Self-made Millionaires: how did hitting 7 figures change you?

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topofthebellcurve
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Self-made Millionaires: how did hitting 7 figures change you?

Post by topofthebellcurve » Sun Aug 14, 2016 9:40 pm

First, a quick thank you to the BH community. It is hard to find a place to talk honestly about money (and goals, and life, and all the deep issues to which money is inextricably bound). You've built a welcoming, knowledgable nook in the vast internet, and I'm delighted to be here. So, thank you.

Here's my question: for those of you (most of you, I'm guessing) who have hit $1M (or your number of choice), how did that impact you, if at all? Did arriving at that number change you in any meaningful way, or change your perspective?

I expect many of us have a number in our heads, and, to go along with that, a sense of how arriving at that destination will make us feel. Since I've started working, I had the goal of hitting $1M by 30. Why? I'm not entirely sure, aside from that it felt like a good "stretch" goal, and, were I to achieve it, I would know that I've somehow "made it". Despite inflation and $1M barely buying you a starter home in San Francisco, the idea and "millionaire" designation still carries cultural weight.

I was a year and a half late, but I got there....and it's been an unsettling few weeks since.

While there's the obvious comfort of knowing my wife and eventual children won't starve (absent my being wildly irresponsible, or WWIII), it's also provoked the sort of existential soul-searching that I think comes with arriving at any important destination. It's now crystal clear to me that I'm unsatisfied in my line of work (commercial real estate). Being on the verge of "real" adulthood (kids, homeownership, etc.), I felt a responsibility to provide, and to make whatever sacrifices necessary to ensure a healthy future for my family. Now, that line of thinking is no longer the motivator that it once was. Of course, $5M is better than $1M, and $1M more today is worth $X M by retirement...but it rings hollow. I'm thinking about my next 30+ years of life, and am feeling a need to be a more positive contributor to the world around me. In a global perspective, I've won the life lottery, and I feel like that comes with responsibility.

I'm not asking for advice so much as wanting to hear from others who have been through similar experiences. Did you just move on with your life as if nothing happened? Was it a cause of reflection or change?

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by boglephreak » Sun Aug 14, 2016 11:40 pm

i didnt know my net worth until recently because of reading bogleheads, and threads talking about knowing your net worth. it didnt affect me when i made it to seven figures (i didnt even know), and it hasnt affected me since. most of its in property though, so its not like i have ever seen it as a figure. im glad for the security though and the idea that if i keep working at it, i will be able to retire early and, more importantly, securely.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by White Coat Investor » Sun Aug 14, 2016 11:40 pm

It's the climb, not the summit. We meant to go celebrate it, but never got around to it. Then it happened again and seemed even less of an event.

At a certain point, it's enough and more isn't going to bring any more happiness or freedom, so you get to go focus on some other aspect of your life.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Noobvestor » Mon Aug 15, 2016 12:05 am

I hit it all at once (from relatively little), and it was a pleasant shock ... but it wears off.

The reality is that 3% of 1MM isn't that much if you have people to support. So it's great as a theoretical baseline, but it doesn't mean you can stop working for more (in most cases). So ... I don't know ... it's nice and it put me ahead of my peers but it didn't revolutionize my life. Don't mean to sound down about it - it's great - but it's all relative to your goals and needs.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by bluejello » Mon Aug 15, 2016 12:35 am

Hi OP,

I know exactly what you mean, and I have very similar feelings.

When I was a young child, my family struggled financially — we used coupons for everything, lived in a 500 sqft bug-infested apartment, took free furniture off the street, etc. Through a combination of hard work, amazing generosity on the part of others (thanks alma mater university for the free scholarship!) and immensely good luck, my family is now very well off. My parents are comfortably retired. My husband and I, who are in our early 30's, could easily retire as well.

Every day I feel grateful beyond words for the life I have, but also somewhat a loss. My main ambition growing up was to be able to provide a decent life for myself and my family. My dream as a young adult was to have little luxuries, like being able to go grocery shopping without mentally tallying up my shopping cart before checkout to make sure it didn't exceed our checking balance. Or being able to take a taxi home instead of the bus if it was raining.

