Wealth Accumulation

[frayne]

Hired in at mega corp at 24 and worked my way up the food chain for 32 years while living within my means, maxing out 401K, company ESOP before that, staying out of debt with the exception of a mortgage and being married to the same woman. Retired at 54 with seven figures net worth and never looked back. As far as investment style pretty much all no load index funds with the exception of company stock while I was employed. I have been extremely fortunate to have been in the right place at the right time in addition to keeping my eye on the prize of financial independence and early retirement.

 

[athena53]

Bottom line, I'm the perfect example of what some one can do financially if they wish too. Unfortunately too many people refuse to follow common sense financial planning. If you've ever read the book the "Millionaire next door", that's me.

I'm seeing that a lot here. A few highly successful entrepreneurs and landlords, but mostly the familiar pattern of "Get a job, go to work, LBYM, educate yourself about investing". I see plenty of retirement-related posts on FB from people who probably had middle-class incomes but spent everything they made in their working years and then some. They're hurting.

 

[Stormy Kromer]

I bought a small business at age 22 and maxed out a SEP IRA. 7 years later I had the business paid. I paid myself a modest salary and invested the rest for another 25 years.

At age 50 I sold the business with the plan on living off the proceeds. 7.5 years into that plan and its working well.

At age 61 I will start drawing on the SEP and other investments. A 2% withdraw rate will easily cover our living expenses. SS at age 67 will supplement it.

 

[donheff]

I inherited a whopping $10K when my mother died and blew it on a jet ski for my newly built weekend home.

Other than that, DW and I worked hard and saved as much as we could. We both benefitted from my outsized federal pension and from DW's outsized earnings from a legal partnership.

 

[jebmke]

Married well

 

[thod]

Our follows a similar pattern here.

-College degrees (dad paid for mine, wife's did involve a small amount of loans)
Computer Science and Mechanical Engineering

-I wanted my wife to have the option to stay at home with our kids when the time came, so we lived off of just one salary right from the start.
I think this set the tone for living below our means.

-She wanted to get her PE, so she needed 5 years experience first. So that meant no kids for at least 5 years.
-Always got the 401k matches, not sure if we were maxing out or not all the time.
-Started investing directly in individual stocks after a few years. We had pretty good luck, but nothing that created instant wealth. Slow and steady.
-Bought house 1 year out of college, still live in it to this day.
-Paid the house off in 16 years
-Very much a do it yourselfers at home.
-Except for my wife's first car, we have always paid cash for our cars. All but 2 were bought used.

We both retired at 52 and 53 in 2019.

Wealth has actually increased since retiring.

 

[nobody]

Parents paid for my Electrical Engineering degree. Never married and no kids. Lots of fun longer term lady friends. Worked and traveled for work a lot. Gone weeks at a time job sites. Twenty years at the same company that also had a really good ESOP. 401k was maxed after first couple of years. Was saving and investing between half to 80% of what I made after first couple of years.

 

[athena53]

-I wanted my wife to have the option to stay at home with our kids when the time came, so we lived off of just one salary right from the start.
I think this set the tone for living below our means.

-She wanted to get her PE, so she needed 5 years experience first. So that meant no kids for at least 5 years.

My brother and SIL lived off of just his salary as well. When they were expecting their first child the accumulation of savings from her salary made a nice down payment on their first house.

And I get postponing having kids for professional goals. I was working on actuarial exams, which I didn't complete till I was 30. DS was born a year later. I knew that postponing having kids was iffy (would all my eggs be dead?) but in retrospect it was a good decision.

 

[JBTX]

I’m almost 60 and consider myself semi retired. I may entertain part time contract work but likely won’t work full time again.

What wealth we created was through working, mostly in corporate america. Mostly as an employee, later some self employed contracting. I’d guess somewhere between 50-60%of our current net worth was from roughly my first 10-12 years of work, while single, that plus the future growth of those savings. Prior to marriage was pretty frugal and usually saved 20-25%. Spouse worked also, still working and has done well for herself.

I was fortunate in that parents largely paid for college so no debt to worry about. College was a lot cheaper then.

 

[Koolau]

College was a lot cheaper then.

Isn't that the truth. I got a $100/semester scholarship to a state school. It paid half my tuition and books!

