The first million takes the longest to achieve

[slowsaver]

14y, 5y, 2y, 2y

 

[street]

14y, 5y, 2y, 2y

Very nice! You sure weren't a slowsaver with those numbers. You did really well.

 

[catii]

9 (based on property values), 3, 1.5, 1.4, 1.2

Takes money to make money!

 

[RobLJ]

I'm really impressed by many of you, although I knew since 2010 or so that I was hanging out here with the 2%ers. Which is cool.

We semi-retired (at 57 and 52) at 1.4 million in 2015 and despite drawing 6% or more are at 2.2. I'm about to draw SS at FRA so maybe in 5-7 years we might hit 3 million, although it's not necessary. My parental units were lower middle class and DW's were lower class, so where we are is not what we ever imagined, until I was 45 or so and ran the numbers.

I think a lot of you need to figure out how to blow the dough, although you should do you. I keep this in mind when I read the threads on asset allocation, where I think for many of you it doesn't really matter whether you go 100% stock or 100% bonds. It is true that the posters are skewed towards the most "successful," so there is that, nothing wrong with it. We're hiking in Scotland in June for our 40th anniversary and I convinced DW, who is very frugal, to fly 1st class since she cannot sleep on long flights. That, to me, is the definition of success.

We have had a great retirement funded by our assets, but we're spending much of what we are "earning." After I draw SS and particularly the DW in 4 years, that will change, according to projections, but I'm not very concerned about the next million. Actually, I don't think most of you are either--once you have one or two or three, it probably doesn't matter, although I guess more than a few of you spend a lot more than we do.

 

[jollystomper]

I have tended to invest more conservatively, particularly since retirement, so the times to the next million after our first million have been longer than some, all around 6 or 7 years. But at this point, any subsequent millions will primarily benefit our heirs and/or the Long Term Care home, so I am not paying too much attention .

 

[pletal]

I have tended to invest more conservatively, particularly since retirement, so the times to the next million after our first million have been longer than some, all around 6 or 7 years. But at this point, any subsequent millions will primarily benefit our heirs and/or the Long Term Care home, so I am not paying too much attention .

I have been conservative also. Now what to do with it?? Always been a saver, hard to change. Can only have so much stuff and traveling all the time isn’t for me

 

[mathjak107]

i have always been an aggressive investor , but only up to pre retirement… much more conservative now

 

[TheWizard]

I have been conservative also. Now what to do with it?? Always been a saver, hard to change. Can only have so much stuff and traveling all the time isn’t for me

Perhaps a change of mindset then?
There's zero need to match spending with income or assets.
It's fine to let excess money pile up for no particular reason.
Something WILL come along every so often that was unplanned and you'll be in good shape to deal with it...

 

[Route246]

I don't have all of the numbers but I do have my current 8-years 401-K numbers summarized which is indicative of how the growth happened. For 8 years I've contributed 261.9K pretax or about 32K/year which goes in 100% of my payroll from Jan 1 every year. (zero paychecks for 3 months but it gets all in ASAP). Generous company match 89K, about 11.2K/year. Growth (I think after-tax in this table is 339K or about 49% overall compounded with 100% in Vanguard Institutional 500 fund. This nets out at about 86K/year over 8 years which is about what I received at two previous companies with slightly less match.

The point is, my entire portfolio is compounding as I am a set and forget type saver/investor. We live off my salary well below our means. If you look at the last 30-40 years of stock market performance and include compounding you end up with what I have today. We did not do anything extraordinary, we never really sacrificed when we needed to spend money, we were just very disciplined about saving up to buy a car instead of taking out a loan, etc.

I have made some money with RSUs are 3 companies but nothing life-changing, it just contributed to the growth, in other words we never made a score like what was happening for some during the dot-com bubble. Everything was slow growth and discipline.

While my friends and colleagues were buying big houses, vacation houses, nice cars (as in 100K+ cars), first class travel vacations and eating at Michelin star restaurants we chose not to do that. Only recently have we been doing BTD type spending, I would say in the last 10 years.

