How did you make your million(s)?

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.

If you have at least $1 million in investable assets, which category describes you best:

Poll ended at Fri Nov 09, 2012 7:27 pm

My household never earned above average wages and we hit the target by saving/investing
52
24%
My household DID earn above average wages and we hit the target by saving/investing
148
68%
Most of the money came from a source other than wages (such as inheritance, lottery, etc.)
17
8%
 
Total votes : 217

Re: How did you make your million(s)?

Postby DKJ70131 » Thu Nov 08, 2012 9:28 pm

DINK, LBYM, stayed out of debt and saved part of part of every paycheck.
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Re: How did you make your million(s)?

Postby Amprdh » Thu Nov 08, 2012 10:39 pm

Two incomes regular savings small inheritance sold my business careful spending would not say frugal
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Re: How did you make your million(s)?

Postby sscritic » Thu Nov 08, 2012 10:52 pm

LonePrairie wrote:Widowed (at a young age); went back to school and got an advanced degree in computer science at the right time; always lived below my means.

And if your late husband had carried $1 million in life insurance payable to you, you would have had your million without doing any of those things.

I am actually surprised that no one else has mentioned death of a spouse as a source of wealth. My wife died and I got a little life insurance, a small pension, a monthly death benefit, the $255 from social security, and, the largest chunk, her retirement plan assets. The latter was from her wages, but I got it as an inheritance. So is that wages or inheritance? If she had lived, the $1 million that we would have had would have been from wages.

If bogleheads never die, why do they buy insurance? Answer: They do, it's just that dead bogleheads don't answer survey questions.

P.S. Why do couples only need $500k each to answer this question but a single person needs $1 million?
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Re: How did you make your million(s)?

Postby paper200 » Thu Nov 08, 2012 11:37 pm

Started working late (32, DW 38). Stock options + savings + rigormortis of the fist, in combination, has helped us save to seven figures. Hopefully Boglehead investing will provide more growth in the next decade before retirement.
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Re: How did you make your million(s)?

Postby travellight » Fri Nov 09, 2012 12:42 am

I guess I managed to make it there doing all the wrong things:
single income
divorce, still paying child support
had a kid, haven't remarried, still a single mom. Learned my lesson.

net worth a little over 3 million now.
I do live somewhat frugally though.
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Re: How did you make your million(s)?

Postby ofcmetz » Fri Nov 09, 2012 1:07 am

sscritic wrote:
If bogleheads never die, why do they buy insurance? Answer: They do, it's just that dead bogleheads don't answer survey questions.



I hear dead bogleheads :-?

Actually, it's against forum rules to post when you are dead. The admin automatically delete posts from dead bogleheads.
Showing up at the donut shop at 5 am to get them hot out of the oil is an example of successful market timing.
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Re: How did you make your million(s)?

Postby interplanetjanet » Fri Nov 09, 2012 1:59 am

travellight wrote:I guess I managed to make it there doing all the wrong things:
single income
divorce, still paying child support
had a kid, haven't remarried, still a single mom. Learned my lesson.

In the same boat (but three kids). Divorce hit me hard, I don't expect to make it to seven figures for a while - but I learned my lesson. I make a good living but CS takes a heck of a bite.

Planning on just socking away what I can and I'll make it there eventually. Heartening to hear about others who have made it there in similar circumstances.
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Re: How did you make your million(s)?

Postby heyyou » Fri Nov 09, 2012 2:21 am

Blue collar worker
LBMM and still do in retirement
Saved pay raises and overtime
Maxing out retirement accounts was an annual game that felt good to win
Due to aversion to debt, paid off mortgage early, then continued to make a similar payment into savings
Made investing mistakes early, felt bad then, but that was good timing
Married late, no kids
Made $70K only once, but did earn $50-65K for the last 15 years of work
Retired at 55 with a no-COLA pension
and Retiree health care due to 30 years at the same employer
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Re: How did you make your million(s)?

Postby Flobes » Fri Nov 09, 2012 3:31 pm

Happily bestowed by a completely unexpected inheritance from a distant aunt with surprising assets.

Yes, indeedy, it happens in real life: not just in the movies.
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Re: How did you make your million(s)?

Postby Sunflower » Fri Nov 09, 2012 4:21 pm

Flobes wrote:Happily bestowed by a completely unexpected inheritance from a distant aunt with surprising assets.

Yes, indeedy, it happens in real life: not just in the movies.


I will be one of those aunts some day, if all goes well. :happy
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Re: How did you make your million(s)?

Postby The Wizard » Fri Nov 09, 2012 7:08 pm

sscritic wrote:P.S. Why do couples only need $500k each to answer this question but a single person needs $1 million?


I think the stock answer is that two can live almost as cheaply as one? Property taxes and utilities don't care much about the # of people in the house and SS income is enough to buy groceries and clothes for person #2.

As for me, I hit $1M somewhere around 1995, got divorced in 1997, paid CS till 2007 but continued making decent retirement fund contributions (not maximal) during that turbulent period. I topped $1M again around 2004 or 05 and have continued upward from there.
I've had slightly above avg income as an engineer and save a decent amount, but also spend more than avg on adventure travel (currently finishing up a 2 wk Bonaire/Curacao excusion)...
Attempted new signature...
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Re: How did you make your million(s)?

