Anyone wealthy by being "self-made"? (No Inheritence, etc..)

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The Wizard
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by The Wizard »

First of all, dwelling on fixed dollar amounts, like one million dollars, is just silly.
What you want to focus on is multiples of your present-day income or expenses. Once you get to ten times your present income saved in your investment portfolio, you're doing OK, especially if you're somewhat frugal and managing your money properly, i.e. living off a modest portion of your income.

Myself, I don't like the phrase "self-made" since there's an implication I'm wealthy beyond all possible concern which simply isn't true. But I've done OK, coming up on 40 years of steady employment, but with no real initiative to grab the bull by the horns and start my own business.
Regardless, I've got about 12 times my present income in investments and, with social security as well, I'll be in OK condition once I cut loose from employment...
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Fallible
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by Fallible »

MortgageOnBlack wrote:I'm 28 years old. Beginning to understand the In's and Out's of life a bit more. More importantly, I'm starting to realize how unfair life actually is. Everyone has different strengths and weaknesses: some people are stronger, taller, faster, better singers, more attractive etc... ...
I had two uncles who started with practically nothing and precious little encouragement or guidance. One went on to become an attorney and company president; the other became vice president of a technical publishing company and then had his own business. So, yes, it can be done and I hope you can overcome your discouragement now, take some of the good advice you've received here, and make it work for you.

I also wanted to note that when you said you were beginning at age 28 to realize how unfair life is, I remembered discovering that when I was in grade school in the '50s. One of my classmates was paralyzed from the waist down with polio, another was in a wheelchair with cerebral palsy, and in sixth grade, another classmate was killed in a car accident and yet another lost his dad to a heart attack. Thus, by the time I was 11, I and my other classmates had firsthand experiences of the terrible unfairness of life and knew how very lucky we were.

Good luck!
"Yes, investing is simple. But it is not easy, for it requires discipline, patience, steadfastness, and that most uncommon of all gifts, common sense." ~Jack Bogle
flowerbuyer
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by flowerbuyer »

Yes, you can become wealthy without an inheritance, and starting with nothing. But be prepared to work hard, stay focused, and make sacrifices to attain your success.

My husband was raised by a deaf, widowed mother who barely made ends meet, yet instilled a sense of pride through hard work in her children. He spent three years in the army right after high school, went into retail at a large chain store after leaving the service. Spent thirteen years working his way up to manager of their largest stores, all the while living far below his means, and saving as much as he could. He then opened his own business (a Ben Franklin Variety Store). Still saving, living below his means, working 6 days a week. Using his experience in retail management, he opened three more craft stores (under his own name) within the next five years. He loved being his own boss, and building the businesses, and always lived by his mantra of "Never, ever give up" .

He is now 73, has been comfortably retired since he was 68, and his children will be left a very large inheritance due to his hard work, sacrifice and frugality.

But he paid a price:
He sacrificed time with his family. He wasn't there for his kids while they were growing up those first 13 years because he worked 10 hour days, 6 days a week and all holidays at the huge chain stores. They were in bed by the time he got home from work. The family moved 13 times in 13 years, sometimes more than once in one year as he was moved around by the company.
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VictoriaF
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by VictoriaF »

The Wizard wrote:Once you get to ten times your present income saved in your investment portfolio, you're doing OK, especially if you're somewhat frugal and managing your money properly, i.e. living off a modest portion of your income.
Is the present income only employment income or also investment income? If the latter, the desired investment portfolio may never be attained, because frequently the investments gain more than 10%, and the size of the portfolio "falls" below ten times income.

Victoria
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scrabbler1
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by scrabbler1 »

MortgageOnBlack wrote:I'm 28 years old. Beginning to understand the In's and Out's of life a bit more. More importantly, I'm starting to realize how unfair life actually is. Everyone has different strengths and weaknesses: some people are stronger, taller, faster, better singers, more attractive etc... I also have noticed that some of peers have different advantages/strengths financially due to inheritance and coming from money etc... It's a little discouraging, but I guess there is nothing I can do about it but shift my fate as much as I can. At the present, I don't have any kids and I believe living my life correctly is by having my last check I write bounce* (figure of speech; I can't take money with me after all!). So, would anyone consider themselves to be self-made wealthy? I mean coming from no money at all to becoming quite wealthy? My parents and my family have always been broke and have always made poor decisions. I have made a promise to myself that I won't repeat those mistakes. With a net worth of only $45k, I find it discouraging at times to even try. Can anyone vouch that all this sacrifice through saving is worth it? It's tough. I'm single, only 1 income, and it feels nearly impossible to see a million dollars at my current pace. :greedy
Not sure if you would consider my being wealthy self-made or not.

