What net worth supersedes Bogleheads’s strategy

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Wricha
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What net worth supersedes Bogleheads’s strategy

Post by Wricha » Sat Feb 16, 2019 8:27 pm

I was reading the thread on net worth 3 million and how did you get there. At that level it was largely: marry right, stay married, two good incomes, live below your means, index investing (classic Bogleheads stuff). My question is: At what net worth level does Bogleheads Philosophy fail to carry the day? For example, if the bar was set at $15 million net worth how did you get there’s? I don’t think it’s possible to make that level of net worth by being a professional, staying married, and LBYM. It requires something extraordinary. What is the net worth limit of being a Boglehead.

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Re: What net worth supersedes Bogleheads’s strategy

Post by livesoft » Sat Feb 16, 2019 8:29 pm

What was the net worth of Mr. Bogle? Other than "start a business" or "win a lottery" or "inherit a lot of money" what else are you looking for?
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Wricha
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Re: What net worth supersedes Bogleheads’s strategy

Post by Wricha » Sat Feb 16, 2019 8:37 pm

livesoft wrote:
Sat Feb 16, 2019 8:29 pm
What was the net worth of Mr. Bogle? Other than "start a business" or "win a lottery" or "inherit a lot of money" what else are you looking for?
My point exactly I am sure Mr Bogle was worth more than $15M and he did it by being a risk taker/starting a business not by LBYM. What I was looking for: what is net worth limit of the traditional Bogleheads.

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Re: What net worth supersedes Bogleheads’s strategy

Post by snackdog » Sat Feb 16, 2019 8:38 pm

I think if you start out frugal and are willing to work 30-35 years, $15 million is achievable under relatively normal conditions. If you remain frugal after retiring, your investments will continue to grow so $15 million by age 80 or so should be no problem. If you retired in 1987 with $5 million and spent $100,000 per year, you would have about $25 million today.

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Re: What net worth supersedes Bogleheads’s strategy

Post by DesertDiva » Sat Feb 16, 2019 8:42 pm

livesoft wrote:
Sat Feb 16, 2019 8:29 pm
What was the net worth of Mr. Bogle? Other than "start a business" or "win a lottery" or "inherit a lot of money" what else are you looking for?
$80M.
Being a Boglehead means adherence to an investment philosophy, regardless of ones occupation or source of income.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Jack FFR1846 » Sat Feb 16, 2019 8:50 pm

Getting to really big money, you have to get it the old fashioned way. You inherit it.
Bogle: Smart Beta is stupid

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Re: What net worth supersedes Bogleheads’s strategy

Post by Wricha » Sat Feb 16, 2019 9:11 pm

OP Here. I am not saying saying working hard at a profession, marrying well, LBYM, index investing are bad things but they do have a financial limit. Someone that is 65 years old needs a net worth of $16M to be in the top 1% of net worth. https://dqydj.com/net-worth-by-age-calc ... ed-states/
That suggests to me it would be difficult to achieve this in a traditional way.
Last edited by Wricha on Sat Feb 16, 2019 9:13 pm, edited 1 time in total.

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Re: What net worth supersedes Bogleheads’s strategy

Post by NightFall » Sat Feb 16, 2019 9:12 pm

Reverse engineer your answer with an estimate. Start with a guess as to what the return of the stock market would be... say 5% real assuming 100% stocks. Decide on how many years you want to measure this over... 30? Then assume you contribute the same amount each year for every year over that period. Is 15M too much?

15M = ((1+.05)^(30+1) - 1)/.05 * contribution

contribution = $211,981

Is that too much to assume you could contribute each year? Perhaps. Depends on your salary. If you increase the years or the real rate of return, things get easier. Of course, this is an approximation.

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Re: What net worth supersedes Bogleheads’s strategy

Post by MotoTrojan » Sat Feb 16, 2019 9:14 pm

Wricha wrote:
Sat Feb 16, 2019 9:11 pm
OP Here. I am not saying saying working hard at a profession, marrying well, LBYM, index investing are bad things but they do have a financial limit. Someone that is 65 years old needs a net worth of $16M to be in the top 1% of net worth. https://dqydj.com/net-worth-by-age-calc ... ed-states/
That suggests to me it would be difficult to achieve this in a traditional way.
Luck at the casino, or in the market (bitcoin).

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Re: What net worth supersedes Bogleheads’s strategy

Post by Darth Xanadu » Sat Feb 16, 2019 9:15 pm

Wricha wrote:
Sat Feb 16, 2019 8:37 pm
livesoft wrote:
Sat Feb 16, 2019 8:29 pm
What was the net worth of Mr. Bogle? Other than "start a business" or "win a lottery" or "inherit a lot of money" what else are you looking for?
My point exactly I am sure Mr Bogle was worth more than $15M and he did it by being a risk taker/starting a business not by LBYM. What I was looking for: what is net worth limit of the traditional Bogleheads.
I"m not sure there is one. Many Bogleheads are entrepreneurs, risk-takers, business owners, real estate owners, etc. But, I do think that the BH approach to investing can be used for any net worth.
"A courageous teacher, failure is."

