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

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

Post by topofthebellcurve »

ScroogeMcDuck wrote:
I'm a lawyer. The anxiety is mostly existential - if I could find a part time job I love that pays a quarter of what I make now, our material needs would be met. The problem is that I'm not sure what I want to do. I'm very goal oriented, which worked out fine with measurable goals like GPA and savings rates. It's a strange transition to having goals solely related to building a happy and meaningful life. We're fortunate to be in this position.

Do you have an idea of what you want to do next?
Great question. I love ferreting out new opportunities (we call it "sourcing" in real estate), so I'd like to focus on that, and perhaps explore some small investment opportunities on the side.

My wife is about to get a substantial promotion to about $120-150K/yr. She's phenomenal in her field, and I am extremely confident in her continued employment and earnings growth). That's enough to cover our life, though with minimal savings. The way I see it, if we can live off of her earnings (including any rent/mortgage payments), and allow our ~$1M in saving to grow naturally over the next 30 years, we'll have enough for college and retirement. I'm not thinking of retiring or staying home with the kids, more that it gives me the comfort to shift into more unstable / risky ways of living (at least financially).

I am honestly not sure what I want to do, but it would be a shame not to explore the options. Perhaps I want to do five things at once! Step one is to get the heck out of this cubicle :happy
msk
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by msk »

It's a cliche but very true nonetheless. If one is lucky enough to enjoy his job as a hobby, no stress enters the picture. Jobs that come to mind, Warren Buffett's investing, academic research, etc. Hope your wife does not get stressed out from the upcoming promotion :oops:
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by ScroogeMcDuck »

topofthebellcurve wrote:Great question. I love ferreting out new opportunities (we call it "sourcing" in real estate), so I'd like to focus on that, and perhaps explore some small investment opportunities on the side.

My wife is about to get a substantial promotion to about $120-150K/yr. She's phenomenal in her field, and I am extremely confident in her continued employment and earnings growth). That's enough to cover our life, though with minimal savings. The way I see it, if we can live off of her earnings (including any rent/mortgage payments), and allow our ~$1M in saving to grow naturally over the next 30 years, we'll have enough for college and retirement. I'm not thinking of retiring or staying home with the kids, more that it gives me the comfort to shift into more unstable / risky ways of living (at least financially).

I am honestly not sure what I want to do, but it would be a shame not to explore the options. Perhaps I want to do five things at once! Step one is to get the heck out of this cubicle :happy
Sounds like an excellent plan! :sharebeer
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Leemiller »

For me, it was a great milestone and I have absolutely no worries about retirement anymore given our net worth and a small Fed pension that I'll receive. The cynic in me assumes we will receive zero in social security benefits.

I do now think more about early retirement or starting a business. I'm not enamoured with my job, but I'm not sure I want to take a pay cut either.

It also is pretty awesome how much our portfolio increases on its own, in addition to what we are putting in. We are already up this year much more than I expected.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by stonerolled »

tnr wrote:For me, getting to the age of a guaranteed pension at my former company was a bigger milestone than achieving a certain net worth. Neither has fundamentally changed me however as I am more motivated by trying to be a better person both to my family and to My community. Whatever wealth I achieve, I hope it will eventually be a positive influence for society.
Same here as a state worker. My goal all along has been regular state retirement. Becoming financially independent has been a huge distraction and temptation but I know that any 'early' retirement would bother me in the future. My net worth with house has probably hit 7 figures but there is no way I would ever be happy if my pension was early or reduced in any way.
Last edited by stonerolled on Fri Aug 26, 2016 5:17 am, edited 2 times in total.
chicagoan23
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by chicagoan23 »

At the risk of boring the original poster and other readers, my personal feelings on hitting seven figures (or more accurately, becoming what I considered to be "wealthy") have definitely changed over time.

I remember graduating in 2000 and being at a net worth of negative $70k, and feeling pretty good when I made it to zero 18 months later. With a high income, I had no problem spending on things like multiple trips to Europe or going to big sporting events (Rose Bowl, Final Four, etc.), things I would never splurge on now. Hitting a six figure net worth with a six figure salary made me feel quite wealthy and I sure did enjoy my 20s.

