Personal: HNW $10M, how did you do it? [High Net Worth]

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EnjoyIt
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by EnjoyIt »

VoiceOfReason wrote: Sat Aug 13, 2022 11:22 am
Jags4186 wrote: Fri Aug 12, 2022 3:08 pm Most people who have a $10mm net worth that aren't athletes/entertainers/trust fund kids did it by starting and operating or selling a very successful business.

There are very few people who are able to make enough money at a job to get to $10mm without hitting some sort of RSU or options lottery.
I think you are correct, broadly speaking that more people reach $10MM net worth by RSU, options, selling business, etc.

However, this should not be confused with difficulty. Anyone with a high paying salary, or dual income families with two reasonably high earners, can accomplish this if that is their goal.

To put this in perspective, if you can get a net worth of $3MM by age of 40-45, invest/save NO MORE $, average a 6% return for ~20 more years you will reach $10MM. Entirely doable, even without saving more $$.

I think many people that need to take that path end up retiring/enjoying their life long before they get to $10MM.
^This right here.
$10 million sounds great. We were on a solid trajectory to get there. But, long before arriving we cut back on work and spent more time enjoying life. We eat healthier, exercise more and spent more time doing the things we love. Sure the extra cash would have been nice. Drive that nicer car, live in that nicer house, fly first class more, etc. But to do that we would have to spend time working and those items I listed are just not worth the extra time at the job. My free time is far more valuable. But that is just me and my spouse. Everyone has to make their own life choices.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by snowday2022 »

goodenyou wrote: Sun Aug 14, 2022 9:20 am As you can see, most people giving you advice on how to do this are not physicians. If they are, many are 2 physician incomes. Even Jim D of WCI suggests to “start a business“ like he did. He also has data and has published it on the percentage of doctors with net worths >$5M. It is small. >$10M is probably very small. If your combined family income is $500k, it is unlikely that you are a surgical sub specialist or high procedure-type physician. The fact that you are asking this question makes me think that the idea of, or your desire to, practice medicine for 35 years (as some have suggested) is unlikely. I don’t blame you. Taking “how to get to $10M net worth” advice from young tech people or entrepreneurs that sold their businesses is of no value if you want to stay in medicine. If you relocate to a “Sportsman’s Paradise” job in the middle of nowhere offered by Merritt Hawkins you may be able to make significantly more income and get to “your number”. It may not be pleasant or on your radar. The only other way to do it in a non-highly compensated specialty is to leverage yourself in a self-owned cattle call-type creepy practice with many mid-level providers. Usually very low quality and high volume doing questionable medicine. Good luck.
Good post. To play devils advocate though, their post tax income is 500K. That is fantastic and many two MD couples say a pediatrician and a surgical subspecialist, might make 800K gross and 500 post tax. Agree with WCIs data but I think that’s a reflection of doctors generally not having financial smarts or discipline, rather than not having the ability to accumulate that NW if they invested smartly and so desired. As I said upthread, MOST doctors do not retire early. Many work into their 70s voluntarily long after FI. This is common at my workplace. It doesn’t even take a high savings rate if one makes 500K post tax to accumulate 10M over a long career if one invests in mostly equities and stays the course. Now to make this number at age 50 which the OP desires is a lot harder. I would encourage him to slow down so as to minimize burnout, try to enjoy the journey and he will get there when he gets there.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by goodenyou »

snowday2022 wrote: Sun Aug 14, 2022 10:21 am
goodenyou wrote: Sun Aug 14, 2022 9:20 am As you can see, most people giving you advice on how to do this are not physicians. If they are, many are 2 physician incomes. Even Jim D of WCI suggests to “start a business“ like he did. He also has data and has published it on the percentage of doctors with net worths >$5M. It is small. >$10M is probably very small. If your combined family income is $500k, it is unlikely that you are a surgical sub specialist or high procedure-type physician. The fact that you are asking this question makes me think that the idea of, or your desire to, practice medicine for 35 years (as some have suggested) is unlikely. I don’t blame you. Taking “how to get to $10M net worth” advice from young tech people or entrepreneurs that sold their businesses is of no value if you want to stay in medicine. If you relocate to a “Sportsman’s Paradise” job in the middle of nowhere offered by Merritt Hawkins you may be able to make significantly more income and get to “your number”. It may not be pleasant or on your radar. The only other way to do it in a non-highly compensated specialty is to leverage yourself in a self-owned cattle call-type creepy practice with many mid-level providers. Usually very low quality and high volume doing questionable medicine. Good luck.
Good post. To play devils advocate though, their post tax income is 500K. That is fantastic and many two MD couples say a pediatrician and a surgical subspecialist, might make 800K gross and 500 post tax. Agree with WCIs data but I think that’s a reflection of doctors generally not having financial smarts or discipline, rather than not having the ability to accumulate that NW if they invested smartly and so desired. As I said upthread, MOST doctors do not retire early. Many work into their 70s voluntarily long after FI. This is common at my workplace. It doesn’t even take a high savings rate if one makes 500K post tax to accumulate 10M over a long career if one invests in mostly equities and stays the course. Now to make this number at age 50 which the OP desires is a lot harder. I would encourage him to slow down so as to minimize burnout, try to enjoy the journey and he will get there when he gets there.
It appears the OP has edited to change the $500k to post-tax or I missed that. Goals are possible if you can live on $250k and save $250k per year for 17 years. I would save even more and live on less because the 8% YOY return is awfully generous and would require a high risk/volatile portfolio that may derail the retirement plans at just the wrong time. Just don’t burn out. I think the average age of physician retirement is less than 70, but I could be mistaken. Most of my colleagues in that age demographic are on multiple marriages and made stupid doctor investments. Not enjoying work at all.
Last edited by goodenyou on Sun Aug 14, 2022 11:43 am, edited 1 time in total.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

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Not sure I’m qualified to comment but I’m 46 y/o, NW between $7-8M. Zero debt. No inheritance or other family money.

I did it earning high w2 income for the last 15 years, investing a lot of it and great timing with the bull market.

However, I have cut back on my savings rate and am spending more now…. You never know how much time you got and I think it’s worth smelling some roses.

My nature is such that I’m my youth I was always so obsessed with “the goal” and didn’t properly enjoy the “journey” - this led to some regrets. I don’t want to make that mistake again.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by glashutte »

Yesterdaysnews wrote: Sun Aug 14, 2022 11:10 am Not sure I’m qualified to comment but I’m 46 y/o, NW between $7-8M. Zero debt. No inheritance or other family money.

I did it earning high w2 income for the last 15 years, investing a lot of it and great timing with the bull market.

However, I have cut back on my savings rate and am spending more now…. You never know how much time you got and I think it’s worth smelling some roses.

My nature is such that I’m my youth I was always so obsessed with “the goal” and didn’t properly enjoy the “journey” - this led to some regrets. I don’t want to make that mistake again.
On a personal note, do you mind expanding on what the regrets were/are? And if they are shared by solely you or you plus partner (if there is a partner)?

I do know to understand and enjoy the journey, but as many on here who are successful I get obsessed to see 'how far I can go' in terms of success. And yes that mindset which could be seen as ambition, does causes some internal conflicts
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by KyleAAA »

Aged Maduro wrote: Sat Aug 13, 2022 1:12 pm Building that kind of wealth typically comes through a significant liquidity event while someone is still relatively young, say under 45 years of age. That could be through selling a start up, an investment banking/private equity commission or inheriting a trust fund. Or be an enormously talented athlete or entertainer. Once a person has a million plus at an early age it is relatively easy for that to compound into $10 million plus just through the normal doubling periods of investing.

In any event, it requires that one either be exceptionally talented or exceptionally lucky. While it is possible for a W2 wage earner to achieve a net worth of $10 million it will probably require a life of austerity along the way.
Nah, I’ll almost certainly hit that amount before 60 with VERY conservative return assumptions, and I’ve never been what anyone would call frugal. In the tech world that number isn’t all that rare. Of course, plenty of people will stop long before they get there. But in an industry where there are lots of 20-somethings earning $250k+ without the expense of grad school, a not-insignificant portion of them will end up eclipsing that number.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

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glashutte wrote: Sun Aug 14, 2022 11:56 am
Yesterdaysnews wrote: Sun Aug 14, 2022 11:10 am Not sure I’m qualified to comment but I’m 46 y/o, NW between $7-8M. Zero debt. No inheritance or other family money.

I did it earning high w2 income for the last 15 years, investing a lot of it and great timing with the bull market.

However, I have cut back on my savings rate and am spending more now…. You never know how much time you got and I think it’s worth smelling some roses.

