Time to reach 1M and 2M milestones

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sanfran2015
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Time to reach 1M and 2M milestones

Post by sanfran2015 » Sun May 17, 2015 5:25 pm

Hi all,
For those folks who are in the two comma club, I am wondering if you could chime in with how long it took you to reach 1M and 2M milestones.
They say the first $1M is the hardest. Is that really true? If so, time to go from $1M to $2M should be much shorter than time to get to $1M.

Has there been a poll done on this kind of question?

Thanks.

livesoft
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Re: Time to reach 1M and 2M milestones

Post by livesoft » Sun May 17, 2015 5:34 pm

To go from $0 to $1M, one needs an infinite gain.
To go from $100K to $1M, one one needs a 9X gain.
To go from $1M to $2M, one needs a 1X gain.
To go from $2M to $3M, one needs a 0.5X gain.
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bcjb
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Re: Time to reach 1M and 2M milestones

Post by bcjb » Sun May 17, 2015 5:39 pm

You could check for yourself with one of the available compound interest calculators, e.g.:
http://www.investor.gov/tools/calculato ... calculator

FinanceGeek
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Re: Time to reach 1M and 2M milestones

Post by FinanceGeek » Sun May 17, 2015 5:56 pm

livesoft wrote:To go from $0 to $1M, one needs an infinite gain.
To go from $100K to $1M, one one needs a 9X gain.
To go from $1M to $2M, one needs a 1X gain.
To go from $2M to $3M, one needs a 0.5X gain.
In reality, once people hit a certain level of wealth they don't compound at the same rates they have in the past. Often, its due to choice and revised AA - a popular saying on this forum is "once you've won, stop playing the game!".

livesoft
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Re: Time to reach 1M and 2M milestones

Post by livesoft » Sun May 17, 2015 7:27 pm

FinanceGeek wrote:In reality, once people hit a certain level of wealth they don't compound at the same rates they have in the past.
I have to write that my experience shows the portfolio did not slow down. One reason is that one cannot really contribute a significant new fraction to the portfolio when it is large. The gains are mostly just internal from investment returns and not from new contributions.
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HalfMillionaire
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Re: Time to reach 1M and 2M milestones

Post by HalfMillionaire » Sun May 17, 2015 7:37 pm

My point of view is that the hard part is done once you have reached a point where portfolio growth typically outpaces your contributions. That's why I consider 500K to be the most significant milestone.

randomguy
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Re: Time to reach 1M and 2M milestones

Post by randomguy » Sun May 17, 2015 8:01 pm

FinanceGeek wrote:
livesoft wrote:To go from $0 to $1M, one needs an infinite gain.
To go from $100K to $1M, one one needs a 9X gain.
To go from $1M to $2M, one needs a 1X gain.
To go from $2M to $3M, one needs a 0.5X gain.
In reality, once people hit a certain level of wealth they don't compound at the same rates they have in the past. Often, its due to choice and revised AA - a popular saying on this forum is "once you've won, stop playing the game!".
Contributions also cease to matter. Save 10k/yr and you can get to 100k in 10 years. On the other hand trying to save 1 million dollars at 10k/yr is pretty much impossible.

As far as how long it takes, it is pretty much all market timing once your contribution is small relative to portfolio size (i.e. someone saving 20k with a 1 million dollar portfolio). The guy in 1995 with a 80/20 portfolio would have double his money in 3 years. The 2000 guy would have taken 14 years.

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David Jay
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Re: Time to reach 1M and 2M milestones

Post by David Jay » Sun May 17, 2015 8:19 pm

With a 70/30 or 60/40 portfolio, long term growth should be about 7-8%. So using 7.5%, it should take less than 10 years without any contributions (again, this is the average!).

It took me almost that long to get from zero to 50,000
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talltodd
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Re: Time to reach 1M and 2M milestones

Post by talltodd » Sun May 17, 2015 8:34 pm

Took me ten years to get from 0 to 1M. Your mileage may vary.

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Re: Time to reach 1M and 2M milestones

Post by Lafder » Sun May 17, 2015 8:45 pm

More than 20 years from first investments to 1 million in investments, not including home equity. The first 4 years I was in school.

