Calling out the not so rich bogleheads

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awval999
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Re: Calling out the not so rich bogleheads

Post by awval999 » Tue Sep 19, 2017 7:06 am

Age 31 / DW 30

Student Loans ($61k)
Investible assets $185k
Net Worth $208k (includes home equity and car equity (you better damn believe I'm including paid off car equity, I love those threads!)

The student loans are the bane of our existence. Can't wait to free up that cash flow. We dump $2500/month plus into those. Less than two years remaining.

I still feel poor, though. Maybe poor isn't the right word, but I don't feel secure. I hope it changes when the student loans are gone.

mouses
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Re: Calling out the not so rich bogleheads

Post by mouses » Tue Sep 19, 2017 7:11 am

Dude2 wrote:
Tue Sep 19, 2017 5:22 am
One of the topics is wealth and about how (as a general measured principle) you will tend to stay at the same economic level that you come from. You may go down a bucket or up a bucket, but the trend is not to leap upwards several buckets. So, accepting that as a general truth can help you to cope with your position. Regardless, BH helps people of any bucket not to be ripped off via high fees and other various snake oil salesmen.
The slowly increasing bucket theory holds true in my family. But I am concerned for younger people, because when I was growing up, any hard working reasonably intelligent person could get a good steady job and build financial security. That is no longer true. Plus the out of nowhere crazily burdensome student loans, what is with that. I came out of college with a master's degree and about a third of a year's income in debt.

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djpeteski
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Re: Calling out the not so rich bogleheads

Post by djpeteski » Tue Sep 19, 2017 7:18 am

The one thing I will say to the OP, and those who consider themselves as "not so rich bogleheads", is that you do not know what the future holds. It is easy to find doom and gloom predictions, but I would like to offer one of hope. Making good financial decisions now will typically lead to good things happening in the future. Things could change in a short time and you could find yourself in the two comma club prior to you thinking it was possible.

This is exactly what happened to my wife and I. For us, the Dave Ramsey (DR) program was necessary and we rocketed through the program. From a negative net worth to being consumer debt free (BS2) in 13 months, to home paid for (BS6) in 36 months, to two comma club in 50 months. During that time we did receive large salary increases, but we both feel that it was part of the blessings of being smart with money. And there are people on here that have done it faster.

I tend to agree with most Bogleheads that DR is great for getting out of debt, but lacking in investment advice. However, I also tend to be a more aggressive then the standard Boglehead.

The point being is that you do what you can when you can do it. It is far very likely that there the positive things in your future will dwarf the negative ones.

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Re: Calling out the not so rich bogleheads

Post by SirRunsabit » Tue Sep 19, 2017 7:30 am

Me: one comma, low starting digit, positive net worth, don't own my dwelling because I'm not sure about staying in my city.

Sometimes you feel outclassed by those with more in their bowl than you. Sometimes you wouldn't want to make their same sacrifices. This year has been a real trial for me. From the expense side it looks like this: "Surprise! You bought a new undriveable car." If the money hadn't gone out, it'd have been hell on my mental state and fatal for my physical state. You've got to do what's right for you, and often the long term sucks in the short term. Bogleheads is not a contest, it's about living life on your terms. If you can do that, you won.

Simple ain't easy.
Hi!

41Fin
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Re: Calling out the not so rich bogleheads

Post by 41Fin » Tue Sep 19, 2017 9:26 am

I'm in the shallow end of the pool here but the shallow end of Bogleworld is better than being in the deep end of most other places.

At 31 I have $20k in cash saved up (mostly towards home DP), no debt and 75k or so in retirement. I spent most of 2015 cleaning up CC debt and 2016 prepping for a baby but I have a plan and can see small growth.

The good thing about finance is that once you have a plan its easy to turn it around( assuming you have consistent income levels).

I find BH interesting and have learned a lot here in my time.

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CyclingDuo
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Re: Calling out the not so rich bogleheads

Post by CyclingDuo » Tue Sep 19, 2017 9:36 am

mouses wrote:
Tue Sep 19, 2017 7:11 am
The slowly increasing bucket theory holds true in my family. But I am concerned for younger people, because when I was growing up, any hard working reasonably intelligent person could get a good steady job and build financial security. That is no longer true. Plus the out of nowhere crazily burdensome student loans, what is with that. I came out of college with a master's degree and about a third of a year's income in debt.
Do you really think it is as dire and gloomy as you think? Have you looked at all of the data for the latest two graduating classes (2016 and 2017)?

That's not to say it isn't an issue. 44.2 Million Americans have student loan debt (13.6% of the US Population). Only 33% of the US adult population holds a 4 year college degree or higher. Although that is up from a decade ago, it still represents only 1/3rd of the US adult population.

What about the college payoff in terms of lifetime earnings?

One of the better studies I have read is linked below, and is well worth the read, IMO:

https://www2.ed.gov/policy/highered/reg ... payoff.pdf

The average college graduate from the class of 2016 graduated with $37,172 in student loan debt.
- https://studentloanhero.com/student-loa ... tatistics/

I graduated back in the early 80's with my undergraduate and 1985 with my master's degree carrying the equivalent in today's dollars of $42K in student loan debt. That is not far off from the average student loan debt for a master's degree today.

Here are today's average student loan devt (2016 figures for various master's degrees)

MBA = $42,000 (11% of graduate degrees)
Master of Education = $50,879 (16% of graduate degrees)
Master of Science = $50,400 (18% of graduate degrees)
Master of Arts = $58,539 (8% of graduate degrees)


I was able to pay off my loans in 10 years time thanks to sending in those monthly checks. Interest rates on student loans in the early to mid 80's were double digit - as in unkind including hitting the peak years for interest rates.

What are today's recent graduates paying, on average, per month for their loans?

Average monthly student loan payment (for borrower aged 20 to 30 years): $351
Median monthly student loan payment (for borrower aged 20 to 30 years): $203
-
https://studentloanhero.com/student-loa ... tatistics/

That's very similar to what I paid every month from 1985-1995 during the first 10 years of my working career.

