Path to UHNW

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills.
User avatar
LiveSimple
Posts: 2311
Joined: Thu Jan 03, 2013 6:55 am

Re: Path to UHNW

Post by LiveSimple »

The calculation shows a $5M gaining around 22% for ten years can make $30 M.
Invest when you have the money, sell when you need the money, for real life expenses...
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

Re: Path to UHNW

Post by willthrill81 »

Lee_WSP wrote: Mon Nov 16, 2020 11:18 am
runner3081 wrote: Sun Nov 15, 2020 4:09 pm Start a business.
Plus a ton of good fortune.
+1

One of my big takeaways from Thomas Stanley's The Millionaire Mind was that even among millionaire parents whose succeed largely came from successful business ventures, comparatively few of them advocated for their children to follow in their footsteps. Most of them personally knew others who had worked very hard for years and still had little reward for their efforts. They learned that there was a big element of serendipity to their own success and how the odds would be stacked against their children. Consequently, these parents typically recommended that their children pursue professional services (e.g., attorneys, physicians, accountants).
The Sensible Steward
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

Re: Path to UHNW

Post by willthrill81 »

LiveSimple wrote: Sat Jan 15, 2022 9:03 pm The calculation shows a $5M gaining around 22% for ten years can make $30 M.
Now just tell me where I can reliably get a 22% return for 10 years. Oh, and $5 million to start with. :P
The Sensible Steward
User avatar
aj76er
Posts: 1178
Joined: Tue Dec 01, 2015 10:34 pm
Location: Austin, TX

Re: Path to UHNW

Post by aj76er »

willthrill81 wrote: Sat Jan 15, 2022 9:36 pm
LiveSimple wrote: Sat Jan 15, 2022 9:03 pm The calculation shows a $5M gaining around 22% for ten years can make $30 M.
Now just tell me where I can reliably get a 22% return for 10 years. Oh, and $5 million to start with. :P
50/50 UPRO/TMF has done it.

$5m invested in 2011 would be around $100m today (CAGR of around 28%).

Can’t help you with the $5m though ;).
"Buy-and-hold, long-term, all-market-index strategies, implemented at rock-bottom cost, are the surest of all routes to the accumulation of wealth" - John C. Bogle
gtrplayer
Posts: 843
Joined: Sat Dec 08, 2018 3:13 pm

Re: Path to UHNW

Post by gtrplayer »

GP813 wrote: Sat Jan 15, 2022 6:10 pm
nigel_ht wrote: Sat Jan 15, 2022 5:57 pm
GP813 wrote: Sat Jan 15, 2022 4:17 pm
nigel_ht wrote: Thu Jan 13, 2022 7:42 am
jack.bauer wrote: Thu Jan 13, 2022 1:01 am 30m is uhnw now? Some liberal use of the word ultra here. There are tons of people with 30m. Probably in the order of 1 in every 10k Americans. Ultra needs to be more rare. I propose we bump uhnw to at least 1b in assets.
295,450 out of 329.5M. Rare enough.

https://www.barrons.com/articles/the-wo ... 1625078725

At $30M you have enough to make a multi-family office worthwhile. You need at least $100M for a family office to make sense since they are very pricey to run.

So if you wanted to set new thresholds then HNW at $5M (up from $1M), VHNW at $30M (Up from $5M) and UHNW at $100M (up from $30M).

That should keep the 401K $1-2M riff-raff (that would be many BHs) out. You should email the head of Capgemini and tell him or her.
$30 million is solidly ultra wealthy. It's in the top 1% of every age group in America by networth with room to spare. I think since the late 1990's the American public has been brainwashed by the billionaire charm offensive/propaganda and so the practicalities of what is actually very wealthy has been skewed to be unrealistic and astronomical.
$30M isn’t really enough to own a private jet…so that’s not really “ultra”.

It’s not just about top x% but lifestyle differences.

Going from $500K to $1M doesn't really enable a significant lifestyle change. Even $1M to $5M is more of the same…still flying commercial air, boats not yachts, larger house or better neighborhood not estates, maybe a vacation house but at a nice lake but not in Tuscany, etc.

Going from $5m to $30 is a bigger bump but it’s not top tier…and since there isn’t a rank above “ultra” it’s really not even entry level to the top tier wealth but more like the top end of normal wealth.
When did the standard for being ultra wealthy become owning a private jet, lol? Something for which the mathematical logistics are really indefensible. This has nothing to do with data and like I already stated has more to do with billionaire propaganda and these pop culture references/flaunting that are out of whack with reality. $30 million dollars is UHNW according to the data.
Billionaire is really an incomprehensible amount of money and the ones who have tens of billions have incomprehensible wealth. Some people get to it but there is no repeatable path to it.

If you’d put 1 million yearly 100% into the total stock market since 1985 and adjusted the contribution for inflation, you’d have around $236 million.

If the average Fortune 500 CEO were say save their salary (approx 12.7 million/yr), it would take nearly 80 years to reach a billion.

Even a million dollars on Amazon when it went public would only get you to around 660 million. Tesla would only take you to $198 million. And you’d have to have held when you were up tens of millions.
FoolMeOnce
Posts: 1392
Joined: Mon Apr 24, 2017 11:16 am

Re: Path to UHNW

Post by FoolMeOnce »

Californiastate wrote: Sat Jan 15, 2022 3:01 pm
FoolMeOnce wrote: Sat Jan 15, 2022 2:20 pm
Californiastate wrote: Sat Jan 15, 2022 11:12 am
TheLaughingCow wrote: Tue Nov 17, 2020 2:24 pm
btenny wrote: Mon Nov 16, 2020 2:17 pm Then buy residential real estate at a young age and purchase your first rental house at 21.

Buy good properties in nice neighborhoods in growing towns.

Buy another rental house every year.

Keep buying a house or two per year.
Just when I think bogleheads can’t get any more out of touch...
I beg to differ. I know more than a few people who did just in Bay Area real estate over the last 50 years. A common southbay home cost around $60k in the mid 70s. Those same homes are now worth $1.5m whether they painted them or not. That same scenario wouldn't work in Cleveland but here it's been the game for quite a while.


