in late 40s than keep working just to claim 'I did it' :annoyed Time is waaaay more valuable imho :sharebeer
Many younger folks have not yet realized time is the ultimate currency. At some point, we grow up have so much more money than we could spend. And at that point, we wish we have more time.

See my signature.
Yup, making it more extreme - for me $5m at 25 is WAY more valuable than $5b at 90 :sharebeer
Hannibal Barca
Posts: 145
Joined: Sun Apr 11, 2021 12:22 pm

Re: Path to UHNW

Post by Hannibal Barca »

visualguy wrote: Mon Jan 17, 2022 4:58 pm
GP813 wrote: Mon Jan 17, 2022 3:26 pm The United States is home to 101,240 ultra high net worth (UNHW) individuals worth at least US$30 million and 927 Billionaires according to 2020 statistics collected by WealthX

so UHNW is already so rare it's only .03% of the U.S. population. Billionaires are .00028% of the U.S. population.
No sure how they know it - how would this information be obtained? There is no wealth tax in the US, or any other reason for people to compute and declare their wealth or net worth (at least not until death).
You're right, there's definitely underreporting. Some people who wouldn't make it on the list:
-Someone builds and majority owns a relatively large private business that has never taken external equity financing or didn't report the valuations it took that financing at
-Someone who gets a few hundred million from selling a business (many times the transaction figure isn't reported, and certainly not the outgoing equity split). If that money is invested for 2-3 decades he'll reach the billionaire level
-Someone with inherited wealth from a family that keeps things private and doesn't have major ownership in a public company where reporting would be required
Last edited by Hannibal Barca on Mon Jan 17, 2022 8:52 pm, edited 1 time in total.
Starfish
Posts: 2996
Joined: Wed Aug 15, 2018 6:33 pm

Re: Path to UHNW

Post by Starfish »

MaxDakota wrote: Mon Jan 17, 2022 6:12 pm What I tell most people: hard work and a lot of luck.

What I tell my kids: make your own luck by working harder than you ever imagined, then work harder still.

Why? It seems very random. Cut the most grass in the world, jump more than anybody? Why is this even a value?
Excessive work comes at a price, wasted life, time, happiness, education. Why chase money if it not necessary?
Hannibal Barca
Posts: 145
Joined: Sun Apr 11, 2021 12:22 pm

Re: Path to UHNW

Post by Hannibal Barca »

gogreen wrote: Mon Jan 17, 2022 5:30 pm
Californiastate wrote: Mon Jan 17, 2022 5:21 pm
gogreen wrote: Mon Jan 17, 2022 5:08 pm
Hannibal Barca wrote: Mon Jan 17, 2022 1:43 pm
It's definitely doable to get to $2M by age 30, which gives you a 30-40 year investment horizon.
Why do you need 30M by age 60-70? I'd rather stop in late 40s than keep working just to claim 'I did it' :annoyed Time is waaaay more valuable imho :sharebeer
Some people enjoy their jobs. It stimulates them and keeps them vibrant. Some retire to play golf, fish, travel or work on old hot rods. Others don't feel productive unless their hair is on fire. Who is to say what's the right path?
Enjoying the job and chasing the number are the orthogonal things :sharebeer
Why do some people try for a sub 5 minute mile time? It's a goal, and to some it can be motivating. Does it stay motivating for 30-40 years? Who knows, but probably not.
SilverSmurfer
Posts: 163
Joined: Sun Jan 16, 2022 7:41 pm

Re: Path to UHNW

Post by SilverSmurfer »

Starfish wrote: Mon Jan 17, 2022 8:46 pm
MaxDakota wrote: Mon Jan 17, 2022 6:12 pm What I tell most people: hard work and a lot of luck.

What I tell my kids: make your own luck by working harder than you ever imagined, then work harder still.

Why? It seems very random. Cut the most grass in the world, jump more than anybody? Why is this even a value?
Excessive work comes at a price, wasted life, time, happiness, education. Why chase money if it not necessary?
Agreed!
MaxDakota
Posts: 30
Joined: Fri Apr 23, 2021 11:21 am

Re: Path to UHNW

Post by MaxDakota »

Starfish wrote: Mon Jan 17, 2022 8:46 pm
MaxDakota wrote: Mon Jan 17, 2022 6:12 pm What I tell most people: hard work and a lot of luck.

What I tell my kids: make your own luck by working harder than you ever imagined, then work harder still.

Why? It seems very random. Cut the most grass in the world, jump more than anybody? Why is this even a value?
Excessive work comes at a price, wasted life, time, happiness, education. Why chase money if it not necessary?
The person cutting the most grass in the world probably has a very productive landscaping company! The person who jumps more than anyone is probably a world class athlete!

