Any success stories of ppl who never made >$50,000?
Any success stories of ppl who never made >$50,000?
Often, when browsing this forum, I see people asking for portfolio advice and usually they are dual medical professionals making north of $300,000 per year and have a $3 million plus portfolio.
I am just wondering if there's anyone here who has a multi million dollar stock portfolio but has never made more than $50,000 (in their day job) or is that near impossible to achieve?
I am just wondering if there's anyone here who has a multi million dollar stock portfolio but has never made more than $50,000 (in their day job) or is that near impossible to achieve?
Re: Any success stories of ppl who never made >$50,000?
seems like Tom Stanley in his book " The Millionaire Next Door " had some examples of lower income/higher net worth types....
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Re: Any success stories of ppl who never made >$50,000?
I think a definition of "success" is needed.
Re: Any success stories of ppl who never made >$50,000?
Bulldawg wrote:seems like Tom Stanley in his book " The Millionaire Next Door " had some examples of lower income/higher net worth types....
Two third's were self-employed business owners. The vast majority of them had high income to begin with and were very frugal. Of course the combination of the 2 will equal great wealth over the years.
If you made $200,000 per year ($140,000 after tax) and save $100,000 of it, in 10 years or less you will be a millionaire by definition.
Re: Any success stories of ppl who never made >$50,000?
I know a single elementary teacher who had 500k left for her nieces and nephews when she died, which impressed me very much.
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Re: Any success stories of ppl who never made >$50,000?
I think it would be difficult to achieve by saving and investing. But those of us who never made more than 50K don't really need a multi-million dollar portfolio.techcrium wrote: I am just wondering if there's anyone here who has a multi million dollar stock portfolio but has never made more than $50,000 (in their day job) or is that near impossible to achieve?
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Re: Any success stories of ppl who never made >$50,000?
It's definitely more difficult to do it at $50k, but its about savings rate and time... As an engineer, this chart is something I can appreciate...
If you start young (25), and consistently save at least 10% of your income you will be able to retire at 65. Start later (35), and its more like 15-20% of your salary. The 50% of final salary replacement is a rough way of accounting for the fact that a retired person should be mortgage free and receiving Social Security... and thus won't need their entire salary. At higher income levels, (SS represents less of your overall portfolio) your replacement rate will be probably need to be closer to 70%.
The table is from a paper published by Wade Pfau.
If you start young (25), and consistently save at least 10% of your income you will be able to retire at 65. Start later (35), and its more like 15-20% of your salary. The 50% of final salary replacement is a rough way of accounting for the fact that a retired person should be mortgage free and receiving Social Security... and thus won't need their entire salary. At higher income levels, (SS represents less of your overall portfolio) your replacement rate will be probably need to be closer to 70%.
The table is from a paper published by Wade Pfau.
Last edited by 3CT_Paddler on Tue Sep 16, 2014 1:19 pm, edited 1 time in total.
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Re: Any success stories of ppl who never made >$50,000?
In my mind, Bogleheads isn't about numbers, it's about philosophy. The number of zeroes behind the first number really doesn't matter - it's your approach to investing that's important.
I don't have my copy handy, but in Jack's book "The Little Book of Common Sense Investing" he relates the following story (cribbed from an Amazon review):
I don't have my copy handy, but in Jack's book "The Little Book of Common Sense Investing" he relates the following story (cribbed from an Amazon review):
That's a true Boglehead!On page 13 of this book Jack Bogle relates a letter that he received in early 2005 about someone who's been investing with Vanguard for about 30 years, and whose portfolio had grown to over $1.25 million, but he'd never made more than $25,000 in any year in his life.
"While some mutual fund founders chose to make billions, he chose to make a difference." - Dedication to Jack Bogle in 'The Bogleheads' Guide to Investing'.
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Re: Any success stories of ppl who never made >$50,000?
By my math, a person could have 1,000,000 saved, with making 50,000 a year after 25 years IF...
They max out their 401(k) each year with a 5% company match and get a 5% real rate of return.
So effectively live off a $32,500 a year salary. Plenty of families live on less per year, so I do not see why it is not possible.
Likely? Maybe I am off base, but I assume that someone with the financial sense to max out a 401(k) each year would probably bring in more than $50,000.
MULTI-million? It would take close to 40 years of this.
They max out their 401(k) each year with a 5% company match and get a 5% real rate of return.
So effectively live off a $32,500 a year salary. Plenty of families live on less per year, so I do not see why it is not possible.
Likely? Maybe I am off base, but I assume that someone with the financial sense to max out a 401(k) each year would probably bring in more than $50,000.
MULTI-million? It would take close to 40 years of this.