My nature is such that I’m my youth I was always so obsessed with “the goal” and didn’t properly enjoy the “journey” - this led to some regrets. I don’t want to make that mistake again.
On a personal note, do you mind expanding on what the regrets were/are? And if they are shared by solely you or you plus partner (if there is a partner)?

I do know to understand and enjoy the journey, but as many on here who are successful I get obsessed to see 'how far I can go' in terms of success. And yes that mindset which could be seen as ambition, does causes some internal conflicts
When I look back, I realize I had a singular focus, almost obsession, with reaching certain goals / notions of success. This occupied my "prime" years of my life in my 20s and 30s. I didn't develop outside interests much, didn't focus on self-improvement, mental health etc. I didn't prioritize my friendships or my relationships with women etc. Basically, I didn't develop into a well rounded and well adjusted human being.

Sure, I reached those goals I set, but now I sit back, feeling a bit old, thinking I could probably have gotten to the same place in life without being so goal focused and enjoying the journey a life more - not just viewing life events as boxes to check off.

I try now to focus on moving forward without making the same mistakes. The pandemic certainly has shown us all how fragile and short life can be. I am still quite fit and in good health as far as I know, so moving forward my hope is the "second act" of my life is just starting I want to take a different approach. Focusing on goals like "having $XX" in my investment accounts etc just seems like another goal / obsession and will likely not be very fulfilling once one reaches the other side.... I think the best approach for me is to continue to invest without thinking about it (401k, dividend reinvestment, compounding doing its thing etc) and use the rest of my income as a tool to enjoy life / the journey. YMMV.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Artsdoctor »

glashutte wrote: Sun Aug 14, 2022 11:56 am
Yesterdaysnews wrote: Sun Aug 14, 2022 11:10 am Not sure I’m qualified to comment but I’m 46 y/o, NW between $7-8M. Zero debt. No inheritance or other family money.

I did it earning high w2 income for the last 15 years, investing a lot of it and great timing with the bull market.

However, I have cut back on my savings rate and am spending more now…. You never know how much time you got and I think it’s worth smelling some roses.

My nature is such that I’m my youth I was always so obsessed with “the goal” and didn’t properly enjoy the “journey” - this led to some regrets. I don’t want to make that mistake again.
On a personal note, do you mind expanding on what the regrets were/are? And if they are shared by solely you or you plus partner (if there is a partner)?

I do know to understand and enjoy the journey, but as many on here who are successful I get obsessed to see 'how far I can go' in terms of success. And yes that mindset which could be seen as ambition, does causes some internal conflicts
I wouldn't presume to tell people what to do with their families but there are a few things I gathered along the way regarding prioritization.

As I mentioned upstream, sometimes you can increase the numbers of hours you work in order to increase your income. That's fine although I learned that you can never take your eyes off of your family. Personally, the years I had the highest income were the years I should have been spending more time at home. I was very lucky that my marriage survived but I noticed several colleagues along the way did not have the same luck. I learned that what goes on at home is much more important than work which is something that many will say but sometimes can lose sight of when in the thick of things. Marriages can break up for many reasons, some of those reasons are more than valid--but you don't want to go through a divorce just because of neglect. You never want to be in a situation where you're pulling in the driveway and unhappy to be home. And if you're really concerned about maximizing your net worth, you're going to want to try and avoid a divorce.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by goodenyou »

Artsdoctor wrote: Sun Aug 14, 2022 12:34 pm
glashutte wrote: Sun Aug 14, 2022 11:56 am
Yesterdaysnews wrote: Sun Aug 14, 2022 11:10 am Not sure I’m qualified to comment but I’m 46 y/o, NW between $7-8M. Zero debt. No inheritance or other family money.

I did it earning high w2 income for the last 15 years, investing a lot of it and great timing with the bull market.

However, I have cut back on my savings rate and am spending more now…. You never know how much time you got and I think it’s worth smelling some roses.

My nature is such that I’m my youth I was always so obsessed with “the goal” and didn’t properly enjoy the “journey” - this led to some regrets. I don’t want to make that mistake again.
On a personal note, do you mind expanding on what the regrets were/are? And if they are shared by solely you or you plus partner (if there is a partner)?

I do know to understand and enjoy the journey, but as many on here who are successful I get obsessed to see 'how far I can go' in terms of success. And yes that mindset which could be seen as ambition, does causes some internal conflicts
I wouldn't presume to tell people what to do with their families but there are a few things I gathered along the way regarding prioritization.

As I mentioned upstream, sometimes you can increase the numbers of hours you work in order to increase your income. That's fine although I learned that you can never take your eyes off of your family. Personally, the years I had the highest income were the years I should have been spending more time at home. I was very lucky that my marriage survived but I noticed several colleagues along the way did not have the same luck. I learned that what goes on at home is much more important than work which is something that many will say but sometimes can lose sight of when in the thick of things. Marriages can break up for many reasons, some of those reasons are more than valid--but you don't want to go through a divorce just because of neglect. You never want to be in a situation where you're pulling in the driveway and unhappy to be home. And if you're really concerned about maximizing your net worth, you're going to want to try and avoid a divorce.
+1. Never compromised on my family time. Coached my kids sports and my wife (who is an NP) stayed at home and never missed any school events. Wife went back to work after kids were older and now has a fantastic job in Pharma Oncology. Can’t say the same for some my practice partners or colleagues. Their marriages, personal lives and financial lives were road kill along the way. It exacts a toll if you don’t watch out.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by goos_news »

kidshrink wrote: Sat Aug 13, 2022 9:23 pm For those who achieved $10MM, was it worth it? Advice from the other side about the experience?
It was never an overarching goal, and nothing that came onto the radar. By not being focused on a numerical "end all" goal, there was never any sense of anxiety. Things just built and things just happened. After a certain point, things snowball, and you end up adding $1M+ per year.

There were never any issues with the hours required, as they were never that extreme. Also, we did not go into extreme deprivation --- there were always restaurants, travel (cost effectively) and other things -- but purchases were still made with an eye for value and we aren't overly interested in big cars, the biggest labels (quality yes, bling no) and other luxe things.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by EnjoyIt »

Yesterdaysnews wrote: Sun Aug 14, 2022 12:28 pm
glashutte wrote: Sun Aug 14, 2022 11:56 am
Yesterdaysnews wrote: Sun Aug 14, 2022 11:10 am Not sure I’m qualified to comment but I’m 46 y/o, NW between $7-8M. Zero debt. No inheritance or other family money.

I did it earning high w2 income for the last 15 years, investing a lot of it and great timing with the bull market.

However, I have cut back on my savings rate and am spending more now…. You never know how much time you got and I think it’s worth smelling some roses.

My nature is such that I’m my youth I was always so obsessed with “the goal” and didn’t properly enjoy the “journey” - this led to some regrets. I don’t want to make that mistake again.
On a personal note, do you mind expanding on what the regrets were/are? And if they are shared by solely you or you plus partner (if there is a partner)?

I do know to understand and enjoy the journey, but as many on here who are successful I get obsessed to see 'how far I can go' in terms of success. And yes that mindset which could be seen as ambition, does causes some internal conflicts
When I look back, I realize I had a singular focus, almost obsession, with reaching certain goals / notions of success. This occupied my "prime" years of my life in my 20s and 30s. I didn't develop outside interests much, didn't focus on self-improvement, mental health etc. I didn't prioritize my friendships or my relationships with women etc. Basically, I didn't develop into a well rounded and well adjusted human being.

Sure, I reached those goals I set, but now I sit back, feeling a bit old, thinking I could probably have gotten to the same place in life without being so goal focused and enjoying the journey a life more - not just viewing life events as boxes to check off.

I try now to focus on moving forward without making the same mistakes. The pandemic certainly has shown us all how fragile and short life can be. I am still quite fit and in good health as far as I know, so moving forward my hope is the "second act" of my life is just starting I want to take a different approach. Focusing on goals like "having $XX" in my investment accounts etc just seems like another goal / obsession and will likely not be very fulfilling once one reaches the other side.... I think the best approach for me is to continue to invest without thinking about it (401k, dividend reinvestment, compounding doing its thing etc) and use the rest of my income as a tool to enjoy life / the journey. YMMV.
That’s kinda how I started when I first began making good money. I’m a physician and was broke most of my life. I only increased my spending slightly after residency. Basically paid off all my high interest debt and was banking as much as I could. After a few years I realized I should be spending more. When I became a boglehead I created my name Enjoyit to remind me that there is more to life than making money.

We never had a goal of $10million. I did have a goal to have a paid off house and 25x comfortable expenses. Not extravagant just comfortable. Once we reached close to that milestone we both cut back on work and went part time. Our spending increases with the growth of our portfolio.

