Question for the Bogleheads Millionaires

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ajacobs6
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Question for the Bogleheads Millionaires

Post by ajacobs6 » Fri Sep 04, 2015 3:42 pm

Many people are underpaid, and living paycheck to paycheck. What was your story for breaking out of this cycle?

In most cases, is the solution really just a higher salary and higher savings rate?

Or is there something else that people should consider? Other forms of income maybe. I may never have millions of dollars in my lifetime, and it's hard to imagine how it is even possible with the average American career.

Thanks

sharpjm
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Re: Question for the Bogleheads Millionaires

Post by sharpjm » Fri Sep 04, 2015 3:44 pm

Live below your means is rule number 1.

"The average american career" probably doesn't support "the average american lifestyle". Toys are expensive, yet i see people living in near poverty with smartphones and a $100+/month phone plan.

livesoft
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Re: Question for the Bogleheads Millionaires

Post by livesoft » Fri Sep 04, 2015 3:50 pm

Education and a spouse with education and a good job.
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dbltrbl
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Re: Question for the Bogleheads Millionaires

Post by dbltrbl » Fri Sep 04, 2015 3:53 pm

Will take a stab at it.

Positive attitude.

No fancy/ pricey vacations.

Eat home . Healthy for you and your wallet.

Save save.

Live below your means.

Average family income in USA 50500.00 per year.

Spend no more than 25% on housing.

Do not speculate. Invest.

25 or 30 years later Millionaire

Good Luck.

Blueskies123
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Re: Question for the Bogleheads Millionaires

Post by Blueskies123 » Fri Sep 04, 2015 3:54 pm

The two previous posts are good and then once you have those two the next step is to work hard and keep your mouth shut.
FIRE July 2015 The US government spends nearly the ENTIRETY of its tax revenue on Social Security, Medicare, and Interest on the Debt.

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stickman731
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Re: Question for the Bogleheads Millionaires

Post by stickman731 » Fri Sep 04, 2015 3:56 pm

BUDGET BUDGET BUDGET - which includes savings - Do not deviate.

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Tycoon
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Re: Question for the Bogleheads Millionaires

Post by Tycoon » Fri Sep 04, 2015 3:58 pm

Learn to distinguish between "wants" and "needs".
...I might be just beginning | I might be near the end. Enya | | C'est la vie

Simple Simon
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Re: Question for the Bogleheads Millionaires

Post by Simple Simon » Fri Sep 04, 2015 3:59 pm

earn more, spend the same

jnet2000
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Re: Question for the Bogleheads Millionaires

Post by jnet2000 » Fri Sep 04, 2015 4:01 pm

It doesn't happen overnight. I didn't come from money, I have never had an inheritance, received any financial support to go to college or buy a house, etc. I am a first generation American and I think the drive to succeed and have a better quality of life than my parents and grandparents was a huge motivator.

At a very young age, I decided living paycheck to paycheck wasn't the lifestyle I wanted.

1. I worked 2 other jobs while getting my first business off the ground. I was extremely underpaid! I was not scared of work and if I had a day off, I spent it finding more work. I refused to be a victim. If you are broke or aren't making enough money, there are plenty of weekend jobs. I would go many years without taking a vacation. I was too busy working. I had goals!

2. Once I started making enough money to live on, I lived below my means and saved. I never had a sophisticated budget, but I paid myself first. I never used debt, outside of a mortgage. I only bought things I could afford to pay cash or I didn't buy them. And I saved. To this day I live in a small home and I drive 10 year old cars which I maintain well and should last me a few more years.

It took me 20 years of living like this to get to where I am at. Now I can finally enjoy it but I paid the price. Most people wouldn't choose the lifestyle I had but I don't regret it.
Last edited by jnet2000 on Fri Sep 04, 2015 4:04 pm, edited 2 times in total.
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Chicken lady
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Re: Question for the Bogleheads Millionaires

Post by Chicken lady » Fri Sep 04, 2015 4:01 pm

Choose your spouse/partner carefully. Divorce and settlements can be very expensive.

