Two Comma Club

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djpeteski
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Two Comma Club

Post by djpeteski » Fri Sep 29, 2017 11:33 am

Last month I put out a post that asked a question about counting a privately held business interest towards one's net worth. It was unanimous: don't count it. Okay, but we were so close to hitting the two comma club, counting any part of it would have pushed us over the threshold.

In the end the deal did not close; but, due to some stock market gains late in the month and some found money we crossed the threshold in August of 2017. It should be noted that at the start of 2013 we had a negative net worth. We started DR in July of 2013, was done with BS2 in Aug 2014, BS3 Jan 2015, BS6 May 2016. Aug 2017 we had a net worth of 1,002,348.

I closed the books on September and this month it seems real. Due to hurricane Irma, we have suffered a loss of about 5K so far, which will likely grow by another 4K by the end of the year. Still we had a small uptick in the net worth figure.

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jfn111
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Re: Two Comma Club

Post by jfn111 » Fri Sep 29, 2017 12:33 pm

Wow, all in 4 years. Well done!

bubbadog
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Re: Two Comma Club

Post by bubbadog » Fri Sep 29, 2017 10:27 pm

Congrats!

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midareff
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Re: Two Comma Club

Post by midareff » Fri Sep 29, 2017 10:34 pm

jfn111 wrote:
Fri Sep 29, 2017 12:33 pm
Wow, all in 4 years. Well done!
+100

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White Coat Investor
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Re: Two Comma Club

Post by White Coat Investor » Sat Sep 30, 2017 12:25 am

djpeteski wrote:
Fri Sep 29, 2017 11:33 am
Last month I put out a post that asked a question about counting a privately held business interest towards one's net worth. It was unanimous: don't count it. Okay, but we were so close to hitting the two comma club, counting any part of it would have pushed us over the threshold.

In the end the deal did not close; but, due to some stock market gains late in the month and some found money we crossed the threshold in August of 2017. It should be noted that at the start of 2013 we had a negative net worth. We started DR in July of 2013, was done with BS2 in Aug 2014, BS3 Jan 2015, BS6 May 2016. Aug 2017 we had a net worth of 1,002,348.

I closed the books on September and this month it seems real. Due to hurricane Irma, we have suffered a loss of about 5K so far, which will likely grow by another 4K by the end of the year. Still we had a small uptick in the net worth figure.
Why wouldn't you count it? Just discount it by 30% or so for illiquidity.

Congrats on hitting a big (perhaps the biggest) milestone!
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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HomerJ
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Re: Two Comma Club

Post by HomerJ » Sat Sep 30, 2017 12:42 am

djpeteski wrote:
Fri Sep 29, 2017 11:33 am
We started DR in July of 2013, was done with BS2 in Aug 2014, BS3 Jan 2015, BS6 May 2016. Aug 2017 we had a net worth of 1,002,348.
I had no idea what any of this meant, but google tells me you are talking about Dave Ramsay and his Babysteps.

You really don't give any details. How did you manage to get to a million in only 4 years? Sounds like your private business is throwing off a ton of cash I guess. Congratulations! Nice job saving it instead of spending it.

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samsoes
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Re: Two Comma Club

Post by samsoes » Sat Sep 30, 2017 2:36 pm

HomerJ wrote:
Sat Sep 30, 2017 12:42 am
djpeteski wrote:
Fri Sep 29, 2017 11:33 am
We started DR in July of 2013, was done with BS2 in Aug 2014, BS3 Jan 2015, BS6 May 2016. Aug 2017 we had a net worth of 1,002,348.
I had no idea what any of this meant, but google tells me you are talking about Dave Ramsay and his Babysteps.
...
Non-intuitive acronyms are ubiquitous on this forum. Makes some threads almost unreadable.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. (Avatar is the statue of Gen. Warren at Little Round Top @ Gettysburg National Military Park.)

WorkToLive
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Re: Two Comma Club

Post by WorkToLive » Sat Sep 30, 2017 2:49 pm

Sorry, those of us familiar with Dave Ramsey just use the BS# format to make our posts shorter. Here is what they mean!

Baby Step 1: $1,000 cash in a beginner emergency fund
Baby Step 2: Use the debt snowball to pay off all your debt but the house
Baby Step 3: A fully funded emergency fund of 3 to 6 months of expenses
Baby Step 4: Invest 15% of your household income into retirement
Baby Step 5: Start saving for college
Baby Step 6: Pay off your home early
Baby Step 7: Build wealth and give generously

dcop
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Re: Two Comma Club

Post by dcop » Sat Sep 30, 2017 6:02 pm

Any chance you could share how you did it so fast in 4 years coming from sub-zero? It took me 13 years to go from 120K to 1.6 million and that was by beng long in solid stocks and maxing out all my tax advantage accounts every year.