Now that we're there, and then some, I'm having big existential thoughts about what to do. I definitely want to keep working, and I definitely feel that I want to give back, to give others some of the good fortune I've enjoyed. I don't have any answers yet, but I have been doing a lot of reading and thinking on this topic.

Here's some of the books I've read in the last year or so that I found very insightful. Hopefully they inspire you too:

Clayton Christensen, How Will You Measure Your Life?

Srikumar Rao, Happiness at Work

Martin Seligman, Flourish

John Wood, Leaving Microsoft to Change the World

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by sperry8 » Mon Aug 15, 2016 12:48 am

Interesting topic. I am self made and retired early. Since then I've spent the majority of the time traveling. 7 figures provides me freedom to choose (which was my goal in the first place). But while quite rewarding in many ways at times I've found life less than fulfilling. The feeling comes and goes (just like it did when I was working).

Recently I've dealt with a loss if a parent which had a silver lining. It has re-energized my zest for life. My parents passing made me again realize how terribly short life is and I've found my youthful attitude to enjoy it to the fullest once more. Having achieved 7 figures I can do so with ease to some extent (although there are many things money cannot buy). Still I can control more than most and use my financial freedom to ensure I'm at least walking the right direction for me. I do remember chasing financial freedom and while my mind had less chance to wander my choices were much more limited. I'll take the latter any day although it does take a mental fortitude to not get lost.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by mmcmonster » Mon Aug 15, 2016 5:10 am

It was nice, and certainly a goal I knew I was reaching. But as soon as I reached it I set my goal higher.

As others had mentioned, 4% of $1M isn't enough to live on indefinitely.

My goal is now more time-based: Keep investing and keep working until my kids are out of school and independent/married.

That will be another15 years. :annoyed

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Barefootgirl » Mon Aug 15, 2016 5:31 am

I only noticed it after the fact (even though the climb up to that point had been a significant challenge)....so while I acknowledged the achievement, it didn't change anything.

Also, if you hang out here long enough, you come to realize that $1M is chump change to many posters on the forum.

In some bizarro world version of life - if people in the real world knew your wealth status, you'd be ranked higher than many, but here it only puts you among the plebes. :) and yet, lots of good information on the forum, so it's worth it to keep digging around.

Best to you.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by wolf359 » Mon Aug 15, 2016 6:02 am

Barefootgirl wrote: Also, if you hang out here long enough, you come to realize that $1M is chump change to many posters on the forum.
Well, I wouldn't say that it's "chump change," but it IS more of just the first milestone for many.

55K/year is about median income in the US. $1M will support about $40K/year. With social security, that's enough for a lot of people. Many people who have achieved it earlier than full retirement age did so on a higher income, and wouldn't be able to do it. They'd keep going.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by prudent » Mon Aug 15, 2016 6:05 am

It was never a goal for us, because it seemed beyond attainable. We just kept our heads down and tried to be diligent in saving, generous in sharing, and frugal in spending. One day, there it was. We marveled at how blessed we were and went out to dinner ($70 incl tip which is pretty fancy for us). That was it.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by The Wizard » Mon Aug 15, 2016 6:17 am

It had very little real effect, since my charts showed I needed closer to two million$ to fund my retirement.
So it was a milestone, similar to $100k and $500k.

If I was on my 20s today, I would be targeting $5M or more by age 65, so the $1M stepping stone becomes less significant over time...
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by FedGuy » Mon Aug 15, 2016 6:32 am

I used to study martial arts. When I first started out, my ultimate goal was to earn a black belt. I figured that achieving black belt was the pinnacle of achievement in martial arts, and would represent an epic level of advancement and mastery.

I was brought down to Earth when the instructor, a fourth degree blackbelt, said to me, "You know, reaching black belt is just the first step of the journey. That just means you have the basics down. Then, the real work begins."

