Under $100k Avg Annual Income Millionaires and How You Did It?

[bigtex]

Just looking for the millionaires on here that did it on less than a $100k average annual household income, and what your main keys to success were? Also, if you wouldn't mind posting at what age you achieved this milestone and any other relevant facts. Thanks!

[02nz]

I'm not quite there, but close. There are no real secrets:

- Live below your means
- Don't overspend on house and car
- Save and invest consistently, using low-cost funds
- Use all your tax-advantaged space, and defer your taxes as much as possible (say at 20% marginal and higher)
- Have some luck with the markets - this one you don't really control, obviously!

[bigtex]

I'm not quite there, but close. There are no real secrets:

- Live below your means
- Don't overspend on house and car
- Save and invest consistently, using low-cost funds
- Use all your tax-advantaged space, and defer your taxes as much as possible (say at 20% marginal and higher)
- Have some luck with the markets - this one you don't really control, obviously!

Thank you. May I ask what was your income and what % of gross did you save?

[02nz]

I'm not quite there, but close. There are no real secrets:

- Live below your means
- Don't overspend on house and car
- Save and invest consistently, using low-cost funds
- Use all your tax-advantaged space, and defer your taxes as much as possible (say at 20% marginal and higher)
- Have some luck with the markets - this one you don't really control, obviously!

Thank you. May I ask what was your income and what % of gross did you save?

Averaged around $90K, started at less. Saved as much as 50% of gross in higher-income years, but not in the beginning when I was making $35K/yr.

[sergio]

These are the most interesting posts IMO - the $80-120k/yr households with kids, no huge windfalls, etc. The one "benefit" of being in that income range is that you can get your taxes down pretty low, probably still qualify for some decent federal/state credits, if you save a lot. Here's one of the more inspiring threads I've seen: viewtopic.php?t=239899

I'm in a similar situation. I try to save as much as possible and spend as little as possible while still living reasonably comfortably.

Saving $20k a year @ a 5% real rate of return will get you $1 million in 25 years (all in today's dollars). That will be $1.5 million just 6 years after that. And in the meantime you'll probably also accumulate things like home equity, get your SS earning up etc.

'

[Dottie57]

My last 8 years were under 110k. All years before that- started at 14k in 1982. I made 40k in 1996. Received raises to end my career at 110k. I was a software engineer. Always single.

I worked hard. Tried to always provide value. Learned new tech whenever I could

15% of every paycheck was saved from mid 1988. As I made more money I started maxing 401k, added to savings, participated in ESPP sometimes. Started a Roth IRA in 2012. Started taxable at same time. Savings came first, then I could spend what was left.

Advice. Set manageable but aggressive goals for savings. Spend the rest to give yourself a good life. Really determine what constitutes a good life for you.

[Snowjob]

Still have yet to make 100k. Made 2 commas in about 12 years total.

- low cost state school had very little debt starting out
- cheap rent & Invested vs buying a house
- cheap cars & low cost hobbies / vacations (lots of outdoor pursuits)
- no wedding / divorce / child expenses
- used leverage juice returns.

[scrabbler1]

Annual wage income rose from $23k when I began working full-time in 1985 to $78k in 2000 before I switched to working part-time in 2001. Wage income varied between $30k and $55k between 2001 and 2008, when I retired at age 45. Average annual wage income was $52k. Total investment NW hit $1M in 2010.

For me, getting to the $1M mark was due to a few things:

(1) no kids, no debts. I paid off my student loans in 1987, paid cash for my cars (no car loans), paid off the mortgage in 1998.
(2) LBYM
(3) one boost was cashing out the $300k in company stock when I retired in 2008. I used NUA to lower the tax bite.
(4) Avoid vices and expensive hobbies.

[Helo80]

OP, I think that you would enjoy the Millionaire Next Door ( the original and revised edition).

Also, in the same vein, Everyday Millionaires by Dave Ramsey personality Chris Hogan is another like book.

Some on BH are very anti-Millionaire Next Door and critique the science and selection of the participants behind the book. I think that said BH are missing the boat. Basically, people with ordinary incomes, teachers, police officers, firemen, etc. are able to achieve millionaire status by living below their means and investing regularly.

[student]

Still have yet to make 100k. Made 2 commas in about 12 years total.

- low cost state school had very little debt starting out
- cheap rent & Invested vs buying a house
- cheap cars & low cost hobbies / vacations (lots of outdoor pursuits)
- no wedding / divorce / child expenses
- used leverage juice returns.

