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BoydCrowder13
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In reply to CharlieBrown17 • 1:51p, 10/17/20
CharlieBrown17 said:
Hoping to hit this net worth wise by 30-32. 25 right now and around 70k net worth.

Debt right now is a mortgage and car note. Inherited a rental property with the wife. Both of us contribute enough to 401ks to take advantage of full matching but most of our savings goes towards a down payment for a second rental property and building a maintenance fund for both plus a more aggressive stock market account than our 401ks.

Definitely agree with a lot of the thoughts on here about really needing to balance enjoyment now and savings for later. We could be more frugal but dinner out on fridays or the bar on Saturday is worth it for now over saving every possible cent. On the flip side, we have several friends with similar income to us that spend every cent of it damn near and I can't even imagine spending that much money a month.


Good luck. Going from 70K to $1M in 5 years will be tough. I just would like to be there by 40. As the sole breadwinner with 3 kids, that is a challenging goal.
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Ed Carter
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1:57p, 10/17/20
AG
For a 39-year-old you have to have 4.9 million to be in the top 1% When you scroll down and look at the asset composition of similar households, 2.9 million of the breakdown comes from "other assets." I'm just assuming a big chunk of that is business equity. I guess this shows the importance of owning your own business when it comes to financially separating yourself from high W2 people
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CharlieBrown17
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In reply to BoydCrowder13 • 2:08p, 10/17/20
AG
We're DINK and bought a house in an area that's seen 8-10% increase in value every year recently. Definitely going to take a little luck to get there in 5. Realistically if we can build some decent equity in our current house and have another rental property bought and paid for by my 32 birthday I'd be happy.

Not having to pay for either of her degrees or mine due to various military benefits has been a blessing for sure.
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chris1515
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In reply to Square Pair • 2:33p, 10/17/20
AG
What kind of company did you start?
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Leander - Ag
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In reply to Sandman98 • 3:16p, 10/17/20
AG
Sandman98 said:
94chem said:
YouBet said:
Ed Carter said:
New net worth data is out...fascinating to see how much it takes to be in the top 1% these days

https://personalfinancedata.com/networth-percentile-calculator/
No kidding. I'm 46 and you have to have $10-11M net worth to be top 1%.


Two bachelor's degrees in engineering in the mid-90's, 1-2 children, maxing out 401(k) with corporate match, minimal giving, etc. $10 million would be a pretty easy number to reach.


Easy probably isn't the word even with those parameters. Inheritance is how most people make the cut.


If you invest in the market at an early age it's not that far of a stretch
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3:29p, 10/17/20
vette
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In reply to [removed post] • 4:27p, 10/17/20
AG
SoupNazi2001 said:
For the ones that make it super young, yes some are high earners who save a lot but there are a lot of trust fund babies in there too or those that are given a lot by their parents. Real estate has been a big contributor to high net worth individuals as well due to the leverage and significant tax benefits. It will be interesting to see how that shakes out with COVID as many high net worth individuals are heavier in CRE investing.


CRE is fine. Especially if it's multifamily
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Square Pair
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In reply to chris1515 • 4:29p, 10/17/20
AG
chris1515 said:
What kind of company did you start?


Systems Engineering and Technical Assistance (Seta) company supporting the DoD. In a nutshell engineering program management for ISR systems, satellites, etc.
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In reply to vette • 7:49p, 10/17/20
94chem
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In reply to CaptnCarl • 6:51a, 10/18/20
CaptnCarl said:
Throw in a common item like child with special needs, private school, IVF, parents with medical bills, etc.

Life can be very difficult, and describing hitting $10MM as easy is almost insulting to people that hit many of life's realities and insincere to those prospective couples in their early 20's.


Yeah, that's not what I said at all. I've got 6 kids and my wife is a SAHM. I'm saying that a double professional income, starting 25 years ago with the purpose of building wealth, could have amassed $10 million without having expanded income. In other words, by merely climbing the ladder in their professions and making a combined $400 - $500K by their mid-40's, they could be in the very upper echelon. I was specifically excluding life's realities. In fact, I wouldn't have wanted to live without them. But if you start young, make a good income, and all you want is a fat wallet, $10 million isn't that hard to achieve.
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YouBet
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In reply to 94chem • 8:44a, 10/18/20
AG
94chem said:
CaptnCarl said:
Throw in a common item like child with special needs, private school, IVF, parents with medical bills, etc.

Life can be very difficult, and describing hitting $10MM as easy is almost insulting to people that hit many of life's realities and insincere to those prospective couples in their early 20's.