I can see the same thought process being applied to becoming a millionaire. I joined the club fairly recently, but still have exactly the same financial worries I did previously. What happens if I become injured or sick and unable to work? Can I really afford the new home I'm hoping to purchase? Is this new hobby that I'm trying out going to bleed my finances dry? Can I really afford this vacation when I have so many other things coming up that I'll need to pay for?

Maybe I'll feel a lot different if I ever get my net worth to, say, $5 million (which I don't think is likely), but for now, I feel pretty much the same as I did back when I was at six figures.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by joebh » Mon Aug 15, 2016 6:42 am

topofthebellcurve wrote:Here's my question: for those of you (most of you, I'm guessing) who have hit $1M (or your number of choice), how did that impact you, if at all? Did arriving at that number change you in any meaningful way, or change your perspective?
Hitting $1M didn't impact me at all, nor did it change anything for me in any meaningful way. My perspective never changed.

That is mostly because I never knew when we hit $1M.

My wife and I have always been savers. We always lived below our means. And we were always invested for the long term.
Over the years, we educated ourselves on saving and investing, but even early on we felt that we were on a reasonably good track.

We didn't watch our investments closely, so when the magical "7 figures" occurred we didn't know. We were closer to $1.2M before we realized.

That was fine, because we never had any plans to do anything different once we hit any magic number. Our plan all along was to work until we were ready to retire and not until we hit a number.

I retired last year. My wife is still planning to work for a few more years. When she is ready to leave the workplace, we'll probably be closer to $2M and well beyond what we have determined we need to live the retirement lifestyle we choose.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Flashes1 » Mon Aug 15, 2016 7:01 am

I think it's made me aware of my unique standing in the world. An American millionaire is something special, and it makes me feel part of the elite of the elite. It allows me to look at other peoples of the world and realize I am different. I have a particular level of discipline, intelligence, work ethic, and just plain old fashioned dumb luck, that very few people have.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Jags4186 » Mon Aug 15, 2016 7:24 am

I can't speak from personal experience, but what I can't wait for is seeing the power for $1,000,000 grow vs my small portfolio. A 10% increase is $100,000--more than I could ever hope to save in a year.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by The Wizard » Mon Aug 15, 2016 7:38 am

Jags4186 wrote:I can't speak from personal experience, but what I can't wait for is seeing the power for $1,000,000 grow vs my small portfolio. A 10% increase is $100,000--more than I could ever hope to save in a year.
Well, yes, but possibly even MORE exciting is a 10% DECREASE in that portfolio.
I've had that happen...
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by RadAudit » Mon Aug 15, 2016 7:44 am

topofthebellcurve wrote:Here's my question: for those of you (most of you, I'm guessing) who have hit $1M (or your number of choice), how did that impact you, if at all? Did arriving at that number change you in any meaningful way, or change your perspective?
Not much has changed. We still use coupons and shop sales. DW came home recently proud as punch that she had purchased A $50 pair of cargo shorts for $0.53.

Getting to my number took almost all of a 39 year career. Shortly after retiring, I started reading Bernstein and his recommendations of 25X RLE in safe assets to assure a secure retirement. Pushing those numbers around the page, I found my retirement wasn't as secure as one might of hoped.

Oh, well. The change in perspective is that some numbers may be a little more important than others as life rolls on.
FI is the best revenge. LBYM. Invest the rest. Stay the course. - PS: The cavalry isn't coming, kids. You are on your own.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by TomatoTomahto » Mon Aug 15, 2016 7:53 am

For us, there were a few milestones:
1. When we were assured of a comfortable retirement (NW > $2.5M, moderate pensions, and SS).
2. When we knew we could provide graduate educations for the kids without debt or affecting retirement (somewhere around NW of $4M; should have realized it sooner, but I'm slow)
3. When DW's income >$1M, and I thought she'd be satisfied and retire, but no luck so far. The downside is that we became a bit sloppy in our finances (eg, not cancelling unused gym memberships, which drives me crazy). I still asked DW and kids if it was okay for me to get a Tesla, because it felt (and is) extravagant.
4. Our next milestone is NW of 8 digits. It will happen sooner rather than later, but tbh, I'm not watching the odometer closely. I'd much rather a lower NW and a retired wife, but I fear that the same things that had her achieve a high income will keep her working. Fwiw, my FIL, well into his 80s is still working (at a job he loves); let's hope it's not genetic.

