Wealth Accumulation

[kevdude]

Didn't grow up in a wealthy family, paid for college on my own, including a fair amount of student loans (went to college in the 80's, so not huge amounts), married a frugal wife. We had OK jobs, but not that high paying until later in my case. I made pretty good money from 40'ish to 49 when I quit working, DW stopped working after our 2nd child was born in 2004. Saved as much as we could in 401k's.

We started investing in rental properties in 2003 and the resulting values make up the vast majority of our NW. We live in a VHCOL area that has a very strong residential rental market. We were up to 34 doors at one time, but have since sold down to 12 units, which we'll probably keep for a few more years.

We have two kids, the oldest will graduate college next year and the youngest will be starting college later this month. Both will graduate debt free. I have turned over the management of our properties to a management company so DW and I can enjoy traveling as empty-nesters and not have to worry about any major issues.

 

[HI Bill]

I was going to say it was all from saving and investing, but I calculated it, and here's how it came out:

• 19% Original Savings/Investments in 401(k)/IRA
• 28% Gains on Investments
• 24% ESOP (free $ for staying with the same company for 17 years)
• 11% Real Estate Gains
• 10% Marriage (wife's prior assets)
• 8% Inheritance

 

[Rianne]

Listening to Bob Brinker on long car rides home for the holidays. He turned us on to index funds and Vanguard. We'd had several shark attacks before that.

DH in the corporate world from 1990 - 2012. I worked in accounting and HR with MBA as we traveled around moving up. I have to say, the old corporate umbrella gave us a lot of advantages. Twice they bought our house in the moves and paid for all real estate and moving expenses. Even paid our rent for 6 months when we relocated. I don't think that's available anymore. We took the pension buyout on 12/2022 when DH turned 65.

The market tidal wave-up helped a lot. We'd always put any bonuses in the market. Pretty much anything above our low-expense living style went right into the market.

I have family members who earned big bucks over the years, but they like to spend. And they can't RE. Working in their late 60s.

 

[Rocky mtn high]

At 25, I estimated on a yellow paper how much I would need to retire because I knew there would be no pension for me. I still have it and have showed it to my children when they graduated college.

 

[Koolau]

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?

Yes, I've noticed the trend. It's certainly possible for a "single" to become financially independent in late 20's, early 30s, but it's more difficult than when a couple starts out at 20 to 25 together and buckles down to serious saving instead of serious dating and having a lot of single-experiences.



There's no one way to do it, but early family ties seems to accelerate the process to FIRE IMHO. YMMV

 

[2017ish]

At 25, I estimated on a yellow paper how much I would need to retire because I knew there would be no pension for me. I still have it and have showed it to my children when they graduated college.

The problem with this is that things change. (But still good to plan!).

Example, oldest son figured out that with his elite engineering degree, he would have no difficulty in quickly accumulating 1,000,000 to enable early retirement and dirt-bag climbing lifestyle in the thirdworld. Then... He met a girl at the climbing gym. Their annual joint pay is easily over that, and with three very young kids and two houses, their expenses are a bit more than a safe withdrawal from 1,000,000 would support (esp. after CA and USA taxes.)

Still, they are in good shape and no one to be sorry for.

 

[Gumby]

Yes, I've noticed the trend. It's certainly possible for a "single" to become financially independent in late 20's, early 30s, but it's more difficult than when a couple starts out at 20 to 25 together and buckles down to serious saving instead of serious dating and having a lot of single-experiences.



There's no one way to do it, but early family ties seems to accelerate the process to FIRE IMHO. YMMV

The young wife and I both went back to school again (sequentially, her first, then me), so we could move into fields entirely different than what we studied in college. When I graduated from law school, 8 years after we got married, I was 33, she was 31, and we had a net worth of zero. So we are proof that you can start in your 30s. You have to work and save harder and wait a little longer, but you can do it.

 

[iloveyoga]

We did not do anything fancy. Both DH and I worked full time jobs and were able to retire from them early. I worked in the pension/401(k) business for 35 years and I simply did what we told our clients to do. We both maxed out our 401(k) plans and both of our jobs provided pensions.

We paid off our house in 2010 and have incurred very little debt since then. Overall we live a modest lifestyle and the COL here is fairly low. Our biggest splurge is travel and we could cut back on that if needed.

 

[Badger]

Married a woman who was willing to LBYM in preparation for retirement. Bought a house that nobody wanted and learned how to fix things. Wife went to college at 41 years old at night after working at that time as a secretary and Coast Guard reserves and completed Cum Laude in 9 years with a teaching degree. The reserves were to provide health insurance (Tricare for Life) once retired. This has been used with our Medicare for pretty much cost free health care after many surgeries. We both had low paying teaching careers at that point. Starting salary for me in 1973 was $7k and 40 years later was $51k. Her salary was much less. Paid off the house early with extra principal payments. Then we contributed the max amount to our 403b and Roth accounts with catch up included. Anything left after expenses were also invested. That amounted to half of our income. I tried to learn about investing via books, magazines, Early-Retirement, and Bogleheads. Only made a few mistakes but nothing major. We don't smoke or drink except for my very occasional beer. Vacations were driving to the destination and camping or sometimes getting a cheap airfare and flying with our camping gear if destination was far like Alaska or Canada. Bought used cars and did all the simple maintenance (oil change, valve adjustment, tune-up, etc.) until it got beyond my skill level then sold and bought another used car -rinse and repeat. Stopped all borrowing and paid off all loans 30+ years ago. Everything was paid with cash after that except for CC which was paid off every month. We were finally retired at 64 so I guess you could say we retired early but just made it. Easy Peasy!

