If your net worth is over $3 million, how did you do it?

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snowox
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Re: If your net worth is over $3 million, how did you do it?

Post by snowox » Sun Feb 17, 2019 6:16 am

For me / we were dancing back and forth over that line with the way the Market has been but here is what I learned but much later in life sadly otherwise I would have probably at least triple.

I did not go to college but got into a business young , into sales and eventually the company I worked for figured away to cut my territory vs rewarding me so I took a leap at 27 and started my own. Within a year they almost went bankrupt because Most of the good customers from a profit standpoint were mine. Mind you I would never have left if they didnt try to cut my territory because they said " I was making to much money" jackasses But there was the Luck! Need a bit of that.

I made alot of mistakes and started a few smaller businesses that did well but I got my teeth kicked in by Divorce and also Bad real-estate investments mostly in Building homes so Stick with what you know!

Figure the money would always be flowing so I did save but not like I should of. Finally in my mid 40's I came across a few financial blogs as my business was starting to kill me and I was hating it. And I walked away from a multi million dollar buyout a year or two past and the industry was starting to suffer so fortunately I started reading sites like this. Though now I was making half or a third of what i was I started hammering away both my DW and I are 401ks , sold all the shit and multiple homes and toys we werent using and invested and just smartened up and fire'd at 50 with about 30% being from my cash flow from my business. The one thing I did do consistently right was I never took on debt and or bought things I couldn't afford.

So dont be like me and if you make good money or not save and invest what you can and forget it.
Keep reading and spending time trying to learn as much as you can about finances and terms etc..
Be patient in buying a home and if you do buy make it a home you could see yourself living in for 30 years.
Some times you cant help it but avoiding divorce is a big one.
Dont buy what you cant afford and unless you intelligently know its just a screaming deal think about the larger purchases for at least 30 days.
Dont get caught up competing or being like the Jones's. (thats one thing I can say I never really was into)

I'm sure there is much much more but there has been so much covered on here its good for anyone just starting out! or in my case a bit older in life having finally getting there sh+t together.

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Abe
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Re: If your net worth is over $3 million, how did you do it?

Post by Abe » Sun Feb 17, 2019 10:34 am

Nissanzx1 wrote:
Sat Feb 16, 2019 4:09 pm
Purchased about $50,000 worth of stock in a small savings and loan in 1984ish. That S&L has done extraordinaryly well and that investment is worth over $1M today and pays out hefty dividend income.
I, also, invested in a local savings and loan about the same time period but didn't invest quite as much money as you did. My investment didn't turn out as well as yours. It went under, and I lost every penny I put in. The only reason I bring it up is to point out that it can go either way. I'm glad that your S & L investment worked out well for you.
Slow and steady wins the race.

Nissanzx1
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Re: If your net worth is over $3 million, how did you do it?

Post by Nissanzx1 » Sun Feb 17, 2019 1:22 pm

Abe wrote:
Sun Feb 17, 2019 10:34 am
Nissanzx1 wrote:
Sat Feb 16, 2019 4:09 pm
Purchased about $50,000 worth of stock in a small savings and loan in 1984ish. That S&L has done extraordinaryly well and that investment is worth over $1M today and pays out hefty dividend income.
I, also, invested in a local savings and loan about the same time period but didn't invest quite as much money as you did. My investment didn't turn out as well as yours. It went under, and I lost every penny I put in. The only reason I bring it up is to point out that it can go either way. I'm glad that your S & L investment worked out well for you.
It is my folks situation I am describing- certainly not my own. I don’t have what it takes to invest that much in a single investment. I have asked Dad about having 1/3 of his worth in one stock, so he showed me his dividend 1099. I now ask no more questions lol.

Sorry you lost yours. You are so right, this investment was and still is risky. Someday if it ever becomes mine- I’d have some serious thinking to do. Hopefully I don’t have to worry about that for 25 years...

bkmcd1
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Re: If your net worth is over $3 million, how did you do it?

Post by bkmcd1 » Sun Feb 17, 2019 10:13 pm

I read a couple pages of this thread, and I enjoyed it greatly. Lots of great principles. Let me summarize what I learned (these are direct quotes):
  • remembers when we ate ramen and got our furniture from what people left on the sidewalk.
I still do this.
  • drink boxed wine
If I drank wine, I would do this.
  • smelling the roses and kids along the way
No way, my kids smell terrible.
  • dress like a hobo
I still do 99% of my clothes shopping at thrift stores.

Looks like I'm headed in the right direction!

JakeyLee
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Re: If your networth is over $3 million, how did you do it?