The data presented in the College Payoff study leads me to believe that today's current graduating classes are going to be able to service their student loan debt with their earnings - just like prior generations were able to do (me, being in the Boomer generation who lived frugally in my early working years to service my student loan debt which, in retrospect was very Boglehead like).

According to those links above, that's not to say there are not issues. There currently is an 11.2% delinquency rate (90+ days delinquent or in default) out of those 44.2 Million with loans. Whether that is from poor budgeting by overspending in other areas, or lack of income in their early years post graduating - it remains an issue as the delinquency rates is higher than in other types of loans:

https://www.federalreserve.gov/releases ... lallsa.htm

I don't know how the current 11.2% delinquency rate for student loans compares to all prior years delinquency rates for student loans, but it appears it is trending down:

https://www.ed.gov/news/press-releases/ ... s-steadily

I am of the belief that the lifetime earnings will not only easily service those loans, but also allow college graduates to accumulate wealth. Of course, standard frugality, saving rates, and not living above their means to service that debt in the first decade is standard mustard.

DarthSage
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Re: Calling out the not so rich bogleheads

Post by DarthSage » Tue Sep 19, 2017 9:46 am

Good morning! I wanted to respond to this, not so much because we're "not rich" as, I'm (clearly) new to Bogleheads.

DH and I are in our mid-50's, and have long lived with a LBYM attitude. I didn't seek out financial websites, because we were doing fine on our own. But this past summer, my MIL died, mean that a large chunk of "legacy money" is coming our way. That led me to look more closely at investing and getting the opinions of others.

I suspect a lot of people on here are Financial Ninjas, or would like to be. Younger people, pretty much by definition, aren't going to be as far along the path as older ones. People nearing retirement are more likely to be concerned with preserving capital. And people generally are going to read/post on topics of interest to them. So, appearances can be a bit skewed.

skor99
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Re: Calling out the not so rich bogleheads

Post by skor99 » Tue Sep 19, 2017 10:18 am

Thanks to all for the responses. The basic intent was to bring out the silent ones who actually might be in the majority, but are too intimidated to speak up. I am fortunate enough to be in the two comma club now in my late 40s, but I started from zero in my 20s.
I was putting myself in the place of those people starting out with very little and just seeing the mountain in front of them, that they have to start climbing but that others have already scaled. The message to them is to keep going at it and use this forum as much as possible. Challenges will always be there and sure enough, I do have issues currently in terms of job security etc. and am still paranoid about the things that could go wrong, but am hoping that my boglehead habits will be useful in securing my and my family's future somewhat.

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pjshen
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Re: Calling out the not so rich bogleheads

Post by pjshen » Tue Sep 19, 2017 10:32 am

skor99 wrote:
Mon Sep 18, 2017 5:47 pm
.... I would say that the forums are generally dominated by folks who are millionaires, multi millionaires or soon to be millionaires at very young ages. This has the effect of scaring away and/or creating resentment in a lot of people who are not close to being millionaires or even just plain wealthy with a healthy emergency cushion, say around 100K-200K saved @ age 35 or 40 ....
I am now one of those millionaires but hopefully not raising fear or resentment in this forum. Two decades ago, at the very young age of 31, my wife and I were just getting out of graduate school, happy but dirt poor. Little did we know that, at 35, I would be going back to school with a net worth that was still hovering around zero. A lot has changed since then.

IMHO, even starting from scratch, it is quite feasible to attain at least a $1m portfolio in 15-20 years simply by following the Boglehead investing philosophy. If only my younger self had gotten on the Boglehead bandwagon sooner. :oops: Bogleheads currently in their 20s and 30s should count their lucky stars, and particularly those with tens of thousands already invested (in tax-advantaged accounts nonetheless)! Sheesh ....

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knpstr
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Re: Calling out the not so rich bogleheads

Post by knpstr » Tue Sep 19, 2017 10:38 am

skor99 wrote:
Mon Sep 18, 2017 5:47 pm
Vast majority of the folks in real life do not have that 100-200K kind of savings let alone a million, and then coming to a forum which has people who are serious and responsible about their financial life, and seeing that you in no way are close to them can be crushing.
In my view this is a "glass half full or half empty" situation. I would say it should be motivating to see so many people doing so well with following very basic principles.

My "paper savings" is relatively small, my net worth is relatively large (though not close to $1M) for my age or 32. I just do the best I can do.
Very little is needed to make a happy life; it is all within yourself, in your way of thinking. -Marcus Aurelius

minesweep
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Re: Calling out the not so rich bogleheads

Post by minesweep » Tue Sep 19, 2017 10:59 am

skor99 wrote:
Mon Sep 18, 2017 5:47 pm
I would say that the forums are generally dominated by folks who are millionaires, multi millionaires or soon to be millionaires at very young ages. This has the effect of scaring away and/or creating resentment in a lot of people who are not close to being millionaires or even just plain wealthy with a healthy emergency cushion, say around 100K-200K saved @ age 35 or 40 . I picked that age range as that is around the time in life when the carefree young days have passed and people begin to think about to their future financial needs, thinking about college for their kids, their own retirement etc . Vast majority of the folks in real life do not have that 100-200K kind of savings let alone a million, and then coming to a forum which has people who are serious and responsible about their financial life, and seeing that you in no way are close to them can be crushing.
I didn’t realize that the Bogleheads was dominated by millionaires that are a very young age. Or that the Bogleheads was scaring anyone away (did I miss a poll?). Anyway I would imagine that more than just a few of the millionaires who post here are in more advanced age group than even the 35-40 you mentioned. In other words, they became millionaires by their “time in the markets”.

livesoft
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Re: Calling out the not so rich bogleheads

Post by livesoft » Tue Sep 19, 2017 11:02 am

I like some of the names orginally posted by stlutz:

IamRich
IwasRich
and
IwantToBeRich
IamNotRich
IhaveNoMoney.