Not random. Hard work and perseverance don’t always result in success, monetary or otherwise, but I don’t know anyone who has made 30M who doesn’t have incredible work ethic.
gogreen
Posts: 393
Joined: Fri Feb 26, 2021 3:38 pm

Re: Path to UHNW

Post by gogreen »

Hannibal Barca wrote: Mon Jan 17, 2022 8:51 pm
gogreen wrote: Mon Jan 17, 2022 5:30 pm
Californiastate wrote: Mon Jan 17, 2022 5:21 pm
gogreen wrote: Mon Jan 17, 2022 5:08 pm
Hannibal Barca wrote: Mon Jan 17, 2022 1:43 pm
It's definitely doable to get to $2M by age 30, which gives you a 30-40 year investment horizon.
Why do you need 30M by age 60-70? I'd rather stop in late 40s than keep working just to claim 'I did it' :annoyed Time is waaaay more valuable imho :sharebeer
Some people enjoy their jobs. It stimulates them and keeps them vibrant. Some retire to play golf, fish, travel or work on old hot rods. Others don't feel productive unless their hair is on fire. Who is to say what's the right path?
Enjoying the job and chasing the number are the orthogonal things :sharebeer
Why do some people try for a sub 5 minute mile time? It's a goal, and to some it can be motivating. Does it stay motivating for 30-40 years? Who knows, but probably not.
Enjoying running and hunting for sub 5 min mile are also orthogonal things :mrgreen: For some it might be motivating for others it might influence health so bad that they stop running at all in few years :sharebeer
SilverSmurfer
Posts: 163
Joined: Sun Jan 16, 2022 7:41 pm

Re: Path to UHNW

Post by SilverSmurfer »

In the end we're all dead.
Spend your time wisely, as it's more valuable than money, the more you age.

[Non-uhnw couple enjoying snowboarding at Jackson Hole this week]
gogreen
Posts: 393
Joined: Fri Feb 26, 2021 3:38 pm

Re: Path to UHNW

Post by gogreen »

SilverSmurfer wrote: Tue Jan 18, 2022 4:21 pm In the end we're all dead.
Spend your time wisely, as it's more valuable than money, the more you age.

[Non-uhnw couple enjoying snowboarding at Jackson Hole this week]
THIS!
Going to take an unpaid vacation to snowboard in CO in March :sharebeer
BillWalters
Posts: 339
Joined: Sun Aug 11, 2019 5:21 pm

Re: Path to UHNW

Post by BillWalters »

The most efficient way is commercial real estate. Every flyover town in America has a random guy worth $50 million from buying and holding CRE. It really isn’t hard relative to the other paths, but you have to spend time in places most other smart motivated people wouldn’t be caught dead in.
User avatar
22twain
Posts: 4016
Joined: Thu May 10, 2012 5:42 pm

Re: Path to UHNW

Post by 22twain »

BillWalters wrote: Tue Jan 18, 2022 7:13 pm Every flyover town in America has a random guy worth $50 million from buying and holding CRE.
And how many UHNW real estate moguls can that town support? :twisted:
Meet my pet, Peeve, who loves to convert non-acronyms into acronyms: FED, ROTH, CASH, IVY, ...
User avatar
Wricha
Posts: 1014
Joined: Sun Mar 25, 2012 10:33 am

Re: Path to UHNW

Post by Wricha »

This thread is interesting in a strange way. OP asked for paths to UHNW. By definition it’s very rare.

1. Yet on this board you have a lot the people claiming it is not, and worse they claim Boglehead philosophy will get you there. Boglehead philosophy is bright and allows one to live a balanced life without using up a lot of precious time trying to figure out how to arrive.
2. Reminds me of the kid (with no talent) who said I could be pro football player. News flash ……. Nope. It’s very hard/rare to be a Pro
3. Or you want to be UHNW person get a degree in fine arts (play the flute). Why? My imagery friend Jethro Tull (Ian Anderson) did it...Please You can’t use the exception and claim it’s the rule.
My point, If a person’s main goal in life is to be UHNW (I would advise get a new goal). But, if that’s the goal and failure is not an option would you advise this person to get a good job, live below your means, and invest in index funds and this would be the best path to UHNW?
Knowing the majority of people in that category are self employed/self made, special skills, inherent/married it and of course luck. Even, Jack Bogle did not became wealthy through investing in index funds,
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

gogreen wrote: Tue Jan 18, 2022 6:27 pm
SilverSmurfer wrote: Tue Jan 18, 2022 4:21 pm In the end we're all dead.
Spend your time wisely, as it's more valuable than money, the more you age.

[Non-uhnw couple enjoying snowboarding at Jackson Hole this week]
THIS!
Going to take an unpaid vacation to snowboard in CO in March :sharebeer
It’s more exclusive at the Yellowstone Club…lol.
User avatar
BrooklynInvest
Posts: 1162
Joined: Sun Jul 28, 2013 9:23 am

Re: Path to UHNW

Post by BrooklynInvest »

I am (was) a corporate drone. Never started my own business.

