Started off late. How am I doing so far? My goal is to hit 1 million.

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studdddy12
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Started off late. How am I doing so far? My goal is to hit 1 million.

Post by studdddy12 »

Graduated college at 22 with a useless degree and worked odd low end jobs paying down debt and struggling. My first job was making 8 dollars per hour working part time post college was depressing. Went back to school later, now I am 33 years old. I didn't start making real money until I was 28 years old so I feel like I am very behind compared to my peers who I went to college with. Some of my friends got real jobs straight out of school.

My total investments right now is 285k. Mostly in index funds, some crypto, 401k, maxing out roth ira. I am saving 18 percent of my paycheck on top of investing whatever money i have left over from my paycheck usually about 1-2k per month. I am guessing I am investing about 50k per year. My debt is low with only school debt at 21k at less than 5 percent interest rate. I will just pay it off slow because the interest rate is low. My salary is around 140k per year. I generally live a low cost lifestyle but travel here and there with my gf. I try to save and invest alot. My goal right now is to have 1 million invested. So far how am I doing and how long will that take me to reach my goal of 1 million?

I realize the goal post will move once I hit a million but I figure I would taper down my work hours.
CoAndy
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by CoAndy »

You are doing very well. Check out the Rule of 72, which shows you how long it takes for your investments to double at various rates of return. You are adding a very healthy chunk each year so it will double much quicker. A million dollars could come pretty quickly with favorable market winds.
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windaar
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by windaar »

You might want to read the Wiki (top of page) and take some time to learn about Boglehead investment philosophy. The classic advice will be to come up with an asset allocation based on your risk tolerance and goals, and to write an investment policy statement that you stick to. Having all equities and then Cr+pto, which we don't even discuss here, is not what one would usually recommend to a 33 year old. A 3-fund portfolio with an advance plan on how the AA will change over time is what I'd recommend.
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rogue_economist
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by rogue_economist »

I would agree you are behind your peers, though well ahead of the bulk of your generation.

I don't think tapering down work hours at one million is appropriate, given the significant headwinds your generation is facing and likely will continue to face. One million sounds like a big number, but these days it is the cost of a decent home in much of the country. Without owning your own residence it is really not enough to have real financial security.
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gavinsiu
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by gavinsiu »

If you are saving 50K a year consistently for a 140K salary, you are doing pretty well. See Portfolio Visualizer link. Note that the allocation is just an example and not an endorsement of the allocation since I have no idea what your risk tolerance is. You can adjust it to your allocation and portfolio and get a more accurate estimate.

Keep in mind that the simulation is hyperthetical. It will depend if you can be fully employed for the rest of our lifes. Many of us will get laid off sometimes more than a year. Some of us will be lucky enough to increase your income. Some of us wil be unlucky and have our income reduced. Keep in mind that it's also just an estimate your actual result may vary. However, the monte carlo is better than guessing or calculate based on a fixed rate of return. At least Monte Carlo gives you a range to consider.
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CyclingDuo
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by CyclingDuo »

studdddy12 wrote: Sun May 12, 2024 6:17 pm Graduated college at 22 with a useless degree and worked odd low end jobs paying down debt and struggling. My first job was making 8 dollars per hour working part time post college was depressing. Went back to school later, now I am 33 years old. I didn't start making real money until I was 28 years old so I feel like I am very behind compared to my peers who I went to college with. Some of my friends got real jobs straight out of school.

My total investments right now is 285k. Mostly in index funds, some crypto, 401k, maxing out roth ira. I am saving 18 percent of my paycheck on top of investing whatever money i have left over from my paycheck usually about 1-2k per month. I am guessing I am investing about 50k per year. My debt is low with only school debt at 21k at less than 5 percent interest rate. I will just pay it off slow because the interest rate is low. My salary is around 140k per year. I generally live a low cost lifestyle but travel here and there with my gf. I try to save and invest alot. My goal right now is to have 1 million invested. So far how am I doing and how long will that take me to reach my goal of 1 million?
Are you behind? Not according to Fidelity, T.Rowe Price, JP Morgan, etc.