That's actually a pretty terrible return. Go put $60k into a S&P500 calculator with dividends reinvested starting in the mid 1970's.
A couple can exclude $500k of capital gains every few years. Try that with an index fund.
I just also plugged it into a S&P calculator. The 10% downpayment of $6k invested in the S&P on Jan 1, 1975 grows to $1,442,613.70. That's roughly equivalent minus tax implications.
And one was 10x leveraged. Anyway, still not a special return.
User avatar
Wricha
Posts: 1014
Joined: Sun Mar 25, 2012 10:33 am

Re: Path to UHNW

Post by Wricha »

gtrplayer wrote: Sat Jan 15, 2022 11:38 am
Mofire wrote: Sun Nov 15, 2020 3:43 pm Outside of an inheritance, what was your path to UHNW ($30M)?
Based on some people’s definition, Jack Bogle himself was not UHNW… he definitely could have been had he structured the business for his own personal gain rather than the investors, or not given money to charity. Probably a lesson there…
If you define UHNW as 30M I’ll take that bet :sharebeer
User avatar
AerialWombat
Posts: 3102
Joined: Tue May 29, 2018 1:07 pm
Location: Cashtown, Cashylvania

Re: Path to UHNW

Post by AerialWombat »

EddyB wrote: Sat Jan 15, 2022 1:32 pm
mak1277 wrote: Tue Nov 17, 2020 7:58 am
Riprap wrote: Tue Nov 17, 2020 6:45 am
2tall4economy wrote: Tue Nov 17, 2020 12:16 am
Riprap wrote: Mon Nov 16, 2020 1:32 pm

Marginal Utility of Wealth.

Here's a good starting place. Let Google be your friend.

https://www.investopedia.com/terms/m/ma ... tility.asp

I think a lot of people at that wealth level come to the same conclusion.
I’m saying the same thing; you don’t see a lot of uhnw folks because many who can achieve that tap out first because there is no margin utility; it’s the liquidity events or the folks that really love their job. I really like what I do. But there are plenty of days I’d prefer to sleep in or play with my kids instead.
You asked if someone could "articulate" the concept. The concept, I believe, is marginal utility of wealth.
I think he was asking for someone to explain the "concept" of why you'd need/want $30 million vs. $10 million. I gave two examples of why I think $30 million would be better for me personally.
I probably wouldn't buy "just fun" cars (e.g., two seater convertibles) on $10 million, but almost surely would at $30 million. I probably wouldn't buy a ~50 foot sailboat on $10 million, but almost certainly would on $30 million. My housing choices would be moderately different, but probably not much.
If I ever hit $10 million, I’m going to upgrade to a 32-37 foot boat, and I’d probably upgrade to a $700k-$800k house. Maybe buy a Cirrus SR-22T for kicks.

At $30 million, I’d be willing to blow $25 million on a ride to orbit.

Priorities. :beer
This post is a work of fiction. Any similarity to real financial advice is purely coincidental.
KyleAAA
Posts: 9497
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Path to UHNW

Post by KyleAAA »

FoolMeOnce wrote: Sat Jan 15, 2022 2:20 pm
Californiastate wrote: Sat Jan 15, 2022 11:12 am
TheLaughingCow wrote: Tue Nov 17, 2020 2:24 pm
btenny wrote: Mon Nov 16, 2020 2:17 pm Then buy residential real estate at a young age and purchase your first rental house at 21.

Buy good properties in nice neighborhoods in growing towns.

Buy another rental house every year.

Keep buying a house or two per year.
Just when I think bogleheads can’t get any more out of touch...
I beg to differ. I know more than a few people who did just in Bay Area real estate over the last 50 years. A common southbay home cost around $60k in the mid 70s. Those same homes are now worth $1.5m whether they painted them or not. That same scenario wouldn't work in Cleveland but here it's been the game for quite a while.
That's actually a pretty terrible return. Go put $60k into a S&P500 calculator with dividends reinvested starting in the mid 1970's.
To be fair, now add the rents collected from all those rental properties and reinvested. And factor in leverage. You’ll quickly double or even triple the stock market’s annual return.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

GP813 wrote: Sat Jan 15, 2022 6:10 pm
nigel_ht wrote: Sat Jan 15, 2022 5:57 pm
GP813 wrote: Sat Jan 15, 2022 4:17 pm
nigel_ht wrote: Thu Jan 13, 2022 7:42 am
jack.bauer wrote: Thu Jan 13, 2022 1:01 am 30m is uhnw now? Some liberal use of the word ultra here. There are tons of people with 30m. Probably in the order of 1 in every 10k Americans. Ultra needs to be more rare. I propose we bump uhnw to at least 1b in assets.
295,450 out of 329.5M. Rare enough.

https://www.barrons.com/articles/the-wo ... 1625078725

At $30M you have enough to make a multi-family office worthwhile. You need at least $100M for a family office to make sense since they are very pricey to run.

So if you wanted to set new thresholds then HNW at $5M (up from $1M), VHNW at $30M (Up from $5M) and UHNW at $100M (up from $30M).

That should keep the 401K $1-2M riff-raff (that would be many BHs) out. You should email the head of Capgemini and tell him or her.
$30 million is solidly ultra wealthy. It's in the top 1% of every age group in America by networth with room to spare. I think since the late 1990's the American public has been brainwashed by the billionaire charm offensive/propaganda and so the practicalities of what is actually very wealthy has been skewed to be unrealistic and astronomical.
$30M isn’t really enough to own a private jet…so that’s not really “ultra”.

It’s not just about top x% but lifestyle differences.

Going from $500K to $1M doesn't really enable a significant lifestyle change. Even $1M to $5M is more of the same…still flying commercial air, boats not yachts, larger house or better neighborhood not estates, maybe a vacation house but at a nice lake but not in Tuscany, etc.

