How to Stash 1 Million

[nun]

I thought I'd be the first to post this yahoo link on how to save a $million.
There's nothing earth shattering, just earn a lot of money and LBYM. But the article fails to mention one of the most critical factors in saving; his family situation. I get the impression that he's single with no children and so can be single minded in his frugal lifestyle and savings. The frightening thing is i have a lot in common with him and he sounds so utterly boring.


how-to-stash-1-million-savings: Personal Finance News from Yahoo! Finance

 

[photoguy]

"I established a traditional defined-benefit pension plan for my business, which allowed me to contribute as much as $240,000 in one year."

How does one arrange this?

 

[kombat]

Good for him. Looks like he's dodged the "Big 3" early-retirement killers: Kids, divorce, and serious illness.

 

[Aiming_4_55]

Good deal.

Perhaps I missed it, but the article didn't touch on how his education expense was covered or the type of residence his budget supports.

I would be more impressed with an article on an average earner making it to 1M or more by 49.

I guess I would expect someone earning > 200k per year to have that much if not more by his age. YMMV... perhaps I have high expectations.

 

[nun]

"I established a traditional defined-benefit pension plan for my business, which allowed me to contribute as much as $240,000 in one year."

How does one arrange this?

If you are self employed you can do a SEP and contribute something like $46k a year to a DC plan, the limits for a DB plan are far higher.....

Some quick Googling and I see that for a SEP DB plan the tax deferred annual amount is essentially limitless. You decide what benefit you want and fund the DB plan appropriately. This is great for someone who is self employed, over 40, and needs to accumulate retirement savings quickly.
So the guy in the article is locking up most of his money in an enormous DB plan. I'd want a little more liquidity.

 

[Aiming_4_55]

- SEP IRA contribution is limited to 25% of total income, up to the $49,000 limit

- DB plan 240k might be compensation limit.... contribution would seem high.

 

[nun]

I'm stereotyping the guy in the article, but I bet one of the things on his retirement to do list is a "mail order bride"

 

[MasterBlaster]

The 4 step process on How to Stash a Million

How to Stash 1 Million

Step 1) Start with 2 Million Dollars

Step 2) Invest in the stock market

Step 3) Wait for crash

Step 4) Pull out money in a panic to invest in "safe" investments.

 

[LOL!]

He should have even more money stashed away. He is losing too much to his "guys" at Merrill Lynch and Schwab. Or is there another explanation for what he did with all his money?

He's 49 and a radiologist. I think the demographics show that 50-year radiologists average $3 million stashed away.

 

[foxfirev5]

Not much I can relate to here. A few years w/ a quarter mil in savings and soon your a millionaire. Plodding along, never made more than $75k, LBYM with a wife, three kids etc. -seven figure investment account -now that's a story

 

[Hobo]

This is typical "guy with a high salary lives frugally and saves a lot of money" story. Personally, I think putting your money with one broker to manage your money is risky. Just putting your eggs in the stock market is risky. I like real estate (eg, raw land) in the mix. I also like to pay my taxes on my investment money. Despite the notion that you will be in a lower tax bracket when you take the money out, paying income taxes on big money always hurts. Better to take the pain at the time you save the money.

 

[mexico]

The really entertaining part of the article are the comments the people have made. The anger, jealousy, and personal attacks on this guy provide a lot of insight on the state of America. It's hard for people to give him credit for becoming a doctor and saving 7 figures. True that most people can't relate to that much money but why attack him because you are one the " have nots".

 

[pb4uski]

Not much I can relate to here. A few years w/ a quarter mil in savings and soon your a millionaire. Plodding along, never made more than $75k, LBYM with a wife, three kids etc. -seven figure investment account -now that's a story

Agree - stories like yours are much more relevant to most folks.

 

[pb4uski]

The really entertaining part of the article are the comments the people have made. The anger, jealousy, and personal attacks on this guy provide a lot of insight on the state of America. It's hard for people to give him credit for becoming a doctor and saving 7 figures. True that most people can't relate to that much money but why attack him because you are one the " have nots".

I don't perceive it as a lot of anger or jealously pr personal attacks. More that at his income level to save a million isn't as huge an accomplishment as the stories of many of the posters on this site who have done the same on much lower income.

 

[RetiredGypsy]

I don't perceive it as a lot of anger or jealously pr personal attacks.

Are we reading the same comments?

 

[FIREd]

The really entertaining part of the article are the comments the people have made. The anger, jealousy, and personal attacks on this guy provide a lot of insight on the state of America. It's hard for people to give him credit for becoming a doctor and saving 7 figures. True that most people can't relate to that much money but why attack him because you are one the " have nots".

Yes, the comments following the article are pathetic and childish.

I do not share information regarding my finances with anyone. I don't want to open myself up to attacks. I don't understand what is to be gained from putting oneself out there like this guy did.

