Path to UHNW

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Post Reply
Topic Author
Mofire
Posts: 46
Joined: Thu Aug 06, 2020 9:28 am

Path to UHNW

Post by Mofire »

Outside of an inheritance, what was your path to UHNW ($30M)?
runner3081
Posts: 3930
Joined: Mon Aug 22, 2016 3:22 pm

Re: Path to UHNW

Post by runner3081 »

Start a business.
Normchad
Posts: 2014
Joined: Thu Mar 03, 2011 7:20 am

Re: Path to UHNW

Post by Normchad »

I’m not in that group, and don’t ever expect to be.

I think being an entrepreneur is the way to hit that. Most entrepreneurs fail. Almost all of them fail. But I imagine people with that kind of NW are all entrepreneurs or ridiculously successful investment bankers.
oldfort
Posts: 2546
Joined: Mon Mar 02, 2020 8:45 pm

Re: Path to UHNW

Post by oldfort »

At that level of wealth, you're talking a lot of entrepreneurs, management consulting, venture capitalists, top finance people, investment banking, private equity, high level entertainer, moviet/tv stars, top level musicians, athletes, top of their profession lawyers, and "C' suite level jobs. I don't expect to ever hit that level of wealth.
flaccidsteele
Posts: 1339
Joined: Sun Jul 28, 2019 9:42 pm
Location: Canada

Re: Path to UHNW

Post by flaccidsteele »

runner3081 wrote: Sun Nov 15, 2020 5:09 pm Start a business.
+1 this is the right answer

99.9% of those Trading their Life for money at a W2 job will only get to HNW (<$10m) aka “mass market millionaire”

Very HNW ($10m-30m) and UHNW ($30+) will likely require a business

Personally I can easily hit VHNW but UHNW will take some doing
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
Soon2BXProgrammer
Posts: 1781
Joined: Mon Nov 24, 2014 11:30 pm

Re: Path to UHNW

Post by Soon2BXProgrammer »

Start early enough and live a long time.
If someone has 2 million by 35 or so.. with enough time, aggressive investments and not paying an AUM fee, 30M+ (adjusted for inflation) should be possible
User avatar
Stinky
Posts: 6933
Joined: Mon Jun 12, 2017 11:38 am
Location: Sweet Home Alabama

Re: Path to UHNW

Post by Stinky »

From my experience at a large life insurance company -

The top 0.5%-1% of the employees can make the $10MM level if they live below their incomes and invest prudently while working.

Only the CEO can make the $30MM level, and that’s only if (s)he is long tenured and successful.
It's a GREAT day to be alive! - Travis Tritt
lessismore22
Posts: 234
Joined: Sun Jul 01, 2018 8:02 pm
Location: USA

Re: Path to UHNW

Post by lessismore22 »

runner3081 wrote: Sun Nov 15, 2020 5:09 pm Start a business.
+1.

And scale it.
jory1804
Posts: 37
Joined: Sat Dec 31, 2016 4:24 pm

Re: Path to UHNW

Post by jory1804 »

I'm not UHNW, but at my age and net worth (38 y/o, 13.5M), I realistically might get there.

In my case it's been mostly W-2. In the "right" industries, e.g. law, finance, tech, if you rise high enough up the ranks, saving $30M is within the realm of possibility. In most cases, to do this, you need to be an unusually strong performer with a lot of responsibility, likely managing a sizeable team. This is how it's been for me.
LFS1234
Posts: 249
Joined: Fri Feb 08, 2019 4:13 am

Re: Path to UHNW

Post by LFS1234 »

A key reason why many business owners reach VHNW and UNHW categories is that their businesses generally are highly illiquid for long periods of time, often many decades. By having 99% of their net worth locked up in illiquid stock, they don't have the ability to spend much, and their effective savings rates can be extraordinary.

The same phenomenon exists with people who have option grants in high-flying companies. They often can't know what their options are worth until fairly late in the game, and even if they do, they may not have access to liquidity. So they live on their normal salaries until they all of a sudden figure out that they're worth $15 million more than they thought they were. At that point, they sometimes post on Bogleheads asking what to do.