When I was 22 and about to start my first full-time job after college in 1985, I had about $2,500 in the bank although I forgot I had another $2,800 in an old custodial account I would later use to pay down the $8,100 I had in student loans. Even with that nearly forgotten money, my net worth was still negative.

By age 28 in 1991, I owned an apartment but it was close to if not under water because the real estate market had crashed in 1990 after I bought my small apartment in 1989. I had built up about $35k split evenly between my 401(k) and personal savings, some of the latter I had begun investing in mutual funds. Pay raises at the time were better than today and I did own my car outright. One "rule" I had back then was to not take on at one time more than one of the common types of costly long-term debt - car loan, student loan, and home mortgage. I paid cash for my car and paid off my student loans before I bought the apartment. And I always paid off my credit cards in full.

In the 1990s, hard work along with a rising stock market accelerated my net worth to $340k in investments along with a fully paid off mortgage by the end of 1999. I did have some good luck in those years in that my company increased its match on 401(k) contributions from 50% to 75% and began an ESOP plan in 1997, something which would explode in the 2000s. The hard work continued to give me nice pay raises in the 5%-8% range every year but my annual salary never exceeded $80k.

But I attribute my growing wealth to a key lifestyle choice I had made when I was 20 years old. I knew at the time that I would be childfree, something which has greatly enabled me to run an annual surplus of revenues over expenses. I was then and still am single, so being married is not a requirement to being wealthy.

In the 2000s, the company ESOP exploded while my expenses remained low, enabling me to switch to working part-time for most of that decade. My only family inheritance was about $18k from my grandfather after he died. By 2008, my investments were worth nearly $1M.

I parlayed all of this into an early retirement in late 2008 at age 45, so I am now living nicely off my investments which have risen to $1.1M in just over the last 3 years. Not too shabby since a negative net worth in 1985.
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zaboomafoozarg
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by zaboomafoozarg »

Random Poster wrote:Sure, it is nice knowing that we have what we have, but then I look around and see everything that we don't have. No house, no kids, no property, no fancy sports cars, etc. Sometimes I want these things, but yet I can't help but realize that part of getting to where we are today is due to us not buying stuff....so what really makes me think that I'll be able to part with the money if and when we really need to?

So is the sacrifice worth it? I'll let you know when I actually get around to enjoying and using the money. Whenever that is....
^ Same here. You want to do things and go places, but realize what that costs, and this convinces you to just do without those things and save another hundred or thousand. Saving as much as possible gets in your system and it's hard to deviate. Sometimes it seems life would be more exciting without the lofty goals of financial freedom at 50-something.

I think it beats spending too much though :D
Last edited by zaboomafoozarg on Mon Mar 26, 2012 11:13 pm, edited 1 time in total.
jayars35
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by jayars35 »

I don't think anyone is truly self-made". Not everyone inherits money, but I think everyone that accumulates a high net worth had a helping had at some point along the way. Maybe help in getting or keeping a job, referrals for clients, customers that stuck around when going elsewhere might have been easier, a boss that gave you a chance to advance when he could have given it to someone else, a teacher that opened a door of opportunity for you when they could have opened it for someone else, etc. Whenever I think about where I am in life and how I would like to believe I did it all alone, I always remind myself that I had help along the way. My only inheritance was $50 from an aunt years ago, but at various times in my life, people extended a hand that helped me get where I am today.

I am a school teacher and business owner. I started my 401k with the state my first year teaching in 1988. I increased my contribution every year even if it was just a few dollars. I started a ROTH for my wife and one for me. My take home pay from teaching, which is still less than $45,000 a year gross, has actually gone down each year the last three years as our pay has been frozen, but the cost of our health insurance has gone up. I have still increased my 401k contributions each year by finding some way to cut my expenses elsewhere. I take my lunch to school each day, our newest vehicle is seven years old, I fix my cars myself, do my own carpentry, plumbing and electrical work and don't take expensive vacations.

Being a teacher, I don't have an expensive image to keep up. No need to join the country club, play golf, buy lots of suits or expensive shoes. Having a low status job allows me to live more cheaply than a lot of other people.

The business I own generates a good profit on paper, but most of that still goes back into paying off commercial property. Five years from now that will change and the profits will start to flow more into my pocket.