As I stated before. We could have gotten to $10million and maybe we still will at some point in the future, if we continue part time. But the goal isn’t necessarily more money. The goal is to live a happy life with a good work life balance.

I will admit, sometimes I get a bit jealous about someone else’s expensive thing that they have. I know if I put in more work I can have that thing as well. But then I realize that my free time is far more valuable to me. So I don’t do it.

Maybe I will regret it 20 years from now. I doubt it.
A time to EVALUATE your jitters: | viewtopic.php?p=1139732#p1139732
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Jimsad »

EnjoyIt wrote: Sun Aug 14, 2022 2:30 pm
Yesterdaysnews wrote: Sun Aug 14, 2022 12:28 pm
glashutte wrote: Sun Aug 14, 2022 11:56 am
Yesterdaysnews wrote: Sun Aug 14, 2022 11:10 am Not sure I’m qualified to comment but I’m 46 y/o, NW between $7-8M. Zero debt. No inheritance or other family money.

I did it earning high w2 income for the last 15 years, investing a lot of it and great timing with the bull market.

However, I have cut back on my savings rate and am spending more now…. You never know how much time you got and I think it’s worth smelling some roses.

My nature is such that I’m my youth I was always so obsessed with “the goal” and didn’t properly enjoy the “journey” - this led to some regrets. I don’t want to make that mistake again.
On a personal note, do you mind expanding on what the regrets were/are? And if they are shared by solely you or you plus partner (if there is a partner)?

I do know to understand and enjoy the journey, but as many on here who are successful I get obsessed to see 'how far I can go' in terms of success. And yes that mindset which could be seen as ambition, does causes some internal conflicts
When I look back, I realize I had a singular focus, almost obsession, with reaching certain goals / notions of success. This occupied my "prime" years of my life in my 20s and 30s. I didn't develop outside interests much, didn't focus on self-improvement, mental health etc. I didn't prioritize my friendships or my relationships with women etc. Basically, I didn't develop into a well rounded and well adjusted human being.

Sure, I reached those goals I set, but now I sit back, feeling a bit old, thinking I could probably have gotten to the same place in life without being so goal focused and enjoying the journey a life more - not just viewing life events as boxes to check off.

I try now to focus on moving forward without making the same mistakes. The pandemic certainly has shown us all how fragile and short life can be. I am still quite fit and in good health as far as I know, so moving forward my hope is the "second act" of my life is just starting I want to take a different approach. Focusing on goals like "having $XX" in my investment accounts etc just seems like another goal / obsession and will likely not be very fulfilling once one reaches the other side.... I think the best approach for me is to continue to invest without thinking about it (401k, dividend reinvestment, compounding doing its thing etc) and use the rest of my income as a tool to enjoy life / the journey. YMMV.
That’s kinda how I started when I first began making good money. I’m a physician and was broke most of my life. I only increased my spending slightly after residency. Basically paid off all my high interest debt and was banking as much as I could. After a few years I realized I should be spending more. When I became a boglehead I created my name Enjoyit to remind me that there is more to life than making money.

We never had a goal of $10million. I did have a goal to have a paid off house and 25x comfortable expenses. Not extravagant just comfortable. Once we reached close to that milestone we both cut back on work and went part time. Our spending increases with the growth of our portfolio.

As I stated before. We could have gotten to $10million and maybe we still will at some point in the future, if we continue part time. But the goal isn’t necessarily more money. The goal is to live a happy life with a good work life balance.

I will admit, sometimes I get a bit jealous about someone else’s expensive thing that they have. I know if I put in more work I can have that thing as well. But then I realize that my free time is far more valuable to me. So I don’t do it.

Maybe I will regret it 20 years from now. I doubt it.
+1
We probably would have a couple of million more but what is the point of that if you have to be austere and deprive yourself ; we spend it on experiences and travel while still healthy
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Yesterdaysnews »

Exactly. Reality is even with a $5M or $10M net worth - we are nowhere near the true rich people in this country. Real money is like Atherton, CA these days, where $5M or $10M net worth probably is spare change for those folks. And no matter how much we work, save, invest etc we ain't gonna get to their level anyway... .so might as well enjoy our own journey, be grateful to be the position we are in, and get on with life.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by VoiceOfReason »

EnjoyIt wrote: Sun Aug 14, 2022 10:12 am
VoiceOfReason wrote: Sat Aug 13, 2022 11:22 am
Jags4186 wrote: Fri Aug 12, 2022 3:08 pm Most people who have a $10mm net worth that aren't athletes/entertainers/trust fund kids did it by starting and operating or selling a very successful business.

There are very few people who are able to make enough money at a job to get to $10mm without hitting some sort of RSU or options lottery.
I think you are correct, broadly speaking that more people reach $10MM net worth by RSU, options, selling business, etc.

However, this should not be confused with difficulty. Anyone with a high paying salary, or dual income families with two reasonably high earners, can accomplish this if that is their goal.

To put this in perspective, if you can get a net worth of $3MM by age of 40-45, invest/save NO MORE $, average a 6% return for ~20 more years you will reach $10MM. Entirely doable, even without saving more $$.

I think many people that need to take that path end up retiring/enjoying their life long before they get to $10MM.
^This right here.
$10 million sounds great. We were on a solid trajectory to get there. But, long before arriving we cut back on work and spent more time enjoying life. We eat healthier, exercise more and spent more time doing the things we love. Sure the extra cash would have been nice. Drive that nicer car, live in that nicer house, fly first class more, etc. But to do that we would have to spend time working and those items I listed are just not worth the extra time at the job. My free time is far more valuable. But that is just me and my spouse. Everyone has to make their own life choices.

Good for you! I believe I would make the same life choice.

People that take the “slow and steady” path towards $10MM have a very different perspective and opportunities to “off ramp” than the person that got it from a single transaction like selling a business or RSU.

Once your 4% withdrawal matches or far exceeds your current lifestyle, something has to give.

For me, if I reached $10MM the slow and steady path, I’d suggest that my life went sideways somewhere.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by loghound »

This has been an intersting post to read -- I thought it might be helpful to be a little data driven on it.

OP is 35, wants to retire at 52 with $10M and currently has $500k

(** note: These calculations assume at 0.04% expense ratio but do **not** include taxes that would occur)

You can use online calculators like fi-calc to sort out what it would take $265k saved annually over 17 years to get a median value of $10M

In this case the OP had to put a lot of money in every year because he didn't have a huge amount of time to let the magic of compounding work.

If instead of 17 years period the OP had started earlier (say at 22) or worked longer (to 65) he would now have 30 years of compounding to play with -- in this case his annual contribution is "only" $70k (which is still a lot of money but much more approachable.

Of course, this comes with the normal cautions of using this kind of analysis and half the time, he doesn't reach it even with that level of contribution.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by goodenyou »

loghound wrote: Sun Aug 14, 2022 6:27 pm This has been an intersting post to read -- I thought it might be helpful to be a little data driven on it.

OP is 35, wants to retire at 52 with $10M and currently has $500k

(** note: These calculations assume at 0.04% expense ratio but do **not** include taxes that would occur)

You can use online calculators like fi-calc to sort out what it would take $265k saved annually over 17 years to get a median value of $10M

In this case the OP had to put a lot of money in every year because he didn't have a huge amount of time to let the magic of compounding work.

If instead of 17 years period the OP had started earlier (say at 22) or worked longer (to 65) he would now have 30 years of compounding to play with -- in this case his annual contribution is "only" $70k (which is still a lot of money but much more approachable.

Of course, this comes with the normal cautions of using this kind of analysis and half the time, he doesn't reach it even with that level of contribution.

He would had to have been Doogie Howser, MD to have started at 22.
"Ignorance more frequently begets confidence than does knowledge" | “At 50, everyone has the face he deserves”
Wanderingwheelz
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Wanderingwheelz »

Jimsad wrote: Sun Aug 14, 2022 4:01 pm
EnjoyIt wrote: Sun Aug 14, 2022 2:30 pm
Yesterdaysnews wrote: Sun Aug 14, 2022 12:28 pm
glashutte wrote: Sun Aug 14, 2022 11:56 am
Yesterdaysnews wrote: Sun Aug 14, 2022 11:10 am Not sure I’m qualified to comment but I’m 46 y/o, NW between $7-8M. Zero debt. No inheritance or other family money.

I did it earning high w2 income for the last 15 years, investing a lot of it and great timing with the bull market.

However, I have cut back on my savings rate and am spending more now…. You never know how much time you got and I think it’s worth smelling some roses.

My nature is such that I’m my youth I was always so obsessed with “the goal” and didn’t properly enjoy the “journey” - this led to some regrets. I don’t want to make that mistake again.
On a personal note, do you mind expanding on what the regrets were/are? And if they are shared by solely you or you plus partner (if there is a partner)?