Postby Dadarkar » Fri Nov 09, 2012 8:32 pm

Curious.

Does a US pediatrician, anywhere, make as little as 90-100k?

Yes, that is the stating salary range of a Pediatrician graduating from residency, in Long Island and most of the New York city area.
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Re: How did you make your million(s)?

Postby travellight » Sat Nov 10, 2012 2:14 am

it's a tough road, Janet.... a good salary helps though, eh? :)
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Re: How did you make your million(s)?

Postby Valuethinker » Sat Nov 10, 2012 9:55 am

Dadarkar wrote:
Curious.

Does a US pediatrician, anywhere, make as little as 90-100k?


Yes, that is the stating salary range of a Pediatrician graduating from residency, in Long Island and most of the New York city area.



Ahhh... starting salary.

So it's a bit like a lawyer? Starting salary maybe $100k but that's got little bearing on peak earnings? (Which say for a lawyer in a big law firm can be anywhere up to $1m).

So the *average* US GP or pediatrician more like $200k?
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Re: How did you make your million(s)?

Postby letsgobobby » Sat Nov 10, 2012 11:26 am

Average is ~$200k, maybe $220k, per various databases IIRC.
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Re: How did you make your million(s)?

Postby Saving$ » Sat Nov 10, 2012 11:40 am

JDCPAEsq wrote:You're fortunate you worked primarily in the post-1986 era when tax brackets were lower. Here's the tax rate for $50,000 of taxable income in earlier decades:
1950 - 53.69%
1960 - 59%
1970 - 51.25%
1980 - 49%

John


However, $50k in 1950 is the equivalent of $460,797 in 2011. I'm guessing there are some tax rates that get fairly close to the above rates with state taxes. Over $388k income = 35% federal income tax bracket +1.45 % medicare + 12.4 social security for self employed+ .6% FUTA = 49.45% tax rate. The math is not correct though, because the 35% does not kick in until $388k, and the FICA (1.45+12.4) kick out at $110k. And the past two years, the FICA has been 2% lower. But many states have 6% income tax, some up to 9%, and let's not forget the many things that are taxed today that were not taxed in 1950. So total tax rate for $50k taxable income may well be close to 50% - 53% for a $460k wage earner.

However, regardless of today's tax rate, it should be relatively easy for a $460k wage earner to LBTM and join the two comma club, the topic of this post.
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Re: How did you make your million(s)?

Postby Zephyr120 » Sun Nov 11, 2012 6:29 pm

Started investing early in low expense mutual funds, had well paying jobs, frugal life style, mid teens savings rate, married late in life when I already had 500K. I have to say though that mostly it was parents who started their married life during the depression and their attitudes and life style rubbed off. Having enough math skills to "run the numbers" of retirement finances certainly kept the mind focused for the last several decades.
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Re: How did you make your million(s)?

Postby UNI4MER » Sun Nov 11, 2012 6:36 pm

I am 60 worked 22 years for a small company which invested an IRA for me then I bought my own business 23 years ago rolled over my ira and got involved with vanguard in asset allocation while did a little dollar cost averaging. Found and used advice on this forum and after the crash in 2008 reallocated everything to the merriman vanguard tax deferred portfolio. Still own my business and am pretty worried about things to come.
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Re: How did you make your million(s)?

Postby gravlax » Mon Nov 12, 2012 1:33 pm

I'm still working on my second million.

I gave up on the first.
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Re: How did you make your million(s)?

Postby Confused » Mon Nov 12, 2012 1:44 pm

Sunflower wrote:
Flobes wrote:Happily bestowed by a completely unexpected inheritance from a distant aunt with surprising assets.

Yes, indeedy, it happens in real life: not just in the movies.


I will be one of those aunts some day, if all goes well. :happy


I will have one of those aunts some day, if all goes well. :wink:
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Re: How did you make your million(s)?

Postby abuss368 » Mon Nov 12, 2012 2:41 pm

Great post.
John C. Bogle: "You simply do not need to put your money into 8 different mutual funds!" | | Disclosure: Three Fund Portfolio + REITs
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Re: How did you make your million(s)?

Postby Bulldawg » Mon Nov 12, 2012 5:43 pm

early to bed , early to rise ...work like heck and advertise !

the above quote could be the mantra for my life as a business owner .

I have benefitted from reading all of Tom Stanley's MND books and of course The Bogleheads books and forum !

I think being naturally frugal helps , but I have been " selectively frugal " and put our 3 kids through private k-12 school and maybe college.
" IN GOD WE TRUST " ( official motto of the United States )
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Re: How did you make your million(s)?

Postby Beagler » Tue Nov 13, 2012 12:00 am

JDCPAEsq wrote:
livesoft wrote:Examination of tax records show that we were in the 33% tax bracket just one year in our lives, but mostly in the 25% and 28% tax brackets.


You're fortunate you worked primarily in the post-1986 era when tax brackets were lower. Here's the tax rate for $50,000 of taxable income in earlier decades:
1950 - 53.69%
1960 - 59%
1970 - 51.25%
1980 - 49%


Tax rates alone tell us much less than what the actual tax code (i.e., available deductions) determined to be the actual April 15th check.
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Re: How did you make your million(s)?