We never forget that
1. Luck was a serious component of our success
2. In spite of #1, in a more egalitarian and fair world, DW would have earned an order of magnitude more and had fewer slights and insults along the way. That said, things are better than they were 30 years ago.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Jack FFR1846 » Mon Aug 15, 2016 8:06 am

For most of my career, I never kept track. Both my wife and I had multiple accounts spread all over. I read in a car forum, of all places that one should find and know costs. That got me looking and building a spreadsheet to understand what I had and what it cost. I looked at the total of my investments and it was $1.5MM. Wow. Who knew. Then I went on with my life as it was before with the exception of finding Bogleheads and understanding that diversification did not mean buying every offering in my 401k in equal amounts and that low cost index funds could reduce my costs. I'm now very focused on cost and asset allocation.

Now that Fidelity has changed all its fund names (why did they do that?), lowering costs and adding fund levels ($5MM minimum and $10MM minimum), I'm looking forward to buying into some $5MM fund(s) to save a couple hundred dollars a year.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by market timer » Mon Aug 15, 2016 8:06 am

More confidence to:
1. Leave a career I didn't enjoy with nothing else lined up
2. Have kids
3. Negotiate a promotion and raise for the first time
4. Feel relaxed at home and work

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Steve723 » Mon Aug 15, 2016 8:09 am

I'm not sure if there was a particular milestone, like $1M, that changed me, but somewhere along the way I developed financial peace of mind, which to me is defined as no longer stressing over money or my job security. That happened sometime in the past two or three years and it's a wonderful place to be in.

I would also say that many bogleheads became independently wealthy precisely because they DIDN'T change much through the accumulation years. I know that certainly applies to me. While I'm no miser, my spending increases over the past decade trail my income increases by a significant margin, such that every year the gap between earnings and expenses widens at an accelerated pace.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by NoNonsenseLandlord » Mon Aug 15, 2016 8:25 am

It really has not changed me a bit, although I left my FT job this year.

When I bought a property in 2011, my NW statement was just over a million. And I was stretching a bit on property values that I already owned. Since then, and a few more properties later, it had virtually quad-rippled. My cash flow has doubled too, to a pretty sizable number that would take a $5M portfolio to match.

The thing is, with over $2 million in real estate equity, you cannot even buy a cup of coffee.

But I still live the same. Except now I think about hiring out stuff, and still do it myself. I never thought about it before. Maybe I am just getting old...

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by soboggled » Mon Aug 15, 2016 8:26 am

A million dollars isn't what it used to be. A "millionaire" is no big deal, depending on your age.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Rodc » Mon Aug 15, 2016 8:28 am

I noticed in passing when we hit 2 commas. I mentioned to DW. We smiled. An interesting round number. Not life changing.

More interesting is when I started doing yearly "what if we retired today" back of the envelop calculations and discovered we could without too much trouble retire if push came to shove. Not retire to the level we might dream of, but well enough that if employers fired us both we would be ok. But since I still like my job and we have things like college to fund (savings well on the way, but not quite there) and nice family vacations to take we are not to the really interesting place of "Hey, we can retire now and have all the money we would really want."