Post by JakeyLee » Sun Feb 17, 2019 10:40 pm

Grt2bOutdoors wrote:
Tue Nov 11, 2014 8:32 am
Not there yet, but here's a couple of ways you could get there:


1) Hit the lottery
2) Had the dumb luck to have majored in some obscure specialty that is suddenly in demand and people will pay anything to have your expertise
3) Married like-minded individual
4) Scrimped and saved, and scrimped and invested
5) Not spending any money - did I mention the term "scrimping"?
6) Got lucky and landed a high paying job early in your career with a company that offered an ESOP plan, a profit sharing plan and a generous pension plan
7) or work for the Suffolk County, NY police department where with overtime you too could be pulling in $250K per year as a detective and a pension based on that salary to boot!
8) You had a big life insurance policy, the good news is your worth $3 million, the bad news is your new home is at Rolling Hills cemetary :twisted:
9) You live in a low-tax state, as opposed to a high cost of living, high tax state
10) You successfully passed the CPA exam and fully understand the intricacies of tax law leading to a successful practice and are now worth more than $3 million.
11) You own a string of gas stations built with borrowed money - in other words, you used leverage to take a gamble and got lucky.
Love your list! As for number 7... Unfortunately, pension is based on base pay. So alas, while that overtime will speed up a person's savings rate, it won't garunteed a lofty pension.

darrvao777
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Re: If your net worth is over $3 million, how did you do it?

Post by darrvao777 » Sun Feb 17, 2019 11:00 pm

Same as everyone else

One little wrinkle, I targeted fields that offered the most $/hr from Day 1 of medical school and ignored trite advice like “chase your passion”. It is important to pick something you like but if you open your eyes, there is a lot of variety in the higher paying fields. That was always important to me from the start.

Then I selected a job that offered more work than is typical of my specialty

Make a lot, save a lot, married wealthy (I did not use this as the reason to marry my wife but it certainly didn’t hurt), and our combined net worth is > 3 before age 35

JakeyLee
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Re: If your net worth is over $3 million, how did you do it?

Post by JakeyLee » Sun Feb 17, 2019 11:08 pm

Okay, I will take a shot at this. Although, please note I'm over two thirds of the way there, but my new bride's assets technically get me to the number at hand.
1. Went to a cheap state school that I cash flowed.
2. I haven't had a credit card, much less credit card debt, since I was 22.
3. Avoided car payments for over 30 years. Only buy with cash, or I don't buy at all.
4. Early in my career I worked every hour I could get my hands on. This not only equaled extra cash, but gave employers the
false impression that was more hungry and a harder worker than my colleagues.
5. I bought a house when I finally saved up 20 % for a down payment. I could afford a much more expensive home at the time,
but I was already hooked on saving the extras for retirement.
6. Maxed out my 401k every year... No matter what was happening in the market. Poured the rest into an after tax vanguard
fund. Index funds, baby!
7. Stayed out of debt for most of my adult life... This includes paying off my home in 11 years.
8. I drink cheap American lager, everyday . I'm not proud... But I'm not ashamed.

That's it. 2.4 million later. 28 years since i started. Seriously. That it. I'm no genius. If an idiot like me can do it, anyone can.

Cipro
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Re: If your net worth is over $3 million, how did you do it?

Post by Cipro » Mon Feb 18, 2019 9:06 am

Surprised I did accumulate about $3.5 MM. Honestly, I haven't really led a frugal lifestyle. Got a late start earning money (lot of education). Earned good salary at large company for many years with excellent bonus and long term incentive (which I saved). Followed boglehead strategy to investing (low cost index investing - started early, stayed in market through downturns). Inherited about $600k - which I used to pay for children's college tuitions (3 kids - private colleges!). Supportive wife. Good job. Started accumulating early.

sman09
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Re: If your net worth is over $3 million, how did you do it?

Post by sman09 » Mon May 06, 2019 1:10 am

yogesh wrote:
Sat Feb 16, 2019 7:07 pm
Our recipe:
- Both working full time and living below means
- Maxing our pretax, after tax 401k into TR index
- Maxing our ESPP, selling immediately and buying index
- Reducing paycheck after deduction to monthly expenses
- Using mint to budget, monitor and reduce expenses
- Paying off mortgage principal, 529s with annual bonuses
- Bond and stock bull market for last decade
- Learning from Bogleheads and firing Fidelity advisor
Great points!

As an aside, does not Fidelity Freedom 2040 have a higher expense ratio compared to constructing your own 3-fund portfolio?

JGoneRiding
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Re: If your networth is over $3 million, how did you do it?

Post by JGoneRiding » Mon May 06, 2019 1:07 pm

2tall4economy wrote:
Mon Sep 19, 2016 9:52 pm
I should be there in a year or two. Turned 40 recently. I certainly feel like I did it the hard way though. Advice I'm giving to my kids when they are old enough (though with the way things go in life they won't listen ;) )

- Get lucky and have rich parents or rich friends so that you learn how their society works and build a network (I missed out on this one)

- Get good enough grades / extracirriculars to get into a very well known college such as harvard / stanford. (I rode the easy wave an got into a well known but public university. my network suffered considerably.)