 

[brett]

Stock options, performance bonus's, salary, employee stock purchase plan, investments, golden handshake from employer.

Living below our means, never incurring any consumer credit.

No get rich quick schemes.

Most important...a spouse who was on the same page as me from a personal financial management perspective.

 

[pacergal]

both landed municipal govt jobs fairly early, pay was not the greatest early on, tried to save something every paycheck, sometimes it was only $100. DH received two small (<25,000) inheritances that got us out of cc debt when we were younger with 2 small kids. Made a lot of financial mistakes, but learned from them.
Started saving in work 547b when it became available in our 30's. Started saving at 3% income, increased gradually until 10-15%
Both worked >30 years, so pension, IAP(individual account program-which became a requirement in 2004), and 457b were our plan.
My last parent died one year prior to retirement, receive inheritance about 1/3 of our savings.

 

[Ronstar]

Worked 50-60 hours a week for 35 years of 40 year career, max'd out 401k, became part owner in business and invested share of profits and proceeds from business stock sale, had some inheritance and gains through real estate.

 

[rodi]

Always contributed to 401k... Started at 10% early in my career, increased to max by age 32.

Set a goal early to be able to retire at 55... Worked towards that goal.

Married a handy and frugal man so home chores and repairs were not hired out. Lived on one salary (the bigger one) after we got married.

We were on track for my age 55 goal retirement age when my father passed, when I was 47. My brother died a few months later. Made me even more committed to early retirement. But health insurance was the big factor as there were some preexisting conditions.

Aca passed. I retired in 2014, 7 years after my dad and brother passed. At age 52. The inheritance from Dad definitely gave us more breathing room, about 1/3 of our investible assets at the time. It also meant that I could use beneficiary RMD to bridge to age 59.5.

So.... Saving, lbym, and dune inheritance that allowed 3 extra years of retirement.

Fwiw. We are not FAT fire.... Definitely still on a budget but 9 years into retirement no regrets.

 

[Car-Guy]

OP here. Wow, (edit) [-]approaching[/-] 70+ responses and over [-]1800[/-] 2000 views in less than 24 hours. Thanks.

My intent of this thread was to encourage the younger members we have here (or lurkers) that you can "make it" just being a worker bee. (As I think most of us are/were.) It's not rare or that hard to do. Steady work, save, invest wisely and LBYM seem to be common themes. 401k's really seemed to help a lot of us. Interesting some of the variations of how some of us accumulated our wealth. No big lottery winners either, so far.

Reading though these posts another thing that popped out to me "in my case". I was fortunate in marrying the right woman. 45+ years, so far. I tend to be the "spender" in the family, she's the "saver", so that helped us live "within" our means and enjoy the walk. However I wouldn't say we were a LBYM family.

 

[REWahoo]

Saving and investing 95%, inheritance 5%.

 

[Charlotte]

DH and I were able to accumulate our nest egg by working in software and big data for a mega bank. My salary and both year end bonuses usually went into investments, and we lived off of his salary.

But, we got such a good saving start early because we started with no student loans (thanks Mom and Dad) and because both sets of our parents were able to retire early too, by being good savers and setting an example and the knowledge of what to do. Thanks again Mom and Dad!

 

[eytonxav]

No inheritance, worked mega corp career for 30+ years, maxed out 401K for most of those years. in hindsight, probably too conservative investment wise.

 

[jollystomper]

Our wealth is due not just to our savings mindset, but also a great career at Megacorp, where the majority of time my job felt more like a hobby than work. When my salary started reaching levels I thought impossible, we kept our LBYM lifestyle and saved. We were better savers than investors. From 1990 our savings rate dipped below 20% only twice, those were years with multiple kids in college. Most other years it was between 25 and 40%. 401k with low expenses and a great Megacorp match definitely helped.

Then there is the "luck" of timing when it came to investing. I did not start investing in equities until 1984 (which was my 401K year start), and other than a few silly years in the 1990s when I thought I could pick stocks, I just kept plowing a lot of our savings into equities. Even with the 1987 crash, early 90s recession, dot-com bust of 2000, great recession of 2008-2009, and recent covid and post-covid market gyrations, staying the course, never choosing to get out of the market, and steadily investing into it paid off.