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Re: Any success stories of ppl who never made >$50,000?
This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
Re: Any success stories of ppl who never made >$50,000?
I suppose you need to define success. In theory, it's quite possible to save quite a bit for retirement, based of course on how much you save, not how much you make. If you save 15% of that 50K, that's 7.5K per year. Compounded annually at 6% over 40 years should be north of a million. Realistically I would assume 4% which still results in a respectable sum of nearly 3/4 mil.
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Re: Any success stories of ppl who never made >$50,000?
You mean working class? Middle class is a wide range of income, something like ~75k/year to ~300k+/year... I'd say almost this entire board is "middle class".Mike Scott wrote:This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
An elephant for a dime is only a good deal if you need an elephant and have a dime.
Re: Any success stories of ppl who never made >$50,000?
That will be very tough. I imagine there are folks in that category, but they probably received a windfall or have a working spouse. OTOH, I know that it took a number of years before either I or my spouse made more than $50,000 a year. One has to start somewhere.techcrium wrote:I am just wondering if there's anyone here who has a multi million dollar stock portfolio but has never made more than $50,000 (in their day job) or is that near impossible to achieve?
Re: Any success stories of ppl who never made >$50,000?
The Federal Reserve had a paper several years ago looking at income and wealth deciles. (I wish I had a copy, because I quote it all the time!). Since this statement is complicated, I'll make up some numbers (not real).
Take the top 10% income earners - let's say they make over $250K - and bottom 10% income - let's say they made $35K. The 10% wealthiest of the $35K crowd actually had more wealth than 50% of the $250K+ crowd. Even after correcting for medical issues, children, etc. Making a good income helps, but in reality, Keeping-Up-With-the-Jones could hurt a lot more than the extra $$!!
Take the top 10% income earners - let's say they make over $250K - and bottom 10% income - let's say they made $35K. The 10% wealthiest of the $35K crowd actually had more wealth than 50% of the $250K+ crowd. Even after correcting for medical issues, children, etc. Making a good income helps, but in reality, Keeping-Up-With-the-Jones could hurt a lot more than the extra $$!!
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Re: Any success stories of ppl who never made >$50,000?
Not sure how those two things are related.FullYellowJacket wrote: Maybe I am off base, but I assume that someone with the financial sense to max out a 401(k) each year would probably bring in more than $50,000.
Re: Any success stories of ppl who never made >$50,000?
knswamy wrote:The Federal Reserve had a paper several years ago looking at income and wealth deciles. (I wish I had a copy, because I quote it all the time!). Since this statement is complicated, I'll make up some numbers (not real).
Take the top 10% income earners - let's say they make over $250K - and bottom 10% income - let's say they made $35K. The 10% wealthiest of the $35K crowd actually had more wealth than 50% of the $250K+ crowd. Even after correcting for medical issues, children, etc. Making a good income helps, but in reality, Keeping-Up-With-the-Jones could hurt a lot more than the extra $$!!
Could that be because the wealthy $35,000 crowd were also drawing from social security and just retired? The wealthy $35,000 could have been making north of $250,000 as senior VP at a large company prior...
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Re: Any success stories of ppl who never made >$50,000?
Given that the median household income in the US is around $50k, your range for middle class seems skewed a bit on the high side.bungalow10 wrote:You mean working class? Middle class is a wide range of income, something like ~75k/year to ~300k+/year... I'd say almost this entire board is "middle class".Mike Scott wrote:This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
Re: Any success stories of ppl who never made >$50,000?
Unlikely. That means they were drawing Social Security, but had all their wealth in tax-sheltered accounts and didn't draw them. An individual wealthy person may chose to live on coupons, but hard to imagine that across a population, that would make much difference.techcrium wrote:Could that be because the wealthy $35,000 crowd were also drawing from social security and just retired? The wealthy $35,000 could have been making north of $250,000 as senior VP at a large company prior...
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Re: Any success stories of ppl who never made >$50,000?
I'm middle class. I only made over $100,000 the last few years of my working life. I see comparatively young people posting here about incomes of a quarter mil a year and I roll my eyes A few years at a salary like that early on and the way I spend, and I could have retired for life.Mike Scott wrote:This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
It seems that every few years I read an article about someone who's willed a million or so to his or her town or some charity, and who had lived a quiet, frugal life with no one having any idea they were saving that much money. Some were carefully buying blue chip stocks for years, some just saving.
Last edited by dolphinsaremammals on Tue Sep 16, 2014 1:42 pm, edited 1 time in total.
Re: Any success stories of ppl who never made >$50,000?