I remember feeling less wealthy in 2009 when we survived the financial crisis and were worth $450k with a newborn and one stay-at-home spouse, but I still had no problem spending with a big mortgage payment, new cars, etc. I didn't feel rich but I thought I was doing great.

I had always wanted to get to the $1 million net worth mark before age 40, and got there at 38 (on Thanksgiving Day, ironically). I was satisfied to have met a goal but like many others who have posted didn't really feel any different, and thought that I was doing OK.

Now almost three years later we are at $1.4 million, and we look around at our friends and neighbors--and read threads like this--and realize that our wealth level is probably below average given our peer group (I am referring to a highly educated, high income, HCOL area professional as opposed to the average US citizen). Then we look at the cost of raising multiple kids and now pretty much watch every penny, saving about 35-40% of our gross income. There are some modest kid-related splurges (Disney World trip, club sports teams, music and dance lessons, monthly dinners out at family restaurants, etc.) but we don't feel wealthy at all.

I would imagine I'm only going to feel even worse off financially until all four kids are through college and we have come out of the next two or three recessions still standing, even as we get to the $2 million mark (hopefully in the next four years or so) and beyond.

Now, finally, to my point.....for the original poster and the other 20- or 30-somethings: as you age, your awareness will change. Reaching that $1 million goal is important but you will likely start to feel much less wealthy as you age and your life changes. Personally I would not focus on early retirement or making any drastic lifestyle changes unless you are truly miserable in your career. You may look at yourself at 40 or 45 or 50 and think that you need to be doing much better than you are doing now. In that sense, I don't think you have really "won the game" until you are getting close to the end of the game, and the young and rich who post here are a long way from there.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Tycoon »

I find myself saying, "we're multi-millionaires, we should have hired someone to do this" a lot. I never used to say that.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Random Poster »

chicagoan23 wrote:In that sense, I don't think you have really "won the game" until you are getting close to the end of the game, and the young and rich who post here are a long way from there.
I think that I get what you are saying, and I might agree with it somewhat, but could please tell me when I am "getting close to the end of the game"?

There is something to be said for the proverb "Enjoy yourself. It is later than you think."

Particularly if you have a net worth of $1 million or more.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by chicagoan23 »

I think that I get what you are saying, and I might agree with it somewhat, but could please tell me when I am "getting close to the end of the game"?

There is something to be said for the proverb "Enjoy yourself. It is later than you think."

Particularly if you have a net worth of $1 million or more.
Yes, good points. I was just trying to convey my experience, that when I was the same age as some of the recent posters (ScroogeMcDuck and Topofthebellcurve) I thought I was better off financially than I feel I am now, even though I have much more now than I did at the time. Those two posters are doing much better than I was at their age, but I would still suggest that their perspective will change as they get older.

Of course, to your point, an early-30s millionaire could only have a few years left and it would be tragic to spend them doing something they really hated. So if they are really miserable then it probably is time to try something different. But if things are tolerable and their life goes as would be expected, then I would keep working and earning and saving until I am in my 50s or even 60s, even if I think I have enough to retire comfortably. Otherwise they might find themselves wishing that they had.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by mickeyd »

Years ago when we realized that we had hit the two comma (7 figure) mark DW was beside herself with joy for some reason. I recall telling her not to get too excited because each of us had just reached the 1/2 million club (2 x1/2 =1) and still needed to save and invest. She became very interested in our investment accounts right after that little episode, if I recall correctly.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by nedsaid »

As Yogi Berra famously said, "A nickel ain't worth a dime anymore." By the time I hit $1,000,000 net worth, I won't feel rich. First, a million dollars isn't what it once was in purchasing power. Second, a million dollars doesn't seem like a lot when you have to live off that for the rest of your life.

If I told my relatives what I was worth today, I would probably get some raised eyebrows and hushed surprises. But I am not at a $1,000,000 net worth, I don't feel rich now and I won't feel rich whenever I get there. Plus I know that markets are volatile. It is knowing that what the market giveth, the market taketh away. I suppose when I get close to retirement and have a lot more of my portfolio in bonds, no one is going to ooh and aah over 2% bond yields. Let me see, 2% on a million is like $20,000 a year? Hardly the stuff of champagne dreams and caviar wishes.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by blissed »

I was lucky enough to hit my first few million at age 24. It didn't change me much -- I still keep my spending at graduate school levels ($1800/mo stipend) although I'll occasionally take my wife out for a nice dinner. My one big splurge was a Tesla Model S and that was it (I have never owned a car).
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by stonerolled »

Abe wrote:
expat wrote: Let's say 1 million produces 40K in annual income. That is nothing in a high cost of living area.
It's better than nothing.