Hopefully the 2nd million won't take as long :)

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House Blend
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Re: Time to reach 1M and 2M milestones

Post by House Blend » Sun May 17, 2015 9:49 pm

livesoft wrote:
FinanceGeek wrote:In reality, once people hit a certain level of wealth they don't compound at the same rates they have in the past.
I have to write that my experience shows the portfolio did not slow down.
Umm, no.

Your first year of investing had infinite portfolio growth. I don't think you had anything near that last year.

Sure, if you add 0.25% in new contributions in a year, the effect on growth is slight, but FinanceGeek is talking about an effect you would see as your contributions drop from 50% to 25% to 10% to 5% of the total portfolio. Not 0.25% to 0.23%.

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Re: Time to reach 1M and 2M milestones

Post by HalfMillionaire » Sun May 17, 2015 10:05 pm

I made the following excel table when I was trying to figure how much I need to save to hit two commas in ten years. Save 70K per year, have 8% growth each year and by the end of year 10 you have made past the 1M milestone. Keep it up for only 6 more years and you get to 2M. Next million takes only 3 years!

Code: Select all

Year	Starting Balance	Contribution	Growth	Ending Balance
1	 -  					70,000 	 2,800 	 72,800 
2	 72,800 	 			70,000 	 8,624 	 151,424 
3	 151,424 	 			70,000 	 14,914 	 236,338 
4	 236,338 	 			70,000 	 21,707 	 328,045 
5	 328,045 	 			70,000 	 29,044 	 427,089 
6	 427,089 	 			70,000 	 36,967 	 534,056 
7	 534,056 	 			70,000 	 45,524 	 649,580 
8	 649,580 	 			70,000 	 54,766 	 774,346 
9	 774,346 	 			70,000 	 64,748 	 909,094 
10	 909,094 	 			70,000 	 75,528 	 1,054,622 
11	 1,054,622 	 		70,000 	 87,170 	 1,211,791 
12	 1,211,791 	 		70,000 	 99,743 	 1,381,535 
13	 1,381,535 	 		70,000 	 113,323 	 1,564,858 
14	 1,564,858 	 		70,000 	 127,989 	 1,762,846 
15	 1,762,846 	 		70,000 	 143,828 	 1,976,674 
16	 1,976,674 	 		70,000 	 160,934 	 2,207,608 
17	 2,207,608 	 		70,000 	 179,409 	 2,457,016 
18	 2,457,016 	 		70,000 	 199,361 	 2,726,378 
19	 2,726,378 	 		70,000 	 220,910 	 3,017,288 
20	 3,017,288 	 		70,000 	 244,183 	 3,331,471 

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market timer
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Re: Time to reach 1M and 2M milestones

Post by market timer » Sun May 17, 2015 10:30 pm

Getting to the first million means you can live on your own terms, you are not tethered to a job. With a 4% withdrawal rate, you should be able to support a reasonable middle class life on $40K/year (maybe not in SF/NYC, but true in most of the world). Beyond that point, there are diminishing returns to saving. You can focus your efforts on other pursuits.

I felt a strong drive to reach the first million, and made great sacrifices to do so. I have much less interest in obtaining the second million, which I expect will come in due time without much effort. I wouldn't want to emulate the janitor who squirreled away an eight- or nine-figure portfolio to donate to a university. Money is a means, not an end. After reaching the first million in our mid-30s, letting compounding do its trick should leave us with plenty in old age. Anything we earn from our labor beyond this point, I'm comfortable spending to make life more enjoyable and to invest in our child. Therefore, in our case, the second million might actually take longer.

sanfran2015
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Re: Time to reach 1M and 2M milestones

Post by sanfran2015 » Sun May 17, 2015 10:58 pm

HalfMillionaire wrote:I made the following excel table when I was trying to figure how much I need to save to hit two commas in ten years. Save 70K per year, have 8% growth each year and by the end of year 10 you have made past the 1M milestone. Keep it up for only 6 more years and you get to 2M. Next million takes only 3 years!

