Can one really become the 'Millionaire Next Door'?

[utrecht]

Quote:

Originally Posted by Fred123 Police officers make a pretty good salary, at least in urban areas. Here in Seattle, police officers make $90K/yr after 5 years. For the two of you, that would be 180k, 3x the King County median of 60k household income. And that doesn't include overtime. I'm still waiting for an example of someone with near median income who accumulated $1M without a significant amount of investing luck.

My wife and I both worked in an urban area. Dallas to be exact. Even after 24 years we never got close to making $90,000. Yes we had dual income which helps but we also raised a son at the same time that I was paying child support for 15 years on another son. I hope this doesnt sound like a braggart but since Fred123 is trying to make his point, I'll say that we saved not just a million but almost 2 million on our relatively average salaries. Just because Fred apparently cant or doesn't want to do it, doesn't mean it cant be done. It takes sacrifice, delayed gratification and dedication to a long term goal.

[NW-Bound]

The millionaire status is just an eye catching term anyway to denote some measure of wealth. If instead of using an absolute number as a benchmark and just talking about financial peace of mind (hence happiness), a person can live quite comfortably with less.

My mother's net worth is far below the $1M mark, yet she has everything she needs. And she gets there by being frugal, along with my late father. And there are people her peers who are not doing as well.

[NW-Bound]

My point was that instead of fixation on the $1M mark (in today's purchasing power as Gumby noted), if our median worker just tries to save 10%, he will be OK in his older age.

I know many people would love to have that $511,789 when they are 62, in addition to their SS. Does it have to be $1M or nothing? Indeed, I have seen many people taking the defeatist attitude that there's no way they can save that much, so they will not bother.

[RonBoyd]

Quote:

Originally Posted by NW-Bound I have seen many people taking the defeatist attitude that there's no way they can save that much, so they will not bother.

"most," in fact.

[CardsFan]

I think NW is right! The focus for any one should not be a million, but what will it take to retire living a life of comfort and enjoyment. This is different for everyone. It does not always require millions, but it does require discipline.

However, to answer the question " can a regular family become millionaires ", I will give a real world answer.
A union mechanic, working for a megacorp, lived frugally but comfortably. I do not know his actual salary, but do know it was in the range of the median. Raised a family, DW worked, but usually minimum wage jobs. Retired around 1992. Passed in 2001 at 75 with over a million of investments. His focus was to make sure he, and DW, never had to rely on family or handouts.
While not everyone can do it, there are many people that could, if they wanted.

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[NW-Bound]

Again, I have not read TMND but did the author say that it is easy to be a millionaire at 40 or even 50, like many posters here, who certainly are among the higher earners? I think many millionaires do not get there by retiring early. They work harder too. Not like the lucky ER's here who retire in their 30s and 40s.

Quote:

Originally Posted by CardsFan ... A union mechanic, working for a megacorp, lived frugally but comfortably. I do not know his actual salary, but do know it was in the range of the median. Raised a family, DW worked, but usually minimum wage jobs. Retired around 1992. Passed in 2001 at 75 with over a million of investments...

We have read from posters whose parents live off only pension and SS, and even save to add to their stash. So, they are not spending it down like some of us ER's do or plan to do. Perhaps your mechanic did the same. One cannot envy their stash.

[Fred123]

Quote:

Originally Posted by utrecht My wife and I both worked in an urban area. Dallas to be exact. Even after 24 years we never got close to making $90,000. Yes we had dual income which helps but we also raised a son at the same time that I was paying child support for 15 years on another son. I hope this doesnt sound like a braggart but since Fred123 is trying to make his point, I'll say that we saved not just a million but almost 2 million on our relatively average salaries. Just because Fred apparently cant or doesn't want to do it, doesn't mean it cant be done. It takes sacrifice, delayed gratification and dedication to a long term goal.

Breaking my own rule about no more postings on this, but I can't resist.

BTW, my disdain for TMND has nothing to do with sour grapes. We're retired and have a very comfortable nest egg. Some of it was frugality, some of it was periods of high income due to ... yes ... a combination of luck and hard work.

Are you willing to share more details? I'm assuming that your statement about not making close to $90K isn't total income, but individual income. So (and correct me if I'm wrong), I'll make a wild guess and assume that you each earned $65K for $130K total income. According to this calculator, that means you earned more than 85% of all households. And if you retired more than a few years ago, you were in an even higher percentile.

One of the interesting side effects of this conversation is discovering how many people think that their household income is typical when it is anything but. Perhaps that's because they rank themselves with their neighbors.

[mpeirce]

Quote:

Originally Posted by Gumby Yes, but I thought that sticking to an inflation adjusted amount would avoid the criticism that a million dollars of purchasing power today should be the measuring point.

Any bets on when the US poverty line hits $1,000,000?

[CardsFan]

Quote:

Originally Posted by NW-Bound We have read from posters whose parents live off only pension and SS, and even save to add to their stash. So, they are not spending it down like some of us ER's do or plan to do. Perhaps your mechanic did the same. One cannot envy their stash.

Not looking for envy, just pointing out it CAN be done, on a good, but not large, income. How you spend it, after you accumulate it, is your choice. As with many of his generation, my mechanic did not need to spend a lot of money to enjoy life.

[NW-Bound]

By envy I meant that some people might not appreciate what this man did to save that stash. One cannot spend it and still has it too.

Some of my peers might think that our income might be a lot higher than theirs, and would not think of any other reason we could retire early. If the expense spreadsheets were pulled out and put side by side for comparison, it might become clear to them, but would they be able to make do without the splurges they are so accustomed to? That's what I meant by "one cannot envy".