Try to learn from financial mistakes. Just because you made an error one time doesn't mean you have to repeat it.

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TomatoTomahto
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Re: Question for the Bogleheads Millionaires

Post by TomatoTomahto » Fri Sep 04, 2015 4:05 pm

I married up. :D

We were also very lucky to have skills in software development at a time when people were paying up for that. It can still be done, but I think it's tougher than before. I took to programming like the proverbial fish to water, back when you got one compile per day, used punchcards, analyzed core dumps, etc.

My wife was technical at first, but quickly showed a knack for managing large numbers of developers and getting projects in on time, on budget, and exceeding specs. I had known her casually for a few years when she was promoted to managing a group that included me. She is unassuming by nature, and at a big meeting that she was leading I remember thinking, okay, so far I don't see what everyone's talking about this great leader, etc. During that meeting, as will happen with developers, things started to go off track a bit, she asked a couple of questions in her unassuming way, and the meeting was back on track. I earned respect for her that day that I have never lost.

For years we lived below our means, until we felt the game was won, but we still probably spend much less relative to our income than comparably paid people.

bradshaw1965
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Re: Question for the Bogleheads Millionaires

Post by bradshaw1965 » Fri Sep 04, 2015 4:11 pm

The self reported net worth surveys of Bogleheads, if accurate, probably indicate that Bogleheads in general are very high earners saving a very high percentage of their earnings. The cool thing is you can be in the bottom decile of Bogleheads, adopt the principles and practices and still be a millionaire in a reasonable amount of time. The techniques work as directed.

Nicolas
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Re: Question for the Bogleheads Millionaires

Post by Nicolas » Fri Sep 04, 2015 4:12 pm

Work hard and save all you can.
Last edited by Nicolas on Mon Dec 14, 2015 11:53 am, edited 7 times in total.

junetree
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Re: Question for the Bogleheads Millionaires

Post by junetree » Fri Sep 04, 2015 4:13 pm

Started investing as soon as we started working (out of college). Well paying career. Spouse and I are on equal footing with similar backgrounds in technology and business. Investing was a hobby right out of college. Lucked out on the dot com boom and real estate in the west coast.

toto238
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Re: Question for the Bogleheads Millionaires

Post by toto238 » Fri Sep 04, 2015 4:16 pm

Take stock of what's REALLY important in your life. Society/culture/media/etc likes to put ideas into your head about things you're supposed to find important. You have to travel the world! You have to have the newest phone! You have to have the nicest house! You have to wear designer clothes! You need to have the latest toys and whatever other conspicuous consumption is being sold in stores!

For me, a number of things are truly important to me:

1. Having a healthy family
2. Being able to provide food, shelter and clothing
3. Investing in my human capital to maximize the positive impact I can have on the world
4. Have a few things I really like, instead of a lot of things I use once
5. Always learn. Never stop learning

None of those things require me to have millions upon millions. But having some decent income and a working spouse helps me to accomplish those goals and still feel comfortable.

Live below your means.
Save.
Invest.

The switch from working for your money and having your money working for you is more mental than anything else.

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Peter Foley
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Re: Question for the Bogleheads Millionaires

Post by Peter Foley » Fri Sep 04, 2015 4:18 pm

There are many ways to become a millionaire, most of which do not apply to the vast majority of Americans. Being born into a wealthy family is one approach, but is out of our control. (We are lucky enough to be born in the developed world.)

Having a great idea/concept/product and bringing it to market is another approach. But as a percentage of the population, that is fairly rare.
Winning it. Again a fairly low percentage option.

So for the average "Joe/Jane" you are left with owning/running your own business, saving and investing. Many of the previous posts lead into that.