I've certainly gone through these stages of finances over the years, starting at the very bottom.
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englishgirl
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Re: Calling out the not so rich bogleheads

Post by englishgirl » Tue Sep 19, 2017 11:09 am

I am not a millionaire. Yet. :D

I've been a Boglehead since 2002. Never yet managed to max out my 401k. And yet I've never been intimidated about posting. Maybe it's because I know that I am rich, and very fortunate, compared to so many. Or I'm just pushy, not sure which.
Sarah

lostdog
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Re: Calling out the not so rich bogleheads

Post by lostdog » Tue Sep 19, 2017 11:49 am

My wife is 39 and I am 42. Our investible assets are about $450,000. Our house is worth around $190,000. We are your average middle class couple with no kids by choice. We're selling the house next Spring. We want to go back to the college life except we're not poor this time. We'll enjoy our bikes and our apartment.

We came out of college with student loan debt, car payments and credit card bills. We also bought a home and took out two mortgages. We decided that situation was ridiculous and started hammering out the debt. Today we have a paid off home with no debt thanks to our frugal ways. We found bogleheads in 2010 and learned how to invest with index funds. It's hard to reject the materialistic ways of our culture especially when you see family and friends living it up with nasty debt. Bogleheads are rare in this culture. Stay the course and you'll do better than most.
Last edited by lostdog on Tue Sep 19, 2017 11:51 am, edited 3 times in total.
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froman118
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Re: Calling out the not so rich bogleheads

Post by froman118 » Tue Sep 19, 2017 11:49 am

I'll post since I'm pretty close to the age OP is looking for:
  • 33 years old / wife is 37
  • Good paying local government job (120k before any benefits) with pension and excellent health insurance
  • $200k in 401k/IRAs
  • $200k in cash (most parked in bond funds)
  • $200k in equity (bought foreclosed townhouse in 2011, extra principal payments and refi to 15 year)
  • Wife stays home with 2 kids, some part time work
  • No student loans for CS degree at cheap state school
  • Have never paid a single cent in credit card interest
  • Buy cars new, but hold long term (my 2005 Tacoma just turned 12, 1 year old minivan at 0%)
  • Don't live too frugally, but closely watch spending and cut all possible fat without feeling we are denying ourselves
Our biggest issue is deciding what to do next with housing. We want to get into a single family home in a better school district, but we're facing a $600k+ price tag in the current SoCal market (and $3k rents to match). Maybe I'm being too conservative and haven't quite wrapped my head around the pile of cash/equity I'm sitting on. The townhouse purchase was a little bit risky at the time ($10k left in the bank after 10% down and doing some work), but that move turned out well for us.

I lurk a lot here (8+ years) and read a ton of posts, but I mainly share and answer questions over on /r/personalfinance.

chicagoan23
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Re: Calling out the not so rich bogleheads

Post by chicagoan23 » Tue Sep 19, 2017 11:53 am

djpeteski wrote:
Tue Sep 19, 2017 7:18 am
For us, the Dave Ramsey (DR) program was necessary and we rocketed through the program. From a negative net worth to being consumer debt free (BS2) in 13 months, to home paid for (BS6) in 36 months, to two comma club in 50 months. During that time we did receive large salary increases, but we both feel that it was part of the blessings of being smart with money. And there are people on here that have done it faster.
This is astonishing--below zero to $1 million in four years. Your income and savings rates must have been massive. Congratulations.

stimulacra
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Re: Calling out the not so rich bogleheads

Post by stimulacra » Tue Sep 19, 2017 11:55 am

I'm 39, divorced, and have about 2X salary saved up. Left side of the Boglehead bell curve for sure but I feel better prepared than non-bogleheads and making progress every month thanks to this site.

feh
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Re: Calling out the not so rich bogleheads

Post by feh » Tue Sep 19, 2017 11:55 am

I've always thought bogleheads was more about attitude than net worth.

There are a lot of LBYM types here, and lots of wealthy people here. Probably because one leads to the other.

KlangFool
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Re: Calling out the not so rich bogleheads

Post by KlangFool » Tue Sep 19, 2017 12:03 pm

ddurrett896 wrote:
Mon Sep 18, 2017 6:41 pm
skor99 wrote:
Mon Sep 18, 2017 5:47 pm
This has the effect of scaring away and/or creating resentment in a lot of people who are not close to being millionaires or even just plain wealthy with a healthy emergency cushion, say around 100K-200K saved @ age 35 or 40 .
You can't get wrapped up in a number. Think about it like this (assuming both people are the same age):

Person 1 makes $50,000/year and has a net worth of $500,000.
Person 2 makes $300,000/year and has a net work of $2,000,000.

Who is doing better? I say person 1.
ddurrett896,

I disagreed. A better gauge is net worth as a multiple of current annual expense.

Person 1 or 2 could be better depending on their current annual expense.

If person 1 is spending 100K per year versus person 2 at 100K per year, who is in a better shape?

Person 1 = 500K/100K = 5 times current annual expense.
Person 2 = 2000k/100K = 20 times current annual expense.

Person 2 is approaching FI. Person 1 may be heading towards a financial disaster.

It has nothing to do with income. It has to do with expense and savings.

KlangFool

skor99
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Re: Calling out the not so rich bogleheads

Post by skor99 » Tue Sep 19, 2017 12:22 pm

Is it only me or are the non LBYM people hidden in plain sight ? Pretty much everybody I know at work or otherwise seems to be the responsible kind, saving and investing as much as they can. Sure, some people drive the expensive cars but I believe they have a net worth to match those cars.
The most important thing for the young people starting out is living below your means for sure, even more than investing, and therefore it could be helpful to identify non-LBYM people and learn lessons from them .

eer_no_evil
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Re: Calling out the not so rich bogleheads

Post by eer_no_evil » Tue Sep 19, 2017 12:32 pm

I'm 30- I appreciate the insight into people's situations- and how they manage them.