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Re: What net worth supersedes Bogleheads’s strategy

Post by MotoTrojan » Sat Feb 16, 2019 9:18 pm

Wricha wrote:
Sat Feb 16, 2019 8:37 pm
livesoft wrote:
Sat Feb 16, 2019 8:29 pm
What was the net worth of Mr. Bogle? Other than "start a business" or "win a lottery" or "inherit a lot of money" what else are you looking for?
My point exactly I am sure Mr Bogle was worth more than $15M and he did it by being a risk taker/starting a business not by LBYM. What I was looking for: what is net worth limit of the traditional Bogleheads.
What is the income limit of a non risk taker?

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Re: What net worth supersedes Bogleheads’s strategy

Post by Wricha » Sat Feb 16, 2019 9:18 pm

NightFall wrote:
Sat Feb 16, 2019 9:12 pm
Reverse engineer your answer with an estimate. Start with a guess as to what the return of the stock market would be... say 5% real assuming 100% stocks. Decide on how many years you want to measure this over... 30? Then assume you contribute the same amount each year for every year over that period. Is 15M too much?

15M = ((1+.05)^(30+1) - 1)/.05 * contribution

contribution = $211,981

Is that too much to assume you could contribute each year? Perhaps. Depends on your salary. If you increase the years or the real rate of return, things get easier. Of course, this is an approximation.
Thanks NightFall your right. I was guessing the upper limit to be around $10M. Which means folks that are in the top 1% of net worth have done something unique.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Dottie57 » Sat Feb 16, 2019 9:23 pm

Wricha wrote:
Sat Feb 16, 2019 9:18 pm
NightFall wrote:
Sat Feb 16, 2019 9:12 pm
Reverse engineer your answer with an estimate. Start with a guess as to what the return of the stock market would be... say 5% real assuming 100% stocks. Decide on how many years you want to measure this over... 30? Then assume you contribute the same amount each year for every year over that period. Is 15M too much?

15M = ((1+.05)^(30+1) - 1)/.05 * contribution

contribution = $211,981

Is that too much to assume you could contribute each year? Perhaps. Depends on your salary. If you increase the years or the real rate of return, things get easier. Of course, this is an approximation.
Thanks NightFall your right. I was guessing the upper limit to be around $10M. Which means folks that are in the top 1% of net worth have done something unique.
Or were lucky.

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Wricha
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Re: What net worth supersedes Bogleheads’s strategy

Post by Wricha » Sat Feb 16, 2019 9:28 pm

Uniquely lucky

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Re: What net worth supersedes Bogleheads’s strategy

Post by SoonerD » Sat Feb 16, 2019 9:30 pm

Wricha wrote:
Sat Feb 16, 2019 8:27 pm
I was reading the thread on net worth 3 million and how did you get there. At that level it was largely: marry right, stay married, two good incomes, live below your means, index investing (classic Bogleheads stuff). My question is: At what net worth level does Bogleheads Philosophy fail to carry the day? For example, if the bar was set at $15 million net worth how did you get there’s? I don’t think it’s possible to make that level of net worth by being a professional, staying married, and LBYM. It requires something extraordinary. What is the net worth limit of being a Boglehead.
Your premise is ridiculous and insulting!

The WIKI reads
"Bogleheads emphasize starting early, living below one's means, regular saving, broad diversification, and sticking to one's investment plan."

No requirement to marry or become a professional.

Do you think blue collar folks can't be Bogleheads?

How about divorced, widowed or never married people?

What is the point you're trying to make; that Bogleheads are limited to <$15mm net worth? You know that's not true if you've spent any time intelligently reading this board; so what is your point?

So given this I would say the upper known bound is 11 figures.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Bacchus01 » Sat Feb 16, 2019 9:33 pm

snackdog wrote:
Sat Feb 16, 2019 8:38 pm
I think if you start out frugal and are willing to work 30-35 years, $15 million is achievable under relatively normal conditions. If you remain frugal after retiring, your investments will continue to grow so $15 million by age 80 or so should be no problem. If you retired in 1987 with $5 million and spent $100,000 per year, you would have about $25 million today.
What? Tell me how easy it is to $15M.

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Re: What net worth supersedes Bogleheads’s strategy

Post by DrGoogle2017 » Sat Feb 16, 2019 9:37 pm

It depends what age. $15 million at 30 or $15 million at 70. If you start at $2million at 30, double it every 10 years, you’ll get close to $15 million by age 70.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Wricha » Sat Feb 16, 2019 9:37 pm

SoonerD wrote:
Sat Feb 16, 2019 9:30 pm
Wricha wrote:
Sat Feb 16, 2019 8:27 pm
I was reading the thread on net worth 3 million and how did you get there. At that level it was largely: marry right, stay married, two good incomes, live below your means, index investing (classic Bogleheads stuff). My question is: At what net worth level does Bogleheads Philosophy fail to carry the day? For example, if the bar was set at $15 million net worth how did you get there’s? I don’t think it’s possible to make that level of net worth by being a professional, staying married, and LBYM. It requires something extraordinary. What is the net worth limit of being a Boglehead.
Your premise is ridiculous and insulting!