To be able to invest you must live below your means so you have something to invest. Being very careful with debt is critical to this effort. My mantra has always been "Do not pay interest on a depreciating asset." There are some minor, albeit temporary, exceptions to this rule - one being you might need to incur some debt to acquire basic dependable transportation so that you can get to work.

You can't control timing, but I think it is a contributing factor as well. Being at the front end of a demographic wave is probably advantageous as is entering the workforce during a period of relative prosperity and low unemployment.

I like dbltrbl's short list of things you can control.

hicabob
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Re: Question for the Bogleheads Millionaires

Post by hicabob » Fri Sep 04, 2015 4:18 pm

Working for myself, on the side at first then permanently. That doesn't work for everyone but if you try it "on the side" you will find out if it's for you quickly.

nobsinvestor
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Re: Question for the Bogleheads Millionaires

Post by nobsinvestor » Fri Sep 04, 2015 4:20 pm

shocked nobody has said it yet.

Get a job in the actively managed investment industry!!! [analyst, fund manager or wholesaler]. You'll be making so much money you won't even need index funds.

drzzzzz
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Re: Question for the Bogleheads Millionaires

Post by drzzzzz » Fri Sep 04, 2015 4:26 pm

I agree with the individual who posed the question - it is very expensive to live nowadays between housing, education, healthcare expenses, children's costs, other needs, and wants. I know many individuals who graduate college with loans the size of a mortgage and will have great difficulty moving ahead ( so career choice is very important). I agree that working hard is the key, education is incredibly important, finding a mate who thinks about money in a similar fashion, and living below your expenses - but I also think there is a huge amount of income inequality and wage inequality and for many individuals who don't have the educational skill set that the market wants, it is very difficult to save and get ahead. Of course the old fashion parents leaving an inheritance helps as well.

toto238
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Re: Question for the Bogleheads Millionaires

Post by toto238 » Fri Sep 04, 2015 4:29 pm

nobsinvestor wrote:shocked nobody has said it yet.

Get a job in the actively managed investment industry!!! [analyst, fund manager or wholesaler]. You'll be making so much money you won't even need index funds.


It's a pretty top-heavy place from my understanding. The fund managers get paid very very well. Everyone else gets the crumbs. Some of the crumbs are of decent size, but even when you're making $100,000, when the guy next to you is making twice as much, it doesn't feel that rich.

BahamaMan
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Re: Question for the Bogleheads Millionaires

Post by BahamaMan » Fri Sep 04, 2015 4:31 pm

ajacobs6 wrote:Many people are underpaid, and living paycheck to paycheck. What was your story for breaking out of this cycle?

In most cases, is the solution really just a higher salary and higher savings rate?

Or is there something else that people should consider? Other forms of income maybe. I may never have millions of dollars in my lifetime, and it's hard to imagine how it is even possible with the average American career.

Thanks


The problem with a higher salary if you don't freeze your standard of living, the the standard of living will always increase to the salary level. I did not get serious until I was 30 and also living paycheck to paycheck with a lot of Debt.

The first step was to cut out all of the discretionary spending and channel it towards debt. This was about $500 a month back in the 80s. Once the debt was erased, I started saving the $500 a month and 'Froze' my standard of living. When I did get a raise my savings increased, not my standard of living. I really paid attention to 'monthly bills'. I never had a Cable Bill (Still Don't) or a Cell Phone Bill (Still Don't)... When we bought a place, we bought a house that was Half as much as the Realtor said we should. Live this way for 20-30 years and the Money starts piling up. It's a slow process.

Today we are retired and can spend a lot more than we did when we were working. Our biggest expense before we were working was "Saving for Retirement".... Since we don't have that 'Expense" anymore, we are free to spend it! :happy -- We use VPW to spend freely and not have to worry about running out of money. We spend 3 times more than non-discretionary.

So, watch expenses, especially recurring ones. We only had one child.... They're expensive. If you have 5 kids they are going to cost you! Don't let anyone tell you different!

