guessing 529 plans count in this too?
millionaires
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Last: 25 min ago by YouBet
I put my 529 in it. It's still under our control. I don't consider my kids savings, though - not that that amount is material.
Great thread. Only 26 now, but my wife and I are well on our way. Both of us have contributed at the max to our 401k since graduation, recently bought a home with > 20% down, and are very (very) frugal. I take the blueprint from my parents - growing up we always lived well, but as I later found out, well below our means. Now, my dad is 61 and going to retire with $10MM+ in liquid assets in the next year or two. Perhaps in the minority, but he has never owned his own business, and has always worked for "the man." They paid for my college and everything that I did until I graduated, and I want to be able to do this for my children. I know that not having a car note, or student debt (or any debt at all until we just got a mortgage) set me (and my wife) WAY ahead of many people my age.
[This message has been edited by UTex09 (edited 8/22/2013 11:28a).]
[This message has been edited by UTex09 (edited 8/22/2013 11:28a).]
Inspiring post about your folks. That's the blueprint I'm following as well. Payed off college loan debt after college as quickly as possible, lived way below means in a modest N. Dallas apt, maxed out 401k & Roth, built a solid emergency fund and drove the same car 10+ yrs. About the only thing I spent money on was travel (have one continent left to visit) after college.
I went on a frugality kick for a month because I needed to generate some extra cash for an unexpected large purchase. Even without breaking down by category, the amount by which I decreased my discretionary spending was an eye opener, and my habits will be better going forward.
I'm buying a primary residence house now. It's a good deal, and I'm planning to make it the first step of a real estate strategy. Either as the first in a portfolio of live-then-rent houses or as a jumpstarter that I can sell in a few years for a significant gain to put down towards a new house for me and one or more rental properties.
Haven't decided on selling or renting, but I expect a pretty solid positive difference between appraisal and mortgage value, with additional increase in dollars in vs. potential sale cost with some judicious improvements combined with the area being on the rise. The whole process has helped me understand (different than having textbook knowledge) how to plan ahead, shop hard, and execute well to generate wealth from real estate.
[This message has been edited by Ulrich (edited 8/22/2013 3:40p).]
I'm buying a primary residence house now. It's a good deal, and I'm planning to make it the first step of a real estate strategy. Either as the first in a portfolio of live-then-rent houses or as a jumpstarter that I can sell in a few years for a significant gain to put down towards a new house for me and one or more rental properties.
Haven't decided on selling or renting, but I expect a pretty solid positive difference between appraisal and mortgage value, with additional increase in dollars in vs. potential sale cost with some judicious improvements combined with the area being on the rise. The whole process has helped me understand (different than having textbook knowledge) how to plan ahead, shop hard, and execute well to generate wealth from real estate.
[This message has been edited by Ulrich (edited 8/22/2013 3:40p).]
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And I'm always skeptical of the people who spend 30-40 years living frugally, driving old cars, etc. so they can have a million or two at retirement. Then what? Go on a huge spending spree? At that point you're used to a lifestyle of depravation, so you end up retired and still living frugally and still driving the 10-year-old vehicle because you'd probably feel too guilty to ever go and splurge. So was all the penny-pinching worth it to retire five years sooner?
This is why people need to budget and realize what is important to them. There is no problem with spending money and enjoying life, as long as you have a budget, which includes prep for ones future.
I think it depends what your goals are. Some people penny pinch and become millionaires. They still live extremely frugally but their kids/grandkids are getting or will get every opportunity in the world to succeed.
Or you can blow it on yourself and have a fun life, and *****them they can make their own money.
Or you can find a balance.
Or you can blow it on yourself and have a fun life, and *****them they can make their own money.
Or you can find a balance.
Nice thread. I'm still on the younger side, but have saved well and only debt between wife and I is our mortgage. Cars etc paid off.
Loved seeing the success stories involving real estate wealth, I'm looking for just that type of thing right now, going into rental properties to build up towards a nice big portfolio one day. Goal is to one day have passive income pay > expenses.
Loved seeing the success stories involving real estate wealth, I'm looking for just that type of thing right now, going into rental properties to build up towards a nice big portfolio one day. Goal is to one day have passive income pay > expenses.
Great thread with some very solid advice. Pay yourself first, shed any debt that you can, and maxing out the 401K is something that every employed person MUST do to achieve wealth. If you're a business owner then so much the better.
But... I do have to wonder about all the love given real estate investing. All the books I've read suggest that the real estate investor should seek to achieve an average ROI of 7%. I've confirmed this by looking at the ROI of rent vs investment on listed multi-family housing (duplexes, triplexes, quads) so I believe the 7% figure to be accurate.