The WIKI reads
"Bogleheads emphasize starting early, living below one's means, regular saving, broad diversification, and sticking to one's investment plan."

No requirement to marry or become a professional.

Do you think blue collar folks can't be Bogleheads?

How about divorced, widowed or never married people?

What is the point you're trying to make; that Bogleheads are limited to <$15mm net worth? You know that's not true if you've spent any time intelligently reading this board; so what is your point?

So given this I would say the upper known bound is 11 figures.
Perhaps a bit harsh? I believe I stated I was reading the thread about 3 million net worth and I was generalizing the characteristics that people stated that got them to this point. After reading this thread I was wondering what the upper limit (in terms of net worth) of these characteristics would be. Read the thread you may reach the same conclusion.
Last edited by Wricha on Sat Feb 16, 2019 9:43 pm, edited 1 time in total.

Mike Scott
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Re: What net worth supersedes Bogleheads’s strategy

Post by Mike Scott » Sat Feb 16, 2019 9:38 pm

One is more likely to want a different tax strategy instead of a different investing strategy as $$$ goes up.

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Re: What net worth supersedes Bogleheads’s strategy

Post by 2015 » Sat Feb 16, 2019 9:44 pm

Warren Buffet has stated you really only need to get a very few things right in life to make it. He mentioned choice of a life mate and good health as taking you most of the way home. He said nothing about an investment strategy. making money. or achieving a certina level of net worth in that statement. He and Munger have repeatedly stated they haven't done anything special other than being consistent and "not doing dumb things". The most valuable information coming out of Buffet/Munger isn't anything related to investing, but related to how to be rational; that is, make decisions aligned with reality and with how the world actually works (when our decisions our out of step with reality we "do dumb things"). Absolutely nothing on Portfolio Visualizer will ever give you that information. The study of human decision-making most certainly will, and may also help with making better decisions based on Portfolio Visualizer play (but no guarantees).

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Re: What net worth supersedes Bogleheads’s strategy

Post by pdavi21 » Sat Feb 16, 2019 9:49 pm

If you can brainwash a few generations into it, Boglehead philosophy could probably get your heirs' heirs pretty rich.
"We spend a great deal of time studying history, which, let's face it, is mostly the history of stupidity." -Stephen Hawking

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Re: What net worth supersedes Bogleheads’s strategy

Post by Wricha » Sat Feb 16, 2019 9:52 pm

pdavi21 wrote:
Sat Feb 16, 2019 9:49 pm
If you can brainwash a few generations into it, Boglehead philosophy could probably get your heirs' heirs pretty rich.
Good point

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Re: What net worth supersedes Bogleheads’s strategy

Post by Tanelorn » Sat Feb 16, 2019 9:55 pm

livesoft wrote:
Sat Feb 16, 2019 8:29 pm
Other than "start a business" or "win a lottery" or "inherit a lot of money" what else are you looking for?
Beat the market? A little leverage and 30% returns and you'll get to your target in a hurry.

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Re: What net worth supersedes Bogleheads’s strategy

Post by GerryL » Sat Feb 16, 2019 9:56 pm

Wricha wrote:
Sat Feb 16, 2019 8:37 pm
livesoft wrote:
Sat Feb 16, 2019 8:29 pm
What was the net worth of Mr. Bogle? Other than "start a business" or "win a lottery" or "inherit a lot of money" what else are you looking for?
My point exactly I am sure Mr Bogle was worth more than $15M and he did it by being a risk taker/starting a business not by LBYM. What I was looking for: what is net worth limit of the traditional Bogleheads.
LBYM is critical no matter where one starts or one's ultimate net worth.
I can't see how your question "what is the net worth limit of the traditional Bogleheads" isn't a sort of non sequitur (if a single sentence can be a non sequitur).

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Re: What net worth supersedes Bogleheads’s strategy

Post by H-Town » Sat Feb 16, 2019 10:01 pm

Wricha wrote:
Sat Feb 16, 2019 8:27 pm
I was reading the thread on net worth 3 million and how did you get there. At that level it was largely: marry right, stay married, two good incomes, live below your means, index investing (classic Bogleheads stuff). My question is: At what net worth level does Bogleheads Philosophy fail to carry the day? For example, if the bar was set at $15 million net worth how did you get there’s? I don’t think it’s possible to make that level of net worth by being a professional, staying married, and LBYM. It requires something extraordinary. What is the net worth limit of being a Boglehead.
At a certain point, net worth will just a number to you. When you get there, it does not matter that it shows $1M, $5M, or $20M. Other than showing off or overcompensating other area of your life (or lack thereof), when you're free from money, you're free from money.

