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Why so many 40-something millionaires?
Old 07-17-2011, 03:22 PM   #1
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Why so many 40-something millionaires?

Seems like a lot of the "can I retire?" threads on ER/Bogleheads-type sites read something like..."we're 40 and have $1 million in invested assets...can we/when can we retire?"

How did y'all get so rich so early?

I recall a recent statistic that most Americans don't have $20k in savings (forget the exact number, but something like that)

So it is just a predominance of 40-something millionaires asking these questions or what?

When I see those types of threads I just close them and move on...something psychological about feeling behind I guess ...but I suppose trying to keep up with the savers is better than trying to keep up with the spenders...

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Old 07-17-2011, 03:28 PM   #2
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3 ways: Own their own business, very large income(attorney, investment banker...), inheritence.

Don't look at it in terms of total $ amount. Look at it in terms of # of years worth of expenses. Two people could each have $1MM in savings with one of them having enough for 10 years while the other has enough for infinite years.

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Old 07-17-2011, 03:53 PM   #3
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We are 40 somethings looking to retire, but we don't actually make that much money, we just don't spend it. We look for free things for fun, fishing, camping, window shopping. We buy a lot of used items rather than new, had the same cars for over 10 years, use coupons for EVERYTHING, saved as much as we could in 401k's. Every vacation is just about free via frequent flier miles and starwood points. We spend $40 a week to go out for dinner, and cook from home, always take lunches. But the biggest thing we do is manage our taxes through investment properties and side businesses.
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Old 07-17-2011, 03:53 PM   #4
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Originally Posted by Gerbil Wheel View Post
How did y'all get so rich so early?
Who, me?

The year I was 40, I passed the $100k/yr mark and was dreaming of $1MM in savings.

And I still made ER at 55. It's as much about how much you need as how much you have.
Retired in Jan, 2010 at 55, moved to England in May 2016
Enough private pension and SS income to cover all needs
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Old 07-17-2011, 04:01 PM   #5
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- Received real estate from parents whose health was declining. Sold it at historically high prices.
- Never married, no divorce, no kids.
- No debts.
- High salary.
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Old 07-17-2011, 04:19 PM   #6
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- No kids.

- No debts.

- Company stock grew by 3,000%.


I was at $590k at the end of the quarter (2Q 2003) in which I turned 40. By 2Q 2007 I was $971k. I was 44 and still working, albeit only 12 hours per week. I ERed in late 2008 as my portfolio was dropping somewhat. I hit the $1M mark briefly in April 2010 before that sudden and weird downturn in May when we had that "flash crash." Got over $1M that September and never looked back.
Retired in late 2008 at age 45. Cashed in company stock, bought a lot of shares in a big bond fund and am living nicely off its dividends. IRA, SS, and a pension await me at age 60 and later. No kids, no debts.

"I want my money working for me instead of me working for my money!"
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Old 07-17-2011, 04:33 PM   #7
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$1 million dollars isn't all it used to be. When I first got out of college I calculated that if I could ever get $200,000 I could retire. With quality stocks paying 8% dividends and 10 year bonds paying 6%, a balanced portfolio would have been safely more than my current salary (~$12,000) and I wasn't coming close to spending that.

I probably had $1 MM when I was a 40-something but inflation had managed to make ER a stretch at that tender age. I'm now a 50-something with more money but the prospect of medical care, passive returns and potential inflation continue to muddy the waters.

At a certain point you have to say it's time. I'm confident I have "enough." What I like about keeping on keeping on is I make a profane amount of money with no stress. DW is otherwise occupied caring for her father which prevents any significant changes I would want to do if I truly retire.
The object of life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane -- Marcus Aurelius
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Old 07-17-2011, 04:35 PM   #8
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Originally Posted by Gerbil Wheel View Post
Seems like a lot of the "can I retire?" threads on ER/Bogleheads-type sites read something like..."we're 40 and have $1 million in invested assets...can we/when can we retire?"

How did y'all get so rich so early?
Get a job out of college or grad school making $60k per year today. Save 27% of your initial salary in a 401k (i.e. $16,500 - the max allowed this year). Every year, increase your contributions to match the maximum allowed (assume that the max goes up by 4% per year). Invest at a rate of 7.2%. In 20 years, when you are probably between 42 and 45 years old, you'll have over $1 million in your 401k.
Living an analog life in the Digital Age.
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Old 07-17-2011, 08:56 PM   #9
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I got there from stock options. I earned my stock options but the fact they were worth something was pretty much just pure luck. Which is why I say I earned my lottery tickets.