FWIW: $IM is not what it used to be, even 20 years ago. Might generate ballpark $40K a year + inflation depending on returns going forward, whether you buy an annuity, etc. Add that to SS and you would be doing fine if you live in a modest cost of living area, especially if you own your home outright. But that is not high flying especially if you live in a high cost of living area.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Steve723 » Mon Aug 15, 2016 8:34 am

soboggled wrote:A million dollars isn't what it used to be. A "millionaire" is no big deal, depending on your age.
Yes, it is a big deal. Folks here need to realize how fortunate they are to even have that as a goal, as it is still well beyond the reach of the vast majority of households in the U.S.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by soboggled » Mon Aug 15, 2016 8:45 am

Steve723 wrote:
soboggled wrote:A million dollars isn't what it used to be. A "millionaire" is no big deal, depending on your age.
Yes, it is a big deal. Folks here need to realize how fortunate they are to even have that as a goal, as it is still well beyond the reach of the vast majority of households in the U.S.
OK, I get it, but there are more than 10 million households with a net worth of $1M in the US, or about 9%. The rate increases substantially with age, according to a 2013 calculator: 1% in their 20s, 15% in their 60s. (These numbers have increased a bit since 2013.) Most people need that much unless they have pensions and paid off mortgages, to retire comfortably in expensive parts of the country.
But the OP has a point - doing it before 30 without inheriting it is an achievement.
https://dqydj.com/net-worth-by-age-calc ... ed-states/

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by investingdad » Mon Aug 15, 2016 8:51 am

We crossed it at 39 after seventeen years of saving and investing.

We are now very close to notching the second one, four years later.

I think the biggest impacts it's had for me personally are:

* I don't worry about the pricey cheese, beer, and chocolate I enjoy
* I'm less concerned about layoffs these days than I was a decade ago
* I don't sweat unexpected expenses

We are not penny pinchers, but we still do the same stuff that got us here...live below our means (especially house and automobiles), invest a good chunk of our income, and limit lifestyle creep.

I think the biggest impact is a reduction in stress.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by JDCarpenter » Mon Aug 15, 2016 8:53 am

The only milestone that really stands out was two years ago when the ratio of our liquid NW to our projected retirement spending was sufficient for me to quit telling DW "five more years." :happy She about fell over to hear "three more years." Until that time, NW, although tracked daily since the early 90s (quicken....), was just a number. I don't remember our reaction to hitting 2 commas for the first time, or to the times when the first number changed. Undoubtedly the increases made us more at ease financially, but nothing in particular stands out.

Still driving lower end Hondas (although both were purchased new) and doing most of my brick/mortar shopping at WalMart and Kroger; don't know that we'll ever leave that. But, much more willing to spend on some luxuries now than in past (better airplane seats, dining out once or twice a month, wine purchases) as a result of the rise in assets and the kids being on their own. And, of course, early retirement would be a huge splurge of a lifetime even without the sharply increased spending that we are planning.

On this level, at least, DW and I are very simpleminded--no angst about the results of our good fortune/luck, hard work, and planning.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Toons » Mon Aug 15, 2016 8:54 am

It offers "options" in life.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by panhead » Mon Aug 15, 2016 8:56 am

I've been working to be FI since before I graduated college. I always craved the choices that would allow me.
That being said, getting there has been like grabbing a fish!
When I first calculated what I needed (late 90s) I figured 500k would be enough at 5%
As the years rolled on, I decided that I needed $1M at 4%
Later, I figured I needed at least $1M in taxable to support me to 59.5
Now, I figure I need $2M @ 2.5% - 3% and a paid off house.
I really hope it stops there but we will see!

I completely agree that $1M is an awesome achievement especially if you do it all on your own. If you were 65 with social security you could retire comfortably now. If you are not 65, and especially if you are in your 30s or 40s, most of us here probably smile a little, buy a bottle of (bogle) wine, reflect a bit, and go to work in the morning.

-pan-

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Steve723 » Mon Aug 15, 2016 8:59 am

soboggled wrote:
Steve723 wrote:
soboggled wrote:A million dollars isn't what it used to be. A "millionaire" is no big deal, depending on your age.
Yes, it is a big deal. Folks here need to realize how fortunate they are to even have that as a goal, as it is still well beyond the reach of the vast majority of households in the U.S.
OK, I get it, but there are more than 10 million households with a net worth of $1M in the US, or about 9%. The rate increases substantially with age, according to a 2013 calculator: 1% in their 20s, 15% in their 60s. (These numbers have increased a bit since 2013.) Most people need that much unless they have pensions and paid off mortgages, to retire comfortably in expensive parts of the country.
But the OP has a point - doing it before 30 without inheriting it is an achievement.
https://dqydj.com/net-worth-by-age-calc ... ed-states/
Yes, true, it certainly isn't what it used to be (of course, nothing is what it used to be!). But anyone that achieves that milestone at any age is still among a fairly small minority of households.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Steve723 » Mon Aug 15, 2016 9:02 am

