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Old 07-18-2011, 08:49 PM   #41
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I/we got lucky:

A combination of living at home, scholarships and part time jobs saw me graduate from university with no debt and a very small positive net worth.

Moving to Hong Kong early in my career and benefitting from moderate tax rates combined with a LBYM lifestyle resulted in good financial progress from my mid twenties to early thirties.

Things accelerated in my early thirties when my income increased significantly - I moved from making a good income to making a very high income. Living costs also went up a lot, but not nearly as fast as my income.

We started investing in Hong Kong property with leverage around the time of the SARS epidemic (which was the low point). Even if prices were to drop by 20% or more from current levels, it would still be a good move.

I changed jobs in early 2009 and received a meaningful lump sum payment from my old employer. Almost all of that payment (+ what I was saving from the new job) went into the stock market in the first half of 2009. Not quite the bottom, but close enough.

Lots of expensive and cringe-worthy mistakes along the way, but the things that went right for us were much more significant than the things that went wrong.
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Old 07-18-2011, 09:05 PM   #42
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I'd agree that it's a stretch to say young-uns save you money (How do you manage that, Fuego? Rent 'em out to empty nesters? )
In addition to everything Fuego already mentioned, think of the DINK entertainment alternatives that parents miss out on:
- frequent golfing or SCUBA diving or other cash-heavy hobbies
- bar-hopping or dining out whenever you feel like it
- weekend trips to anywhere/everywhere
- serial home remodeling & landscaping

Agreed, all of these activities can be done with kids, or none of them can be done because you're LBYM, but "no kids" opens up all sorts of spending opportunities.

Before we all start moaning & griping about the cost of sports and lessons and tutoring and whatever else we spend our parenting money on: think of them all as part of the college fund, and the experience as some sort of academic or physical preparation. My daughter and I spent thousands of dollars getting our taekwondo black belts, but there wouldn't have been any other way to spend so much time together in class and tournaments and in the car-- talking and mentoring. She didn't just learn how to memorize and kick & punch; she learned how to get back up after being knocked down. We spent more thousands of dollars on Kumon math tutoring (although the instructor eventually paid it back to her in salary) which led directly to a top college and years of work experience. She knows she already has the skills to never go hungry again because she's done the work alongside other adults.

Otherwise we raised her on Goodwill, garage sales, and eBay. We saved the big bucks for the important stuff...
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Old 07-18-2011, 09:40 PM   #43
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Some keys:

1) LBYM

2) Invest early - let the magic of compounding work for you

3) Don't raid your 401K, IRA

4) Be careful where you walk with your hard earned money (stay away from stepping into poop)

The last one I thought of the other day as I was walking fido
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Old 07-18-2011, 10:03 PM   #44
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The age at which a large number of people become millionaires depends not only on their earnings and lifestyle, but on the era and the country in which they live. For example, 40 years ago the quickest place to be a millionaire at a young age would have been Italy (in the days of the Lire)!

I hit $1m in 2005 when I was 48. I was close in 2004 and would have hit it anyhow but an inheritance put me well over the top. I am a high earner and was passably LBYM. Ironically, I have become more LBYM since then, because I could see my way to FIRE. Now I'm FI but not RE...yet.
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Old 07-18-2011, 11:44 PM   #45
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Hit millionaire status at 48 by doing the boring things:

LBYM
Save approximately 25% of earnings
One kid
paid off mortgage and all other debts by age 40


FI but still working
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Old 07-19-2011, 12:08 AM   #46
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I make a modest salary so when you are in that position you have to forget about what others think about your strange frugal lifestyle.

I bought eleven (10 single family 1 duplex) over the last 27 years on 5 to 7 year notes. Large payments but large rewards. I have done much of the painting myself. Bought in a close in neighborhood with good but largely undiscovered schools. I knew it would be discovered but it took time. Going from boho to yuppie.

Also worked in same job 25 years maxing out 401K and recently Roth.


1st million early 40s 2nd late 40s now close to 3 at 53.
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Old 07-19-2011, 12:23 AM   #47
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We made good money thru our 40s but living in So. Cal. made it hard to save much of it. Cashing out of a nice home in 2008 with lots of equity and moving to a cheaper state has helped our portfolio hit that magic number recently, but we still have a long way to go before we'd be comfortable retiring.
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Old 07-19-2011, 03:56 AM   #48
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When I separated from first wife at 42 I had a negative net worth with virtually no assets other then my future earnings potential. Lived an extreme LBYM lifestyle for about 5-7 years before things took off with career. Probably over $1million around age 47. Multiplied that 10 fold over following 7 years or so through equity awards at work and continuing with LBYM ,although now high spending lifestyle. retired at 56.
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Old 07-19-2011, 04:40 AM   #49
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People on this board are abnormal in that sense... they are not a reflection of the general population.