Going from $5m to $30 is a bigger bump but it’s not top tier…and since there isn’t a rank above “ultra” it’s really not even entry level to the top tier wealth but more like the top end of normal wealth.
When did the standard for being ultra wealthy become owning a private jet, lol? Something for which the mathematical logistics are really indefensible. This has nothing to do with data and like I already stated has more to do with billionaire propaganda and these pop culture references/flaunting that are out of whack with reality. $30 million dollars is UHNW according to the data.
Mathematically indefensible? Lol.

So your claim is that $30M and $30B are equivalently ultra?

That the wealth required for each tier should be linear vs exponential?

$30M isn’t elite in terms of wealth.
finite_difference
Posts: 3626
Joined: Thu Jul 09, 2015 7:00 pm

Re: Path to UHNW

Post by finite_difference »

I think a doctor, lawyer, or tech employee could hit $30m.

Save $200k/year for 30 years. Save more if possible. 100% stock. Should be possible to hit $30m.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh
Californiastate
Posts: 1516
Joined: Thu Feb 04, 2021 10:52 am

Re: Path to UHNW

Post by Californiastate »

What is after Ultra? Is it ludicrous or plaid?
Normchad
Posts: 5630
Joined: Thu Mar 03, 2011 6:20 am

Re: Path to UHNW

Post by Normchad »

According to firecalc, there is a possibility I will become UHNW during my retirement. It’s slim, but it’s there. Don’t underestimate the power of time..
Jimsad
Posts: 903
Joined: Mon Mar 20, 2017 5:54 pm

Re: Path to UHNW

Post by Jimsad »

In the networth thread I saw a good number of people make multi million gains with Tesla , bit coin in last decade and well on their way to UHNW in their 30s and 40s.
d18lover
Posts: 131
Joined: Wed Jul 20, 2016 12:31 pm

Re: Path to UHNW

Post by d18lover »

It's not what you know, it's who you know. Or who you're born to.

I am middle aged and feel bad for those just entering the work force, those I am hiring. We pay decent money for our field. Most of my staff starting out, all require a college degree, have to work two jobs for at least a few years. They defer families, have multiple roommates, and basically just get by.

This is not in a HCOL area. The only hope some of them have is their families are well-off enough to subsidize the American dream. Retired parents reduce the cost of child care for many. Assistance with housing downpayment, or sometimes the parents retire off to warm weather/condo and let the kids take the house. Otherwise the market is just too expensive. Someone above posted about buying their first rental property at 21. LOL.
User avatar
Lee_WSP
Posts: 10346
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Path to UHNW

Post by Lee_WSP »

It seems some posters are forgetting about inflation.

To achieve 30 million in today’s dollars and assuming a real rate of return of 5% and 40 years, one would need to save 20.5 thousand dollars per month in today’s dollars. 16,000 with a RROR of 6%.

50 years of work will get you there if you dump in 8.5k at a 6% real ROR. 11.8k at 5%.
gougou
Posts: 1311
Joined: Thu Sep 28, 2017 7:42 pm

Re: Path to UHNW

Post by gougou »

Use $2M down payment to buy $10M worth of cash-flowing rental properties. Assuming properties appreciate at 4% a year, 30 years later you would have completely paid off the mortgages and your properties would be worth $32.4M free and clear. Very doable if you are willing to be a landlord.

(Actual return is probably higher because I’m not counting the positive cashflow and I’m not cash-out refinancing the properties to maintain leverage. Houses also appreciated a lot more than 4% in recent years. )
The sillier the market’s behavior, the greater the opportunity for the business like investor.
User avatar
willthrill81
Posts: 32250
Joined: Thu Jan 26, 2017 2:17 pm
Location: USA
Contact:

Re: Path to UHNW

Post by willthrill81 »

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. :(
The Sensible Steward
GP813
Posts: 1231
Joined: Wed Dec 11, 2019 9:11 am

Re: Path to UHNW

Post by GP813 »

nigel_ht wrote: Sun Jan 16, 2022 2:14 pm
GP813 wrote: Sat Jan 15, 2022 6:10 pm
nigel_ht wrote: Sat Jan 15, 2022 5:57 pm
GP813 wrote: Sat Jan 15, 2022 4:17 pm
nigel_ht wrote: Thu Jan 13, 2022 7:42 am

295,450 out of 329.5M. Rare enough.

https://www.barrons.com/articles/the-wo ... 1625078725

At $30M you have enough to make a multi-family office worthwhile. You need at least $100M for a family office to make sense since they are very pricey to run.

So if you wanted to set new thresholds then HNW at $5M (up from $1M), VHNW at $30M (Up from $5M) and UHNW at $100M (up from $30M).

That should keep the 401K $1-2M riff-raff (that would be many BHs) out. You should email the head of Capgemini and tell him or her.
$30 million is solidly ultra wealthy. It's in the top 1% of every age group in America by networth with room to spare. I think since the late 1990's the American public has been brainwashed by the billionaire charm offensive/propaganda and so the practicalities of what is actually very wealthy has been skewed to be unrealistic and astronomical.
$30M isn’t really enough to own a private jet…so that’s not really “ultra”.

It’s not just about top x% but lifestyle differences.

Going from $500K to $1M doesn't really enable a significant lifestyle change. Even $1M to $5M is more of the same…still flying commercial air, boats not yachts, larger house or better neighborhood not estates, maybe a vacation house but at a nice lake but not in Tuscany, etc.

Going from $5m to $30 is a bigger bump but it’s not top tier…and since there isn’t a rank above “ultra” it’s really not even entry level to the top tier wealth but more like the top end of normal wealth.
When did the standard for being ultra wealthy become owning a private jet, lol? Something for which the mathematical logistics are really indefensible. This has nothing to do with data and like I already stated has more to do with billionaire propaganda and these pop culture references/flaunting that are out of whack with reality. $30 million dollars is UHNW according to the data.
Mathematically indefensible? Lol.

So your claim is that $30M and $30B are equivalently ultra?

That the wealth required for each tier should be linear vs exponential?

$30M isn’t elite in terms of wealth.
We're not arguing what is "elite" level wealth. We are discussing an industry recognized term that was established according to research (UHNW). Arbitrarily selecting some criteria of what you consider "elite" wealth doesn't amount to much, who cares, a thousand people can have a thousand different opinions about what "elite" wealth is.