If the market doubles every seven years and I keep working and contributing at the same rate let's say I'll hit $30 million in roughly 30 years, at age 85. So in order to hit that number I either have to be miserable for the next 30 years or I'll die trying.

I'm good with less... a LOT less.
gogreen
Posts: 393
Joined: Fri Feb 26, 2021 3:38 pm

Re: Path to UHNW

Post by gogreen »

nigel_ht wrote: Wed Jan 19, 2022 8:08 am
gogreen wrote: Tue Jan 18, 2022 6:27 pm
SilverSmurfer wrote: Tue Jan 18, 2022 4:21 pm In the end we're all dead.
Spend your time wisely, as it's more valuable than money, the more you age.

[Non-uhnw couple enjoying snowboarding at Jackson Hole this week]
THIS!
Going to take an unpaid vacation to snowboard in CO in March :sharebeer
It’s more exclusive at the Yellowstone Club…lol.
I don't think $30m will get you there... Residences start from $18m. We need a new topic - Path to Yellowstone Club :sharebeer
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

Wricha wrote: Wed Jan 19, 2022 8:06 am This thread is interesting in a strange way. OP asked for paths to UHNW. By definition it’s very rare.

1. Yet on this board you have a lot the people claiming it is not, and worse they claim Boglehead philosophy will get you there.
It can…it just takes a couple generations…

Anyone who can get to a 7 figure estate (lots of Bogleheads) and has a kid who will safeguard it another 48 years (that’s a little harder but not excessively difficult) after they are gone while continue to add to the pot has a good chance of getting their family into UHNW status as long as we don’t end up with a Nikkei style crash.

Say you leave behind $2M. Double every 12 years. $2M->$4M->$8M->$16M->$32M.

If my kid is 20 when we pass away then at age 68 she has a good shot at UHNW status especially if she follows BH principles in her own life and has a couple million saved herself.

Will this be rare? Yes.

But it’s not technically difficult. It just requires the desire and the market to continue the same general path for another 50 years.

If not, then passive investing will have stopped working and bogleheads will be obsolete.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

gogreen wrote: Wed Jan 19, 2022 8:22 am
nigel_ht wrote: Wed Jan 19, 2022 8:08 am
gogreen wrote: Tue Jan 18, 2022 6:27 pm
SilverSmurfer wrote: Tue Jan 18, 2022 4:21 pm In the end we're all dead.
Spend your time wisely, as it's more valuable than money, the more you age.

[Non-uhnw couple enjoying snowboarding at Jackson Hole this week]
THIS!
Going to take an unpaid vacation to snowboard in CO in March :sharebeer
It’s more exclusive at the Yellowstone Club…lol.
I don't think $30m will get you there... Residences start from $18m. We need a new topic - Path to Yellowstone Club :sharebeer
Nah…$320K for membership and $9.2M for a condo.

https://yellowstoneclub.com/real-estate ... residences

Alas, they are sold out.

Used to only be like $4M for a condo a few years ago*…but yeah, $30M is kinda light to dump 33% of your net worth into a vacation house. How could you possibly manage with only $20M left? Lol.

Amusingly Spanish Peaks sold for $26M…for the price of many Yellowstone Club properties you could have been like Cartman and owned your own park and told folks they couldn’t come…

See…$30M ain’t so ultra…
Last edited by nigel_ht on Wed Jan 19, 2022 8:47 am, edited 1 time in total.
gogreen
Posts: 393
Joined: Fri Feb 26, 2021 3:38 pm

Re: Path to UHNW

Post by gogreen »

nigel_ht wrote: Wed Jan 19, 2022 8:43 am
gogreen wrote: Wed Jan 19, 2022 8:22 am
nigel_ht wrote: Wed Jan 19, 2022 8:08 am
gogreen wrote: Tue Jan 18, 2022 6:27 pm
SilverSmurfer wrote: Tue Jan 18, 2022 4:21 pm In the end we're all dead.
Spend your time wisely, as it's more valuable than money, the more you age.

[Non-uhnw couple enjoying snowboarding at Jackson Hole this week]
THIS!
Going to take an unpaid vacation to snowboard in CO in March :sharebeer
It’s more exclusive at the Yellowstone Club…lol.
I don't think $30m will get you there... Residences start from $18m. We need a new topic - Path to Yellowstone Club :sharebeer
Amusingly Spanish Peaks sold for $26M…for the price of many Yellowstone Club properties you could have been like Cartman and owned your own park and told folks they couldn’t come…

See…$30M ain’t so ultra…
:mrgreen:
Yeah, luxury jets can hit $500M so as human beings we can also find something to struggle about :sharebeer
Leesbro63
Posts: 10581
Joined: Mon Nov 08, 2010 3:36 pm

Re: Path to UHNW

Post by Leesbro63 »

nigel_ht wrote: Wed Jan 19, 2022 8:31 am
Wricha wrote: Wed Jan 19, 2022 8:06 am This thread is interesting in a strange way. OP asked for paths to UHNW. By definition it’s very rare.