I try to subscribe to the old adage, "comparison is the thief of joy"- :moneybag :sharebeer

With that being said- hoping that compounding speeds up lol

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Sheepdog
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Re: Calling out the not so rich bogleheads

Post by Sheepdog » Tue Sep 19, 2017 12:35 pm

First of all, we are not all rich as this Net Worth survey of over 1300 Bogleheads in 2015: shows. You may be interested in that. The original thread with comments can be found here: viewtopic.php?t=154364.

I have never been "rich", but my assets have continued to grow from my 30s to my present mid 80s. In my mid 30s, my wife and I had very little. We had our first child at my age of 31. I became a chemical engineer at my age of 28, so I did have a decent salary. Our investments were mostly in CDs. I didn't trust the stock market until I was in my late 50s. You are all growing much faster than we did. I did have a pension coming though, and THAT was what most depended on. Example, we had $132,000 at my age of 59 (1992). At 65, when I retired in 1998, that had grown to $397,000 with a bull market and I added to that the lump sum of my pension ($222,000) and we had a paid for house and 2 cars. I have lived off of that and now I am within $20K of that $1M. But that $1M today is only $668K in 1998.
Last edited by Sheepdog on Tue Sep 19, 2017 12:41 pm, edited 1 time in total.
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triceratop
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Re: Calling out the not so rich bogleheads

Post by triceratop » Tue Sep 19, 2017 12:38 pm

Sheepdog wrote:
Tue Sep 19, 2017 12:35 pm
First of all, we are not all rich as this Net Worth survey of over 1300 Bogleheads in 2015: viewtopic.php?f=2&t=154364&start=100 shows. You may be interested in that. The original thread with comments can be found here: viewtopic.php?t=154364.

I have never been "rich", but my assets have continued to grow from my 30s to my present mid 80s. In my mid 30s, my wife and I had very little. We had our first child at my age of 31. I became a chemical engineer at my age of 28, so I did have a decent salary. Our investments were mostly in CDs. I didn't trust the stock market until I was in my late 50s. You are all growing much faster than we did. I did have a pension coming though, and THAT was what most depended on. Example, we had $132,000 at my age of 59 (1992). At 65, when I retired in 1998, that had grown to $397,000 with a bull market and I added to that the lump sum of my pension ($222,000) and we had a paid for house and 2 cars. I have lived off of that and now I am within $20K of that $1M. But that $1M today is only $668K in 1998.
Thank you SheepDog. I see now that my net worth is slightly below the median reported Boglehead NW for my age, even as it in the 93rd percentile nationally. This goes to my perspective that simply following Boglehead principles will make you "rich" compared to most. I'm pretty average around these parts.
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ddurrett896
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Re: Calling out the not so rich bogleheads

Post by ddurrett896 » Tue Sep 19, 2017 12:44 pm

KlangFool wrote:
Tue Sep 19, 2017 12:03 pm
ddurrett896 wrote:
Mon Sep 18, 2017 6:41 pm
skor99 wrote:
Mon Sep 18, 2017 5:47 pm
This has the effect of scaring away and/or creating resentment in a lot of people who are not close to being millionaires or even just plain wealthy with a healthy emergency cushion, say around 100K-200K saved @ age 35 or 40 .
You can't get wrapped up in a number. Think about it like this (assuming both people are the same age):

Person 1 makes $50,000/year and has a net worth of $500,000.
Person 2 makes $300,000/year and has a net work of $2,000,000.

Who is doing better? I say person 1.
ddurrett896,

I disagreed. A better gauge is net worth as a multiple of current annual expense.

Person 1 or 2 could be better depending on their current annual expense.

If person 1 is spending 100K per year versus person 2 at 100K per year, who is in a better shape?

Person 1 = 500K/100K = 5 times current annual expense.
Person 2 = 2000k/100K = 20 times current annual expense.

Person 2 is approaching FI. Person 1 may be heading towards a financial disaster.

It has nothing to do with income. It has to do with expense and savings.

KlangFool
I should have clarified - assuming same age and spends the same based on % of their income.

imareal1
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Re: Calling out the not so rich bogleheads

Post by imareal1 » Tue Sep 19, 2017 12:47 pm

I come from a lower income family and I never held a real job until I was 23. I am 24 now so I've been working just over a year. Before my current job, I did part-time work for living expenses and my bank account maybe broke $1,000 once. My first check at my current job was more than that.

So I started my current job with practically no money saved. I only started saving for retirement about 6 months ago. Before that, I was just accumulating my earnings in my checking account and spending how I like :oops: . 6 months ago, I started saving my money in Roth IRAs and company 401k, at a rate of ~22% of gross salary. I currently have $18k in those two accounts and $2-3k in checking.

I have terrible spending habits that keep my cash low, but I feel like I'm young and can afford to splurge whatever I have left after retirement savings.

Emily1980
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Re: Calling out the not so rich bogleheads

Post by Emily1980 » Tue Sep 19, 2017 12:50 pm

My husband and I are 38 and 37 respectively. When I joined Bogleheads we were in the mid six figures in investible assets (around $400k), and now we're still in the mid six figures in investible assets (around $600k). We're probably on the lower end of the spectrum here. I entered our data in the spreadsheet once, and I noticed a lot of people our age with a lot more in investible assets. Our household income is probably below average here too.

We started out with six figures in student loan debt and mid five figures in credit card debt because we spent our anticipated salaries ahead of time in college living it up. Right after college we moved into a swanky loft apartment and spent even more money. But the post-college phase lasted less than a year. We even broke the lease on our swanky apartment to end the phase. That was when we realized that, while our incomes were good, our lifestyle was simply not going to work. Not long term. Our incomes couldn't afford what we, coming from low-income families, anticipated they would.