And yes the logistics for private flight are indefensible especially considering the environmental impact and the lack of taxation. You might want to research this.
eagleeyes
Posts: 359
Joined: Sat Dec 28, 2013 1:49 pm

Re: Path to UHNW

Post by eagleeyes »

willthrill81 wrote: Sat Jan 15, 2022 9:35 pm
Lee_WSP wrote: Mon Nov 16, 2020 11:18 am
runner3081 wrote: Sun Nov 15, 2020 4:09 pm Start a business.
Plus a ton of good fortune.
+1

One of my big takeaways from Thomas Stanley's The Millionaire Mind was that even among millionaire parents whose succeed largely came from successful business ventures, comparatively few of them advocated for their children to follow in their footsteps. Most of them personally knew others who had worked very hard for years and still had little reward for their efforts. They learned that there was a big element of serendipity to their own success and how the odds would be stacked against their children. Consequently, these parents typically recommended that their children pursue professional services (e.g., attorneys, physicians, accountants).

It’s interesting. Amongst my wealthy colleagues, there is a feeling that they possess “true grit” and that they did it all on their own. Serendipity, luck/good fortune, parental support doesn’t play a role in their success.

Amongst my close friends, who are substantially less wealthy, they seem to realize, part of the reason they are successful is they were lucky enough to be born into good families, grew up in solidly middle class neighborhoods and went to good suburban public schools, and then went to college with parental help

Something about that money…really causes amnesia.

Take what you will from this anecdote.
helloeveryone
Posts: 1283
Joined: Sun Sep 04, 2016 5:16 pm

Re: Path to UHNW

Post by helloeveryone »

jory1804 wrote: Sun Nov 15, 2020 7:16 pm I'm not UHNW, but at my age and net worth (38 y/o, 13.5M), I realistically might get there.

In my case it's been mostly W-2. In the "right" industries, e.g. law, finance, tech, if you rise high enough up the ranks, saving $30M is within the realm of possibility. In most cases, to do this, you need to be an unusually strong performer with a lot of responsibility, likely managing a sizeable team. This is how it's been for me.
Do you kmow what is the breakdown between W2 salary versus huge bonuses for these performers typically?
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

GP813 wrote: Sun Jan 16, 2022 8:31 pm
nigel_ht wrote: Sun Jan 16, 2022 2:14 pm
GP813 wrote: Sat Jan 15, 2022 6:10 pm
nigel_ht wrote: Sat Jan 15, 2022 5:57 pm
GP813 wrote: Sat Jan 15, 2022 4:17 pm

$30 million is solidly ultra wealthy. It's in the top 1% of every age group in America by networth with room to spare. I think since the late 1990's the American public has been brainwashed by the billionaire charm offensive/propaganda and so the practicalities of what is actually very wealthy has been skewed to be unrealistic and astronomical.
$30M isn’t really enough to own a private jet…so that’s not really “ultra”.

It’s not just about top x% but lifestyle differences.

Going from $500K to $1M doesn't really enable a significant lifestyle change. Even $1M to $5M is more of the same…still flying commercial air, boats not yachts, larger house or better neighborhood not estates, maybe a vacation house but at a nice lake but not in Tuscany, etc.

Going from $5m to $30 is a bigger bump but it’s not top tier…and since there isn’t a rank above “ultra” it’s really not even entry level to the top tier wealth but more like the top end of normal wealth.
When did the standard for being ultra wealthy become owning a private jet, lol? Something for which the mathematical logistics are really indefensible. This has nothing to do with data and like I already stated has more to do with billionaire propaganda and these pop culture references/flaunting that are out of whack with reality. $30 million dollars is UHNW according to the data.
Mathematically indefensible? Lol.

So your claim is that $30M and $30B are equivalently ultra?

That the wealth required for each tier should be linear vs exponential?

$30M isn’t elite in terms of wealth.
We're not arguing what is "elite" level wealth. We are discussing an industry recognized term that was established according to research (UHNW). Arbitrarily selecting some criteria of what you consider "elite" wealth doesn't amount to much, who cares, a thousand people can have a thousand different opinions about what "elite" wealth is.

And yes the logistics for private flight are indefensible especially considering the environmental impact and the lack of taxation. You might want to research this.
Given that the definitions are arbitrary to begin with the assertion that $30M represents some mathematical law is amusing.

The $30M number will be revised upwards at some point and already has among some firms. BCS puts UHNW at $100M for a household. Cerulli states that HNW is $5M.

In any case $30M is insufficient for many things associated with ultra wealth whether that is a family office, private jet, the ability to buy permanent residency in NZ, etc.

At the end of the day, you are UHNW if the financial institution agrees you are UHNW.

And having ultra wealth means you don’t have to care about environmental impact if you don’t want to and have no need to defend flying in a private jet to anyone.
GP813
Posts: 1231
Joined: Wed Dec 11, 2019 9:11 am

Re: Path to UHNW

Post by GP813 »

nigel_ht wrote: Sun Jan 16, 2022 10:50 pm
Given that the definitions are arbitrary to begin with the assertion that $30M represents some mathematical law is amusing.

The $30M number will be revised upwards at some point and already has among some firms. BCS puts UHNW at $100M for a household. Cerulli states that HNW is $5M.

In any case $30M is insufficient for many things associated with ultra wealth whether that is a family office, private jet, the ability to buy permanent residency in NZ, etc.

At the end of the day, you are UHNW if the financial institution agrees you are UHNW.

And having ultra wealth means you don’t have to care about environmental impact if you don’t want to and have no need to defend flying in a private jet to anyone.
The definitions of things always change this goes without saying but the thread was about path to UHNW, and the acceptable definition today is what it is, based on data. A side topic about the increasing wealth gap from even the top 1%($11 million net-worth) to .10%($43 million net-worth) to .01%($111 million net-worth) might make for an interesting discussion but that was not the purpose of this thread. If we are going to discuss a topic we have to find a common definition, not just what Poster X thinks is really wealthy.