The most commonly stated ROI goal for index fund investing in the stock market is 8%. My personal ROI with picking individual low to middle cap stocks is more than 3 times the index fund rate. I've done even better than that with some limited stock option trading.
7% vs 8% vs > > 8% - what am I not seeing about real estate?
But... I do have to wonder about all the love given real estate investing. All the books I've read suggest that the real estate investor should seek to achieve an average ROI of 7%. I've confirmed this by looking at the ROI of rent vs investment on listed multi-family housing (duplexes, triplexes, quads) so I believe the 7% figure to be accurate.
The most commonly stated ROI goal for index fund investing in the stock market is 8%. My personal ROI with picking individual low to middle cap stocks is more than 3 times the index fund rate. I've done even better than that with some limited stock option trading.
7% vs 8% vs > > 8% - what am I not seeing about real estate?
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[This message has been edited by Cole Trickle (edited 8/25/2013 9:38p).]
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You putting X dollars in your account making 8%
Someone else putting X dollars in your account (rent/mortgage) and making 7%
Big difference
I don't subscribe to the "whomever dies with the most money wins" theory. I know too many people like that and just think they aren't enjoying life. Now, spending frivolously doesn't make me happy, so again - balance between what makes you happy. It's a matter of choices. Some people "can't afford private school for their kids", but then drive off in their 7-series BMW (true story - can't make that up).
I want to enjoy life, but not work my whole life either, and I don't necessarily think I "win" by dying with millions.
I want to enjoy life, but not work my whole life either, and I don't necessarily think I "win" by dying with millions.
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7% vs 8% vs > > 8% - what am I not seeing about real estate?
There's some tax benefits to real estate.
^ Yes, the deductions + using things like a 1031 exchange are very nice advantages. Also, (personal preferences) I like the leverage with financing, and having something tangible with an investment.
I would also add that "value plays" can lead to a ROI that is > 7-8%. My strategy in getting into real estate is to capture (unrealized) equity and get a stream of passive income flowing. Usually that requires some creative ways to find and buy a property that could use improvements, and in essence re-position it in the market with improvements.
I would also add that "value plays" can lead to a ROI that is > 7-8%. My strategy in getting into real estate is to capture (unrealized) equity and get a stream of passive income flowing. Usually that requires some creative ways to find and buy a property that could use improvements, and in essence re-position it in the market with improvements.
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All the books I've read suggest that the real estate investor should seek to achieve an average ROI of 7%. I've confirmed this by looking at the ROI of rent vs investment on listed multi-family housing (duplexes, triplexes, quads) so I believe the 7% figure to be accurate.
Is that 7% gross or net? I'd think you'd want the return to be quite a bit higher due to the relatively illiquid nature of the underlying assets.
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The most commonly stated ROI goal for index fund investing in the stock market is 8%.
S&P 500 Returns
Distribution of Returns
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Yes, the deductions + using things like a 1031 exchange are very nice advantages. Also, (personal preferences) I like the leverage with financing, and having something tangible with an investment.
I would also add that "value plays" can lead to a ROI that is > 7-8%. My strategy in getting into real estate is to capture (unrealized) equity and get a stream of passive income flowing. Usually that requires some creative ways to find and buy a property that could use improvements, and in essence re-position it in the market with improvements.
I had never heard of a 1301 Exchange until your post. Thank you!
Are there any books that you or others would recommend on the subject?
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1031 exchanges!!! (Most of the time)
The Wall Street Journal Guide to Real Estate Investing, and Schaub's Building Wealth One House at a Time are both pretty good real estate books, though a little dated now.
quote:quote:
Yes, the deductions + using things like a 1031 exchange are very nice advantages. Also, (personal preferences) I like the leverage with financing, and having something tangible with an investment.
I would also add that "value plays" can lead to a ROI that is > 7-8%. My strategy in getting into real estate is to capture (unrealized) equity and get a stream of passive income flowing. Usually that requires some creative ways to find and buy a property that could use improvements, and in essence re-position it in the market with improvements.
I had never heard of a 1301 Exchange until your post. Thank you!
Are there any books that you or others would recommend on the subject?
On my phone now, otherwise i'd link it, but biggerpockets.com has some nice resources. They have an ultimate beginners guide online that is real good. And its free. edit: here the link http://www.biggerpockets.com/real-estate-investing
Make sure to stay away from the get rich quick guru crap out there. Lots of scams and phonies in that business.
[This message has been edited by Cyprian (edited 8/27/2013 1:09p).]
ttt
To the degree possible max out the tax deferred retirement savings, and then the tax paid but tax free retirement savings as best you can and as early as you can ( at 21) , invest it in diversified mutual funds, and don't do very much trading.
Buy a house on a mortgage and write off the interest payments. Pay it off. No second mortgages.
Otherwise live within your means. Positive cash flow every month. Pay off credit cards every month.