- Study finance in school as an undergrad (engineering was ok but more work and less applicable to later life - also harder to develop social skills)

- Get a graduate degree at a highly ranked college because, whether you want to believe or not, the best companies only hire from a handful of well known universities and handful of regional ones and they have the best paying, best benefits, most secure jobs available (check)

- Get it in one of the few fields that makes financial sense to do so (generally medicine, business/finance, computer science. Petroleum engineering probably has legs for another 10-15 years but then watch out, and law could be good if they become a little scarcer -- way too many new law grads minted in past few years (failed the first time by getting engineering, suceeded the second time with an MBA)

- Join a fortune 500 (failed first time, got it post-MBA)

- work your ass off (check)

- fully contribute to 401k to match, then to max 18k, then to after-tax max 53k (check, though I have done a 50/50 split between real estate and 401k after hitting the match)

- pick and keep a simple asset allocation and manage funds yourself (failed at first, then corrected course)

- If you're super lucky, contribute to a 457 etc on the same basis (fail)

- Contribute to backdoor Roth IRA (check)

- Contribute to NQDP -- IIIIIFFFF you vehemently believe your company will be around. And plan for what happens if it's not and you lose the whole thing. Definitely contribute up to the maximum match, if any, as long as there are no immediate signs of bankruptcy (check)

- Invest the rest in real estate or taxable accounts with the excess (check)

- Define a few priority "wants" in life, Spend money on things you have a passion for. Pinch pennies on everything else. (check, though I recommend you not choose cars as a priority like I did. would be far better off today financially :) )

- Marry someone who is also driven, and/or someone you want to be a great dad/mom to your children (I selected based on the first but it ended up beind the second)

- don't divorce, or divorce while your nest egg is still small (check, so far!)

- enjoy your life, checking your balance every few days will make you nuts. (partially fail here!)
I would argue hard that 2 doesn't matter at all if you do 4. If instead you go to a small regional college and excell you are more likely to successfully do a highly ranked grad school and do well.

Studies show only min benefit to high ranked undergrad and in fact the pressure may be very detrimental.

MikeG62
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Re: If your net worth is over $3 million, how did you do it?

Post by MikeG62 » Mon May 06, 2019 1:48 pm

First off I had a high paying job for a long time. Without that my method would not have yielded the results it did.

We lived well below our means (but far from frugally). Resisted the urge to keep up with the Joneses. Saved entire annual bonus and proceeds from selling equity grants. We dipped into savings when needed (new cars, home improvements, vacations, etc...). However, annual savings overwhelmingly swamped periodic one-off cash draws. Invested in very low cost index funds. Resisted the temptation to trade or speculate in the markets. Did this for nearly 20 years.

Fully retired four years ago at 53 (DW was a SAHM for the prior 22 years). No pension. Living off our taxable accounts at this point. Travel a considerable amount (sleeping away from home roughly 50-60 nights per year). Life is good.
Real Knowledge Comes Only From Experience

Xrayman69
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Re: If your net worth is over $3 million, how did you do it?

Post by Xrayman69 » Mon May 06, 2019 3:35 pm

Graduate level education with high paying employment early that permitted the learning skills to translate into entrepreneurship side gigs/consulting. The joy of the job and professionalism was likely critical as it showed through with passion and not just a pursuit of money which clients and others can see right through and eventually burn out.

Had children later in life, which permitted a high savings rate early. Married with no children early in professional life while “living the dream” and still living well below my means.

The children are by far the most “expensive” part of the “lifestyle “. The child is considered the Ferrari that could have been otherwise in the garage (joking).

Summary, live below means, high paying pursuits that provide personal and professional satisfaction with continuous understanding that continued learning is likely required for durability

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curiouskitty
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Re: If your net worth is over $3 million, how did you do it?

Post by curiouskitty » Mon May 06, 2019 3:50 pm

Stock options were the ticket for us although we were saving a good amount already. One company got acquired and the other went the IPO route.

wrongfunds
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Re: If your networth is over $3 million, how did you do it?

Post by wrongfunds » Tue May 07, 2019 9:40 am

livesoft wrote:
Wed Nov 12, 2014 10:07 pm
^I agree with that. But let inflation work its magic, so that $8MM will be the new $3MM.
Are we there yet? I think earlier you had said that the $3million is the new $1million, so by inference, the $8million is the new $1million, correct?

But I don't agree with you. I believe $5MM is the new $1MM.

stonerolled
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Re: If your net worth is over $3 million, how did you do it?

Post by stonerolled » Wed May 08, 2019 2:37 pm

Very interesting general question. Dead I'm worth about 1.2m. On first glance not even close. But its possible to not be as far as it seems if generous with evaluating pension, job, and IRA's straight up. My investment account may count for one. My state pension of 60k with benefits may count for two, (quick look at immediateannuities.com). My part time job paying 50k, although I take off a lot of Fridays may count for the third (40k meets safe withdrawal on a million). If the average person can live on 40k, one million is one unearned income unit. If a person needs 120k to live, 3 million is one unearned income unit. I can live easy on 40k so i currently have 2 unearned income units and if my job is enjoyed and optional and brings in 40k+, could that be considered a semi-unearned income unit? If so, alive my 'net worth' may not be that far from it. Nice problem to have thanks to Mr. Bogle and this forum over the years.

just1question
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Re: If your net worth is over $3 million, how did you do it?

Post by just1question » Wed May 08, 2019 5:14 pm

"How did you do it?"
1. Higher education and hard work.
2. Living below my means.
3. Top shelf vodka.

Starfish
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Re: If your net worth is over $3 million, how did you do it?

Post by Starfish » Wed May 08, 2019 6:15 pm

Not yet there but will be in several years if everything stays the same.

1. Education
2. Got 2 decently paid jobs
3. Living in HCOL, good for RE leveraged investment
4. Worked hard at the beginning.
5. Lived under our means.
6. One kid

Pretty much make good income and save a good chunk of it. Invest the rest in Vanguard. Do this for more than a decade. Done.
A lot of things I did were timed wrong or just plain wrong, from age of 18 to now. I could've done a lot better.
Last edited by Starfish on Wed May 08, 2019 6:17 pm, edited 1 time in total.

tfunk
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Re: If your net worth is over $3 million, how did you do it?