However, my retirement accounts also hit a $1 million by the time I was 40. I made more than 7.2% by adopting an aggressive investment strategy when I was young but mostly cause exactly what Gumby suggested maxed out my retirement savings.
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Old 07-17-2011, 09:00 PM   #10
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1. enjoying a good salary;
2. living below my means;
3. no kids;
4. no debt;
5. never married.

Originally Posted by Gerbil Wheel View Post
How did y'all get so rich so early?
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
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Old 07-17-2011, 09:16 PM   #11
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Probably lots of people with $1M in their 40's are realizing they may be able to retire early. Probably not too many in their 50's with $10k saved are looking to retire early. And anyone who's 65 isn't retiring early. So it's a somewhat self-selected group.

As Gumby pointed out, a lot of professionals like engineers (who seem to be well represented here) can LBYM and retire early simply be saving what they earn, no luck involved. Though I'll admit to less LBYM (I targeted retirement at 62), and more stock options in achieving FIRE.
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Old 07-17-2011, 09:34 PM   #12
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It was easy.

Just work 20 years from age 20 to age 40 (or 22 to 42 if you want). Be married to someone else who works. Save/invest one entire salary. Participate in the great bull market. Have kids if you want, but they don't go to private school.

One probably needed to save about $20K a year to get to a million in 20 years, but you had to start early even at a time that 401(k) contributions were limited to $4K a year.

And then the second million was even easier. And don't forget that the stock market has doubled in the last 16 months, so the 3rd and 4th million are gonna be easier still.

Things that were NOT necessary:
1. Inheritance.
2. Not marrying and not having kids.
3. Didn't need high income.
4. Didn't need to be self-employed business owner.
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Old 07-17-2011, 10:29 PM   #13
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Originally Posted by Gerbil Wheel View Post
How did y'all get so rich so early?
So it is just a predominance of 40-something millionaires asking these questions or what?
Well, the only people asking the questions are the ones who think they're close to the answers. The people with a net worth of $20K aren't even thinking about next year, let alone retirement.

In our case: dual-military couple, plenty of sea duty, some bonus pay, no time to spend money. "Easy". Looks pretty good from this side of the retirement date, anyway.

Spring 2020: my daughter and I wrote “Raising Your Money-Savvy Family For Next-Generation Financial Independence.”
Author of the book written on "The Military Guide to Financial Independence and Retirement."

I don't spend much time here— please send a PM.
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Old 07-17-2011, 10:38 PM   #14
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A million isn't very much these days. I've got a low-pay, dead-end job, and I need two million to even feel near ready to retire (cost of health insurance, etc.) I don't have near a million yet , but if I did, I'd only think I had a good down payment towards retirement....
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Old 07-17-2011, 11:59 PM   #15
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Many millionaires on the board and elsewhere got there in different ways. Like others have said: high salary, stock options, low expenses, and inheritance.

At around age 40 just after my divorce, my exwife left me with nearly $80,000 in various credit card and other debts, alimony, child support for one child (I was raising the other one myself) so I had to provide a household for him while trying to manage a high stress long hour job with next to nothing in after-everything payments, no savings, 0$, small house with a borrowed downpayment and PMI on the mortgage. Etc.

After taking every dime I could muster up I paid off the debt in about 2 years. That was the worst time in my financial life. After that, I started saving for ME and buying savings bonds for my son's education (pre 529 plan). Once I had and emergency account and about 3 months of critical living expenses in a MM account I started directing money into my 401k and dipped my toe in the stock market.

I hit some home runs and struck out several times but learned along the way. When I remarried my new wife's financial ideas were similar to mine so that also helped. So after 10 years of child support and 7 years of alimony I was free of all extra payments. I took those amounts and plowed them back into the market. I also had a few pretty puny stock options that mostly drowned before they paid a dime. I would rather of had the cash up front so I could invest it where I wanted it and would have come out way ahead.

We are now reversing the investments to a degree...rebalancing and converting some to more liquid forms for living expenses before we start the 401k IRAs at 70.5.

We have lived well in the past 15 years and have saved well. We are now reversing the ship and living on what we is a bit of a mind altering experience and is taking some getting used to.

