Millionaire In The Making??

[Eyerishgold]

Millionaires in the Making Justin and Emily Bergman «

For the life of me, I can't figure out why these people were profiled as "millionaires in the making".

Sure, they've got some savings and investments but they inherited 50k and took 25k profit from the sale of a home and list just under 40k in assets. I just don't understand......

 

[travelover]

Tithe: $300 per month

At least they have got the hereafter covered.

 

[Martha]

They are in their 20s and even with kids have a positive net worth. Doing a lot better than I was at that age.

 

[RunningBum]

Sounds like a lot of the house profit went to credit card debt and a loan from their parents. A good chunk of the inheritance went towards the new van.

They are in good shape IF the credit card monster doesn't come back, and they really save the money that was going towards car payments once they are paid off. Otherwise they'll need a windfall every few years.

 

[Razor]

Without the inheritance they would be in pretty rough shape if you ask me..

 

[Buckeye]

How does his annual salary of $28,000 (plus housing allowance) and her monthly salary of $1600 add up to an annual combined income of $70,000? Did I miss something? His housing allowance is $1900 per month?

 

[W2R]

How does his annual salary of $28,000 (plus housing allowance) and her month salary of $1600 add up to an annual combined income of $70,000? Did I miss something? His housing allowance is $1900 per month?

I don't know - - but I remember when I was a Navy wife back in the 1970's, that housing allowance was substantial plus he got another substantial allowance for being overseas and/or in a combat zone. It seemed like these allowances were a substantial part of his pay.

He might have even got an allowance for being married. Oh, come to think of it, maybe not. "If the Navy wanted you to have a wife, you'd have been issued one in your seabag!". (Grrr!)

 

[Gumby]

It has been a long time, but I think the BAQ (basic allowance for quarters) was higher if you were married than if you were single. When I was in, I got a bonus for being a submariner (hazardous duty pay) and another for actually being on a boat (sea pay). There was also another bonus for being nuclear trained. If Justin in the article is a Navy officer in Connecticut, it is a better than even bet that he is a nuclear trained submariner who receives all these bonuses.

 

[Nords]

The details of military compensation will make just about anyone's eyeballs glaze over, but here they are. They've left out a lot of the details so I'll speculate about the gaps.

He probably made lieutenant (O-3) this summer and has "over 6" years of service for seniority. He's on shore duty but since he's working in the shipyard (and getting a MechE master's) he may have gone from a submarine warfare job to an engineering duty career. OTOH he may have taken some ugly shipyard job to get out of Georgia and he may still be planning to go back to sea as a department head.

From the monthly pay tables:
$4602 Base pay
$595.00 "Submarine Duty Incentive Pay" for volunteering to be a submariner
$192.74 "Basic Allowance for Subsistence" for food

$64,677 total. She's probably making up the difference with the computer consulting.

"Pay" is taxable, "allowances" are tax-free. His $62,364 taxable income is reduced to $53,064 by the $9300 TSP contribution. I don't know where they get the $28K number-- unless they're leaving out the pay/allowance details and subtracting the debt payments?

If they lived off-base he'd also be eligible for $936.30/month "Basic Allowance for Housing" with family. Since they're living on-base, they get free housing (and mostly free utilities) but not the BAH.

Since he's just about finished his initial service obligation, if he stays qualified in nuclear engineering then he'll soon be on the nuclear-submariner bonus program. If he stays on active duty until the end of each fiscal year he'll be eligible for $10K (taxable). If he signs a three-year agreement to stay on active duty then the bonus is boosted to $17K/year and paid at the start of the FY. If he also agrees to be a department head then he's eligible for an annual $25K. This will continue as long as he stays a "nuke in good standing" and up to 26 years of service. Since retention for LTs with his years of service is currently running in the single digits, it's quite likely that these bonus-pay numbers will be boosted by 10-20% in the next 3-5 years.

Oh, and when he goes back to see he'll be eligible for $210.00/month "Sea Pay"...

 

[GoodSense]

I've always wondered about these "Millionaires in the Making." I do admire these people for posting their stories for the entire world to see. I have often thought that the people on this board are far more likely to be millionaires in the making than those featured on CNN Money. But again, not everyone wants their financial situation public.

It is also a little odd that their definition is that these people will be millionaires by the time they retire. As far as I could tell, it takes at least that much to retire (unless you've got a fat pension, of course, but it seems to already be calculated in some cases). So by definition, almost every middle- or upper-class person is a millionaire in the making...