I pity the idea that having money absolves you of environmental stewardship, that's really messed up.

Also what is the BCS you're referring to, Barclays?
Last edited by GP813 on Sun Jan 16, 2022 11:58 pm, edited 4 times in total.
visualguy
Posts: 2988
Joined: Thu Jan 30, 2014 12:32 am

Re: Path to UHNW

Post by visualguy »

nigel_ht wrote: Sun Jan 16, 2022 10:50 pm In any case $30M is insufficient for many things associated with ultra wealth whether that is a family office, private jet, the ability to buy permanent residency in NZ, etc.
One other thing is being able to afford a divorce without falling out of the category. Having $15M left certainly doesn't cut it, and divorces aren't exactly rare. :wink:
User avatar
Wricha
Posts: 1014
Joined: Sun Mar 25, 2012 10:33 am

Re: Path to UHNW

Post by Wricha »

gougou wrote: Sun Jan 16, 2022 7:14 pm Use $2M down payment to buy $10M worth of cash-flowing rental properties. Assuming properties appreciate at 4% a year, 30 years later you would have completely paid off the mortgages and your properties would be worth $32.4M free and clear. Very doable if you are willing to be a landlord.

(Actual return is probably higher because I’m not counting the positive cashflow and I’m not cash-out refinancing the properties to maintain leverage. Houses also appreciated a lot more than 4% in recent years. )
You don’t want to see the tax effect on selling that $30M building. Plus where did you get $2M so early in your career to be a landlord for 30 more years.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

GP813 wrote: Sun Jan 16, 2022 11:38 pm
nigel_ht wrote: Sun Jan 16, 2022 10:50 pm
Given that the definitions are arbitrary to begin with the assertion that $30M represents some mathematical law is amusing.

The $30M number will be revised upwards at some point and already has among some firms. BCS puts UHNW at $100M for a household. Cerulli states that HNW is $5M.

In any case $30M is insufficient for many things associated with ultra wealth whether that is a family office, private jet, the ability to buy permanent residency in NZ, etc.

At the end of the day, you are UHNW if the financial institution agrees you are UHNW.

And having ultra wealth means you don’t have to care about environmental impact if you don’t want to and have no need to defend flying in a private jet to anyone.
The definitions of things always change this goes without saying but the thread was about path to UHNW, and the acceptable definition today is what it is, based on data. A side topic about the increasing wealth gap from even the top 1%($11 million net-worth) to .10%($43 million net-worth) to .01%($111 million net-worth) might make for an interesting discussion but that was not the purpose of this thread. If we are going to discuss a topic we have to find a common definition, not just what Poster X thinks is really wealthy.

I pity the idea that having money absolves you of environmental stewardship, that's really messed up.

Also what is the BCS you're referring to, Barclays?
Boston Consulting Group I think. I was googling what financial consultants think UHNW thresholds are. Pretty much every definition is prefaced with “there is no legal or official definition for HNW or UHNW but this group says $X”

It matters mostly because below that amount you aren’t considered for some financial product.

The closest thing to official is the SEC threshold for accredited investor at $1M. The UK and other countries have similar thresholds for certain things.

While the topic was getting to UHNW the definition of UHNW is relevant. Part of that is eliciting WHY getting to UHNW is a useful objective.

The difference between $25M and $30M is minimal in comparison to the difference between $1 and $5M.

The difference between $15M and $30M isn’t all that high either and hitting $15M is an easier path to chart. You can still get into a MFO at $15M but on the lower end.

But if the OP is asking how to get to UHNW to have the really fancy lifestyle upgrades then $30M is way too low a threshold to sustain that. That’s not “billionaire propaganda”…that’s the reality that the TCO is far larger than the sticker price.

As far as environmental impact, whatever. Just buy carbon offsets like everyone else or pay for the kabuki green theater because if you actually want to enjoy UHNW status your footprint will be huge regardless of what you do to mitigate it. If you want a minimalist environmental footprint you don’t need to reach UHNW status.

Flying private vs flying commercial is a difference in degree, not a difference in kind. Folks super serious about being a “steward to the environment” don’t fly at all.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

visualguy wrote: Sun Jan 16, 2022 11:40 pm
nigel_ht wrote: Sun Jan 16, 2022 10:50 pm In any case $30M is insufficient for many things associated with ultra wealth whether that is a family office, private jet, the ability to buy permanent residency in NZ, etc.
One other thing is being able to afford a divorce without falling out of the category. Having $15M left certainly doesn't cut it, and divorces aren't exactly rare. :wink:
Lol…too true.
nigel_ht
Posts: 4742
Joined: Tue Jan 01, 2019 9:14 am

Re: Path to UHNW

Post by nigel_ht »

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.
gougou
Posts: 1311
Joined: Thu Sep 28, 2017 7:42 pm

Re: Path to UHNW

Post by gougou »

Wricha wrote: Mon Jan 17, 2022 6:28 am
gougou wrote: Sun Jan 16, 2022 7:14 pm Use $2M down payment to buy $10M worth of cash-flowing rental properties. Assuming properties appreciate at 4% a year, 30 years later you would have completely paid off the mortgages and your properties would be worth $32.4M free and clear. Very doable if you are willing to be a landlord.

(Actual return is probably higher because I’m not counting the positive cashflow and I’m not cash-out refinancing the properties to maintain leverage. Houses also appreciated a lot more than 4% in recent years. )
You don’t want to see the tax effect on selling that $30M building. Plus where did you get $2M so early in your career to be a landlord for 30 more years.
$2M is doable in 10 to 15 years for a hardworking individual. If you are creative, you could buy houses with 5% down and convert them to rental properties. So the cash required is very minimal.