I do know to understand and enjoy the journey, but as many on here who are successful I get obsessed to see 'how far I can go' in terms of success. And yes that mindset which could be seen as ambition, does causes some internal conflicts
When I look back, I realize I had a singular focus, almost obsession, with reaching certain goals / notions of success. This occupied my "prime" years of my life in my 20s and 30s. I didn't develop outside interests much, didn't focus on self-improvement, mental health etc. I didn't prioritize my friendships or my relationships with women etc. Basically, I didn't develop into a well rounded and well adjusted human being.

Sure, I reached those goals I set, but now I sit back, feeling a bit old, thinking I could probably have gotten to the same place in life without being so goal focused and enjoying the journey a life more - not just viewing life events as boxes to check off.

I try now to focus on moving forward without making the same mistakes. The pandemic certainly has shown us all how fragile and short life can be. I am still quite fit and in good health as far as I know, so moving forward my hope is the "second act" of my life is just starting I want to take a different approach. Focusing on goals like "having $XX" in my investment accounts etc just seems like another goal / obsession and will likely not be very fulfilling once one reaches the other side.... I think the best approach for me is to continue to invest without thinking about it (401k, dividend reinvestment, compounding doing its thing etc) and use the rest of my income as a tool to enjoy life / the journey. YMMV.
That’s kinda how I started when I first began making good money. I’m a physician and was broke most of my life. I only increased my spending slightly after residency. Basically paid off all my high interest debt and was banking as much as I could. After a few years I realized I should be spending more. When I became a boglehead I created my name Enjoyit to remind me that there is more to life than making money.

We never had a goal of $10million. I did have a goal to have a paid off house and 25x comfortable expenses. Not extravagant just comfortable. Once we reached close to that milestone we both cut back on work and went part time. Our spending increases with the growth of our portfolio.

As I stated before. We could have gotten to $10million and maybe we still will at some point in the future, if we continue part time. But the goal isn’t necessarily more money. The goal is to live a happy life with a good work life balance.

I will admit, sometimes I get a bit jealous about someone else’s expensive thing that they have. I know if I put in more work I can have that thing as well. But then I realize that my free time is far more valuable to me. So I don’t do it.

Maybe I will regret it 20 years from now. I doubt it.
+1
We probably would have a couple of million more but what is the point of that if you have to be austere and deprive yourself ; we spend it on experiences and travel while still healthy
I’ll add on to this to mention that we were well on our way (we’ll hit it someday no matter what since I’ll receive a large inheritance), but rather than stay on the course we are on we decided to un-work me at 49 so that we would have the added flexibility of our schedules to do more of what we were not. We just returned from our second vacation of the summer and those are the first two summertime trips we’ve taken since we were married almost 20 years ago. NW now is about half of ten, but will keep growing significantly as long as we still have one high income.

We also have no real desire to run up the scoreboard, so we invest relatively conservatively for a couple who is fine with putting money at risk (business owners). We would be more aggressive if we measured ourselves by our net worth.
Being wrong compounds forever.
Carousel
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Carousel »

goodenyou wrote: Sat Aug 13, 2022 3:19 pm Make a good income and invest. Don't spend it early. You will be fortunate if you desire less as you amass more wealth. Don't seek to impress people. Don't try to reach for yield to speed up the process. Don't make stupid doctor mistakes in investing and try not to get divorced. You will Win the Loser's Game.
Winning the Loser's Game--thanks for this reference. I'd never heard it before.
If anyone's interested, here's a very brief sports-themed article on the notion:
https://hockeysarsenal.substack.com/p/w ... osers-game
TurksandCaicos01
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by TurksandCaicos01 »

I have a similar post tax salary in my household, actually a little less than 500K.

I am easily able to save 300K+ a year.

I also went to medical school but was lucky to come into attending life with no student loans (I paid back about 50K during residency and parents paid as much as they could during medical school, finished off the loans right before finishing fellowship)

I have a NW of about 3m currently (all in index investing) and I am about 5 years out as an attending.

I have made plenty of big purchases as an attending however am still able to save a high amount I think just due to having the intention of saving every month, instead of spending every month). My car and house were all purchased on very very low interest rate loans.

If I continue my trajectory and if my salary does not decrease, I think I will have 10m in my mid-40s.

However, when I started as an attending I also had the 10m goal. Now I am realizing I can coast fire basically. I can cut working hours, continue as high a savings rate as possible and easily be very comfortable forever. And will easily surpass 10m at some point.
mikejuss
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by mikejuss »

jory1804 wrote: Sat Aug 13, 2022 10:20 pm My wife and I reached $10M of net worth at around age 36. This was from W-2 income (which was substantial) and index fund investing. We're now 42 y/o and net worth is a little over $18M.

I started with zero net worth out college, and was fortunate to have college paid for by my parents. Wife was the same. No inheritance for either of us.

We never spent extravagantly, but in our case it was high income rather than low spending which got us to these numbers. My only advice is to work in a field that really interests you, because reaching a high net worth on W-2 will probably mean putting long hours, and that's much easier to do if you actually like your field.

Our spending at this point is quite high. Between two properties, school for the kids, a full-time nanny (both parents work) and credit card bills, we're spending around $600k/year. This is obviously quite a bit of spending, but there are also many things we don't spend on. I am perfectly happy to buy casual clothes at J Crew and the like, no sports cars, and our family always flies coach. My sweet spot on a bottle of wine is $30.

While the overall level of spending is high, I have no interest in paring back. I see no point continuing to work hard if we aren't going to spend some of the income on our family.

Someone asked if it was worth it. I definitely think it was; careers have been pretty fulfilling, and it's nice to have no money issues whatsoever. When the market drops, we don't worry because we know we have more than enough.

I also earn much more than 50% of the family income, but consider my wife and equal and full partner in our success.
Wow--may I ask: what do you do for a living? I'm assuming something in tech. And spending $50,000 a month--really?
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by mikejuss »

Artsdoctor wrote: Sun Aug 14, 2022 12:34 pm
glashutte wrote: Sun Aug 14, 2022 11:56 am
Yesterdaysnews wrote: Sun Aug 14, 2022 11:10 am Not sure I’m qualified to comment but I’m 46 y/o, NW between $7-8M. Zero debt. No inheritance or other family money.

I did it earning high w2 income for the last 15 years, investing a lot of it and great timing with the bull market.

However, I have cut back on my savings rate and am spending more now…. You never know how much time you got and I think it’s worth smelling some roses.

My nature is such that I’m my youth I was always so obsessed with “the goal” and didn’t properly enjoy the “journey” - this led to some regrets. I don’t want to make that mistake again.
On a personal note, do you mind expanding on what the regrets were/are? And if they are shared by solely you or you plus partner (if there is a partner)?

I do know to understand and enjoy the journey, but as many on here who are successful I get obsessed to see 'how far I can go' in terms of success. And yes that mindset which could be seen as ambition, does causes some internal conflicts
I wouldn't presume to tell people what to do with their families but there are a few things I gathered along the way regarding prioritization.

As I mentioned upstream, sometimes you can increase the numbers of hours you work in order to increase your income. That's fine although I learned that you can never take your eyes off of your family. Personally, the years I had the highest income were the years I should have been spending more time at home. I was very lucky that my marriage survived but I noticed several colleagues along the way did not have the same luck. I learned that what goes on at home is much more important than work which is something that many will say but sometimes can lose sight of when in the thick of things. Marriages can break up for many reasons, some of those reasons are more than valid--but you don't want to go through a divorce just because of neglect. You never want to be in a situation where you're pulling in the driveway and unhappy to be home. And if you're really concerned about maximizing your net worth, you're going to want to try and avoid a divorce.
Sage, chilling words.
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mikejuss
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by mikejuss »

A lot of food for thought here. Thanks for your perspectives, folks.
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WhiteMaxima
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by WhiteMaxima »

I just add a zero to my current net worth and pretend my HNW is 10mil. Why not 1 billion ? Sometime I just think if I had 10mil or 100mil, then what?
Last edited by WhiteMaxima on Mon Aug 15, 2022 12:32 am, edited 4 times in total.
Starfish
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Starfish »

Jags4186 wrote: Sat Aug 13, 2022 5:43 pm
Starfish wrote: Sat Aug 13, 2022 2:02 pm
Jags4186 wrote: Fri Aug 12, 2022 3:08 pm Most people who have a $10mm net worth that aren't athletes/entertainers/trust fund kids did it by starting and operating or selling a very successful business.

There are very few people who are able to make enough money at a job to get to $10mm without hitting some sort of RSU or options lottery.
I don't think that is true at all.
The ones that reached 10MM NW before 40-45 are the ones that won the RSU/options lottery or sold a business, but over 50 is common to get there with regular jobs.

