Lucky or Good?

[clifp]

Ah no.


Thats a simple calculation and its not even close to just 1-2%. Certainly not over a 30+ year timespan.

I'd say your off by a factor of 100.
It is hard to hone on a single number but I'd say the average annual return for an aggressive portfolio vs a safe one is 4% a year, and it was more than 6% during my prime accumulation years 1980-2000. At 4% difference with steady saving that adds up to 180% and a 6% that is 240% more money. Even if saving is ramped up considerable over time so that most of the saving was done in the last 10 years it it hard to construct a case where the aggressive saver does not end up with twice as much as the rik free saver. That is for a 30 year accumulation period for a early retiree, for a more typical 40 year accumulation period the difference in saving is closer to 200-300% more.

 

[Andre1969]

In my case, I think it was a combination of Lucky AND Good. On one hand, I'm where I'm at because of hard work, sometimes pulling down a second and even third job. And sacrificing, by maxing out the 401k, saving as much as possible, etc, rather than going out and buying more house than I can afford, expensive cars, exotic vacations, etc. And having roommates can definitely be a sacrifice.

But, I also had the luck to be born healthy, and with a good head on my shoulders (most of the time, at least...I've done stupid things in the past, as I'm sure everyone else has). I'm also lucky to have a family that's been pretty supportive, a good job, roommates that are quality people and don't try to screw me over, etc. So, I think it's a combination.

 

[aim-high]

Fortunate circumstances definitely has something do with it. I didn't do anything to be born in a first world country with the wiring, aptitude, and genetic intelligence that happened to fit the technology boom over the last three decades. On the other hand, there are plenty of other people in my circumstances who did worse (and plenty better.)

That said, one still has to execute in order to succeed regarding most things pertaining to FIRE. An examination of what happens to lottery winners, entertainers, or professional athletes proves the point.

 

[rodi]

I can echo many of the others:

Lucky:

Hit the DNA jackpot with health and brains.

Hit the DNA jackpot with stable parents, upper middle class background, and a paid for engineering degree (no student loans).

Hit the marital jackpot with a LBYM husband with similar family values and outlook on life.

Had father who retired into the go-go 90's so he was able to leave me some of his retirement savings when he passed. (If he'd retired a decade earlier or later I would not have inherited anything.)

No catastrophic illnesses or disabilities. That's definitely luck. (My brother had two cancers and died before 50.)

Good:

Worked hard in college to get a degree when women weren't typical in engineering.

Worked hard at jobs to prove I was as good as the guys.

LBYM lifestyle with focus on finding balance between work and homelife.

 

[aim-high]

I've got two kids in college and about to enter the workforce. They are fortunate, but they also know that in today's world, it doesn't take much to stand out.

If you work hard, serve your "customer" in a friendly manner, do more than expected without being asked, do it conscientiously, and think / act like you own the business (whether you do or not) . . . you'll succeed in your career.

Of course, if your chosen career is in the entertainment industry, forget all that . . . there are lots of other factors.

 

[jollystomper]

I guess my luck was being born to immigrant parents who saw the lack of opportunity in their native countries and decided, for all its perceived faults, raising their children in the U.S. would expose themselves to more opportunities. Something they continuously taught us as we grew up.

My good was listening to them and the teachers who encouraged me to get educated and to use my mathematical talents, instead of those who insulted me (and even threatened me) for doing things like spending time in the library than hanging out on the streets. Also, studying 5-6 hours a night in college rather than going to lots of parties (I went to some, but I had my priorities), and seeking out older workers at Megacorp to learn from, and always trying to learn something from everyone I have encountered (both what to do and what not to do).

In fact, it was probably better for me to have grown up in a tough environment... had I been "lucky" and born into a better ethnic/financial environment, I may not have been so strident to achieve. Not saying that applies to everyone, but my siblings and I often discuss how that tough upbringing gave us all a desire to achieve.

 

[Derslickmeister]

I'd say your off by a factor of 100.
It is hard to hone on a single number but I'd say the average annual return for an aggressive portfolio vs a safe one is 4% a year, and it was more than 6% during my prime accumulation years 1980-2000. At 4% difference with steady saving that adds up to 180% and a 6% that is 240% more money. Even if saving is ramped up considerable over time so that most of the saving was done in the last 10 years it it hard to construct a case where the aggressive saver does not end up with twice as much as the rik free saver. That is for a 30 year accumulation period for a early retiree, for a more typical 40 year accumulation period the difference in saving is closer to 200-300% more.

I think it depends on the time span and how it's cherry picked. Don't you guys remember the late 70s, early 80s when jumbo CDs paid 10%+, of course mortgages were 16% but if you were a saver... I remember when the bond decision line was 8%, 8%!!!

 

[HFWR]

..,in today's world, it doesn't take much to stand out.

I second this. Both in college and at w*rk, the "Bell curve" made me look smart!

 

[Al in Ohio]

I'd say your off by a factor of 100.
It is hard to hone on a single number but I'd say the average annual return for an aggressive portfolio vs a safe one is 4% a year, and it was more than 6% during my prime accumulation years 1980-2000. At 4% difference with steady saving that adds up to 180% and a 6% that is 240% more money. Even if saving is ramped up considerable over time so that most of the saving was done in the last 10 years it it hard to construct a case where the aggressive saver does not end up with twice as much as the rik free saver. That is for a 30 year accumulation period for a early retiree, for a more typical 40 year accumulation period the difference in saving is closer to 200-300% more.

Yep, thats basically the calc to compare why conservative saving vehicles that are safer can end up being a much smaller portfolio after 30 years. But my statement of not being close was by a factor of 2-3 times as clifp has factored in his example above ( but 180%-300% is a factor of 2-3 times, not 100)

 

[gerntz]

I think I've been good/decent with my lucky circumstances.

 

[robnplunder]

I was lucky, working in a job that was horrible, in a horrible industry. Two disgusting bosses(both making big money) made my job a total nightmare. Not having other opportunities in this area I worked full time there, and 6 hours at night school. Then the coursework on weekends.

When I interviewed at Megacorp, they mentioned long hours. Explained I was partially prepared due to my schooling. Worked for a wonderful person, actually a few. I earned respect at senior levels, was constantly challenged and rewarded.

Along the way, because of people at Megacorp, I learned the power of investing. Megacorp funded profit sharing, later a great 401k. Thanks to what I had learned, fully funding my 401k was a no brainer.
Several option grants, not huge money, it was invested.

MIl/FIL left us some inheritance, not a huge amount, but it had a big impact. We became debt free. The biggest benefit was it changed my DWs thoughts in money. She became very LBYM, because her DF had worked so hard. She was not going to unwisely spend her parents money.

After close to 30 years, management changes had me working again for 2 disgusting bosses.

Once again I reinvented myself, this time ER.

Those fist two disgusting bosses, that were making big bucks. They blew it all, both are FRA, working to eat.

I consider myself blessed, disgusting people helped me earn a better life.

Life sure is funny,
MRG

Your post above was very entertaining as I can relate to some of it. It made my day.