I’m not sure why you have to sell the buildings, or how is that very different from selling stocks. Yes there’s gain and depreciation recapture but you’ll pay tax on anything that appreciates in value.
The sillier the market’s behavior, the greater the opportunity for the business like investor.
User avatar
Lee_WSP
Posts: 10346
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Path to UHNW

Post by Lee_WSP »

eagleeyes wrote: Sun Jan 16, 2022 8:53 pm
willthrill81 wrote: Sat Jan 15, 2022 9:35 pm
Lee_WSP wrote: Mon Nov 16, 2020 11:18 am
runner3081 wrote: Sun Nov 15, 2020 4:09 pm Start a business.
Plus a ton of good fortune.
+1

One of my big takeaways from Thomas Stanley's The Millionaire Mind was that even among millionaire parents whose succeed largely came from successful business ventures, comparatively few of them advocated for their children to follow in their footsteps. Most of them personally knew others who had worked very hard for years and still had little reward for their efforts. They learned that there was a big element of serendipity to their own success and how the odds would be stacked against their children. Consequently, these parents typically recommended that their children pursue professional services (e.g., attorneys, physicians, accountants).

It’s interesting. Amongst my wealthy colleagues, there is a feeling that they possess “true grit” and that they did it all on their own. Serendipity, luck/good fortune, parental support doesn’t play a role in their success.

Amongst my close friends, who are substantially less wealthy, they seem to realize, part of the reason they are successful is they were lucky enough to be born into good families, grew up in solidly middle class neighborhoods and went to good suburban public schools, and then went to college with parental help

Something about that money…really causes amnesia.

Take what you will from this anecdote.
Probably because you need an extremely strong conviction and belief to pour all your sweat, tears, and money into an enterprise. You need to believe you have the magic sauce and are then rewarded for having the magic sauce. And, maybe you do have the magic sauce because a good chunk of entrepreneurship is the ability to bring home the bacon.

The reason it isn’t repeatable is because not every fishing hole has fish.
User avatar
Yesterdaysnews
Posts: 964
Joined: Sun Sep 14, 2014 1:25 pm
Location: Sugar Land, TX

Re: Path to UHNW

Post by Yesterdaysnews »

Interesting convo. Personally, I have been a high income W2 earner for about 15 years. I have been faithfully squirreling away money into index products. It is clear to me that this strategy is fine but I will never reach UHNW and thus why bother trying? I have since decided to cut back on my hours somewhat and focus on other things like personal development and enjoying life more.
User avatar
Wricha
Posts: 1014
Joined: Sun Mar 25, 2012 10:33 am

Re: Path to UHNW

Post by Wricha »

gougou wrote: Mon Jan 17, 2022 10:33 am
Wricha wrote: Mon Jan 17, 2022 6:28 am
gougou wrote: Sun Jan 16, 2022 7:14 pm Use $2M down payment to buy $10M worth of cash-flowing rental properties. Assuming properties appreciate at 4% a year, 30 years later you would have completely paid off the mortgages and your properties would be worth $32.4M free and clear. Very doable if you are willing to be a landlord.

(Actual return is probably higher because I’m not counting the positive cashflow and I’m not cash-out refinancing the properties to maintain leverage. Houses also appreciated a lot more than 4% in recent years. )
You don’t want to see the tax effect on selling that $30M building. Plus where did you get $2M so early in your career to be a landlord for 30 more years.
$2M is doable in 10 to 15 years for a hardworking individual. If you are creative, you could buy houses with 5% down and convert them to rental properties. So the cash required is very minimal.

I’m not sure why you have to sell the buildings, or how is that very different from selling stocks. Yes there’s gain and depreciation recapture but you’ll pay tax on anything that appreciates in value.
To make you argument a little more plausible. I think it’s doubtful that anyone is going to work 15 years save $2M (that’s a big number in 15 years) and suddenly put everything they own into real estate and be a landlord for the next 30+ years while working their regular job (even part time). Someone who saves 2M in their first 15 years of a career is almost certainly a college educated professional. (Think engineer, doctor, lawyer, IT) and will probably continue in that career.

Also, I think managing $30M of residential real estate is not for the novice. Someone who gets into the commercial real estate business early in their career maybe (big maybe) able to parlay their knowledge of real estate into some lucrative deals with real estate and hit UHNW.

My whole point once you get to 30M+ you need to have done something extraordinary and it’s more than go to college, get a good job, live below your means and buy index funds. Although this maybe good advice resulting in a good life it is an unlikely path to UHNW which was the post.
gougou
Posts: 1311
Joined: Thu Sep 28, 2017 7:42 pm

Re: Path to UHNW

Post by gougou »

Wricha wrote: Mon Jan 17, 2022 12:31 pm
gougou wrote: Mon Jan 17, 2022 10:33 am
Wricha wrote: Mon Jan 17, 2022 6:28 am
gougou wrote: Sun Jan 16, 2022 7:14 pm Use $2M down payment to buy $10M worth of cash-flowing rental properties. Assuming properties appreciate at 4% a year, 30 years later you would have completely paid off the mortgages and your properties would be worth $32.4M free and clear. Very doable if you are willing to be a landlord.

(Actual return is probably higher because I’m not counting the positive cashflow and I’m not cash-out refinancing the properties to maintain leverage. Houses also appreciated a lot more than 4% in recent years. )
You don’t want to see the tax effect on selling that $30M building. Plus where did you get $2M so early in your career to be a landlord for 30 more years.
$2M is doable in 10 to 15 years for a hardworking individual. If you are creative, you could buy houses with 5% down and convert them to rental properties. So the cash required is very minimal.

I’m not sure why you have to sell the buildings, or how is that very different from selling stocks. Yes there’s gain and depreciation recapture but you’ll pay tax on anything that appreciates in value.
To make you argument a little more plausible. I think it’s doubtful that anyone is going to work 15 years save $2M (that’s a big number in 15 years) and suddenly put everything they own into real estate and be a landlord for the next 30+ years while working their regular job (even part time). Someone who saves 2M in their first 15 years of a career is almost certainly a college educated professional. (Think engineer, doctor, lawyer, IT) and will probably continue in that career.

Also, I think managing $30M of residential real estate is not for the novice. Someone who gets into the commercial real estate business early in their career maybe (big maybe) able to parlay their knowledge of real estate into some lucrative deals with real estate and hit UHNW.