1. Yet on this board you have a lot the people claiming it is not, and worse they claim Boglehead philosophy will get you there.
It can…it just takes a couple generations…

Anyone who can get to a 7 figure estate (lots of Bogleheads) and has a kid who will safeguard it another 48 years (that’s a little harder but not excessively difficult) after they are gone while continue to add to the pot has a good chance of getting their family into UHNW status as long as we don’t end up with a Nikkei style crash.

Say you leave behind $2M. Double every 12 years. $2M->$4M->$8M->$16M->$32M.

If my kid is 20 when we pass away then at age 68 she has a good shot at UHNW status especially if she follows BH principles in her own life and has a couple million saved herself.

Will this be rare? Yes.

But it’s not technically difficult. It just requires the desire and the market to continue the same general path for another 50 years.

If not, then passive investing will have stopped working and bogleheads will be obsolete.
Your analysis doesn't take inflation into account.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

Leesbro63 wrote: Wed Jan 19, 2022 9:11 am
nigel_ht wrote: Wed Jan 19, 2022 8:31 am
Wricha wrote: Wed Jan 19, 2022 8:06 am This thread is interesting in a strange way. OP asked for paths to UHNW. By definition it’s very rare.

1. Yet on this board you have a lot the people claiming it is not, and worse they claim Boglehead philosophy will get you there.
It can…it just takes a couple generations…

Anyone who can get to a 7 figure estate (lots of Bogleheads) and has a kid who will safeguard it another 48 years (that’s a little harder but not excessively difficult) after they are gone while continue to add to the pot has a good chance of getting their family into UHNW status as long as we don’t end up with a Nikkei style crash.

Say you leave behind $2M. Double every 12 years. $2M->$4M->$8M->$16M->$32M.

If my kid is 20 when we pass away then at age 68 she has a good shot at UHNW status especially if she follows BH principles in her own life and has a couple million saved herself.

Will this be rare? Yes.

But it’s not technically difficult. It just requires the desire and the market to continue the same general path for another 50 years.

If not, then passive investing will have stopped working and bogleheads will be obsolete.
Your analysis doesn't take inflation into account.
It does because doubling every 12 years is based on 6% (below the 6.8% CAGR adj for inflation since 1871). If we used the 11%ish average you would double every 6.5 years.

So, it accounts for inflation and then shaves off another 0.8% for extra cushion.
Leesbro63
Posts: 10581
Joined: Mon Nov 08, 2010 3:36 pm

Re: Path to UHNW

Post by Leesbro63 »

nigel_ht wrote: Wed Jan 19, 2022 11:45 am
Leesbro63 wrote: Wed Jan 19, 2022 9:11 am
nigel_ht wrote: Wed Jan 19, 2022 8:31 am
Wricha wrote: Wed Jan 19, 2022 8:06 am This thread is interesting in a strange way. OP asked for paths to UHNW. By definition it’s very rare.

1. Yet on this board you have a lot the people claiming it is not, and worse they claim Boglehead philosophy will get you there.
It can…it just takes a couple generations…

Anyone who can get to a 7 figure estate (lots of Bogleheads) and has a kid who will safeguard it another 48 years (that’s a little harder but not excessively difficult) after they are gone while continue to add to the pot has a good chance of getting their family into UHNW status as long as we don’t end up with a Nikkei style crash.

Say you leave behind $2M. Double every 12 years. $2M->$4M->$8M->$16M->$32M.

If my kid is 20 when we pass away then at age 68 she has a good shot at UHNW status especially if she follows BH principles in her own life and has a couple million saved herself.

Will this be rare? Yes.

But it’s not technically difficult. It just requires the desire and the market to continue the same general path for another 50 years.

If not, then passive investing will have stopped working and bogleheads will be obsolete.
Your analysis doesn't take inflation into account.
It does because doubling every 12 years is based on 6% (below the 6.8% CAGR adj for inflation since 1871). If we used the 11%ish average you would double every 6.5 years.

So, it accounts for inflation and then shaves off another 0.8% for extra cushion.
Fair enough. I stand corrected.
EddyB
Posts: 2431
Joined: Fri May 24, 2013 3:43 pm

Re: Path to UHNW

Post by EddyB »

Wricha wrote: Wed Jan 19, 2022 8:06 am This thread is interesting in a strange way. OP asked for paths to UHNW. By definition it’s very rare.

