Join Early Retirement Today
View Poll Results: How much do millionaires earn?
Under 50k (wow!) 4 4.26%
50-100k 19 20.21%
100k-150k 35 37.23%
150k-200k 22 23.40%
200k-300k 8 8.51%
over 300k 6 6.38%
Voters: 94. You may not vote on this poll

Reply
 
Thread Tools Search this Thread Display Modes
What incomes millionaires?
Old 06-03-2007, 06:59 PM   #1
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 162
What incomes millionaires?

I have seen recent mention of millionaires, and how it is not possible to ever get there without big incomes. Yet I am convinced that on this board anyway, there are many with modest incomes and large net worth.

Not to upset anyone, but excluding:

inheritances
home equity
pensions (their equivalent worth).

If you have at least 1 million in stocks, bonds, cash, CDs, etc. amongst retirement and nonretirement accounts, how much was your household's peak earning years? But please do not vote a disproportionate year, say when you got a bonus for hundreds of thousands or sold a business for a ton. It would be interesting to see how many people of modest means got to this milestone through LBYM and careful investing, or if more folks will be at the higher end of the income scale.
__________________

__________________
firewhen is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 06-03-2007, 07:14 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Feb 2006
Posts: 1,183
I have to quibble with you a bit on the methodology. Pensions are part of the wage package but not reflected in annual income. When you exit a company and take the annuity OR roll to IRA seems irrelevant. Both are money and part of the bottom line. You failed to exclude 401K's and that usually has a corp contribution. Most millionaires did not just save... They looked at all the options and LBYM to some extent.
__________________

__________________
crazy connie is offline   Reply With Quote
Old 06-03-2007, 07:29 PM   #3
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 162
Connie,

I definitely understand your point. It is something like the lottery winners. Take 1 million today or the interest equivalent over the next 20 years. My point is that for the folks who physically have the dollars today, even if in 401ks, what incomes did it take to amass it?

Admittedly, folks with bigger pensions might earn less each year, and even have less incentive to save, knowing they have the pension to rely on.
__________________
firewhen is offline   Reply With Quote
Old 06-03-2007, 07:52 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,616
What happens when you put $22,000 a year away since 1987? What interest rate would you need to have a million?
__________________
LOL! is offline   Reply With Quote
Old 06-03-2007, 08:05 PM   #5
Recycles dryer sheets
 
Join Date: Dec 2006
Posts: 162
LOL!,

If I did it correctly, 8% would get you there.
Excel function: =FV(0.08,20,22000)

That would mean that if someone were earning 100,000 today and after taxes and expenses saved 22,000 each year, they would have 1 million only 20 years later at 8%. Obviously with inflation they would likely save more and their ending point would increase, but in real terms they dcould get to 1 million without LBYM too greatly. With 2 people working the whole 22,000 savings could be in a 401k with before tax money.

If only the rest of the world could figure this out!
__________________
firewhen is offline   Reply With Quote
Old 06-03-2007, 08:17 PM   #6
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,616
Quote:
Originally Posted by firewhen View Post
=With 2 people working the whole 22,000 savings could be in a 401k with before tax money.
Historically, that may not be true. Remember, I wrote 1987 and I'm not sure the 401k limits were high enough in the early years of this scenario to allow $22K in contributions. But it is true that if one banked the working spouse's income instead of spending it, then a million is essentially trivial to reach for a working couple.
__________________
LOL! is offline   Reply With Quote
Old 06-04-2007, 08:40 AM   #7
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
Discipline, discipline is the way from early on and compounding will do it. Do not let the rest of the World figure it out --- where would inflation be then? Only the disciplined deserve the fruits of their savings. (don't know who to quote one).
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 06-04-2007, 09:08 AM   #8
Thinks s/he gets paid by the post
retire@40's Avatar
 
Join Date: Feb 2004
Posts: 2,670
There is a snowball effect when you keep saving.

At some point, your investments will grow as much, if not more, than what you are adding from your earnings. At that point, you can make a decision either to keep working and pumping money in, or become semi-retired and earn just enough to meet your living expenses while your investments grow on their own to the point that will sustain you for full retirement.
__________________
No man is free who is not master of himself. --- Epictetus
Enjoy Yourself (It's Later Than You Think). --- Guy Lombardo
retire@40 is offline   Reply With Quote
Old 06-04-2007, 10:48 AM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jul 2003
Location: Kansas City
Posts: 7,408
1966 to 1992 wages 8 to 60k. Note that index funds/company 401k showed up 1977. DCA the best I could - crossed 1 mil the last few years - a little short of forty years after 1966. Retired 1993 with about one year temp work in the stretch.

DCA and time in the market.

heh heh heh - stone simple Watching grass grow is more exciting.
__________________
unclemick is offline   Reply With Quote
Old 06-04-2007, 11:26 AM   #10
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,465
Some folks reach a high net worth by investments - not savings. Building and selling a business, for example, or stock options. In those cases the return can be hundreds of times the original investment.

Audrey
__________________
audreyh1 is online now   Reply With Quote
Old 06-04-2007, 03:30 PM   #11
Thinks s/he gets paid by the post
FIRE'd@51's Avatar
 
Join Date: Aug 2006
Posts: 2,315
Quote:
Originally Posted by LOL! View Post
Historically, that may not be true. Remember, I wrote 1987 and I'm not sure the 401k limits were high enough in the early years of this scenario to allow $22K in contributions. But it is true that if one banked the working spouse's income instead of spending it, then a million is essentially trivial to reach for a working couple.
Actually, when 401k plans were implemented back in the halcyon days of the 1980's, one could put 15% of one's gross income (up to a max of 30K) into a 401k plan.
__________________

__________________
FIRE'd@51 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Millionaires: do they pay off their mortgages? LOL! FIRE and Money 93 05-17-2008 09:31 PM
What You Can Learn From 1,000 Millionaires Nords FIRE and Money 52 12-27-2005 09:16 AM
Sorry, only millionaires can retire PL Young Dreamers 10 11-11-2004 11:27 PM
Number of Millionaires Update intercst FIRE and Money 15 06-17-2004 11:26 AM
Wealth personalities: 6 types of millionaires sgeeeee Life after FIRE 4 04-26-2004 05:20 PM

 

 
All times are GMT -6. The time now is 09:17 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.