Surest Way to $1M

[Onward]

1. Get degree
2. Get well-paid job
3. Invest a good chunk of each paycheck in index funds
4. Do whatever necessary to avoid divorce
5. Retire in 20 yrs or so and go have fun

It's very, very simple if you follow the rules.

Of course, silly me didn't follow the rules, so it wasn't so simple.

 

[vttlarry]

rbmrtn, a quick check of that site shows a 1.34% rate for 2 years. Have you seen something else?

 

[teejayevans]

Get a good degree, and then a good job with a MegaCorp. Live below you means. Manage your tax liability.[-] Marry someone who thinks similar[/-]. Don't have kids if you want to get there even faster.

Good strategy, I made it better
TJ

 

[73ss454]

Sorry for hijacking thread and for typos - typing from iPhone while traveling. Just wanted to mention there are 3% CDs available this week. Just bought some.

Great, at least you may be keeping up with inflation.

 

[Aviator]

Last page of this month's money magazine has a CNN poll results that asks "What is the surest way to reach $1M"?
- Invest in Stocks = 36%
- Buy Real Estate = 21%
- Own a Small Business = 31%
- Win the Lottery = 12%

WIN THE LOTTERY = 12% Really?
More than 1 in 10 people think this is the surest way to $1M...depressing.

I think CNN's pole asked the wrong question. They should have asked, "What is the surest way to be financially independent and retire early?" Too many people focus on the dollar amount. I know it sounds like a broken record and I wish Nords would write for "Money" cuz he would tell them it's not about how much you make.... it's how much you save and don't spend. For me ... I'll be too busy enjoying a work-free, debt-free retirement, thanks to your advice on this forum, than worrying about reaching a million$.

 

[rbmrtn]

rbmrtn, a quick check of that site shows a 1.34% rate for 2 years. Have you seen something else?

On their home page go to products and services tab, then certificates. The first tab is a special 1yr CD @3.00%

 

[foxfirev5]

The subject matter here regards the surest way to reach a million. While I know many who have started a business and made it, they are certainly in the minority. Not the surest way. Many excellent suggestions are offered above. Don't be discouraged by thinking that your not highly educated or able to start your own business. Diligent saving and a diversified investment plan over a long time horizon will get you there. Play the hand that is dealt you. LBYM and invest the rest.

 

[MikeD]

I will PM you - don't want to highjack the thread

Please tell me also. I tried to PM you but your PM count has been exceeded! You've caused quite a stir!

Mike D.

 

[boatfishandnature]

Get a good degree, and then a good job with a MegaCorp. Live below you means. Manage your tax liability. Marry someone who thinks similar. Don't have kids if you want to get there even faster.

+1

 

[Independent]

If you want to make it to $1 million by earning and saving, and you think you can work for 40 years, you'll need annual savings of

$13,260 if you can earn inflation + 3%
,,$6,460 if you can earn inflation + 6%

(Currently, TIPS are at inflation + 0%)

The median income for full-time, year-round workers in 2010 was
$50,360 for men, and
$38,300 for women.

So half the full-time, year-round workers made less than that.

I think $1 million is a challenge for lots of Americans, just because they don't have the income to support that level of saving.

 

[scrabbler1]

Get a good degree, and then a good job with a MegaCorp. Live below you means. Manage your tax liability. Marry someone who thinks similar. Don't have kids if you want to get there even faster.

I was gong to post this myself. LBYM, and be childfree. No debts (other than a mortgage which should be paid off early if possible) is good. I am not married so that is not a requirement.

 

[ejman]

Surest way though not the fastest is to work a 9-to-5 job with a megacorp, keep your nose to the grindstone, live LBYM, maxing out 401k, save as much as possible with after-tax money. Invest in stocks. Rental properties if you have the knack for it.

Yup, this is exactly what worked for me. Not terribly fast but really didn't take that long. Got MBA summer of 76, ER end of 2002 so about 26 years or so, with one year sabbatical for navel gazing so really 25 years of work. Tried the rental property bit but really not my cup of tea. After dabbling with individual stocks and determining to my entire satisfaction that I am not remotely related to that Buffett fellow invested solely in mutual funds which did well for me.

 

[obgyn65]

A few people have asked where I got the 3% CD. Instead of emailing everyone, a post might be better... I bought from Edward Jones, here are the details :

GOLDMAN SACHS BK USA NY CD 3%2
C/D FDIC INS TO LIMITS: DUE 09/02/2021 03.000% MJSD: SOLICITED: 1M

 

[UnderTheRadar]

I suppose you can argue the +/- of each option.....to each their own. I am just shocked that more than 10% say the "surest" way is the lottery. Clearly they do not understand the odds....

I guess I can see it from the point of view of despair " I am 50 years old w/ $35k in credit card debt, no ambition, and a minimal salary job"..... I suppose your only option may be the lottery. But hopefully this is not what you are teaching your kids/grand kids!

 

[JohnDoe]

I suppose you can argue the +/- of each option.....to each their own. I am just shocked that more than 10% say the "surest" way is the lottery. Clearly they do not understand the odds....

The option was not play the lottery - it was win the lottery. That probably IS the surest way to 1MM.

 

[foxfirev5]

If you want to make it to $1 million by earning and saving, and you think you can work for 40 years, you'll need annual savings of

$13,260 if you can earn inflation + 3%
,,$6,460 if you can earn inflation + 6%

(Currently, TIPS are at inflation + 0%)

The median income for full-time, year-round workers in 2010 was
$50,360 for men, and
$38,300 for women.

So half the full-time, year-round workers made less than that.

I think $1 million is a challenge for lots of Americans, just because they don't have the income to support that level of saving.