There have been some fundamental changes in the US over the last 30 or 40 years that has made it (more) possible for people to acquire money and personal wealth.


  1. More college educated people that earn more money in their lifetime.
  2. I will call it "Womens' Lib" for those of us from a different time. This societal change led to more women seeking college educations and working as professionals in the work force.... Two College educated professionals can earn a good living.
  3. LBYM + 2 High Incomes + Saving and Investing Earlier in life.
  4. Using a tried an true investment approach with the power of compounding.
  5. Limit the use of debt (to homes and cars). Once once becomes able get out of debt completely.
  6. If small windfalls (of money) happen you way through life, save and invest it instead of spending it.
  7. Don't try to live like the "Jones'"... this is a variant of LBYM.
  8. The advent of IRAs and 401k.... plus the increase in availability of ways to invest... (e.g., more mutual funds, ETFs, discount brokerages)... that cater to the general public.
  9. Some also have pensions and/or employer contributions on top of their personal savings.... just another form of deferred compensation.
  10. Good Health (that did not put a huge financial burden on the family)
  11. Continuing to work until FI.

However, all of the items in the list above are things that either made it possible... many of them still required one to use them and stick with it over many years.


There are some people that got big inheritances or were lucky with stock options in the 90's and later.
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Old 07-19-2011, 04:51 AM   #50
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People on this board are abnormal in that sense... they are not a reflection of the general population.
Fixed that for you.

I agree with your list. The major addition is the more widespread knowledge of good personal finance practices (nothwithstanding the Suze case studies etc).

I suppose the follow up question is whether it is getting harder to accumulate wealth or easier. The decline of DB pensions, rising college costs etc must have an impact on a sizeable portion of the population?

As an aside, the equivalent changes we are seeing in the developing world are even more dramatic - the sheer number of people around the workd who are joinging the middle class is staggering.
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Old 07-19-2011, 05:30 AM   #51
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Philosophically, I think some of the best things you can do for your kids don't cost anything other than your time and attention.

Take note our kids are still young (both will be in elementary school this fall), and so I could be in for a very rude awakening (and I have budgeted for this to a certain degree). But we also live in a moderate income area ("gentrifying area") so our kids don't see lots of spoiled rich kids surrounding them all day (another benefit of living in a moderate cost neighborhood and going to schools with a high proportion of low income students).
Yes, you could be in for a rude awakening........

Raising our family cost us all our money and a little more. Briefly empty nesters, we now have the grand youngin's to take over looting the bank of Gramma and Papa! Kids and grand kids can consume an infinite amount of resources.

But in the end, raising the family just sets the bar a bit higher on the way to FIRE, just another expense to account for and take care of. And, for us, the rewards are well worth it.
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Old 07-19-2011, 07:19 AM   #52
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Yes, you could be in for a rude awakening........

Raising our family cost us all our money and a little more. Briefly empty nesters, we now have the grand youngin's to take over looting the bank of Gramma and Papa! Kids and grand kids can consume an infinite amount of resources.

But in the end, raising the family just sets the bar a bit higher on the way to FIRE, just another expense to account for and take care of. And, for us, the rewards are well worth it.
Well said........
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Old 07-19-2011, 07:20 AM   #53
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Nice list, Chinaco.

I would add one more item to that list, perhaps an offshoot of items #2 and #7:

More and more people making the fine choice to be childfree (i.e. lower birthrates), thereby avoiding the financial downside of having kids, contributes to increased personal wealth. No chance I could have ERed if I had kids. No chance I'd have $1M saved up by age 47 (last year) if I had kids.
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Old 07-19-2011, 08:20 AM   #54
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Yes, you could be in for a rude awakening........

Raising our family cost us all our money and a little more. Briefly empty nesters, we now have the grand youngin's to take over looting the bank of Gramma and Papa! Kids and grand kids can consume an infinite amount of resources.

But in the end, raising the family just sets the bar a bit higher on the way to FIRE, just another expense to account for and take care of. And, for us, the rewards are well worth it.
Agreed - kids are worth it. Spending remains a choice, and of my budget line items, kid-related spending represents the most uncertainty (more than health care/health insurance!).

Overall, I don't see kids as an impediment to FIRE status.