The Fed Reserve has the Survey on Consumer Finances. There is a thread on that: http://www.bogleheads.org/forum/viewtop ... 0&t=146493 It's great for some data mining of what is middle class, credit card debt, etc.
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Re: Any success stories of ppl who never made >$50,000?
I know that example well. The Little Book of Common Sense Investing is one of my favorites. That story is near the back of the book and describes a letter Mr. Bogle received from a Shareholder that invested in the S&P500, Total Stock, a few bond funds, and I believe a few common stocks. It was an eye opener.danwhite77 wrote:In my mind, Bogleheads isn't about numbers, it's about philosophy. The number of zeroes behind the first number really doesn't matter - it's your approach to investing that's important.
I don't have my copy handy, but in Jack's book "The Little Book of Common Sense Investing" he relates the following story (cribbed from an Amazon review):
That's a true Boglehead!On page 13 of this book Jack Bogle relates a letter that he received in early 2005 about someone who's been investing with Vanguard for about 30 years, and whose portfolio had grown to over $1.25 million, but he'd never made more than $25,000 in any year in his life.
John C. Bogle: “Simplicity is the master key to financial success."
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Re: Any success stories of ppl who never made >$50,000?
Sorry, the internet ate my initial reply.flyingbison wrote:Given that the median household income in the US is around $50k, your range for middle class seems skewed a bit on the high side.bungalow10 wrote:You mean working class? Middle class is a wide range of income, something like ~75k/year to ~300k+/year... I'd say almost this entire board is "middle class".Mike Scott wrote:This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
Don't confuse middle income with middle class. Middle class is a definition that is based on how people earn their money, not how much they earn. The Middle Class are usually college-educated managers and professionals.
The largest socio-economic group in the US is Working Class, followed by Lower Middle Class. This is why the median income is lower than what a traditional middle class worker earns.
http://en.wikipedia.org/wiki/American_middle_class
Everyone wants to believe they are middle class...
Last edited by bungalow10 on Tue Sep 16, 2014 1:53 pm, edited 1 time in total.
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Re: Any success stories of ppl who never made >$50,000?
I have a question for you. Why would you need a million in portfolio to be successful? What about a person is making 50k with a 500k in portfolio and 50k in pension a year. Who would be in a better position? I rather have a million though.
Re: Any success stories of ppl who never made >$50,000?
I always get a kick out of the Boglehead idea of what 'middle class' is
Back to the OP's question, I remember reading about a Boglehead janitor who introduced himself to Jack Bogle at some event- I want to say he was worth a million bucks (or a lot on a modest salary, anyway). Somebody else will remember this story and hopefully elaborate upon it.
Back to the OP's question, I remember reading about a Boglehead janitor who introduced himself to Jack Bogle at some event- I want to say he was worth a million bucks (or a lot on a modest salary, anyway). Somebody else will remember this story and hopefully elaborate upon it.
Last edited by Index Fan on Tue Sep 16, 2014 1:59 pm, edited 1 time in total.
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Re: Any success stories of ppl who never made >$50,000?
If people change the definition of "middle class" to reflect middle income, than no one can ever say the middle class is shrinking.Index Fan wrote:I always get a kick out of the Boglehead idea of what 'middle class' is
An elephant for a dime is only a good deal if you need an elephant and have a dime.
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Re: Any success stories of ppl who never made >$50,000?
Or they had converted all their tax-sheltered accounts to after-tax accounts, so drawing on them didn't generate any income.knswamy wrote:Unlikely. That means they were drawing Social Security, but had all their wealth in tax-sheltered accounts and didn't draw them. An individual wealthy person may chose to live on coupons, but hard to imagine that across a population, that would make much difference.techcrium wrote:Could that be because the wealthy $35,000 crowd were also drawing from social security and just retired? The wealthy $35,000 could have been making north of $250,000 as senior VP at a large company prior...
In theory, theory and practice are identical. In practice, they often differ.
Re: Any success stories of ppl who never made >$50,000?
Agreed. I made <50k until about two years ago, and was able to save 20% of my income and pay off student loans...but things were definitely tight, and that's with being in my 20s, single, and living in a studio. Saving and having a family on that salary would be much harder, but even saving 6-10% for 40 years would secure a decent nest egg.Mike Scott wrote:This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
This forum can be extremely hostile to those who don't roll out of school with computer science or medical degrees. Not everyone makes $100k at their first job, and not making enough to max your 401k doesn't mean you lack intelligence. There are a ton of highly educated careers that add value to society and don't bring high incomes. Unfortunately, this forum seems to scare most of those people away.
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Re: Any success stories of ppl who never made >$50,000?