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

Post by SurferLife »

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?
Finally, I can now answer this question because DW and I have been in this club for all of 3 hours. :sharebeer I check our balances on the first of the month and I saw it happen, and had a feeling that September was going to be "the month". Well let me say that it feels really great to hit it, it has been a long time coming, and thank you Boglehead community.... but my worry is far from over. We have been riding a fairly aggressive AA, and it has paid off, but I think it might be foolish to keep at it, so I'm re-looking that now in hopes of making it more conservative. Something funny though that you may get a chuckle out of, is that when we hit 7 figures, my excel column wasn't wide enough so all I saw at first was ###########; it really took some of the fun out of seeing it "roll over". On to your question....

Our hitting 7 figures couldn't come at a better time actually. I am military and we are near the end of my military career; I'm currently 45, DW is in her 30s. I have another deployment coming up in a year, and I do not want to go, mainly because I have a 1yr old and another on the way, and I've done my time downrange and am tired of people trying to blow me up. I can retire now, so I have been looking and looking at our numbers, seeing if we can do it earlier than expected. Being that we don't know where we want to live after the military, it's hard to know how much cash flow and taxable money we need to fill the gap for early retirees, and that is truly the crux of my concern; we can't figure out "our number"! I am still in the "we have got to save everything we can because we may never make this amount of money again" mode. I don't like being in that mode, but I can't see it changing until I retire. I'm also thinking not just about my kids, but my wife and me as well. I've done the military more than half my life, and I'm ready for something new and who knows how much longer I have. DW is a high-achiever and is not cut out to be a SAHM, but I want to give her the gift of being able to choose something where she doesn't have to worry about making money. Can we do that with where we are at now? I think we can, and the comfort that provides is wonderful. I can say though without a doubt, that I am done with the military and want to retire today. My grandfather and father died young, and I don't want to make the mistake of not pursuing my passions while I'm still young enough, and more importantly, able enough, to pursue them.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by BlackStrat »

Congrats to Surferlife and thank you for your service! Looking forward to hearing about your second million in a handful of years!
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Taz »

SurferLife wrote: SNIP//// I'm also thinking not just about my kids, but my wife and me as well. I've done the military more than half my life, and I'm ready for something new and who knows how much longer I have. DW is a high-achiever and is not cut out to be a SAHM, but I want to give her the gift of being able to choose something where she doesn't have to worry about making money. Can we do that with where we are at now? I think we can, and the comfort that provides is wonderful.
@SurferLife - When I retired after 21 yrs, I became the stay-at-home-dad and my wife went back to work after 11 yrs. Having one of us at home was more important than having a big house & trying to maximize earnings. So depending on her income potential and your retired pension amount, you can do this (BTW you are well ahead of where we were when I retired). The downside is that your military skills/employability are generally worth less the longer you are out. Depending on their ages you can work part-time or take advantage of the GI bill (with the stipend as a bit of extra income) until you both feel the time is right for both of you to work.

For us, retiring just before the 2008/2009 crash meant a delay into the club (& buying at the top of the market :( -- but that's another story).

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

Post by Stormbringer »

topofthebellcurve wrote:Self-made Millionaires: how did hitting 7 figures change you?
It was exciting until I realized that it would only provide $40K a year in income. I sighed. I went back to work.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by goodenyou »

Stormbringer wrote:
topofthebellcurve wrote:Self-made Millionaires: how did hitting 7 figures change you?
It was exciting until I realized that it would only provide $40K a year in income. I sighed. I went back to work.
That is if you reach 7-figures of investable assets. Counting the equity in your home does not provide any income. Many count home value as part of their 7-figures and it doesn't generate any income. Owning a house in San Francisco for 6 months doesn't really count. :shock:
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by am »

Sure 1 mil= 40k/yr or so but this amount ensures you are set for the rest of your life and have freedom if you choose. You can live in most places of the us at a comfortable level and with part time work even better. Plus if you are young, eventually SS will come and give you a raise. And there is a great chance your money will grow, perhaps much more than you could have imagined given all the grim predictions from "experts" and their quantitative analysis of markets which are based on unpredictable human behavior. For non boglehead types and 95% of others you will be rich! Plus the habits that led you to 1 mil will lead you to more.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Abe »