My whole point once you get to 30M+ you need to have done something extraordinary and it’s more than go to college, get a good job, live below your means and buy index funds. Although this maybe good advice resulting in a good life it is an unlikely path to UHNW which was the post.
I didn’t mean this person suddenly dumped $2M into rental properties. You could’ve saved money and bought rentals every year. If someone buys a $1M fourplex with 5% or 20% down every year they have $10M worth of rental properties after 10 years.

I didn’t say the investor must personally manage the properties. There are property management companies that do a reasonable job for a small fee. And you can still be cashflow positive after the management fees in many places in America.

My whole point was that in America there is a clear path (under some reasonable assumptions) for an average person to reach $30M after 30 to 40 years of saving and investing. I’m not saying everybody should do it, and most people probably don’t want to go this way, so maybe this is extraordinary.
The sillier the market’s behavior, the greater the opportunity for the business like investor.
User avatar
Lee_WSP
Posts: 10346
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Path to UHNW

Post by Lee_WSP »

gougou wrote: Mon Jan 17, 2022 12:44 pm
My whole point was that in America there is a clear path (under some reasonable assumptions) for an average person to reach $30M after 30 to 40 years of saving and investing. I’m not saying everybody should do it, and most people probably don’t want to go this way, so maybe this is extraordinary.
This is true, but replace 30 million with thirty thousand not too long ago and you can see how it's just a relative and meaningless number without inflation adjustments.

Net worth is and always will be relative. UHNW is at least the top 1%. It means being at the very least pretty darned rare.
Firemenot
Posts: 1496
Joined: Wed Apr 01, 2020 8:48 pm

Re: Path to UHNW

Post by Firemenot »

Lee_WSP wrote: Mon Jan 17, 2022 10:37 am
eagleeyes wrote: Sun Jan 16, 2022 8:53 pm
willthrill81 wrote: Sat Jan 15, 2022 9:35 pm
Lee_WSP wrote: Mon Nov 16, 2020 11:18 am
runner3081 wrote: Sun Nov 15, 2020 4:09 pm Start a business.
Plus a ton of good fortune.
+1

One of my big takeaways from Thomas Stanley's The Millionaire Mind was that even among millionaire parents whose succeed largely came from successful business ventures, comparatively few of them advocated for their children to follow in their footsteps. Most of them personally knew others who had worked very hard for years and still had little reward for their efforts. They learned that there was a big element of serendipity to their own success and how the odds would be stacked against their children. Consequently, these parents typically recommended that their children pursue professional services (e.g., attorneys, physicians, accountants).

It’s interesting. Amongst my wealthy colleagues, there is a feeling that they possess “true grit” and that they did it all on their own. Serendipity, luck/good fortune, parental support doesn’t play a role in their success.

Amongst my close friends, who are substantially less wealthy, they seem to realize, part of the reason they are successful is they were lucky enough to be born into good families, grew up in solidly middle class neighborhoods and went to good suburban public schools, and then went to college with parental help

Something about that money…really causes amnesia.

Take what you will from this anecdote.
Probably because you need an extremely strong conviction and belief to pour all your sweat, tears, and money into an enterprise. You need to believe you have the magic sauce and are then rewarded for having the magic sauce. And, maybe you do have the magic sauce because a good chunk of entrepreneurship is the ability to bring home the bacon.

The reason it isn’t repeatable is because not every fishing hole has fish.
While luck certainly plays a big role for entrepreneurs that become UHNW, they did take on extra risk. Just like investing, more risk gives the potential for more upside (or downside).
User avatar
Wricha
Posts: 1014
Joined: Sun Mar 25, 2012 10:33 am

Re: Path to UHNW

Post by Wricha »

My whole point was that in America there is a clear path (under some reasonable assumptions) for an average person to reach $30M after 30 to 40 years of saving and investing.

This is where we disagree. I don’t think average people doing average things are worth $30M but I could be wrong.
[/quote]
Hannibal Barca
Posts: 145
Joined: Sun Apr 11, 2021 12:22 pm

Re: Path to UHNW

Post by Hannibal Barca »

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.
Hannibal Barca
Posts: 145
Joined: Sun Apr 11, 2021 12:22 pm

Re: Path to UHNW

Post by Hannibal Barca »

Fun fact: After adjusting for inflation, today's $30M is also about what being a millionaire (having $1M) was in the early 1800's when the term first entered the English language.
Last edited by Hannibal Barca on Mon Jan 17, 2022 3:03 pm, edited 1 time in total.
Marseille07
Posts: 16054
Joined: Fri Nov 06, 2020 12:41 pm

Re: Path to UHNW

Post by Marseille07 »

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.
I'm not sure if you necessarily have to be born in it.

If you amass 2M and keep investing aggressively, you might get there. Imo the chorus of "won the game, stop playing the game" does a disservice if you're trying to hit UHNW - you have to take risks and continue taking risks.
Last edited by Marseille07 on Mon Jan 17, 2022 2:09 pm, edited 1 time in total.
alfaspider
Posts: 4805
Joined: Wed Sep 09, 2015 4:44 pm

Re: Path to UHNW

Post by alfaspider »

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.
EddyB
Posts: 2431
Joined: Fri May 24, 2013 3:43 pm

Re: Path to UHNW

Post by EddyB »

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).
It's not crystal clear based on the time I'm willing to spend on it (not much), but the 99th percentile for wealth for what seems to be "families" aged 30-34, including home equity, was just under a million bucks in 2020. Anything's possible, but twice that amount, when entering that age range, strikes me as a different meaning for "doable" than how I usually take it. https://dqydj.com/net-worth-by-age-calc ... ed-states/
eagleeyes
Posts: 359
Joined: Sat Dec 28, 2013 1:49 pm

Re: Path to UHNW

Post by eagleeyes »

Lee_WSP wrote: Mon Jan 17, 2022 10:37 am
eagleeyes wrote: Sun Jan 16, 2022 8:53 pm
willthrill81 wrote: Sat Jan 15, 2022 9:35 pm
Lee_WSP wrote: Mon Nov 16, 2020 11:18 am
runner3081 wrote: Sun Nov 15, 2020 4:09 pm Start a business.
Plus a ton of good fortune.
+1

One of my big takeaways from Thomas Stanley's The Millionaire Mind was that even among millionaire parents whose succeed largely came from successful business ventures, comparatively few of them advocated for their children to follow in their footsteps. Most of them personally knew others who had worked very hard for years and still had little reward for their efforts. They learned that there was a big element of serendipity to their own success and how the odds would be stacked against their children. Consequently, these parents typically recommended that their children pursue professional services (e.g., attorneys, physicians, accountants).