Does it bother me when I see people my age or younger that always seem to be driving new cars, taking expensive vacations and living high? Somewhat, but then I remind myself that those people may have a net worth of $100 or be up to their ears in debt. 17 years ago, my net worth was a few thousand dollars. It is now more than 150x what it was then, but not because I was smarter than anyone else or got a big inheritance. I did what a lot of others on this forum did. I did a few things right and avoided a few common financial mistakes people sometimes make.

Is like unfair? Sometimes it is. Will other people gets breaks you don't. Yes they will. The other people on this forum dealt with the same obstacles, but didn't let it stop them from reaching their goal. I began learning from many of these members years ago on another forum and realized that many were incredibly knowledgeable and helpful people. Listen to them and put in place a plan with the understanding that wealth is kind of like trees. It takes time for it to grow and you have to be patient but determined.

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MIGIHIDARI
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by MIGIHIDARI »

This post has generated a good amount of posts and lot of advice!
My wife and I came to USA with $6000 in our pockets and a kid in tow. I was 35 years old. Did not inherit anything. Worked all kinds of jobs. Now in our sixtees, I can't call us rich but, are comfortable financially. I still work and will continue as long as I feel like because, I like my job. Both of us feel we have lived a good life, did not hurt anyone along the way to achieve what we have.
To answer your question, Yes you can be wealthy by being self made and you don't have to do anything extraordinary to do so.
Just don't give up!
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FrugalInvestor
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by FrugalInvestor »

Yes, you can be self-made without being given any particular 'breaks' including money or an inside track to employment. What my parents did give me was a strong work ethic, an education in a excellent public school system, and the desire to go to college and make the most of myself. I'll always be grateful to them for the things they gave me as well as the things they didn't.

Edit: I don't think that I'm 'wealthy' but I am very comfortable in early retirement. In other words, I have enough.
Last edited by FrugalInvestor on Tue Mar 27, 2012 2:28 pm, edited 1 time in total.
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travellight
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by travellight »

I had a net worth of about 5K at age 28. I think I spent half my net worth on a 6 week trip around the world to reward myself for paying my dues. I am now doing quite well. Save but enjoy yourself along the way as well.
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Dave76
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by Dave76 »

travellight wrote: Save but enjoy yourself along the way as well.
I agree. Everything in moderation. We could save save save until we reach $1M or $2M or $3M; but by then, we may be too old and frail to enjoy it. You really can't enjoy your wealth when a nurse is shoving a pill into you and a bedpan under you.
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mlebuf
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by mlebuf »

MortgageOnBlack wrote:I'm 28 years old. Beginning to understand the In's and Out's of life a bit more. More importantly, I'm starting to realize how unfair life actually is. Everyone has different strengths and weaknesses: some people are stronger, taller, faster, better singers, more attractive etc... I also have noticed that some of peers have different advantages/strengths financially due to inheritance and coming from money etc... It's a little discouraging, but I guess there is nothing I can do about it but shift my fate as much as I can. At the present, I don't have any kids and I believe living my life correctly is by having my last check I write bounce* (figure of speech; I can't take money with me after all!). So, would anyone consider themselves to be self-made wealthy? I mean coming from no money at all to becoming quite wealthy? My parents and my family have always been broke and have always made poor decisions. I have made a promise to myself that I won't repeat those mistakes. With a net worth of only $45k, I find it discouraging at times to even try. Can anyone vouch that all this sacrifice through saving is worth it? It's tough. I'm single, only 1 income, and it feels nearly impossible to see a million dollars at my current pace. :greedy
Hi MortgageOnBlack:

A net worth of $45K at age 28 is nothing to sneeze at. That's over $45K more than I was worth when I was your age. At age 28 I was one year out of grad school, had completed my first year as a assistant professor and owed more in student loans than I had in the bank. To throw in the towel at age 28 is selling yourself very, very short. Speaking as a 70 year-old who didn't inherit a dime, you have a boatload of time to prepare, work, save and invest your way to financial independence....and time is your most valuable resource.

Some questions to ask yourself:
1. What have you done through education or work experience to increase your earning potential? Do you have a degree or degrees in a marketable skill? Have you acquired any unique skills that might enable you to start your own business? Statistically, wealth favors the well educated and the self-employed. Wealth flows to those who build a skill set that people are willing to pay for. If you haven't already done so, get busy building and adding to that skill set.

2. Are you saving a nice part of every paycheck with an ultimate goal of being financially independent? I know that life after 50 seems light years away, but it will be here before you know it. All financially independent people have just one thing in common: they live below their level of income and income and invest the difference.