I made $6500/yr at my first job, and there weren't any 401k plans then.vachica wrote:Agreed. I made <50k until about two years ago, and was able to save 20% of my income and pay off student loans...but things were definitely tight, and that's with being in my 20s, single, and living in a studio. Saving and having a family on that salary would be much harder, but even saving 6-10% for 40 years would secure a decent nest egg.Mike Scott wrote:This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
This forum can be extremely hostile to those who don't roll out of school with computer science or medical degrees. Not everyone makes $100k at their first job, and not making enough to max your 401k doesn't mean you lack intelligence. There are a ton of highly educated careers that add value to society and don't bring high incomes. Unfortunately, this forum seems to scare most of those people away.
Of course, that was when dinosaurs roamed the earth...
In theory, theory and practice are identical. In practice, they often differ.
Re: Any success stories of ppl who never made >$50,000?
I believe the Fed paper included investment income, so it would have included dividends and capital gains.technovelist wrote: Or they had converted all their tax-sheltered accounts to after-tax accounts, so drawing on them didn't generate any income.
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Re: Any success stories of ppl who never made >$50,000?
If you have a high enough basis, you won't generate any capital gains to tax. And even if you do, the taxable income is based on the amount you sell, not on your entire holding.knswamy wrote:I believe the Fed paper included investment income, so it would have included dividends and capital gains.technovelist wrote: Or they had converted all their tax-sheltered accounts to after-tax accounts, so drawing on them didn't generate any income.
Which is one reason I don't like high-dividend stocks in taxable accounts, as you have to pay tax on the entire "gain" every year.
Last edited by technovelist on Tue Sep 16, 2014 2:10 pm, edited 1 time in total.
In theory, theory and practice are identical. In practice, they often differ.
- pennstater2005
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Re: Any success stories of ppl who never made >$50,000?
I make just over 50k including my wife's part time work. I am managing to save, although not as much as I'd like, enough for a comfortable retirement. I do count on SS being there in some form though. I've never felt like I didn't belong here because of my lower income. Boglehead principles still apply.
“If you think nobody cares if you're alive, try missing a couple of car payments.” – Earl Wilson
Re: Any success stories of ppl who never made >$50,000?
Yes,It CAN be done
Live beneath your means,for decades
Separate wants ,from needs
Budget ,budget,budget with software and STICK to it
Avoid ANY kind of debt(Pay yourself interest,not someone else) other than a house.
buy used cars when starting out
If you are going to work for a company ,try to find a well established one that has excellent benefits(health insurance ,401k etc)
Find a way to invest in equity based mutual funds in the 401k plan,max out(,tax deferred compounding is amazing)
Find a way to invest in a Roth IRA.
Find a way to take out a 15 year mortgage when purchasing a home.(Pay it off early,it can be done)
Save,Save,Save,,,without savings you can't invest.
Invest in index funds as early and often in your life as possible,,,the miracle of compounding will eventually do the heavy lifting of the portfolio to those numbers that you could have never imagined.
When the Bear Market OPPORTUNITY comes knocking keep investing as others flee in fear,you will be REWARDED.
Stay the Course Unwavering.
Remember this, all of the above requires one of the most important words in the english language(for me anyway) and that is Discipline,Discipline and more Discipline.
Live beneath your means,for decades
Separate wants ,from needs
Budget ,budget,budget with software and STICK to it
Avoid ANY kind of debt(Pay yourself interest,not someone else) other than a house.
buy used cars when starting out
If you are going to work for a company ,try to find a well established one that has excellent benefits(health insurance ,401k etc)
Find a way to invest in equity based mutual funds in the 401k plan,max out(,tax deferred compounding is amazing)
Find a way to invest in a Roth IRA.
Find a way to take out a 15 year mortgage when purchasing a home.(Pay it off early,it can be done)
Save,Save,Save,,,without savings you can't invest.
Invest in index funds as early and often in your life as possible,,,the miracle of compounding will eventually do the heavy lifting of the portfolio to those numbers that you could have never imagined.
When the Bear Market OPPORTUNITY comes knocking keep investing as others flee in fear,you will be REWARDED.
Stay the Course Unwavering.
Remember this, all of the above requires one of the most important words in the english language(for me anyway) and that is Discipline,Discipline and more Discipline.
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
Re: Any success stories of ppl who never made >$50,000?
Let's take an example of someone who graduates college at age 22 and starts working at $40,000 a year. Between his own contributions and his company's match, he puts in 10% of his income to his 401k. If he can do that until age 67, assuming he beats inflation by 5% per year over that time, he will have about $638,000 in his 401k.
So multi-millions seems like it would be farfetched. But maybe not. Because this story doesn't describe the average person's life story.