Wow.

[student]

Annual wage income rose from $23k when I began working full-time in 1985 to $78k in 2000 before I switched to working part-time in 2001. Wage income varied between $30k and $55k between 2001 and 2008, when I retired at age 45. Average annual wage income was $52k. Total investment NW hit $1M in 2010.

For me, getting to the $1M mark was due to a few things:

(1) no kids, no debts. I paid off my student loans in 1987, paid cash for my cars (no car loans), paid off the mortgage in 1998.
(2) LBYM
(3) one boost was cashing out the $300k in company stock when I retired in 2008. I used NUA to lower the tax bite.
(4) Avoid vices and expensive hobbies.

Wow.

[Conch55]

We made it mostly on less than 100k per year, two kids, college, weddings but it took 30 years. Time in the market was key, kept investing in low cost funds and paying attention to expenses. We are now in our early 60's, no longer working, house paid for, kids on there own.

[Toons]

Take advantage of all tax deferred ,tax free saving vehicles,Ira,Roth,401k,max if possible,
Invest you must.You have to put the compounding machine to work you.
The compounding machine doesn't sleep ,you do,
Stick to a budget( I used and still use Quicken)
Live beneath your means
Do not live "up" to income,pay off debt or invest the raise in 401k etc...
Keep debt to a minimum,Do not,I repeat ,Do Not become a slave to the lender.
Do your best to get a 15 year mortgage and pay that off early if possible
Do not buy more house "than you need"
When thinking about a large expense for something "sleep on it"
Pay cash.
Completely ignore what "The Jones family has".
If you have to have a car payment keep it low,buy used,or buy economical.
Keep the car for years.
Don't smoke.
Do not over indulge your children,,,,teach them the value of a dollar and what it takes to earn one.
Stay focused on your financial goal,,day after day ,week after week ,year after year,,,remember
It is a marathon,,not a sprint.
I would say "good luck",,but
Good luck usually falls on those who are prepared

[Abe]

It never ceases to amaze me when I read post from people making $100k a year and more. I never earned $100k in my life. Best I can remember, the most I ever made was around $67k, and most years much less. Of course I can remember when the people across the street built a nice house for $12k. I'm retired now with a networth around $7.5 million, at least that's about what it was before the latest downturn. I can't really remember my age when I hit my first million, but it probably was in my early to mid forties. As too keys to success, I would say an extremely high savings rate had a lot to do with it and living below my means. You can't keep up with the Joneses if you want to get rich. I also got into investing in mortgages, which was very lucrative; and rental property investments. Some of these types of investments would be considered risky, but you have to take more risk if you expect to get higher returns. The risk I took were calculated risk that paid off. Every penny I invested stayed invested and compounded for many years. To this day I have never spent a penny of any money I invested except for rental income. I live on the income from rental properties and social security.

[Hyperborea]

I think that the slow and steady route of LBYM is a necessary part of getting there. Even if you earn a lot more, if you spend it all then you won't become a millionaire.

However, you should look at the other side of the issue. How can you improve yourself and raise your income? If you can do that and make more than a $100K then building a million dollar or more net worth is easier. That might mean going back to school or taking night school (better if funded by your company), learning things on your own, taking on more responsibility at your current job, looking for a new job, moving to a different geographic area, or changing careers. As some have put it before, work the offence as well as the defence.

P.S. Also think about the inflation side of it when listening to the stories of the older folks. Your $100K cutoff is more like $50K in 1990 and $15K in 1970. To turn it around that $100K in 1990 is like $200K now and the $100K in 1970 is like $650K now. So, somebody falling under your cutoff in the past might have been effectively far above it.

[Jags4186]

P.S. Also think about the inflation side of it when listening to the stories of the older folks. Your $100K cutoff is more like $50K in 1990 and $15K in 1970. To turn it around that $100K in 1990 is like $200K now and the $100K in 1970 is like $650K now. So, somebody falling under your cutoff in the past might have been effectively far above it.

This gets lost so much. People who read The Millionaire Next Door forget that it was written in 1996. When Danko says in the book says the median income of “the millionaire next door” is $131,000 and the average income is $247,000 that is equivalent to $210,000 & $396,000 today respectively. These are big earners.

[RadAudit]

It's simple; not easy.

Started working at 24 for $9.6K/yr. Invested 8% of income per year with a 4% match. LBYM. Waited 39 years. (That's the second time I hit, barely, $1 mil. The first was 2007 and then 2008 happened, IIRC) Retired.