1. Yet on this board you have a lot the people claiming it is not, and worse they claim Boglehead philosophy will get you there. Boglehead philosophy is bright and allows one to live a balanced life without using up a lot of precious time trying to figure out how to arrive.
2. Reminds me of the kid (with no talent) who said I could be pro football player. News flash ……. Nope. It’s very hard/rare to be a Pro
3. Or you want to be UHNW person get a degree in fine arts (play the flute). Why? My imagery friend Jethro Tull (Ian Anderson) did it...Please You can’t use the exception and claim it’s the rule.
My point, If a person’s main goal in life is to be UHNW (I would advise get a new goal). But, if that’s the goal and failure is not an option would you advise this person to get a good job, live below your means, and invest in index funds and this would be the best path to UHNW?
Knowing the majority of people in that category are self employed/self made, special skills, inherent/married it and of course luck. Even, Jack Bogle did not became wealthy through investing in index funds,
The path to $30 million on a Bogleheads strategy is a bit baffling to me in another way. Do the "save $250k/year for 40 years" suggestions imagine that those savers are also spending ~$500k/year along the way? If not, why do those savers need such a large portfolio (even with hyper-conservative withdrawal rates)? And if so, then you're talking about people netting ~$750k/year after tax. Even on Bogleheads, that can't be much of the audience, and even among those of us doing it, how many of us would even claim there's 40 years of it to be had?
HootingSloth
Posts: 1041
Joined: Mon Jan 28, 2019 2:38 pm

Re: Path to UHNW

Post by HootingSloth »

EddyB wrote: Wed Jan 19, 2022 12:07 pm The path to $30 million on a Bogleheads strategy is a bit baffling to me in another way. Do the "save $250k/year for 40 years" suggestions imagine that those savers are also spending ~$500k/year along the way? If not, why do those savers need such a large portfolio (even with hyper-conservative withdrawal rates)? And if so, then you're talking about people netting ~$750k/year after tax. Even on Bogleheads, that can't be much of the audience, and even among those of us doing it, how many of us would even claim there's 40 years of it to be had?
Presumably, because they have non-financial motivations to continue working beyond financial independence or some desire for money that does not involve spending it all, such as charity or legacy motivations.

My wife and I are W2-only, index-fund only savers. If you ask Portfolio Visualizer what will happen if we continue on our current course of savings, it predicts reaching $30M (in 2022 dollars) somewhere between about ages 55 and 70. I agree that it's not terribly likely that we will actually follow this path as far as that, because there are many years to go where something could go wrong and, of course, our other priorities might pull us away from work sooner. But it does not seem like a horribly objectionable outcome, to me, if we did arrive at this destination, especially if luck caused us to get there on the earlier end of that range. I am not particularly interested in retiring with children still at home and a wife who is continuing to work because she loves what she does. My work is frustrating at times, but a lot of good could be done with the extra money beyond what we need for our lifestyle if that is what ends up happening.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
EddyB
Posts: 2431
Joined: Fri May 24, 2013 3:43 pm

Re: Path to UHNW

Post by EddyB »

HootingSloth wrote: Wed Jan 19, 2022 1:11 pm
EddyB wrote: Wed Jan 19, 2022 12:07 pm The path to $30 million on a Bogleheads strategy is a bit baffling to me in another way. Do the "save $250k/year for 40 years" suggestions imagine that those savers are also spending ~$500k/year along the way? If not, why do those savers need such a large portfolio (even with hyper-conservative withdrawal rates)? And if so, then you're talking about people netting ~$750k/year after tax. Even on Bogleheads, that can't be much of the audience, and even among those of us doing it, how many of us would even claim there's 40 years of it to be had?
Presumably, because they have non-financial motivations to continue working beyond financial independence or some desire for money that does not involve spending it all, such as charity or legacy motivations.

My wife and I are W2-only, index-fund only savers. If you ask Portfolio Visualizer what will happen if we continue on our current course of savings, it predicts reaching $30M (in 2022 dollars) somewhere between about ages 55 and 70. I agree that it's not terribly likely that we will actually follow this path as far as that, because there are many years to go where something could go wrong and, of course, our other priorities might pull us away from work sooner. But it does not seem like a horribly objectionable outcome, to me, if we did arrive at this destination, especially if luck caused us to get there on the earlier end of that range. I am not particularly interested in retiring with children still at home and a wife who is continuing to work because she loves what she does. My work is frustrating at times, but a lot of good could be done with the extra money beyond what we need for our lifestyle if that is what ends up happening.
I don't buy it. Seriously, I can look at firecalc and see the projections (in the best historic sequence, I'd get there in just another six years!), and lots of Bogleheads can, and yet, actually getting there seems to be incredibly rare. I'm not saying it's impossible by any stretch, just unrealistic in almost every case, for a whole bunch of reasons.

Charitable motives? To accumulate a fortune over decades, rather than give in the nearer term (which is quite different for an index investor than someone like Buffett, where his fortune and control are linked)?

People who believe fundamentally in living well below their own means, but prioritize an enormous legacy? Perhaps for some special needs situations, of course, but I worry tremendously about my kids' perspective even now, living on 10% of my income. I'm going to prioritize leaving them a vast sum?