Postby FinancialDave » Tue Nov 13, 2012 1:15 am

Just got gazelle about saving around age 30. Household income barely above average (defined as about $100k in todays dollars) at retirement. Never in debt except for house, did my own investing. Retired at 60.

fd
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Re: How did you make your million(s)?

Postby Confused » Tue Nov 13, 2012 11:26 am

FinancialDave wrote:Just got gazelle about saving around age 30. Household income barely above average (defined as about $100k in todays dollars) at retirement. Never in debt except for house, did my own investing. Retired at 60.

fd


Holy cow, "average" is defined at $100k? Our household income is half that and I don't know anybody who pulls in six figures.
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Re: How did you make your million(s)?

Postby HomerJ » Tue Nov 13, 2012 5:01 pm

FinancialDave wrote:Just got gazelle about saving around age 30. Household income barely above average (defined as about $100k in todays dollars) at retirement. Never in debt except for house, did my own investing. Retired at 60.

fd


50% of households make less than $50k or so... $100k is far above average... $100k puts you in the top 15% or 20%.
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Re: How did you make your million(s)?

Postby FinancialDave » Tue Nov 13, 2012 5:57 pm

I guess "average" has to be taken in the context of your age and since the question was about Households let's remember that in todays day and age spousal income can add 50% to 100% of the primary wage earner.

Let's look at a little CNN article on the subject of college graduates (my circle of "average friends" include mostly college graduates, and most studies show if you don't graduate you most likely will have a below average salary - not always, so just go with me on this)

http://money.cnn.com/2012/09/27/pf/college/college-salary/index.html

Let's look at the mid-career salaries (you don't expect to compare someone who is retired to a 1st year graduate, do you?) for both the top ten and the bottom ten and then compute the midpoint.

$122,500 for the top ten and $44,490 for the bottom ten schools with the lowest salaries.

Mid-point of the above is $83,495.

Put this average person together with another average person making 50% of this and you get a salary of $125,243.

To be fair to everyone and not start a discussion of what is "average" -- the age of the respondent and his/her definiton of average was left to the judgement of the "poster," but since the voting was closed you don't have to worry that I skewed the results!
:happy

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Re: How did you make your million(s)?

Postby Jerilynn » Tue Nov 13, 2012 6:06 pm

Valuethinker wrote:Curious.

Does a US pediatrician, anywhere, make as little as 90-100k?



Yes. But, they may not be working as many days/hrs per week as the ones who earn more than that.
Cordially, Jeri . . . 100% all natural asset allocation. (no supernatural methods used)
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Re: How did you make your million(s)?

Postby technovelist » Wed Nov 14, 2012 3:34 pm

Probably slightly above average wages for some years, but on average not tremendously high.
Started out with less than 1/4 of that amount 15 years ago and have saved another 10% or so; the rest is from 14% CAGR in the last 10 years.
In theory, theory and practice are identical. In practice, they often differ.
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Re: How did you make your million(s)?

Postby am » Wed Nov 14, 2012 9:30 pm

You make less in medicine when you have no specialization, do few billable procedures, and live in a desirable area. Supply demand factors in popular areas and lower reimbursements. Not to mention that popular areas are more competitive and often less desirable for practicing. So you get a relatively low paying job, high cost of living and worse practice conditions.
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Re: How did you make your million(s)?

Postby travellight » Thu Nov 15, 2012 1:10 am

I think FinancialDave meant household income which might mean 2 people contributing at 50k each. Or maybe he meant average Boglehead income. ;)
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Re: How did you make your million(s)?

Postby mholdi1540 » Thu Nov 15, 2012 1:31 pm

I know a number of ped's MD's that make that low amount of $ based on where they live and % of medicaid (which can be a lot these days) that represents their patient population makeup. As an example of this in cetain poor southern states (and lots of others), the % of medicaid reimbursement for pre-natal care equals 70% of births. It also consists of working less hours to have more time off for family or just plain lazy (and this applies across the spectrum of specality). The debt of numerous new medical graduates is significant and can be as high as $250,000.00 to >$300,00.00 upon graduation (family member in exact situation) and don't forget the interest rate on these loans. Physicians are not the best investors and get suckered into making quick million dollar schemes and lose it that way along with kids, braces, private schools and divorces that clean their clock. One MD I know just went to his 30th med school reunion with his younger pregant wife (# 4) and get a load of this - he was previously treated for prostate cancer! When most get out of training they get a good sarting salary but like most lottery winners start spending it like drunken sailors and years later wonder where it all went. In the book "...The Millionaire Next Door" the author points out that only a small % of MD's have accumulated a 7 figure retirement plan. This is not to say that most MD's are honest hard working people, but their appreciation of financial matters is severely lacking after leaving high school and facing another 12 - 17 years of training before they get to call theirselves a real doctor. I spoke to a friend MD recently and he told me that in the 14 years of training after high school he never had a 1 hour lecture about money or financial objectives. Just my 2cents but I see it everyday.
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