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Re: What net worth supersedes Bogleheads’s strategy

Post by NotWhoYouThink » Sat Feb 16, 2019 10:05 pm

I know quite a few Megacorp executives who achieved 8 figure net worth by working hard, whether they lived below their means or not. Boglehead investing could have helped all of them. Some chose that path, some did not. But if you make enough you can make mistakes and still win the game.


Still not sure what your question is.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Wricha » Sat Feb 16, 2019 10:09 pm

GerryL wrote:
Sat Feb 16, 2019 9:56 pm
Wricha wrote:
Sat Feb 16, 2019 8:37 pm
livesoft wrote:
Sat Feb 16, 2019 8:29 pm
What was the net worth of Mr. Bogle? Other than "start a business" or "win a lottery" or "inherit a lot of money" what else are you looking for?
My point exactly I am sure Mr Bogle was worth more than $15M and he did it by being a risk taker/starting a business not by LBYM. What I was looking for: what is net worth limit of the traditional Bogleheads.
LBYM is critical no matter where one starts or one's ultimate net worth.
I can't see how your question "what is the net worth limit of the traditional Bogleheads" isn't a sort of non sequitur (if a single sentence can be a non sequitur).
I not saying LBYM is not valued it just not what sprung Mr Bogle’s high net worth. What I was asking given the $3 million thread I was reading. There was a theme running through that thread about the characteristics that people felt were essential for them to achieve this milestone. Given those characteristics what is the upper limit of that net worth.

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Wricha
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Re: What net worth supersedes Bogleheads’s strategy

Post by Wricha » Sat Feb 16, 2019 10:11 pm

H-Town wrote:
Sat Feb 16, 2019 10:01 pm
Wricha wrote:
Sat Feb 16, 2019 8:27 pm
I was reading the thread on net worth 3 million and how did you get there. At that level it was largely: marry right, stay married, two good incomes, live below your means, index investing (classic Bogleheads stuff). My question is: At what net worth level does Bogleheads Philosophy fail to carry the day? For example, if the bar was set at $15 million net worth how did you get there’s? I don’t think it’s possible to make that level of net worth by being a professional, staying married, and LBYM. It requires something extraordinary. What is the net worth limit of being a Boglehead.
At a certain point, net worth will just a number to you. When you get there, it does not matter that it shows $1M, $5M, or $20M. Other than showing off or overcompensating other area of your life (or lack thereof), when you're free from money, you're free from money.
Could not agree more.

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Re: What net worth supersedes Bogleheads’s strategy

Post by SoonerD » Sat Feb 16, 2019 10:16 pm

Wricha wrote:
Sat Feb 16, 2019 9:37 pm
SoonerD wrote:
Sat Feb 16, 2019 9:30 pm
Wricha wrote:
Sat Feb 16, 2019 8:27 pm
I was reading the thread on net worth 3 million and how did you get there. At that level it was largely: marry right, stay married, two good incomes, live below your means, index investing (classic Bogleheads stuff). My question is: At what net worth level does Bogleheads Philosophy fail to carry the day? For example, if the bar was set at $15 million net worth how did you get there’s? I don’t think it’s possible to make that level of net worth by being a professional, staying married, and LBYM. It requires something extraordinary. What is the net worth limit of being a Boglehead.
Your premise is ridiculous and insulting!

The WIKI reads
"Bogleheads emphasize starting early, living below one's means, regular saving, broad diversification, and sticking to one's investment plan."

No requirement to marry or become a professional.

Do you think blue collar folks can't be Bogleheads?

How about divorced, widowed or never married people?

What is the point you're trying to make; that Bogleheads are limited to <$15mm net worth? You know that's not true if you've spent any time intelligently reading this board; so what is your point?

So given this I would say the upper known bound is 11 figures.
Perhaps a bit harsh? I believe I stated I was reading the thread about 3 million net worth and I was generalizing the characteristics that people stated that got them to this point. After reading this thread I was wondering what the upper limit (in terms of net worth) of these characteristics would be. Read the thread you may reach the same conclusion.
Perhaps I was harsh. I do get tired of claims that there is a checklist to being a BH. No requirement to having a professional career, nor to being (staying) married, etc.

My colleagues in asset management make 7 figure bonuses on top of salaries starting at $200,000. Some married others in the same compensation level. So $1b is within reach for those that stay on for a normal length career and marry similar.

