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Save early, Live Below Your Means, You'll be rich
Old 11-17-2019, 10:53 AM   #1
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Save early, Live Below Your Means, You'll be rich

I know I have posted this before, but I updated all my data with actuals today and it still amazes me how stupid we were until we read the book The Millionaire Next Door (you can see on the graph when we got a clue). We always spent more than we made and didn't start saving anything until 2009. And then just a little in our 401k as we racked up even more debt.

Had we just saved 15% of our income since we started working and lived at our means, we would be in the same spot but with a lot less stress.

So for the young ones on the fora, please LBYM and save 15% of your gross income. You will be rich one day.

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Old 11-17-2019, 11:03 AM   #2
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...
So for the young ones on the fora, please LBYM and save 15% of your gross income. You will be rich one day. ...
Here is a free 15 page instruction manual from one of the most respected investment writers in the country: If You Can (If You Can and Rational Expectations)
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Old 11-17-2019, 11:06 AM   #3
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My wife and I both started 401ks and maxed them out, I started at 21, retired at 52, she started at 29 retired at 59.5....also did the catch-up once we both reached 50.... No regrets and are living with a nice portfolio..... Been retired going on 6 years now
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Old 11-17-2019, 11:37 AM   #4
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So, is that graph trying to imply that $2.75 M net worth is what makes you rich? I think this would depend on if you are single or have a larger family, your location / COL, age, and other factors. There's no one size fits all. As a single person in a LCOL area, I'm about $1 M below that figure. I wouldn't call myself rich, but I'm sure many others in this area would if they knew of my stash.
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Old 11-17-2019, 12:09 PM   #5
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I saved and invested at 28, debt free at 32, retired at 50 with a good size networth. Couple co workers made the same $$$ but always had new RV, boat and car every couple years and still working and not maxing out 401K.
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Old 11-17-2019, 01:37 PM   #6
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Thatís impressive growth. Congrats.
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Old 11-17-2019, 10:12 PM   #7
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So, is that graph trying to imply that $2.75 M net worth is what makes you rich? I think this would depend on if you are single or have a larger family, your location / COL, age, and other factors. There's no one size fits all. As a single person in a LCOL area, I'm about $1 M below that figure. I wouldn't call myself rich, but I'm sure many others in this area would if they knew of my stash.
Nah, we've got more than that in our current state of retirement (plus pension and could start SS anytime, as I'm at that age).... and in our L/MCOL area we're "comfortable" ...we wouldn't consider ourselves "rich" but if we couldn't make it in our retirement then others are gonna be in a world of hurt
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Old 11-18-2019, 02:13 AM   #8
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Thank God, the topic title describes most of my life enabling me to retire comfortably, debt-free and early [age 55.] I am blessed.
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Old 11-18-2019, 04:11 AM   #9
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Is that 15% curve based on actual market returns over the stated years? It just seems so smooth despite the crashes of 2001 and 2008. Congratulations on saving so much over 10 years, but in retrospect 2009-2019 was an awfully good time to get serious about investing. I'd imagine doing the same from 1999-2009 would have had somewhat different results.
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Old 11-18-2019, 05:14 AM   #10
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Is that 15% curve based on actual market returns over the stated years? It just seems so smooth despite the crashes of 2001 and 2008. Congratulations on saving so much over 10 years, but in retrospect 2009-2019 was an awfully good time to get serious about investing. I'd imagine doing the same from 1999-2009 would have had somewhat different results.
+1. It must be using a steady rate of return.
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Old 11-18-2019, 06:04 AM   #11
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It is using a steady rate
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Old 11-18-2019, 06:08 AM   #12
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Is that 15% curve based on actual market returns over the stated years? It just seems so smooth despite the crashes of 2001 and 2008. Congratulations on saving so much over 10 years, but in retrospect 2009-2019 was an awfully good time to get serious about investing. I'd imagine doing the same from 1999-2009 would have had somewhat different results.
Sure did! However, buying on the way down and back up has yielded impressive results as well. Started working 1997; estimated retirement 4/2020 at 45 y.o.
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Old 11-18-2019, 12:48 PM   #13
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I know I have posted this before, but I updated all my data with actuals today and it still amazes me how stupid we were until we read the book The Millionaire Next Door (you can see on the graph when we got a clue). We always spent more than we made and didn't start saving anything until 2009. And then just a little in our 401k as we racked up even more debt.

Had we just saved 15% of our income since we started working and lived at our means, we would be in the same spot but with a lot less stress.

So for the young ones on the fora, please LBYM and save 15% of your gross income. You will be rich one day.

I am guessing by that graph if a person saved 15% they would pass the average retired person in about 10 years. I heard save 20% if you want to retire early. Great chart. The family I grew up in were always big savers but several years they were low income. But it is the idea that counts.
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Old 11-18-2019, 01:07 PM   #14
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I like you had 0 in 2006. I did have some RE equity but not much.

Currently saving at ~25% of our gross. > 12 years to ER...if my next 12 looks anything like this chart... I'll be set lol.
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Old 11-18-2019, 01:10 PM   #15
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Sure did! However, buying on the way down and back up has yielded impressive results as well. Started working 1997; estimated retirement 4/2020 at 45 y.o.
Envious... although I didn't really "start working" until 2006...If I wanted to retire at 45 in 7 years, I would need to eat rice and beans the next 7 years lol.
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AA (Stock/Bond/Cash ): 97.5/0/2.5% MIX (Small/Mid/Large): 25/25/50% BLEND(US/Foreign): 100/0%, REIT (Real Estate Equity): ~50% of Assets

FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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Old 11-18-2019, 03:00 PM   #16
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Save early, Live Below Your Means, You'll be rich




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... it still amazes me how stupid we were until we read the book The Millionaire Next Door
We found that by reading TMND it gave us a great deal of encouragement along the way.

Our friends and co-workers often wanted us to blow our money on stupid stuff. But we stuck to our plan, and it worked.
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Old 11-18-2019, 03:13 PM   #17
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Save early, save often, LBYM, and pay as little tax and interest as possible, do the math, and check the math...oh, and never, ever pay retail!

Words of wisdom to a younger kgyest LOL! That LBYM though...I had no idea how addicting that can become. Do we really need to be constrained and defined by all these "things" and "stuff" we have?

Everytime you want to blow some dough on some"THING" pickup the phone and ring a friend...the reward will be much more rich and meaningful.

If you have no friends, and no family by all means BLOW THE DOUGH BABY!
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FIRE in 2031 @ 50yrs old (+/- 2yrs) w/ a hypothetical $2.5mil portfolio, 3 appreciated homes worth $1.0mil and rental income to fund my gap years until RMD. Assets will go to an inherited IRA where I plan on watching the investments grow until I die or the trust gets executed.
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Old 11-18-2019, 05:19 PM   #18
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For me the book that helped the most was the Wealthy Barber. I read the the Millionaire Next Door too, both were great. Ben Stein wrote a good book too that I forget the name of. The best thing that happened to me was to marry DW who shared the same goals. ER'd at 50.
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Old 11-18-2019, 08:21 PM   #19
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I do not thing that there is any magic to this. Millions of people have done it and are doing it.

All it takes is a small amount of common sense and some self control.
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Old 11-19-2019, 01:37 AM   #20
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It is using a steady rate
So what happened around 2018-2019? Just curious.
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