Code: Select all

Year	Starting Balance	Contribution	Growth	Ending Balance
1	 -  					70,000 	 2,800 	 72,800 
2	 72,800 	 			70,000 	 8,624 	 151,424 
3	 151,424 	 			70,000 	 14,914 	 236,338 
4	 236,338 	 			70,000 	 21,707 	 328,045 
5	 328,045 	 			70,000 	 29,044 	 427,089 
6	 427,089 	 			70,000 	 36,967 	 534,056 
7	 534,056 	 			70,000 	 45,524 	 649,580 
8	 649,580 	 			70,000 	 54,766 	 774,346 
9	 774,346 	 			70,000 	 64,748 	 909,094 
10	 909,094 	 			70,000 	 75,528 	 1,054,622 
11	 1,054,622 	 		70,000 	 87,170 	 1,211,791 
12	 1,211,791 	 		70,000 	 99,743 	 1,381,535 
13	 1,381,535 	 		70,000 	 113,323 	 1,564,858 
14	 1,564,858 	 		70,000 	 127,989 	 1,762,846 
15	 1,762,846 	 		70,000 	 143,828 	 1,976,674 
16	 1,976,674 	 		70,000 	 160,934 	 2,207,608 
17	 2,207,608 	 		70,000 	 179,409 	 2,457,016 
18	 2,457,016 	 		70,000 	 199,361 	 2,726,378 
19	 2,726,378 	 		70,000 	 220,910 	 3,017,288 
20	 3,017,288 	 		70,000 	 244,183 	 3,331,471 
This is a nice spreadsheet. The only variable of course is market return where you assume 8%. But in reality, this is a huge luck/timing issue, i.e. investing during 90s boom or 2008 crash. So how would this change if you were to assume say 5% growth?

sanfran2015
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Re: Time to reach 1M and 2M milestones

Post by sanfran2015 » Sun May 17, 2015 11:03 pm

livesoft wrote:
FinanceGeek wrote:In reality, once people hit a certain level of wealth they don't compound at the same rates they have in the past.
I have to write that my experience shows the portfolio did not slow down. One reason is that one cannot really contribute a significant new fraction to the portfolio when it is large. The gains are mostly just internal from investment returns and not from new contributions.
Assuming a $1M portfolio with 60/40 AA
(1) Annual interest+dividend of 2% --> 20k
(2) Annual growth of stock portion of 5% (of 600k) --> 30k
(3) Total returns -->50k

So if your additional annual contributions has to be >>50k to be a meaningful contribution of your growth. Is this valid?

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kwan2
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Re: Time to reach 1M and 2M milestones

Post by kwan2 » Sun May 17, 2015 11:07 pm

if your young, you may not realized it, but older folks pass away, and if you have a rich uncle, it might happen faster, than you ever imagined.....
“The history of Paris teaches us that beauty is a by-product of danger, that liberty is at best a consequence of neglect, that wisdom is entwined with decay."

Emilyjane
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Re: Time to reach 1M and 2M milestones

Post by Emilyjane » Sun May 17, 2015 11:26 pm

Getting to $1 million in investments took 27 years, reached that in 2008. Of course, didn't stay there long, went to $700,000. I kept maxing 403b contributions to target fund, even though I'd never heard of Mr. Bogle,and now up to $1.6 million. Not sure if I will make $2 million, might retire. :D
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wjo
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Re: Time to reach 1M and 2M milestones

Post by wjo » Mon May 18, 2015 12:06 am

sanfran2015 wrote:
livesoft wrote:
FinanceGeek wrote:In reality, once people hit a certain level of wealth they don't compound at the same rates they have in the past.
I have to write that my experience shows the portfolio did not slow down. One reason is that one cannot really contribute a significant new fraction to the portfolio when it is large. The gains are mostly just internal from investment returns and not from new contributions.
Assuming a $1M portfolio with 60/40 AA
(1) Annual interest+dividend of 2% --> 20k
(2) Annual growth of stock portion of 5% (of 600k) --> 30k
(3) Total returns -->50k

So if your additional annual contributions has to be >>50k to be a meaningful contribution of your growth. Is this valid?
No, you certainly don't need >>$50k for additional contributions to be a meaningful contribution to growth of your corpus. In this example, just contributing $50k/yr (not >>$50k) means your contributions equals your growth - so still significant.

If instead, say, you contributed $25k/year, in 10 years that would be $250k in contributions plus whatever growth on those contributions. That would be 1/4 of the $1 million at the start of the period, so not insignificant.