Let's say our little college graduate meets a special someone in their 20s and marries them. That special someone is also college educated and followed the exact same pattern as our protagonist. Now they're retiring at 67 with $1.2million in the bank. Not bad at all.
But hey, in a two-person household, there could be more efficiencies to be gained. So while our protagonist was living on $36,000 pre-tax per year before the love of his life came along, they probably don't need double that now. Let's say the married life costs $50,000 a year (no kids). I got that $50,000 figure based off of the standard of living I now have in a 1-bedroom apartment with my wife. Now they have $80,000 in total income and $50,000 of income needed for life. They both put close to the max in their 401ks, and end up putting away $30k every year until age 67. That couple would have a whopping $4.8 mil between the two of them at that time.
So now it seems very possible! But let's be honest, they're not going to put away $30k a year starting at age 22. Probably not. Because they had student loans, and a mortgage, and 2.5 kids. Let's say they don't marry until 27, so they each only had the ability to save $4000 a year until then, or $8000 total. But they also made student loan payments worth $3000 a year each until age 30 (they paid it off quicker than necessary). So they saved a total of 2000 per year. Then at age 27 they got married, and moved in together in a brand new house (mortgage!). So now their costs of living have gone up to $60,000 a year, leaving only $20,000 a year available for total savings, but of course, they're still paying off those student loans for age 28, 29, and 30. So in those years they only save $14,000 a year. But at age 31, they think they're about to start to become super savers! Except kid 1 and 2 happen to be twins (makes my calculations easier!) and at age 30 life expenses have now gone up to $70,000 a year. But luckily those student loans are gone, but still, that leaves only $10,000 a year to be saved. But alas, your kids were super brilliant and got full scholarships to the local state school, so after 18 years, your expenses for them went down to 0! Huzzah! So now at age 49, you're finally socking away the full $20,000 a year you wanted to, as you're still living a $60,000 lifestyle, considering you still have a mortgage. But that 30-year mortgage is paid off at age 57, so starting at age 58, you start putting $30,000 a year into your retirement savings! Good for you! Assuming you beat inflation by 5% every year during that time, you and your dear spouse are retiring at age 67 with a neat $1.8mil. If you only beat inflation by 4%, then you'd have $1.4mil. That makes for a decent retirement. In fact, they will pass the million dollar mark at age 62.
So even with a little wrench thrown into the engine, a couple making $40k a year, adjusted for inflation, could retire millionaires. If they're super savers and at least one of them gets a promotion at some point in their career, the chances are improved.
So multi-millions seems like it would be farfetched. But maybe not. Because this story doesn't describe the average person's life story.
Let's say our little college graduate meets a special someone in their 20s and marries them. That special someone is also college educated and followed the exact same pattern as our protagonist. Now they're retiring at 67 with $1.2million in the bank. Not bad at all.
But hey, in a two-person household, there could be more efficiencies to be gained. So while our protagonist was living on $36,000 pre-tax per year before the love of his life came along, they probably don't need double that now. Let's say the married life costs $50,000 a year (no kids). I got that $50,000 figure based off of the standard of living I now have in a 1-bedroom apartment with my wife. Now they have $80,000 in total income and $50,000 of income needed for life. They both put close to the max in their 401ks, and end up putting away $30k every year until age 67. That couple would have a whopping $4.8 mil between the two of them at that time.
So now it seems very possible! But let's be honest, they're not going to put away $30k a year starting at age 22. Probably not. Because they had student loans, and a mortgage, and 2.5 kids. Let's say they don't marry until 27, so they each only had the ability to save $4000 a year until then, or $8000 total. But they also made student loan payments worth $3000 a year each until age 30 (they paid it off quicker than necessary). So they saved a total of 2000 per year. Then at age 27 they got married, and moved in together in a brand new house (mortgage!). So now their costs of living have gone up to $60,000 a year, leaving only $20,000 a year available for total savings, but of course, they're still paying off those student loans for age 28, 29, and 30. So in those years they only save $14,000 a year. But at age 31, they think they're about to start to become super savers! Except kid 1 and 2 happen to be twins (makes my calculations easier!) and at age 30 life expenses have now gone up to $70,000 a year. But luckily those student loans are gone, but still, that leaves only $10,000 a year to be saved. But alas, your kids were super brilliant and got full scholarships to the local state school, so after 18 years, your expenses for them went down to 0! Huzzah! So now at age 49, you're finally socking away the full $20,000 a year you wanted to, as you're still living a $60,000 lifestyle, considering you still have a mortgage. But that 30-year mortgage is paid off at age 57, so starting at age 58, you start putting $30,000 a year into your retirement savings! Good for you! Assuming you beat inflation by 5% every year during that time, you and your dear spouse are retiring at age 67 with a neat $1.8mil. If you only beat inflation by 4%, then you'd have $1.4mil. That makes for a decent retirement. In fact, they will pass the million dollar mark at age 62.
