My opinion is you want to diversify pre and post tax contributions just as you diversify what youre invested in. Hedge and dont go 100% into anything.

If you were unfortunate to end up in IT, get away from the cost center side. Go vendor. Next, go solo. Next automate tasks and work multiple remote opportunities. Save capital in business. Become a reseller with a major vendor. Sell. $.

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If you were unfortunate to end up in IT, get away from the cost center side. Go vendor. Next, go solo. Next automate tasks and work multiple remote opportunities. Save capital in business. Become a reseller with a major vendor. Sell. $.

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Your experience?

Sir Psycho-

I apologize for my outrage. there were a few other comments of a similar nature earlier in the thread as well, so i guess i jumped the gun.

plus your user name does not help your cause - haha!

My username is because I was a Red Hot Chili Peppers fan in the 90s.

New on the board and wanted to say this is all great information. Spouse and I are behind the curve, as we've had several job losses and unexpected medical costs ($16k last year), so we can't save as much as we'd like. But we keep putting what we can away, and being happy with what we have, which makes all the difference.

Just found this...great thread!

We diversify our 401K plans... wife max's out her Roth and I max out my traditional 401K. I figure we are doing the best we can on that front.

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and being happy with what we have,

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If you can continue this you are and will be rich forever.

This is a great thread.

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#5 Be a DINK

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I am 34, and I am not a millionaire, but will be soon. Like bayouAggie I have been overseas in Africa and Australia, for most of the last 5 years. I also have 4 children under 7, and a stay at home wife. The wife is continually perfecting the art of home economics. She grocery shops like a scientist. She lands us these amazing deals on vacations. It allows me to focus fully on income generation. I focus on continually increasing revenue, and she works at reducing expenses. Her work is as important our bottom line as mine is. Sometimes, more so.

I have unsuccessfully attempted to create two businesses, but succeeded in learning a lot about myself and my industry. If I would not have tried either one of these, I would have made a million years ago. But I don't regret either pass, and am open to doing it again. What I do regret was not prioritising saving earlier in life. I have always earned good wages. I earned 40k as a 16 year old carpenters apprentice. But I burned it all on trucks and travel. It wasn't until that first baby got here 7 years ago that I started saving. If i would have been blessed with kids sooner, i'd probably already be there already. Time is your friend in wealth accumulation. But it's never to late to start.

Unfortunately, my life's goal, financially speaking, is not 1 million in net worth. I'd damn near be there. It's a million in charitable giving, and I'm not even close yet.

But that doesn't bother me either. I love my wife, I love my kids, and I Iove my work. And they love me back. I have been rich for years.

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For some who may be interested, the blog "Mr Money Moustache" is a very interesting read and relative to this topic. I started reading it at the recommendation of someone else here on this board.

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He has great advice and I love his attitude, but I just smile when he goes on about biking everywhere. Here in Central Texas, it's in the high 90s with humidity in the high 80s, and I'd have to cover 12 miles each way over two highways to get to work!

Being a millionaire isn't really about grinding it out over 30 years to have a few million in assets to retire. Although it is one way.

Alternatively, as shown by a few in the thread, there is the entrepreneur route.

But there is also a third not discussed: be responsible for large sums of $$$. Investment bankers, attorneys, asset managers, traders, sales, or consulting. If you touch or can be tied to large sums of money, you can justify a commission.

For example, look at guys who run the funds in your 401k. Its maybe 3-4 people, and they take a small cut; a few basis points on $5B is nice payout. Same for finance, helping facebook go public and raise money requires a fee which = $$$.

Or, a consultant can tell to a F500 company what he says will increase revenue 20% can justify $5M in fees.

And we all know how class-action lawsuits work...

Fantastic thread. Just read the whole thing.

Question: Is ROTH not the way to go 100%? Some people have suggest diversifying between pre and post-tax investments.

Roth is not the way to go if your AGI exceeds the allowable limits.

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Everybody I know that has become a millionaire did so because they started their own business. You're not going to get rich working for somebody else. They said it takes hard work, ability to take risks, and a little luck.