The vast majority of our nest egg is equities appreciation in the stock market. We have a few winners but I sold all of the losers and we have mostly SPY and VTI type funds and ETFs. There is no magic formula to this, it just requires discipline, especially during market corrections and panics when everyone is selling low in order to prepare to buy high. Never understood that. I have always bought into corrections and downturns when everyone else was selling.

Regarding the first million being the most difficult I would concur. By the time you have 10M the next M just means 10% growth and if it is in SPY during a long period of time 10% is not much different from the 30 year SPY annual growth rate.

One more significant growth contributor is ESPP. Most have a 2-year price lock and they always have a 15% discount. That is 15% free money right off the top. If the company stock is doing well then it is possible to make quite a bit in the 2nd year's purchases which can be at a substantial discount.

The bottom line is compounding makes this happen.

One more thing I'm editing in. We are about 85-15 equities which has very high exposure. I'm OK with that. It is one of the humbling factors and makes us not feel "rich" because a market correction can take away quite a bit of our assets. If we were 15-85 I would probably feel rich but having such as huge exposure in equities (my choice) tends to keep things in line.

Sources	Allocation	Current Balance ($)	Vested Balance ($)	Vested (%)
100%	$690,717.14	$690,717.14
AFTER TAX CONTRIBUTIONOpen detailsHide Details
49.10%	$339,112.14	$339,112.14	100.00%
Investments	Shares	Balance
VANG INST 500 IDX TR	2,920.611	$339,112.14
PRE-TAX DEFERRALSOpen detailsHide Details
37.93%	$261,960.30	$261,960.30	100.00%
Investments	Shares	Balance
VANG INST 500 IDX TR	2,256.139	$261,960.30
EMPLOYER MATCHOpen detailsHide Details
12.98%	$89,644.70	$89,644.70	100.00%
Investments	Shares	Balance
VANG INST 500 IDX TR	772.067	$89,644.70
Post Tax Contributions
Post Tax Contributions
Post-86 After Tax
$209,340.42

Would you mind sharing how much in contributions you made throughout this timeframe? This is seriously impressive!

Amazing growth. Using the quick rule of 72, that is an average annual 18% from 2012-2015 and average 24% per year over from 2015 thru 2023. Congratulations.

 

[youbet]

A (mostly) COLA'd pension for each of us, plus my social security taken at 62, covers all our expenses. We have no mortgage or other debt, so it's just day to day living, plus occasional travel. During 2020 and 2021 when we couldn't travel due to Covid, we actually had a small negative withdrawal rate.

Our FIRE paths continue to have some similarities except DW and I have been at it far longer (almost 19 years for me and 22 years for DW) and my pension is not cola'd. For some time after my long term unemployment began, we had a negative withdrawal rate. Then, thanks to inflation and my non-cola'd pension, we had an approximately zero WR for a few years. Now, having started RMD's, we pay the fed income taxes the RMD causes from the portfolio so we have a modest positive WR.

We're getting kinda long in the tooth for any further procrastination on spending, so there will likely be some withdrawals for more elaborate travel, a new tow vehicle, maybe a new camper, etc., coming up.

 

[mathjak107]

when i go back to something like firecalc now that i am 71 and my wife 73 , coupled with the good markets we had since i retired in 2015 , the amount the portfolio can provide is a crazy high number .

we live on maybe 140-160k a year here in nyc .

when we add pension , ss and my part time work i enjoy doing it shows we can take 100k more a year at this stage with 22 years figured left

 

[marko]

when i go back to something like firecalc now that i am 71 and my wife 73 , coupled with the good markets we had since i retired in 2015 , the amount the portfolio can provide is a crazy high number .

we live on maybe 140-160k a year here in nyc .

when we add pension , ss and my part time work i enjoy doing it shows we can take 100k more a year at this stage with 22 years figured left

I'm 72 now. I don't know where that crossover line is but like you, with the "time left" clock winding down, it seems one hits a critical mass of sorts where little, if anything can hurt you.