Don't get a divorce.
Stay working for 30 + yrs.
have health insurance to cover you and your family from catastrophic medical expenses.
If you do those things, you are likely to retire comfortably.
Buy a house on a mortgage and write off the interest payments. Pay it off. No second mortgages.
Otherwise live within your means. Positive cash flow every month. Pay off credit cards every month.
Don't get a divorce.
Stay working for 30 + yrs.
have health insurance to cover you and your family from catastrophic medical expenses.
If you do those things, you are likely to retire comfortably.
I always like to read this thread whenever I'm making a decision on something that I already know I should do.
I'm almost halfway there. Making a military salary, I'd say I'm doing pretty well for being 27. I was lucky enough to have school and a car paid for. Never been in debt and I save/invest >50% my current salary. I started investing in 2009 just as the market started rocketing up. I got lucky, but it still amazes me how some of my coworkers who make the same salary as me still live paycheck to paycheck.
My personal experience is that the vast majority of the wealthy people I know did not get there by extreme saving and pinching pennies. They got there by making a ton of money.
At the end of the day there is a floor on cutting expenses but there is no ceiling on earnings. Not saying go spend like crazy but the extreme penny pinching is not the way to financial success, working your butt off and making smart decisions mixed with a little bit of good timing/luck is what gets you wealthy.
Unfortunately the whole extreme financial conservatism tends to breed a scared group of people unwilling to take risks (I mean hell it took 5 years to save up that $1000 by cutting out Starbucks right?) and that can be deadly to financial success.
I know there is more than one way to skin a cat but just my 2 cents.
At the end of the day there is a floor on cutting expenses but there is no ceiling on earnings. Not saying go spend like crazy but the extreme penny pinching is not the way to financial success, working your butt off and making smart decisions mixed with a little bit of good timing/luck is what gets you wealthy.
Unfortunately the whole extreme financial conservatism tends to breed a scared group of people unwilling to take risks (I mean hell it took 5 years to save up that $1000 by cutting out Starbucks right?) and that can be deadly to financial success.
I know there is more than one way to skin a cat but just my 2 cents.
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I'm almost halfway there. Making a military salary, I'd say I'm doing pretty well for being 27
IMO, being close to 500k net worth at 27 is better than doing pretty well.
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I'm almost halfway there.
...
I started investing in 2009
please explain
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(I mean hell it took 5 years to save up that $1000 by cutting out Starbucks right?)
5 years, if I kept my wife away for 6 months (okay maybe 5) I might save that.
I'll agree it's a combination of living below your means, hard work, and luck (to include proper timing). I'm hoping to be there before age 40 not including the house which will be paid off. I've never really considered my home an asset since I wouldn't sell it for another investment opportunity, same with the wife's wedding ring and other stuff inside the house.
quote:quote:
I'm almost halfway there.
...
I started investing in 2009
please explain
A. Rich parents
B. Gambling
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A. Rich parents
B. Gambling
Haha not really. Parents paid for my car, and the government paid for college. I came out of college with some money saved from summer jobs. When I started getting a paycheck, I invested most of it. I got lucky with some stock picks (check out VRX, PIR, and SBGI). Bought them several years ago and recently sold them. Most of my money was more conservatively invested, but even index funds have been pretty wild the last few years. Looking back, I probably took more risks than I should have, but being single and young made me not care.
There is a lot to be said for making it through college debt free, and living below your means. I don't even have an iPad... first world problems, I know!
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got lucky with some stock picks (check out VRX, PIR, and SBGI). Bought them several years ago and recently sold them.
Well done! Technically, sounds like a lot of option B and you might be in the wrong profession, my friend!
Love this thread, everyone. Great advice and lessons learned. My wife and I hope to make it here by 35.
2009 was a pretty solid time to start investing!
This thread makes me alittle depressed. Im 40
I have about 1mil in retirement but make at the top 1% of income.
I could easily save 200k a year and still live off 100k comfortably but I do not want to look back regretting the best years of my life. If I just lived off 100k a year, i would easily have 3 mil in the bank right now
I sacrificed my 20's in medschool/residency and I didn't want to regret my 30's skimping.
Money is nice but I didn't want to have regrets when I am 50 sitting on a pile of money wishing I went on more vacations, drove a nice car, live in a big house.
I have about 1mil in retirement but make at the top 1% of income.
I could easily save 200k a year and still live off 100k comfortably but I do not want to look back regretting the best years of my life. If I just lived off 100k a year, i would easily have 3 mil in the bank right now
I sacrificed my 20's in medschool/residency and I didn't want to regret my 30's skimping.
Money is nice but I didn't want to have regrets when I am 50 sitting on a pile of money wishing I went on more vacations, drove a nice car, live in a big house.
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