It was also *very* beneficial to marry my DW, who had the same saving (along with spiritual and career achievement) goals as I did. It is interesting (and sad) when we look at a number of our friends who married around the same time as we did but are not divorced, primarily driven not by infidelity or abuse but from vastly differing views on finances and the resultant issues.

 

[frayne]

For the youngsters reading this, the road to wealth and financial independence is a marathon not a sprint, another analogy, think tortoise and the hare fable. A slow and steady sticking to one's plan will get you there but it takes patience, discipline and hard work. And with all that said, financial independence is truly liberating and worth it.

 

[LateToFIRE]

For the youngsters reading this, the road to wealth and financial independence is a marathon not a sprint, another analogy, think tortoise and the hare fable. A slow and steady sticking to one's plan will get you there but it takes patience, discipline and hard work. And with all that said, financial independence is truly liberating and worth it.

On that note, I fret that I see too many of the younger members of my extended family only beginning to settle into careers, marriage, saving, etc. until their mid-late 30's. In other words, what for my generation (Early Gen-X, late-Boomer) was our unsettled 20's, for Millennials has become their unsettled 20's + 30's. For the absence of doubt, I'm not pointing fingers, more expressing concern - I realize they're fighting an uphill battle against generational trends and economic forces. Has anyone else noticed this or is it just me?

 

[FlaGator]

I worked hard, I didn't spend all the money I made, and I invested the savings. No inheritance, no lottery. Nothing but work, save, and invest.

+1

 

[rodi]

On that note, I fret that I see too many of the younger members of my extended family only beginning to settle into careers, marriage, saving, etc. until their mid-late 30's. In other words, what for my generation (Early Gen-X, late-Boomer) was our unsettled 20's, for Millennials has become their unsettled 20's + 30's. For the absence of doubt, I'm not pointing fingers, more expressing concern - I realize they're fighting an uphill battle against generational trends and economic forces. Has anyone else noticed this or is it just me?

As the mom of a 20 yo and 22 yo (both still in college)... And also my own lived experience...

I didn't marry till age 38, had first kid at 39, and second one at 41. So despite not being married, I still managed to save. Even though in my 20's I was also going out to nightlife, etc. But since 401k was payroll deducted, it was never part of my spending. It's important to start saving/investing before you have a chance to spend it. I'll admit I had some credit card debt, but wiped that out when my employer was bought out and all our options vested immediately... coincidentally at the peak market price. (Didn't have a crystal ball - just got VERY lucky with the timing...)

My kids, despite being college students, work, and put money in their roth's. So they have learned to save, even with very low income. Despite super low income from part time mc-jobs, they each manage to put at least $1k/year towards Roth IRAs. And this is with me not giving them *quite* enough to pay all their bills so their wages also go towards food/utilities/spending.

As other's have mentioned - having had no college loans (thanks mom and dad) allowed me to get ahead and start saving sooner. My kids are in the same boat - we put aside 529 money to pay for their state school undergraduate degrees.

Marrying someone on the same page as far as debt and savings also was a huge boost.

 

[Love This Community]

I’m one of those “youngsters” that religiously follow this forum. I’m 45, not yet retired and on our way to secure our financial future. Grateful for so many wise and experienced folks paving the way for younglings and showing it can be done. I also refer to the pearls of wisdom that imoldernu passed on from time to time to keep myself grounded. Since this thread is targeted towards younger forum members, it might be worth it to link it. I don’t know how to add the link to a post, otherwise would have done it myself. Thank you people.

 

[athena53]

On that note, I fret that I see too many of the younger members of my extended family only beginning to settle into careers, marriage, saving, etc. until their mid-late 30's. In other words, what for my generation (Early Gen-X, late-Boomer) was our unsettled 20's, for Millennials has become their unsettled 20's + 30's. <snip> Has anyone else noticed this or is it just me?

As Rodi noted, not settling down till your 30s isn't necessarily bad. It still depends on what you're making and what you're saving. I was part owner of a house at age 26 (bought a two-family with a friend) but didn't marry till age 31. DS married at 28 but also owned a house. If you spend your 20s AND 30s going out to clubs every night, buying new high-end cars and not putting money aside..yeah, it's hard to recover from that. If you've got a lot of student loans, even with a marketable degree, that will slow down your savings as well.