I know plenty of people in that range, most of them are there just through two good jobs (but not exceptional), reasonable career growth but nothing special, and of course saving and investing over 20 years.
Real estate played an important role.
It's just the old compromise between time spend working and how much one saves. Over long time the requirement for savings rate is much smaller.
Roughly 1% of households have a net worth of $10mm or more. I do not agree with you that it is "common to get there with regular jobs".

$10mm 2022 money is an incredible sum. Starting salaries in the 80s and early 90s were in the $10,000-$20,000 range. Saying you can save an invest over 40 years to get to $10mm starting today...well sure you can. But $10mm today is equivalent to $3.5mm in 1982. In 2062 you'll need $30-$40mm to replicate $10mm today. Having $10mm today is mighty impressive.
We get into semantics here but 1% is not the definition of impressive. If a kid is in top 1% in his year, nationwide, you will not call that mighty impressive (I would definitely not). Probably he is not even getting admitted in the top universities :D
1% of households are about a million of households or so. That is very far from an exclusive club.
Sure, it is mighty impressive to accumulate 10MM under 40 starting from zero, but not at 70, or starting from 9MM.
Coming back to the initial discussion, I think it's lot harder to make 10MM from a business than from a job. There are plenty of people who could make 10MM from W2 jobs in 40 years but I most of them are sane enough to quit without chasing a stupid number. 5-6-7-8-9 MM are plenty to live a good life, there is no need to work a large percentage of the rest of your healthy life to get to 10.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Starfish »

I did not read all posts so I am not sure if anybody said the obvious. Having 10MM as a target in itself (not as a consequence of other things) while spending 50k$ a year (2% of 10MM is 200k$) it's just as worthy a goal as dreaming to pull a 10 tone truck with your pen... tongue.
Obsessing over a number while sacrificing the rest of you life is a mental health issue, not a goal to be admired.
My duty is to live the best life I can and to maximize happiness, not to die with 10 million $. I would not complain if I reach 10MM in the process, but that is not on my list of things to achieve in life (I am getting close to 5 and still in my 40s so it is not out of reach).

PS: BTW, 10MM is the former 7MM from couple of years ago.
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Re: Personal: HNW $10M, how did you do it?

Post by traveling_salesman »

White Coat Investor wrote: Fri Aug 12, 2022 2:08 pm
glashutte wrote: Fri Aug 12, 2022 1:37 pm I would like to hear from $10M on how you made it there, how long it took, and what financial support did you receive or not receive

I am looking to compare to myself personal and take actional tips to help support myself (and others reading) get there.

Myself:
-35 yrs old married w/kids in no state income tax area
-No financial help from parents (poor) for college, med school, rent, downpayment, home, or wedding.
-Debt: None except mortgage, took forever to have $0 school debt.
-Dual household income: $500K post-tax
-Net worth: $500k in savings (soon to create 2 fund portfolio)
-Goal: Hit $10M portfolio by age 52 (kids will be out of HS). Wanting to learn how to get there!
This is just math. The keys are:
1) Get a high income
2) Build a business
3) Own stuff
4) Have a high savings rate
5) Invest in some reasonable way consistently over years to decades.

In your case you're making $500K and you have 17 years to reach your goal. If your investments earn 8%, you'll need to save:

=PMT(8%,17,-500000,10000000) = $241K a year to get there

Doable? Yes. Will it require significant planning and sacrifice if you're like most earning $500K? Absolutely. That's almost a 50% of gross savings rate.
I notice you’re using a nominal return rate. Seems much harder (considering taxes…impossible?) to get to $10M real net worth with this income.
Wanderingwheelz
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Wanderingwheelz »

Starfish wrote: Mon Aug 15, 2022 12:00 am
Jags4186 wrote: Sat Aug 13, 2022 5:43 pm
Starfish wrote: Sat Aug 13, 2022 2:02 pm
Jags4186 wrote: Fri Aug 12, 2022 3:08 pm Most people who have a $10mm net worth that aren't athletes/entertainers/trust fund kids did it by starting and operating or selling a very successful business.

There are very few people who are able to make enough money at a job to get to $10mm without hitting some sort of RSU or options lottery.
I don't think that is true at all.
The ones that reached 10MM NW before 40-45 are the ones that won the RSU/options lottery or sold a business, but over 50 is common to get there with regular jobs.

I know plenty of people in that range, most of them are there just through two good jobs (but not exceptional), reasonable career growth but nothing special, and of course saving and investing over 20 years.
Real estate played an important role.
It's just the old compromise between time spend working and how much one saves. Over long time the requirement for savings rate is much smaller.
Roughly 1% of households have a net worth of $10mm or more. I do not agree with you that it is "common to get there with regular jobs".

$10mm 2022 money is an incredible sum. Starting salaries in the 80s and early 90s were in the $10,000-$20,000 range. Saying you can save an invest over 40 years to get to $10mm starting today...well sure you can. But $10mm today is equivalent to $3.5mm in 1982. In 2062 you'll need $30-$40mm to replicate $10mm today. Having $10mm today is mighty impressive.
We get into semantics here but 1% is not the definition of impressive. If a kid is in top 1% in his year, nationwide, you will not call that mighty impressive (I would definitely not). Probably he is not even getting admitted in the top universities :D
1% of households are about a million of households or so. That is very far from an exclusive club.
Sure, it is mighty impressive to accumulate 10MM under 40 starting from zero, but not at 70, or starting from 9MM.
Coming back to the initial discussion, I think it's lot harder to make 10MM from a business than from a job. There are plenty of people who could make 10MM from W2 jobs in 40 years but I most of them are sane enough to quit without chasing a stupid number. 5-6-7-8-9 MM are plenty to live a good life, there is no need to work a large percentage of the rest of your healthy life to get to 10.
I agree with a lot of what you wrote, but as a high net worth household (at least for me) who made it all from being self employed, I think it’s easier than for a person who works for someone else. The work may be harder, granted, but there are always levers to pull to increase income if that’s what you wish to do. Open a new location, create a new product, gain additional training, invest in new technology, hire or fire, work on Saturday.. As long as you’re good at it, the sky is the limit. That said, the vast majority of business owners find a level where they’re happy and make the best of it.

Also, there are more 55 year olds with $3MM than 70 year olds, simply due to the fact that money needs to be found to live on once a person retires. I’m not sure how the $10MM demographic would measure out, but my guess it would still be true due to lifestyle creep.
Being wrong compounds forever.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by fourwheelcycle »

Starfish wrote: Mon Aug 15, 2022 12:00 am ... There are plenty of people who could make 10MM from W2 jobs in 40 years but ... most of them are sane enough to quit without chasing a stupid number. 5-6-7-8-9 MM are plenty to live a good life, there is no need to work a large percentage of the rest of your healthy life to get to 10.
Without commenting on where we are regarding the $10M question, my wife and I never worked to attain a goal, and we never retired or cut back work because we did attain a goal.

We were fortunate to have careers we enjoyed. We never focused on savings goals. We knew we would need good savings to raise our children, pay for their college, and prepare for our retirement. We spent what we needed for our family and saved the rest.

At age sixty, my long time boss retired and I did not like his successor, so I retired. But I ended up consulting for my employer, only on projects I enjoyed, until I was 67. My wife, who loved her job and had no bosses, continued to work until age 70.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by 356Fan »

I appreciate the information shared. My thoughts/story -

Started from zero but was able to graduate college with no debt and an engineering degree (and a good job out of college) via the military. Masters program was also "free" though payback involved a lot of time overseas. Went into IT/tech field when I left the military as there was potential for high pay, and the newness of the industry created churn, which in turn created opportunities (something to consider when changing fields).

Worked my way into C-level positions with two companies which were both successfully sold to mega corp companies. I had small ownership stakes in each via traditional equity and phantom stock. There was significant risk here as the moves to the smaller companies involved significant pay cuts and only the potential of a payout down the road. The chance that the moves from megacorp to the smaller firms would turn out to be very bad financial moves if we did not get to sale was very real and significant.

While the financial pieces worked out very well, and I was able to retire relatively early (early 50s), there were trade-offs. The hours were long, sometime brutal, and often stressful - for years on end. While I really tried to balance family commitments and being there for my wife and kids, the reality is that I was often exhausted. And though I attended most of my kids spots events, I was often on a business call during the game and never in a position to do something like coach, something I think I would have enjoyed.