Post by tfunk » Wed May 08, 2019 6:52 pm

1. Earn as much as you can.
2. Save as much as you can.
3. Spend as little as you can.
4. Invest conservatively.
5. Wake up 30 years later with $3million.

Fullhouse2007
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Re: If your net worth is over $3 million, how did you do it?

Post by Fullhouse2007 » Wed May 08, 2019 10:06 pm

One house
One spouse
Pay yourself first (and pay yourself well)
Compound interest will work harder than you
The stock market just went on sale (2008)
Never stop learning

There have been many intelligent people that I’ve crossed paths with who have laid some words of wisdom in my direction. Each one of these nuggets helped our family build a good 4M+ net worth (mid-40s).

chknlips
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Re: If your net worth is over $3 million, how did you do it?

Post by chknlips » Wed May 08, 2019 10:34 pm

Don't have kids!?

goldendad
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Re: If your net worth is over $3 million, how did you do it?

Post by goldendad » Wed May 08, 2019 10:35 pm

Started with a net of $300 at 22. Worth almost 6 mil. Started saving from a paper route in junior high school and have saved all my life. My wife is also good with money. Have invested in the market from the early 1980s. Did not hear about the Boglehead philosophy until the last few years but have always been a long term investor. One of the biggest factors was not raising our cost of living for the last 25 years as my salary continued to grow - saved/invested the difference. In short we kept spending under control, always lived on a budget, and invested the rest. Retired at 63 a few months ago. Still live on the same budget we did in 1994. Will hopefully use the money to send all the grandchildren and great grandchildren to college.

PDX_Traveler
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Re: If your net worth is over $3 million, how did you do it?

Post by PDX_Traveler » Thu May 09, 2019 1:48 am

Entered the country 33 years ago with $750 in cash and a suitcase full of clothes. Started first job out of grad school with ~$5000 in bank. Sum total of two jobs since then, fortunate to work in an industry that pays well, married a spouse with whom I share a lot of views on life, lived in an area that really has bloomed from a low-MCOL to med-HCOL area, lived quite well but also quite well below means for many years,....
Not very scientific about investments for many, many years but mostly bailed out by high savings rate + compounding. Finances-wise, the one thing I really wish was being exposed much earlier to the investing principles of Jack Bogle, largely espoused by folks on this here forum.
A simplified portfolio + high savings rate + consistency = a thing of beauty + peace of mind + more time to LIVE life.

P.S. Can't resist adding the old gag line - of course, one other way to a NW of $3M is to start with $1.003B and find a way to lose $1B over a decade or more :-)

time>money
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Re: If your net worth is over $3 million, how did you do it?

Post by time>money » Thu May 09, 2019 4:03 am

Decades ago I discovered that even though I was much more efficient and competent at my job compared with my peers, corporate policy would never allow me to be compensated commensurately with my contribution. I started my own company to provide those services both to my former employer and other companies. I hired a few people, and pretty soon income had increased 4x from my salary. We lived it up some, but always saved at least 30% of income. Invested in index funds. Bought some real estate at low points in the market.

Started with nothing 30 years ago, and now we have a NW over 6M

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augryphon
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Re: If your net worth is over $3 million, how did you do it?

Post by augryphon » Thu May 09, 2019 8:16 am

1. raised by parents that valued education highly, very highly
2. got a degree in a valued field
3. worked hard
4. was sought out by 2 fine gentlemen who piqued my interest to become an investor. they both took their time to teach me.
5. was blessed with a great DW with an education and work ethic similar to mine and who has been my devoted partner in all things
6. made a plan and stayed the course

So your question was "how did you do it." As you can see, #1, 4, and 5 I didn't do at all. Call it luck, chance, a blessing, whatever you will, without any of those three things beyond my control, I might have turned out very differently.

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Tycoon
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Re: If your net worth is over $3 million, how did you do it?

Post by Tycoon » Thu May 09, 2019 8:31 am

I might be better to reveal what I didn't do:
I didn't delude myself into thinking I was smart enough to time the market.
I didn't let emotions drive investment decisions.
I didn't fall in love with numbers, patterns, and complicated conjecture.
I didn't think in terms of short-term gain.
I didn't make investments that my spouse didn't agree with.
I never lost faith.
Emotionless, prognostication free investing. Ignoring the noise and economists since 1979. I see the world as it is; not how I wish it to be.

fastrak99
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Re: If your net worth is over $3 million, how did you do it?

Post by fastrak99 » Thu May 09, 2019 1:01 pm

Agree with most of which have been said here - the investment / saving route definitely works to get to high net worth but takes MANY many years of compounding, diligent saving, being thrifty etc.

To me achieving that number took starting and scaling a number of eCommerce businesses (that run outside of your time) - without needing to 'scale back' much, cut down on expenses or limit any of my toys or travel that I enjoy.

