Poll:How You Got to $1 million NW

[Ronstar]

About 40% NW from saving from employment income and investing
About 40% from owning/operating a business
About 20% from buying/selling real estate with 10 yrs of rental income

 

[Car-Guy]

Savings from work including a 401k which had a great matching option. As they say, the first million was the hardest, or at least it took the longest to accumulate.

 

[Danmar]

Mostly incentive comp(options, DSUs, RSUs) from mega corp. Held them as long as I could and it paid off spectacularly. Couldnt help but LBYM in the circumstances. Wasn't the smartest thing from a risk management standpoint and if the financial crises had been of longer duration, my retirement might have been much more modest. I feel very lucky.

Real estate was where some of the money went but certainly didn't contribute much to increasing my net worth. Have held on to a fair bit of my employer's stock( big Canadian bank) and it has continued to outperform the market.

 

[Independent]

I could say "saving/investing", but that would ignore the part about the megacorp job that paid about 3x the median wage.

Having more income than most Americans made saving easier.

 

[aaronc879]

I have never made over $50K/yr so my spending has always been low. I will never reach the $1M mark because I don't need to. I will retire early because of living frugally on my low income and saving/investing as much as I can.

 

[HadEnuff]

I'm nto sure I understand the "Professional" option. Whats the difference from being a doctor or a salesman who invests her income to make double commas? What's the difference between a lawyer with his own practice and a fast food franchise owner?

Seems the lawyer/doctor should pick one of the other choices: investing, Real estate, or entrepreneurship.

There is no fundamental difference between doctoring and plumbing as far as investing goes. I'm an ex-doctor, but I also have real estate investments. But "professional" was the option on the poll that I felt was most applicable, since real estate is only a small fraction of my investments. If I had my own clinic I suppose I could have chosen "entrepreneur".

Designing good survey questions is not easy. Perhaps a market researcher might like to prepare a "how-to" guide for polls on the forum.

I chose not to vote since no single option really applied to me. The "Professional" option makes no sense, since that is not, in and of itself, a pathway to FIRE. I know many "Dr.-Lawyer"s who never accumulated any wealth because the spent every dime that came in, or chased "get rich quick" schemes instead of slowly, and steadily putting away 10% or 15% and sensibly investing it.

To answer the question: I never made a nickel in real estate, as ever since I moved to my town, property values have declined. I needed a building for my business, and a roof over my head but neither appreciated significantly. In fact, over a period of nearly 40 years I actually LOST money on the value of my office property. But I lost less than I would have had I paid rent for those 40 years. I think.

So my profession (dentist) paycheck allowed me to put money away every year (in lieu of fancy cars or expensive vacations), which bit by bit accumulated. Never hit a home-run. Rode the ups and downs of broad-based investing....a lifetime of solid singles and a few doubles in the gaps......one day it added up to enough to be FIRE....no magic.

 

[Luck_Club]

Saving from employment/business/profession is the only answer

For all of us I would venture to say that if you didn't save from your earnings, you would have nothing to invest.

So after that initial vehicle of living below your paycheck, you have to invest in something. It could be invested in Gold, CD's, Real estate, stocks, bonds, or even bitcoin and pokeman cards, though I don't recommend the last two.

The only other answer is the oldest way to accumulate wealth, inherit it.

my 2 cents

 

[euro]

There was a thread today about getting to the '2 Comma Club' ($1M NW), and a reply that most people do it through owning a business or real estate. I thought it would make an interesting poll. If you have a NW over $1 million, what was the largest contributor to getting there among the choices?

LBYM

 

[Rianne]

Saving, investing and never selling when the market dips. We panicked in 2008, but decided to stay in the market. Initial SM investments were when DOW was @ 6000. Just gradually kept throwing everything saved, and we are frugal, into the market. Has paid off. We do have bonds, good portion earning 4%. Those coming due in 5 years, I think.

 

[Mo Money]

I reluctantly posted that I made my first million as a lawyer. Because I did. But I really could have checked a few of those survey boxes. I made the first million by avoiding lifestyle creep, being a biz owner (I was an equity partner in a law firm), saving, and investing in diversified index funds. And the first million really was the hardest...

 

[euro]

I could say "saving/investing", but that would ignore the part about the megacorp job that paid about 3x the median wage.

Having more income than most Americans made saving easier.

No doubt that is true - however, I know plenty of people who make that kind of money and live paycheck to paycheck.

 

[SpinDr]

Saving #1
House #2
LBYM #3

And a very supportive spouse who has the same views on the above.