Some additional, more broad thoughts (with the benefit of hindsight) -

- In a perfect-world, my job/career would have been the great marriage of (1) something I enjoyed/was passionate about, (2) something I was good at, (3) financially lucrative, (4) offering great work-life balance. I'm sure these unicorn jobs exist, but not in my world. You need to choose your pain. My jobs got high-marks in #2 and #3, but often fell short on #1 and way short on #4.

- My financial plan did not depend on the two sales being successful. I saved like they would not happen and kept my spending in check.

- That said, as my salary and NW increased, I used the money to buy quality time (e.g., hiring a house-cleaner, yard maintenance, etc.) and some nice experiences for the family. I think the key word is "balance". I was damn sure going hit my savings goals and not spend myself into poverty, but I was also not going to try to become the richest guy in the graveyard.

Less than a year in retirement. So far . . . pretty damn nice.
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SconnieBro
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by SconnieBro »

I just want to say there is a lot of great insight in this thread and it’s very enlightening as someone in their mid 30s debating similar life/career/family crossroads. It’s not easy figuring out the right balance and path forward.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Starfish »

fourwheelcycle wrote: Mon Aug 15, 2022 8:39 am
Starfish wrote: Mon Aug 15, 2022 12:00 am ... There are plenty of people who could make 10MM from W2 jobs in 40 years but ... most of them are sane enough to quit without chasing a stupid number. 5-6-7-8-9 MM are plenty to live a good life, there is no need to work a large percentage of the rest of your healthy life to get to 10.
Without commenting on where we are regarding the $10M question, my wife and I never worked to attain a goal, and we never retired or cut back work because we did attain a goal.

We were fortunate to have careers we enjoyed. We never focused on savings goals. We knew we would need good savings to raise our children, pay for their college, and prepare for our retirement. We spent what we needed for our family and saved the rest.

At age sixty, my long time boss retired and I did not like his successor, so I retired. But I ended up consulting for my employer, only on projects I enjoyed, until I was 67. My wife, who loved her job and had no bosses, continued to work until age 70.

Yes, this is exactly what I meant. I makes sense to have a high NW as a result of something else - a well paid job you enjoy, an inheritance, a successful financial or business deal etc - but not as a purpose in itself while "eating from dumpsters" to get there.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by sureshoe »

Restating a few posts and a bit of the obvious. $10M is very possible with slow and steady W2. As others reported, it's generally done more through big wins.

The problem for the OP is TIME. 17 years is pretty short, even on a large income. I saw someone post saving $250k/year. You'd have to get a compound 9%-ish return on that. And I would argue "to what end?" The time is the key. Heck, $50k/year at just 7% gets you there too... but it takes 40 years.

Anyway, I don't want to advocate spending-for-the-sake-of, but I saw above a person talking about "enjoying the journey". You can't get back the years between 35 and 52... and those should be some of the best years of your life. I wouldn't want to defer until retirement, but that's me. The secret is balance...
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by smitcat »

sureshoe wrote: Mon Aug 15, 2022 10:36 am Restating a few posts and a bit of the obvious. $10M is very possible with slow and steady W2. As others reported, it's generally done more through big wins.

The problem for the OP is TIME. 17 years is pretty short, even on a large income. I saw someone post saving $250k/year. You'd have to get a compound 9%-ish return on that. And I would argue "to what end?" The time is the key. Heck, $50k/year at just 7% gets you there too... but it takes 40 years.

Anyway, I don't want to advocate spending-for-the-sake-of, but I saw above a person talking about "enjoying the journey". You can't get back the years between 35 and 52... and those should be some of the best years of your life. I wouldn't want to defer until retirement, but that's me. The secret is balance...
The OP has about $500K post tax each year - that would allow for spending $250K and saving $250K. I have no idea what others have done as far as spending but with $250K per year you certainly do have a lot available to 'enjoy the journey'.
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White Coat Investor
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Re: Personal: HNW $10M, how did you do it?

Post by White Coat Investor »

traveling_salesman wrote: Mon Aug 15, 2022 7:41 am
White Coat Investor wrote: Fri Aug 12, 2022 2:08 pm
glashutte wrote: Fri Aug 12, 2022 1:37 pm I would like to hear from $10M on how you made it there, how long it took, and what financial support did you receive or not receive

I am looking to compare to myself personal and take actional tips to help support myself (and others reading) get there.

Myself:
-35 yrs old married w/kids in no state income tax area
-No financial help from parents (poor) for college, med school, rent, downpayment, home, or wedding.
-Debt: None except mortgage, took forever to have $0 school debt.
-Dual household income: $500K post-tax
-Net worth: $500k in savings (soon to create 2 fund portfolio)
-Goal: Hit $10M portfolio by age 52 (kids will be out of HS). Wanting to learn how to get there!
This is just math. The keys are:
1) Get a high income
2) Build a business
3) Own stuff
4) Have a high savings rate
5) Invest in some reasonable way consistently over years to decades.

In your case you're making $500K and you have 17 years to reach your goal. If your investments earn 8%, you'll need to save:

=PMT(8%,17,-500000,10000000) = $241K a year to get there

Doable? Yes. Will it require significant planning and sacrifice if you're like most earning $500K? Absolutely. That's almost a 50% of gross savings rate.
I notice you’re using a nominal return rate. Seems much harder (considering taxes…impossible?) to get to $10M real net worth with this income.
Of course. But not hard to estimate. Just use 5% instead of 8%. It'll take a little longer or require a little higher savings rate. Notice I also didn't account for any increase in income.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by sureshoe »

smitcat wrote: Mon Aug 15, 2022 10:42 am
sureshoe wrote: Mon Aug 15, 2022 10:36 am Restating a few posts and a bit of the obvious. $10M is very possible with slow and steady W2. As others reported, it's generally done more through big wins.

The problem for the OP is TIME. 17 years is pretty short, even on a large income. I saw someone post saving $250k/year. You'd have to get a compound 9%-ish return on that. And I would argue "to what end?" The time is the key. Heck, $50k/year at just 7% gets you there too... but it takes 40 years.

Anyway, I don't want to advocate spending-for-the-sake-of, but I saw above a person talking about "enjoying the journey". You can't get back the years between 35 and 52... and those should be some of the best years of your life. I wouldn't want to defer until retirement, but that's me. The secret is balance...
The OP has about $500K post tax each year - that would allow for spending $250K and saving $250K. I have no idea what others have done as far as spending but with $250K per year you certainly do have a lot available to 'enjoy the journey'.
There are a lot of people who make that much (and more) who do not enjoy the journey.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by smitcat »

sureshoe wrote: Mon Aug 15, 2022 10:57 am
smitcat wrote: Mon Aug 15, 2022 10:42 am
sureshoe wrote: Mon Aug 15, 2022 10:36 am Restating a few posts and a bit of the obvious. $10M is very possible with slow and steady W2. As others reported, it's generally done more through big wins.

The problem for the OP is TIME. 17 years is pretty short, even on a large income. I saw someone post saving $250k/year. You'd have to get a compound 9%-ish return on that. And I would argue "to what end?" The time is the key. Heck, $50k/year at just 7% gets you there too... but it takes 40 years.

Anyway, I don't want to advocate spending-for-the-sake-of, but I saw above a person talking about "enjoying the journey". You can't get back the years between 35 and 52... and those should be some of the best years of your life. I wouldn't want to defer until retirement, but that's me. The secret is balance...
The OP has about $500K post tax each year - that would allow for spending $250K and saving $250K. I have no idea what others have done as far as spending but with $250K per year you certainly do have a lot available to 'enjoy the journey'.
There are a lot of people who make that much (and more) who do not enjoy the journey.
I agree - of course there are.
There are also more folks that make much less than that and do not enjoy the journey.
There will always be folks that do not enjoy the journey - money is not a cure ....just something that you can trade for something else.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Steve723 »

Interesting thread. I'm definitely in that "if I keep on truckin' on the current path, I'll eventually get there" group, but will likely take an exit ramp before that happens. My struggle is what will I exit to? I don't love or hate my job - I'm somewhere in the vast in between area! I'd exit now if I knew what it was that could help fill the social and intellectual stimulation I get from my job. That is more of the issue for me vs. reaching an arbitrary net worth milestone.

Thanks all for the insights and perspectives!
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by WhiteMaxima »

The ultimate problem is NW is a number. It could be billions or infinite. Human life is limited. Typical people don' t need billion to enjoy the life journey. People are too obsessed in accumulating the number and forget that we only need this much to consume and have a enjoyable life
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by jory1804 »

mikejuss wrote: Sun Aug 14, 2022 9:27 pm
jory1804 wrote: Sat Aug 13, 2022 10:20 pm My wife and I reached $10M of net worth at around age 36. This was from W-2 income (which was substantial) and index fund investing. We're now 42 y/o and net worth is a little over $18M.