Major keys to success - a frugal DW, modest home.

YMMV.

[tibbitts]

Just looking for the millionaires on here that did it on less than a $100k average annual household income, and what your main keys to success were? Also, if you wouldn't mind posting at what age you achieved this milestone and any other relevant facts. Thanks!

I don't think you realize how difficult it will be to generate any useful conclusions from this information. Inflation is complicated to account for over the different time periods people are going to report, and people benefitting from the markets of the '80s and '90s aren't going to a relevant comparison to those experiencing the '60 and the '70s. Not to mention you haven't defined "millionaire" - if you mean net worth, some people could have made that entirely based on a single fortuitous real estate purchase (without debating luck vs. skill.) Basically nothing you learn will apply to you.

[cal91]

Tip #1. No kids.

(Disclaimer: I have 3 almost 4)

[Old_Dollar]

Question for the under $100k income millionaires.

Do you have any regrets about missing out on some things in your younger adult years as a consequence of high savings rates?

[RadAudit]

Do you have any regrets about missing out on some things in your younger adult years as a consequence of (your) savings rates?

No.

[Starfish]

I'm not quite there, but close. There are no real secrets:

- Live below your means
- Don't overspend on house and car
- Save and invest consistently, using low-cost funds
- Use all your tax-advantaged space, and defer your taxes as much as possible (say at 20% marginal and higher)
- Have some luck with the markets - this one you don't really control, obviously!

I am not one of them but saving 100$ per month, inflation adjusted, from 1970 does the trick. Time and consistency are important.

https://www.marketwatch.com/story/save- ... 2018-03-26

Add house valuations and you can make even multiple millions with "normal" salaries.

[White Coat Investor]

Just looking for the millionaires on here that did it on less than a $100k average annual household income, and what your main keys to success were? Also, if you wouldn't mind posting at what age you achieved this milestone and any other relevant facts. Thanks!

It just takes good habits and time. Obviously easier on higher incomes, but just run the numbers. Say you make $80K, save 25% of it ($20K a year) and earn 8% on it. Let's also assume your home equity adds up to $300K by the time you hit millionaire status. How long does it take for your investments to reach $700K at 8% and $20K a year?

A simple NPER calculation shows the answer to be 17 years. If you wanted to ignore home equity, it would be 21 years. If you ignored home equity and only made 5%, then it would be 26 years. But that's still well less than a typical 30-40 year career.

Now if you want to do it on a $40K income, I think that's a real challenge. Let's say you save 15% of it, or $6,000 a year. At 8% a year (and ignoring home equity) that's 35 years. Better start early if you want to retire with a million bucks. But given the average household income in America is $60K these days, it's a shame that there aren't far more millionaires out there.

[goblue100]

Question for the under $100k income millionaires.

Do you have any regrets about missing out on some things in your younger adult years as a consequence of high savings rates?

I almost fit the mold, the last few years I've cracked the 100k mark. To answer the question I've quoted above, the answer is a little. Yes, we have been frugal, but not total tightwads. We've been to Hawaii twice, a couple of cruises, and other pretty nice vacations. Still, there may have been some more things we could have done with my daughter when she was younger and unmarried. I guess I'll quote Sinatra:
"Regrets, I've had a few. But then again too few to mention"...

[White Coat Investor]

Also, I think anyone wondering how to become rich on a low income needs to give serious consideration to something I've learned over the last decade- barring disability or similarly difficult life situations increasing your income is not nearly as hard as it seems when you've never made more than $50K a year. I used to think all those goofy books about positive thinking and avoiding a scarcity mentality were just, well, goofy. I think there's actually some wisdom there though. Whether you think you can or you think you can't, you're right. It's obviously not all in our control, but more so than most probably think.

[White Coat Investor]

Question for the under $100k income millionaires.

Do you have any regrets...

I almost fit the mold, the last few years I've cracked the 100k mark.

I think this happens a lot. When people start focusing on their finances, they find ways to make more money, which allows them to save more money, which in turn allows them to have more money. I often listen to the "I'm Debt Free" screamers on the Dave Ramsey show and almost all of them have significantly increased their income while paying off their debt. I don't think that's coincidence. Although I do wonder if it's a confounding factor. Maybe the ones who never increased their income never became debt free and so never came on the show. But I think it's probably more likely that your income goes up when you start focusing more on financial goals like becoming debt free.