I did many of the other recommended items on these boards - got a high education, 'well paying' corporate job - but by 25 realized that its a very slow and gradual rise to the top of being FI if I stay on that path. Started an eCommerce business during my early corporate years, saved up some money, and was eventually able to take a leap of faith, quit my corporate job - and scale up from there (def with hiccups along the way).

Starting from 0 I reached the 3+mil mark around 32/33 yo. None of it was made through investments - as I just recently looked into boglehead mindset, investing etc so starting down that path now.

loghound
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Re: If your net worth is over $3 million, how did you do it?

Post by loghound » Thu May 09, 2019 7:13 pm

really boring way (54 year old)
  • I started work out of college (21) and immediately entered my companies 401k plan and stock purchase plan.

    I am successful at my job/career and have advanced nicely (with increasing pay/benefits)

    I married well (a women who shares my values) and she had a good job until our 2nd child, she cashed out of former employers with attractive packages

    I held a 2nd job for about 10 years (freelance work)

    I never had any major expenses (health care, divorce, legal issue, etc)

    I live below my means most of my life (but it is/was a nice life) -- I just was careful to drive a modest car, I didn't take a ton of expensive vacations, etc.

    I made some very good (or perhaps lucky?) investments that had really good returns.
It's only recently that I've stopped being worried about saving for retirement and begun to loosen the pursestrings a bit and enjoy life (nicer car, house remodel, etc.)

cableguy
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Re: If your net worth is over $3 million, how did you do it?

Post by cableguy » Thu May 09, 2019 7:40 pm

Hard work. Luck (company stock options finally paid off). Save. Always save. Live simple. I'm 51.

Cipro
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Re: If your net worth is over $3 million, how did you do it?

Post by Cipro » Thu May 09, 2019 8:00 pm

Started early

mmcmonster
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Re: If your net worth is over $3 million, how did you do it?

Post by mmcmonster » Thu May 09, 2019 8:20 pm

Not quite at $3M, but I'll get there in the next year or so.

My list:
1 - Marry someone with similar goals
1a - Never tried to keep up with the neighbors
1b - Kept kids in public school through high school. Made sure we lived in good school districts.
1c - Don't hire house cleaners, nanny, etc. Do as much ourselves as we can.
1d - Two kids. No more.
1e - Everyone healthy
1f - Don't give money to family (other than our kids). Keep charity giving to a minimum.
2 - Married, two professional incomes in the health care field
3 - High paying jobs / Work hard
3a - Kept kids in aftercare rather than a nanny
4 - Started investing ~30y/o and made enough mistakes before I was 35 that I won't try to beat the market ever again.
5 - Don't buy a house we couldn't afford. First house cost 1.5 years of my pre-tax income. Second house cost 2 years of my pre-tax income.
6 - Spent every dollar to minimize debt and pay off mortgages exceedingly early (first house had a mortgage we paid off in 5 years; we then moved and the second house mortgage was paid off in under 4 years)
7 - Once the mortgages was paid off and the only debt was an extremely low rate car loan, I started investing.
7a - Soon after started investing, found this site!
7b - Soon after I found this site, I fired my financial advisors.
8 - Put more than 40% (probably closer to 50%) of my pre-tax money in investments.

jayk238
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How many reached +3 million in <20 years and how?

Post by jayk238 » Fri May 10, 2019 6:19 am

[Merged -- mod oldcomputerguy]


Excluding business owners, sales of business, stock windfalls (ie ipos etc), inheritance > 500k, lottery etc, other large sudden amounts received.

Essentially this includes anyone who earned income as partner, salary or stock over time and was able to reach 3 million. Id like to know what it took you guys and income needed and savings rate and type of investment.

I ask because this is my goal.

Online it says i can do this w just saving 130k a year and im not sure how these assumptions are made (ie thru my 401k provider and schwab vanguard etc). My calculstions show minimum 180 k to account for inflation and tax

22twain
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Re: How many reached +3 million in <20 years and how?

Post by 22twain » Fri May 10, 2019 6:29 am

[deleted - no longer needed after thread merge]
Last edited by 22twain on Sat May 25, 2019 5:59 am, edited 1 time in total.
My investing princiPLEs do not include absolutely preserving princiPAL.

BanquetBeer
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Re: How many reached +3 million in <20 years and how?

Post by BanquetBeer » Fri May 10, 2019 6:31 am

Engineer. Saved half salary, all bonus/match/pension/stock options&grants.
Starting saving about $50k currently about 90k. Pay taxes from my spend half. Split expenses with SO (2 kids).

Currently $1.2mil@10 Years. SO is similar. Separate finances. Using current saving rate and 6% real, expect to his $3mil in 10 years. Goal is FI at 120k/yr by 45 and figure out where to go from there.

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TheTimeLord
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Re: If your net worth is over $3 million, how did you do it?

Post by TheTimeLord » Fri May 10, 2019 7:33 am

Is $3 million Net Worth some sort of magic number? And is it really Net Worth we should focus on, which includes the equity in your house, or just the total of the balances of your portfolios? Does age play into this, I guess I would be curious about those who reached it before 60 or even 50 because considering the last 10 years I would imagine many BH who were retired still LBYM would have seen their portfolio balances explode upward. Maybe instead of age we should ask did you achieve $3 million before or after retirement.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

mak1277
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Re: If your net worth is over $3 million, how did you do it?