I can remember when I was making maybe around $12k a year. A million dollars was all the money in the world to me. Back then, probably in the sixties, savings accounts were paying 5.25%. I remember wishfully thinking, if I had a million dollars, I could draw $50k a year and never touch the principal. I would be rich. I would never have to work again. I imagined what it would be like but didn't think there was much chance I would ever get there. But life is like a box of chocolates, you never know what you're gonna get. :happy
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Petrocelli »

It didn't. I was a jackass before I got that first million. I'm still a jackass
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by victorb »

The best thing is that it gives you freedom & options. Maybe you want to retire early. Maybe you want to help out a relative. Since we also did a good job at knowing our expenses, it allows you to project money usage and how long money will last. It has given me a tremendous sense of calm and allowed me to retire early. I never realized the stress work was adding to my life. Having a nice nest egg allowed me retire before 66 and feel comfortable doing it. Retiring early and not having to watch every penny has turned out great.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by frugalecon »

Stormbringer wrote:
topofthebellcurve wrote:Self-made Millionaires: how did hitting 7 figures change you?
It was exciting until I realized that it would only provide $40K a year in income. I sighed. I went back to work.
I felt similarly. I tend to think more in terms of income streams. The portfolio will yield one income stream in retirement, and pensions and SS others.

It is certainly the case, though, that if someone had told me that I would have the assets I have now, I would have assumed I would be done saving, if not entirely done working. But that was when I thought that 8% returns were reasonable. The world looks a little different at 3-4%.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Abe »

frugalecon wrote: It is certainly the case, though, that if someone had told me that I would have the assets I have now, I would have assumed I would be done saving, if not entirely done working. But that was when I thought that 8% returns were reasonable. The world looks a little different at 3-4%.
It sure does. It means you need twice as much.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by WarpSpeed »

For me, the one million mark (net worth as I haven't yet hit a portfolio value of $1M) was really no different than any other financial goal in my life. I would say that my proudest financial moments were (1) paying off my student loans in full and (2) paying off our mortgage in full. Reaching $1M net worth was a relatively recent achievement, and nothing has changed--it's just one more mile marker on the road to financial independence. If anything, I'm more aware that FI will eventually be possible for us sometime in the future, so I guess that's something. On reflection, it makes me feel incredibly blessed.

I and my family grew up fairly poor (financially). We lived in a trailer park when I was 8-9. And yet I never felt poor. We had enough food to eat and we had good relationships with friends and family. I can recall in my early teens (or perhaps a bit younger) dreaming about how having $1M would mean we were set for life. Savings accounts were yielding about 5% at the time, I believe, and I knew enough math to realize that would be $50,000 a year in income, which was more than my parents were making. But $1M now doesn't have the same income power, so while it's a significant amount of money, in no way do I feel "set for life".

My parents sacrificed a lot for me and my siblings, sending us to a church school that cost them several hundred dollars every month. For that I'll be forever grateful. We are now doing the same for our kids (only it's costing us quite a bit more, I think...). There are some things more important than money, and we've been willing to spend on quality education, like my parents did for me, even though it will mean we won't hit our FI number nearly as soon as we might have otherwise. For college, I was pretty much on my own (hence the student loans), but we're planning to cover around 50-80% of the college costs for our kids. Education is what has allowed me achieve a six-figure income, and education is one of the few areas where I believe it is worth it to "spoil" the kids (although I'm sure they'd rather see the money spent on "toys" or a lake house, etc.)

I've tracked my finances quite closely ever since getting out of college. Every month or two I would see my net worth (very negative) increase a little bit with each payment toward my loans. I also accelerated payments, and when I paid one off, I'd but the extra money every month toward principle on the next (Dave Ramsey's debt snowball, although I didn't know who he was at the time, and I modified it slightly to tackle higher interest loans first). Back in my 20s reaching $1M net worth didn't really seem possible--I never even thought about it since it was so far away.