[White Coat Investor]

These are the most interesting posts IMO - the $80-120k/yr households with kids, no huge windfalls, etc. The one "benefit" of being in that income range is that you can get your taxes down pretty low, probably still qualify for some decent federal/state credits, if you save a lot.

I think it's just a continuum. The lower your income, the more "benefits" you get but the harder it is to reach financial goals. I've lived on $20K, 10 times that and 100 times that. I assure you this whole thing gets easier with higher income despite paying a lot more in tax. I have two friends who are continually arguing about the "ideal income." Their idea is that it is in the $250-400K range. I disagree. While I think there is an ideal for everyone (at some point your time is better spent doing something besides making money) since people exchange their time for money at different rates, there is no ideal income. If you got paid $10K an hour, why would you stop working for the year after just 40 hours? You're certainly not burned out. You probably don't have better things to do with ALL of that time.

[White Coat Investor]

Just looking for the millionaires on here that did it on less than a $100k average annual household income, and what your main keys to success were? Also, if you wouldn't mind posting at what age you achieved this milestone and any other relevant facts. Thanks!

I have a family member who never made over $100K until he was in his 60s and had a government pension and then became an IC doing similar work for more while collecting the pension. Didn't make any awesome financial moves or start saving super early either. Certainly wasn't a millionaire at 60 (even counting home equity etc) and in fact wasn't even when he retired if you don't count the pension and home equity. But within a few years of retiring his portfolio hit the $1M mark thanks to compound interest, a Boglehead investing philosophy, and ongoing frugality.

[jayk238]

I tell you what. Wife and I thought we were living well above our means but somehow I managed to save 30k this year. I ‘only’ made 143 and yet have 12k in bank and 18 in 401. This after spending 20k in medical expenses. The thing is we blew our money as much as we could saying wed get it out if our system till january. This was on half year income

Personally Im not sure how to inflate our lifestyle because we bought whatever we wanted and wont anymore.

We dont have a thing for luxury cars or homes or boats so that helps i guess.

Dont understand how people spend so much as high earners

[sergio]

These are the most interesting posts IMO - the $80-120k/yr households with kids, no huge windfalls, etc. The one "benefit" of being in that income range is that you can get your taxes down pretty low, probably still qualify for some decent federal/state credits, if you save a lot.

I think it's just a continuum. The lower your income, the more "benefits" you get but the harder it is to reach financial goals. I've lived on $20K, 10 times that and 100 times that. I assure you this whole thing gets easier with higher income despite paying a lot more in tax. I have two friends who are continually arguing about the "ideal income." Their idea is that it is in the $250-400K range. I disagree. While I think there is an ideal for everyone (at some point your time is better spent doing something besides making money) since people exchange their time for money at different rates, there is no ideal income. If you got paid $10K an hour, why would you stop working for the year after just 40 hours? You're certainly not burned out. You probably don't have better things to do with ALL of that time.

Agreed with you 100%. I guess the point I was trying to make is that in my state (+ federal), you could easily get $5-10k in "benefits" (tax credit/deductions) on $80k/year if you save enough in your 401k, HSA, tIRA, FSA, 529 etc. As you move towards $120k, those "benefits" go to 0. Obviously you're still better off with the $120k income and no credits, but you still can eek out some free money as a reward for saving enough on a reasonably comfortable income.

We're in the low $100s for income. Sometimes I am amazed how much me (frugal) and my wife (a beyond-frugal Chinese woman) can save

[White Coat Investor]

I tell you what. Wife and I thought we were living well above our means but somehow I managed to save 30k this year. I ‘only’ made 143 and yet have 12k in bank and 18 in 401. This after spending 20k in medical expenses. The thing is we blew our money as much as we could saying wed get it out if our system till january. This was on half year income

Personally Im not sure how to inflate our lifestyle because we bought whatever we wanted and wont anymore.

We dont have a thing for luxury cars or homes or boats so that helps i guess.

Dont understand how people spend so much as high earners

People can figure it out, I assure you. I have a partner who told me he spent $100K on vacations last year. He can afford it I suppose given both spouses are high earners and they've taken care of business but I was pretty amazed considering the dozen trips I did and I don't think we went through $30K. So I asked him about it. It involved flying first class and renting not one but two of those over the water bungalows in the South Pacific. I guess if you don't want the kids in yours, that's what you've got to do.