This and related forums will be filled with high net worth individuals mostly because it takes money to retire and especially early. It should not be too surprising to find multimillionaires here from all walks of life. Over-achievers tend to flock together.
Work? I don't have time to work....I'm retired.
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Old 07-18-2011, 02:26 AM   #16
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Just shy of 40, We are barely $ Millionaires (Living in India now). I worked for 10 years, Hubby has been working for 17 years. Started at salary for $1500 per annum each :-) in India. US starting salary for $40-50K each. Best year family income was $225K (For 1-2 years). Average family income would be $80-90K p.a. all these years.

* No Inheritence
* Stock optins but not more than $200K
* No major luck in Stock Market or Real estate
* LBYM - saved 40-70% of Gross (Even on 1 income)
* 2 kids
* Same car for 10 years in US, Home-made lunches & dinners mostly, 5-7 year old basic clothing, No drinking/gambling/expensive hobbies other than vacations
* Worked our butts off at job to get all the raises & promos we could.

So HARD WORK & LBYM it is (with decent bit of luck thrown in)

Basically content with Life. Millionaire or not Happy to be who we are, where we are and the person we are living with.

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Old 07-18-2011, 07:32 AM   #17
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Well, I know of at least two millionaires (ie > $1 million in investable assets) in their early 40's, in my circle of friends / acquaintances.
  1. Male who did a Computer Science / Economics combined degree. Went on to become a management consultant for a large firm after uni - basically goes into businesses and does strategic/operational reviews, including how to increase profits/sales, who needs to be fired, that sort of thing. Did this for a few years, before realising he could do this for himself and not have to work for a salary, ie keep all the money. Has worked in London, now back in Oz. Married, two kids, wife does not work, large home with pool in a leay suburb. Continues to be a successful management consultant with his own firm (you know, the type that you give him your watch and he tells you the time - just kidding, he is obviously very good at what he does)
  2. Male, engineer, has worked for twenty years since leaving uni. Always for the same firm. Not a huge income, but reasonable - he is not an Engineering Manager or Director, just an engineer. Never married, no kids, definitely a LBYM - maybe taken to excess. His firm provides a car and all car expenses. Still lives at home with his parents. Limited social life.
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Old 07-18-2011, 07:45 AM   #18
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Owned our own business, made a very high income for a few years, lived far below our means, kept those habits of saving and living frugally even as our income varied over the years. No debt except the mortgage.

We hit $1M net worth in early 30s, retired early 40s.

We tell our own kids the key isn't how much you make, it's how much you save —*and start *early*.

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.
And this, our life, exempt from public haunt, finds tongues in trees, books in the running brooks, sermons in stones, and good in everything. — Shakespeare


retired mid-2000s age 42
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Old 07-18-2011, 08:04 AM   #19
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1. LBYM- Used budget as a guideline
2. Good paying job and continue to improve skills. (Who Moved my Cheese?)
3. When we got married lived off one income
4. Began to look for alternative income sources (online teach, online sales, etc)
5. Rental Property (not over leveraged, used low rates to pay down fast, restructured for more positive cash flow)
6. 2 Kids (one was real sick and we spent a lot of time in the hospital)
7. Drive cars for as long as you can.
8. Try not to get into situations where you become very inelastic to purchases because you have to have it now.
9. Now add in Military retirement. (in our case) I am still trying to figure out the MC vs MB of doing a military career. I would love to see a utility function of what we learned at the 4 yr, 6, yr, 10 yr points, etc. I suspect there is a huge diminishing returns in later years. I can tell you this for sure. DON'T DO IT FOR THE MONEY. You will be miserable.

No doubt military retirements and TRICARE really help create a nice foundation. There were times when being active duty actually costs us more due to missed opportunities, additional costs, family wear and tear etc.

10. Attitude- This is a big one for us. Be happy for others success, learn from their success, and figure out how you can leverage their success. For the most part is successful people are happy to share how they got where they are. Just like with my sons now. If I surround them with motivated kids they push each other and do better. If I let them blow in the wind they just hang out. You can't always pick the situations you are going to be in no matter how hard you try, but you can pick your attitude you bring.

11. Be yourself.

I think the members on this board already are doing pretty well as they have the thought process and desire to reach their goals.

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Old 07-18-2011, 08:10 AM   #20
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Sorry, make that three millionaires in their 40s I know personally. Forgot about the following, but there are extenuating circumstances, which makes him atypical.

Third one is a male, married, four kids, wife doesnt work. He owns a number of rental properties and shops. Sold a separate grocery/take away business. Left school at 18, did not attend university. Works for himself. Parents won the lottery about twenty years ago (at that time, I think about $1M or so). This was how his family was able to get into the business and buy properties, from that start. Father now deceased, so transfer of wealth has and continues to occur.

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