3. Do you realize that you, far more than anyone else, will determine your economic future? You can't control the economy but you can control your economy. Focus on what you can control and ignore the rest. Those who throw up their hands and blame the president, the politicians, the economy, Wall St. etc. are simply choosing to be poor. It's always easier to blame others because if it's somebody else's fault, then we don't have to change, get off our tails and go to work.

I happen to believe that life is indeed unfair. It deals all of us a different hand of cards. The key to becoming successful isn't the hand of cards we are dealt, but how we play the hand. Last month a former student and I spent several days together when he was here for a business conference. His parents divorced when he was 3 years of age and his mother lived on welfare. He told of nights as a child when dinner consisted of crackers and mayonnaise. He went to work at age 12 and always worked throughout high school and college. After college he got a job selling insurance for a large company and eventually started his own independent agency. Today he is 65 and worth many millions of dollars.

I'm no prophet but I will make this prediction with great certainty: Right now there are of millions of 28 year-olds with a net worth of $45K or less. Among those millions are some who will be very wealthy in 20 years. I hope that one of them is you. Good luck.
Last edited by mlebuf on Tue Mar 27, 2012 12:59 am, edited 1 time in total.
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ilmartello
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by ilmartello »

It's hard to define wealthy. I think people focusing on 1 million dollars is interesting by the time you hit retirement age is not really what the poster at the opening had in mind....

That being said, it's definitely correct that there are a lot of people who basically inherited enough money to the point they could do nothing for their rest of their life and live large.

There's also a lot more people who definitely got tied to lucrative jobs because of the influence of their parent's and others in their parent's peer network.


For extreme examples see #4-9 on the Forbes list of American billionaires.

4 Christy Walton $23.4 billion Wal-Mart, inherited
5 Charles Koch $21.5 billion Koch Industries, inherited
6 David Koch $21.5 billion Koch Industries, inherited
7 Jim Walton $20.1 billion Wal-Mart, inherited
8 Alice Walton $20 billion Wal-Mart, inherited
9 S. Robson Walton $19.7 billion Wal-Mart, inherited

---
Notice the right column.

http://www.forbes.com/forbes-400/

And if you really want to get pissed off, all those people probably all pay less in taxes than you (as a percent of their income). They all pay around 15 percent or less in income taxes.
To a certain extent, the system is rigged, but there's not much you can do about it.
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FrugalInvestor
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by FrugalInvestor »

mlebuf wrote:Focus on what you can control and ignore the rest.
Excellent advice!
Have a plan, stay the course and simplify. Then ignore the noise!
Diogenes
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by Diogenes »

[off-topic comments removed by admin alex]

In my view, if you have enough to do what you want, when you want, you are rich enough.

It is interesting that I might be considered 'rich' because I have no bills, and an investment account in the low seven figures, which I do not rely upon for my living expenses. Having started from less than zero when I started college, I can assure you it is possible.

Positive attitude, hard work, don't blame others for having more than you, don't expect anyone to hand something to you. Save the max in tax sheltered vehicles, live below your means and still enjoy life. Oh, and don't sit in front of the TV wondering why you can't get ahead. Read this board instead. You can do it yourself!

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JeffX
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by JeffX »

This board has some of the smartest and wealthy people on here, most self-made, by saving, time, and investing over low cost index funds.

I also started out poor in life. My parents had a family of 5 and we live in a mobile home and I never want to go back (no offense to mobile homers). I think this is what will give you motivation to succeed. You mentioned your family has been poor and you want to change and this is what will make you succeed (With hard work of course:)
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NightOwl
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by NightOwl »

First and foremost: $45k net worth at 28 is impressive in my book. Count me among those who were massively negative (student loans AND cc debt) at that point in my life.

Next, please don't demonize inheritance in general -- many of us here want to leave money to our loved ones -- and definitely not without considering life insurance. I had two close college friends whose fathers died unexpectedly. Both of my friends received lots of insurance money, and both of them would have given every dime of it back in a hot second to get their fathers back. There's nothing wrong with inheriting money.

Count me as one who believes that there's no such thing as "self-made," but that doesn't mean that there's anything wrong with having help.

NightOwl
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by The Wizard »

VictoriaF wrote:
The Wizard wrote:Once you get to ten times your present income saved in your investment portfolio, you're doing OK, especially if you're somewhat frugal and managing your money properly, i.e. living off a modest portion of your income.
Is the present income only employment income or also investment income? If the latter, the desired investment portfolio may never be attained, because frequently the investments gain more than 10%, and the size of the portfolio "falls" below ten times income.