Not inconceivable, but a real corner case. Relatively speaking, I know a ton of people who are, I assume, around this level, many of whom probably applied some boglehead-like approach to their investing, but with incomes that even by bogleheads standards make it a bit more understandable (professionals in partnerships that average $4 or $5 million in annual profit), because it's what it takes to continue their lifestyles.

ETA: Just to emphasize, I'm not disputing the possibility, or challenging anyone's odds of doing it if it's what they want, just remarking that it seems to involve enough competing elements, within a pool that would necessarily be relatively rare in the first place, that it just strikes me as quite unlikely that many bogleheads who could, would want to.
HootingSloth
Posts: 1041
Joined: Mon Jan 28, 2019 2:38 pm

Re: Path to UHNW

Post by HootingSloth »

EddyB wrote: Wed Jan 19, 2022 3:53 pm
HootingSloth wrote: Wed Jan 19, 2022 1:11 pm
EddyB wrote: Wed Jan 19, 2022 12:07 pm The path to $30 million on a Bogleheads strategy is a bit baffling to me in another way. Do the "save $250k/year for 40 years" suggestions imagine that those savers are also spending ~$500k/year along the way? If not, why do those savers need such a large portfolio (even with hyper-conservative withdrawal rates)? And if so, then you're talking about people netting ~$750k/year after tax. Even on Bogleheads, that can't be much of the audience, and even among those of us doing it, how many of us would even claim there's 40 years of it to be had?
Presumably, because they have non-financial motivations to continue working beyond financial independence or some desire for money that does not involve spending it all, such as charity or legacy motivations.

My wife and I are W2-only, index-fund only savers. If you ask Portfolio Visualizer what will happen if we continue on our current course of savings, it predicts reaching $30M (in 2022 dollars) somewhere between about ages 55 and 70. I agree that it's not terribly likely that we will actually follow this path as far as that, because there are many years to go where something could go wrong and, of course, our other priorities might pull us away from work sooner. But it does not seem like a horribly objectionable outcome, to me, if we did arrive at this destination, especially if luck caused us to get there on the earlier end of that range. I am not particularly interested in retiring with children still at home and a wife who is continuing to work because she loves what she does. My work is frustrating at times, but a lot of good could be done with the extra money beyond what we need for our lifestyle if that is what ends up happening.
I don't buy it. Seriously, I can look at firecalc and see the projections (in the best historic sequence, I'd get there in just another six years!), and lots of Bogleheads can, and yet, actually getting there seems to be incredibly rare. I'm not saying it's impossible by any stretch, just unrealistic in almost every case, for a whole bunch of reasons.

Charitable motives? To accumulate a fortune over decades, rather than give in the nearer term (which is quite different for an index investor than someone like Buffett, where his fortune and control are linked)?

People who believe fundamentally in living well below their own means, but prioritize an enormous legacy? Perhaps for some special needs situations, of course, but I worry tremendously about my kids' perspective even now, living on 10% of my income. I'm going to prioritize leaving them a vast sum?

Not inconceivable, but a real corner case. Relatively speaking, I know a ton of people who are, I assume, around this level, many of whom probably applied some boglehead-like approach to their investing, but with incomes that even by bogleheads standards make it a bit more understandable (professionals in partnerships that average $4 or $5 million in annual profit), because it's what it takes to continue their lifestyles.

ETA: Just to emphasize, I'm not disputing the possibility, or challenging anyone's odds of doing it if it's what they want, just remarking that it seems to involve enough competing elements, within a pool that would necessarily be relatively rare in the first place, that it just strikes me as quite unlikely that many bogleheads who could, would want to.
I agree that it is quite unlikely that many will end up wanting to do this. It is not something you would do (without an extraordinarily high income) if your primary goal of working, saving, and investing is to optimize your financial life. It is something that you have to do incidental to other goals because you will just stop working at $5M or $10M or $20M if that is your motivation.

It does seem to me that other routes that end up with $30M are quite unlikely as well and people choosing those paths also often don't do so primarily for monetary rewards.
Global Market Portfolio + modest tilt towards volatility (80/20->60/40 as approach FI) + modest tilt away from exchange rate risk (80% global+20% U.S. stocks; currency-hedge bonds) + tax optimization
Irenaeus
Posts: 123
Joined: Wed Sep 21, 2011 2:06 pm

Re: Path to UHNW

Post by Irenaeus »

willthrill81 wrote: Sun Jan 16, 2022 7:51 pm
Californiastate wrote: Sun Jan 16, 2022 5:20 pm What is after Ultra? Is it ludicrous or plaid?
If it's like radio band frequencies, it would go to 'super high', then to 'extremely high', then to 'tremendously high'.

In reality, there are no clear designations in the real world for such things, and those with wealth at all levels are often just trying to compare themselves to other wealthy people. It's no different than kids playing contests on the playground except that the stakes are higher.