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patrick013
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Re: Question for the Bogleheads Millionaires

Post by patrick013 » Fri Sep 04, 2015 4:43 pm

I have alot of bad luck, every place I work I always get laid-off, fired,
mutual termination, just because of plain corporate downsizing
and the resulting internal politics. But that's the business cycle
for you creating behavior getting things done better.

I was able to get one pension secured, so, things are bright in that
respect.

Anyway, if I put just $10,000/yr. into a 401k or IRA for 30 years expecting
8% return every year, no taxes paid yet, that account will be over $1
million dollars for retirement. Good old TSM should do it. That's what
I would recommend.

I've had bosses, lucky, worked their jobs over 25 years. Pension checks
so big you almost don't need investments.

I read somewhere yesterday after $60,000 income your quality of life doesn't
really improve, you just spend money on stuff you don't really need.

So, whatever. :D
age in bonds, buy-and-hold, 10 year business cycle

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davidkw
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Re: Question for the Bogleheads Millionaires

Post by davidkw » Fri Sep 04, 2015 5:05 pm

Max out retirement from day one. Working two jobs teaches the value of money. I worked a maintenance job when I was 16 and had my own lawn cutting business. From that I learned to make wise financial decisions. I still work two jobs. My second job pays well, and it is fun. I ref lacrosse and volleyball. On Sundays in the fall and winter, instead of going to an NFL game and paying big $$$$, I'm out make $100 - $200 an afternoon doing something I love reffing sports.
David | | From Jack Brennan's "Straight Talk on Investing", page 23 "Living below your means is the ultimate financial strategy"

jcar
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Re: Question for the Bogleheads Millionaires

Post by jcar » Fri Sep 04, 2015 5:13 pm

Not to be repetitive but always live below your means. Learn the difference between a want and a need. Have no debt except real estate and eliminate that quickly. Work hard, enjoy your life, and learn to invest. Don't loan money to any individual.

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friar1610
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Re: Question for the Bogleheads Millionaires

Post by friar1610 » Fri Sep 04, 2015 5:23 pm

Read "The Millionaire Next Door," although the short version has already been said in the preceding posts.
Friar1610

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Maynard F. Speer
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Re: Question for the Bogleheads Millionaires

Post by Maynard F. Speer » Fri Sep 04, 2015 5:25 pm

Most active fund managers earn peanuts ... Apart from a handful of real investors, the majority are just figureheads with mediocre academic backgrounds and a team of college grads to help out .. Many can't even afford to live in London these days - they'll commute in from satellite towns

It's hedge funds where the real money is - didn't Kenneth Griffin earn $1.3bn in 2014? .. Much more competitive - a few quarters of bad performance on a trading desk and you can be kicked to the curb before your career's even started .. I've got friends who've done it .. Stories of people sleeping under their desks; not leaving the office for weeks on end; punch-ups; chairs thrown through windows ... Very few can hack it

As for making money ... From a very young age I was brought up with the mantra "You've can't get wealthy working for money; you have to make money work for you" ... Which is essentially what BH philosophy is about

But it extends beyond buying stocks and bonds ... When you're working for someone else's business, your time and energy obviously aren't being compensated very efficiently ... Example: take a McDonalds restaurant that nets over $2m; employs equivalent 10 full-time staff .. Well they're probably not on $200,000 salaries .. They're netting perhaps 5-10% of their value .. And office work is no different

So if you can make even a very small, niche online business run efficiently, you should earn closer to 100% of what you're actually contributing to the system (which may be a lot more than you'll make in employment) .. There are millionaires in the UK who've built their empires effectively bargain hunting for electronic gadgets on eBays - real grunt work
"Economics is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor to draw correct conclusions." - John Maynard Keynes

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bengal22
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Re: Question for the Bogleheads Millionaires

Post by bengal22 » Fri Sep 04, 2015 5:33 pm

I think the two keys are:

1. Focus on your career and make a lot of money
2. Start saving regularly in your early 20's and never stop

p.s. living below your means is overrated


I always remember those early IRA ads that showed the beauty of compound interest. So if you invest x amount every year starting at the age of 21 you will be a millionaire before you retire. It works

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Marmot
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Amen to everything noted above

Post by Marmot » Fri Sep 04, 2015 5:36 pm

I particularly agree with the "needs vs. wants" statement, we use those very words all of the time. We are newly ER'ed (58 and 55). If you are in your "consumption" age, be cognizant. We weren't all of the time, so easy to see looking back now:)

BahamaMan
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Re: Question for the Bogleheads Millionaires

Post by BahamaMan » Fri Sep 04, 2015 5:39 pm

bengal22 wrote:I think the two keys are:

1. Focus on your career and make a lot of money
2. Start saving regularly in your early 20's and never stop

p.s. living below your means is overrated


So, if you don't live below your means and you spend everything you earn, how are you Saving Anything? -- :oops:

Living below your means is MANDATORY !!

gd
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Re: Question for the Bogleheads Millionaires

Post by gd » Fri Sep 04, 2015 5:50 pm

I'm borderline old, and I still don't indulge myself as much as the average college student, much less 30-something. Am I depriving myself? They probably think so, I don't. It's no concern to me, as long as they don't whine about the results.

S&L1940
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Re: Question for the Bogleheads Millionaires

Post by S&L1940 » Fri Sep 04, 2015 6:03 pm

livesoft wrote:Education and a spouse with education and a good job.

yes, the spouse part is an important component. especially if you were not born rich; marry rich or at least have a spouse with a solid & growing income. works every time :moneybag :greedy
Don't it always seem to go * That you don't know what you've got * Till it's gone

staythecourse
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Re: Question for the Bogleheads Millionaires

Post by staythecourse » Fri Sep 04, 2015 6:12 pm

There are many ways to get to be a millionaire. I will let you know the most predictable, but most won't like the answers:

1. Get a good education
2. Get a highly paid job
3. Marry a spouse who values the same things (if he/ she works as well even better)
4. Save a lot

It really is that simple. It is like losing weight. Everyone knows what it takes, i.e. eat less +/- exercise, but yet everyone tries every random way outside of the guaranteed way. That is like getting rich. It is easy to be a millionaire. Just do the above. The problem is everyone would love to sidestep the education part as that is "too much work" and want it faster and easier. A few do it easy, but most work hard to make themselves wealthy and almost everyone puts a lo of forethought into it.

To the younger readers on this forum if you want to be rich stop reading about asset allocation and start studying and get a good education in the most highly paid career you will actually like doing for 20+ years.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

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Maynard F. Speer
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Re: Question for the Bogleheads Millionaires

Post by Maynard F. Speer » Fri Sep 04, 2015 6:14 pm

If you're relatively young and don't want to go the entrepreneurial route, I hear psychiatrists in many states average £200-250k/year

Means getting a medical degree then some in-field experience, but it's a relatively linear career path from what I gather, and the number of jobs in the professional is estimated to increase considerably in coming decades (unlike many careers, which are likely to be negatively impacted by new technologies)
"Economics is a method rather than a doctrine, an apparatus of the mind, a technique of thinking, which helps its possessor to draw correct conclusions." - John Maynard Keynes

bubbadog
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Re: Question for the Bogleheads Millionaires

Post by bubbadog » Fri Sep 04, 2015 6:25 pm

Staythecourse hit the nail on the head. Agree 100%.

The Wizard
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Re: Question for the Bogleheads Millionaires

Post by The Wizard » Fri Sep 04, 2015 6:26 pm

Forget the spouse thing. It takes more for two to live than one.
If $1M is good for a single person, it takes at least $1.6M for a couple at same standard.

And forget the $1,000,000 number. Too dependant on Inflation and salary level.
Focus instead on a salary multiple, like 10X.
If your final salary is $75,000, then $750K is a good target.
You can get there saving 20% to 30% of gross over your career.