[soundwave]

I'm on the low net worth end of the BH spectrum however am quite comfortable with my net worth as well as the lifestyle it provides. I continue to gain wisdom & benefit from people of all incomes & net worths & I will be forever grateful for the opinions & advice of others who are on the same path. I'm just below a million so thought I'd chime in since I think it's more important to others how you arrived when it wasn't under ideal circumstances.

I've been a single parent for most of my (now grown) children's lives. Although I retired with an income over 100K, for the majority of my working years I was well under...very well under.

For some it's a straight line trajectory upward however for many others it comes in fits & starts. Until a few years prior to retirement, I was never able to be consistent in my % of salary saved. However, I was always doggedly determined to save every dollar that I could & this, my dear BH friends & mentors, made all the difference.

Not only did I live below my means at a very low income (think $17-20K), I also made the decision to leave my highest paid position to date ($42K annual at age 46) and return to school. I applied for every scholarship, wrote many essays & worked every hour that I wasn't in school or studying. Oh, and my essays paid off as I won many of the scholarships that I applied for. Due to my diligence, I graduated with no student loan debt. My income rose steadily after that, as did my % of earnings invested each month.

Persistence, perseverance and keeping your focus will always get you where you want to be. I promise.

[Starfish]

These are the most interesting posts IMO - the $80-120k/yr households with kids, no huge windfalls, etc. The one "benefit" of being in that income range is that you can get your taxes down pretty low, probably still qualify for some decent federal/state credits, if you save a lot.

I think it's just a continuum. The lower your income, the more "benefits" you get but the harder it is to reach financial goals. I've lived on $20K, 10 times that and 100 times that. I assure you this whole thing gets easier with higher income despite paying a lot more in tax. I have two friends who are continually arguing about the "ideal income." Their idea is that it is in the $250-400K range. I disagree. While I think there is an ideal for everyone (at some point your time is better spent doing something besides making money) since people exchange their time for money at different rates, there is no ideal income. If you got paid $10K an hour, why would you stop working for the year after just 40 hours? You're certainly not burned out. You probably don't have better things to do with ALL of that time.

Unfortunately for most people this kind of flexibility does not exist.
A well paying job does not scale down. You cannot be part time director of engineering or part time manager. Side gigs usually pay much less. Contracting could be an option for some but even there it is not easy to scale your work as desired.
Yes, for doctors probably is a different thing. Not even for all of them though. If you have high fixed costs in a private practice you have to work a large part of the year only to cover the fixed costs. Even if you make 200k a month, it is irrelevant until first dollar of profit.

[MathWizard]

Average inflation adjusted household income in last 30 years was $72K, was in grad school before that, hence much less.

Hit one million invested assets with no debt 2 years ago, last child out of college last year.

How: Lived in old mobile homes that I bought with small loans both in grad school and for 10 years afterwards, paying down student loans, paying off mobile home, and saving 20% down for my first regular house, a fixer upper.

Refi'd mortgage 3 times, each time at lower % and shorter term, paying a 30 yr loan off in 27 years.

Cars were all used and cheap. After grad school, all cars were bought with cash, 2 at auction.

Saved 15% from day one at my job. The last 10 years, at least half of every raise went to Roth and savings. The last 3 years maxing out tax advantaged.

[Watty]

One thing to keep in mind is that the average household income in the US is only about $60K so someone that is making $100K a year is still way above average.

Just looking for the millionaires on here that did it on less than a $100k average annual household income, and what your main keys to success were? Also, if you wouldn't mind posting at what age you achieved this milestone and any other relevant facts. Thanks!

I just barely made the two comma club when I was in my late 50's about the time I retired a few years ago, but that also includes the value of my house.

A few key things;

1) I lived in a reasonable cost of living area. For example for less than $300K you can get a nice 3 bedroom/ 2 bath 2,000 square foot house a good school district in the suburbs. Starter homes can be found with for less than $200k if you make some compromises.

2) Other than a mortage I almost never had any debt except for an occasional car loan, which I quickly paid off.

3) When I was going through my mid 30s to late 40s I committed to myself to save half of any raise I got and I pretty well stuck with that for a long time. I would try to change my 401k withholding percent as soon as I had my salary review so that I would never see the extra money in my paycheck. For a while I was saving 20% of my income.

4) I was not overly frugal and did things like modest travel and paid for my kid to go to a state university. I usually bought modest new cars that I kept for about ten years.

5) I've only been married once and still am after 30 years.

