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Road to $1M
Old 10-30-2013, 12:35 PM   #1
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Road to $1M

Hi,

I recently hit a milestone of $500k. Pretty happy about that. I feel that I've hit this milestone much earlier than I expected... thanks to this bull market.

From 500k to 1M, did you get there much earlier than you expected? Were you surprised by how fast you got there? Or was it the other way around?

I'm projecting to hit 1M when I'm 40 but hope this trend continues and get there earlier, hehe.

Thanks
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Old 10-30-2013, 12:44 PM   #2
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The nature of compounding suggests that hitting that second leg will be much faster than the first leg. And I think that's the reality for most people. Whether that's earlier than you expect is entirely up to what ROI assumptions you have baked into the pie.

The biggest potential setback you'll normally have to beware is market losses. Having an investment strategy/asset allocation that incorporates an entire bull/bear cycle - better yet, having personally experienced at least one full bull/bear cycle - is the best medicine against unrealistic expectations.

Congrats on achieving a significant nest egg at such an early age. That bodes well...
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Old 10-30-2013, 12:45 PM   #3
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You'll get there when you get there. As your portfolio grows, its internal growth starts having a bigger influence on its size than your contributions. And - as we all know - we can't predict what the markets will do. For me - 2000 hit just when I was beginning to make rosy realistic predictions.

Congratulations on reaching this amazing milestone - just keep doing what you are doing today and it will get there.
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Old 10-30-2013, 12:47 PM   #4
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I'm not at $1M quite yet, but, barring any catastrophes, I think I'll get from $500K to $1M a lot quicker than I got from $0 to $500K. Basically, it takes money to make money.

I've been keeping track of how long it's taken me to get to each $100K threshold, and here's what I've experienced so far...

March 1998: start, nothing saved up, as I was recovering from a divorce, and this was when I started investing again.
$100K: January 2004: 71 months
$200K: June 2005: 16 months
$300K: October 2006: 16 months
$400K: October 2007: 12 months
$500K: March 2010: 28 months (not too bad, considering the "great recession", I guess...)
$600K: January 2011: 10 months
$700K: March 2012: 14 months (again not too bad, considering what a flat year 2011 was)
$800K: April 2013: 13 months (would have been earlier, but I bought a new truck, and started cashing out and paying the mortgage down)
If I hadn't started aggressively paying down that mortgage, as well as buying that truck, I'd be over $900K by now.
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Old 10-30-2013, 12:53 PM   #5
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I hit my 1st M in Sept 2007 but was cut in almost half(644K) a year later in Oct 2008 for my after tax brokerage account. Rode the market, invested more from savings and today it's 1.65M.
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Old 10-30-2013, 01:01 PM   #6
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For me - 2000 hit just when I was beginning to make rosy realistic predictions.
Same here, actually. In fact, back in 1999 I made a comment, jokingly, that if the stock market kept going up at the rate that it was, I'd be retired and filthy rich by the time I was 40. I think I based that on the fact that my rate of return at that point in the year was around 40%.

Of course, I knew the market wouldn't go up 40% every single year, but by the time I turned 40, damn if one of my friends didn't hold that statement over my head! But, I did break $500K right before my 40th birthday, so I was still doing pretty well, I guess.
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Old 10-30-2013, 02:27 PM   #7
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The two big risks to getting from 500k to $1mm is (1) a market downtown - which is a temporary setback and (2) starting to lift your living standards, which can be a permanent setback. You already know how to LBYM, keep that up and let the rest take care of itself.
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Old 10-30-2013, 02:42 PM   #8
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1M can grow to be close to 2M in 10 years if it gained 7% each year due to compounding.

If life was that simple.
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Old 10-30-2013, 03:03 PM   #9
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1M can grow to be close to 2M in 10 years if it gained 7% each year due to compounding.

If life was that simple.
My second 500K went a lot quicker than the first, mainly because I /a/ had a higher salary and /b/ was concentrating on FIRE more. I did most of my saving from 1997 through 2010 and I doubt if compounding did more than keep pace with inflation over that time.

In the last year, our total net worth has gone up by $200K. That's $100K in market gains and $100K in loss of value of the dollar relative to the Euro, which is my base currency. If the Euro dropped 10% tomorrow, I would gain the price of a small apartment or an Aston Martin. When you invest outside your base currency, fluctuations can be as important as asset allocation!
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Old 10-30-2013, 03:07 PM   #10
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Getting from 100K to 200K seems to take the longest (it just drags on), but then the next 100K's get going a bit quicker. Once you a 1M, the 100Ks seem effortless. . .
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Old 10-30-2013, 03:44 PM   #11
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It definitely goes quicker. I only started keeping track in 2003, but at that point, 12 years into the working years, I had about $250K in investments. I hit $500K in 2007, then fell, then hit it again in 2009. Various life events happened over that time, but, it took me 18 years of working to get that first $500K and stay above it.

