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Old 06-18-2014, 05:59 AM   #81
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Exactly, many of the best investments are accredited only. Even more important is having the assets to invest in illiquid, long-term deals that provide better returns than wall street assets can really accelerate your portfolio. Liquidity is nice but doesn't come for free.
What kind of snake oil are you selling here ?
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what type of biz
Old 06-18-2014, 08:15 AM   #82
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what type of biz

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Originally Posted by jetpack View Post
I don't recall specifically. I didn't have Mint.com to add it up and give me a daily running total of my net worth.

The biggest milestone for me was when I had a well paid day job and my business was starting to take off... There was the first month my business made more than my work.. That was fun. I quit 2 weeks later. Exciting times.
Thats awesome JetPack. What type of industry is your SB in? I am always looking for a good opportunity to go independent! thx
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Old 06-18-2014, 08:31 AM   #83
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The DW and myself have separate accounts, so I've been tracking just my 'net worth' in my ever more complex (but good) spreadsheet.

It was late last year that my accounts ticked past 1M.

All I did was make a note next to the cell on that tab:
"Congrats - you are a millionaire"

The term just doesn't seem to carry the same cache it did...

DW's networth is also just above 1M - and we are not counting the sizable college fund or the house equity.

Maybe we *should* celebrate!
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Old 06-18-2014, 08:53 AM   #84
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+1

No offense, but I hope I never see such a relative number (compared to the overwhelming majority) as "no big deal".

My opinion is that the 1st million is absolutely the best one.
I think a previous poster summed it up perfectly, when they contrasted saving and investing to get to $1M, versus winning the lottery. I think it's the suddenness of it that makes it feel more like a big deal, than the slow and steady route.

If I went from having nothing, to suddenly having $1M fall into my lap, it would come as a bit shock. But with the slow and steady route, as you accumulate (for me, at least), you start getting accustomed to what you have, and it becomes your "new normal". Nevermind the fact that, once you hit $1M in investible assets, you're into something like the top 8% of US households, it still just feels like no big deal.

I think the last time I had a financial event that really seemed like a big deal happen was in late 2004. I made the final payment on my car just before Thanksgiving of that year. And around December 12, I went to closing on my condo. I walked out of settlement with a check for $94,000, although it was more like $78k once I paid off some credit cards I had borrowed against to do some remodeling. Getting that condo off my back also freed up about $1000-1100 per month, and getting the car paid off meant another $347.66 I no longer had to shell out every month.

Once the condo was sold, I was able to start maxing out my 401k every year, and I ended up investing a good chunk of that $78K, so I felt like my financial status really got elevated at the time. But, before too long I got used to it. And now I've gotten so used to keeping my 401k maxed out, I'm worried I'll feel like I'm failing, somehow, if I don't max it out.
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Old 06-18-2014, 09:11 AM   #85
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What are these investment options, pray tell? I have only seen more ways for sales guys to sink their teeth into whales.
Private equity funds, private real estate deals, to name a few. You can get some of the same exposure through a REIT but then you get soaked with layer upon layer of fees which is why REITS don't offer consistent double digit returns.
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Old 06-18-2014, 09:23 AM   #86
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After parsing through this thread, I go back on what I said. I am going to celebrate $1MM when we hit it. It does t mean the same as it used to, but it still takes YEARS of discipline and is more than 95%+ of the country will ever accumulate. Life is about celebrating things like this.
+2 I am wondering as I read these posts if we on this forum are losing touch with the real world. There are plenty of people retiring with far less and I am failing to see misery in their lifestyle.
Go ahead and celebrate! Just don't spend any money
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Old 06-18-2014, 09:41 AM   #87
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+2 I am wondering as I read these posts if we on this forum are losing touch with the real world. There are plenty of people retiring with far less and I am failing to see misery in their lifestyle.
Go ahead and celebrate! Just don't spend any money
I'd actually feel uncomfortable celebrating when I hit $1M, because I'd worry that it would feel like bragging to my friends, and rubbing their noses in it.