panhead wrote:I've been working to be FI since before I graduated college. I always craved the choices that would allow me.
That being said, getting there has been like grabbing a fish!
When I first calculated what I needed (late 90s) I figured 500k would be enough at 5%
As the years rolled on, I decided that I needed $1M at 4%
Later, I figured I needed at least $1M in taxable to support me to 59.5
Now, I figure I need $2M @ 2.5% - 3% and a paid off house.
I really hope it stops there but we will see!

I completely agree that $1M is an awesome achievement especially if you do it all on your own. If you were 65 with social security you could retire comfortably now. If you are not 65, and especially if you are in your 30s or 40s, most of us here probably smile a little, buy a bottle of (bogle) wine, reflect a bit, and go to work in the morning.

-pan-
Well, perhaps you have grabbed the fish, but keep deciding to throw it back in the water! At some point, you need to look at the fish, admire it, and say, "this will do...this will do".

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by JDCarpenter » Mon Aug 15, 2016 9:02 am

panhead wrote:I've been working to be FI since before I graduated college. I always craved the choices that would allow me.
That being said, getting there has been like grabbing a fish!
When I first calculated what I needed (late 90s) I figured 500k would be enough at 5%
As the years rolled on, I decided that I needed $1M at 4%
Later, I figured I needed at least $1M in taxable to support me to 59.5
Now, I figure I need $2M @ 2.5% - 3% and a paid off house.

....

This is what DW hated about my financial planning over the years! Our proposed spending, adjust for inflation, has not changed since the early 90s, but the margin of safety kept getting more conservative. Thus, the jokes about my putting a carrot (or, some nice Pinot and Chocolate) on a stick just out of her reach, saying "five more years." The more I learned, the longer she had to work.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by truenorth418 » Mon Aug 15, 2016 9:08 am

Hitting $1,000,000 in investable assets was awesome. It was a major milestone and the goal I had been seeking for years.

But, as others have pointed out, it was not enough to retire on, so I kept pounding away at my corporate job and quietly socking away as much as I could in order to reach the even more relevant goal of financial independence.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Rob54keep » Mon Aug 15, 2016 9:09 am

It really meant very little at the time. A milestone perhaps but not the finish line. It did force me to think about when is enough,,,enough. Hoarding should never be the goal but having the sense of financial independence and the ability to bless others is a nice freedom.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by goodenyou » Mon Aug 15, 2016 9:09 am

I wasn't watching when I hit 7-figures. I became a Boglehead after I reached 7 figures, unbeknownst to me. I was always debt adverse and a LBYM person prior, but I had to learn the investing side. 20 years ago, I moved to an ultra LCOL area with a job that had a terrific earning and investment potential. The goal was to get to a point (as fast as I could) to pay off debt quickly and where I wasn't dependent on earning money in a career that is quickly changing in a negative way. Low 7 figures wasn't enough to be mentally financially independent at a young age (<50), but it created an incentive to try to build on the saving. I don't include home equity as part of my net worth because it doesn't change my mental state of financial independence. Over the last several years, I have been around several people that have a net worth over 9-figures and one with a 10-figure net worth. It has been eye-opening to see wealth at extremes since I grew up in a lower middle class family. Being able to go to the grocery store without looking at prices has been a whole new concept to me.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by panhead » Mon Aug 15, 2016 9:14 am