Here's what I calculated for a single such person who invests his post-tax bonus in his own fund (which was a requirement for a good portion of our bonuses). I use $0.5mm as the annual investment contribution for 35 yr career. This assumes the big bonuses start at age 30 and end at 65. Then the portfolio is de-risked some to get to a 7% growth rate until death at age 85. That grows to $500mm for a single A.M. high performer. Now the CEO of said firm is worth billion(s) and I think is just late 50s. He can be a BH too since he LBYM and invests in the whole market far more than is possible for a Vanguard only customer.

annual contribution (EoY) = $500,000
number of working years = 35
interest rate (working) = 10.00%
FV of above = $135,512,184
number of retired years = 7.00%
interest rate (retired) = 20
FV at death = $524,389,394

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Wricha
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Re: What net worth supersedes Bogleheads’s strategy

Post by Wricha » Sat Feb 16, 2019 10:37 pm

SoonerD wrote:
Sat Feb 16, 2019 10:16 pm
Wricha wrote:
Sat Feb 16, 2019 9:37 pm
SoonerD wrote:
Sat Feb 16, 2019 9:30 pm
Wricha wrote:
Sat Feb 16, 2019 8:27 pm
I was reading the thread on net worth 3 million and how did you get there. At that level it was largely: marry right, stay married, two good incomes, live below your means, index investing (classic Bogleheads stuff). My question is: At what net worth level does Bogleheads Philosophy fail to carry the day? For example, if the bar was set at $15 million net worth how did you get there’s? I don’t think it’s possible to make that level of net worth by being a professional, staying married, and LBYM. It requires something extraordinary. What is the net worth limit of being a Boglehead.
Your premise is ridiculous and insulting!

The WIKI reads
"Bogleheads emphasize starting early, living below one's means, regular saving, broad diversification, and sticking to one's investment plan.

"

No requirement to marry or become a professional.

Do you think blue collar folks can't be Bogleheads?

How about divorced, widowed or never married people?

What is the point you're trying to make; that Bogleheads are limited to <$15mm net worth? You know that's not true if you've spent any time intelligently reading this board; so what is your point?

So given this I would say the upper known bound is 11 figures.
Perhaps a bit harsh? I believe I stated I was reading the thread about 3 million net worth and I was generalizing the characteristics that people stated that got them to this point. After reading this thread I was wondering what the upper limit (in terms of net worth) of these characteristics would be. Read the thread you may reach the same conclusion.
Perhaps I was harsh. I do get tired of claims that there is a checklist to being a BH. No requirement to having a professional career, nor to being (staying) married, etc.

My colleagues in asset management make 7 figure bonuses on top of salaries starting at $200,000. Some married others in the same compensation level. So $1b is within reach for those that stay on for a normal length career and marry similar.

Here's what I calculated for a single such person who invests his post-tax bonus in his own fund (which was a requirement for a good portion of our bonuses). I use $0.5mm as the annual investment contribution for 35 yr career. This assumes the big bonuses start at age 30 and end at 65. Then the portfolio is de-risked some to get to a 7% growth rate until death at age 85. That grows to $500mm for a single A.M. high performer. Now the CEO of said firm is worth billion(s) and I think is just late 50s. He can be a BH too since he LBYM and invests in the whole market far more than is possible for a Vanguard only customer.

annual contribution (EoY) = $500,000
number of working years = 35
interest rate (working) = 10.00%
FV of above = $135,512,184
number of retired years = 7.00%
interest rate (retired) = 20
FV at death = $524,389,394
I think you would agree these are extraordinary individuals/circumstances.

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Re: What net worth supersedes Bogleheads’s strategy

Post by TxInjun » Sat Feb 16, 2019 10:47 pm

Wricha wrote:
Sat Feb 16, 2019 8:27 pm
What is the net worth limit of being a Boglehead.
Old Texas saying: “Dance with who brung’ya”. Just sayin’

TxIn
Last edited by TxInjun on Sat Feb 16, 2019 11:27 pm, edited 1 time in total.

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Re: What net worth supersedes Bogleheads’s strategy

Post by KyleAAA » Sat Feb 16, 2019 10:49 pm

$15mm is definitely possible with a high income and frugal lifestyle. I doubt I'll ever hit $30mm without starting a company. I Don't think being a boglehead has anything to do with it, though.
Last edited by KyleAAA on Sun Feb 17, 2019 12:28 am, edited 1 time in total.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Cycle » Sat Feb 16, 2019 11:05 pm

Wife and I each make 150k-ish per year. Net worth at 35 1.4MM. save 175k/yr. if we get 8% returns over the next 65 years and no raises/promotions, that's nearly 500MM by age 100.

I plan to live to 120, so could easily be a billionaire on two non-management individual contributor salaries at megacorp.
Never look back unless you are planning to go that way

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Re: What net worth supersedes Bogleheads’s strategy

Post by JBTX » Sat Feb 16, 2019 11:09 pm

The limit is really a function is what is the limit of traditional recurring liquid income? A Boglehead making $500k salary or cash flow a year will end up with more than a Boglehead who pulls $100k per year. The Boglehead philosophy is simply a way of maximizing long term wealth given a recurring income.