 

[pb4uski]

And why would we believe any posts by a spin doctor?

 

[neihn]

Saving from 401k, Roth IRA and some luck.

 

[6miths]

Agree on having a hard time picking a single item. I was in a 'Professional' career but in the first 20 years didn't make more money than many trades people and made it to 1M before I took a job that really had a major income so I would go with 'saving and investing'. LBYM allowed for the saving.

 

[Zig56]

Owned a construction company

 

[LuckyDog]

Maxed out IRA's and 401k's/403B's from the time that they began. 100% in stocks for many years, but sat on the sidelines and made 6% during the crash in the early 2000's. So saving, LBYM, and Luck!

 

[kcowan]

In 1989, the value of our house took off, fueled in part by panic in HK of the communist takeover and that got us over the top. By 1990, the house itself was over $1.0 million.

Megacorp retirement, divorce, owning my business, investments all contributed to crossing the threshold again around 1997.

2001 and 2008 investment reversals were both absorbed well above that threshold.

 

[scrabbler1]

I voted Saving/Investing but I need to add a few items to that:


(1) About 30% of my first $1M came from the company stock I cashed out when I left the company and retired in late 2008. While you could consider this in the broad definition of "compensation," to me it was always an extra "super-match" of earnings held in my 401k/ESOP savings plan.


(2) Being childfree greatly enabled me to save about half of my income during my peak earning years of the 1990s.


(3) Having my peak earning years in the 1990s when the stock market boomed helped a lot.

 

[FiveDriver]

I don't want to say it was all Luck, but I suppose there was some serendipitous timing involved.

My first Real Estate Purchase was a Condo at the Jersey Shore, and it appreciated greatly in the 2 years I owned it. The proceeds from that Sale allowed us to buy a SF Home in a nice neighborhood, using a favorable Mortgage with 20% Down and no PMI. The RE Boom of the 80's boosted our home's equity. I resisted the temptation to Re-Fi and buy toys.

My MegaCorp had a 401K with a generous match. I took full advantage from the first day I was eligible. The Company Stock became the darling of Wall Street, and I was heavily over-weighted. Some would say too heavy. But when the stock is doubling and splitting and doubling again -- several times over. I let it ride.

My position at Mega gave me an overview of the Biggest Bull Market of our Generation. I used Fido's Mutual Funds. Thank you Peter Lynch and whoever was running the Select Tech Fund at that time. The 80's and 90's were very good to us.

So I'll say Real Estate & Investing -- and claim no special skills in either of them.

 

[NW-Bound]

For all of us I would venture to say that if you didn't save from your earnings, you would have nothing to invest.

So after that initial vehicle of living below your paycheck, you have to invest in something. It could be invested in Gold, CD's, Real estate, stocks, bonds, or even bitcoin and pokeman cards, though I don't recommend the last two.

The only other answer is the oldest way to accumulate wealth, inherit it.

my 2 cents

Yes. You either earn it in some way, or have it handed to you.

There are actually a few other ways: win the lottery, or rob a bank, or deal drugs. The OP allows for these under the category of "Other".

However, I think the OP's intention is to find out a bit more details on how one earns enough to save. Thus, the breakdown into RE investing, or owning a small business, or working for megacorp or the government, etc...

Even there, it is difficult to generalize. I know some lawyers and doctors who do not do that well. And we all read about lucky employees of start-ups that became multi-millionaires when the companies got successful. At established megacorps like my employers, one has to reach a reasonably high managerial position to get some options. I always wanted to stay technical, and dropped out early off the rat race at that, so was never in any position to be granted any option.

 

[SpinDr]

And why would we believe any posts by a spin doctor?

A bit of a family joke. When I started my career I was in marketing and then helped out on a local friends political campaign. My dad would tell folks I was some sort of "Spin Dr".

I've left all that behind and have vowed 100% truth in all communications

 

[pb4uski]

A bit of a family joke. When I started my career I was in marketing and then helped out on a local friends political campaign. My dad would tell folks I was some sort of "Spin Dr".

I've left all that behind and have vowed 100% truth in all communications

Isn't that what they all say? I would expect nothing less than 100% truth.

 

[SpinDr]

Isn't that what they all say? I would expect nothing less than 100% truth.

 

[YVRRocketSurgery]

I picked savings and investments.
When crossing the $1M mark, it was about a 70:30 house:savings/investments split. The value of the house essentially doubled but I consider the purchase and paying off the initial price of the home as part of savings.