As someone pointed out upthread, you can turn $2m into $30m by letting it compound for 30-40 years. The problem is, almost nobody is willing to leave that $2m alone for that period of time. So something has to force you not to spend any of it. It's not a natural thing for most people to do.
User avatar
novolog
Posts: 125
Joined: Tue Jan 30, 2018 6:24 pm

Re: Path to UHNW

Post by novolog »

Grew up in a town with many families that would be categorized as "UNHW." In my experience if you want to generate that much wealth in 1 generation without significant risk (like starting your own business or being responsible for leading a successful company) then you should become an employee at a Private Equity fund and spend your career there. Just based on what I've observed, it seems like "UHNW" wealth is usually built over many generations and thus inherited.
edge
Posts: 3524
Joined: Mon Feb 19, 2007 7:44 pm
Location: NY

Re: Path to UHNW

Post by edge »

Not too sure re: the management consulting one.
oldfort wrote: Sun Nov 15, 2020 5:15 pm At that level of wealth, you're talking a lot of entrepreneurs, management consulting, venture capitalists, top finance people, investment banking, private equity, high level entertainer, moviet/tv stars, top level musicians, athletes, top of their profession lawyers, and "C' suite level jobs. I don't expect to ever hit that level of wealth.
oldfort
Posts: 2546
Joined: Mon Mar 02, 2020 8:45 pm

Re: Path to UHNW

Post by oldfort »

edge wrote: Sun Nov 15, 2020 10:13 pm Not too sure re: the management consulting one.
oldfort wrote: Sun Nov 15, 2020 5:15 pm At that level of wealth, you're talking a lot of entrepreneurs, management consulting, venture capitalists, top finance people, investment banking, private equity, high level entertainer, moviet/tv stars, top level musicians, athletes, top of their profession lawyers, and "C' suite level jobs. I don't expect to ever hit that level of wealth.
I thought senior partners/managing directors at Mckinsey, BCG, or Bain could pull in 7 figures in total comp, but I might be wrong.
User avatar
novolog
Posts: 125
Joined: Tue Jan 30, 2018 6:24 pm

Re: Path to UHNW

Post by novolog »

edge wrote: Sun Nov 15, 2020 10:13 pm Not too sure re: the management consulting one.
oldfort wrote: Sun Nov 15, 2020 5:15 pm At that level of wealth, you're talking a lot of entrepreneurs, management consulting, venture capitalists, top finance people, investment banking, private equity, high level entertainer, moviet/tv stars, top level musicians, athletes, top of their profession lawyers, and "C' suite level jobs. I don't expect to ever hit that level of wealth.
+1

I don't think anyone is making this much money as a management consultant, but I think many of them go on to start their own businesses which drops them into the "entrepreneur" category.
oldfort
Posts: 2546
Joined: Mon Mar 02, 2020 8:45 pm

Re: Path to UHNW

Post by oldfort »

novolog wrote: Sun Nov 15, 2020 10:28 pm
edge wrote: Sun Nov 15, 2020 10:13 pm Not too sure re: the management consulting one.
oldfort wrote: Sun Nov 15, 2020 5:15 pm At that level of wealth, you're talking a lot of entrepreneurs, management consulting, venture capitalists, top finance people, investment banking, private equity, high level entertainer, moviet/tv stars, top level musicians, athletes, top of their profession lawyers, and "C' suite level jobs. I don't expect to ever hit that level of wealth.
+1

I don't think anyone is making this much money as a management consultant, but I think many of them go on to start their own businesses which drops them into the "entrepreneur" category.
A lot if this depends on savings rate and time. If you're able to save $300k a year for 30 years with some decent investment returns, this should get you close to UHNW territory by retirement.
2tall4economy
Posts: 630
Joined: Thu Jan 08, 2015 7:55 am
Location: Global

Re: Path to UHNW

Post by 2tall4economy »

Most of the answers here are in the zone.