After a certain point very high wealth tends to be created by investments in one's own business, or Company equity, etc.

These hypothetical examples of people accruing $15 million in today's dollars, with "normal" incomes seem highly improbable. Most people start out with modest incomes and build to high incomes. Those with higher incomes, such as some MDs, tend to get a later start and have school debt to contend with.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Katietsu » Sat Feb 16, 2019 11:10 pm

Wricha wrote:
Sat Feb 16, 2019 8:27 pm
I was reading the thread on net worth 3 million and how did you get there. At that level it was largely: marry right, stay married, two good incomes, live below your means, index investing (classic Bogleheads stuff). My question is: At what net worth level does Bogleheads Philosophy fail to carry the day? For example, if the bar was set at $15 million net worth how did you get there’s? I don’t think it’s possible to make that level of net worth by being a professional, staying married, and LBYM. It requires something extraordinary. What is the net worth limit of being a Boglehead.
I think understand what you are saying. Instead of asking the net worth limit of being a BH, I believe you are wondering the net worth achievable with LBYM, saving and investing using BH philosophies, and an “ordinary” professional job. I agree that $15 million in today’s dollars is unrealistic without having had stepped out of the pack or having been in the right place at the right time. However, I also think there is so much subjectivity in what is a normal career with a normal salary that you are not going to get a better answer than you already hav.

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Re: What net worth supersedes Bogleheads’s strategy

Post by sfnerd » Sat Feb 16, 2019 11:25 pm

Like others have said, it's merely a function of income. The Boglehead approach will get you X return on your capital (depending on allocation, portfolio, etc.), and we here believe it's the best and most efficient approach for most people.

You can get rich with this approach, as long as your income is high enough. You can work to become an executive, start a business, etc. and still be a Boglehead.

Of course, you can make less money and still become rich, but not by being a Boglehead. If you make 100k a year, you need to take some pretty wild risks to get to 15m. Good luck to those who try, but I enjoy sleeping indoors :)

I will hit 15m in the next 10 or 15 years if I continue working (I will probably stop before that) in similar jobs to where I am now. I have a good career and high income, but my investments have been largely Boglehead ones (95%, say). If I work into my 60s I will probably have 30-50m. Compounding and high income can go a long way.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Stinky » Sun Feb 17, 2019 6:50 am

JBTX wrote:
Sat Feb 16, 2019 11:09 pm
A Boglehead making $500k salary or cash flow a year will end up with more than a Boglehead who pulls $100k per year. The Boglehead philosophy is simply a way of maximizing long term wealth given a recurring income.
+1

The Boglehead philosophy does not have an upper income (or wealth) limit.
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Re: What net worth supersedes Bogleheads’s strategy

Post by livesoft » Sun Feb 17, 2019 7:17 am

Cycle wrote:
Sat Feb 16, 2019 11:05 pm
Wife and I each make 150k-ish per year. Net worth at 35 1.4MM. save 175k/yr. if we get 8% returns over the next 65 years and no raises/promotions, that's nearly 500MM by age 100.

I plan to live to 120, so could easily be a billionaire on two non-management individual contributor salaries at megacorp.
I will wager that you both won't be working as long as you think. And possibly you will discover the joys of giving away your money pretty early on.

Indeed, that one issue about people on track to become billionaires. Don't many of them choose to jump off the track?
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Re: What net worth supersedes Bogleheads’s strategy

Post by masonstone » Sun Feb 17, 2019 7:26 am

Cycle wrote:
Sat Feb 16, 2019 11:05 pm
Wife and I each make 150k-ish per year. Net worth at 35 1.4MM. save 175k/yr. if we get 8% returns over the next 65 years and no raises/promotions, that's nearly 500MM by age 100.

I plan to live to 120, so could easily be a billionaire on two non-management individual contributor salaries at megacorp.
Living till 120 will be the hardest part. I’ve never met a non-demented individual that was older than 100.

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Re: What net worth supersedes Bogleheads’s strategy

Post by basspond » Sun Feb 17, 2019 7:33 am

What you are not factoring in is risk. How many more people did the non Boglehead strategy and didn’t get to 8 figures? We have been married for over 30 years, always did LBYM which includes charitable giving, saved around 20% and started saving the first day of our careers, not in management or at a level where we got bonuses, lived in same house for over 25 years, keep cars until they don’t go anymore, no inheritance, paid for our children’s college, retiring at 55, and expect to hit 8 figures by 65. You can choose the unsexy way discipline or take your money to the craps table.
Last edited by basspond on Sun Feb 17, 2019 8:03 am, edited 1 time in total.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Cycle » Sun Feb 17, 2019 7:45 am

masonstone wrote:
Sun Feb 17, 2019 7:26 am
Cycle wrote:
Sat Feb 16, 2019 11:05 pm
Wife and I each make 150k-ish per year. Net worth at 35 1.4MM. save 175k/yr. if we get 8% returns over the next 65 years and no raises/promotions, that's nearly 500MM by age 100.