Now we live well below our means. But we like it. The psychological security that comes from have no financial obligations is, to us, priceless. No mortgage. No kids. We share a low cost car. I guess what I would say to those who feel like they are behind is: Don't worry. Just take stock of your situation and decide what needs to be done to get to where you want to be. And don't be afraid to make unpopular choices. All of our friends have fancy houses in the suburbs, kids, dogs, fancier cars. If you can afford those things and get to where you want to be, then good for you. If not, then make different choices. Retiring financially secure is, statistically, an uncommon outcome. That means you're probably going to have to make uncommon choices to achieve it. Nothing (within reason, obviously) should be off the table in terms of the choices you're willing to consider.

(I'm going to have to click on Sheepdog's link to the survey results to see where we actually fall on the list...)

Crow Hunter
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Re: Calling out the not so rich bogleheads

Post by Crow Hunter » Tue Sep 19, 2017 12:53 pm

I am 44, wife is 39. Neither of us have ever made more than 6 figures, combined we only broke 150K last year. Our net worth is over $2M.

----------------------------------------------------------------------------------------------------------------------------------------------

However:

- We live in a VLCOL rural part of the US with extremely limited non-outdoor related recreational activities.
- My wife can't have children.
- Both of my parents passed away at an early age leaving me a mid-6 figure inheritance.
- My wife and I have gone on 4 vacations of greater than 3 days in the 17 years we have been married and all of them were less than a days drive away from a combination of being frugal, caring for sick family members and health problems.
-I nearly died earlier this year due to a medical condition that is still causing me health issues.

Don't compare yourself to others. You can only see what people post. If you only saw the top half of my post you might be envious. You likely wouldn't be envious of how I got there.

I would much rather have a negative net worth right now and have children, my parents alive, memories of vacations with my wife instead of watching my parents life ebb away from them and not have "seen the elephant" in my early 40's and the follow-on problems.
Last edited by Crow Hunter on Tue Sep 19, 2017 2:24 pm, edited 1 time in total.

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Re: Calling out the not so rich bogleheads

Post by TomatoTomahto » Tue Sep 19, 2017 1:02 pm

You speak the truth, Crow Hunter.

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Re: Calling out the not so rich bogleheads

Post by jadd806 » Tue Sep 19, 2017 2:49 pm

Hey, that's me!

24 years old, $40k net worth.

Am I rich? Certainly not. But I probably will be someday if I continue to live below my means and steadily invest in my 3 fund portfolio. I have gotten my girlfriend on the same page and she is closing in fast on a positive net worth. Not too bad for both graduating college with a combined $100k in student loans a couple years ago. I am thankful that I discovered the Bogleheads and Mr. Money Mustache while I was still in college.

I will say that it's frustrating to have to "hide" how well we are doing from our peers (and people a decade older than us). Not that I want to brag about it or show it off, but having to sit there and nod while everyone else in your age group whines about living paycheck to paycheck or how their student loans are evil tends to get a bit old.

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Re: Calling out the not so rich bogleheads

Post by PFInterest » Tue Sep 19, 2017 3:08 pm

wait your first post:
- I am 48 and made good money for a number of years but now see myself getting sidelined.
- I have around 2 MM saved ( almost 60/40 in retirement/ non retirement incl around 100 K total for college for 2 kids ages 18/14). DW works but earns minimal income from a part time job as we gave priority to our kids. We have no pensions.

and your thought for this post:
- I would say that the forums are generally dominated by folks who are millionaires, multi millionaires or soon to be millionaires at very young ages. -
This has the effect of scaring away and/or creating resentment in a lot of people who are not close to being millionaires or even just plain wealthy with a healthy emergency cushion, say around 100K-200K saved @ age 35 or 40 .
- Vast majority of the folks in real life do not have that 100-200K kind of savings let alone a million, and then coming to a forum which has people who are serious and responsible about their financial life, and seeing that you in no way are close to them can be crushing.



so whats your point again?

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Re: Calling out the not so rich bogleheads

Post by new2bogle » Tue Sep 19, 2017 3:15 pm

My dad will be retiring with > $2 million in assets. He did not make more than $100k until he was well into his 50s. He did not (does not) know that he is a boglehead. But it works for if you are in the middle class.

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Re: Calling out the not so rich bogleheads

Post by Slacker » Tue Sep 19, 2017 3:23 pm

KlangFool wrote:
Tue Sep 19, 2017 12:03 pm
ddurrett896 wrote:
Mon Sep 18, 2017 6:41 pm
skor99 wrote:
Mon Sep 18, 2017 5:47 pm
This has the effect of scaring away and/or creating resentment in a lot of people who are not close to being millionaires or even just plain wealthy with a healthy emergency cushion, say around 100K-200K saved @ age 35 or 40 .
You can't get wrapped up in a number. Think about it like this (assuming both people are the same age):

Person 1 makes $50,000/year and has a net worth of $500,000.
Person 2 makes $300,000/year and has a net work of $2,000,000.

Who is doing better? I say person 1.
ddurrett896,

I disagreed. A better gauge is net worth as a multiple of current annual expense.

Person 1 or 2 could be better depending on their current annual expense.

If person 1 is spending 100K per year versus person 2 at 100K per year, who is in a better shape?

Person 1 = 500K/100K = 5 times current annual expense.
Person 2 = 2000k/100K = 20 times current annual expense.

Person 2 is approaching FI. Person 1 may be heading towards a financial disaster.

It has nothing to do with income. It has to do with expense and savings.

KlangFool
I don't know about that. Based only on the information provided one would have to make the inference that Person 1's spending is significantly less than Person 2's spending. How does Person 1 spend $100k/year when they only earn $50k/year minus taxes and minus savings???

Granted, it could be that Person 2 was in school/training and only has 10 years of earning 300k while Person 1 has been earning 50K for 20 years which changes how one evaluates each situation.

I guess not really enough information to know - but once again I would think we should infer that the original poster was trying to say all constraints should be taken as similar (number of years working). In that case, we could be comparing two hypothetical people both with 20 year careers where one has saved 10x their income and the other has only saved 6.7x their income. Given that Person 2 clearly has higher expenses, they won't be FI anytime soon while Person 1 with their very modest expenses should be FI much sooner.