Post by mak1277 » Fri May 10, 2019 8:09 am

Made it to $1.5 by age 38. Main factors - High performance at work (early promotions, etc.) and high performing spouse (two 6-figure incomes from age 30-38 helped quite a bit). I can't say we have ever been "frugal" but we have never been excessive either.

From 38-42, high performing stock options really kicked things into overdrive. I changed employers at just the right time and received healthy stock compensation at the time of my switch. Then the actual performance far exceeded projections. So basically, good luck.

What I didn't do - Start saving early. I didn't contribute a single penny to my 401k before age 30. I made a bet on my future earning potential and (luckily) it paid off. What I failed to contribute in my 20s (with appreciation) wouldn't even increase my net worth by 10%.

wolf359
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Re: If your net worth is over $3 million, how did you do it?

Post by wolf359 » Fri May 10, 2019 8:31 am

TheTimeLord wrote:
Fri May 10, 2019 7:33 am
Is $3 million Net Worth some sort of magic number? And is it really Net Worth we should focus on, which includes the equity in your house, or just the total of the balances of your portfolios? Does age play into this, I guess I would be curious about those who reached it before 60 or even 50 because considering the last 10 years I would imagine many BH who were retired still LBYM would have seen their portfolio balances explode upward. Maybe instead of age we should ask did you achieve $3 million before or after retirement.
Not the OP, but $3 million invested net worth results in a projected income of $120K/year if following the 4% rule. That is 2X median income, and is a cushy retirement. The number is often used as the bottom target line for "Fat FIRE", or a financial independence number which supports a higher income. With that amount, the 4% rule could probably be used safely, because it is plenty of room to reduce expenses if there is an extended market downturn.

For that reason, $3 million is a popular stretch goal, especially for those who like working or make a high income and want a target for "enough."

The next higher number usually cited is $5 million (espoused by Suze Orman and others.)
Last edited by wolf359 on Fri May 10, 2019 11:19 am, edited 1 time in total.

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TheTimeLord
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Re: If your net worth is over $3 million, how did you do it?

Post by TheTimeLord » Fri May 10, 2019 8:38 am

wolf359 wrote:
Fri May 10, 2019 8:31 am
TheTimeLord wrote:
Fri May 10, 2019 7:33 am
Is $3 million Net Worth some sort of magic number? And is it really Net Worth we should focus on, which includes the equity in your house, or just the total of the balances of your portfolios? Does age play into this, I guess I would be curious about those who reached it before 60 or even 50 because considering the last 10 years I would imagine many BH who were retired still LBYM would have seen their portfolio balances explode upward. Maybe instead of age we should ask did you achieve $3 million before or after retirement.
Not the OP, but $3 million invested net worth results in a projected income of $120K/year if following the 4% rule. That is 2X median income, and is a cushy retirement. The number is often used as the bottom target line for "Fat FIRE", or a financial independence number which supports a higher income. With that amount, the 4% rule could probably be used safely, because it is plenty of room to reduce expenses if there is an extended market downturn.

For that reason, $3 million is a popular stretch target, especially for those who like working or make a high income and want a target for "enough."

The next higher target number usually cited is $5 million target (espoused by Suze Orman and others.)
That makes sense, especially if we are assuming we are talking about $3 million no later than mid/late 50s. Otherwise SS and any pensions would likely make up a large percentage of a $120K/year target for a fair percentage of posters, especially those who are married and have/had high incomes.
IMHO, Investing should be about living the life you want, not avoiding the life you fear. | Run, You Clever Boy! [9085]

ClaycordJCA
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Re: If your net worth is over $3 million, how did you do it?

Post by ClaycordJCA » Sat May 11, 2019 12:08 am

Does it count if net worth was $3 million at the beginning of the week? :annoyed

Dad paid for college (thanks, Dad) and I graduated from law school with only $15.5k in debt.
Dad stressed the importance of opening an IRA early - the $6k or so invested in 87-89 is now over $100k

Maxed out the 401k every year. Began making after tax investments after the 529 accounts were sufficiently funded. Fired our financial advisor and went self directed, thereby saving 1% in management fees every year. Have done ok despite stumbling around a bit with managed funds for several years before finding Bogleheads.

Well paying law firm job (but had to step back from very well paying partnership when DW became disabled).

Have kept expenses mostly in check. We don’t live frugally but aren’t overly conspicuous in our consumption, either. Pay extra on the mortgage to reduce principal. Purchase used Lexuses and probably will continue to do so.

Told DS I would pay for 4 years of a public university, not a private school. He graduates next week. :beer . DD elected to work instead of going to school. She’s now raising her own family. Lucky me.

House is in the VHCOL Bay Area - but we are 30+ miles from SF so housing expenses are less than the Central Bay Area. Home equity is about 20% of our net worth.

Bacchus01
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Re: If your net worth is over $3 million, how did you do it?

Post by Bacchus01 » Sat May 11, 2019 6:40 am

Interesting thread to read. We crossed that threshold earlier this year at ages 45/50. 3 kids.