BUT, if you're working for minimum wage for 40 years, saving 20% will be hard. So aim for higher levels of employment...
Attempted new signature...

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Re: Question for the Bogleheads Millionaires

Post by GoldenFinch » Fri Sep 04, 2015 6:45 pm

Blueskies123 wrote:The two previous posts are good and then once you have those two the next step is to work hard and keep your mouth shut.


Yes! Work, SAVE and don't talk!

Read The Richest Man in Babylon for old fashioned inspiration. (I read it on vacation after coming across the title here and loved it!) :happy

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FrugalInvestor
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Re: Question for the Bogleheads Millionaires

Post by FrugalInvestor » Fri Sep 04, 2015 6:55 pm

I think that saving a good portion of your income is most important whether you become a millionaire or not.

Saving a good portion of your income accomplishes three important things, two of which are obvious. First, it assures that you live below your means providing there's no creative accounting going on. Second, it builds up your savings for future (retirement) use which is the purpose of saving.

Third, and most important, is to never ramp your lifestyle and expectations up beyond your ability to fund it - including a good amount of savings. The financial downfall of many people is that they ratchet their lifestyles up to the limit of their incomes without savings, planning to save later. The longer that is done the more difficult it is to to ever go back and get into the habit of saving (LBYM). This doesn't mean that you never ratchet your lifestyle up, just that it always lags behind your earning capacity by the amount of saving you need to do.
Last edited by FrugalInvestor on Fri Sep 04, 2015 7:22 pm, edited 2 times in total.
IGNORE the noise! | Our life is frittered away by detail... simplify, simplify. - Henry David Thoreau

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JoMoney
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Re: Question for the Bogleheads Millionaires

Post by JoMoney » Fri Sep 04, 2015 6:58 pm

... is there something else that people should consider? Other forms of income maybe. I may never have millions of dollars in my lifetime, and it's hard to imagine how it is even possible with the average American career.

The "average American" will not attain the wealth of Millionaires. It is extremely difficult. The number one rule for growing wealth is your income needs to be more then your outgo. This may be easier said then done depending on your level of income and what your expenses are.
I think there's some good and interesting advice in these two books which I don't think I ever see mentioned around here:
P.T. Barnum in The Art of Money Getting or, Golden Rules for Making Money wrote: http://www.gutenberg.org/files/8581/8581-h/8581-h.htm
DON'T MISTAKE YOUR VOCATION, SELECT THE RIGHT LOCATION, AVOID DEBT, PERSEVERE, WHATEVER YOU DO DO IT WITH ALL YOUR MIGHT, USE THE BEST TOOLS, DON'T GET ABOVE YOUR BUSINESS, LEARN SOMETHING USEFUL, LET HOPE PREDOMINATE BUT BE NOT TOO VISIONARY, DO NOT SCATTER YOUR POWERS, BE SYSTEMATIC, READ THE NEWSPAPERS, BEWARE OF "OUTSIDE OPERATIONS", DON'T INDORSE WITHOUT SECURITY, ADVERTISE YOUR BUSINESS, "DON'T READ THE OTHER SIDE", BE POLITE AND KIND TO YOUR CUSTOMERS, BE CHARITABLE, DON'T BLAB, PRESERVE YOUR INTEGRITY
... Money is in some respects like fire; it is a very excellent servant but a terrible master. When you have it mastering you; when interest is constantly piling up against you, it will keep you down in the worst kind of slavery. But let money work for you, and you have the most devoted servant in the world. It is no "eye-servant." There is nothing animate or inanimate that will work so faithfully as money when placed at interest, well secured. It works night and day, and in wet or dry weather.
I was born in the blue-law State of Connecticut, where the old Puritans had laws so rigid that it was said, "they fined a man for kissing his wife on Sunday." Yet these rich old Puritans would have thousands of dollars at interest, and on Saturday night would be worth a certain amount; on Sunday they would go to church and perform all the duties of a Christian. On waking up on Monday morning, they would find themselves considerably richer than the Saturday night previous, simply because their money placed at interest had worked faithfully for them all day Sunday, according to law!
Do not let it work against you; if you do there is no chance for success in life so far as money is concerned. John Randolph, the eccentric Virginian, once exclaimed in Congress, "Mr. Speaker, I have discovered the philosopher's stone: pay as you go." This is, indeed, nearer to the philosopher's stone than any alchemist has ever yet arrived. ...