Now that I've reached it, I simply look forward to the next milestone: $1M in the portfolio. And when I reach that, I'll be looking forward to hitting "the number", which is quite a bit higher, especially since I fully expect to receive less than full SS benefits by the time I'm eligible [OT comment removed by moderator prudent]

But in the end, it's not the numbers associated with these milestones that matter. What's important is that "the number" means freedom and security for my family, and the ability to give more towards the causes that matter to us. And I find that making note of the milestones along the way to "the number" (whatever they may be) is a way to keep focus and gauge progress. Keep living your life consistent with your values and remember why you're trying to achieve FI. It needs to be about something more meaningful than just "being rich".
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by ofcmetz »

if I get there I'll be sure to let you know. I can say that being 37 with the ability to walk with a pension that would immediately pay me 40K a year is nice although not quite the same as looking at 7 figures.

This thread is a great read. I'm impressed by the discipline and habits shared by so many of y'all. The boglehead millionaires have a good grasp of their expenses as it relates to their wealth. They also have very good spending habits from what I'm reading. Most have a plan and don't let having a bit more money than most change them. I'm very impressed and thank all for their informative posts. I've been reading this thread off and on for over a week now and just now finally finished.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by LuigiLikesPizza »

I see a few in this thread have emphasized the role of their pension over their personal savings. Since one can always purchase an annuity using cash savings - why the magical mystical allure of the pension?
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by bargainhuntingking »

Smiled to myself, took a screenshot of my account balance, then got back to whatever I was doing.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by gator15 »

I had a lot of joy when hitting both $100k and $1,000,000. I also celebrated both. When I hit $100k I took a trip to Australia, New Zealand and Fiji. Don't regret that at all. When I hit $1,000,000 I bought some pretty expensive shoes I wanted and I also committed to some home improvement projects which cost around $20k. Don't regret that either. Reaching the milestone has changed me somewhat because I don't worry about money like I use to. More money equals more flexibility for me. I will continue to celebrate savings milestones along the way. It's fun. Gives me something to look forward to. Next stop is $1.5m which I hope to hit in the next three years. With that milestone comes another reward I'm looking forward too.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by gator15 »

I had a lot of joy when hitting both $100k and $1,000,000. I also celebrated both. When I hit $100k I took a trip to Australia, New Zealand and Fiji. Don't regret that at all. When I hit $1,000,000 I bought some pretty expensive shoes I wanted and I also committed to some home improvement projects which cost around $20k. Don't regret that either. Reaching the milestone has changed me somewhat because I don't worry about money like I use to. More money equals more flexibility for me. I will continue to celebrate savings milestones along the way. It's fun. Gives me something to look forward to. Next stop is $1.5m which I hope to hit in the next three years. With that milestone comes another reward I'm looking forward too.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by SRenaeP »

LuigiLikesPizza wrote:I see a few in this thread have emphasized the role of their pension over their personal savings. Since one can always purchase an annuity using cash savings - why the magical mystical allure of the pension?
I can't speak for anyone else but for me, the great thing about my pension is that it doesn't cost me any money vs purchasing an annuity. My pension plan is employer contribution only. That is 'guaranteed' money that doesn't require any effort on my part and isn't subject to the whims of the market like my own investments are.

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

Post by pennywise »

LuigiLikesPizza wrote:I see a few in this thread have emphasized the role of their pension over their personal savings. Since one can always purchase an annuity using cash savings - why the magical mystical allure of the pension?
Because I didn't have to accumulate the money to buy it myself :wink:
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by HomerJ »

chicagoan23 wrote:Now, finally, to my point.....for the original poster and the other 20- or 30-somethings: as you age, your awareness will change. Reaching that $1 million goal is important but you will likely start to feel much less wealthy as you age and your life changes.
The trick is to keep your costs under control...

I feel extremely wealthy with $1 million in investable assets, because the house is paid off, I live in a LCOL Mid-west city, I drive a cheap Honda Civic, and I'm sending/have sent my kids to State U.
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HomerJ
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by HomerJ »

frugalecon wrote:
Stormbringer wrote:
topofthebellcurve wrote:Self-made Millionaires: how did hitting 7 figures change you?
It was exciting until I realized that it would only provide $40K a year in income. I sighed. I went back to work.
I felt similarly. I tend to think more in terms of income streams. The portfolio will yield one income stream in retirement, and pensions and SS others.
Just note that income streams in retirement are different from "income" while working.