Here is what we did:
- started saving young. Always putting at least the max to match in our 401ks and most years the max.
- 401K balance is over $1M for me and just over $200K for spouse who has been a SAHM or PT for many years. Right there you are nearly half way there with just 20-25 years of saving in a 401K
- we almost always bargain shop, but generally have nice things
- I took every opportunity to grow my career including moving 3 times in 5 years. CAGR income growth over my career is 12-13%
- invested in Backdoor Roth when available since around 2010. Now have $140k in them. Again, no magic, just invest.
- invested in 529s since 2010. Now have $175k in them and add $15k a year
- I was part of an IPO and my windfall was a whopping $20k
- I did get a LOT of options at one point but when I left the company in 2010 the only thing that was left was $25k
- I do get options now but after 6 years they are worth just $100k
- we have $1.4M In after tax investments that we put everything away when we can.
- we’ve bought exactly one new car between us ever. All the rest have been low-mileage used

So, the single biggest driver was career growth. Second was taking advantage of available investment vehicles and tax shelters. Third was a 10 year bull run. Fourth was living below our means. I do not think this last one has had that big of an impact.

Now, for those that think they’ve made mistakes often discussed here and can’t get out, let me add what we’ve done that is bad over that time:

- both paid for our own undergrads and left school with combined $50k in student loan debt. I actually maxed student loans one semester to buy a motorcycle! It was a cool motorcycle though.
- our first home we bought with just $5k down and carried PMI for 6 years at an interest rate of just under 7%
- I once held more than 15 different funds in my 401K because I thought that meant diversification
- our second house was more than $650k on a salary of less than $125k. We put down 20% this time, but carried a 4.5% interest-only loan on it.
- I bought in to my company’s IPO at more than $200k of cash outlay (on top of my already-high concentration on that company). I sold once the window expired and made just $20K.
- at a different company, I once held 50% of my 401K in that company’s stock. When 2009 happened, the stock went from 70+ to $3 at one point. Value dropped in the 401K from like $200k to less than $50k. It is now still there and since 2010(I left that company) the balance is more than $550k but with no company stock.
- we own two houses and vacant land. None are a good investment. At all.
- I just dropped nearly $60k on a bathroom remodel. I’d suggest it would drive value up on the house maybe $25k.
- When we refinanced to a 15-fixed a couple years ago, it was the first time in 20 years of home ownership we didn’t have an ARM, interest-only, or paid PMI.
- I’ve never had an accountant do our taxes
- we’ve never had a financial advisor

investingdad
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Re: If your net worth is over $3 million, how did you do it?

Post by investingdad » Sat May 11, 2019 6:52 am

We have a shot at hitting 3 million by the end of 2019. I need about a 3.5% market gain plus our normal contributions to break it. We'll be 46.

- engineering and business degrees for wife and I
- good paying jobs in our field, but not crazy high, we broke 100k each around age 40
- saved about 25% of gross over the years
- sensible home and car purchases
- each began investing at 23
- index funds, no trading
- that's it

Patient investing, sensible spending, good jobs.

LC Mike
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Re: If your net worth is over $3 million, how did you do it?

Post by LC Mike » Sat May 25, 2019 12:02 am

Very similar story to investingdad. We are at $3.2M net worth with spouse and I at 52 this year
- Two engineering degrees in the family
- Started 401K contributions at 6% at age 23 and continually increased % as pay increases were granted
- Maxing out 401K contributions including catch up for over 50 years of age
- Have always lived below our means
- Always paid extra on home mortgage, paid off last year
- no trading in market, followed index approach
- currently saving about 30% of income

Living below our means, or at least avoiding how the majority of the world acts is important. We lack for nothing, enjoy nice vacations, and continue to contribute to charities and distribute some of our blessings to our children. We plan to retire at 56, travel as we want, minimize taxes (optimize tax deferred accounts), and gift to our children over the next 30 years.

surfstar
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Re: If your net worth is over $3 million, how did you do it?

Post by surfstar » Sat May 25, 2019 12:14 am

We won't ever do it [NW >3m]. We could, but that would mean we worked longer than needed (until like 67 or something crazy like that).

Rus In Urbe
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Re: If your net worth is over $3 million, how did you do it?

Post by Rus In Urbe » Sat May 25, 2019 5:38 am

It was so much easier than I expected! It took us roughly 20 years on teacher salaries.

1. LBYM. Every day. Year after year.
2. STC (especially during the Great Recession and the Glorious Great Recovery)
3. Never pay a dollar of interest
4. Max out retirement funds, especially matching ones
5. Retire any mortgage(s) asap
6. Keep your eye on the long game, not the roller coaster
7. Find joy in simple things, not expensive ones
8. Live life fully---money isn't the goal

It's all about spending habits really.
What you don't spend, and therefore save, is the single most important factor in building wealth.

Some luck helps too.
I'd like to live as a poor man with lots of money. ~Pablo Picasso

basspond
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Re: If your net worth is over $3 million, how did you do it?

Post by basspond » Sat May 25, 2019 6:00 am

Keep what you have for as long as you can spouse included
Invest early and often
Share your money
Save for those rainy days

LeeInTN
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Re: If your net worth is over $3 million, how did you do it?

Post by LeeInTN » Sat May 25, 2019 7:58 am

Rus In Urbe wrote:
Sat May 25, 2019 5:38 am
It was so much easier than I expected! It took us roughly 20 years on teacher salaries.