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wjo
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Re: Time to reach 1M and 2M milestones

Post by wjo » Mon May 18, 2015 12:32 am

market timer wrote:Getting to the first million means you can live on your own terms, you are not tethered to a job. With a 4% withdrawal rate, you should be able to support a reasonable middle class life on $40K/year (maybe not in SF/NYC, but true in most of the world). Beyond that point, there are diminishing returns to saving. You can focus your efforts on other pursuits.

I felt a strong drive to reach the first million, and made great sacrifices to do so. I have much less interest in obtaining the second million, which I expect will come in due time without much effort. I wouldn't want to emulate the janitor who squirreled away an eight- or nine-figure portfolio to donate to a university. Money is a means, not an end. After reaching the first million in our mid-30s, letting compounding do its trick should leave us with plenty in old age. Anything we earn from our labor beyond this point, I'm comfortable spending to make life more enjoyable and to invest in our child. Therefore, in our case, the second million might actually take longer.
Abstracting the specifics of your situation, once you have reached a certain milestone with respect to savings goals, it is appropriate to reconsider the balance of savings versus spending. That said, unless you are completely done saving (don't need any future growth and could retire today), I don't think it is wise to essentially stop saving - there are too many uncertainties in the world. Similarly, if you get used to living off your total income, you will be used to living at a higher level of spending so will need more money for satisfaction in retirement, etc. I think the best analogy is that you can slow down by pulling back on the accelerator, but don't hit the brakes.

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Re: Time to reach 1M and 2M milestones

Post by empb » Mon May 18, 2015 5:00 am

market timer wrote:Getting to the first million means you can live on your own terms, you are not tethered to a job. With a 4% withdrawal rate, you should be able to support a reasonable middle class life on $40K/year (maybe not in SF/NYC, but true in most of the world). Beyond that point, there are diminishing returns to saving. You can focus your efforts on other pursuits.

I felt a strong drive to reach the first million, and made great sacrifices to do so. I have much less interest in obtaining the second million, which I expect will come in due time without much effort. I wouldn't want to emulate the janitor who squirreled away an eight- or nine-figure portfolio to donate to a university. Money is a means, not an end. After reaching the first million in our mid-30s, letting compounding do its trick should leave us with plenty in old age. Anything we earn from our labor beyond this point, I'm comfortable spending to make life more enjoyable and to invest in our child. Therefore, in our case, the second million might actually take longer.
The older I get, the more I come around to this way of thinking. However, I think I'd be crippled with anxiety using a 4% withdrawal rate starting at, say, 37. The possibility of working part-time not withstanding. Have you actually done this? Or are you still working?

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Re: Time to reach 1M and 2M milestones

Post by SJCX » Mon May 18, 2015 5:27 am

randomguy wrote:
FinanceGeek wrote:
livesoft wrote:
Contributions also cease to matter.
I'm 44 and when I calculate my estimate with catch up contributions and without the end result is very close to the same. The vast majority of the growth comes from the mid 6 figures I already have in my TSP account.

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Re: Time to reach 1M and 2M milestones

Post by meowcat » Mon May 18, 2015 6:00 am

randomguy wrote: Contributions also cease to matter. Save 10k/yr and you can get to 100k in 10 years. On the other hand trying to save 1 million dollars at 10k/yr is pretty much impossible.
Hardly. If you've got time on your side, say, an entire investing career of 40 years, 1 million is easily reached, even with just 5k/yr.
More people should learn to tell their dollars where to go instead of asking them where they went. | -Roger Babson

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Re: Time to reach 1M and 2M milestones

Post by Dandy » Mon May 18, 2015 7:06 am

Once you have the first million those assets provide a nice and increasing tail wind to get you to the next million. A modest allocation might return 5% which would be 50k the first year plus your contributions and the gain on both. That usually is a significant boost to your asset growth -- the power of compounding.

Luck and good savings maybe 1st million by your mid 40's, 2nd million by early 60's -- the more you front end the investment the sooner the nice tail wind occurs. But - life balance is key - you can't go back in time (yet) so enjoy the journey.