Victoria
It's just one of those simplistic rules of thumb that is indexed both to inflation and approximately, to your lifestyle.
It's most meaningful to people who pull down a salary, but don't have a pension in their future, just social security.

You could adapt this to be X times your annual expenses rather than your "salary", but then X equals 20 to 25 which is approaching the 4% Safe Withdrawal Ratio...
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by bungalow10 »

We aren't wealthy by any means, but DH and I are 33 and have a net worth between 400-500k, plus we both have jobs with vested pensions. We have not received any inheritance or windfall. I had student loan debt when I graduated. DH never went to college and works a blue collar job. I got an MBA paid by my employer. We have two kids and bought not one but two properties during the housing bubble - but we cleaned up the mess and learned from our mistakes (hopefully).

We never will be wealthy, but I think we can look forward to putting our kids through college and having a nice retirement (not to mention we are pretty comfortable now). The key is living below your means and being deliberate in your money management.

Making a conscious decision to be happy with less is also a big help. My kids bring me more joy than anything else in the world, I would live in a shack if it meant my family was intact, healthy, and happy.

eta: My grandfather died a millionaire in the 1970s (quite wealthy for the time). He had an 8th grade education and came from literally nothing. His kids (my mom being one) inherited the remains of the estate a couple years ago, after my grandma lived off it for three decades - it was still well over a million dollars. It was split many ways, and I'm sure I'll never see any of it (which is fine). Point being - my grandfather was self-made from nothing, and my grandma was able to not only keep the estate but grow it while not working (and she only had a sixth grade education).
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by reggiesimpson »

The vast majority of wealthy people got that way by earning it themselves (not inheriting it). It starts with a burning desire to become wealthy and then doing something about it. Action steps if you will. If you do not become wealthy then its not what you really wanted so just accept that and move on.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by travellight »

mlebuf,

+1!!!!! and bravo. That is one of the wisest, most generous, and well written posts I have read here or anywhere.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by jbdiver »

I worked for a number of start up companies early in my career and watched as these companies crashed and burned. I figured I could do better, so at the age of 28 I started a tech company. I had zero assets at the time except for a head on my shoulders. I sold the business nine years later to a large public company. Some people have told me that I'm lucky. While I admit that luck plays a role in the growth of almost any business, you mainly make your own luck. What do I mean? You make your own luck by putting yourself in a position to get lucky. You start by picking the right career -- preferably in a growth industry. You work in a growth region. You surround yourself with successful people. And finally (here's the big one) you embrace risk.

Most people don't embrace risk and therefore don't generate significant wealth. Most people are unwilling to make big changes in their career due to fear of failure or family obligations. I've encountered dozens of people during my career that whine about their life situation, but then do nothing to improve it.
eaglesfan
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by eaglesfan »

I agree with most everyone above, stay positive!!

To give another example, I am only 27, and I have a net worth right now of -$38,185. Last year around this time it was -$150,000, even more 3 years ago. My parents live paycheck to paycheck, and haven't given me a dime since I was 17. I expect to inherit nothing, but hope to have 2 million in retirement assets by age 50 if I keep up this pace. A good job helps, as does a wife who works, but as long as you live below your means you can amass a comfortable retirement. But as others have said, don't forget to have a little fun along the way. For me, that means a couple trips a year to a tropical resort.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by Barefootgirl »

I'll add my voice to the chorus of echoes:

Wealth is a relative concept. You already have more at your age than most do or did at the time. Pick up a copy of The Millionaire Next Door.

Ok, that said, you are already very wise. You are wise because you are considering the issues early, when they matter the most. I am a couple decades ahead of you and my entire life has been enriched by following the motto of - if you want to know about the road ahead, ask those on the way back.

I am living proof that it can be done, even while working against incredible odds. I have beat all the odds and continue to do so.

Let me throw another book suggestion at you: "Your Money or Your Life" by Dominguez and Robin...many people are under the impression we only have two choices - hedonism or deprivation. There is nothing farther from the truth. The truth lies in priorities and only you know what where your true contentment lies. Consider that statement over and again.

Other random thoughts - marriage? not sure that it will guarantee financial success, it's a crapshoot. My marriage ended five years ago (I married someone whose career success triggered obsessive spending)....half of my assets (substantial) left with the marriage. In five years, I am nearly back to where I was when the marriage ended....and given the economy over the five years, you can bet little of it was due to luck. It was more of engaging the same behaviors that have aided me over the long haul - looking for ways to maximize income, while minimizing spending - all while still having a good time.