I plan to live to 120, so could easily be a billionaire on two non-management individual contributor salaries at megacorp.
Living till 120 will be the hardest part. I’ve never met a non-demented individual that was older than 100.
You need to look forward not backwards. Dimensia will largely be erradicated in my lifetime, at least the Alzheimers variety.

If you are in your 20s or 30s, plan on having a good quality of life past 100.
Never look back unless you are planning to go that way

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Re: What net worth supersedes Bogleheads’s strategy

Post by Bacchus01 » Sun Feb 17, 2019 7:51 am

Cycle wrote:
Sun Feb 17, 2019 7:45 am
masonstone wrote:
Sun Feb 17, 2019 7:26 am
Cycle wrote:
Sat Feb 16, 2019 11:05 pm
Wife and I each make 150k-ish per year. Net worth at 35 1.4MM. save 175k/yr. if we get 8% returns over the next 65 years and no raises/promotions, that's nearly 500MM by age 100.

I plan to live to 120, so could easily be a billionaire on two non-management individual contributor salaries at megacorp.
Living till 120 will be the hardest part. I’ve never met a non-demented individual that was older than 100.
You need to look forward not backwards. Dimensia will largely be erradicated in my lifetime, at least the Alzheimers variety.

If you are in your 20s or 30s, plan on having a good quality of life past 100.

That’s been said for decades. The through is that longevity has not increased that much. When you knock one thing down, another comes along.

Why is this relevant here? Because planning horizon discussion is very critical. Most are planning to like 80s. 120, I wish, but I just don’t think we’ll get there.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Bacchus01 » Sun Feb 17, 2019 7:55 am

DrGoogle2017 wrote:
Sat Feb 16, 2019 9:37 pm
It depends what age. $15 million at 30 or $15 million at 70. If you start at $2million at 30, double it every 10 years, you’ll get close to $15 million by age 70.
“Achievable under relatively normal conditions”

$2M at 30 does not fit that description.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Shallowpockets » Sun Feb 17, 2019 8:00 am

A desire or a fixation on a 15 million net worth could turn you into a bad player. Maybe you get that 3 million but mow you want more and start to feel the need. Then you begin move from the BH mindset and become speculative trying to reach that 15 million.
I am saying that greed and a reach beyond your grasp can become either financially or mentally draining in pursuing it.
If 15 million is not achievable with ((OP) income levels then it is chasing fairies and could be detrimental to your BH health.
A majority of people don't make 1 million in their lifetime.
You could just as easily push this 15MM figure out to 30 MM. I thought the 3 MM thread was a bit too far out in reality to talk about. It is arbitrary to each person's means and lifestyle.

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Re: What net worth supersedes Bogleheads’s strategy

Post by IngognitoUSA » Sun Feb 17, 2019 8:31 am

H-Town wrote:
Sat Feb 16, 2019 10:01 pm
Wricha wrote:
Sat Feb 16, 2019 8:27 pm
I was reading the thread on net worth 3 million and how did you get there. At that level it was largely: marry right, stay married, two good incomes, live below your means, index investing (classic Bogleheads stuff). My question is: At what net worth level does Bogleheads Philosophy fail to carry the day? For example, if the bar was set at $15 million net worth how did you get there’s? I don’t think it’s possible to make that level of net worth by being a professional, staying married, and LBYM. It requires something extraordinary. What is the net worth limit of being a Boglehead.
At a certain point, net worth will just a number to you. When you get there, it does not matter that it shows $1M, $5M, or $20M. Other than showing off or overcompensating other area of your life (or lack thereof), when you're free from money, you're free from money.
Exactly, when you are free from money, you are free from money.

Friend of mine is always comparing net worth among peers, co workers, acquaintances and making himself worried sick, I call it a disease ‘networthtites’.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Van » Sun Feb 17, 2019 8:40 am

If you have lived a Boglehead life up to retirement, is there any point in having more than 5 million?

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Re: What net worth supersedes Bogleheads’s strategy

Post by FoolMeOnce » Sun Feb 17, 2019 9:11 am

Wricha wrote:
Sat Feb 16, 2019 10:37 pm
SoonerD wrote:
Sat Feb 16, 2019 10:16 pm
Wricha wrote:
Sat Feb 16, 2019 9:37 pm
SoonerD wrote:
Sat Feb 16, 2019 9:30 pm
Wricha wrote:
Sat Feb 16, 2019 8:27 pm
I was reading the thread on net worth 3 million and how did you get there. At that level it was largely: marry right, stay married, two good incomes, live below your means, index investing (classic Bogleheads stuff). My question is: At what net worth level does Bogleheads Philosophy fail to carry the day? For example, if the bar was set at $15 million net worth how did you get there’s? I don’t think it’s possible to make that level of net worth by being a professional, staying married, and LBYM. It requires something extraordinary. What is the net worth limit of being a Boglehead.
Your premise is ridiculous and insulting!