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Re: Time to reach 1M and 2M milestones

Post by SamB » Mon May 18, 2015 7:30 am

HalfMillionaire wrote:My point of view is that the hard part is done once you have reached a point where portfolio growth typically outpaces your contributions. That's why I consider 500K to be the most significant milestone.
That was certainly my experience. The savings rate is the most important objective when you are first beginning to build financial wealth. In fact, a case can be made that being in an all equity portfolio at this point is not the best thing to do. You are generally not very knowledgeable, and your behavior under huge market swings may be self defeating. Also, your financial reserves are low to begin with, and should you need them, they will not be there in a down market.

This goes against what I would consider conventional wisdom applied to taking on risk with age. I have never agreed with the "age in bonds" approach. You have to look at each individual case. Given a certain level of consumption relative to your overall wealth equity swings may make little difference.

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Re: Time to reach 1M and 2M milestones

Post by The Planner » Mon May 18, 2015 7:40 am

SamB wrote:
HalfMillionaire wrote:My point of view is that the hard part is done once you have reached a point where portfolio growth typically outpaces your contributions. That's why I consider 500K to be the most significant milestone.
That was certainly my experience. The savings rate is the most important objective when you are first beginning to build financial wealth. In fact, a case can be made that being in an all equity portfolio at this point is not the best thing to do. You are generally not very knowledgeable, and your behavior under huge market swings may be self defeating. Also, your financial reserves are low to begin with, and should you need them, they will not be there in a down market.

This goes against what I would consider conventional wisdom applied to taking on risk with age. I have never agreed with the "age in bonds" approach. You have to look at each individual case. Given a certain level of consumption relative to your overall wealth equity swings may make little difference.
HalfMillionaire wrote:My point of view is that the hard part is done once you have reached a point where portfolio growth typically outpaces your contributions. That's why I consider 500K to be the most significant milestone.
I love these two posts. My wife and I are currently being very aggressive in building our portfolio. We only started in September last year and are already at 70k USD. By the end of this year, we will be at 130k USD. By the end of next year, 210k USD. We are absolutely focused, saving 63% of our income.

We were wondering when things would start to take off and it seems that 500k has something of a "magic number" feel to it.

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Re: Time to reach 1M and 2M milestones

Post by randomguy » Mon May 18, 2015 7:57 am

meowcat wrote:
randomguy wrote: Contributions also cease to matter. Save 10k/yr and you can get to 100k in 10 years. On the other hand trying to save 1 million dollars at 10k/yr is pretty much impossible.
Hardly. If you've got time on your side, say, an entire investing career of 40 years, 1 million is easily reached, even with just 5k/yr.
1 million/ 10k = 100 years. Impossible:) You are not getting there by saving. You are getting there by investing.

5k at 8%/yr for 45 years with 2% inflation gives you 1 million real dollars. Over that same time period your 1 million dollars turns into 13 million. Sure having another million is nice, but the difference between 14 million and 13 million is pretty small on the utility scale. Over the 6-15 years we are looking at to turn 1 million into 2 million, it will have a similarly small effect.

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Re: Time to reach 1M and 2M milestones

Post by market timer » Mon May 18, 2015 8:13 am

empb wrote:The older I get, the more I come around to this way of thinking. However, I think I'd be crippled with anxiety using a 4% withdrawal rate starting at, say, 37. The possibility of working part-time not withstanding. Have you actually done this? Or are you still working?
I left my job to become a stay-at-home dad about a year ago. There was a fairly long honeymoon phase with early retirement, and I traveled for a couple months, but now I'm thinking of trying a new career.

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Re: Time to reach 1M and 2M milestones

Post by investingdad » Mon May 18, 2015 8:27 am

My wife and I each started saving / investing for retirement at age 22 (we met in our mid 20s). We reached $1 million at 38 so...sixteen years was how long it took us.

I'm turning 42 this summer and am estimating we may break $2 million around 42 or, more likely, 43 based on our current net, so call it five years.