Career? I have a professional career, but am planning for the day when I will be my own boss. Consider your interests and your personality type in this decision.

Life is precious. Feel free to ask any specific questions weedhopper : )

Barefootedgirl on a sunny day
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by sscritic »

jbdiver wrote:I worked for a number of start up companies early in my career and watched as these companies crashed and burned. I figured I could do better, so at the age of 28 I started a tech company. I had zero assets at the time except for a head on my shoulders. I sold the business nine years later to a large public company. Some people have told me that I'm lucky. While I admit that luck plays a role in the growth of almost any business, you mainly make your own luck. What do I mean? You make your own luck by putting yourself in a position to get lucky. You start by picking the right career -- preferably in a growth industry. You work in a growth region. You surround yourself with successful people. And finally (here's the big one) you embrace risk.

Most people don't embrace risk and therefore don't generate significant wealth. Most people are unwilling to make big changes in their career due to fear of failure or family obligations. I've encountered dozens of people during my career that whine about their life situation, but then do nothing to improve it.
Ah, risk. I don't like it. I didn't want it. I took a stable government job with a pension. Does that mean I couldn't save and be well off (I won't use the term wealthy)? Not at all.

However, I do agree that taking a risk with yourself is not the same as taking a risk in the stock market by buying individual penny stocks (or buying lottery tickets). Note that even if you
[put] yourself in a position to get lucky. [pick] the right career -- preferably in a growth industry. work in a growth region. [and] surround yourself with successful people.
you could still lose everything.

I knew that I couldn't handle that psychologically, so I went with living below my means and making steady progress toward greater wealth with what would be considered around here as conservative investments (50-50; it's what suited me), even as a young person. The OP has to make his own life in a way that makes sense to him. Living below your means works for both the risk taker and the risk averse.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by DVMResident »

I'm 29 and, while not rich or have a high salary, have a good amount of net wealth for my age/salary.

I did have some of it handed to me: my folks and grandma paid for my school. My father is a lawyer and did very well, but also worked a lot (~70 hours/week...not an exaggeration). He had 4 children and put them all through school with the help of my grandma. My mom worked full time and raised us (never made much). We really only spent large amounts of money on eduction. My dad drove the same car from 1988-2005 and 2005-current. We had the same TV my parents got a wedding gift in 1982 until it broke in 2007. They live in the same house in a neighborhood where my folks had higher income then almost everyone else (though we didn't talk about it).

I'd say I'm not "self-made" in the since I was given a chance to start adulthood debt free, was shown how to work hard, the importance of education/career, and how to set financial goals. All 4 of the children (now adults) are pretty good with money and I expect to free of severe money stress for their lives (and the other kids will be in a place to help if something goes wrong).

I'm not counting on inheritance, but I'd say the education and life lessons make me not "self-made."
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by 3CT_Paddler »

market timer wrote:It is stressful if you don't know what you want from life. No amount of money will give your life meaning.
+1. I think that cuts to the quick.

Blind pursuit of money seems a hollow victory.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by ilmartello »

reggiesimpson wrote:The vast majority of wealthy people got that way by earning it themselves (not inheriting it). It starts with a burning desire to become wealthy and then doing something about it. Action steps if you will. If you do not become wealthy then its not what you really wanted so just accept that and move on.
I'll just be a contrarian, and say, source?

I see a lot of people on the list of billionaires who inherited their money.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by Alex Frakt »

ilmartello wrote:
reggiesimpson wrote:The vast majority of wealthy people got that way by earning it themselves (not inheriting it). It starts with a burning desire to become wealthy and then doing something about it. Action steps if you will. If you do not become wealthy then its not what you really wanted so just accept that and move on.
I'll just be a contrarian, and say, source?

I see a lot of people on the list of billionaires who inherited their money.
It depends on what number you use to define "wealthy". At a million, it's mostly earned. Somewhere above $10 million it's mostly inherited. Google "intergenerational wealth transfer" and you'll see just how much money this is (and how much the "wealth management industry" and, to a lesser extent, the philanthropic community wants to make sure they get a cut). Also note that the word inheritance means more than just cash handed down to your offspring at death, it includes all the social, educational and employment opportunities which the parents can provide throughout their lives. It's OT here, but if you are really interested in this, the key search phrase is "social mobility." Here's a link to the wikipedia entry on social mobility in the United States.