How much better would we all be if all our efforts to outdo others were instead devoted to helping others. :(
I almost always love your posts and I appreciate your final sentence above. Yet I have often cringed in recent decades at some of what has passed for "charity" or "philanthropy." I find that gifts from some of the most conspicuously wealthy folks today - MacKenzie Scott, for one example, often go to causes that to me suggest a misdiagnosis of true problems, or from others - Bill Gates, Melinda French Gates, and Warren Buffett, to causes that to me, anyway, are misanthropic and unjust. I won't go into details, but the differences stem I think from basic disagreements about right and wrong or that some believe in bad means to good ends.
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

Re: Path to UHNW

Post by willthrill81 »

Irenaeus wrote: Wed Jan 19, 2022 5:22 pm
willthrill81 wrote: Sun Jan 16, 2022 7:51 pm
Californiastate wrote: Sun Jan 16, 2022 5:20 pm What is after Ultra? Is it ludicrous or plaid?
If it's like radio band frequencies, it would go to 'super high', then to 'extremely high', then to 'tremendously high'.

In reality, there are no clear designations in the real world for such things, and those with wealth at all levels are often just trying to compare themselves to other wealthy people. It's no different than kids playing contests on the playground except that the stakes are higher.

How much better would we all be if all our efforts to outdo others were instead devoted to helping others. :(
I almost always love your posts and I appreciate your final sentence above. Yet I have often cringed in recent decades at some of what has passed for "charity" or "philanthropy." I find that gifts from some of the most conspicuously wealthy folks today - MacKenzie Scott, for one example, often go to causes that to me suggest a misdiagnosis of true problems, or from others - Bill Gates, Melinda French Gates, and Warren Buffett, to causes that to me, anyway, are misanthropic and unjust. I won't go into details, but the differences stem I think from basic disagreements about right and wrong or that some believe in bad means to good ends.
I entirely agree. The track record of private foundations in the U.S. is abysmal. IIRC, only about 40% of the inflows to all private foundations go to their stated causes.

Further, the total lack of basic compassion for human beings among some of the very wealthy is absolutely abhorrent, such as that indicated by the recent statement by an NBA team owner (I won't say more than that due to forum rules).

One's worldview literally dictates how one lives.
The Sensible Steward
FoolMeOnce
Posts: 1392
Joined: Mon Apr 24, 2017 11:16 am

Re: Path to UHNW

Post by FoolMeOnce »

MaxDakota wrote: Mon Jan 17, 2022 10:42 pm
Starfish wrote: Mon Jan 17, 2022 8:46 pm
MaxDakota wrote: Mon Jan 17, 2022 6:12 pm What I tell most people: hard work and a lot of luck.

What I tell my kids: make your own luck by working harder than you ever imagined, then work harder still.

Why? It seems very random. Cut the most grass in the world, jump more than anybody? Why is this even a value?
Excessive work comes at a price, wasted life, time, happiness, education. Why chase money if it not necessary?
The person cutting the most grass in the world probably has a very productive landscaping company! The person who jumps more than anyone is probably a world class athlete!

Not random. Hard work and perseverance don’t always result in success, monetary or otherwise, but I don’t know anyone who has made 30M who doesn’t have incredible work ethic.
I know someone who will probably retire in his mid 40s with about $15 million and a rather below-average work ethic. Just in the right tech place at the right time.
Hannibal Barca
Posts: 145
Joined: Sun Apr 11, 2021 12:22 pm

Re: Path to UHNW

Post by Hannibal Barca »

Leesbro63 wrote: Wed Jan 19, 2022 11:56 am
nigel_ht wrote: Wed Jan 19, 2022 11:45 am
Leesbro63 wrote: Wed Jan 19, 2022 9:11 am
nigel_ht wrote: Wed Jan 19, 2022 8:31 am
Wricha wrote: Wed Jan 19, 2022 8:06 am This thread is interesting in a strange way. OP asked for paths to UHNW. By definition it’s very rare.

1. Yet on this board you have a lot the people claiming it is not, and worse they claim Boglehead philosophy will get you there.
It can…it just takes a couple generations…

Anyone who can get to a 7 figure estate (lots of Bogleheads) and has a kid who will safeguard it another 48 years (that’s a little harder but not excessively difficult) after they are gone while continue to add to the pot has a good chance of getting their family into UHNW status as long as we don’t end up with a Nikkei style crash.

Say you leave behind $2M. Double every 12 years. $2M->$4M->$8M->$16M->$32M.

If my kid is 20 when we pass away then at age 68 she has a good shot at UHNW status especially if she follows BH principles in her own life and has a couple million saved herself.

Will this be rare? Yes.

But it’s not technically difficult. It just requires the desire and the market to continue the same general path for another 50 years.

If not, then passive investing will have stopped working and bogleheads will be obsolete.
Your analysis doesn't take inflation into account.
It does because doubling every 12 years is based on 6% (below the 6.8% CAGR adj for inflation since 1871). If we used the 11%ish average you would double every 6.5 years.