So even with a little wrench thrown into the engine, a couple making $40k a year, adjusted for inflation, could retire millionaires. If they're super savers and at least one of them gets a promotion at some point in their career, the chances are improved.
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Re: Any success stories of ppl who never made >$50,000?
I was just making an observation that while I would not be surprised to see someone making $50,000 maxing out his or her 401(k), I would be surprised if this person does not eventually make more than $50,000 per year.flyingbison wrote:Not sure how those two things are related.FullYellowJacket wrote: Maybe I am off base, but I assume that someone with the financial sense to max out a 401(k) each year would probably bring in more than $50,000.
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Re: Any success stories of ppl who never made >$50,000?
Nice post Toons! Separate wants from needs. So true, I want a leaf blower....however I have a rakeToons wrote:Yes,It CAN be done
Live beneath your means,for decades
Separate wants ,from needs
Budget ,budget,budget with software and STICK to it
Avoid ANY kind of debt(Pay yourself interest,not someone else) other than a house.
buy used cars when starting out
If you are going to work for a company ,try to find a well established one that has excellent benefits(health insurance ,401k etc)
Find a way to invest in equity based mutual funds in the 401k plan,max out(,tax deferred compounding is amazing)
Find a way to invest in a Roth IRA.
Find a way to take out a 15 year mortgage when purchasing a home.(Pay it off early,it can be done)
Save,Save,Save,,,without savings you can't invest.
Invest in index funds as early and often in your life as possible,,,the miracle of compounding will eventually do the heavy lifting of the portfolio to those numbers that you could have never imagined.
When the Bear Market OPPORTUNITY comes knocking keep investing as others flee in fear,you will be REWARDED.
Stay the Course Unwavering.
Remember this, all of the above requires one of the most important words in the english language(for me anyway) and that is Discipline,Discipline and more Discipline.
“If you think nobody cares if you're alive, try missing a couple of car payments.” – Earl Wilson
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Re: Any success stories of ppl who never made >$50,000?
I know that used to be common sense, but my observation indicates that it's pretty rare these days. Unfortunately.toto238 wrote:Let's take an example of someone who graduates college at age 22 and starts working at $40,000 a year. Between his own contributions and his company's match, he puts in 10% of his income to his 401k. If he can do that until age 67, assuming he beats inflation by 5% per year over that time, he will have about $638,000 in his 401k.
So multi-millions seems like it would be farfetched. But maybe not. Because this story doesn't describe the average person's life story.
Let's say our little college graduate meets a special someone in their 20s and marries them. That special someone is also college educated and followed the exact same pattern as our protagonist. Now they're retiring at 67 with $1.2million in the bank. Not bad at all.
But hey, in a two-person household, there could be more efficiencies to be gained. So while our protagonist was living on $36,000 pre-tax per year before the love of his life came along, they probably don't need double that now. Let's say the married life costs $50,000 a year (no kids).
In theory, theory and practice are identical. In practice, they often differ.
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Re: Any success stories of ppl who never made >$50,000?
I'm a good example, though not a "success story".
Currently make $50K/yr, 25% plus company match goes into 401K. Very frugal, single. Started about age 25 (w/ lower salary and lower saving rate). Agressive portfolio, indexed. Now age 49 inching up to $400K. Not bad, and maybe on a path to double comma, but far less than many (most?) on this board.
Currently make $50K/yr, 25% plus company match goes into 401K. Very frugal, single. Started about age 25 (w/ lower salary and lower saving rate). Agressive portfolio, indexed. Now age 49 inching up to $400K. Not bad, and maybe on a path to double comma, but far less than many (most?) on this board.
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Re: Any success stories of ppl who never made >$50,000?
To further the conversation, I know someone that did this!
My grandfather easily never made more than $50,000 in a year. He grew up poor as dirt and did not inherit a dime. Saving every penny he could (and investing the money received from his nice pension after retiring), he is now a millionaire!
...Or was until he took his money out of the market after the crash and never put it back in.
My grandfather easily never made more than $50,000 in a year. He grew up poor as dirt and did not inherit a dime. Saving every penny he could (and investing the money received from his nice pension after retiring), he is now a millionaire!
...Or was until he took his money out of the market after the crash and never put it back in.
Re: Any success stories of ppl who never made >$50,000?