In all cases you need to be the top of your profession and do it for years successfully or you need to roll the dice with entrepreneurship.

I think anyone in a corporate / consulting / finance job that makes $1m+ per year toward mid to late career, watches their spending, and sticks with it until mandatory retirement could do it. $1m+ might seem impossible but in a Fortune 500 I’d guess 50 or more reach that. Not just the c suite.

But I think most people will get around $10m, realize there is nothing they can’t afford anymore, and exit before reaching uhnw.

This is essentially my choice now that I’m getting close to $5m in my 40s. When I only had $1m I’d model out my net worth working until 65 and seeing those huge numbers. But there is really nothing more I can do with my money at $30m than I can do at $10m (if someone can articulate that I’d love to hear about it - I couldn’t find anything except lower parasite fees with major banks) so I see no point in continuing to get up early and report for duty.

Other than that, as people above said, it’s those who get a liquidity event (ipo, stock option goes nuts, entrepreneur selling out, etc) who are used to w2 income levels matching their lifestyle spending and then get a huge inflow. I think many people will have lifestyle creep eat up their earnings increases if there isn’t a one time liquidity event involved.

And frankly, liquidity events are the pure definition of luck in my book. So don’t plan for that, plan for slow and steady.
You can do anything you want in life. The rub is that there are consequences.
User avatar
AAA
Posts: 1502
Joined: Sat Jan 12, 2008 8:56 am

Re: Path to UHNW

Post by AAA »

Mofire wrote: Sun Nov 15, 2020 4:43 pm Outside of an inheritance, what was your path to UHNW ($30M)?
I wish people wouldn't use acronyms without translation thus requiring others to look it up. Or maybe you figured that anyone who had to look it up would have nothing to contribute to the discussion.
mak1277
Posts: 1762
Joined: Fri Jan 09, 2015 4:26 pm

Re: Path to UHNW

Post by mak1277 »

oldfort wrote: Sun Nov 15, 2020 10:28 pm
edge wrote: Sun Nov 15, 2020 10:13 pm Not too sure re: the management consulting one.
oldfort wrote: Sun Nov 15, 2020 5:15 pm At that level of wealth, you're talking a lot of entrepreneurs, management consulting, venture capitalists, top finance people, investment banking, private equity, high level entertainer, moviet/tv stars, top level musicians, athletes, top of their profession lawyers, and "C' suite level jobs. I don't expect to ever hit that level of wealth.
I thought senior partners/managing directors at Mckinsey, BCG, or Bain could pull in 7 figures in total comp, but I might be wrong.
For sure. I worked with Big 4 audit partners who were making 7 figures annually.
mak1277
Posts: 1762
Joined: Fri Jan 09, 2015 4:26 pm

Re: Path to UHNW

Post by mak1277 »

2tall4economy wrote: Sun Nov 15, 2020 10:56 pm This is essentially my choice now that I’m getting close to $5m in my 40s. When I only had $1m I’d model out my net worth working until 65 and seeing those huge numbers. But there is really nothing more I can do with my money at $30m than I can do at $10m (if someone can articulate that I’d love to hear about it - I couldn’t find anything except lower parasite fees with major banks) so I see no point in continuing to get up early and report for duty.
Personally, at $30 million I would absolutely be looking into a NetJets membership. I don't think I could get that done at $10 million. Also, at $30 million, I would have no problem dropping $5-$10 million into multiple properties, which would have real value to me.
BogleFan510
Posts: 387
Joined: Tue Aug 04, 2020 2:13 pm

Re: Path to UHNW

Post by BogleFan510 »

oldfort wrote: Sun Nov 15, 2020 10:28 pm
edge wrote: Sun Nov 15, 2020 10:13 pm Not too sure re: the management consulting one.
oldfort wrote: Sun Nov 15, 2020 5:15 pm At that level of wealth, you're talking a lot of entrepreneurs, management consulting, venture capitalists, top finance people, investment banking, private equity, high level entertainer, moviet/tv stars, top level musicians, athletes, top of their profession lawyers, and "C' suite level jobs. I don't expect to ever hit that level of wealth.
I thought senior partners/managing directors at Mckinsey, BCG, or Bain could pull in 7 figures in total comp, but I might be wrong.
Easily. One partner I worked with charged 25k/day (client billing rate) in the 90s, and was usually in full demand. Top Big 4 Accounting Partners also pull in 7 figures and have 'salary for life' pensions (PWC, KPMG, EY, Deloitte).
KyleAAA
Posts: 8759
Joined: Wed Jul 01, 2009 5:35 pm
Contact:

Re: Path to UHNW

Post by KyleAAA »

Start your own business, or become an executive at a large corporation. You don't need to be a C-level exec, but you probably need to be in at meast the SVP range. A company like Microsoft likely has over 1,000 employees making 7 figures, with some making $3-4mm outside of the C suite.
Last edited by KyleAAA on Mon Nov 16, 2020 12:25 pm, edited 1 time in total.
Lee_WSP
Posts: 4001
Joined: Fri Apr 19, 2019 5:15 pm
Location: Arizona

Re: Path to UHNW

Post by Lee_WSP »

runner3081 wrote: Sun Nov 15, 2020 5:09 pm Start a business.
Plus a ton of good fortune.
snailderby
Posts: 1353
Joined: Thu Jul 26, 2018 11:30 am

Re: Path to UHNW

Post by snailderby »

At a 7% rate of return, if you save $150,000 per year for 40 years or $320,000 per year for 30 years, you could get in that range. (Not sure what the point would be. But that's not the question you asked.)
flaccidsteele
Posts: 1339
Joined: Sun Jul 28, 2019 9:42 pm
Location: Canada

Re: Path to UHNW

Post by flaccidsteele »

mak1277 wrote: Mon Nov 16, 2020 11:30 am
2tall4economy wrote: Sun Nov 15, 2020 10:56 pm This is essentially my choice now that I’m getting close to $5m in my 40s. When I only had $1m I’d model out my net worth working until 65 and seeing those huge numbers. But there is really nothing more I can do with my money at $30m than I can do at $10m (if someone can articulate that I’d love to hear about it - I couldn’t find anything except lower parasite fees with major banks) so I see no point in continuing to get up early and report for duty.
Personally, at $30 million I would absolutely be looking into a NetJets membership. I don't think I could get that done at $10 million.
+1 this

I was thinking the same thing. NetJets totally worth it @$30m+. Not so much @$10m. Glad you said it!
The US market always recovers. It’s never different this time. Retired in my 40s. Investing is a simple game of rinse and repeat
rich126
Posts: 2463
Joined: Thu Mar 01, 2018 4:56 pm

Re: Path to UHNW

Post by rich126 »

There is a lot of luck to it. Obviously starting a business can be a good path but it isn't easy. Having skills and working in a startup where you can cash in on stock options or % of ownership is another way. Sports :)

And there is a cost to it. Obviously if someone enjoys what they are doing it is fine but a lot of people at those levels didn't have much of a life outside of work. Running your own business is tough. It is hard to find people you can trust.

I've never had any interest in working those hours. I'd rather enjoy life. I can't say there is anything in life I'm craving right now (except some form of normality). My biggest regrets are not enjoying my younger years more and that had nothing to do with money.

I've talked/hung around with some people who had sizable $$$ (Ferrari, multiple homes, millions in the bank) and some still couldn't relax and enjoy what time they had left. I know a real estate guy who has well over a couple of hundred people working for him and he is 50s and he still is a workaholic. Great guy but when is enough, enough?