One of my best friends is a teacher, and hadn't had a raise since 2008, until just this year when he got a whopping 1%. He's also worried about making ends meet during the summer, because he set it up so he gets a bigger paycheck 9-10 months out of the year, rather than a smaller paycheck year-round. Still comes out the same at the end of the year, but he always feels the pinch around August. He's trying to land a summer job, with of all places, Primerica, over the summer, to make ends meet.

Then I have another friend who makes about twice what I do, but spends more like it's three times. Whines about money, but then goes and buys a $190 Diesel watch, on a whim.

Then there's my buddy who was laid off in 2002, and again in 2009. Had to take a job with a big pay cut in 2009. Well, he just got the boot again. Very little equity in his house. Not much saved up in the 401k. Worried about making ends meet.

Got another friend who bought a ramshackle house at the top of the market for around $270k. I doubt if it's worth half that now. He went through a layoff and transfer here and there...makes pretty good money now, but it'll be awhile before he really gets out from under.

I also know plenty of people paying off student loans...some of them are over $100K.

Granted, many of these people made their own beds, so now they have to lay in them. But still, I'd feel guilty celebrating, sort of a survivor's guilt I guess? So, any celebrating I do will most likely be done in private...or this website!
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Old 06-18-2014, 10:04 AM   #88
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No good comes from flaunting your wealth to those who have made (and probably continue to make) poor decisions.

Keep in mind their negative energy regarding finances will affect you - hanging out with financial under performers is not good for your net worth.

I'll add my friend's story on the higher end. $850k annual income (w2), between expenses (living like a $2M income) and alimony/child support, not a penny left over per month. Net worth less than 1/2 mine and i've never hit that high of an income. Couldn't come up with $50k to invest in our last real estate project if her life depended on it.

You can be poor on a huge income and rich on a tiny one.
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Old 06-18-2014, 10:06 AM   #89
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No good comes from flaunting your wealth to those who have made (and probably continue to make) poor decisions.

Keep in mind their negative energy regarding finances will affect you - hanging out with financial under performers is not good for your net worth.

I'll add my friend's story on the higher end. $850k annual income (w2), between expenses (living like a $2M income) and alimony/child support, not a penny left over per month. Net worth less than 1/2 mine and i've never hit that high of an income. Couldn't come up with $50k to invest in our last real estate project if her life depended on it.

You can be poor on a huge income and rich on a tiny one.
+1
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Old 06-18-2014, 10:19 AM   #90
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Private equity funds, private real estate deals, to name a few. You can get some of the same exposure through a REIT but then you get soaked with layer upon layer of fees which is why REITS don't offer consistent double digit returns.
Have some very high net worth friends that did this. Guess how it turned out for them?
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Old 06-18-2014, 10:49 AM   #91
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Have some very high net worth friends that did this. Guess how it turned out for them?
Uh...I have no idea. So what are you recommending then?
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Old 06-18-2014, 10:56 AM   #92
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+2 I am wondering as I read these posts if we on this forum are losing touch with the real world. There are plenty of people retiring with far less and I am failing to see misery in their lifestyle.
Go ahead and celebrate! Just don't spend any money
Agile. mobile, and hositile. Not to mention cheap. ER'd age 49, 1993, NW maybe 250k ballpark. 150 k inheritance along the way. Time in the market, small pension, some temp work for a year, early SS.

No IPO - married the second million late in life. Party on.

heh heh heh LYBM is cool. 20 plus years ER'd and counting.
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Old 06-18-2014, 11:03 AM   #93
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You can get some of the same exposure through a REIT but then you get soaked with layer upon layer of fees which is why REITS don't offer consistent double digit returns.
If you had purchased Vanguard's REIT index fund, VGSIX, on 6/18/1996 and held it through the close of business yesterday, you would have enjoyed an average 10.8% compounded annual return over the past 18 years (assuming dividends were reinvested). Seems to me to offer pretty consistent double digit returns.
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Old 06-18-2014, 11:23 AM   #94
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Uh...I have no idea. So what are you recommending then?
Here it is: High net worth individuals often got there by having intelligence, being very good at what they do, working hard, and saving. Some don't have a lot of time to worry about investments, are very trusting, especially of friends and associates of friends, and can fall prey to people selling "special" investment products.