I used a Rake for 35 years,,,,I bought a leaf blower last year with a "dividend",,,I like it so much Im gonna buy another one,,,,,LOLpennstater2005 wrote:Nice post Toons! Separate wants from needs. So true, I want a leaf blower....however I have a rakeToons wrote:Yes,It CAN be done
Live beneath your means,for decades
Separate wants ,from needs
Budget ,budget,budget with software and STICK to it
Avoid ANY kind of debt(Pay yourself interest,not someone else) other than a house.
buy used cars when starting out
If you are going to work for a company ,try to find a well established one that has excellent benefits(health insurance ,401k etc)
Find a way to invest in equity based mutual funds in the 401k plan,max out(,tax deferred compounding is amazing)
Find a way to invest in a Roth IRA.
Find a way to take out a 15 year mortgage when purchasing a home.(Pay it off early,it can be done)
Save,Save,Save,,,without savings you can't invest.
Invest in index funds as early and often in your life as possible,,,the miracle of compounding will eventually do the heavy lifting of the portfolio to those numbers that you could have never imagined.
When the Bear Market OPPORTUNITY comes knocking keep investing as others flee in fear,you will be REWARDED.
Stay the Course Unwavering.
Remember this, all of the above requires one of the most important words in the english language(for me anyway) and that is Discipline,Discipline and more Discipline.
Stay the Course
http://www.amazon.com/gp/product/B007PO ... UTF8&psc=1
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
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Re: Any success stories of ppl who never made >$50,000?
I have no idea what my parents actually made per year during their working years. My Mother stopped working in the late 1990's and my Dad offcially retired in 2001. Both of them worked for AT&T for the vast majority of their working careers. He as a lineman and she as a customer service representative. I do know that they were impressed with my $33,000 starting salary in 1997 and very impressed when I got a raise the following year to $43,000.
We did not do without while I was growing up. We took more vacations and bought more things growing up that I do now...
My Mom had over $1M in cash/stocks/bonds and mutual funds when she passed away this year.
We did not do without while I was growing up. We took more vacations and bought more things growing up that I do now...
My Mom had over $1M in cash/stocks/bonds and mutual funds when she passed away this year.
Re: Any success stories of ppl who never made >$50,000?
So the median income doesn't put you in the middle class but having an income in the top 2% does?bungalow10 wrote:You mean working class? Middle class is a wide range of income, something like ~75k/year to ~300k+/year... I'd say almost this entire board is "middle class".Mike Scott wrote:This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
Re: Any success stories of ppl who never made >$50,000?
I based my estimate of $50,000 a year based off of my current lifestyle. I live on about $40k a year in a 1 bedroom apartment with my wife, so I figured $50k was a conservative estimate. Then again, we don't go on vacations, we barely go out to eat, etc.technovelist wrote:I know that used to be common sense, but my observation indicates that it's pretty rare these days. Unfortunately.toto238 wrote:Let's take an example of someone who graduates college at age 22 and starts working at $40,000 a year. Between his own contributions and his company's match, he puts in 10% of his income to his 401k. If he can do that until age 67, assuming he beats inflation by 5% per year over that time, he will have about $638,000 in his 401k.
So multi-millions seems like it would be farfetched. But maybe not. Because this story doesn't describe the average person's life story.
Let's say our little college graduate meets a special someone in their 20s and marries them. That special someone is also college educated and followed the exact same pattern as our protagonist. Now they're retiring at 67 with $1.2million in the bank. Not bad at all.
But hey, in a two-person household, there could be more efficiencies to be gained. So while our protagonist was living on $36,000 pre-tax per year before the love of his life came along, they probably don't need double that now. Let's say the married life costs $50,000 a year (no kids).
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Re: Any success stories of ppl who never made >$50,000?
I understand the difference, but I think the range you gave (75-300K) is skewed too high. There are lots of middle class, college educated, white collar professionals who earn a lot less than 75Kbungalow10 wrote:Sorry, the internet ate my initial reply.flyingbison wrote:Given that the median household income in the US is around $50k, your range for middle class seems skewed a bit on the high side.bungalow10 wrote:You mean working class? Middle class is a wide range of income, something like ~75k/year to ~300k+/year... I'd say almost this entire board is "middle class".Mike Scott wrote:This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
Don't confuse middle income with middle class. Middle class is a definition that is based on how people earn their money, not how much they earn. The Middle Class are usually college-educated managers and professionals.
The largest socio-economic group in the US is Working Class, followed by Lower Middle Class. This is why the median income is lower than what a traditional middle class worker earns.
http://en.wikipedia.org/wiki/American_middle_class
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Re: Any success stories of ppl who never made >$50,000?