Quote:
Originally Posted by Nords
In addition to everything Fuego already mentioned, think of the DINK entertainment alternatives that parents miss out on:
- frequent golfing or SCUBA diving or other cash-heavy hobbies
- bar-hopping or dining out whenever you feel like it
- weekend trips to anywhere/everywhere
- serial home remodeling & landscaping
Can't agree with this enough. Sure, kids cost something, but I regard it as a spending shift instead of an outright increase in spending for the reasons you mentioned. We like to travel, and we would undoubtedly be taking a lot more long weekend trips and week long vacations but for the kids. Now kids fill up our free time in a usually positive way ("whaddya do all day").

And having kids provides huge motivation for me and DW to FIRE because we want to spend more time with them. We also look forward to not being exhausted and mentally fatigued from work so that we have more energy to interact with them.
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Old 07-19-2011, 10:32 AM   #55
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We also look forward to not being exhausted and mentally fatigued from work so that we have more energy to interact with them.
That was one of the biggest improvements of my ER. Suddenly the whole family seemed willing to spend more time with me...
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Old 07-19-2011, 03:20 PM   #56
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$ 1 Mill Net reached at 45 1st time . Today at 50 $1.6

Educated

DINKS

Bought first home at age 23. All interest paid offset from apprecation in total of three homes.

Told mom when I was 15 I would be a millionaire by 30 so just a little late.

Maxed 401Ks

When We Got a raise saved 50% of net and had fun with the other.

Bonuses after tax saved 75% spent the other 25%

Never paid a dime in credit card interest.

Made car payments to my self then paid cash for cars.

Grandfather told me once never pay the Bank have the Bank pay you stuck early on.

Essentials always bought on sale.

Always asked for discount.

Save 1/3 spend a 1/3 and give the govt and charity 1/3 whole career.

Lived along the way Sailboats Vacations and Fine Ddining.
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Old 07-25-2011, 12:20 PM   #57
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This is a great thread!

39 ... will be 40 in a few months.

We're bouncing around the million mark. I told my wife that we'll celebrate once we're comfortably over the mark. A bad week in the stock market will put us below the mark.

Some of our keys:

3 kids. And yes, kids are pretty expensive ... now were in the travel baseball and basketball

Until a couple years ago, we were both cheapskates. We no longer worry about a few dollars here or there

No expensive or real bad habits. I do Drink some beer and do little bit of gambling but not extreme.

We buy 2 year old cars and drive them for until they're about 8 - 10 years old

I always do 3, 5, or 7 year ARM mortgages. Save $ now and role the dice that interest rates won't go up a great deal. I take the risk vs. the bank.

The last few years, I've made a good salary ... with bonus 150 - 190 ... prior to that though i was in the 80- 100 range. Wife has worked part time 1 to 2 1/2 days per week. Bringing in 10 - 20 per year. Mostly a stay at home Mom.

made no more than about 100k off stock options

always maxed the 401k and iras out

5 - 6 more years and i'm likely gone. Looking for 2MM ... wife will continue to work part time for the insurance.
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Old 07-25-2011, 02:51 PM   #58
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I feel a nice kinship with the people who've replied in this list. We wear clothes for a long time, drive cars for 20 years, take cheap camping vacations, and really enjoy life.
+1

Some of my fondest vacation memories have been camping!

We donít keep the same car for 20 years because of the miles I put on a car, but we are not picky about what kind of a car we drive as long
as we get a good deal on a car that has very low miles preferably from the original owner, or estate.


Iím on my second Saturn 3 door coupe. A 2002 bought 2 years ago with 4,500 miles for $6,500.00. After selling my old Saturn with 120,000
miles on it for $2,5000 my new car was relatively cheap! Iíll probably need another car next year after I retire, by then this little Saturn will
have as many miles on it as my old one did.

Too bad they no longer make Saturnís, good little cars.
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Old 07-26-2011, 07:48 AM   #59
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Are there really so many 40-something millionaires? As someone already pointed out, only 6% of the US population has a net worth of one million. And I'd wager the majority of those are significantly older than 40. I also would propose that a lot of people you may think are millionaires really aren't. They're just living the lifestyle--but it's all on credit. That, after all, is the American way.

As for me, I'm in my mid-40s and only about 3/4 of the way there. If I play my cards right, I may top the mark in as little as 3 years--but as another person pointed out, a million doesn't mean what it used to...
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Old 07-26-2011, 01:29 PM   #60
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1. enjoying a good salary;
2. living below my means;
3. no kids;
4. no debt;
5. never married.
this is me... plus some hyper-aggressive investments. Looking to shift gears. I have 1.8 Million and want to semi-retire within the next 12-24 months.
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