Steve723 wrote:Well, perhaps you have grabbed the fish, but keep deciding to throw it back in the water! At some point, you need to look at the fish, admire it, and say, "this will do...this will do".
Lol, yeah, I hear you. At some point, I have to stop moving the goalpost. I think this is very common here considering the "OMY" threads. Back to the OP, I guess my point was that $1M is a great achievement, but for many here it's like seeing the sign, "Entering South Carolina" on your way to Spring Break in Daytona Beach, Florida.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by panhead » Mon Aug 15, 2016 9:24 am

JDCarpenter wrote:
panhead wrote:I've been working to be FI since before I graduated college. I always craved the choices that would allow me.
That being said, getting there has been like grabbing a fish!
When I first calculated what I needed (late 90s) I figured 500k would be enough at 5%
As the years rolled on, I decided that I needed $1M at 4%
Later, I figured I needed at least $1M in taxable to support me to 59.5
Now, I figure I need $2M @ 2.5% - 3% and a paid off house.

....

This is what DW hated about my financial planning over the years! Our proposed spending, adjust for inflation, has not changed since the early 90s, but the margin of safety kept getting more conservative. Thus, the jokes about my putting a carrot (or, some nice Pinot and Chocolate) on a stick just out of her reach, saying "five more years." The more I learned, the longer she had to work.
I can certainly relate. In my 20s,I figured 5% was fine because I was young and strong and could always go back to work doing anyting, including construction if need be. In my early 30s I came to the conclusion that 4% made a lot more sense as I wouldn't want to go back to work with the exception of doing something I wanted to do, not for need. In my late 30s, I decided I needed more of a cushion as I saw that even when the 4% wr didn't fail, it nearly decimated portfolios several times, so I lowered my wr to 3%. In my early 40s I decided that initially living on about what my portfolio spit out for income would be more prudent, so that resulted in a 2.5% wr. Sigh. Wish I could get comfortable with a 3% wr.

OP, this change of view seems to happen naturally with most of us as the years roll on. That being said, $1M will certainly let you take a LOT of time off, or if you can get your expenses down to about $25-$30k, you could retire now. I could certainly get my expenses that low, but I would not want to live at that level for the rest of my life. Thus, to work I go.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by LarryAllen » Mon Aug 15, 2016 9:31 am

Milestones are important and congrats for achieving. Now find your next milestone and keep working on it.

For me, yes I was excited when I hit $1m, yes I was excited when I hit $2m, yes I was excited when I hit $10m. However, by and large nothing has changed except I stress differently (not less just differently) about money, almost always pay for the ocean view rooms in Hawaii and find myself more focused on managing our assets than before. On the other hand I still walk around the house turning off the lights, don't run the AC too much, have a 10 year old car, don't eat at expensive restaurants except on rare special occasions, etc....

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by bigred77 » Mon Aug 15, 2016 9:45 am

I am still a few years away from hitting $1M in net worth (and a number of years away if we are only counting financial assets) but I'm surprised people aren't treating it as a bigger milestone.

Roughly 10% of households in the US ever hit that number. To me, hitting that number means I can handle a multi-year period with no job and still be OK if something really bad happens. It means unless I screw things up royally, my family has avoided the risk of ever living in poverty. And it's a big round number with connotations of achievement attached to it. At least talk about with your spouse and celebrate it as the achievement it is.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by azanon » Mon Aug 15, 2016 9:59 am

I think it should mean different things to different people depending on what your expenses are. The far more meaningful target is whatever your financial independence number is; where you can meet your expenses with purely passive income sources. Someone with no more than a 30-yr horizon living modestly on 50-55k/year or so, might have no trouble making ends meet on 1 mil invested and social security.

For me, that figure will pretty much mean I've saved enough, and that I just have to finish serving my required time as a Fed (FERS) so that I qualify for my pension upon immediate retirement.

I see a few saving 5-10+ mil. With my lifestyle, I just don't need anything close to that. Then again, I just have a slightly above average home in (low cost) Little Rock, AR. Enough is all I need.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Tigermoose » Mon Aug 15, 2016 10:12 am

soboggled wrote:A million dollars isn't what it used to be. A "millionaire" is no big deal, depending on your age.
It puts you in the 1%. That's a pretty big deal. You are probably more wealthy and well off than 99.9% of persons throughout history. That's a pretty big deal.
Institutions matter

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Tigermoose » Mon Aug 15, 2016 10:15 am

It enabled me to feel confident about having a large family.