I believe the degree of workplace autonomy, income security, etc, all play into it.flyingbison wrote:I understand the difference, but I think the range you gave (75-300K) is skewed too high. There are lots of middle class, college educated, white collar professionals who earn a lot less than 75Kbungalow10 wrote:Sorry, the internet ate my initial reply.flyingbison wrote:Given that the median household income in the US is around $50k, your range for middle class seems skewed a bit on the high side.bungalow10 wrote:You mean working class? Middle class is a wide range of income, something like ~75k/year to ~300k+/year... I'd say almost this entire board is "middle class".Mike Scott wrote:This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
Don't confuse middle income with middle class. Middle class is a definition that is based on how people earn their money, not how much they earn. The Middle Class are usually college-educated managers and professionals.
The largest socio-economic group in the US is Working Class, followed by Lower Middle Class. This is why the median income is lower than what a traditional middle class worker earns.
http://en.wikipedia.org/wiki/American_middle_class
Someone making less than 75k very well could be middle class or lower middle class, or they could be working class.
There are many ways to define middle class, my main points were that using average or median household income is not one of them and that most Bogleheads ARE middle class.The lower middle class... these are people in technical and lower-level management positions who work for those in the upper middle class as lower managers, craftspeople, and the like. They enjoy a reasonably comfortable standard of living, although it is constantly threatened by taxes and inflation. Generally, they have a Bachelor's and sometimes Master's college degree.
An elephant for a dime is only a good deal if you need an elephant and have a dime.
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Re: Any success stories of ppl who never made >$50,000?
Agreedbungalow10 wrote: I believe the degree of workplace autonomy, income security, etc, all play into it.
Someone making less than 75k very well could be middle class or lower middle class, or they could be working class.
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Re: Any success stories of ppl who never made >$50,000?
techcrium wrote:Often, when browsing this forum, I see people asking for portfolio advice and usually they are dual medical professionals making north of $300,000 per year and have a $3 million plus portfolio.
I am just wondering if there's anyone here who has a multi million dollar stock portfolio but has never made more than $50,000 (in their day job) or is that near impossible to achieve?
It depends where you live too. If you're making 50k in NYC or SF, then yes saving and investing for the long term can be really difficult. It will be easier to live in a lower cost of living area with a 50k/year income.
Like others as said, the philosophy doesn't change.
Re: Any success stories of ppl who never made >$50,000?
Really this would seem very possible if you had (had cause the number of these jobs seem to decrease) a job where you can get a pension of 100% after 25-40 years (depending on the specific situation).
Start some government job sometime between 18-22, build your way up the ladder (not the top of the ladder but somewhere in the middle), and then retire with the full pension. Provided you are saving doing those working year you could easily get to a million since your pension would cover most of your expense (hopefully all) in retirement.
But if you take out the pension factor not sure how practical it would be UNLESS you are single with no dependents.
Start some government job sometime between 18-22, build your way up the ladder (not the top of the ladder but somewhere in the middle), and then retire with the full pension. Provided you are saving doing those working year you could easily get to a million since your pension would cover most of your expense (hopefully all) in retirement.
But if you take out the pension factor not sure how practical it would be UNLESS you are single with no dependents.
Re: Any success stories of ppl who never made >$50,000?
much harder but can be done, easier to do on 2 incomes and get some nice marriage tax breaks
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Re: Any success stories of ppl who never made >$50,000?
For this to have meaning, you'd have to qualify this as never over $50K in 2014 dollars, since someone
who started 40 years at age 22 making $10,400 would have be making the equivalent of 50,269 in 2014 dollars.
40 years is not that long ago, that person would only be 62 now.
who started 40 years at age 22 making $10,400 would have be making the equivalent of 50,269 in 2014 dollars.
40 years is not that long ago, that person would only be 62 now.
Re: Any success stories of ppl who never made >$50,000?
100% agree with that.vachica wrote:Agreed. I made <50k until about two years ago, and was able to save 20% of my income and pay off student loans...but things were definitely tight, and that's with being in my 20s, single, and living in a studio. Saving and having a family on that salary would be much harder, but even saving 6-10% for 40 years would secure a decent nest egg.Mike Scott wrote:This is a tough crowd to hang with if you are merely "middle class" which is too bad because the principles are the same. I have noticed several lower income first time posters that don't seem to come back after their first post.
This forum can be extremely hostile to those who don't roll out of school with computer science or medical degrees. Not everyone makes $100k at their first job, and not making enough to max your 401k doesn't mean you lack intelligence. There are a ton of highly educated careers that add value to society and don't bring high incomes. Unfortunately, this forum seems to scare most of those people away.