I even ran FC with 15 years of nursing home and still came out ok at a 90% success rate.

 

[LateToFIRE]

i always say success is where opportunity, luck and preparation all meet up .

we had sold our house and decided to rent and invest in some kind of passive business and our accountant turned us on to a client who was thinking of selling his breakeven apartments he owned .

we also held a 10% stake in the commercial lease rights in the same building with real estate mogul bernard spitzer .

we got it as a sweetener to the package since rents were break even

before he died spitzer sold the lease rights off to the ashkenazy group , big developers in nyc for 18 million dollars.

this was a life changing investment

Just catching up on this thread. That was some impressive finagling on your part (you have to be a NYer to know what finagling means). Though as you stated elsewhere, those kinds of deals are something of a closed club, usually only certain old NY real estate families would have access.

My stuff is more conventional, I've just been a serial buyer/seller of properties, generally resi (including my own homes) but a bit of commercial. Now that I've retired I'm selling, no desire to be a landlord, no desire to live in NYC full-time, will be eating huge capital gains tax, but c'est la vie. I literally have brokers stalking me now and I have not advertised or put anything on the market.

I'd like to say that DW and I have some sort of gift for this sort of thing but truth is that pocketing $$$ on NYC r.e. has been like shooting fish in a barrel the past few decades. Maybe even more like shooting fish in a fish tank.

 

[LateToFIRE]

^^^
It's telling that your last two tenants could not come up with the capital to buy their apts for half price - Access to capital is such a huge part of this kind of wealth building. An ability to judge risk/reward is the other part. Probably these tenants had neither.

 

[LateToFIRE]

I'm 72 now. I don't know where that crossover line is but like you, with the "time left" clock winding down, it seems one hits a critical mass of sorts where little, if anything can hurt you.

I even ran FC with 15 years of nursing home and still came out ok at a 90% success rate.

I'm a decade younger, so still in that SORR danger zone. I imagine that should I make it thru next 10-15 years fiscally unscathed, could look forward to a similar level of bulletproofing! Was a big mental shift for me to recognize that mostly what I needed to worry about was the next ~10 years, not the next 30 years, in terms of financial security.

 

[Andre1969]

Just catching up on this thread. That was some impressive finagling on your part (you have to be a NYer to know what finagling means). Though as you stated elsewhere, those kinds of deals are something of a closed club, usually only certain old NY real estate families would have access.

I just today learned that the word is spelled "finagling" I always thought it was "finangling!"

 

[mathjak107]

^^^
It's telling that your last two tenants could not come up with the capital to buy their apts for half price - Access to capital is such a huge part of this kind of wealth building. An ability to judge risk/reward is the other part. Probably these tenants had neither.

they could have ran an add for an investor and sold the next day and pocketed 600k profit

so capital is easy to find for the right deal

 

[mathjak107]

Just catching up on this thread. That was some impressive finagling on your part (you have to be a NYer to know what finagling means). Though as you stated elsewhere, those kinds of deals are something of a closed club, usually only certain old NY real estate families would have access.

My stuff is more conventional, I've just been a serial buyer/seller of properties, generally resi (including my own homes) but a bit of commercial. Now that I've retired I'm selling, no desire to be a landlord, no desire to live in NYC full-time, will be eating huge capital gains tax, but c'est la vie. I literally have brokers stalking me now and I have not advertised or put anything on the market.

I'd like to say that DW and I have some sort of gift for this sort of thing but truth is that pocketing $$$ on NYC r.e. has been like shooting fish in a barrel the past few decades. Maybe even more like shooting fish in a fish tank.

it is pretty much a closed good ole boys club here .

it’s the arena of pros in nyc .

to the outside rent stabilization looks awful for a landlord .. to the pros it’s a gold mine .

so you won’t see these kinds of deals listed .

they are sold via broker and a private client list like ours was .

it sold in a day to an investor group