Since most of it is in retirement accounts, I feel long term wealthy (assuming the world doesn't go to ....), but in the short term I feel pretty much like any other middle class family. I guess if I lived somewhere other than the suburbs of the United States, I would feel wealthier.
Institutions matter

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by vitaflo » Mon Aug 15, 2016 10:18 am

I set a goal to hit the 2 comma club when I turned 40. I hit it a year early at 39. My wife and I both grew up in poor rural areas, so for us this was a major achievement. That said we don't live like millionaires and we certainly haven't told anyone we are. Outwardly nothing has really changed. We're the prototypical "millionaire next door".

Inwardly it has changed our psychology a bit. Technically we're done saving if we want to be. We just need to make enough to live on until we retire, which isn't much. This of course puts the thought in your head of early retirement, something we've thought a lot about since reaching this number. It's given us a bit of anxiousness to get out of the rat race, or find a job that is more fulfilling but pays less. It's become a bigger topic of conversation now, what's the right path? That can cause some analysis paralysis since the end goal feels so reachable now.

In the end our new goal currently is to retire when we hit 50, and we look to be on track for this. Of course, anything can happen, and another 2008 will feel a lot different now than it did back then. But it does make me feel good to sleep at night knowing we have options for all the hard work we put in.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by ryman554 » Mon Aug 15, 2016 10:21 am

Tigermoose wrote:
soboggled wrote:A million dollars isn't what it used to be. A "millionaire" is no big deal, depending on your age.
It puts you in the 1%. That's a pretty big deal. You are probably more wealthy and well off than 99.9% of persons throughout history. That's a pretty big deal.
Likely a lot more than 99.9%. That would more than cover the people alive *today*, many (most?) of which still live on subsistence incomes.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by panhead » Mon Aug 15, 2016 10:28 am

LarryAllen wrote: For me, yes I was excited when I hit $1m, yes I was excited when I hit $2m, yes I was excited when I hit $10m. However, by and large nothing has changed except I stress differently .....
As you can see from the above post, being a part of this community also tends to motivate one to get "more". There is very little chance (i'll never say never) that I'll hit $10M, probably not even $5M, but my competitive side reads things like this and I get motivated to run up the score.

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Scamp » Mon Aug 15, 2016 10:43 am

I have been fascinated with the word "millionaire" for a while. Look it up on wikipedia it's pretty interesting. It's been in use since the 1800's. Think of how much wealth it meant back then. In 1900 it was worth about 25,000,000 in 2015 dollars. How many other words have carried this import for 200 years? We don't still use tycoon or Brahmin on a regular basis anymore, but millionaire still rings true. How long before it just fails to carry any wait. My guess around 2030.

We haven't celebrated the million milestone or any of the others since because my wife just doesn't think that way. We crossed a substantial one this year in my opinion about 18 months sooner than I guessed we would. I excitedly shared the news and she said "that's nice." I suppose she keeps me grounded!

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Diogenes » Mon Aug 15, 2016 10:47 am

I think if this were 1970, $1M would be still significant. However what I noticed when passing a multiple of that, and finding that I didn't need any of it really to live, was that I no longer wanted 'things' and mostly wanted to get rid of stuff.
Living years overseas helped to see that also. In much of the world there is not a strong emphasis on filling a big house, or a driving a new shiny car.

It's a different journey for everyone. Most of us here are very fortunate that we live in a society where all is possible, and where a number is just a number...

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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Just sayin... » Mon Aug 15, 2016 10:50 am

I remember the moment. I was sitting in my home office and pushed the update button in Quicken after a particularly good day in the market - and the net worth column rolled over to seven figures. I called my wife in and pointed to the number (we're both from relatively poor families), then celebrated by going out for a hamburger. Next day, it was back to work. The only change was a degree of satisfaction that "the plan is working."

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