Given 7% average annual returns, equal monthly deposits, 20year time frame, and the final end amounts provided above:
Person 1 saved 23% of their gross and has expenses of $38.5K (incl tax) and are now sitting on 13x their expenses
Person 2 saved 15.4% of their gross and has expenses of $253.9K (incl tax) and are now sitting on 7.9x their expenses

The only benefit in Person2's favor is that their tax bill will go down much further than Person1's tax bill in retirement when they only generate $254k from their investments vs $300K income currently.

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Re: Calling out the not so rich bogleheads

Post by Levett » Tue Sep 19, 2017 3:43 pm

Yes. It went sideways from the first response.

Too bad: it could have been productive with a little more openness.

Most of us weren't born on third base, as the saying goes.

I wish the OP all the best.

Lev

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Re: Calling out the not so rich bogleheads

Post by rustymutt » Tue Sep 19, 2017 3:56 pm

I'm not understanding your logic. We want everyone to have the knowledge and ability to be whatever they want financially. Most the questions I see don't have nothing to do with being a millionaire, but rather being informed about what's in your best interest. Are you feeling a bit left out? If so, it's not the fault of this website, but rather your perception. Are there some millionaires here, yes I'm sure of it, and I'd love to be one of them. Are there some with their noses in the air? Maybe, but I hadn't ever noticed. :sharebeer
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Re: Calling out the not so rich bogleheads

Post by DaftInvestor » Tue Sep 19, 2017 3:59 pm

Levett wrote:
Tue Sep 19, 2017 3:43 pm
Yes. It went sideways from the first response.

Too bad: it could have been productive with a little more openness.

Most of us weren't born on third base, as the saying goes.

I wish the OP all the best.

Lev
Contrary to how you may have thought the OP was doing from his post here - the OP has $2M saved at age 48 (he said this in another thread) - he's doing quite well in my book. Honestly I'm not sure what he was hoping to get out of this thread (hear from others that are much further down than him??).
Last edited by DaftInvestor on Tue Sep 19, 2017 4:09 pm, edited 1 time in total.

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Re: Calling out the not so rich bogleheads

Post by Levett » Tue Sep 19, 2017 4:07 pm

What Lady Geek observed about the "survey":

"Remember that this survey is only from those who choose to participate. We've got 41,760 members to date. Compare that to the total number participating.

There's also no way to verify the information supplied."
(posted 2 January 2015, 2:40pm).

Take the survey with a massive grain of sea salt. ;-)

Lev

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Re: Calling out the not so rich bogleheads

Post by KlangFool » Tue Sep 19, 2017 4:17 pm

Slacker wrote:
Tue Sep 19, 2017 3:23 pm
KlangFool wrote:
Tue Sep 19, 2017 12:03 pm
ddurrett896 wrote:
Mon Sep 18, 2017 6:41 pm
skor99 wrote:
Mon Sep 18, 2017 5:47 pm
This has the effect of scaring away and/or creating resentment in a lot of people who are not close to being millionaires or even just plain wealthy with a healthy emergency cushion, say around 100K-200K saved @ age 35 or 40 .
You can't get wrapped up in a number. Think about it like this (assuming both people are the same age):

Person 1 makes $50,000/year and has a net worth of $500,000.
Person 2 makes $300,000/year and has a net work of $2,000,000.

Who is doing better? I say person 1.
ddurrett896,

I disagreed. A better gauge is net worth as a multiple of current annual expense.

Person 1 or 2 could be better depending on their current annual expense.

If person 1 is spending 100K per year versus person 2 at 100K per year, who is in a better shape?

Person 1 = 500K/100K = 5 times current annual expense.
Person 2 = 2000k/100K = 20 times current annual expense.

Person 2 is approaching FI. Person 1 may be heading towards a financial disaster.

It has nothing to do with income. It has to do with expense and savings.

KlangFool
I don't know about that. Based only on the information provided one would have to make the inference that Person 1's spending is significantly less than Person 2's spending. How does Person 1 spend $100k/year when they only earn $50k/year minus taxes and minus savings???
Slacker,

<<Based only on the information provided one would have to make the inference that Person 1's spending is significantly less than Person 2's spending.>>

Based on my own firsthand observation, that inference is not necessarily correct.

<<How does Person 1 spend $100k/year when they only earn $50k/year minus taxes and minus savings???>>

1) They have no saving for the current year.

2) They get into serious debt since they are rich now. For example, they buy a big house, luxury cars, and get into the serious credit card debt. Most of their net worth is in the house.

KlangFool

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Re: Calling out the not so rich bogleheads

Post by Slacker » Tue Sep 19, 2017 4:21 pm

KlangFool wrote:
Tue Sep 19, 2017 4:17 pm
Slacker wrote:
Tue Sep 19, 2017 3:23 pm
KlangFool wrote:
Tue Sep 19, 2017 12:03 pm
ddurrett896 wrote:
Mon Sep 18, 2017 6:41 pm
skor99 wrote:
Mon Sep 18, 2017 5:47 pm
This has the effect of scaring away and/or creating resentment in a lot of people who are not close to being millionaires or even just plain wealthy with a healthy emergency cushion, say around 100K-200K saved @ age 35 or 40 .
You can't get wrapped up in a number. Think about it like this (assuming both people are the same age):

Person 1 makes $50,000/year and has a net worth of $500,000.
Person 2 makes $300,000/year and has a net work of $2,000,000.

Who is doing better? I say person 1.
ddurrett896,

I disagreed. A better gauge is net worth as a multiple of current annual expense.

Person 1 or 2 could be better depending on their current annual expense.

If person 1 is spending 100K per year versus person 2 at 100K per year, who is in a better shape?

Person 1 = 500K/100K = 5 times current annual expense.
Person 2 = 2000k/100K = 20 times current annual expense.

Person 2 is approaching FI. Person 1 may be heading towards a financial disaster.