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You must not know anyone that worked for a successful software or computer company. The phrase "Dell-ionnaire" exists for good reason.

Lots of DINKS can attain significant wealth in a short period of time if they don't spend it like crazy.

By the time we retire I expect my wife and I (already > $1M) will both have more than $1M in our 401Ks. Can be done.

[This message has been edited by Clavell (edited 7/1/2013 2:00p).]

Nowhere near a millionaire, but reading this thread made me actually go in and figure my net worth.

For a single income home (that isn't that great in comparison) we are doing just fine. Assuming I stay on the same path, and with the same (or similar) company, I'll have nothing to worry about when i retire at 58-60 years old.

Millionaire next door simple equation for wealth at current age and income:

(Age X "current salary")/10 = net worth

Salary = what you would put down as income on a survey....

Example
(35X100k)/10 = $350,000 in net worth.
If you are under your number you are behind, equal is on pace to be "wealthy", and ahead is very wealthy.

Less accurate for younger people (less than 28 or so) or people who's income fluctuates significantly in any given year.

Yeah, at 24 years of age and less than 2 years out of school with some student loans that calculation doesn't yet apply to me lol

I'm at about 61% of that particular equation at age 26(only assets I counted were the house and the cars) so I'm actually probably higher than that.

It's just a number to chase, If you're 40 years old and combined family income is 200,000 (easily doable in a duel income family with college degrees) then your number is $8 million.

Edit: I'm a dumb*ss- yes I forgot to divide by 10


[This message has been edited by Wrec86 Ag (edited 7/8/2013 3:25p).]

U forgot to divide by 10 dude

well crap... I thought it seemed weird. I'll leave it up to show how much of an idiot I am.

Wrec, that's what I'm worried about.

As a recent grad, I have ambitious goals for my retirement and savings. I hope it doesn't all get snatched up by the government.

Bump - Great thread

Anyone have a rec on a solid financial advisor in the greater Houston area? Preferably the west side...Been looking for one for some time now.

I've got some extra cash just sitting around and have been thinking about either a rental property or other real estate. Just wanted to figure out if this is best for my situation.

just for clarity - how is net worth defined? As simple as assets-liabilities? do retirement accounts play into that?

I can point you in the right direction to my financial advisor

[This message has been edited by Prestigeworldwide11 (edited 8/20/2013 9:12p).]

CapCity - Thats how I define it (CPA). Its not QUITE that simple though in that some things change value over time, but you cant go wrong with that basic formula.

To leave debt out of the picture is just dishonest. Most of the "millionaires" I see driving around town are swimming in debt instead of scrooge mcduck bills

Edited because i spoke to the wrong person!



[This message has been edited by gigemhilo (edited 8/21/2013 4:45p).]

For retirement accounts I've always just taken 33% off the total amount to account for future taxes. I don't know why in the world you wouldn't factor these in to a net worth calculation.

^^

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For retirement accounts I've always just taken 33% off the total amount to account for future taxes. I don't know why in the world you wouldn't factor these in to a net worth calculation.

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Not sure that makes sense to me. Your projecting future expenses, but not future growth of money in account. Seems should look at either current value or future value (growth + taxes).

im just doing that for present day value of a retirement fund for present day net worth purposes. .. .off the cuff formula dude

how does a home with a mortgage factor in? Say home is valued at 250K, but you owe 100K on it

I would consider the value of the home as an asset and the value of the loan as a liability.

So a $200K home with an outstanding mortgage amount of $140K would have a net worth impact of +$60K

Or in your example, $250K home, $100K outstanding would give you a positive net of $150K.

[This message has been edited by JDCAG (NOT Colin) (edited 8/21/2013 3:17p).]

I agree with the post above about being wealthy to me isn't just about reaching $1MM but more so about reaching the point when you can give $1MM in charity. I have a long ways to go in that. 27 and over the calculated value mentioned above but still would rather get to a point where I can substantially help others besides the "small" donations I'm making now. Working for the man right now but have started two businesses on the side. One hasn't panned out but working on the second.

Also, love this thread as it motivates me even more every time I read it.