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Old 03-15-2015, 11:57 AM   #161
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You all have some malfunctioning troll RADAR.

Someone take this thread out back and shoot it.

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Old 03-15-2015, 12:34 PM   #162
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Originally Posted by brewer12345 View Post
Wow, over 150 posts of acrimony. Ever heard of "agreeing to disagree?"
Well, someone who claims it cannot be done is easily refuted, as Fred has been, by several posters' personal experience. The cherry on top is obviously Mulligan's Dad. If this is a controversy, it has been laid to rest with the yeas winning.

Any claims to the contrary are now plainly trolling.

Ha
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Old 03-15-2015, 12:43 PM   #163
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Well, someone who claims it cannot be done is easily refuted, as Fred has been, by several posters' personal experience.
Who said it couldn't be done?
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Old 03-15-2015, 12:47 PM   #164
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Well, someone who claims it cannot be done is easily refuted, as Fred has been, by several posters' personal experience. The cherry on top is obviously Mulligan's Dad. If this is a controversy, it has been laid to rest with the yeas winning.

Any claims to the contrary are now plainly trolling.

Ha

It definitely happened, Ha, but at a price I wouldn't have paid. Of course my Dad would disagree though. LBYM ingrained habits don't disappear after you have "made it". He has everything he wants paid off in cash and all that investment money, but still to this day saves $1000 a month from their SS and small pension. About 20% of his LBYM rubbed off on me. I wish 50% had, but certainly not 100%!


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Old 03-15-2015, 12:54 PM   #165
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You all have some malfunctioning troll RADAR.
You are probably right.

However, I personally got a lot out of TMND and I think it might help others as much as it helped me. So I am paying it forward by trying to keep people interested in the book. I wish my own kids would read it!
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Old 03-15-2015, 04:52 PM   #166
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I personally do not think anyone was trolling here. The difference between arguments was mostly semantic.

Many posters here who brag about having million(s) and retiring in their 40s and 50s indeed have higher incomes than average, and may have stock options to boot. It is impossible for someone making $50K/yr to save and invest to get $1M to retire early, unless he bets on the right stock like Apple or Intel when the companies are still in infancy.

There are millionaires with modest income like Mulligan's dad, geezers who get their million after saving and working their whole life, and underspend their SS and pension too, for crying out loud. They are not the young millionaires who goof off early as people here are doing or aspiring to do.

No point in arguing if people are talking about different things.
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Old 03-15-2015, 07:00 PM   #167
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A MND may not be impressed by the car, but it is hard not to be impressed with the woman in white pants standing next to it. Maybe she'd like a ride in the MNDs F-150 out to a barbeque at his 60 year old suburban ranch?

Sure, maybe.

Ha
The implication is with a woman like that, one will definitely never become MND
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Old 03-15-2015, 07:09 PM   #168
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Never got stock options, did get some bonuses at one job, it was a total $1,500 per yr.
Whoopie Doo.

No Serverence packages either from anywhere, no golden handshakes for me
Didn't buy APPL, GOOGLE, darn it all....

Was willing to move to new states for a better job, repeatedly...
Worked 80 hrs a week when opportunity came, "make hay when the sun shines".
Always pay my bills so I don't pay interest, forgot once on a single CC and am still pissed at myself for that !

No Pensions either, so I knew I had to save for myself.

Happy I can FIRE as MND considering I was homeless mid-life.
Sure its luck, just as today I was lucky to not get hit by a meteorite
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Old 03-15-2015, 07:19 PM   #169
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... today I was lucky to not get hit by a meteorite
The day's not over yet.
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Old 03-15-2015, 07:23 PM   #170
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It is possible to survive a direct hit by a small meteorite, I think, given that many are really small. The size of a bullet, perhaps?

REWahoo's oft-mentioned asteroid, now that's a life-changer (life-ender?) , and no direct hit is needed.
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Old 03-15-2015, 07:33 PM   #171
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Never got stock options, did get some bonuses at one job, it was a total $1,500 per yr.
Whoopie Doo.

No Serverence packages either from anywhere, no golden handshakes for me
Didn't buy APPL, GOOGLE, darn it all....

Was willing to move to new states for a better job, repeatedly...
Worked 80 hrs a week when opportunity came, "make hay when the sun shines".
Always pay my bills so I don't pay interest, forgot once on a single CC and am still pissed at myself for that !

No Pensions either, so I knew I had to save for myself.