OK so it's impossible. Sorry but a lot of us made it happen with good luck, yes, a favorable market , yes .
Maybe the same situation will present iself again. I started my investment career in the late 70's on an income of less than 10k per year. Wife, I kid and no benefits. Fifteen years later around 1995 I had about 60k for my total fortune.
Now I've somehow got it made. Give me a break. Make your plan and make it work,

 

[clifp]

If you want to make it to $1 million by earning and saving, and you think you can work for 40 years, you'll need annual savings of

$13,260 if you can earn inflation + 3%
,,$6,460 if you can earn inflation + 6%

(Currently, TIPS are at inflation + 0%)

The median income for full-time, year-round workers in 2010 was
$50,360 for men, and
$38,300 for women.

So half the full-time, year-round workers made less than that.

I think $1 million is a challenge for lots of Americans, just because they don't have the income to support that level of saving.

Historically stocks have returned more than 6% after inflation. Now granted into today's environment that maybe challenging especially with a less aggressive AA.

However even today for more than 1/2 of college graduate who are not un or underemployed (sadly 40%+ are un/underemployed) with a starting salary of 40K and start by saving 10%. That is 4K a year. If do what a lot of us on the forum have done and what books (like Nords) advocate and when they get a raise allocate 1/3 to taxes, 1/3 for spending and save 1/3, but the time their salary hits 50K they will be saving $7,000 a year and well on their way to being a millionaire.


Frankly the key ingredient that is missing is LBYM, but for anybody making the median income by age 30 it isn't hard to become a millionaire by saving ~10-15% of their salary.

Now obviously if you in place with a higher cost of living it is more challenging and for people who's income never gets above 50K and.or raising a large family it may not be possible. But my niece is married to a minister, they live in California and have 3 kids. She is homeschooling them and has some part time work grading essays. They don't make 50K a year and manage to save 10%+ for college and retirement.

So I am with FoxFire here lots of people have done it in the past and people are still doing it today.

 

[HillCountry]

I would recommend try all three except lottery.

I still have to make M in real estate, as I just started. I already achieved my goal with stock and small biz.

 

[photoguy]

Now obviously if you in place with a higher cost of living it is more challenging

Sometimes working in a high cost of living area can help as your pay scale will be higher but only if you control housing expenses.

 

[Independent]

Historically stocks have returned more than 6% after inflation. Now granted into today's environment that maybe challenging especially with a less aggressive AA.

However even today for more than 1/2 of college graduate who are not un or underemployed (sadly 40%+ are un/underemployed) with a starting salary of 40K and start by saving 10%. That is 4K a year. ....

Suppose that 1/2 the young workers have 4 year college degrees and only half of them are getting the higher salaries they expected.
So that's 1/4 of the population that has comfortably above median incomes due to their degrees.
Then there's another 1/4 that get above the median without the college degree.

But if "median" means anything, half the workers earn less than that. I'm thinking about those workers.

 

[pletal]

Here is another way to hit the 1 Million mark, or more. Save 20% of your pay. Been doing it since 18 years old. 48 now, never stopped, never spent it. Make life choices based on not having that money. Don't care where you put it, market or CD's you should be able to retire early.

 

[NW-Bound]

In my case, with both of us working, we got a bit of an advantage. My wife's salary was much less than mine, but it still helps, particularly as she was never a big spender. Our children went to public schools, not expensive private ones. I practiced all the common LBYM manners, such as driving my cars to the ground, cooking and eating at home, etc... But we always took our children on 2 vacation trips a year, until they reached late teenage years and did not want to do with us anymore.

So, we had reasonable income but would still be able to claim some credits for our LBYM efforts, as we know plenty of people who made the same money or more and are still toiling at megacorp.

Though we were always savers, we did not know much about investing. I kept my nose to the grindstone at megacorp, and never kept track of my accounts. Quite a few Sundays found me at the nearby university library researching some papers related to my work (this was pre-internet), instead of reading up on investment topics. If I could live my life over again, I would spend more time caring about my money than my work at megacorp.

By the way, at megacorps, what I have seen was that the people who got more money and retired early were usually not the best technical workers, but rather more financially astute than the latter. I was one of the booksmarts, and should have been a bit more streetsmart. I was lucky to turn out OK.

I agree with Independent that it is not easy for a typical worker with a lower income to get to $1M. It would be late in his life, if he gets there. On the other hand, if the goal is just to retire early, then there are people who manage to do it with less than $1M. One can live a more modest lifestyle, or downshift to a part-time job with less stress for ESR. If the goal is to pursue happiness rather than a certain watermark in one's net worth, then there are many roads one can take.

 

[teejayevans]

Here is another way to hit the 1 Million mark, or more. Save 20% of your pay. Been doing it since 18 years old. 48 now, never stopped, never spent it. Make life choices based on not having that money. Don't care where you put it, market or CD's you should be able to retire early.

To put it another way, you can't control the market returns you will get, but you can control (up to a point) how much money you save.
TJ

 

[CyclingInvestor]

Surest way though not the fastest is to work a 9-to-5 job with a megacorp, keep your nose to the grindstone, live LBYM, maxing out 401k, save as much as possible with after-tax money. Invest in stocks.

This is what worked for me, along with having dogs instead of kids.

 

[RunningBum]

Some people really have no prospects at ever getting to $1M. If you have a limited education and a low income job and no special skills, you may live pretty much month-to-month, and not have any capital to start a business or invest in stocks. These people probably see the lottery as their only chance at $1M, and they may not be wrong.

However, as we all know, that's the worst plan of all. Cutting expenses and putting something away each month to invest or start a business may not get them $1M, but getting halfway there or even less will make for a much better retirement, early or not. It's not an all or nothing deal.