 

[obgyn65]

+2

I do not share information regarding my finances with anyone. I don't want to open myself up to attacks. I don't understand what is to be gained from putting oneself out there like this guy did.

 

[Major Tom]

The anger, jealousy, and personal attacks on this guy provide a lot of insight on the state of America.

I think they provide more insight into how many people will make these types of inane comments when they feel emboldened by the anonymity of the internet. This type of behaviour is not just the preserve of Americans.

 

[Isadora]

The really entertaining part of the article are the comments the people have made. The anger, jealousy, and personal attacks on this guy provide a lot of insight on the state of America. It's hard for people to give him credit for becoming a doctor and saving 7 figures. True that most people can't relate to that much money but why attack him because you are one the " have nots".

that is cute, but consider if he is single, there is nobody for him to bore.
Are you single? then perhaps that could be the reason. If not, ask your spouse.

 

[foxfirev5]

Wow, interesting reactions. The intent of my response was that there are many other examples that could provide usefull information for others. For example I know a drywaller with a 10th grade education who has an over 3m investment portfolio. How did he get there? Or the school teacher and police officer who have put together multiple unit rentals providing an income of over 100k. Articles like this should present some sort of actionable information that people can apply to improve their lot in life. I could be the subject of this article myself but stating my good fortune (and luck) in itself is not impresssive.

 

[nun]

Wow, interesting reactions. The intent of my response was that there are many other examples that could provide usefull information for others. For example I know a drywaller with a 10th grade education who has an over 3m investment portfolio. How did he get there? Or the school teacher and police officer who have put together multiple unit rentals providing an income of over 100k. Articles like this should present some sort of actionable information that people can apply to improve their lot in life. I could be the subject of this article myself but stating my good fortune (and luck) in itself is not impresssive.

I agree. The radiologist is to be congratulated for getting through medical school and earning a good salary. I think the criticisms are of the article rather than the radiologist as "earn big bucks and save $250k to a DB plan" doesn't help the vast majority of people saving for retirement. Also the article failed to highlight his personal circumstances, probably single no kids, as a factor on his ability to save.

An interesting aspect is the big tax break the self employed get on retirement savings. This seems like one of those loop holes that needs to be fixed in tax reform.

 

[pb4uski]

Are we reading the same comments?

No, we were not.

I think you were speaking of the comments to the Yahoo piece after the article and I was speaking of the comments on this forum. So many of the commenters on Yahoo pieces are flaming idiots that I hardly ever bother to read the comments.

My BIL is a doc and I think you have to give people who chose those professions credit for the sacrifices that they make in getting their training for the bigger payday at the end of residency (the studies during undergrad and med school, commonly huge student loans, long hours and pressures of residency, etc.) No disrespect, but I think many folks with normal full time jobs have trouble appreciating the sacrifices these folks make - and they deserve the big payday at the end.

That said, I think stories of people with average incomes who LBYM, dilligently save and invest and have secured their financial future are a lot more inspiring than this guy's story. I have been luck enough to make good money so FI has been easier for me but I am really impressed on some of the "average Joe" stories of people of more modest means who have built nice nesteggs for themselves by living prudently.

Agree with other posters that I would never open the komono to my finances the way this man did - I just don't see the upside (unless perhaps he's trolling for arm candy).

 

[Hobo]

It's hard for people to give him credit for becoming a doctor and saving 7 figures. True that most people can't relate to that much money but why attack him because you are one the " have nots".

I think most people can easily relate to saving 7 figures on this forum. And I don't see anything that indicates jealousy. Most people are just not impressed with his story, including me. He obviously worked hard to get where he is, but that really is no different than a large percentage of Americans. Everybody works hard.

Being a doctor is definitely not the profession I would choose to get rich. That's what's called working for your money, not letting your money work for you.

 

[NW-Bound]

An interesting aspect is the big tax break the self employed get on retirement savings. This seems like one of those loop holes that needs to be fixed in tax reform.

Actually, if you think of deferring taxes as a way to average one's income over the years, particularly for an early retiree, why would that be bad? The progressive tax system penalizes someone who makes $250K one year, then nothing the next four years, vs. someone who makes $50K each of those 5 years.

So, to be fair, this tax deferment should be extended to more people, in my view.

Being a doctor is definitely not the profession I would choose to get rich. That's what's called working for your money, not letting your money work for you.

How does one get the first batch of money then, other than inheriting it or winning the lottery?

 

[mexico]

that is cute, but consider if he is single, there is nobody for him to bore.
Are you single? then perhaps that could be the reason. If not, ask your spouse.

I think the comments are a bit more pointed than he seems like a boring guy or just got where he is by being single. Derogatory comments about the guy being gay are the same if you were to mention that he is black. What does it have to do with the article, perhaps, makes people feel better about themselves.