I'd be thrilled with $3 million before turning 50 because that would let me take 3%, pay taxes, and still have enough to pay 100% of our expenses. This is all pie in the sky because I really don't know what the markets are going to do. For all I know things could take a big fat dump and we could be back down to $1million at age 43. :shock:

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Re: Time to reach 1M and 2M milestones

Post by DA200 » Mon May 18, 2015 8:37 am

For individuals who are maxing out a 401K and Roth IRA ($18K/year + 5.5K/year = 23.5K/year I think the $500K milestone is important. At $500K the yearly contribution is less than 5% of the total, so compounding really is the main contributor to growth of the portfolio. Of course if you have a very high income and save significantly more than $23.5K/year, then the important milestone might be $1 or 2M
In my case it took the following:
$500K - 12 years
$1M - 6 more years
$2M - 4 more years
This thread shows many more examples of the time to grow a portfolio.
http://www.bogleheads.org/forum/viewtop ... &start=100

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Re: Time to reach 1M and 2M milestones

Post by kaudrey » Mon May 18, 2015 11:23 am

For me, so far (counting from when I first started working in 1991):

$500K - 16/18 years; I put both because I first hit it in 2007, and we know what happened after that! ;)
$1M - 23 years.

I am 46; DH is 41. We am hoping to hit $2M around my 32-year mark, when I am 54.

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Re: Time to reach 1M and 2M milestones

Post by Abe » Mon May 18, 2015 12:19 pm

Yes, it's true the time to go from 1 million to 2 million should be shorter because after reaching 1 million you have two things working for you: yourself plus 1 million. :happy
Slow and steady wins the race.

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Re: Time to reach 1M and 2M milestones

Post by MathWizard » Mon May 18, 2015 12:39 pm

For investment portfolio, excludes house and EF, and in today's dollars:

$1M expect to be there within 5 years. Total time investing will be 30 years.
$2M won't ever make it

I found the first 12 to 16 years to be the most important. After that,
long-term gains started to outstrip contributions.

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Re: Time to reach 1M and 2M milestones

Post by sesq » Mon May 18, 2015 12:41 pm

I once read an anology on another forum comparing the journey to financial independence to a giant moonshot worthy 4 stage booster rocket. The idea being that the size of the boosters and fuel required diminished as the rocket got higher up, momentum made things easier, gravity's pull grew weaker, etc. But the power and the effort required to lift the rocket up off the ground was massive, which is consistent with starting to save early in the career with lower earnings and many competing uses for your dollar. In that post they likened Stage 1 - $100k; stage 2 - $500k; stage 3 - $1m and stage 4 - FI.

I crested 1M in NW last year and should hit it in financial assets this year assuming the market cooperates. I am mid career (18 years in) and my pay and incentive comp should push over 2m within the next 5-6 years (on both metrics NW and fin assets).

LeisureLee
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Re: Time to reach 1M and 2M milestones

Post by LeisureLee » Mon May 18, 2015 3:14 pm

For us it took about half as long to get from $1M to $2M as it took to get the first $1M. The existing balance growing by itself was a significant factor, but our incomes rose and our savings rate also grew over that time. It also seems a lot faster because once you get used to the saving habit and you know you're getting closer to "done" every month, you stop looking as often. =)

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Re: Time to reach 1M and 2M milestones

Post by chessmannextmove » Mon May 18, 2015 4:27 pm

livesoft wrote:To go from $0 to $1M, one needs an infinite gain.
To go from $100K to $1M, one one needs a 9X gain.
To go from $1M to $2M, one needs a 1X gain.
To go from $2M to $3M, one needs a 0.5X gain.
Lol. Assuming the convention of the last three, the first statement is wrong.

poker27
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Re: Time to reach 1M and 2M milestones

Post by poker27 » Mon May 18, 2015 4:58 pm

sesq wrote:
I crested 1M in NW last year and should hit it in financial assets this year assuming the market cooperates. I am mid career (18 years in) and my pay and incentive comp should push over 2m within the next 5-6 years (on both metrics NW and fin assets).
That would be another interesting question/ metric... How many 'working years' did it take you to get to $1mm.

I'm nowhere near that amount, and have been working a 'real' job for 9 years.

robiu977
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Re: Time to reach 1M and 2M milestones

Post by robiu977 » Mon May 18, 2015 5:03 pm

Graduated med school in 2005. I was lucky and fortunate to have zero debt but essentially no assets.
Finished residency in 2010. I maxed out my 401k and Roth IRAs during these years.
We made it to the 1M mark in March 2015 at the ages of 36 (this does NOT include the $350,000 in home equity we have).