By age 33 with a $140K salary, use as the starting point of multiples of current salary to save by a certain age such as shown in the following chart from T.Rowe Price (or Fidelity, or JP Morgan, etc.):

Image
Original Source: https://www.troweprice.com/personal-inv ... y-now.html

The annual guide to retirement that JP Morgan puts out is a nice planner. Their multiples of salary metric are showing you are not behind based on your current salary:

Image
https://am.jpmorgan.com/us/en/asset-man ... lsrc=aw.ds

Fidelity

Image

Keep up the good work!

CyclingDuo
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my2p
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by my2p »

You are doing fine. The $1m figure is arbitrary. Read JL Collins' book "The simple path to wealth" or his blog (https://jlcollinsnh.com/stock-series/) and many things will become clearer to you.
“The simple path to wealth” — JL Collins.
babystep
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by babystep »

studdddy12 wrote: Sun May 12, 2024 6:17 pm Graduated college at 22 with a useless degree and worked odd low end jobs paying down debt and struggling. My first job was making 8 dollars per hour working part time post college was depressing. Went back to school later, now I am 33 years old. I didn't start making real money until I was 28 years old so I feel like I am very behind compared to my peers who I went to college with. Some of my friends got real jobs straight out of school.

My total investments right now is 285k. Mostly in index funds, some crypto, 401k, maxing out roth ira. I am saving 18 percent of my paycheck on top of investing whatever money i have left over from my paycheck usually about 1-2k per month. I am guessing I am investing about 50k per year. My debt is low with only school debt at 21k at less than 5 percent interest rate. I will just pay it off slow because the interest rate is low. My salary is around 140k per year. I generally live a low cost lifestyle but travel here and there with my gf. I try to save and invest alot. My goal right now is to have 1 million invested. So far how am I doing and how long will that take me to reach my goal of 1 million?

I realize the goal post will move once I hit a million but I figure I would taper down my work hours.
Max-out pre-tax 401k. Check if HSA and after-tax 401k are available.
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by Sandtrap »

studdddy12 wrote: Sun May 12, 2024 6:17 pm Graduated college at 22 with a useless degree and worked odd low end jobs paying down debt and struggling. My first job was making 8 dollars per hour working part time post college was depressing. Went back to school later, now I am 33 years old. I didn't start making real money until I was 28 years old so I feel like I am very behind compared to my peers who I went to college with. Some of my friends got real jobs straight out of school.

My total investments right now is 285k. Mostly in index funds, some crypto, 401k, maxing out roth ira. I am saving 18 percent of my paycheck on top of investing whatever money i have left over from my paycheck usually about 1-2k per month. I am guessing I am investing about 50k per year. My debt is low with only school debt at 21k at less than 5 percent interest rate. I will just pay it off slow because the interest rate is low. My salary is around 140k per year. I generally live a low cost lifestyle but travel here and there with my gf. I try to save and invest alot. My goal right now is to have 1 million invested. So far how am I doing and how long will that take me to reach my goal of 1 million?

I realize the goal post will move once I hit a million but I figure I would taper down my work hours.
to op:
1
Why 1 million?
It is not much.
Consider 25x at age 65 where "x" equals annual retirement expenses. Depending on your "unknown" and "can't be predicted this far out" financials, that 25x "that earns an income stream" (not home equity), might turn out to be 2.5 million or much more.
2
Given life's inevitable "black swans" and "perfect storms", it is not linear, to compensate, can you substantially "very substantially" increase your income stream?

As suggested earlier, read the "getting started" forum wiki and restructure your financials now, then move on from there, building on that, not what you have now.