Yeah, that's not what I said at all. I've got 6 kids and my wife is a SAHM. I'm saying that a double professional income, starting 25 years ago with the purpose of building wealth, could have amassed $10 million without having expanded income. In other words, by merely climbing the ladder in their professions and making a combined $400 - $500K by their mid-40's, they could be in the very upper echelon. I was specifically excluding life's realities. In fact, I wouldn't have wanted to live without them. But if you start young, make a good income, and all you want is a fat wallet, $10 million isn't that hard to achieve.
That's my wife and I. We are DINKs - well, we were until 2 weeks ago - and that is still hard to achieve.

We are 46 and 44 and have done very well. But not $10M. I mean, damn, that is not nearly as easy as you think it is. We've had an aggressive portfolio for almost the entirety of that time up until the last year or so being almost 100% equities and maxing all tax advantaged vehicles. No expanded income - just our combined professional salaries. Never been out of the market and plowed through all downturns with no change in strategy. We could have done more than we have in taxable accounts, but not enough to close the gap to $10M.

If you are talking a doctor and a lawyer DINK arrangement then I can see $10M (this is actually our best friends and I suspect they are close to this number but don't know).
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MAS444
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9:50a, 10/18/20
AG
Yeah if it was so easy it wouldn't be the top 1%. Being doable (with lots of "ifs") and "easy" are 2 different things.

Also, what percentage of those in the top 1% do you think have significant family money/inheritance? I'd guess it's high.
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ORAggieFan
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9:52a, 10/18/20
The challenge with getting to $10 mil is the taxes to get there. You aren't doing it via 401k alone. You mostly have to do it through business equity or be a very high level exec. Either way, it's about equity.
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$30,000 Millionaire
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10:43a, 10/18/20
AG
I think some of you all have unrealistic expectations of getting to $10M, especially depending on what basis you start from, student loans and lack of financial training in particular. I came from a family that didn't understand compounding interest in both directions and told me not to get involved in the stock market. Thank God for great mentors i have had along the way.

Being a good investor helps, however, you still need to show up with the principal to get it to grow, regardless of investment vehicle. Very few people are putting in a net new $300K a year into the market or growing business equity at that rate.
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CaptnCarl
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In reply to $30,000 Millionaire • 12:30p, 10/18/20
AG
I think this discussion is loosely interchanging the adjective "easy" and "simple". The path and math are simple, the execution is far from easy.

I wanted to share this tweet about the best way to starting the path to $10MM net worth is buying an existing business. I strongly agree with this. The idea is simple, but the amount of dedication and perseverance is lofty.



ETA: click the link for the model he outlays.
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YouBet
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In reply to CaptnCarl • 1:20p, 10/18/20
AG
CaptnCarl said:
I think this discussion is loosely interchanging the adjective "easy" and "simple". The path and math are simple, the execution is far from easy.

I wanted to share this tweet about the best way to starting the path to $10MM net worth is buying an existing business. I strongly agree with this. The idea is simple, but the amount of dedication and perseverance is lofty.



Yes, but you've moved away from the premise which was two professional jobs with 401ks. IOW, typical corporate scenario.
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CaptnCarl
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In reply to YouBet • 1:28p, 10/18/20
AG
I think this thread has been open to all the various ways to achieve the mark.
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94chem
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10:20p, 10/18/20
If you're 45 years old and have $10M net worth, I sure hope you've taken nice vacations, driven nice cars, eaten at nice restaurants, gone to nice gyms, and worked at something you could tolerate, and maybe brought a life into the world. If not, you'd better start now.
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YouBet
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In reply to 94chem • 8:22a, 10/19/20
AG
94chem said:
If you're 45 years old and have $10M net worth, I sure hope you've taken nice vacations, driven nice cars, eaten at nice restaurants, gone to nice gyms, and worked at something you could tolerate, and maybe brought a life into the world. If not, you'd better start now.


I've done all of those things minus the kid. That's why I don't have $10M in net worth.

That's the paradox!
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Pepper Brooks
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9:08a, 10/19/20
AG
10M by 40s is a level of work my mind doesn't care to fathom. We're early 30s with a net worth of around 500k and I don't see how the 10M goal is possible without...

A) giving up all of the fun things/travel we did in our 20s; and/or
B) inheriting a significant sum of money; and/or
C) Hitting a home run on shark tank

We just added a kid to the mix so I don't like our chances but you never know. We have maxed out IRS 401k and IRA contributions for the last few years and have about $150k on taxable investment accounts. We didn't have the income to do it and save 20% for a house for awhile.
“There is no red.
There is no blue.
There is the state.
And there is you.”

“As government expands, Liberty contracts” - R. Reagan
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RightWingConspirator
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9:14a, 10/19/20
AG
"But it is easier to purchase products that denote superiority than to be actually superior in economic achievement." - Thomas J. Stanley
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Boat Shoes
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In reply to 94chem • 9:44a, 10/19/20
AG
94chem said:
If you're 45 years old and have $10M net worth, I sure hope you've taken nice vacations, driven nice cars, eaten at nice restaurants, gone to nice gyms, and worked at something you could tolerate, and maybe brought a life into the world. If not, you'd better start now.