My goal is/was to hit $1M by March 2015, but I will likely hit it by the end of this year. So, that is 4 years to go from $500K to $1M.

Compounding is doing more for me at this point than saving, although I am still doing that too, of course.
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Old 10-30-2013, 04:20 PM   #12
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Took 16 years to reach $500,000

Then 8 years more to reach $1,000,000
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Old 10-30-2013, 04:47 PM   #13
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Hit $500k 2010 and hit $1 million right at 3 years later.
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Old 10-30-2013, 05:25 PM   #14
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It took me 18 years of working (1985-2003) to get to $500k. It took me 7 more years (2010) to get from $500k to $1M although I very nearly got there in late 2007 (around $985k) before the market went south. The big reason for the surge in the mid-2000s was the exploding value of my company stock, going from zero in 1997 (its inception) to $300k in 2008 when I liquidated it upon ERing.
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Old 10-30-2013, 05:34 PM   #15
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As I recall, it took me 23 years of working as a physician to get to $500K. It took 3 years more to top $1M. I had an inheritance that year but I would have made it to $1M without that. I was not surprised, because while I was a below average earner for my occupation and had spent longer in training, I was LBYM and I had been modeling everything on Excel for some time. I was also aware that I would never have a pension. What was different after the inheritance was that it gave my NW a significant boost and opened the door to more choices, including ER. That was a nice surprise! Soon after, I joined this board and became even more motivated and more LBYM! And the rest is history......
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Old 10-30-2013, 05:46 PM   #16
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Quote:
Originally Posted by Enjoy the Ride View Post
Hi,

I recently hit a milestone of $500k. Pretty happy about that. I feel that I've hit this milestone much earlier than I expected... thanks to this bull market.

From 500k to 1M, did you get there much earlier than you expected? Were you surprised by how fast you got there? Or was it the other way around?

I'm projecting to hit 1M when I'm 40 but hope this trend continues and get there earlier, hehe.

Thanks
I do not know when I hit $500K. I was working too hard, and was too ignorant to pay more attention to my finance. However, I am sure that I got to $1MM when I was 43, and that's investable accounts, not including RE. Also, that was for a couple.

Comparing myself to earlier posters, I think I was about average. Could have done better if I knew more about investing, and put more into the market.
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Old 10-30-2013, 05:54 PM   #17
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I would say our relative sprint from 500k to 1M was due more to increased salaries and the steady reduction and eventual slaying of our mortgage and other expenses. Our lifestyle has not changed one iota as our income has risen. A 70% savings rate will get you places, financially speaking.

I've only really been an avid investor for the last few years - if only I had known enough to go "all in" back in early 2009 - I know I'm not the only one to lament that one.
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Old 10-30-2013, 07:59 PM   #18
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I am amazed by so many reaching 500K at such early ages. I have to tip my hat to you. It's got me thinking what did I do wrong. It took me into my fifties to reach that. But I've always been a fearful investor and that is something that I regret.
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Old 10-30-2013, 08:28 PM   #19
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I am not sure when I hit 500K it was young. But I do remember the first year the gain on my investment topped my salary. It was 1991 the S&P was up 26% and the NASDAQ and my portfolio were up even more. It wasn't my favorite year at work,and realize that it was ok to devote more time to my investments rather than working super hard a work trying to get the extra 2% raise.
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Old 10-30-2013, 08:44 PM   #20
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I hit my 1st M in Sept 2007 but was cut in almost half(644K) a year later in Oct 2008 for my after tax brokerage account. Rode the market, invested more from savings and today it's 1.65M.
Can echo don't project at peaks: we were at 715k in Oct. 07, although now 1.45K. I thought it would take 4-5 years at least to recover and I was wrong; the value recovered in 20 months. The last 3-4 years can be surprising, as a co-worker about to retire told me once, as long as you are catching a wave (if you retire at the peak like some here in '08, not so nice).

However, in '03 I told my wife we might be able to retire early at the rate we were going and am shocked that it now appears possible. That was before Enron blew up (she worked for Dynegy) and before our two boys were off to college, so I didn't have any trust in ROI projections.

Hit 500k in late '06; hit 1000k in March 2011, despite the crash. I was amazed.
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