The WIKI reads
"Bogleheads emphasize starting early, living below one's means, regular saving, broad diversification, and sticking to one's investment plan.

"

No requirement to marry or become a professional.

Do you think blue collar folks can't be Bogleheads?

How about divorced, widowed or never married people?

What is the point you're trying to make; that Bogleheads are limited to <$15mm net worth? You know that's not true if you've spent any time intelligently reading this board; so what is your point?

So given this I would say the upper known bound is 11 figures.
Perhaps a bit harsh? I believe I stated I was reading the thread about 3 million net worth and I was generalizing the characteristics that people stated that got them to this point. After reading this thread I was wondering what the upper limit (in terms of net worth) of these characteristics would be. Read the thread you may reach the same conclusion.
Perhaps I was harsh. I do get tired of claims that there is a checklist to being a BH. No requirement to having a professional career, nor to being (staying) married, etc.

My colleagues in asset management make 7 figure bonuses on top of salaries starting at $200,000. Some married others in the same compensation level. So $1b is within reach for those that stay on for a normal length career and marry similar.

Here's what I calculated for a single such person who invests his post-tax bonus in his own fund (which was a requirement for a good portion of our bonuses). I use $0.5mm as the annual investment contribution for 35 yr career. This assumes the big bonuses start at age 30 and end at 65. Then the portfolio is de-risked some to get to a 7% growth rate until death at age 85. That grows to $500mm for a single A.M. high performer. Now the CEO of said firm is worth billion(s) and I think is just late 50s. He can be a BH too since he LBYM and invests in the whole market far more than is possible for a Vanguard only customer.

annual contribution (EoY) = $500,000
number of working years = 35
interest rate (working) = 10.00%
FV of above = $135,512,184
number of retired years = 7.00%
interest rate (retired) = 20
FV at death = $524,389,394
I think you would agree these are extraordinary individuals/circumstances.
You keep moving the goalposts. Your question in the thread title suggests you are asking at what net worth does Bogleheads philosophy stop working, which is never. Your posts explain you are really looking for how far Bogleheads can get you in net worth for someone just earning a salary rather than starting a business or other risk-taking. Which is odd, since many Bogleheads in here start businesses. But then you get an example of a professional earning a lot of money and write them off.

Really, you are just asking a simple math problem: how much do you need to save every year to get to 5 or 10+ million, and, secondly, can this be done in a professional salary?

The first question was answered for you above in this thread: about $212,000/year to get to 15 million (suggesting 5+ is within reach for a lot of people)

As for the second part, plenty of people earn enough as megacorp execs, law firm partners, wealth managers, etc. But if your rules exclude these people, then your question by definition has one answer: it can't be done.

If you can state an income cap for what you consider non-"extraordinary," then again you can just do some simple math to see how much one can amass in a ordinary career.

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Re: What net worth supersedes Bogleheads’s strategy

Post by Meaty » Sun Feb 17, 2019 9:14 am

Jack FFR1846 wrote:
Sat Feb 16, 2019 8:50 pm
Getting to really big money, you have to get it the old fashioned way. You inherit it.
False. The vast majority of millionaires are 1st generation. Ask bill gates, Jeff bezos, zuckerberg, mark cuban, etc
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Re: What net worth supersedes Bogleheads’s strategy

Post by newenglandpat » Sun Feb 17, 2019 10:12 am

the secret is starting as early in life as possible and let it compound. for example, our daughter is 25, works as an RN making 70k, has no student loans or other debt,contributes the max to Roth IRA & 401K and currently has approx 350k invested in indexes. even if she didn't invest another dollar that should compound to between 5 and 10 million by age 65 (nominal). yes she was guided and set up by her parents, drives our 13 year old car but she totally gets it and not even her boyfriend knows what she has..

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Re: What net worth supersedes Bogleheads’s strategy

Post by stoptothink » Sun Feb 17, 2019 10:17 am

Cycle wrote:
Sun Feb 17, 2019 7:45 am
masonstone wrote:
Sun Feb 17, 2019 7:26 am
Cycle wrote:
Sat Feb 16, 2019 11:05 pm
Wife and I each make 150k-ish per year. Net worth at 35 1.4MM. save 175k/yr. if we get 8% returns over the next 65 years and no raises/promotions, that's nearly 500MM by age 100.

I plan to live to 120, so could easily be a billionaire on two non-management individual contributor salaries at megacorp.
Living till 120 will be the hardest part. I’ve never met a non-demented individual that was older than 100.
You need to look forward not backwards. Dimensia will largely be erradicated in my lifetime, at least the Alzheimers variety.

If you are in your 20s or 30s, plan on having a good quality of life past 100.
I like your enthusiasm, but as one who is in health research, I think you're a TAD optimistic.

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