And I'm someone who is much more of a type A person.
playtothebeat
Posts: 448
Joined: Thu Jan 24, 2013 12:39 pm
Location: southern california

Re: Path to UHNW

Post by playtothebeat »

I know many such individuals, all of whom are in the commercial real estate space (development and/or investment/ownership). Not an overnight success, of course.
bwalling
Posts: 164
Joined: Thu Nov 25, 2010 1:04 pm

Re: Path to UHNW

Post by bwalling »

playtothebeat wrote: Mon Nov 16, 2020 1:56 pm I know many such individuals, all of whom are in the commercial real estate space (development and/or investment/ownership). Not an overnight success, of course.
Not sure commercial real estate is where you want to be right now or in the short term future. Work from home just got a massive shot in the arm in 2020.
User avatar
Riprap
Posts: 519
Joined: Thu Jan 29, 2009 2:08 pm

Re: Path to UHNW

Post by Riprap »

2tall4economy wrote: Sun Nov 15, 2020 10:56 pmif someone can articulate that I’d love to hear about it
Marginal Utility of Wealth.

Here's a good starting place. Let Google be your friend.

https://www.investopedia.com/terms/m/ma ... tility.asp

I think a lot of people at that wealth level come to the same conclusion.
btenny
Posts: 5557
Joined: Sun Oct 07, 2007 6:47 pm

Re: Path to UHNW

Post by btenny »

Work hard and save money via a OK day job. Then buy residential real estate at a young age and purchase your first rental house at 21. Buy good properties in nice neighborhoods in growing towns. Buy another rental house every year. Do your own repairs and management at night and weekends. Start your own management company and maintenance company to take care of your stuff and other peoples stuff. Keep working your day job for the first 15 years. At 35 or so when you now own and rent 14 or 15 properties quit your day job and manage your rentals full time. Keep buying a house or two per year. Buy a rental office building or multi unit apartment if the price and numbers work. Start a title company to manage your real estate purchases. Start a real estate sales brokerage to save costs and help find good properties. Rinse and repeat unit you are 50 or so. Your early purchases are almost paid off. So your cash flow is now getting large. Hire some more management help and slow down a little. But keep running the various businesses and and buying properties for 15 more years. At 65 you will own 25 paid off houses and 15-20 other good real estate holdings and 3 other related businesses. At 65 you will have a annual income of $500K or more. You will have a net worth of $20M or more.

Good Luck.
leehamster
Posts: 41
Joined: Wed Jan 18, 2012 1:43 pm

Re: Path to UHNW

Post by leehamster »

LFS1234 wrote: Sun Nov 15, 2020 8:57 pm A key reason why many business owners reach VHNW and UNHW categories is that their businesses generally are highly illiquid for long periods of time, often many decades. By having 99% of their net worth locked up in illiquid stock, they don't have the ability to spend much, and their effective savings rates can be extraordinary.

The same phenomenon exists with people who have option grants in high-flying companies. They often can't know what their options are worth until fairly late in the game, and even if they do, they may not have access to liquidity. So they live on their normal salaries until they all of a sudden figure out that they're worth $15 million more than they thought they were. At that point, they sometimes post on Bogleheads asking what to do.

As someone pointed out upthread, you can turn $2m into $30m by letting it compound for 30-40 years. The problem is, almost nobody is willing to leave that $2m alone for that period of time. So something has to force you not to spend any of it. It's not a natural thing for most people to do.
This is very wise insight, which ambitious youngsters should pay attention to.

“The first rule of compounding: Never interrupt it unnecessarily.” Charlie Munger
adamthesmythe
Posts: 4017
Joined: Mon Sep 22, 2014 4:47 pm

Re: Path to UHNW

Post by adamthesmythe »

1. Luck.

2. Fraud.
playtothebeat
Posts: 448
Joined: Thu Jan 24, 2013 12:39 pm
Location: southern california

Re: Path to UHNW

Post by playtothebeat »

bwalling wrote: Mon Nov 16, 2020 2:30 pm
playtothebeat wrote: Mon Nov 16, 2020 1:56 pm I know many such individuals, all of whom are in the commercial real estate space (development and/or investment/ownership). Not an overnight success, of course.
Not sure commercial real estate is where you want to be right now or in the short term future. Work from home just got a massive shot in the arm in 2020.
You might be thinking “office” when you say “commercial real estate”. In reality, many sectors are doing better than ever (industrial is the primary one, with cap rates in many markets being at all time lows, apartments in many markets as well; self storage is resilient; for-sale housing is extremely strong).
Wricha
Posts: 721
Joined: Sun Mar 25, 2012 10:33 am