Happy I can FIRE as MND considering I was homeless mid-life.
Sure its luck, just as today I was lucky to not get hit by a meteorite

"The plural of anecdote is not data."
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Old 03-15-2015, 07:47 PM   #172
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Well, someone who claims it cannot be done is easily refuted, as Fred has been, by several posters' personal experience. The cherry on top is obviously Mulligan's Dad. If this is a controversy, it has been laid to rest with the yeas winning.

Any claims to the contrary are now plainly trolling.

Ha
Mostly I think that after 150+ posts the relevant question is, "Who gives a squink?"
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Old 03-15-2015, 08:13 PM   #173
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We know a family who made millions from a start up but didn't have a LBYM lifestyle and the money is all gone. It just went the way of lottery winners.

TMND may not be a complete picture of millionaires, but if you draw a Venn diagram of sets of millionaires from the book and people who never were millionaires, there are insights to be gleaned, survivorship bias or not. The traits the TMNDs all had in common were living below their means (whatever their means were) and being the Joneses, not trying to keep up with them. This doesn't mean everyone who lives below their means will become a millionaire or stay one, but it is hard to do without those particular traits. And the surveys of jobs or businesses owned by millionires was interesting to me. It does seem to take a relatively high income to become a millionaire. There were not a lot of low wage jobs listed as occupations, despite the news stories of janitors leaving endowment funds.

We take it for granted now, but at the time the book came out most people didn't realize the inverse relationship between purchases of luxury items and consumer goods could have to savings and net worth. The old image of a millionaire was Thurstan Howell, III, not a rice farmer or scrap metal dealer.

I think you hit on the head. LBYM is necessary but not sufficient condition to become a millionaire for most people. That piece of insight seems blindly obvious to most of us, but it isn't to the general population, and wasn't at all obvious back 20 years ago.

I need to look and act successful to be successful was a guiding principal for plenty of books/magazines in the 60s-90s. E.g. Dress for success, the whole Playboy, GQ, Esquire lifestyle.

One of the first things in Better Call Saul, that the sleazy lawyers does when he get some money, is spent most of it on expensive custom made suit while inventing excuse why his car is a piece of crap. There is a plenty of people who thing that is intelligence thing to do if you get a windfall.
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Old 03-15-2015, 08:23 PM   #174
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"The plural of anecdote is not data."
We have 28K members on the forum. IIRC last poll had about 1/3 were millionaire, and the number would be higher if we included home equity. Now you can argue the number should be 1.5 million and the poll is self-selecting.

Certainly the average household family income is above 50K, but there hundreds if not thousand of members on the forum, who have become millionaire where nobody in the family made over $100K a year.

Fred, at what point would this become data?
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Old 03-15-2015, 08:30 PM   #175
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It appears we cross-posted, so I'm reposting the edit to my last post

Upon reflection, I think you're entitled to a better answer than that. So let's approach it this way. The Census Bureau says that the median household income in 2013 was $51,939 (source -- http://www.census.gov/content/dam/Ce...mo/p60-249.pdf). Now, let's assume that the household really buckles down and saves 10% of their income, which would be savings of approximately $5194 per year or $433 per month. Let's assume that they earn a 4% real return on their investments. Using this calculator Savings Calculator we see that after 40 years (say, ages 22-62) of saving, they will have amassed only $511,789. They would either need to save 20% of their income to become millionaires, or earn 6.6% in real returns to amass a million, or some combination of greater savings and higher return (15% savings and 5.1% real return would work). It would indeed be difficult, but maybe possible for a few.
To further flesh out this calculation, the annualized rate of return for Vanguard Wellington since its inception in 1929 has been about 8.28% (source Vanguard Wellington? Fund Investor Shares - NYTimes.com ). Over that period, inflation, as measured by the CPI deflator, has been running at 3.07% (source http://www.bls.gov/cpi/cpid1501.pdf), meaning that our hypothetical median household simply buying VWELX could expect a real return of approximately 5.2%, and that they therefore would need to save 14.4% of their income to hit a million at 62. Around here, saving that much of a $52k income would be quite difficult. In fact, the United Way recently conducted a study of ALICE households in Connecticut (Asset Limited, Income Constrained, Employed) and determined that a basic survival budget for a family of 4 here is $64,689 annually. (source http://alice.ctunitedway.org/files/2...-Report_CT.pdf)
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Old 03-15-2015, 09:04 PM   #176
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To further flesh out this calculation, the annualized rate of return for Vanguard Wellington since its inception in 1929 has been about 8.28% (source Vanguard Wellington? Fund Investor Shares - NYTimes.com ). Over that period, inflation, as measured by the CPI deflator, has been running at 3.07% (source http://www.bls.gov/cpi/cpid1501.pdf), meaning that our hypothetical median household simply buying VWELX could expect a real return of approximately 5.2%, and that they therefore would need to save 14.4% of their income to hit a million at 62. Around here, saving that much of a $52k income would be quite difficult. In fact, the United Way recently conducted a study of ALICE households in Connecticut (Asset Limited, Income Constrained, Employed) and determined that a basic survival budget for a family of 4 here is $64,689 annually. (source http://alice.ctunitedway.org/files/2...-Report_CT.pdf)
But the median house house income for Connecticut is 66K, so one or no kids, save about 10% over your income stick it in Wellington and you have a million by retirement.