Note: reaching an arbitrary financial number then "tapering down" can be an unreliable artificial construct when projecting out over 30 years.

j
Wiki Bogleheads Wiki: Everything You Need to Know
Tamalak
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by Tamalak »

OP you sound a lot like me. I graduated late, shuffled around with periods of unemployment and low paying jobs, then finally landed something real when I was about 29. Started from 0 at that point. Invested 60k or so per year. When I was 40 I hit a million. 41 now and I'm at 1.3 million. Compounding works :D
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ruralavalon
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by ruralavalon »

Welcome to the forum :D

studdddy12 wrote: Sun May 12, 2024 6:17 pm Graduated college at 22 with a useless degree and worked odd low end jobs paying down debt and struggling. My first job was making 8 dollars per hour working part time post college was depressing. Went back to school later, now I am 33 years old. I didn't start making real money until I was 28 years old so I feel like I am very behind compared to my peers who I went to college with. Some of my friends got real jobs straight out of school.

My total investments right now is 285k. Mostly in index funds, some crypto, 401k, maxing out roth ira. I am saving 18 percent of my paycheck on top of investing whatever money i have left over from my paycheck usually about 1-2k per month. I am guessing I am investing about 50k per year. My debt is low with only school debt at 21k at less than 5 percent interest rate. I will just pay it off slow because the interest rate is low. My salary is around 140k per year. I generally live a low cost lifestyle but travel here and there with my gf. I try to save and invest alot. My goal right now is to have 1 million invested. So far how am I doing and how long will that take me to reach my goal of 1 million?

I realize the goal post will move once I hit a million but I figure I would taper down my work hours.
You are doing great.

With $285 in investments on a salary of $140/year at age 33 you are far ahead of most of your contemporaries, link.

Your savings rate of 36% (50/140) is excellent in my opinion.

If any decent funds are offered in your employer's 401k plan, then make the maximum annual employee to ($23k while under age 50). The employer match does not count toward the employee maximum, it's extra.

Continue living within your means, and using tax-advantaged accounts. Invest in very diversified index funds with low expense ratios.

Skip the crypto and any other speculative investing.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
tashnewbie
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by tashnewbie »

You didn't start late. 28 (and 33) is still very young.

I didn't start making decent money until I was 31 and didn't make my first 401k elective deferral contribution until then.

If you're not already, max traditional 401k (I think $23k in 2024) and Roth IRA via backdoor ($7k). Only do the latter if you understand the steps and are willing to deal with the extra tax paperwork.

All you can do is keep pounding money into the accounts. Eventually the magic of compounding will take over.

I would ditch the crypto. If you feel like you're behind, I would focus on saving even more of your income. But don't forget to live your life, too!
Outer Marker
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by Outer Marker »

tashnewbie wrote: Mon May 13, 2024 9:39 am I would ditch the crypto.
+1. Read what Charlie Munger and Warren Buffet have to say about crypto. It's frowned upon around here. Even it's discussion is prohibited, though hopefully this brief mention is within bounds. Other than that, you look very much on track if not ahead of the curve.
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ruralavalon
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by ruralavalon »

Duplicate post deleted
Last edited by ruralavalon on Mon May 13, 2024 10:04 am, edited 1 time in total.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
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ruralavalon
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by ruralavalon »

Outer Marker wrote: Mon May 13, 2024 9:44 am
tashnewbie wrote: Mon May 13, 2024 9:39 am I would ditch the crypto.
+1. Read what Charlie Munger and Warren Buffet have to say about crypto. It's frowned upon around here. Even it's discussion is prohibited, though hopefully this brief mention is within bounds. Other than that, you look very much on track if not ahead of the curve.
+ 2.

https://www.youtube.com/watch?v=Uf7OZld47K4

https://www.cnbc.com/2022/04/30/warren- ... tcoin.html
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link: Bogleheads® investment philosophy
bonesly
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by bonesly »

studdddy12 wrote: Sun May 12, 2024 6:17 pm ...I am 33 years old ... My total investments right now is 285k ... I am investing about 50k per year ... how long will that take me to reach my goal of 1 million?
The link @gavinsiu provided to Portfolio Visualizer's Monte Carlo projection of your future balance, assuming a 70/30 asset allocation, is a good link to study. If you scroll down to simulated portfolio balances you can see 5 exponential curves showing the range of possible outcomes within the likelihood distribution for sequence of returns on the given input assumptions.