I started with zero net worth out college, and was fortunate to have college paid for by my parents. Wife was the same. No inheritance for either of us.

We never spent extravagantly, but in our case it was high income rather than low spending which got us to these numbers. My only advice is to work in a field that really interests you, because reaching a high net worth on W-2 will probably mean putting long hours, and that's much easier to do if you actually like your field.

Our spending at this point is quite high. Between two properties, school for the kids, a full-time nanny (both parents work) and credit card bills, we're spending around $600k/year. This is obviously quite a bit of spending, but there are also many things we don't spend on. I am perfectly happy to buy casual clothes at J Crew and the like, no sports cars, and our family always flies coach. My sweet spot on a bottle of wine is $30.

While the overall level of spending is high, I have no interest in paring back. I see no point continuing to work hard if we aren't going to spend some of the income on our family.

Someone asked if it was worth it. I definitely think it was; careers have been pretty fulfilling, and it's nice to have no money issues whatsoever. When the market drops, we don't worry because we know we have more than enough.

I also earn much more than 50% of the family income, but consider my wife and equal and full partner in our success.
Wow--may I ask: what do you do for a living? I'm assuming something in tech. And spending $50,000 a month--really?
I’d rather not say specifically, but it’s one of the fields where you can do very well (e.g. tech, law, finance) at a big firm even if you’re not a C-level executive, which I am not.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Steve723 »

jory1804 wrote: Mon Aug 15, 2022 12:07 pm
mikejuss wrote: Sun Aug 14, 2022 9:27 pm
jory1804 wrote: Sat Aug 13, 2022 10:20 pm My wife and I reached $10M of net worth at around age 36. This was from W-2 income (which was substantial) and index fund investing. We're now 42 y/o and net worth is a little over $18M.

I started with zero net worth out college, and was fortunate to have college paid for by my parents. Wife was the same. No inheritance for either of us.

We never spent extravagantly, but in our case it was high income rather than low spending which got us to these numbers. My only advice is to work in a field that really interests you, because reaching a high net worth on W-2 will probably mean putting long hours, and that's much easier to do if you actually like your field.

Our spending at this point is quite high. Between two properties, school for the kids, a full-time nanny (both parents work) and credit card bills, we're spending around $600k/year. This is obviously quite a bit of spending, but there are also many things we don't spend on. I am perfectly happy to buy casual clothes at J Crew and the like, no sports cars, and our family always flies coach. My sweet spot on a bottle of wine is $30.

While the overall level of spending is high, I have no interest in paring back. I see no point continuing to work hard if we aren't going to spend some of the income on our family.

Someone asked if it was worth it. I definitely think it was; careers have been pretty fulfilling, and it's nice to have no money issues whatsoever. When the market drops, we don't worry because we know we have more than enough.

I also earn much more than 50% of the family income, but consider my wife and equal and full partner in our success.
Wow--may I ask: what do you do for a living? I'm assuming something in tech. And spending $50,000 a month--really?
I’d rather not say specifically, but it’s one of the fields where you can do very well (e.g. tech, law, finance) at a big firm even if you’re not a C-level executive, which I am not.

Congrats on the achievement! You are well beyond the point of being able to help out with your future grandkids college or their first car, LOL!

But seriously, curious as to how you and your wife think about your heirs - what you tell them, when you tell them, etc. This level of wealth leads to some potentially complicated things to think about as your children age. Not a bad problem to have for sure! Curious on your thoughts.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by jory1804 »

Steve723 wrote: Mon Aug 15, 2022 3:47 pm
jory1804 wrote: Mon Aug 15, 2022 12:07 pm
mikejuss wrote: Sun Aug 14, 2022 9:27 pm
jory1804 wrote: Sat Aug 13, 2022 10:20 pm My wife and I reached $10M of net worth at around age 36. This was from W-2 income (which was substantial) and index fund investing. We're now 42 y/o and net worth is a little over $18M.

I started with zero net worth out college, and was fortunate to have college paid for by my parents. Wife was the same. No inheritance for either of us.

We never spent extravagantly, but in our case it was high income rather than low spending which got us to these numbers. My only advice is to work in a field that really interests you, because reaching a high net worth on W-2 will probably mean putting long hours, and that's much easier to do if you actually like your field.

Our spending at this point is quite high. Between two properties, school for the kids, a full-time nanny (both parents work) and credit card bills, we're spending around $600k/year. This is obviously quite a bit of spending, but there are also many things we don't spend on. I am perfectly happy to buy casual clothes at J Crew and the like, no sports cars, and our family always flies coach. My sweet spot on a bottle of wine is $30.

While the overall level of spending is high, I have no interest in paring back. I see no point continuing to work hard if we aren't going to spend some of the income on our family.

Someone asked if it was worth it. I definitely think it was; careers have been pretty fulfilling, and it's nice to have no money issues whatsoever. When the market drops, we don't worry because we know we have more than enough.

I also earn much more than 50% of the family income, but consider my wife and equal and full partner in our success.
Wow--may I ask: what do you do for a living? I'm assuming something in tech. And spending $50,000 a month--really?
I’d rather not say specifically, but it’s one of the fields where you can do very well (e.g. tech, law, finance) at a big firm even if you’re not a C-level executive, which I am not.

Congrats on the achievement! You are well beyond the point of being able to help out with your future grandkids college or their first car, LOL!

But seriously, curious as to how you and your wife think about your heirs - what you tell them, when you tell them, etc. This level of wealth leads to some potentially complicated things to think about as your children age. Not a bad problem to have for sure! Curious on your thoughts.
Thankfully, my kids are young enough that I can kick the can down the road on that one.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Wricha »

.
Not to be a wise guy but $10M is not what it used to be. Salaries for certain professions are incredibly high today (software folks, physicians and healthcare administrators to name a few. I got out 12 years ago at 55 working for myself as a independent consultant. I invested as most bogleheads do. I probably made as much in commercial real estate as I did in my career. Also took other risks before retiring at 55. $10M twelve years ago was a nice piece of money (no inheritance, stock options or married it). Given the salaries folks are claiming in their 30’s on this board I think $10M is possible through just W-2 income, this was not the case 25 years ago. There are other similar older threads where I argued that $10M+ could not be achieved except through some extraordinary event.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Billy C »

glashutte wrote: Fri Aug 12, 2022 1:37 pm I would like to hear from $10M on how:
1. you made it there
2. how long it took
3. what financial support did you receive or not receive from family

I am looking to compare to myself personal and take actional tips to help support myself (and others reading) get there.
My net worth the last time I checked was $16 million. I retired ten years ago at age 45 when I reached the $5 million mark, which was the original goal that I set for myself. I was part-time for a few years before that so I could test whether I enjoyed the extra free time before making the final commitment. I’m invested 99% in Vanguard Total Stock Market and Tax-Managed Funds, the other 1% in Municipal Money Market Fund. Nothing special or complicated. I’ve had this asset allocation from the beginning and stayed the course, letting the majesty of simplicity, low-costs, tax efficiency, and compounding work their magic for 25 years.

I started out with 85k in medical school debt, which I paid off in a few years after starting private practice. When I was in high school my parents told me they would pay for college and my first car, but anything beyond that I was responsible for myself. I’m grateful for their generosity but also thankful that I paid for everything since age 22 since that helped me develop discipline and good spending habits.

When I was a 30 year-old fellow I was browsing a Waldenbooks at a local mall and came across “Bogle on Mutual Funds”. That book changed my life. I knew immediately that if I followed the given advice, and saved half of my gross income, I would be able to retire early if I wanted to. I’ve never owned a house or had kids so it was relatively easy to control expenses.

Retirement has been a blessing. I’ve been able to enjoy the freedom that comes with financial independence, which is what I desired all along. So many wonderful things to experience that don’t require spending a lot of money: time with friends and family, exercising, traveling, reading, fishing, learning a musical instrument. I’m as happy and content as I’ve ever been in my life and feel blessed to be in my current situation. But I’m also mindful that it took years of hard work and living well below my means to get to this point.

The OP’s goal is definitely achievable and I wish him success on his journey.
“When there are multiple solutions to a problem, choose the simplest one.” ― John C. Bogle
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by abuss368 »

This is a very good thread! I appreciate all the knowledge sharing.

Best.
Tony
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Sandtrap »

abuss368 wrote: Tue Aug 16, 2022 8:33 am This is a very good thread! I appreciate all the knowledge sharing.

Best.
Tony
Your presence and astute substantive input is well appreciated.