Re: Path to UHNW

Post by Wricha »

I will take a stab at this. First eliminate 99.99% of all W-2 workers (including professional docs, lawyer etc) they are never ever going to get there. Then eliminate 99.98% of all small business folks. Eliminate 99.99% of all entrepreneurs. Note I am being extremely liberal with those percentages given there are only 70k UHNW people in the US out of work force 162M. Eliminate entertainers (including politicians), sports figures, salary, lottery winners, inherited wealth, marriage. And there is the path to UHNW by dancing through those rain drops. Remember Jack Bogle did get there by being a boglehead.
I know a few personally (around 20) including business partners great stories but I am old so going to bed maybe another time for that.
User avatar
goodenyou
Posts: 2605
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: Path to UHNW

Post by goodenyou »

I watched my close friend from high school amass wealth beyond imagination as a hedge fund manager. Having an IQ over 170 and an undergraduate and masters degree in EE in 4 years from MIT with straight A’s was also a big help. His yearly comp was well beyond $30M.
"Ignorance more frequently begets confidence than does knowledge" | “Do you know how to make a rain dance work? Dance until it rains”
2tall4economy
Posts: 630
Joined: Thu Jan 08, 2015 7:55 am
Location: Global

Re: Path to UHNW

Post by 2tall4economy »

Riprap wrote: Mon Nov 16, 2020 2:32 pm
2tall4economy wrote: Sun Nov 15, 2020 10:56 pmif someone can articulate that I’d love to hear about it
Marginal Utility of Wealth.

Here's a good starting place. Let Google be your friend.

https://www.investopedia.com/terms/m/ma ... tility.asp

I think a lot of people at that wealth level come to the same conclusion.
I’m saying the same thing; you don’t see a lot of uhnw folks because many who can achieve that tap out first because there is no margin utility; it’s the liquidity events or the folks that really love their job. I really like what I do. But there are plenty of days I’d prefer to sleep in or play with my kids instead.
You can do anything you want in life. The rub is that there are consequences.
User avatar
Riprap
Posts: 519
Joined: Thu Jan 29, 2009 2:08 pm

Re: Path to UHNW

Post by Riprap »

2tall4economy wrote: Tue Nov 17, 2020 1:16 am
Riprap wrote: Mon Nov 16, 2020 2:32 pm
2tall4economy wrote: Sun Nov 15, 2020 10:56 pmif someone can articulate that I’d love to hear about it
Marginal Utility of Wealth.

Here's a good starting place. Let Google be your friend.

https://www.investopedia.com/terms/m/ma ... tility.asp

I think a lot of people at that wealth level come to the same conclusion.
I’m saying the same thing; you don’t see a lot of uhnw folks because many who can achieve that tap out first because there is no margin utility; it’s the liquidity events or the folks that really love their job. I really like what I do. But there are plenty of days I’d prefer to sleep in or play with my kids instead.
You asked if someone could "articulate" the concept. The concept, I believe, is marginal utility of wealth.
mak1277
Posts: 1762
Joined: Fri Jan 09, 2015 4:26 pm

Re: Path to UHNW

Post by mak1277 »

Riprap wrote: Tue Nov 17, 2020 7:45 am
2tall4economy wrote: Tue Nov 17, 2020 1:16 am
Riprap wrote: Mon Nov 16, 2020 2:32 pm
2tall4economy wrote: Sun Nov 15, 2020 10:56 pmif someone can articulate that I’d love to hear about it
Marginal Utility of Wealth.