6) I worked in IT and managed to keep my job through my 50s, but I saw a lot of coworkers get laid off in their 50s.

7) Our plan for long term care is to use the home equity in our paid off house. That will work best if only one of us is surviving when LTC is needed.

By the time I retired I was making a bit less than $100K but adjusted for inflation my earnings likely peaked in my late 40s which is not uncommon.

This is rough but before I retired part of my budget looked something like this;

7.5% FICA taxes
10% Federal and State income taxes.
15% Retirement savings
10% Mortgage payments
10% Child raising and college expenses

That adds up to 52.5% of my budget.

I retired at about the time I paid off my mortage and my kid finished college and once I retire my tax rate became a lot lower so almost all of those expenses ended.

There are of course some new expenses in retirement like paying for partially subsidized ACA health insurance, medicare supplements, and more travel but overall my total expenses are not all that high.

If you are earning and living comfortably on $100K you may not need to become a millionaire to maintain the same lifestyle in retirement.

Once we both start Social Security we will be getting around $40K so that will cover a lot of expenses.

There are also all sorts of details like long term care and only having one Social Security check if one of us survives the other that we need to keep in mind but the numbers seem to be working out better than I expected.

[22twain]

It helps to live where housing is inexpensive. Our house (3bd 2ba, corner lot) is worth about $150-$160K, about what we paid for it 30 years ago, after inflation. Our annual property tax bill has never been more than about $1100.

We don't have kids and don't need to haul a lot of stuff around, so we've never needed big vehicles like SUVs and pickups. Small sedans and hatchbacks are fine with us. We also live within walking distance of work (or used to work). It's a bit of a luxury for us to own two cars, and always buy them new. However, we've never paid more than $18K for any of them, and we keep them as long as we can: 10, 12, and 22 years for our previous cars, and 5 years so far for our current two.

We also benefited from generous employer contributions (about 8%) to our 403b plans.

[yeahman]

I'd like to hear from the parents here. Average cost of raising a kid in the US is $2k/month. With daycare in a high COLA area, earning less than $100k and saving sufficiently to eventually net over a millionaire has got to be a struggle.

[ArmyInvestor]

I reached one million early 2018 at 35, though net worth has dropped just under now. I'm an Army Warrant Officer so you can lookup pay scales. Wife worked for a few years before we had 2 kids. My "secret" was to decide I wanted to be financially independent at a young age and started saving from the beginning of my career. When I see peers buying fancy things, I imagine I am paying for a money machine. I try to maintain a steady living expense and put raises into more investments. My portfolio is a pretty simple mix of US, International, Bond, and REIT (makes me feel like I own real estate since I move around). Most of my duty stations have been in the southeast where the cost of living is fairly low.

I remember my dad buying some stocks when I was a kid and I think that interested me in investing at a young age. I initially started in some mediocre USAA funds and TPS, but as I learned more, I moved the USAA funds to Vanguard. I hope to teach my kids what I know so they can start early.

[KlangFool]

I'd like to hear from the parents here. Average cost of raising a kid in the US is $2k/month. With daycare in a high COLA area, earning less than $100k and saving sufficiently to eventually net over a millionaire has got to be a struggle.

yeahman,

This is obviously a lie. US median household income is only 60K.

KlangFool

[catdude]

A lot of what I'm reading on this thread rings true for me. My salary peaked at $94K at the time I retired 8 years ago. I started saving and investing when I was 40, and was able to retire at 55. I reached the 2-comma club about a year ago, which was nice, but given the ups & downs of the market since then, it's possible I no longer qualify as a millionaire (it's been a couple weeks since I checked my Vanguard account balances)...

I just lived modestly and saved as much as I could. I bought a modest townhouse when I was 42 and stayed there for 14 years, even though I could've easily afforded a nicer place. The only reason I sold it was because I was moving across the country... and I've bought another modest townhouse here...

As somebody once said, the key to building financial security is being the kind of person who doesn't need much to be happy.

[White Coat Investor]

Unfortunately for most people this kind of flexibility does not exist.

I agree that many jobs don't provide this flexibility. But if you make choices throughout your life and career in order to maximize this kind of flexibility, you might be surprised how much flexibility you can get.