Using the conservative 10th percentile curve, it looks like you have a 90% chance of reaching $1M or higher about 10 years from now (age 43). There's a 50% chance by age 43 that your balance would be higher or lower than $1,591K. There's a 10% chance by age 43 that your balance would be $2,232K or higher, with a 90% chance that it would lower.

You didn't identify your allocation among stocks and bonds and you could well be 100% stocks (rather than the 70% assumed for that Monte Carlo result), but as @windaar suggested, you'll want to get some basic understanding of investing by reading the five introductory topics in the Wiki, then choose an asset allocation plan suited to your risk-tolerance and stick to that plan (helps avoid "chasing the new hotness" and underperforming as you constantly change horses in the middle of the stream).

See Getting Started for US Investors on the left side of the Main Wiki Page.
1) Getting started - Start here.
2) Investment philosophy - Our investment principles.
3) Investing start-up kit - A top-down approach to start investing.
4) Investment policy statement - Identify your investment objectives and how you plan to meet them.
5) Prioritizing investments - Choosing where to save your investing money, such as an employer's retirement plan or a savings account.

Avoid complex portfolios and investments you can't explain to someone else because you don't understand them yourself. Stick to a simple portfolio with a majority composition of Total US Stocks, Total Int'l Stocks, and Total US Bonds using low-cost index funds.
"Simplicity is the master key to financial success." -- John C. Bogle

If you like books for getting smart on investing consider one of these:
The Bogleheads' Guide to Investing (Lindauer)
The Little Book of Common Sense Investing (Bogle)
Common Sense on Mutual Funds (Bogle) <-- personal favorite
If You Can – How Millennials Can Get Rich Slowly (Bernstein) <-- free & brief online PDF
studdddy12 wrote: Sun May 12, 2024 6:17 pm So far how am I doing
I'd say you're doing fine!

If you want a more detailed response, consider editing your first post to provide the info requested in the template for Asking Portfolio Questions, since suggestions about improving the tax-efficiency of your holdings, or rebalancing suggestions to get you from your current AA back on track (or to a newly chosen AA) depend on information like tax-bracket, amounts among taxable, tax-deferred, and tax-free, with % of total portfolio value in holdings for each of those three account types.
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by cbs2002 »

You are in the 89th percentile for net worth for your age per Don't Quit Your Day Job. That's households, and you are just a single person. You are doing fabulously well.

If I split it in half with my spouse, I was about where you are at 33. Now I/we are way wealthier. Both were salaried, neither of us is a lawyer, doctor, nor in finance or tech. Never owned a business or real estate apart from our primary residence. Vast majority of wealth is from savings from salary and stock market returns.

Save like you've been doing and keep it invested in an index like the SP500. Don't look at it and certainly don't sell it no matter how bad things get.

I suggest you think more about the way you want to live, and then go do those things while saving money, and think not so much about a number as a financial goal.
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studdddy12
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by studdddy12 »

Right now im investing like 70-80 percent in total us market index and 20 in international, 10 percent in bonds. My 401k is 18 percent of paycheck. I just want to hit 1 million quickly hopefully before i am 40 years old. I guess for me it would be more like a small goal has been reached.
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by one_speed »

studdddy12 wrote: Mon May 13, 2024 4:22 pm Right now im investing like 70-80 percent in total us market index and 20 in international, 10 percent in bonds. My 401k is 18 percent of paycheck. I just want to hit 1 million quickly hopefully before i am 40 years old. I guess for me it would be more like a small goal has been reached.
40 - 33 = 7 years
$1,000,000 - $285,000 = $715,000
$1,000,000 ÷ $285,000 = 3.5

Not saying you can't do it, but don't beat yourself up if accumulating $715k over 7 years, or multiplying your investments by a factor of three and a half, doesn't quite happen. That's a lot to ask of both savings rate and growth rate.