Huge thanks!
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Wannaretireearly »

Steve723 wrote: Mon Aug 15, 2022 11:27 am Interesting thread. I'm definitely in that "if I keep on truckin' on the current path, I'll eventually get there" group, but will likely take an exit ramp before that happens. My struggle is what will I exit to? I don't love or hate my job - I'm somewhere in the vast in between area! I'd exit now if I knew what it was that could help fill the social and intellectual stimulation I get from my job. That is more of the issue for me vs. reaching an arbitrary net worth milestone.

Thanks all for the insights and perspectives!
+1. Exiting at 50/early 50s is our plan. Even just 6 months off will give a lot of perspective and indication of what we can do to keep busy (or not) and happy. Just looking forward to an extended break.

Perhaps cos we travel loads, I think of net worth categories in terms of airline seats. Pardon my crude analogy below, but it’s been on my mind:

Use case is 2, maybe 3 vacations a year. Just considering flights for this crude exercise!

#1 Economy travel: average $1k ticket each. Family of four = $8k to 10k a year.

#2 Premium economy travel. Generally 50-100% higher of #1. Family of four = $12-15k a year.

#3 Business class travel. Roughly 200-300% of #1. Family of four = $20-30k a year.

#4 first class travel. Roughly double biz class. Fam of four = $40k $60k a year.

I’d guess most people with a net worth over $1M can afford #1. Getting to net worth levels needed for #3 would def be in the $10M plus range imo. For #4 perhaps in the $20M+ Net worth range.

I skipped #3 as it’s the first time we flew Premium Economy recently with the family on a recent trip. It doubled our flight cost (remember, I’m not including other costs!). I guess at $5M I can ‘afford’ this splurge. Likely not for multiple trips though!

As someone upstream said, if adding NW dollars doesn’t materially change your lifestyle, it may not be $ worth chasing just to hit a NW number?

Anyway, hope this above makes some sense.
I will never reach a NW where I can fly biz class all the time. Perhaps only on points, or perhaps once kids are out of the house and I only have to buy two tickets 😬.

It helps me to think like this above, when determining cost/benefit or opportunity cost of chasing more stressful, but higher paying work. I’ve come to my conclusion that I just want to play it out and current levels for a few more years, and enjoy an economy or maybe premium economy lifestyle!
“At some point you are trading time you will never get back for money you will never spend.“ | “How do you want to spend the best remaining year of your life?“
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by Firemenot »

Wannaretireearly wrote: Tue Aug 16, 2022 9:43 am
Steve723 wrote: Mon Aug 15, 2022 11:27 am Interesting thread. I'm definitely in that "if I keep on truckin' on the current path, I'll eventually get there" group, but will likely take an exit ramp before that happens. My struggle is what will I exit to? I don't love or hate my job - I'm somewhere in the vast in between area! I'd exit now if I knew what it was that could help fill the social and intellectual stimulation I get from my job. That is more of the issue for me vs. reaching an arbitrary net worth milestone.

Thanks all for the insights and perspectives!
+1. Exiting at 50/early 50s is our plan. Even just 6 months off will give a lot of perspective and indication of what we can do to keep busy (or not) and happy. Just looking forward to an extended break.

Perhaps cos we travel loads, I think of net worth categories in terms of airline seats. Pardon my crude analogy below, but it’s been on my mind:

Use case is 2, maybe 3 vacations a year. Just considering flights for this crude exercise!

#1 Economy travel: average $1k ticket each. Family of four = $8k to 10k a year.

#2 Premium economy travel. Generally 50-100% higher of #1. Family of four = $12-15k a year.

#3 Business class travel. Roughly 200-300% of #1. Family of four = $20-30k a year.

#4 first class travel. Roughly double biz class. Fam of four = $40k $60k a year.

I’d guess most people with a net worth over $1M can afford #1. Getting to net worth levels needed for #3 would def be in the $10M plus range imo. For #4 perhaps in the $20M+ Net worth range.

I skipped #3 as it’s the first time we flew Premium Economy recently with the family on a recent trip. It doubled our flight cost (remember, I’m not including other costs!). I guess at $5M I can ‘afford’ this splurge. Likely not for multiple trips though!

As someone upstream said, if adding NW dollars doesn’t materially change your lifestyle, it may not be $ worth chasing just to hit a NW number?

Anyway, hope this above makes some sense.
I will never reach a NW where I can fly biz class all the time. Perhaps only on points, or perhaps once kids are out of the house and I only have to buy two tickets 😬.

It helps me to think like this above, when determining cost/benefit or opportunity cost of chasing more stressful, but higher paying work. I’ve come to my conclusion that I just want to play it out and current levels for a few more years, and enjoy an economy or maybe premium economy lifestyle!
It’s interesting how much airfare seat class is an item of discussion on Bogleheads in regards to net worth.
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Re: Personal: HNW $10M, how did you do it?

Post by Booper »

White Coat Investor wrote: Fri Aug 12, 2022 2:08 pm
glashutte wrote: Fri Aug 12, 2022 1:37 pm I would like to hear from $10M on how you made it there, how long it took, and what financial support did you receive or not receive

I am looking to compare to myself personal and take actional tips to help support myself (and others reading) get there.

Myself:
-35 yrs old married w/kids in no state income tax area
-No financial help from parents (poor) for college, med school, rent, downpayment, home, or wedding.
-Debt: None except mortgage, took forever to have $0 school debt.
-Dual household income: $500K post-tax
-Net worth: $500k in savings (soon to create 2 fund portfolio)
-Goal: Hit $10M portfolio by age 52 (kids will be out of HS). Wanting to learn how to get there!
This is just math. The keys are:
1) Get a high income
2) Build a business
3) Own stuff
4) Have a high savings rate
5) Invest in some reasonable way consistently over years to decades.

In your case you're making $500K and you have 17 years to reach your goal. If your investments earn 8%, you'll need to save:

=PMT(8%,17,-500000,10000000) = $241K a year to get there

Doable? Yes. Will it require significant planning and sacrifice if you're like most earning $500K? Absolutely. That's almost a 50% of gross savings rate.
I'd add just a few things to this.

1. Due to inflation, in 17 years $10M will not have the same purchasing power as it does today. For example, according to https://www.usinflationcalculator.com/, "An item that cost $10M in 2005 (17 years ago) would cost $15M today". The point here is that aiming for a nominal (i.e. not inflation-adjusted) amount of money in the distant future is probably not as meaningful as it appears at first glance.

2. Taxes. Suppose you are close to your goal. You have $9M and 40% of that = $3.6M is invested in bonds. Well VBTLX currently yields 3%. That's $108k in taxable income. At your tax bracket the government takes 37% which would leave you with "only" $68k. The $40k which goes to the IRS cannot be reinvested or spent. The point here is that when calculating rates of return, pre- and post-tax rates of return matter.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by pivoprussia »

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Last edited by pivoprussia on Wed Aug 17, 2022 6:34 am, edited 1 time in total.
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Re: Personal: HNW $10M, how did you do it? [High Net Worth]

Post by stoptothink »

pivoprussia wrote: Tue Aug 16, 2022 12:30 pm Paid my own way through college (working hot summers in a warehouse, for the university during school & received scholarships plus a small loan). Only owed $5000 from undergrad. Life was great but money was always so tight. I was always jealous of friends who could afford to eat out while I ate my packaged/canned food. Then off to grad school - paid for with a small scholarship and loans. Came out with about $85k in debt.

First job mid-six figures. Paid my loans off in the first year. Continued at my work with a few job changes. Eventually found a good fit, was offered an opportunity to be co-owner and my income sky-rocketed. Unfortunately so did my stress. I continued this for about 15 years total. Had enough of the job, the politics, etc. Sold my ownership and found a PT gig. NW was about $10mm. Managed that for another few years but eventually lost interest so I retired. Market took off and before the recent downturn we hit $20mm. Now probably about $18mm.

I'm now consulting because I like the people and the work is interesting. Money is no longer the driver. Funny how it changes things.

Money will never directly buy happiness but it does provide freedom of choice. Freedom and choice make people happy.

I never dreamed I'd get here, nor necessarily was it my goal. Financial independence was the goal. What number did that mean? Wasn't really sure but I thought $10mm was probably more than enough.

Our burn rate is now <1% and live a great life. Really have no needs and few wants. Initially we always kept spending low because for me it became a way of life - survival instincts. Those frugal habits don't die easily. (I still struggle to spend if something is not on sale!) Funny thing - I love reading the posts about things worth spending money on and others' budgets - - I'm always looking for inspiration! I'm trying to slowly spend more but it's not easy (and yes we have a large, well-funded DAF). My primary focus is now on experiences. I'm starting by trying to eat at nicer restaurants more often. We do travel extensively, although usually not business class. Probably should spend more on therapy! Haha.
First job out of grad school was mid 6-figures, it was presumably 20+ years ago and not in medicine :shock: ?
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