It’s interesting. Amongst my wealthy colleagues, there is a feeling that they possess “true grit” and that they did it all on their own. Serendipity, luck/good fortune, parental support doesn’t play a role in their success.

Amongst my close friends, who are substantially less wealthy, they seem to realize, part of the reason they are successful is they were lucky enough to be born into good families, grew up in solidly middle class neighborhoods and went to good suburban public schools, and then went to college with parental help

Something about that money…really causes amnesia.

Take what you will from this anecdote.
Probably because you need an extremely strong conviction and belief to pour all your sweat, tears, and money into an enterprise. You need to believe you have the magic sauce and are then rewarded for having the magic sauce. And, maybe you do have the magic sauce because a good chunk of entrepreneurship is the ability to bring home the bacon.

The reason it isn’t repeatable is because not every fishing hole has fish.
I would agree if my colleagues were mark zuckerbergs or Elon musks, or real entrepreneurs. but they are just doctors. For the most part mediocre ones. I don’t think any have strong convictions besides making good stable salary. Just lucky with good family structure, engaged parents, decent college, and medical school.

No magic sauce needed. Or rather, this magic sauce is widely known. And eminently repeatable.

I’m not saying some don’t have true grit, they do, but wbr with grit, constellation of good fortune is needed to succeed.
User avatar
Lee_WSP
Posts: 10346
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Path to UHNW

Post by Lee_WSP »

Deleted. Off topic.
Last edited by Lee_WSP on Mon Jan 17, 2022 8:54 pm, edited 1 time in total.
GP813
Posts: 1231
Joined: Wed Dec 11, 2019 9:11 am

Re: Path to UHNW

Post by GP813 »

nigel_ht wrote: Mon Jan 17, 2022 7:10 am
But if the OP is asking how to get to UHNW to have the really fancy lifestyle upgrades then $30M is way too low a threshold to sustain that. That’s not “billionaire propaganda”…that’s the reality that the TCO is far larger than the sticker price.


This is exactly what OP posted.
Mofire wrote: Sun Nov 15, 2020 3:43 pm Outside of an inheritance, what was your path to UHNW ($30M)?


I think it was pretty clear and they defined the term with what is the current definition of UHNW according to most of the industry. People adding on well that's not really wealthy to me, is them projecting their own nonsense into the thread.
Jags4186
Posts: 8198
Joined: Wed Jun 18, 2014 7:12 pm

Re: Path to UHNW

Post by Jags4186 »

Wildly successful business
Elite athlete
A-list actor/actress
Big wig finance guy
Named partner at a big law firm
Successful career C-suite at midsized company or very high ranking at F100 companies
Incredibly good investments (going all in Apple/Bitcoin/Tesla/MSFT and riding it for years)
Internet celebrity/oddity (it's been reported that Bella Thorne makes $1mm/mo on her Onlyfans site.)
Hannibal Barca
Posts: 145
Joined: Sun Apr 11, 2021 12:22 pm

Re: Path to UHNW

Post by Hannibal Barca »

EddyB wrote: Mon Jan 17, 2022 2:20 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).
It's not crystal clear based on the time I'm willing to spend on it (not much), but the 99th percentile for wealth for what seems to be "families" aged 30-34, including home equity, was just under a million bucks in 2020. Anything's possible, but twice that amount, when entering that age range, strikes me as a different meaning for "doable" than how I usually take it. https://dqydj.com/net-worth-by-age-calc ... ed-states/
This is in a nut shell how my wife and I did it, so it's definitely doable. :sharebeer

But I completely get why most people don't. And the temptation to take the foot off the gas is real and growing...
SmallSaver
Posts: 634
Joined: Mon Mar 26, 2012 11:34 am

Re: Path to UHNW

Post by SmallSaver »

nigel_ht wrote: Thu Jan 13, 2022 7:42 am
jack.bauer wrote: Thu Jan 13, 2022 1:01 am 30m is uhnw now? Some liberal use of the word ultra here. There are tons of people with 30m. Probably in the order of 1 in every 10k Americans. Ultra needs to be more rare. I propose we bump uhnw to at least 1b in assets.
295,450 out of 329.5M. Rare enough.

https://www.barrons.com/articles/the-wo ... 1625078725
That 295,450 is global. If it were for the US that would be one out of a thousand.
GP813
Posts: 1231
Joined: Wed Dec 11, 2019 9:11 am

Re: Path to UHNW

Post by GP813 »

SmallSaver wrote: Mon Jan 17, 2022 3:15 pm
nigel_ht wrote: Thu Jan 13, 2022 7:42 am
jack.bauer wrote: Thu Jan 13, 2022 1:01 am 30m is uhnw now? Some liberal use of the word ultra here. There are tons of people with 30m. Probably in the order of 1 in every 10k Americans. Ultra needs to be more rare. I propose we bump uhnw to at least 1b in assets.
295,450 out of 329.5M. Rare enough.

https://www.barrons.com/articles/the-wo ... 1625078725
That 295,450 is global. If it were for the US that would be one out of a thousand.

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.
Last edited by GP813 on Mon Jan 17, 2022 3:37 pm, edited 3 times in total.
Firemenot
Posts: 1496
Joined: Wed Apr 01, 2020 8:48 pm

Re: Path to UHNW

Post by Firemenot »

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”.
H-Town
Posts: 5876
Joined: Sun Feb 26, 2017 1:08 pm

Re: Path to UHNW

Post by H-Town »

LiveSimple wrote: Sat Jan 15, 2022 9:03 pm The calculation shows a $5M gaining around 22% for ten years can make $30 M.
Okay, Bernie Madoff.
Time is the ultimate currency.
Locked