Some of the choices I have made that allowed me to have this sort of flexibility:

1) Chose to go to medical school
2) Chose emergency medicine
3) Left the military
4) Turned down prestigious but time consuming leadership and committee positions
5) Pursued a side gig
6) Saved a huge percentage of my income
7) Paid off debt even when the math didn't make sense
8) Income-wise, doubled down on what worked and cut back on what didn't work as well

So if that sort of flexibility is important to you, avoid careers and specific jobs that don't provide it and get your personal finances in order to allow you options.

My partnership staff sent me an email this week saying "our audit shows you didn't work 1000 hours last year so if you're not going to do that this year, you can't use our health insurance" (that I pay every penny of.) I did work >1000 hours last year so I have no idea how they're auditing, but it was almost enough of an annoyance for me to say, "Fine, you don't want me, I'm out of here." Imagine if there was something that really bothered me? F-you money is a valuable commodity.

[Darwin]

Take advantage of all tax deferred ,tax free saving vehicles,Ira,Roth,401k,max if possible,
Invest you must.You have to put the compounding machine to work you.
The compounding machine doesn't sleep ,you do,
Stick to a budget( I used and still use Quicken)
Live beneath your means
Do not live "up" to income,pay off debt or invest the raise in 401k etc...
Keep debt to a minimum,Do not,I repeat ,Do Not become a slave to the lender.
Do your best to get a 15 year mortgage and pay that off early if possible
Do not buy more house "than you need"
When thinking about a large expense for something "sleep on it"
Pay cash.
Completely ignore what "The Jones family has".
If you have to have a car payment keep it low,buy used,or buy economical.
Keep the car for years.
Don't smoke.
Do not over indulge your children,,,,teach them the value of a dollar and what it takes to earn one.
Stay focused on your financial goal,,day after day ,week after week ,year after year,,,remember
It is a marathon,,not a sprint.
I would say "good luck",,but
Good luck usually falls on those who are prepared

This worked for us!
Combined we've always earned less than 100k, and applying the above-mentioned strategy hit our first million last year (age 48) without help. If you only need a little to be happy, bank the rest. And let the Joneses do their thing. Meanwhile, I have a trail to hike and a fish to catch!

[Pu239]

Combination of determination, sacrifice, luck and math:

- Two incomes, two kids
- 35 year investing time period
- Steady work history with regular investment deductions averaging 10%
- Economy cars and lifestyle
- Exceptionally good market conditions/buy and hold philosophy
- Real estate appreciation from LCOL/MCOL area to MCOL/HCOL
- No major financial setbacks or emergencies
- Inflation

[yeahman]

I'd like to hear from the parents here. Average cost of raising a kid in the US is $2k/month. With daycare in a high COLA area, earning less than $100k and saving sufficiently to eventually net over a millionaire has got to be a struggle.

yeahman,

This is obviously a lie. US median household income is only 60K.

KlangFool

I had that number in my head and looked it up again. The $2k/month is for urban Northeast households earning over $107k. For all households and for urban Northeast households earning less than $107k, it's almost half that.

[msk]

1. Save and invest at least 30% of after tax income
2. Never buy a home worth more than 3x income (2.5x combined income)
3. Never acquire car(s) whether buying or leasing, worth more than 6 months income.

The INVEST part in 1. made a huge difference to my financial health. I built some rental apartments in a super hot market (lucky!) and very quickly my net rental income exceeded my job income, probably in my early 30s back in the 1970s. You need to find your own investments niche. It's not always RE but generating a secondary income early in life (even if it is just owning some Berkshire Hathaway stock or SPY) makes a HUGE difference. You MUST make a start early. Target is to make your job income unimportant by the time you enter middle age. Most youngsters claim they just can't live on 70% of their after-tax income. Balderdash! Any college student can live on $25k p.a. very comfortably. You are still the same you when you earn 60k after tax. Save and invest 20k and very quickly your investment income will become substantial, even with SPY. And then you have to save and invest only 30% of your after tax job+investment income. I could afford much more fancy toys before age 40 (top of the line Mercedes Coupe within Rule 3 above, about $150k today) than my colleagues who kept spending all their income. Recently I was astonished and disappointed when my 45 year-old daughter mentioned that they still had a $100k mortgage outstanding on their home. And I paid for her all the way to an MBA...! Husband is a VP at a medium sized company. Idiots!

[heyyou]

Max annual pay ever, $67K in 2003. My market portfolio (excludes residence) reached double commas at age 56, prior to the 2008 crash. Portfolio topped at 1.3 thousand thousand last year, after a dozen years of retirement, but my $40.8K of no COLA pension helps with retirement expenses.