Conservatively should have home completely paid off in 3 years.
If saving and spending stays somewhat consistent with past few years, then I believe we can hit 2M within 3 years, of course assuming no major market crashes.

sawhorse
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Re: Time to reach 1M and 2M milestones

Post by sawhorse » Mon May 18, 2015 5:23 pm

kwan2 wrote:if your young, you may not realized it, but older folks pass away, and if you have a rich uncle, it might happen faster, than you ever imagined.....
I get the feeling that many many young people who have high net worth--not all of course--didn't do it by themselves. Student debt is huge these days even at public universities. The median tuition increase among state universities since 2008 is 25%. Nine states have increased tuition more than 50% after inflation. Arizona has increased tuition 83.6% :shock: Combined with the fact that many students' parents lost money and/or jobs in the 2008 crash, it's a rare and fortunate student who doesn't graduate with debt.

What people sometimes fail to realize is that contributing to an employer retirement account is a luxury. Young people these days are increasingly in jobs that don't offer 401ks for their classification of employee or don't match. It's really hard to grow a $5000 IRA contribution into a million dollars. Even if they do have access to an employer plan, it's risky for them to contribute to it. If they lose their job, how will they pay the bills, how will they pay the student debt with that 10% penalty?

The instability also means they can't afford to take risks with their non-retirement accounts. If you don't take those risks, then growing your money will take a long time.

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TomatoTomahto
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Re: Time to reach 1M and 2M milestones

Post by TomatoTomahto » Mon May 18, 2015 5:30 pm

I'm not sure how to answer this. Is the >50% my ex-wife took with her considered part of my first million? We were very close to $1M then, but it took another 3-4 years to get there with my "forever" wife.

Going from 1-2M took almost 6 years (the $1M mark occurred around 1999-2000). Subsequent $1M increases ranged from 1 to 3 years in duration.

All of the above numbers are extremely approximate. I used Quicken, but over the years what I tracked and what I ignored changed considerably, so it's a rough number. ETA: Our average age in 2000 was 45.
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A-Commoner
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Re: Time to reach 1M and 2M milestones

Post by A-Commoner » Mon May 18, 2015 6:39 pm

sanfran2015 wrote:Hi all,
For those folks who are in the two comma club, I am wondering if you could chime in with how long it took you to reach 1M and 2M milestones.
They say the first $1M is the hardest. Is that really true? If so, time to go from $1M to $2M should be much shorter than time to get to $1M.

Has there been a poll done on this kind of question?

Thanks.

From 0 to $1 million took 40 long years (I count from birth to 40 years old). From 1 to 2 million only took 5 years (45 years old). Yes the 1st million is the hardest.

HalfMillionaire
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Re: Time to reach 1M and 2M milestones

Post by HalfMillionaire » Mon May 18, 2015 7:11 pm

That is some torrid pace Planner. You will look back at this period of aggressive saving with a lot of satisfaction one day. 63% saving rate is awesome!

500K does seem something like a magic number. It does feel like the way forward from here will be easier.
The Planner wrote: I love these two posts. My wife and I are currently being very aggressive in building our portfolio. We only started in September last year and are already at 70k USD. By the end of this year, we will be at 130k USD. By the end of next year, 210k USD. We are absolutely focused, saving 63% of our income.

We were wondering when things would start to take off and it seems that 500k has something of a "magic number" feel to it.

john94549
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Re: Time to reach 1M and 2M milestones

Post by john94549 » Mon May 18, 2015 7:15 pm

Once you hit $2 million, it's just keeping score. The key is a million or so in cash, FDIC/NCUA insured cash.

sawhorse
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Re: Time to reach 1M and 2M milestones

Post by sawhorse » Mon May 18, 2015 7:43 pm

For people who have reached these milestones, did you ever dip below them again due to unemployment or other hardship, increased expenses, taking out a mortgage, paying for child or parent expenses, investment losses, lower housing value, inflation, etc?

If so, how many times? What is the biggest percent dip, and how long did it take you to get back?

sanfran2015
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Re: Time to reach 1M and 2M milestones

Post by sanfran2015 » Mon May 18, 2015 8:45 pm

Thanks for all the great responses. A related question I have is this -

(1) For those who reached $1M and $2M milestones, did you become more conservative in your investing approach?
(2) Did you move to a more bond/fixed-income weighted asset allocation even though you were far from retirement?