100% this. You can't take it with you when you go. Gotta find that balance of saving/investing while also enjoying your life.
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YouBet
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In reply to Pepper Brooks • 11:11a, 10/19/20
AG
Carol Baskin said:
10M by 40s is a level of work my mind doesn't care to fathom. We're early 30s with a net worth of around 500k and I don't see how the 10M goal is possible without...

A) giving up all of the fun things/travel we did in our 20s; and/or
B) inheriting a significant sum of money; and/or
C) Hitting a home run on shark tank

We just added a kid to the mix so I don't like our chances but you never know. We have maxed out IRS 401k and IRA contributions for the last few years and have about $150k on taxable investment accounts. We didn't have the income to do it and save 20% for a house for awhile.
Because it's damn near impossible under the premise of two professional, corporate jobs unless one or both of you gets to C Suite and secures the corresponding wealth that could come with that. However, you can still easily achieve several million by 40s on this path. $10M threshold is a far reach though.

Now, get in early on your own business with a great idea/product that takes off then $10M is totally doable.

Real estate? $10M is doable.
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John Francis Donaghy
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In reply to YouBet • 3:55p, 10/19/20
Quote:
If you are talking a doctor and a lawyer DINK arrangement then I can see $10M (this is actually our best friends and I suspect they are close to this number but don't know).


Either your friends make extremely high salaries, and have since day one out of school, or they've had some major help along the way. The downside to a profession lome law and medicine is you don't start really earning until your late 20s at the earliest, and you likely have a lot of student debt to get under control before you start stacking away large sums. Not a great recipe for a massive portfolio by 45.

Edit:
Average law school debt is about 150k. Average med school debt is about 200k. Starting your careers at 26 or 27 with a combined 350k in interest accruing debt during what are likely your lowest earning years is a really tough starting point with a goal of $10 million by 45.
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YouBet
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In reply to John Francis Donaghy • 4:38p, 10/19/20
AG
John Francis Donaghy said:
Quote:
If you are talking a doctor and a lawyer DINK arrangement then I can see $10M (this is actually our best friends and I suspect they are close to this number but don't know).


Either your friends make extremely high salaries, and have since day one out of school, or they've had some major help along the way. The downside to a profession lome law and medicine is you don't start really earning until your late 20s at the earliest, and you likely have a lot of student debt to get under control before you start stacking away large sums. Not a great recipe for a massive portfolio by 45.

Edit:
Average law school debt is about 150k. Average med school debt is about 200k. Starting your careers at 26 or 27 with a combined 350k in interest accruing debt during what are likely your lowest earning years is a really tough starting point with a goal of $10 million by 45.
Yeah, I have no idea what their net worth is. I'm sure it's higher than my wife and me simply because their income is higher and they are fairly frugal and never had kids.
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John Francis Donaghy
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In reply to YouBet • 4:56p, 10/19/20
YouBet said:
John Francis Donaghy said:
Quote:
If you are talking a doctor and a lawyer DINK arrangement then I can see $10M (this is actually our best friends and I suspect they are close to this number but don't know).


Either your friends make extremely high salaries, and have since day one out of school, or they've had some major help along the way. The downside to a profession lome law and medicine is you don't start really earning until your late 20s at the earliest, and you likely have a lot of student debt to get under control before you start stacking away large sums. Not a great recipe for a massive portfolio by 45.

Edit:
Average law school debt is about 150k. Average med school debt is about 200k. Starting your careers at 26 or 27 with a combined 350k in interest accruing debt during what are likely your lowest earning years is a really tough starting point with a goal of $10 million by 45.
Yeah, I have no idea what their net worth is. I'm sure it's higher than my wife and me simply because their income is higher and they are fairly frugal and never had kids.


No worries. Your example jumped out at me just because it was almost exactly my real life scenario at 26, and nobody evet puts that part in the professional school brochures.
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OasisMan
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5:35p, 10/19/20
AG
I see a lot of med school grads entering residency at ~300k debt and then leaving residency with more,

Even up to 500k in school loans

When I completed residency in 2017, my wife/I total net worth was ~ -500k
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CaptnCarl
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9:18a, 10/20/20
AG
Speaking of buying a business, does anybody have a contact for an experienced business broker? Asking for a friend...
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CharlieBrown17
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In reply to OasisMan • 10:07a, 10/20/20
AG
Glad people do it, but the idea of taking that kind of debt on plus the grind of that much extra school is mind blowing to me
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TXTransplant
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10:30a, 10/20/20
I crossed the seven-figure threshold earlier this year at age 41 (almost 42). I would have hit it in Feb/March, but the COVID crazies delayed it by a few more months.