Could ypu do it by essentially saving half your gross pay $70k and counting on your asset allocation to deliver the rest? Yeah if we got a repeat of the last 7years. But we may do better, may do worse with the next 7.
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ruralavalon
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by ruralavalon »

studdddy12 wrote: Mon May 13, 2024 4:22 pm Right now im investing like 70-80 percent in total us market index and 20 in international, 10 percent in bonds. My 401k is 18 percent of paycheck. I just want to hit 1 million quickly hopefully before i am 40 years old. I guess for me it would be more like a small goal has been reached.
In my opinion your asset allocation is within the range of what is reasonable.

In my opinion you are in track for your goal.
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bonesly
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by bonesly »

studdddy12 wrote: Mon May 13, 2024 4:22 pm I just want to hit 1 million quickly hopefully before i am 40 years old.
As noted in the Monte Carlo posted above, 90% chance by age 43, only a 50% chance by age 40. As you say "small goal" and 'it's just a number."

$1M might give you some psychological sense of security but it's pretty useless out of context. To someone that is living paycheck to paycheck on minimum wage it's a dream that only comes from winning the lottery. For someone that makes $400K/yr, it's an insignificant waypoint on the way to a $10M balance to sustain their lifestyle in early retirement.

For useful context, you need to think about: what spending level you'd need/like to have in retirement and what age are you planning that retirement? Answering those two questions usually gets you a much more meaningful goal like "I need to reach 25 times my predicted annual retirement expenses of X, by age Y, with expected pension and SocSec income of Z, to life a comfortable lifestyle in retirement." where 25X (inverse of the 4% rule) may be considerably more than $1M if you want to retire at 65, and retiring at 50 is more like 29X than 25X.
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by Finridge »

bonesly wrote: Tue May 14, 2024 2:15 pm
studdddy12 wrote: Mon May 13, 2024 4:22 pm I just want to hit 1 million quickly hopefully before i am 40 years old.
As noted in the Monte Carlo posted above, 90% chance by age 43, only a 50% chance by age 40. As you say "small goal" and 'it's just a number."

$1M might give you some psychological sense of security but it's pretty useless out of context. To someone that is living paycheck to paycheck on minimum wage it's a dream that only comes from winning the lottery. For someone that makes $400K/yr, it's an insignificant waypoint on the way to a $10M balance to sustain their lifestyle in early retirement.

For useful context, you need to think about: what spending level you'd need/like to have in retirement and what age are you planning that retirement? Answering those two questions usually gets you a much more meaningful goal like "I need to reach 25 times my predicted annual retirement expenses of X, by age Y, with expected pension and SocSec income of Z, to life a comfortable lifestyle in retirement." where 25X (inverse of the 4% rule) may be considerably more than $1M if you want to retire at 65, and retiring at 50 is more like 29X than 25X.
Yes, and if OP is saving 50K out of a 140K salary, then OP's burn rate is 90K. so to hit 25x to support spending 90K at a 4% SWR, OP needs $2,250,000. More if a higher SWR is used.
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by BoglesMyHero »

Young man you are doing great!!
Using a compounding savings interest calculator figuring a conservative 6% return you should hit $1,000,000 in about 9 years.
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Re: Started off late. How am I doing so far? My goal is to hit 1 million.

Post by dogagility »

studdddy12 wrote: Sun May 12, 2024 6:17 pm ...how long will that take me to reach my goal of 1 million?
Using this tool will give you a range of possible lengths of time. https://www.portfoliovisualizer.com/mon ... simulation
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