Thanks.

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TomatoTomahto
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Re: Time to reach 1M and 2M milestones

Post by TomatoTomahto » Mon May 18, 2015 10:15 pm

john94549 wrote:Once you hit $2 million, it's just keeping score. The key is a million or so in cash, FDIC/NCUA insured cash.
A lot depends on what your obligations and hopes are. I hit $1M with a child entering a private college, child support for another, iirc the last dregs of alimony to pay my ex, and two young children to raise. It was quite some time before it could be considered keeping score, and tbh, it doesn't feel like that now -- keeping score is for games.
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TomatoTomahto
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Re: Time to reach 1M and 2M milestones

Post by TomatoTomahto » Mon May 18, 2015 10:17 pm

sanfran2015 wrote:Thanks for all the great responses. A related question I have is this -

(1) For those who reached $1M and $2M milestones, did you become more conservative in your investing approach?
(2) Did you move to a more bond/fixed-income weighted asset allocation even though you were far from retirement?

Thanks.
We were 70/30, give or take, for the first $1M. We are now somewhere around 50/50. We have steadily increased our bond holdings.
Zero Net Carbon by 2019.

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Yesterdaysnews
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Re: Time to reach 1M and 2M milestones

Post by Yesterdaysnews » Mon May 18, 2015 10:27 pm

I hit $1M net worth in 2010 (age 34), 2M in 2013 and 3M in 2015.

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kwan2
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Re: Time to reach 1M and 2M milestones

Post by kwan2 » Mon May 18, 2015 10:57 pm

my employer is said to be generous, but the matching is such a joke, after 8 years working (you getting nothing if you don't get 1000 hours/year credited, or pro-ration'd , after your vested in 5 years, i saw dozen of employees come and go from our small office, and even if they did fully contribute will get 0 matching for not having the 5 years in). the retirement scheme in this country is broken, and "rigged" in the words of elizabeth warren, imho, not to mention all the other goal post moving, like you state below, and a recent front page article in the NYT pointed out about out of state tuition, now being favored at public schools, etc ...... glad i'm old already
sawhorse wrote:
kwan2 wrote:if your young, you may not realized it, but older folks pass away, and if you have a rich uncle, it might happen faster, than you ever imagined.....
I get the feeling that many many young people who have high net worth--not all of course--didn't do it by themselves. Student debt is huge these days even at public universities. The median tuition increase among state universities since 2008 is 25%. Nine states have increased tuition more than 50% after inflation. Arizona has increased tuition 83.6% :shock: Combined with the fact that many students' parents lost money and/or jobs in the 2008 crash, it's a rare and fortunate student who doesn't graduate with debt.

What people sometimes fail to realize is that contributing to an employer retirement account is a luxury. Young people these days are increasingly in jobs that don't offer 401ks for their classification of employee or don't match. It's really hard to grow a $5000 IRA contribution into a million dollars. Even if they do have access to an employer plan, it's risky for them to contribute to it. If they lose their job, how will they pay the bills, how will they pay the student debt with that 10% penalty?

The instability also means they can't afford to take risks with their non-retirement accounts. If you don't take those risks, then growing your money will take a long time.
“The history of Paris teaches us that beauty is a by-product of danger, that liberty is at best a consequence of neglect, that wisdom is entwined with decay."

sanfran2015
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Re: Time to reach 1M and 2M milestones

Post by sanfran2015 » Mon May 18, 2015 11:12 pm

Yesterdaysnews wrote:I hit $1M net worth in 2010 (age 34), 2M in 2013 and 3M in 2015.
Wow! Thats super-fast. How much of that was market returns and how much was your additional contributions?

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kwan2
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Re: Time to reach 1M and 2M milestones

Post by kwan2 » Tue May 19, 2015 12:54 am

i think the 1st post, is too vague, for all these comments, imho.

maybe you need to put in for those whose primary earnings are from investing or something, time to reach for whom, starting at what etc etc
“The history of Paris teaches us that beauty is a by-product of danger, that liberty is at best a consequence of neglect, that wisdom is entwined with decay."

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