"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

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topper1296
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Re: Question for the Bogleheads Millionaires

Post by topper1296 » Fri Sep 04, 2015 7:05 pm

GoldenFinch wrote:
Blueskies123 wrote:The two previous posts are good and then once you have those two the next step is to work hard and keep your mouth shut.


Yes! Work, SAVE and don't talk!

Read The Richest Man in Babylon for old fashioned inspiration. (I read it on vacation after coming across the title here and loved it!) :happy


I consider that the best book ever written on personal finance. I've read it a few times.

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blueblock
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Re: Question for the Bogleheads Millionaires

Post by blueblock » Fri Sep 04, 2015 7:10 pm

Twenty five years ago, in my early saving/investing years, it was definitely living below my means. I didn't really have anything to invest, so that was how I started to get ahead financially in those days. (While I wouldn't want to eat it today, back then dinner often involved a one-dish meal of Kraft Mac 'n Cheese, canned tuna and broccoli.)

Later, I bought a place that was well below what my mortgage company told me I could afford, and lived there happily for 20 years. With my 401K, I started with just enough to get the match, and then later upped my 401K contribution rate by one percent per year until I hit the max.

And, yes, starting in the late Nineties, my employment earnings hit $100K, and kept rising until I retired in April this year, most of which increases I saved.

To tell you the truth, I still can't quite wrap my head around being a millionaire. It's not something I ever dreamed would apply to me. Certainly, I have my talents, but much more I have my lucky stars to thank.

I'm sorry if this sounds like bragging; I don't discuss my finances with anyone except my partner, so it feels good to proclaim my gratitude to the universe, if anonymously.

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market timer
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Re: Question for the Bogleheads Millionaires

Post by market timer » Fri Sep 04, 2015 7:33 pm

High income was the key for me. It's straightforward in the US to get a $150K+/year job with the right education. That's a typical starting salary for someone from a good JD or MBA program or any med school. You don't need to be particularly creative or even a very productive employee to earn that kind of salary. To become a millionaire, all you have to do is work for about 10 years and save half your income, even if you are a mediocre employee.

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LiveSimple
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Re: Question for the Bogleheads Millionaires

Post by LiveSimple » Fri Sep 04, 2015 8:12 pm

BahamaMan wrote:
bengal22 wrote:I think the two keys are:

1. Focus on your career and make a lot of money
2. Start saving regularly in your early 20's and never stop

p.s. living below your means is overrated


So, if you don't live below your means and you spend everything you earn, how are you Saving Anything? -- :oops:

Living below your means is MANDATORY !!



Agree that Living below your means is needed, on the same token, we do need to agree that living below your means is overrated.

For example, Partick013, stated that

Anyway, if I put just $10,000/yr. into a 401k or IRA for 30 years expecting
8% return every year, no taxes paid yet, that account will be over $1
million dollars for retirement. Good old TSM should do it. That's what
I would recommend.


If you have more expendable income apart from $10,000/yr , you do not need to live below your means.

It is all mathematics ;-)

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Cosmo
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Re: Question for the Bogleheads Millionaires

Post by Cosmo » Fri Sep 04, 2015 8:24 pm

staythecourse wrote:There are many ways to get to be a millionaire. I will let you know the most predictable, but most won't like the answers:

1. Get a good education
2. Get a highly paid job
3. Marry a spouse who values the same things (if he/ she works as well even better)
4. Save a lot



^ This although I would re-word highly paid to well-paid.