I think too many people see "$40k a year! I can't live on that! I make $100k now"

But of that $100k:

$6,000 goes to payroll taxes (and of course income tax is higher on $100k)
$12,000 goes to savings
$18,000 goes to mortgage.

So one is really only needs $64,000 a year (with a paid off house) to give you the exact same lifestyle you had while working full-time and making $100k.

$40,000 a year is pretty big chunk of that. Add in Social Security, and $1 million (and a paid-off-house) gives the same lifestyle as someone making $100k today. And you get to sleep in every day. :)

We should all count our blessings.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Abe »

HomerJ wrote: $40,000 a year is pretty big chunk of that. Add in Social Security, and $1 million (and a paid-off-house) gives the same lifestyle as someone making $100k today. And you get to sleep in every day. :)

We should all count our blessings.
Amen to that.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by RoadHouseFan »

Abe wrote:
HomerJ wrote: $40,000 a year is pretty big chunk of that. Add in Social Security, and $1 million (and a paid-off-house) gives the same lifestyle as someone making $100k today. And you get to sleep in every day. :)

We should all count our blessings.
Amen to that.
Agree. A million bucks is a lot of money.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by frugalecon »

HomerJ wrote:
frugalecon wrote:
Stormbringer wrote:
topofthebellcurve wrote:Self-made Millionaires: how did hitting 7 figures change you?
It was exciting until I realized that it would only provide $40K a year in income. I sighed. I went back to work.
I felt similarly. I tend to think more in terms of income streams. The portfolio will yield one income stream in retirement, and pensions and SS others.
Just note that income streams in retirement are different from "income" while working.

I think too many people see "$40k a year! I can't live on that! I make $100k now"

But of that $100k:

$6,000 goes to payroll taxes (and of course income tax is higher on $100k)
$12,000 goes to savings
$18,000 goes to mortgage.

So one is really only needs $64,000 a year (with a paid off house) to give you the exact same lifestyle you had while working full-time and making $100k.

$40,000 a year is pretty big chunk of that. Add in Social Security, and $1 million (and a paid-off-house) gives the same lifestyle as someone making $100k today. And you get to sleep in every day. :)

We should all count our blessings.
Exactly! I compare anticipated income streams to anticipated expenses, not current income.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by goodenyou »

Abe wrote:
HomerJ wrote: $40,000 a year is pretty big chunk of that. Add in Social Security, and $1 million (and a paid-off-house) gives the same lifestyle as someone making $100k today. And you get to sleep in every day. :)

We should all count our blessings.
Amen to that.

True, but what if I don't want to wait until I'm 70 to have the equivalent of a $100,000 income in retirement?
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by czeckers »

Becoming a millionaire doesn't change you. It's the changes you made beforehand that allowed you to become a millionaire.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by lthenderson »

We just went from thinking about having the retirement that we wanted to how can we save more to retire even earlier. I suppose when my spouse decides to retire full time, we will move on to what do we want to spend it on first and transition to how can we best leave what is left to our kids. There is always the next stage to consider until there isn't.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by eog »

I think the reason most on this board say that hitting 7 figures haven't changed them is because it required lots of planning and making good decisions along the way to hit that milestone. I am positive you would have similar responses if we reworded this question with "how did hitting $5M or $10M change you".

I haven't quite hit the 7 figure mark yet but when I do, I doubt I will be much different than how I am now. I will most likely take the family out to a fancy dinner and celebrate. Million dollars is a lot of money no matter what anybody says and it is a big accomplishment that I will be sure to internalize.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by TheTimeLord »

In all honesty it has changed me some and my view of other people more. I find myself not as tolerant of co-workers who complain about their struggling finances and have more annoyance than empathy for people who have forgone saving. Frankly, I think I seek out the company of like minded savers while avoiding those who are financially struggling. I think achieving wealth (whatever that is) is often fairly isolating, separating one from many of their peers and family. In a way that explains why many people come to this forum to have a safe and comfortable place to discuss their finances and financial plans.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by itstoomuch »

We may have a million in assets if we can sell them. :oops:
What is liquid to semiliquid is only retirement income and not to be played with lightly. :annoyed
The Only is the one who is really going to enjoy the inheritance, not us. :confused
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by goodenyou »

TheTimeLord wrote:In all honesty it has changed me some and my view of other people more. I find myself not as tolerant of co-workers who complain about their struggling finances and have more annoyance than empathy for people who have forgone saving. Frankly, I think I seek out the company of like minded savers while avoiding those who are financially struggling. I think achieving wealth (whatever that is) is often fairly isolating, separating one from many of their peers and family. In a way that explains why many people come to this forum to have a safe and comfortable place to discuss their finances and financial plans.
It is not easy finding people with the virtue of self discipline.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Bharat »

I am still far from that goal. But joining this thread to read other's story and inspiration.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by chicagoan23 »

The trick is to keep your costs under control...