It has nothing to do with income. It has to do with expense and savings.

KlangFool
I don't know about that. Based only on the information provided one would have to make the inference that Person 1's spending is significantly less than Person 2's spending. How does Person 1 spend $100k/year when they only earn $50k/year minus taxes and minus savings???
Slacker,

<<Based only on the information provided one would have to make the inference that Person 1's spending is significantly less than Person 2's spending.>>

Based on my own firsthand observation, that inference is not necessarily correct.

<<How does Person 1 spend $100k/year when they only earn $50k/year minus taxes and minus savings???>>

1) They have no saving for the current year.

2) They get into serious debt since they are rich now. For example, they buy a big house, luxury cars, and get into the serious credit card debt. Most of their net worth is in the house.

KlangFool
KlangFool,

You are grasping at straws to construct an extremely unlikely corner case event when someone is making a general comment that wasn't about the extreme margins.

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Re: Calling out the not so rich bogleheads

Post by KlangFool » Tue Sep 19, 2017 4:28 pm

Slacker wrote:
Tue Sep 19, 2017 4:21 pm

KlangFool,

You are grasping at straws to construct an extremely unlikely corner case event when someone is making a general comment that wasn't about the extreme margins.
Slacker,

Let's go back to the main point.

A) Is the net worth as a ratio of a person's current annual expense

or,

B) Or the net worth as a ratio of a person's current annual income

a better gauge of a person's financial health?

(A) or (B)?

That is the question.

KlangFool

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Re: Calling out the not so rich bogleheads

Post by staythecourse » Tue Sep 19, 2017 4:30 pm

livesoft wrote:
Mon Sep 18, 2017 6:09 pm
My reaction to this is folks should just get over it and not measure their happiness and self-worth against others. I never did.
Great advice. Me personally, I strive to do this. Unfortunately, often failing. It is human nature to want to compare oneself and bemoan what you don't have and others do have. I agree though I have never found happiness comparing myself to others. And as you can imagine folks don't compare oneself to those less successful do so it will always be a losing proposition.

Do the best you can and always be proud what you have accomplished in life. Anyone on this site is showing they are serious about the finances which is the most important thing.

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

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Re: Calling out the not so rich bogleheads

Post by triceratop » Tue Sep 19, 2017 4:39 pm

Levett wrote:
Tue Sep 19, 2017 3:43 pm
Yes. It went sideways from the first response.

Too bad: it could have been productive with a little more openness.

Most of us weren't born on third base, as the saying goes.

I wish the OP all the best.

Lev
I don't follow; my first response made clear I am nowhere being wealthy or a millionaire. I inherited nothing, and didn't receive any assistance from parents for my college education. How was I born on third base? I also asked the OP what they were looking for from us not-wealthy Bogleheads. Fact is, with diligent adherence to Boglehead principles one will do well.
"To play the stock market is to play musical chairs under the chord progression of a bid-ask spread."

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Re: Calling out the not so rich bogleheads

Post by randomguy » Tue Sep 19, 2017 4:52 pm

bigred77 wrote:
Mon Sep 18, 2017 7:00 pm
ddurrett896 wrote:
Mon Sep 18, 2017 6:41 pm
skor99 wrote:
Mon Sep 18, 2017 5:47 pm
This has the effect of scaring away and/or creating resentment in a lot of people who are not close to being millionaires or even just plain wealthy with a healthy emergency cushion, say around 100K-200K saved @ age 35 or 40 .
You can't get wrapped up in a number. Think about it like this (assuming both people are the same age):

Person 1 makes $50,000/year and has a net worth of $500,000.
Person 2 makes $300,000/year and has a net work of $2,000,000.

Who is doing better? I say person 1.
I'll take person 2 everyday :D
2 and it isn't even very close.:) Seriously though there are too many unknowns. Did the people start working at the same time (imagine 1 started working at 18 and 2 started at 30 after going to med school. If they say 35 now what do you think the numbers will look like at 55), get married and have kids at the same time, lucked into a good/bad housing market, had random setbacks (i.e. what would say have a special needs kid that cost 30k/year do to 1 versus 2), live in the same COL area, taxes, and so on. For a minor thing, think about how much is costs to wear glasses over 40+ years if you don't have vision insurance. Random life event causes 10k+ of expense between eye exams, prescription lenses for glasses, contacts, and sun glasses when you are looking at 40. Or just having an allergy that requires you to buy a 300 dollar epipen every year for your kid.


The above people are roughly in the same spot, if you try and make everything equal. The 300ker is paying like 90k in taxes, saves 60 and lives on 150k . The 50k pays 5k in taxes, saves 10k and lives on 35k. They are both going to hit their retirement numbers at about the same time (+- a couple of years).

At a high level absolute numbers don't really matter. Save ~15% of your salary starting at 25 or so and you will be able to retire at 60 or so and maintain the same lifestyle that you have been living. Doesn't really matter if you make 30k or 300k.

The same basic trend happens on any board though where the "good" posters can make the "bad" ones feel inadequate. Go to a golf board and people talk about their horrible rounds of 74. I will kill to break 90.:). On a running board people talk about how slow their 14:30 5ks are. I would have killed to break 16. Go to a lifting forum and people talk about how weak they are with 500lb deadlifts. I dream of breaking 300. And go to some of the frugality boards and people are talking about how family of 4 can live an extravagant live on 20k/year. I know I would have to cut too much stuff I would miss to get much below 80k. Some of it is passive bragging. A lot is just self selection where people following things they are good at and that the community rewards.

In the end boglehead investing is a long slog. You are talking 20+ years to see results. That doesn't appeal to a lot of people. Some people get lucky and start investing at the start of the bull market and get the positive reinforcement of seeing their account values go up. See the 1980 investor. Some have bad timing. The 2000 investor on the other hand was basically break even for the first 10 years. That is discouraging.