1. LBYM. Every day. Year after year.
2. STC (especially during the Great Recession and the Glorious Great Recovery)
3. Never pay a dollar of interest
4. Max out retirement funds, especially matching ones
5. Retire any mortgage(s) asap
6. Keep your eye on the long game, not the roller coaster
7. Find joy in simple things, not expensive ones
8. Live life fully---money isn't the goal

It's all about spending habits really.
What you don't spend, and therefore save, is the single most important factor in building wealth.

Some luck helps too.
Yes, Yes, and Yes! Don't forget numbers 7 and 8! Stop blowing money and competing within your "Identity Group." Cherish relationships and be grateful. Don't practice scarcity. Gradually it happens. I've had colleagues come and thank me twenty years after I suggested your Number 1 to them. It seems so simple, but many never try it.

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changingtimes
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Re: If your net worth is over $3 million, how did you do it?

Post by changingtimes » Sat May 25, 2019 8:12 am

1. Maxxed out 401k early.

2. Bought a house and stayed in it for 25 years in a neighborhood that exploded.

3. No kids. (sorry, but it's true--and it's the biggest reason)

quantAndHold
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Re: If your net worth is over $3 million, how did you do it?

Post by quantAndHold » Sat May 25, 2019 2:37 pm

1. Made good money, consistently for 30 years.
2. Lived within our means, consistently for 30 years.
3. Invested like a boglehead.
4. Got lucky on real estate. Twice.
5. Inherited the last bit.

Rus In Urbe
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Re: If your net worth is over $3 million, how did you do it?

Post by Rus In Urbe » Sat May 25, 2019 3:57 pm

LeeInTN wrote:
Stop blowing money and competing within your "Identity Group." Cherish relationships and be grateful. Don't practice scarcity. Gradually it happens. I've had colleagues come and thank me twenty years after I suggested your Number 1 to them. It seems so simple, but many never try it.
Beautifully said, LeeInTN !

Yes, it never ceases to amaze me how hard #1 (LBYM) is for most people----if the money is there it is spent, and then some. Of course, we are drowning in a consumerist society with literally thousands of daily messages trying to entice us to buy more, buy more. Since we pulled our TV cable more than 20 years ago, that kind of noise doesn't reach us much. Disengaging from all that advertising pressure also helps one re-focus on what is really important and what matters most.

Props on your advice: "Don't practice scarcity!"

:beer :beer :beer :beer :beer To the simple life!

Rus
I'd like to live as a poor man with lots of money. ~Pablo Picasso

Vogatrice
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Re: If your net worth is over $3 million, how did you do it?

Post by Vogatrice » Sat May 25, 2019 9:00 pm

We are at this number now, unfortunately without the virtuous behaviour described by others. The key is "time value of money" combined with a bit of LBYM and low cost investing.

My daddy taught me all the right things: get a good education, a good job, work hard and save from your very first paycheck, never carry consumer debt. I did all those virtuous things: Ivy League degree, then an MBA at night while working days, paid off student loans in < 10 years, maxed IRA contributions from my very first paycheck. Worked in the U.S. for ten years, making between $15K (first job) to $40K (last job). Invested IRA in Vanguard, bought a Honda Civic for cash.

Then...moved to Canada to marry a man who, it turned out, had a different outlook on money. He casually saved retirement money, but never maxed it. Had paid off his house, then divorced and re-mortgaged it. I tried to teach him about money: I maxed his and my retirement savings, paid off our first joint house in 9 years, made him drive his car until it died, etc. Drove my Honda Civic for 20 years. Paid off our second house in only 1.5 years. Second ten years of my career, things went swimmingly. Had two healthy children.

Then...he quit work at age 50 with no discussion and no good reason. I was 42. Savings screeched to a halt as I emotionally spent as if we still had two incomes. No further retirement contributions from either of us. No debt of any kind, no new cars, house remained paid off, but living AT your means is not the same as BELOW your means. 18 years later, I have just retired.

My combined US and Cdn retirement >$1M, his Cdn retirement >$1M, house value >$1M. The trick was set and forget.

Interestingly, my U.S. IRA value = CAD RRSP value within $200. Later (though much higher) contributions and higher fees in Canada have put the brakes on the Canadian fund while Vanguard has delivered year after year.

That old "start early" advice from my father really worked! Have owned two houses and two cars lifetime to date. Intend to sell the house asap and live in a rental in a LCOL place. Feeling comfortable this will work out, after years of angst.

Prodiver
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Re: If your net worth is over $3 million, how did you do it?

Post by Prodiver » Sun May 26, 2019 7:39 am

Well, I think we are around 8.5 at age 69.

4 year BS degree. Started a rep business and tonned it in the late 70’s. Made up to 35k a month. Sold it, and got into residential real estate sales. Absolutely killed it. Never under 250k, the highest was $700k. Inheritance twice from both families. Started new business at 65 and have someone wanting to buy me out at almost 2 million.

Had boats, airplanes, motorcycles, second homes. Lost 500-600k on various ventures. No 401k. Cashed in the ira to start new business but there wasn’t much in it. Paid for private health insurance for the family and it was EXPENSIVE!

So now I’m on Boglehead trying to figure out what to do. Going to sell out in a year or two. I’m actually scared of waking up with nothing to do! But it’s been a great ride...

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