Here's a good starting place. Let Google be your friend.

https://www.investopedia.com/terms/m/ma ... tility.asp

I think a lot of people at that wealth level come to the same conclusion.
I’m saying the same thing; you don’t see a lot of uhnw folks because many who can achieve that tap out first because there is no margin utility; it’s the liquidity events or the folks that really love their job. I really like what I do. But there are plenty of days I’d prefer to sleep in or play with my kids instead.
You asked if someone could "articulate" the concept. The concept, I believe, is marginal utility of wealth.
I think he was asking for someone to explain the "concept" of why you'd need/want $30 million vs. $10 million. I gave two examples of why I think $30 million would be better for me personally.
User avatar
goodenyou
Posts: 2605
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: Path to UHNW

Post by goodenyou »

At UHNW you can buy something that you cannot at lower levels of wealth, time. I would definitely fly private jet and save myself time and the headache. It would be nice to see family and friends more often without the hassle, especially now.
"Ignorance more frequently begets confidence than does knowledge" | “Do you know how to make a rain dance work? Dance until it rains”
wfrobinette
Posts: 1442
Joined: Fri Feb 20, 2015 3:14 pm

Re: Path to UHNW

Post by wfrobinette »

Mofire wrote: Sun Nov 15, 2020 4:43 pm Outside of an inheritance, what was your path to UHNW ($30M)?
Not there.

But it takes a lot of luck!

The right job/business at the right time with the right products/services that are very early in their growth cycle.
stoptothink
Posts: 8984
Joined: Fri Dec 31, 2010 9:53 am

Re: Path to UHNW

Post by stoptothink »

Of all the UHNW people around me, not a single one is not an entrepreneur. My boss is a physician, but he was essentially broke a dozen years ago when him and 3 friends started a company. They're all worth 9-figures now. I also have a childhood friend who is a concert/event promotor. His business is dying now, but he was making mid 7-figures a year for the past 15yrs or so and at this point is living off a sizable real estate portfolio (over a dozen homes in SoCal and at least one apartment complex). A few others in my circle are owners of local tech companies. Almost all of my colleagues are physicians; while I can't say I know their financial situations intimately, I would bet my life that none of them will ever reach UHNW status. Most of them are still paying student loans in their 40's-50's.
wfrobinette
Posts: 1442
Joined: Fri Feb 20, 2015 3:14 pm

Re: Path to UHNW

Post by wfrobinette »

goodenyou wrote: Mon Nov 16, 2020 10:47 pm I watched my close friend from high school amass wealth beyond imagination as a hedge fund manager. Having an IQ over 170 and an undergraduate and masters degree in EE in 4 years from MIT with straight A’s was also a big help. His yearly comp was well beyond $30M.
Another example of luck! I know he worked hard but being born with a 170 IQ is lucky.
sd323232
Posts: 896
Joined: Thu Jun 21, 2018 4:45 pm

Re: Path to UHNW

Post by sd323232 »

movie actor, sports player, nfl, nba, etc
User avatar
goodenyou
Posts: 2605
Joined: Sun Jan 31, 2010 11:57 pm
Location: Skating to Where the Puck is Going to Be..or on the golf course

Re: Path to UHNW

Post by goodenyou »

wfrobinette wrote: Tue Nov 17, 2020 2:06 pm
goodenyou wrote: Mon Nov 16, 2020 10:47 pm I watched my close friend from high school amass wealth beyond imagination as a hedge fund manager. Having an IQ over 170 and an undergraduate and masters degree in EE in 4 years from MIT with straight A’s was also a big help. His yearly comp was well beyond $30M.
Another example of luck! I know he worked hard but being born with a 170 IQ is lucky.
Yes. The genetics are luck, but the hard work wasn't.
"Ignorance more frequently begets confidence than does knowledge" | “Do you know how to make a rain dance work? Dance until it rains”
TheLaughingCow
Posts: 194
Joined: Tue Jul 01, 2014 9:41 pm

Re: Path to UHNW

Post by TheLaughingCow »

btenny wrote: Mon Nov 16, 2020 3:17 pm Then buy residential real estate at a young age and purchase your first rental house at 21.

Buy good properties in nice neighborhoods in growing towns.

Buy another rental house every year.