I think it is hard for the person earning a below average wage to become a millionaire, but a couple even if both are earning average salaries can do it.
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Old 03-15-2015, 09:11 PM   #177
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I think we can wrap this up, simply, by saying that there is a wide variety of ways to become the Millionaire Next Door.

After all, the world don't move to the beat of just one drum. What might be right for you, may not be right for some.

I could go on, but to summarize, it takes diff'rent strokes to move the world.
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Old 03-15-2015, 10:11 PM   #178
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I worked full-time for 16 years, topping out at just under $78k, before I switched to part-time for 7 more years with a salary topping out at just under $50k. I attribute my ER 6 years ago at age 45 to 3 things:


(1) No kids (never wanted them);
(2) LBYM (low housing costs, no expensive hobbies, keep low-end, inexpensive cars a long time);
(3) Company stock's value I cashed out at nearly $300k when I ERed;


My total value of investments just missed $1M in late 2007 before the crash but rebounded in less than 3 years, finally exceeding $1M in 2010.
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Old 03-15-2015, 10:37 PM   #179
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But the median house house income for Connecticut is 66K, so one or no kids, save about 10% over your income stick it in Wellington and you have a million by retirement.

I think it is hard for the person earning a below average wage to become a millionaire, but a couple even if both are earning average salaries can do it.
But I think Gumby's point in referencing the report (please correct me if not true) is that the median income in CT is very close to the survival income. And survival means, at least to me, no room for savings. That income is the *combined* income of all wage earners who live in the household. The median *individual* income is much lower, around $22K for women and $35K for men. Good luck saving a million dollars (or $1.5M in TMND dollars) on that. Really, it's tough for a lot of people in this country, and that isn't really appreciated by some of the posters here.

And now an editorial: just become someone disagrees with you doesn't mean that they are a "troll." It means that they disagree with you. I originally started participating in these forums because of the lively, relatively snark free discussions I found here, but, for whatever reason, the snark factor has increased lately -- directed at both posters who disagree with the main stream, and for individuals who, due to character flaws or lack of income, haven't managed to achieve financial independence. This place is headed towards being yet another Internet echo chamber, which seems pretty sad to me. Oh well.
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Old 03-16-2015, 01:07 AM   #180
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You just seem overly hung up on this idea of proving the unlikelihood of becoming a millionaire while earning a median income, which is something that basically no one disputes. The original claim that ordinary people can become millionaires made no such claim that "ordinary" was defined as someone making a U.S. median salary. You made that assumption and have been vigorously attacking that straw man ever since.

I think in the context it was used, the word "ordinary" simply refers to the fact that these are largely not people who were born into generational wealth, or won the lottery, or live in mansions with butlers attending to their every whim. They're regular people working fairly regular jobs, who if you saw them on the street, you wouldn't notice anything special about them. Of course they made a higher than median salary, and of course they probably dodged their share of bad luck in life, but they also took steps to preserve their wealth that others making those same salaries typically don't, which is why they're the ones who ended up millionaires.

I think one also has to consider the target audience of the book, for whom having higher-wage, white-collar jobs with discretionary income to invest is likely quite ordinary indeed. For some in that target demographic, the message that ordinary people like themselves can reach such a major milestone through prudent financial planning can be quite enlightening. The fact that there are a lot of poor people in the country's ghettos, who will probably never read the book and for whom this doesn't apply, is sort of beside the point. It just comes across like you have a political axe to grind about how the wealthy don't appreciate how good they have it.
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