[utrecht]

Quote:

Originally Posted by Fred123 Breaking my own rule about no more postings on this, but I can't resist. BTW, my disdain for TMND has nothing to do with sour grapes. We're retired and have a very comfortable nest egg. Some of it was frugality, some of it was periods of high income due to ... yes ... a combination of luck and hard work. Are you willing to share more details? I'm assuming that your statement about not making close to $90K isn't total income, but individual income. So (and correct me if I'm wrong), I'll make a wild guess and assume that you each earned $65K for $130K total income. According to this calculator, that means you earned more than 85% of all households. And if you retired more than a few years ago, you were in an even higher percentile. One of the interesting side effects of this conversation is discovering how many people think that their household income is typical when it is anything but. Perhaps that's because they rank themselves with their neighbors.

You are completely missing the point. The point is that you can save a lot of money if you have the discipline to do it and spend the time to learn how to invest it properly. Obviously its easier to save more and end up with a larger portfolio if you make more money. Just about every one of my former co-workers, who made generally the same amount as I did, complains that they don't make enough money and that there's no way to put any aside for the future. Then they get a raise, find a way to spend it and continue to complain.

Very few people would expect 2 married cops to end up as millionaires, and very few do, but most any of them could if that was really their goal instead of buying the newest car and biggest house.

[Fred123]

Quote:

Originally Posted by utrecht You are completely missing the point. The point is that you can save a lot of money if you have the discipline to do it and spend the time to learn how to invest it properly. Obviously its easier to save more and end up with a larger portfolio if you make more money. Just about every one of my former co-workers, who made generally the same amount as I did, complains that they don't make enough money and that there's no way to put any aside for the future. Then they get a raise, find a way to spend it and continue to complain. Very few people would expect 2 married cops to end up as millionaires, and very few do, but most any of them could if that was really their goal instead of buying the newest car and biggest house.

No I'm not missing the point. You can save a lot of money (if by a lot of money you mean levels equivalent to TMND's 1 million in '96 which would be 1.5M now) if you have relatively high wages AND you are frugal AND you have a bit of luck (no disabling chronic health problems, for instance). As another poster said, frugality is necessary but not sufficient. Something that should be remembered by all of those who pat themselves on the back for accumulating a decent amount of wealth.

But, 'nuff said.

[CardsFan]

Quote:

Originally Posted by utrecht Very few people would expect 2 married cops to end up as millionaires, and very few do, but most any of them could if that was really their goal instead of buying the newest car and biggest house.

+1
Have we circled all the way back to LBYM?
Not everyone can save a million. But most everyone can save. Even a little helps, and multiplies over a full working career. The sacrifices don't need to be large. You can still have fun. Just pay yourself first!!

[akrono]

When I read the posts from UTRECHT it struck me as something that I could have written. It exactly mirrors my situation and opinion. My wife and I are also police officers who earned an average wage here in Ohio and have always lived beneath our means while saving and investing through 457 plans, IRA's and our pension fund DROP program. I am now retired and my wife will work for two more years. We have accumulated assets well into seven figures which will allow us to live through retirement in comfort.
I am firmly convinced the average person who starts saving & investing early, stays out of debt and adopts a disciplined approach to living beneath your means can indeed make it to millionaire status. While still working it always amazed me how the co-workers who cryed poor mouth were also the ones leasing new vehicles and not participating in our 457 plan available to everyone

[Mulligan]

Quote:

Originally Posted by Fred123 Police officers make a pretty good salary, at least in urban areas. Here in Seattle, police officers make $90K/yr after 5 years. For the two of you, that would be 180k, 3x the King County median of 60k household income. And that doesn't include overtime. I'm still waiting for an example of someone with near median income who accumulated $1M without a significant amount of investing luck.

My dad has a million in investable assets. He was broke at age 43 after divorcing my mother. He never made more than 50k his entire life and that was way late in his career through additional side gigs. His job he retired from in mid 90s made him about $11 an hour, and he now gets a $600 month no cola pension. Being frugal, working side jobs, and the compounding of time got him there in the past few years. He is about 80 now. And he isn't going to spend any of it now either. It's his favorite hobby to look at his investment account every day.


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[harley]

Quote:

Originally Posted by Mulligan My dad has a million in investable assets. He was broke at age 43 after divorcing my mother. He never made more than 50k his entire life and that was way late in his career through additional side gigs. His job he retired from in mid 90s made him about $11 an hour, and he now gets a $600 month no cola pension. Being frugal, working side jobs, and the compounding of time got him there in the past few years. He is about 80 now. And he isn't going to spend any of it now either. It's his favorite hobby to look at his investment account every day.

Good job, Mulligan. You win. It can be done. Conversation and thread over.

[brewer12345]

Wow, over 150 posts of acrimony. Ever heard of "agreeing to disagree?"

[Mulligan]

Quote:

Originally Posted by harley Good job, Mulligan. You win. It can be done. Conversation and thread over.

Ya he made it Harley, but it certainly isn't the path to early retirement since he was in his 70s when he got there! . Living in a rural low cost area also helped him too, I might add.


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[HFWR]

Are we sure we all read the same book? I read TMND years ago, so the minutiae is long gone from my memory, and I don't intend to read it again. But since when do we take 100% of any book as "gospel".

Hell, even Rich Dad, Poor Dad has a pearl or two of wisdom.


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[Andre1969]

Quote:

Originally Posted by NW-Bound OK, you tickled my curiosity, so I had to click on the link to see the car, and the woman too, of course. And as the photo caption says, an overpriced luxury car does not impress me. As for the woman, well, she's too young and too high maintenance for me, so impressive or not, I would only look, as I always do.

A car like that could bankrupt you pretty quickly. So could the woman. When you get to that price point, I think most people lease them. That way, by the time they become too much trouble, they're no longer your problem.