Keep buying a house or two per year.
Just when I think bogleheads can’t get any more out of touch...
playtothebeat
Posts: 448
Joined: Thu Jan 24, 2013 12:39 pm
Location: southern california

Re: Path to UHNW

Post by playtothebeat »

TheLaughingCow wrote: Tue Nov 17, 2020 3:24 pm
btenny wrote: Mon Nov 16, 2020 3:17 pm Then buy residential real estate at a young age and purchase your first rental house at 21.

Buy good properties in nice neighborhoods in growing towns.

Buy another rental house every year.

Keep buying a house or two per year.
Just when I think bogleheads can’t get any more out of touch...
I wasn't the poster, but curious as to why you think that's out of touch? Certainly a very common path to wealth accumulation. Of course, it doesn't always work out, but it many times does.
User avatar
queso
Posts: 1215
Joined: Thu Jan 07, 2016 3:52 pm

Re: Path to UHNW

Post by queso »

playtothebeat wrote: Tue Nov 17, 2020 4:22 pm
TheLaughingCow wrote: Tue Nov 17, 2020 3:24 pm
btenny wrote: Mon Nov 16, 2020 3:17 pm Then buy residential real estate at a young age and purchase your first rental house at 21.

Buy good properties in nice neighborhoods in growing towns.

Buy another rental house every year.

Keep buying a house or two per year.
Just when I think bogleheads can’t get any more out of touch...
I wasn't the poster, but curious as to why you think that's out of touch? Certainly a very common path to wealth accumulation. Of course, it doesn't always work out, but it many times does.
I didn't get it either. Why waste all that time? Just buy all 25 houses, 15-20 other good real estate holdings and 3 other related businesses when you turn 21?
DesertDiva
Posts: 1061
Joined: Thu Mar 01, 2018 12:49 pm
Location: In the desert

Re: Path to UHNW

Post by DesertDiva »

For a moment, I thought I was on BiggerPockets, not Bogleheads :shock:
nigel_ht
Posts: 1864
Joined: Tue Jan 01, 2019 10:14 am

Re: Path to UHNW

Post by nigel_ht »

flaccidsteele wrote: Mon Nov 16, 2020 1:24 pm
mak1277 wrote: Mon Nov 16, 2020 11:30 am
2tall4economy wrote: Sun Nov 15, 2020 10:56 pm This is essentially my choice now that I’m getting close to $5m in my 40s. When I only had $1m I’d model out my net worth working until 65 and seeing those huge numbers. But there is really nothing more I can do with my money at $30m than I can do at $10m (if someone can articulate that I’d love to hear about it - I couldn’t find anything except lower parasite fees with major banks) so I see no point in continuing to get up early and report for duty.
Personally, at $30 million I would absolutely be looking into a NetJets membership. I don't think I could get that done at $10 million.
+1 this

I was thinking the same thing. NetJets totally worth it @$30m+. Not so much @$10m. Glad you said it!
Yah, a lot more stuff is suddenly viable at 30+M than 5-10M.

Are those things worth getting up early and reporting for duty once you get to $10M? Meh.
nigel_ht
Posts: 1864
Joined: Tue Jan 01, 2019 10:14 am

Re: Path to UHNW

Post by nigel_ht »

TheLaughingCow wrote: Tue Nov 17, 2020 3:24 pm
btenny wrote: Mon Nov 16, 2020 3:17 pm Then buy residential real estate at a young age and purchase your first rental house at 21.

Buy good properties in nice neighborhoods in growing towns.

Buy another rental house every year.

Keep buying a house or two per year.
Just when I think bogleheads can’t get any more out of touch...
If you have the right motivated kid...but that's partly genetics (aka luck). More luck and some mentorship is also required to not get into the wrong property early and suffer a loss out of the gate.

We have quite a bit saved for college. Rather than do an expensive 4 year, do 2 at community college and 2 at the state U for a comp sci degree. Get a software job paying 70-100K. Take the left over college money and buy your first rental while living at home. Save half your gross. Get enough revenue stream + income to afford 2nd rental.

Doable but arguably this is partly inherited/subsidized by parents...but it's not outside the realm of possibility of upper-middle class parents that save for college.
Post Reply