I feel extremely wealthy with $1 million in investable assets, because the house is paid off, I live in a LCOL Mid-west city, I drive a cheap Honda Civic, and I'm sending/have sent my kids to State U.
The interesting thing for me is that I have drastically reduced my personal costs, and have tried to keep the kids costs in check, yet still feel less wealthy. I actually spend less now annually than I did when I was in my 20s and had a net worth in the five figures. It all comes from my perspective having changed. $1.4 million seemed like a lot to me 15 years ago, and now it feels like I need to triple that before I can even think about making a major life change.

I would imagine that I will start to feel more wealthy as I get to the stage where you are now--kids out of the house (or on their way), educated and well established--regardless of where my net worth is at that time. I'm a long way from there though.

My advice to the young and rich remains that they should keep plugging away as long as they can stand to, and at least through the next recession, before jumping out of the early retirement window.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by burritos »

It changed nothing for me. For myself, I'm still a cheap [person - moderator prudent] . My wife on the other hand, except for the time share and to anything that will take our kids out of school for an extended period of time, I almost never say "no" to her wishes(as if my saying no would actually deter her from doing what she wants to do anyways).
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by HomerJ »

chicagoan23 wrote:I actually spend less now annually than I did when I was in my 20s
Well, it makes sense that you feel less wealthy then.

I was dead-broke and in debt in my 20s, and I spend far more today than I did back then, without having student-loan and credit-card debt hanging over my head, and so I feel extremely wealthy.
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by TheTimeLord »

topofthebellcurve wrote: 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?

CNBC says based on the new Ameriprise survey, rich retirees think these five financial milestones are more important than becoming a millionaire:

Retiring : 55 percent
Paying off home mortgage : 43 percent
Having the ability to pay cash for a new car or other special purchase : 31 percent
Paying for children’s education : 28 percent
Reaching a certain annual income level : 20 percent

http://finance.yahoo.com/news/5-things- ... 51320.html
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Re: Self-made Millionaires: how did hitting 7 figures change you?

Post by Escape Velocity »

I cannot get over the number of responses to this thread.

I just read all 299 posts, and it made me look back to see when it was I hit that first million. Feb 2005.

That was a little before a good friend turned me on to Jack Bogle and index investing.

I had made some pretty dumb moves before then. Buying individual stocks, and worse, selling some. I owned Apple and thought is was a good idea to sell it at $19/share, just before the holidays one year. I worried about another terrorist attack, and figured I'd be able to buy it back afterwards, but of course it shot up and I never did :oops:

But then I found index investing, and my level of financial angst dropped dramatically. It was that move that let me move through the $1M level, to the point where, just recently, I concluded I had "enough" and effectively retired on July 4th ("my" Independence Day).

So for me, it wasn't the financial milestone, but getting my financial act together, and no longer worrying about it. I rode the market down in 2008 with no worries (granted, I was gainfully employed) and viewed each level as greater and greater sale price. Thankfully, that turned out to be true.

Now, with all of this group's collective help, I've shifted my AA from 70/30 accumulator to 30/70 immanent retiree, and will slowly build back to 50/50 once I confirm my retiree expense budget matches (or is lower) than my projections, and once we avoid a crash early in my retirement. :beer

I will say that once we had our first $1M, we contemplated early retirement (I was 48 at the time), which would have been a disaster :shock: But instead we took the confidence gained by that wealth to shift directions at my company and begin almost a decade of overseas assignments. What a great experience, and most of it was financially rewarding as well.

So thanks for the great stories on this thread, and the support of this group, to enable so many of us to take individual control of our financial destinies. The real measure of financial independence is to have the time to explore what this one and only life of our is all about.

EV
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