Note that none of this detracts from the point that has been mentioned over and over again. You simply don't need a huge salary to live a comfortable life and have a comfortable retirement. What you do need is steady work, steady savings, a reasonable definition of comfortable, time, and a little luck to avoid things like major health issues.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by RadAudit »

MortgageOnBlack wrote:So, would anyone consider themselves to be self-made wealthy? I mean coming from no money at all to becoming quite wealthy? I'm single, only 1 income, and it feels nearly impossible to see a million dollars at my current pace.
OK, you can be a millionaire. No problem.

Wealthy? Different question. I just read that in 1963, $1 million was pretty good. An equivalent amount of money in 2010 was $7 million +. Don't know where the goal posts will be in another 40 years.

However, you can become quite comfortable starting from where you are.

Best of luck.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by 3CT_Paddler »

Alex Frakt wrote: It's OT here, but if you are really interested in this, the key search phrase is "social mobility." Here's a link to the wikipedia entry on social mobility in the United States.
Social mobility is sometimes used as a kind of code word for income redistribution. Its a false measure, because the real issue is equality of opportunity vs equalizing outcomes.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by VictoriaF »

3CT_Paddler wrote:
Alex Frakt wrote: It's OT here, but if you are really interested in this, the key search phrase is "social mobility." Here's a link to the wikipedia entry on social mobility in the United States.
Social mobility is sometimes used as a kind of code word for income redistribution.
Income redistribution is a code word, too.
3CT_Paddler wrote:Its a false measure, because the real issue is equality of opportunity vs equalizing outcomes.
What is false and what is real depends on one's politics, a topic that does not belong here.

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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by 3CT_Paddler »

VictoriaF wrote:
3CT_Paddler wrote:
Alex Frakt wrote: It's OT here, but if you are really interested in this, the key search phrase is "social mobility." Here's a link to the wikipedia entry on social mobility in the United States.
Social mobility is sometimes used as a kind of code word for income redistribution.
Income redistribution is a code word, too.
3CT_Paddler wrote:Its a false measure, because the real issue is equality of opportunity vs equalizing outcomes.
What is false and what is real depends on one's politics, a topic that does not belong here.

Victoria
I agree the topic doesn't belong on here...
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by fareastwarriors »

I'm not wealthy but I will be "self-made" eventually. My parents are immigrants with no retirement savings or much of any savings. So I will hope to do well enough to take care of them and myself (+ future family). One day/one step at a time, I will get "there."
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by chaz »

DVMResident wrote:I'm 29 and, while not rich or have a high salary, have a good amount of net wealth for my age/salary.

I did have some of it handed to me: my folks and grandma paid for my school. My father is a lawyer and did very well, but also worked a lot (~70 hours/week...not an exaggeration). He had 4 children and put them all through school with the help of my grandma. My mom worked full time and raised us (never made much). We really only spent large amounts of money on eduction. My dad drove the same car from 1988-2005 and 2005-current. We had the same TV my parents got a wedding gift in 1982 until it broke in 2007. They live in the same house in a neighborhood where my folks had higher income then almost everyone else (though we didn't talk about it).

I'd say I'm not "self-made" in the since I was given a chance to start adulthood debt free, was shown how to work hard, the importance of education/career, and how to set financial goals. All 4 of the children (now adults) are pretty good with money and I expect to free of severe money stress for their lives (and the other kids will be in a place to help if something goes wrong).

I'm not counting on inheritance, but I'd say the education and life lessons make me not "self-made."
My situation was similar.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by livelife »

ilmartello wrote: And if you really want to get pissed off, all those people probably all pay less in taxes than you (as a percent of their income). They all pay around 15 percent or less in income taxes.
To a certain extent, the system is rigged, but there's not much you can do about it.
IMO, your comments are political in nature and have no place in this discussion. I also advise you to relax about inequities and focus on finding joy in your life. Nothing is to be gained by your attitude.
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Post by Marmot »

Same as everyone else, at 31 we had a pretty impressive negative net worth :D 23 years later we are easily north of 2m. No inheritience, some bad calls. We did make a choice to max out tax deferred accounts at 32 (that is easily over the 1m mark now). I don't even think we had much networth in our 40's. I will say that the freedom you have by having no debt and decent savings is pretty powerful. It can be done, it takes money to make money. A 5% return on 1m is 50K, it adds up quick. I would say live your life and don't be too much of a tightwad.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by SpecialK22 »

Above all don't get discouraged. When in the early stages of saving it is more difficult to see the power of compounding. Let me get this straight, I put $100 away in a savings account at .8% and a year later I'll have $100.80? Saving is super awesome guys! I think this is what fells many people; it's hard to get the momentum going because it's hard to see your money working early on. Keep saving and it will grow over time. Remember this: It's not so much where you are at in life but where you are heading. Any positive net worth in your 20s is a good thing.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by sunspotzsz »

Life is deeply unfair and we just need to get used to it.