In that number, I'm including my cash savings, 401k/403b, Roth, HSA, and the full cash value of my pension. I'm not including equity in my house.

I went to grad school and worked in academics and then a start-up, so my retirement savings was behind when I finally made the jump to corporate life about 8 years ago. Three moves in three years also cost me money (I missed the peak real estate market in College Station by about a year and lost money instead of making $60-$70k).

I'm a single mom and can be frugal or splurge, depending on the circumstance. My son and I have traveled extensively and those memories are priceless.

I buy new cars, trading them in after about 5 years, but I always pay them off in about 3.

House is modest by the neighborhood standards, but it's the most expensive one I've ever owned (did I say moving is expensive?).

I'm paying it down on a 15 year at 2.625%, and that alone has kept me from upgrading to a more expensive house, despite being tempted several times.

One thing I've noticed over the past few months is how much faster my money grows now that I have a more substantial sum. I always knew compound interest was critical to building wealth, but it's nice to actually see it happening every month.

I'm just hoping we avoid another drop in the stock market because of the election (or whatever other random reason gets Wall Street spooked).

I still have a little bit of room to improve my salary, but with a teenaged driver who will be in college in a couple of years, I don't expect that money will go to savings.

I can go back and look at the things I've spent money on, add them up in my head, and know that I could have hit this milestone a couple years earlier, but I don't believe in regret, and I'm pretty happy with where I am right now.

I suspect my college friends who have 20-25 years with CVX and XOM hit that milestone in their mid-30s
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Mustang1
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In reply to TXTransplant • 5:17p, 10/20/20
AG
At your age, a dip on the market = buying opp.
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TXTransplant
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In reply to Mustang1 • 6:01p, 10/20/20
Mustang1 said:
At your age, a dip on the market = buying opp.


That's where I could improve. I've got about 1/3 of my cash savings spread across a few mutual funds. They have done pretty well and bounced back quickly from the dip earlier this year. I did get a little spooked and pulled about $10k out of the market (wanted to make sure I had enough extra to pay off the car my son will be driving). Paid off the car last week and will be putting what I pulled out back in. I could probably afford to invest a little more, but it's hard to let go of the cash safety net.

It took me until my mid-30s (coinciding with the obliteration of interest rates) to move from CDs to the market.
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94chem
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In reply to TXTransplant • 9:25p, 10/20/20
TXTransplant said:
I crossed the seven-figure threshold earlier this year at age 41 (almost 42). I would have hit it in Feb/March, but the COVID crazies delayed it by a few more months.

In that number, I'm including my cash savings, 401k/403b, Roth, HSA, and the full cash value of my pension. I'm not including equity in my house.

I went to grad school and worked in academics and then a start-up, so my retirement savings was behind when I finally made the jump to corporate life about 8 years ago. Three moves in three years also cost me money (I missed the peak real estate market in College Station by about a year and lost money instead of making $60-$70k).

I'm a single mom and can be frugal or splurge, depending on the circumstance. My son and I have traveled extensively and those memories are priceless.

I buy new cars, trading them in after about 5 years, but I always pay them off in about 3.

House is modest by the neighborhood standards, but it's the most expensive one I've ever owned (did I say moving is expensive?).

I'm paying it down on a 15 year at 2.625%, and that alone has kept me from upgrading to a more expensive house, despite being tempted several times.

One thing I've noticed over the past few months is how much faster my money grows now that I have a more substantial sum. I always knew compound interest was critical to building wealth, but it's nice to actually see it happening every month.

I'm just hoping we avoid another drop in the stock market because of the election (or whatever other random reason gets Wall Street spooked).

I still have a little bit of room to improve my salary, but with a teenaged driver who will be in college in a couple of years, I don't expect that money will go to savings.

I can go back and look at the things I've spent money on, add them up in my head, and know that I could have hit this milestone a couple years earlier, but I don't believe in regret, and I'm pretty happy with where I am right now.

I suspect my college friends who have 20-25 years with CVX and XOM hit that milestone in their mid-30s


Your home equity is way more liquid than your 401(k). Don't know why people don't include it. If you owned rentals you would include equity.
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6:36a, 10/21/20
TXTransplant
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In reply to [removed post] • 7:00a, 10/21/20
SoupNazi2001 said:
People include rentals because they produce cash flow. Many people don't include your primary residence because you have to live somewhere, it produces no cash flow and you only access it if you take out a home equity loan, sell it to rent or downsize.


This is exactly why I don't include the equity in my home.

Also, that equity is not "investable". I have a friend who is a financial planner who only works with high net worth single women - defined as women with $2 million or more in investable assets (specifically excluding home equity).
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