Over the long term they always do worse then the plain vanilla products available to everyone. These "special" opportunities are really only special for those selling this stuff. I have seen people get big short term gains, but in the end there are always even bigger losses. My recommendations? Stay away from these products.

There is no special knowledge that allows over market gains for the long term for anyone. Sure you can get lucky, but in the end luck only gets you to gamblers ruin.
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Old 06-18-2014, 11:54 AM   #95
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DW and I went out and had a nice dinner at the local Amish restaurant. We even splurged on dessert.
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Old 06-18-2014, 12:32 PM   #96
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1st Million I had a drink to celebrate. Same with subsequent millions. But then again I have a drink nightly so don't know that I would say I did anything special!
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Old 06-18-2014, 12:37 PM   #97
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My recommendations? Stay away from these products.
I think we are talking about different things - first I'd like to know more about what "products" you are referring to - as would others on this forum so we can avoid them at all cost. What you describe sounds like either an outright scam or a high fee fund of some sort.

What I was referring to in regards to accredited investors were assets like this:

-Direct ownership of real estate such as apartment complex, mobile homes, notes secured by real estate & residential. It can be hard to take down a whole $5M apartment complex yourself, so if the deal is syndicated you can invest in multiple properties in different MSAs - and syndicated deals typically require accreditation.

While I like Vanguard ETFS and use them, it might be a bit extreme to exclude all other vehicles because someone you know lost money in the past, don't you think?

(BTW in 2008 you would have lost 1/2 your money in that ETF, which was highly correlated to the rest of the market)
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Old 06-18-2014, 12:51 PM   #98
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Part of my ER plan was to redo the allocation of my portfolio between taxable (non-retirement) accounts and retirement accounts because I knew I would be living solely off the former for about 15 years (age 45-59.5) until I could obtain unfettered access to the latter. At the time, I had about 1/3 of my portfolio in the latter but my plan was to cash out my company stock using NUA (Net Unrealized Appreciation) and pay relatively low taxes (LTCG) on nearly all of it. The company stock was about half of the retirement account so overall it was about 1/3 of my overall portfolio. Cashing it out basically reversed the overall ratio to 3/2 taxable and 1/3 retirement, something far more suitable to cover me from age 45 to age 59.5.

I have heard of this 72t rule to gain early access to one's IRA and it remains a Plan B or Plan C for me although as of now there is very little chance I will need to go that route. As I have seen mentioend elsewhere in this forum and in this thread, perhaps that can aid your access to cash to cover you until you turn age 59.5?

I have looked into the 72T rule and it could an option but it has to be done exactly right or there can be some ugly retroactive penalties.

Without a house payment we are adding to the taxable account at a rapid pace while still maxing out the 401K's. So maybe after another seven years it will be enough.......its just sad that a million isn't even a reason to get too excited anymore!
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Old 06-18-2014, 01:13 PM   #99
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No celebrating here. Just wondering if the million will be enough for my DH to retire in December at 57. FIRE says yes.
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Old 06-18-2014, 01:16 PM   #100
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Back on topic for me (sorry for the divergence)

When we crossed $1M when I was approx 30 years old I celebrated the fact that I met that goal - which was one I had written down from age 25. The wife thought it was pretty neat as well, but no big formal celebration.

When we crossed $2M I started to feel like this is really accelerating and becoming real.

We are about to hit $3M and things have really become interesting - mainly because I no longer have to be an employee and can pursue my passions. That was worth celebrating and we are enjoying a week at the beach right now. Ironically it's a free week at the beach given as a "thank you" from another investor we work with.

Life is good
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