While many complain about money, I have work so hard to just stay in this country. I came to US 7 years ago for graduate school. I got degree in engineering, work very hard on the job, pay a lot taxes. But I still don't see any hopes of even getting green card since the immigration system designed to encourage frauds and punish honesty. Every time I think about it, it makes so mad and sad...
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by travellight »

I have to wonder how many of the posters who also had very little at age 28 and are now millionaires had significant education/training and special skills. I would be interested to know if there are any skilled laborers who have a high school degree with zero net worth at age 28 who are millionaires by 50. My impression is that many posters here were paying their dues in education and were poised at age 28 to 30s to really start reaping the rewards.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by moneywise3 »

$45k net worth at 28 does not say anything one way or the other. You are just starting out. A doctor can have 0 or -ve net worth at 28. Or a engineer/finance guy could have quarter million networth at 28 (considering he makes $80k annually for 6 years out of college). Give us more info about your career and maybe family situation.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by VictoriaF »

SpecialK22 wrote:When in the early stages of saving it is more difficult to see the power of compounding.
This is an excellent point. In the beginning, compounding is a minor factor in comparison to the employment income and savings. Then, after some years, one notices that his salary is relatively small in comparison to the annual portfolio growth. The greater the savings are the sooner this realization comes.

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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by fareastwarriors »

VictoriaF wrote:
SpecialK22 wrote:When in the early stages of saving it is more difficult to see the power of compounding.
This is an excellent point. In the beginning, compounding is a minor factor in comparison to the employment income and savings. Then, after some years, one notices that his salary is relatively small in comparison to the annual portfolio growth. The greater the savings are the sooner this realization comes.

Victoria

Yup, I agree. I'm trying to get there. Cheers!
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by reggiesimpson »

ilmartello wrote:
reggiesimpson wrote:The vast majority of wealthy people got that way by earning it themselves (not inheriting it). It starts with a burning desire to become wealthy and then doing something about it. Action steps if you will. If you do not become wealthy then its not what you really wanted so just accept that and move on.
I'll just be a contrarian, and say, source?

I see a lot of people on the list of billionaires who inherited their money.
I believe its about 80% earned it and about 20% inherited it. I would say its much easier to earn millions than earn billions therefore more billionaires inherited it while many more earned millions. I dont remember the exact source as i heard this a few times from various sources over the years but i think The Millionaire Next Door may help clarify it (not one of my "references" however).
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by wshang »

Life is unfair. Honestly, I have no idea if those posting from the US or Europe on this forum appreciate what this means for those living elsewhere. In countries where a phone call is a luxury, how "unfair" is life? We live in an incredible time historically and a place in the world where opportunity abounds.

I can't remember the exact details, but this is not too far off base: Ray Kroc of McDonalds fame, was over 50 years old when he franchised McDonalds. In the decade before that, "Between the end of the war and the early 1950s he tried his hand at a number of trades including paper cup salesman, pianist, jazz musician, band member and radio DJ at Oak Park radio station WGES." http://en.wikipedia.org/wiki/Ray_Kroc He was so hard up sometime after the purchase, he offered 50% of McDonald's ownership for $50k or $100k (I can't remember exactly, but no one took him up).

James Penney in his teens, began working as a salesman in a store. The owners, impressed by his work ethos, offered him one-third partnership in a new store he would open. Mr. Penney opened his first store in Kemmerer, Wyoming, before going on to found J.C. Penney. Sam Walton it is said was taught by Mr. Penney how to frugally wrap packages.

There is the anecdote of when the founders of Apple first moved, they offered Apple stock in lieu of payment to the movers. The movers, it is said, took the safer cash instead.

Envy is such a destructive and useless emotion.
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by SpecialK22 »

reggiesimpson wrote: I would say its much easier to earn millions than earn billions
I never would've guessed making millions would be easier than making billions. :wink: Sorry, I couldn't resist :sharebeer
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Re: Anyone wealthy by being "self-made"? (No Inheritence, et

Post by Mel Lindauer »

This thread has run its course and there are too many OT posts and comments on this thread to edit, so I'm locking it.
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