PFInterest
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Re: Two Comma Club

Post by PFInterest » Sat Sep 30, 2017 6:42 pm

now you need to make it to 3 commas...

viewtopic.php?p=3554415#p3554415

retire57
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Re: Two Comma Club

Post by retire57 » Sat Sep 30, 2017 7:23 pm

dcop wrote:
Sat Sep 30, 2017 6:02 pm
Any chance you could share how you did it so fast in 4 years coming from sub-zero? It took me 13 years to go from 120K to 1.6 million and that was by beng long in solid stocks and maxing out all my tax advantage accounts every year.
Yes, I would be interested to know that as well. Took us 16 years.

sc9182
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Re: Two Comma Club

Post by sc9182 » Sat Sep 30, 2017 8:55 pm

retire57 wrote:
Sat Sep 30, 2017 7:23 pm
dcop wrote:
Sat Sep 30, 2017 6:02 pm
Any chance you could share how you did it so fast in 4 years coming from sub-zero? It took me 13 years to go from 120K to 1.6 million and that was by beng long in solid stocks and maxing out all my tax advantage accounts every year.
Yes, I would be interested to know that as well. Took us 16 years.
A friend of ours - bought a near-million TLC home on foreclosure @ 55% discount in 2012 during market depression -- with its 2013 value jumped up - pulled equity out after1 year - bought two rental foreclosures. With UP market - all three homes appreciated about $300k each. Sold one rental - paid off primary home mortgage - BS6. He did tstart off in 2012 with about 60k, and took 5 years. Now he shows off BS6. Good for him. Highly timely/lucky risky events - highly leveraged gains with perfect timing (luck?). He did think of foreclosure 6-8 months into buying his first one when real-estate market stayed flat. But just after 1-year turn, with good sweat equity - and recovered real estate market - a refi changed his game!!
Last edited by sc9182 on Sat Sep 30, 2017 10:34 pm, edited 1 time in total.

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badbreath
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Re: Two Comma Club

Post by badbreath » Sat Sep 30, 2017 9:25 pm

About time you got up to two comma club.

Just kidding :sharebeer
“While money can’t buy happiness, it certainly lets you choose your own form of misery.” Groucho Marx

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djpeteski
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Re: Two Comma Club

Post by djpeteski » Mon Oct 02, 2017 5:16 am

dcop wrote:
Sat Sep 30, 2017 6:02 pm
Any chance you could share how you did it so fast in 4 years coming from sub-zero? It took me 13 years to go from 120K to 1.6 million and that was by beng long in solid stocks and maxing out all my tax advantage accounts every year.
Salary and salary increases. Also intensity, for most of our pay off debt journey we lived off of less than 50K per year, often a lot less.

Our household income is about 300K now, and 4 years ago it was about 180K. I firmly believe that we received blessings because we started handling money wisely. Most people who call into the show to do the debt free scream receive significant salary increases during their journey. The exception being those that choose to send keep one parent home to take care of the kids.

We could have got there sooner, but we also cash flowed school for one child, and helped two others.

During our baby step 2 (pay off all consumer debt) the formula was pretty simple: Make what we did, live off 35K, pay 60K to the IRS, and 165K in debt can disappear in 13 months. The funny thing is we did get discouraged during this time period despite averaging $400/day in debt reduction. Keep good records, it helps.

We did receive some gains from a property we bought, about 50K, and the home we already owned, about 75K. The market, for 2013, 2014, and later part of 2016, has also been very, very good to us. Still without the salary we would have not been able to buy the property or put money in the market.

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Cycle
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Re: Two Comma Club

Post by Cycle » Mon Oct 02, 2017 5:58 am

djpeteski wrote:
Mon Oct 02, 2017 5:16 am
Our household income is about 300K now, and 4 years ago it was about 180K.
Thanks for this post. Books like millionaire next door can make one think owning a business is the only way to get your finances squared away. Reality is someone who is willing to seek out an above average salary using their primary skillset shouldn't need to sidehussle or build a real estate empire. Especially if in stem or healthcare.

I'm impressed by how in 4 yrs you accumulated 1.1m off <300k/yr. We put 150k into savings a yr off 240k salary + 20k rent. A good chunk of that is in tax deferred.

FedGuy
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Re: Two Comma Club

Post by FedGuy » Mon Oct 02, 2017 6:25 am

WorkToLive wrote:
Sat Sep 30, 2017 2:49 pm
Baby Step 5: Start saving for college
Just out of curiosity, if you don't have children and don't plan to, and you've already achieved Baby Step 4, can you consider yourself to have achieved Baby Step 5 and be working on Baby Step 6?

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djpeteski
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Re: Two Comma Club

Post by djpeteski » Mon Oct 02, 2017 7:20 am

FedGuy wrote:
Mon Oct 02, 2017 6:25 am
WorkToLive wrote:
Sat Sep 30, 2017 2:49 pm
Baby Step 5: Start saving for college
Just out of curiosity, if you don't have children and don't plan to, and you've already achieved Baby Step 4, can you consider yourself to have achieved Baby Step 5 and be working on Baby Step 6?
In the general sense, if you do not have children, BS 5 is the easiest. Just skip it. Even if you plan to have a child in the future, you can skip it for now. So yes.

For the record, we found BS3 (3-6 month emergency fund) the hardest. Saving money that does not earn hardly any interest is tough.

alfaspider
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Re: Two Comma Club

Post by alfaspider » Mon Oct 02, 2017 8:52 am

djpeteski wrote:
Fri Sep 29, 2017 11:33 am
Last month I put out a post that asked a question about counting a privately held business interest towards one's net worth. It was unanimous: don't count it. Okay, but we were so close to hitting the two comma club, counting any part of it would have pushed us over the threshold.
Seems strange to me. Under that analysis, Mark Zuckerberg was penniless until Facebook went public. Clearly, he was a billionaire well before then. The difficulty in private businesses is valuation, but there are a variety of accepted methods for valuing private companies.

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