Made my greedy, high risk investing mistakes before age 30
Was laid off for six weeks, about a year after getting my first (and only) mortgage
Started investing wisely about 1980 (near end of bad period, start of good period)
Maxed 401k and IRAs every year for 25 years, eventually adding after tax contributions to 401k
Payroll deductions kept me from seeing extra money in my take home paycheck, before David Bach wrote that
The Magellan Fund taught me to not expect good past performance to repeat in actively managed funds
Moved from a mid-cost urban area to a low cost rural area with great recreation but kept the same pay
Married late so we were already grown up
No kids since we didn't want to be raising teenagers in our fifties, like our parents did
She is a better tightwad than I am
We drive used cars that are known for being reliable
Near 20 years exposure to VG Diehards at M* then Bogleheads.org

Applicable Morgan Housel remarks:
Your wealth is the money that you didn't spend.
Most of us are not good at managing money, so to manage money well, you have to behave differently with it than most people.

[KlangFool]

I'd like to hear from the parents here. Average cost of raising a kid in the US is $2k/month. With daycare in a high COLA area, earning less than $100k and saving sufficiently to eventually net over a millionaire has got to be a struggle.

yeahman,

This is obviously a lie. US median household income is only 60K.

KlangFool

I had that number in my head and looked it up again. The $2k/month is for urban Northeast households earning over $107k. For all households and for urban Northeast households earning less than $107k, it's almost half that.

yeahman,

It is still a lie with half of the number. It is not possible with US median household income of 60K. The correct answer is the parent spend whatever amount that they want. My kid's high school classmate drove a Jaguar to school.

<<saving sufficiently to eventually net over a millionaire has got to be a struggle.>>

You do not get it.

1) You have a choice.

A) Live like average people and save close to nothing.

B) Do not live like average people and be a millionaire.

So, what is your choice? If you want to be a millionaire, do not follow whatever average people spend.

2) Please note the difference here.

A) Normal people spend first and save whatever remains.

B) Good saver saves first and spends whatever remains.

I save 1 year of expense and spend whatever left. I do not budget. So, it is the same all the time. With or without kid do not change the process.

My annual expense is 60K with 2 kids. I am in the Northeast. So, it is a lie even with 1K per kid per month. Many of my peers have a 600K house. So, it is obvious that they cannot afford 2K per kid per month too.

KlangFool

[stan1]

The millionaire next door concept is a few decades old now. My father in law is a Battle of the Bulge veteran who became a millionaire next door (now 94). He did not have a college degree but had good technical skills starting as a draftsman and advanced into a senior management job at a well known manufacturing company before retiring in 1985. He invented something all of us would recognize and say "wow, I wish I thought of that" but patent was held by the company. Of course the plant is now closed and the product he used to design and oversee now comes in from Mexico and China. He got an early good deal on a pension cash out which he elected to take and then they lived mostly off SS from 65 to present. He gave the money from the pension cash out to Merrill Lynch, and by some miracle they managed to stock trade him into being a millionaire. They always lived below their means but that wasn't enough to get them to the $1M status. The small midwestern city they live in used to have a bustling economy but now is a shadow of its former self with an economy in some part driven by high paid health care workers taking care of people on Medicare and Medicaid.

I don't think their situation is repeatable today.

[A440]

We reached 1 million at age 46. (not including 529 or house)
Public school teacher in NJ for last 25 years. 2 kids with SAHM.

-We did not receive any inheritances.
-Live below your means (but live well) and don't compete with the Jones' (Comparison is the thief of Joy)
-Find a side hustle or two that doesn't take too much time away from your family
-Start investing early in low-cost index funds and keep it simple.
-Track your spending and have a spending plan
-Read "The Millionaire Next Door" and Bogle's "Little Book of Common Sense Investing" for inspiration.

[Snowjob]

Question for the under $100k income millionaires.

Do you have any regrets about missing out on some things in your younger adult years as a consequence of high savings rates?

No, not in a vacuum. There were certain things that I wish I did more of, but I didn't consciously make a decision not to do them based on wanting to save money. Of course there were other things that I would go back and change, I think anyone can play the "oh I if I knew then what I know now game" but that knowledge would not have come simply from spending more money, or even if it might, there would have been no guarantee that it would have. That said, given my more modest salary, had I spent much more, I would not be in the position that I am in with opportunities / flexibility I have today. In that light, only if I squander the present and future, should I end up regretting the past as I am still relatively young (mid 30s).