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Re: Calling out the not so rich bogleheads

Post by msk » Tue Sep 19, 2017 4:58 pm

I suspect that a huge majority of BHs had, like myself a NW of around zero at age 30. Many (most?) do get to 7 figures by retirement age. Not much to get worried about at age 35 if your NW is still zero, but you HAVE to get started with saving and investing asap. Then, No Worry! I am now well into retirement and my story may encourage the younger BHs:

-Started investing at age 32 by building a house. Initially, "Savings" was the equity build-up in mortgages, both on my primary residence plus 2 rental properties. Target was to save 30% of income (includes job and subsequently investment income)
-Started dabbling in stocks at age 40. By then I was so much into not-wasting-money that I was "saving" more than 30% of income. Investments were throwing off good income, that frankly I was under-spending and Living Well Below My Means. Quickly discovered SPY and Berkshire Hathaway; the nirvana of stock investing :mrgreen:
-Retired at age 55 with a 7-figure NW. 17 years later the BH habit of LBYM grew my portfolio well into 8-figures.

Rules for the youngsters starting out and that I followed religiously throughout since my 30s:

Save at least 30% of income
Never spend more than 6 months income on cars
Your own home should not cost more than 3 years income

You'll get to 7 figures NW without too much hassle, and probably retire early as well.

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Re: Calling out the not so rich bogleheads

Post by sreynard » Tue Sep 19, 2017 5:09 pm

DaftInvestor wrote:
Tue Sep 19, 2017 3:59 pm
Levett wrote:
Tue Sep 19, 2017 3:43 pm
Yes. It went sideways from the first response.

Too bad: it could have been productive with a little more openness.

Most of us weren't born on third base, as the saying goes.

I wish the OP all the best.

Lev
Contrary to how you may have thought the OP was doing from his post here - the OP has $2M saved at age 48 (he said this in another thread) - he's doing quite well in my book. Honestly I'm not sure what he was hoping to get out of this thread (hear from others that are much further down than him??).
Maybe he wanted to know how the little people live? :twisted:

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Re: Calling out the not so rich bogleheads

Post by vested1 » Tue Sep 19, 2017 5:14 pm

Regardless of current net worth, the takeaway from being a Boglehead is having an open mind, correcting your mistakes, and getting on the right path to achieve your goals. We started extremely late in our early 50's due to multiple divorces, child support, insane exes, and a general lack of knowledge. Bogelheads showed me the error of my ways and opened my eyes to what was possible, which is the true beauty and gift of this community.

Retired now and thanking you all for the sage wisdom dispensed regularly on this forum. Wealth is a relative commodity, but comfort with a financial plan which can provide the probability of success is priceless.

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Re: Calling out the not so rich bogleheads

Post by DrGoogle2017 » Tue Sep 19, 2017 5:25 pm

I'm not sure I'm even a BH, I always LAYM(live at your mean) and not LBYM kind of gal, at least it's better than LAYM(live above your mean).
But I wish I had discovered Bogglehead forum many years ago instead of closer to retirement or after retirement when I have to worry about SWR and RMD, I know a lot of acronyms. But I'm here to learn so I can help my kids investing with confidence.
Last edited by DrGoogle2017 on Tue Sep 19, 2017 5:27 pm, edited 1 time in total.

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Re: Calling out the not so rich bogleheads

Post by sunny_socal » Tue Sep 19, 2017 5:26 pm

It's an odd thread. OP says he's a "commoner" yet he's one of the dreaded MMMMMMMMMMillionaires? :shock:

Either way, I don't think people are scared away from the forum.

IBTL :beer

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Re: Calling out the not so rich bogleheads

Post by Earl Lemongrab » Tue Sep 19, 2017 5:31 pm

heybro wrote:
Tue Sep 19, 2017 4:59 am
ddurrett896 wrote:
Mon Sep 18, 2017 6:41 pm
skor99 wrote:
Mon Sep 18, 2017 5:47 pm
This has the effect of scaring away and/or creating resentment in a lot of people who are not close to being millionaires or even just plain wealthy with a healthy emergency cushion, say around 100K-200K saved @ age 35 or 40 .
You can't get wrapped up in a number. Think about it like this (assuming both people are the same age):

Person 1 makes $50,000/year and has a net worth of $500,000.
Person 2 makes $300,000/year and has a net work of $2,000,000.

Who is doing better? I say person 1.
Very true! Rate of Savings is a huge indicator. Not only does it demonstrate how much you are saving but it also shows how little you are spending.
Objection! Assumes facts not in evidence. We don't know what percentage either of their net worth figures are due to saving. Person 1 might have inherited 1000k and only has 500k left. The only objective numbers we have shows one person with both more net worth and higher savings potential, and that is Person 2.
This week's fortune cookie: "You will do well to expand your horizons." Ow. Passive-aggressive and vaguely ominous.

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Re: Calling out the not so rich bogleheads

Post by TheHouse7 » Tue Sep 19, 2017 11:45 pm

sunny_socal wrote:
Tue Sep 19, 2017 5:26 pm
It's an odd thread. OP says he's a "commoner" yet he's one of the dreaded MMMMMMMMMMillionaires? :shock:

Either way, I don't think people are scared away from the forum.

IBTL :beer
Yeah being a commoner (56k per year/ @30) I think no body gets scared away from this forum.
"PSX will always go up 20%, why invest in anything else?!" -Father-in-law early retired.

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Re: Calling out the not so rich bogleheads

Post by White Coat Investor » Wed Sep 20, 2017 3:35 am

sport wrote:
Mon Sep 18, 2017 6:13 pm
skor99 wrote:
Mon Sep 18, 2017 5:47 pm
Having said that, I would say that the forums are generally dominated by folks who are millionaires, multi millionaires or soon to be millionaires at very young ages.
While this is how it seems to you, I do not believe that it is necessarily true. We don't know the wealth level of most Bogleheads.
Sure we do, at least those of us who saw the now outlawed surveys.

The OP is right. There are a lot of millionaires here. About half of Bogleheads as I recall.
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