 

[W2R]

I've always wondered about these "Millionaires in the Making." I do admire these people for posting their stories for the entire world to see. I have often thought that the people on this board are far more likely to be millionaires in the making than those featured on CNN Money. But again, not everyone wants their financial situation public.

It is also a little odd that their definition is that these people will be millionaires by the time they retire. As far as I could tell, it takes at least that much to retire (unless you've got a fat pension, of course, but it seems to already be calculated in some cases). So by definition, almost every middle- or upper-class person is a millionaire in the making...

Suppose you have a paid off house, no pension at all, expect social security at $1250/month, and have "only" a half million invested (4% SWR = $20K/yr). That would give you $2850/month over and above housing. Single people living in locations where the cost of living is low, who might have simpler needs than you are considering, might find they do not need anywhere near a million to be just fine.

 

[GoodSense]

Suppose you have a paid off house, a "skinny pension" of $750/month, expect social security at $1250/month, and have "only" a half million invested. That would give you $3600/month over and above housing. Single people living in locations where the cost of living is low, who might have simpler needs than you are considering, might find they do not need anywhere near a million to be just fine.

That's true. I was more thinking about these featured young folks who are mostly in their 20s and 30s. I don't know how much they could count on SS. Also, most of their featured people are couples, although they did have some single parents and one single guy who works for the fed.

Personally I hope I don't need $1M (today's dollars) to FIRE. Everyone I talk to says that your spending goes down a lot in retirement (w the exception of lots of travelling and health insurance, of course). But for now it's too far into the future to speculate.

 

[maddythebeagle]

It is also a little odd that their definition is that these people will be millionaires by the time they retire. As far as I could tell, it takes at least that much to retire (unless you've got a fat pension, of course, but it seems to already be calculated in some cases). So by definition, almost every middle- or upper-class person is a millionaire in the making...

Bingo....a million isnt what it used to be.....Seems they had articles with people banking large home equity gains without selling the house a few years back...I think some of those should be revisited.....

 

[W2R]

That's true. I was more thinking about these featured young folks who are mostly in their 20s and 30s. I don't know how much they could count on SS. Also, most of their featured people are couples, although they did have some single parents and one single guy who works for the fed.

Personally I hope I don't need $1M (today's dollars) to FIRE. Everyone I talk to says that your spending goes down a lot in retirement (w the exception of lots of travelling and health insurance, of course). But for now it's too far into the future to speculate.

Some people have the "travel bug", and you're right, that is a very expensive hobby to feed. Others (like me) have BTDT and have no desire to travel further.

I hope you don't need $1M in today's dollars to FIRE, too. An advantage that younger generations may have is the probable availablity of national health insurance by that time, even if you may get the shaft on SS. Or, you could get both, or neither. The future is hard to predict.

I would strongly urge those living in areas like San Jose or NYC to look at areas in middle America with low cost of living. It may be better to ER many years earlier than otherwise in such an area, than to be on the coasts and working.

 

[Dawg52]

Millionaires in the Making Justin and Emily Bergman «

For the life of me, I can't figure out why these people were profiled as "millionaires in the making".

Sure, they've got some savings and investments but they inherited 50k and took 25k profit from the sale of a home and list just under 40k in assets. I just don't understand......

Seems like a nice family and all but looks like they must be running out of volunteers to profile.

 

[Nords]

Seems like a nice family and all but looks like they must be running out of volunteers to profile.

Must be the way we treat the journalists who come to this site trolling for volunteers...

 

[Moemg]

I would strongly urge those living in areas like San Jose or NYC to look at areas in middle America with low cost of living. It may be better to ER many years earlier than otherwise in such an area, than to be on the coasts and working.

I think New Yorkers could not be moved to middle America cold turkey .They would have to be destressed slowly ,maybe Jersey for a few years then western Pa. and eventually middle America.

 

[Eyerishgold]

I think New Yorkers could not be moved to middle America cold turkey .They would have to be destressed slowly ,maybe Jersey for a few years then western Pa. and eventually middle America.

What about New York to Chicago then to the great beyond of middle America??

 

[Moemg]

What about New York to Chicago then to the great beyond of middle America??

No ,I think they need a few years in the burbs first so they can learn to drive and shop walmart !

 

[Cattusbabe]

Now that the conversation has turned to moving to "Middle America" I have to ask this question. DON'T HIT ME PLEASE. I am not trying to be a smarta$$ for asking this but what do folks do for fun in small town middle America. I always hear that the cost of living is lower once you get off the coasts and that your retirement income goes farther but I am a big city girl and live on the East coast. Always have. Love the arts and culture scene. Love museums, ethnic restaurants, lectures and shopping, love not needing a car to get around. Not the outdoorsy type at all. Going to the park suits me fine. When DH and I were considering a move away from the "Big City" we started looking at collage towns to at least have to opportunity to do the things we like to do. In the end we opted to stayed put but I have always wondered what people do the fill up their days in the heartland.