Cosmo

RadAudit
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Re: Question for the Bogleheads Millionaires

Post by RadAudit » Fri Sep 04, 2015 9:12 pm

A lot of good posts.

It also helps to have a plan to get to your goal. Mine was done about 30 years ago without a financial calculator. It was just a piece of paper that projected the year end totals of the portfolio every year until it reached $1 mil. I think the biggest contribution of the plan was that it showed that even though the balances were small at the start I was on tract to get to the goal.

And, you have to want to to be a millionaire. You have to want it enough to stick to the plan you choose to get to your goal. It also helps to understand - before you get there - that with an SWR of 4%, $1 mil is only an extra $40k / yr. No use in being disappointed after 20 to 40 years of saving.
FI is the best revenge. LBYM. Invest the rest. Stay the course.

LateStarter1975
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Re: Question for the Bogleheads Millionaires

Post by LateStarter1975 » Fri Sep 04, 2015 9:21 pm

dbltrbl wrote:Will take a stab at it.

Positive attitude.

No fancy/ pricey vacations.

Eat home . Healthy for you and your wallet.

Save save.

Live below your means.

Average family income in USA 50500.00 per year.

Spend no more than 25% on housing.

Do not speculate. Invest.

25 or 30 years later Millionaire

Good Luck.


Rinse and repeat. +1
Debt is dangerous...simple is beautiful

Atilla
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Re: Question for the Bogleheads Millionaires

Post by Atilla » Fri Sep 04, 2015 9:26 pm

Yep - pretty much a higher salary and savings rate. And being married to someone with the same financial goals as yourself. And time. Until the markets took their recent crap, we crossed the magic line of 1 Mil net worth at 48 years old each.

Until 12 years ago I always spent more than I earned. Amazing what piles up once you decide to get serious about it and have the huge blessing of a good-earning partner along for the ride.
The Village Idiot - here for your entertainment.

MathWizard
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Re: Question for the Bogleheads Millionaires

Post by MathWizard » Fri Sep 04, 2015 9:50 pm

I'm not yet a millionaire, but barring some unfortunate circumstances, will be in about 3-5 years.

High income helps, but combined income for my wife and I only exceeded $100K in the last year.

We were both raised in families that were either lower middle class or poor. No inheritance for either of us.

School loans for both of us, but scholarships helped.

Education, though expensive, helped in the income category.

The biggest was always paying myself first. Started with 15% of my pay and went upwards.
Once school loans were paid off, that amount went to retirement savings.

I've only borrowed on cars 3 times, and never leased. Never had a new car.

We have had trips around the nation, and a few to Europe, so not all work and no play,

Yes, it is possible. At the beginning, it looks like you are getting nowhere. After about 12-16 years, you will
see investment earnings start to equal contributions. Then it seems easier, with passive income generating
half the work.

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bengal22
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Re: Question for the Bogleheads Millionaires

Post by bengal22 » Fri Sep 04, 2015 9:53 pm

BahamaMan wrote:
bengal22 wrote:I think the two keys are:

1. Focus on your career and make a lot of money
2. Start saving regularly in your early 20's and never stop

p.s. living below your means is overrated


So, if you don't live below your means and you spend everything you earn, how are you Saving Anything? -- :oops:

Living below your means is MANDATORY !!


You cannot see the difference between spending everything you have and living below your means?

reason-logic
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Re: Question for the Bogleheads Millionaires

Post by reason-logic » Fri Sep 04, 2015 9:57 pm

Maximize any employer matching retirement plan.
Save 10% or more of net income.
Target annual earning increase 2x inflation rate.
Work hard and maximize your value to your employer.

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Toons
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Re: Question for the Bogleheads Millionaires

Post by Toons » Fri Sep 04, 2015 9:59 pm

Live benath your means.
Spouse or partner needs to be on the same financial page.
Stay out of debt :happy
We never made high wages.
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

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