So, it accounts for inflation and then shaves off another 0.8% for extra cushion.
Fair enough. I stand corrected.
The pie also grows over time in real terms. So $30M in today's dollars may be enough to get you into the 0.1%-ers today; in a few generations it may only get you into the 1%.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

Hannibal Barca wrote: Wed Jan 19, 2022 10:51 pm
Leesbro63 wrote: Wed Jan 19, 2022 11:56 am
nigel_ht wrote: Wed Jan 19, 2022 11:45 am
Leesbro63 wrote: Wed Jan 19, 2022 9:11 am
nigel_ht wrote: Wed Jan 19, 2022 8:31 am

It can…it just takes a couple generations…

Anyone who can get to a 7 figure estate (lots of Bogleheads) and has a kid who will safeguard it another 48 years (that’s a little harder but not excessively difficult) after they are gone while continue to add to the pot has a good chance of getting their family into UHNW status as long as we don’t end up with a Nikkei style crash.

Say you leave behind $2M. Double every 12 years. $2M->$4M->$8M->$16M->$32M.

If my kid is 20 when we pass away then at age 68 she has a good shot at UHNW status especially if she follows BH principles in her own life and has a couple million saved herself.

Will this be rare? Yes.

But it’s not technically difficult. It just requires the desire and the market to continue the same general path for another 50 years.

If not, then passive investing will have stopped working and bogleheads will be obsolete.
Your analysis doesn't take inflation into account.
It does because doubling every 12 years is based on 6% (below the 6.8% CAGR adj for inflation since 1871). If we used the 11%ish average you would double every 6.5 years.

So, it accounts for inflation and then shaves off another 0.8% for extra cushion.
Fair enough. I stand corrected.
The pie also grows over time in real terms. So $30M in today's dollars may be enough to get you into the 0.1%-ers today; in a few generations it may only get you into the 1%.
The definition of UHNW will certainly change over time but generally the first million is the hardest.

Bogleheads are generally in a lucky financial group that can even contemplate such things. It is much easier to LBYM to save more for investments when making a good income.
H-Town
Posts: 5876
Joined: Sun Feb 26, 2017 1:08 pm

Re: Path to UHNW

Post by H-Town »

nigel_ht wrote: Fri Jan 21, 2022 8:03 am
Bogleheads are generally in a lucky financial group that can even contemplate such things. It is much easier to LBYM to save more for investments when making a good income.
Good income + paid off house + no debts = super saver.

The only big ticket expense we have now is taxes.
Time is the ultimate currency.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

Irenaeus wrote: Wed Jan 19, 2022 5:22 pm
willthrill81 wrote: Sun Jan 16, 2022 7:51 pm
Californiastate wrote: Sun Jan 16, 2022 5:20 pm What is after Ultra? Is it ludicrous or plaid?
If it's like radio band frequencies, it would go to 'super high', then to 'extremely high', then to 'tremendously high'.

In reality, there are no clear designations in the real world for such things, and those with wealth at all levels are often just trying to compare themselves to other wealthy people. It's no different than kids playing contests on the playground except that the stakes are higher.

How much better would we all be if all our efforts to outdo others were instead devoted to helping others. :(
I almost always love your posts and I appreciate your final sentence above. Yet I have often cringed in recent decades at some of what has passed for "charity" or "philanthropy." I find that gifts from some of the most conspicuously wealthy folks today - MacKenzie Scott, for one example, often go to causes that to me suggest a misdiagnosis of true problems, or from others - Bill Gates, Melinda French Gates, and Warren Buffett, to causes that to me, anyway, are misanthropic and unjust. I won't go into details, but the differences stem I think from basic disagreements about right and wrong or that some believe in bad means to good ends.
Eh, as a group today’s billionaires are not quite as rapacious as the previous ones. Vanderbilt, Carnegie, et al we’re far worse. The MS Windows Monopoly was very benign in comparison.

People will disagree about the value of specific causes Gates etc contribute to but at the end of the day there will be some positive outcomes for their giving.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

willthrill81 wrote: Wed Jan 19, 2022 6:09 pm
Further, the total lack of basic compassion for human beings among some of the very wealthy is absolutely abhorrent, such as that indicated by the recent statement by an NBA team owner (I won't say more than that due to forum rules).

One's worldview literally dictates how one lives.
I don’t think wealth is a major factor in how much compassion any given human will have.

Perhaps certain personalities that naturally tend toward less compassion also tend toward more success but I’m not willing to make that assertion without more research.

Do you believe that the percentage of lack of compassion is more prevalent among the rich than the poor or that it simply matters less?

The great evils of the world generally occurred when the masses participated in it. Arguably the elite went to lengths to convince them of the sub-human status of the victims but doesn’t it take a total lack of basic compassion to be part of genocide?

So personally my belief is that wealth is mostly an amplifier of the kind of human a person really is.
Locked