 

[REWahoo]

... I have always wondered what people do the fill up their days in the heartland.

Mostly we wonder what the folks in the big city see in all the arts and culture scene, plus all those museums, ethnic restaurants, lectures and shopping. Oh yeah, and then there's the bugs and critters we battle...mostly for entertainment.

 

[W2R]

Now that the conversation has turned to moving to "Middle America" I have to ask this question. DON'T HIT ME PLEASE. I am not trying to be a smarta$$ for asking this but what do folks do for fun in small town middle America. I always hear that the cost of living is lower once you get off the coasts and that your retirement income goes farther but I am a big city girl and live on the East coast. Always have. Love the arts and culture scene. Love museums, ethnic restaurants, lectures and shopping, love not needing a car to get around. Not the outdoorsy type at all. Going to the park suits me fine. When DH and I were considering a move away from the "Big City" we started looking at collage towns to at least have to opportunity to do the things we like to do. In the end we opted to stayed put but I have always wondered what people do the fill up their days in the heartland.

I understand. Still, it reminds me of the "What will you DO when you retire?" threads. What will you do? Probably whatever you want to do. Yes, you will be exposed to a different culture and a different environment, but as you probably suspected, life does not come to a halt. I could never get bored in small town middle America, personally.

 

[Nords]

... but what do folks do for fun in small town middle America.

I've lived in a few of those places. You have to be more responsible for your own entertainment than ever!

Some of it is the same everywhere:
- 500 digital channels and nothing to watch.
- Four billion websites and nothing to read.
- Libraries everywhere without the books you want.
- Plenty of stores with nothing you need.
- Lots of places to go dancing and [-]get drunk, meet hot chicks, and get into trouble[/-] socialize.
- Gripe about the government (although in small towns you might also be the government) and the corrupt politicians (this too).

Some of it is different:
- Recreate on a nearby body of water-- boat, water ski, fishing, sailing, diving, even surfing.
- Hiking, camping.
- Sports. Lots and lots of sports in community/workplace leagues.
- Clubs. Lots & lots of clubs with activities like building or crafting things, playing games, discussing books, or stock investing.
- Attending sporting events of minor league, college, and high-school teams. Be shocked with disbelief that people would pay $40/ticket for a sporting event.
- Maintain and operate your property. Now that you're out of the big city, you can actually spread out on some land, build a bigger house (or not), and acquire some serious diesel-powered [-]toys[/-] tools.
- Wonder how those big-city folks ever put up with community associations and home-owner rules & regulations.
- Raise funds to build arts & culture sites like them there big cities. Try to decide whether or not the town needs a symphony orchestra.
- Hotly debate whether or not the town needs a traffic light.
- Hotly debate just about everything at town meetings.
- Zone as much of the surrounding area conservation/land trust as possible. Raise funds to buy it or rezone it.
- Legislate against "big box" stores.
- Food, agricultural, & community festivals.
- Parades for every occasion.
- Know (and discuss) everybody's business.
- [-]To keep out the riffraff and the druggies, file repeated anti-business suits to outlaw every form of modern mass transportation known to mankind.[/-] Sorry, that's probably a Hawaii specialty...

 

[Kronk]

I guess the area I grew up in was even a step down from Nords' experiences. And my experience in rural western NY make me very leery of moving to a cheaper area when I retire because my mind still equates that to where I grew up, which was too small and poor enough to support most of those things. Except for the "know (and discuss) everybody's business", which I find to be something to be avoided.

 

[RunningBum]

I grew up in Nebraska.

- Socialize with family and friends--cards, games, etc

- TV is pretty much the same as what you get, if you have cable or satellite

- Movies, even if the selection of movies isn't as wide, but who wants to see them artsy films anyway? ;-)

- Jack Daniels tastes the same wherever you go, but we might mix it with Coke. In fact I remember crashing a wedding party in my roomie's home town and instead of an open bar, they had kegs of beer and jugs of whiskey and coke.

- Wonder what people in other "less-advanced" countries do for fun since they don't have all the great things to do like we have

- Wonder how you people in the big cities can waste so much time sitting in traffic, when you could actually be doing something!

- Red Lobster might just be a chain to you, but it's got a lot of different seafood and that's pretty exotic to us. Besides, the beef you get isn't fresh like what we keep so our restaurants are probably better.