Cheers!

 

[Vincenzo Corleone]

- Won the womb lottery.

- Grit.

- Mom taught me the importance of saving early and maxing out retirement accounts.

- Worked my way through grad school to prepare for a career change that proved to be even more lucrative than I realized it would; right place, right time so a little luck there too.

- Entered said new career in my early 30s where most of my colleagues were in their early 20s. They'd want to spend money, party, go to strip clubs, drink, gamble, etc., and I wasn't interested in any of that. I squandered time in my youth and made my mistakes early - I was determined not to do it again. Saved and invested the majority of my salary/bonus.

- Married well and had a small, intimate wedding/reception that cost only a couple of thousand dollars. My wife shares all of my money values. As my career started to wane, hers remained stable and eventually her salary eclipsed mine. She also maxes out her retirement accounts.

- My wife is an excellent chef, so we don't eat out much.

- We bought a home that was much less than what we could have afforded.

- Mistakes that I made in terms of investments were not too bad.

Edit to add:
- We never had kids.

 

[Scout]

1. Was fortunate to get a degree that led to a decent income.
2. Worked hard to get degree, worked even harder in residency so graduated with an entitled attitude telling myself I should be able to enjoy the good life. The good life being nice cars, homes, etc. Wasted a year doing this.
3. Read Millionaire next Door and my perspective and life changed.
4. My wife read Millionaire next Door and her perspective and life changed
5. Forgot to mention I married a smart woman;-)
6. Spent the next 18 years working, investing, making investing mistakes (remaining too conservative), learning from my mistakes, and investing more.
7. Discovered this community and lurked often to stay motivated
8. Tried to ‘blow that dough’ on experiences with wife and family, great hobbies, and hopefully well calculated giving.
9. Drove Toyotas till they died.
10. Tried to be as handy as possible. Learned a lot from YouTube
11. Now 48 wife 50 and FIRE’d….Except we’re still working PT:-/ Something about FI that opens doors to work that can be fulfilling and mostly enjoyable.

 

[FiveDriver]

A combination of things led us to this happy place in Life.

I bought a condo at the Jersey Shore as a Bachelor Pad. Then I met the woman who would become my Wife. We sold that Condo 3 years later, after it had doubled in price.

We bought a home in a good school district and put 20% down, avoiding PMI. We resisted the temptation to re-finance and buy fancy cars. Paid off the 15 year Mortgage a few years early. The word Mortgage is derived from the French Mort -- meaning 'Pay until Death' Not for us.

Started saving for Daughter's College the year she was born thru Payroll Deduction, really a painless way to accumulate. We used a lot of Savings Bonds which were Tax-Free when used for Education. She graduated College a semester early, and got a head start on her job search. She landed with a good firm that paid for her MBA.

While at MegaCorp, I accumulated a large chunk of Company Stock in my 401K. With our Home, College Fund, and Retirement in good order, I was free to take a little risk with after tax investments. I had a front-row seat for the Tech Rally in the 80's - 90's.

When I left MegaCorp, I rolled the 401K into an IRA for more control and a lower Expense Ratio. While my 401K was transitioning into Fidelity, the 2008 Financial Meltdown took place. I watched from the safety of a Money Market Fund. Kept my powder dry until the SP500 showed signs of life, dollar cost averaging into SPY and QQQ. I made Bank during the Obama Recovery. I crossed into 2 Comma Territory during Trump's First Year. I am beholding to neither Political Party.

I've had my share of Swing & Miss decisions. I bought JDSU at it's exact Peak Price and watched $10K turn into dust -- and that was when $10K was real money. I refused to buy Facebook because Zucker is an Alien. Same thing with Melon Musk.
But we don't talk about those decisions.

 

[sturge]

Spent most of my money on booze, women and motorcycles...I wasted what was left

 

[aja8888]

Spent most of my money on booze, women and motorcycles...I wasted what was left

While I can't recall all the booze I drank (teetotaller now), i went through three women (one live in, two wives) and a dozen or more motorcycles over the years. I'm on the right path now......

Even my old friends don't recognize me anymore.

 

[NW-Bound]

What I like about wealth accumulation is that it continued after both of us took ER, my wife at 50 and me at 55.

The market god has been so generous. I am very grateful.

 

[NW-Bound]

I did not keep good financial records until 45, but am sure we always had a positive net worth after our marriage in our 20s. By the time I was 30, we probably had a couple of $100K.

But at the age of 40, perhaps of middle-life crisis, I got tired of megacorp career though they treated me well. Too much politics and infighting for my taste, so I had this notion that I could do something on my own. I have told this story before. Two different startups with two different groups of engineers crashed and burned after a few years. Not wanting to go back to the old rut, although I had several offers, I did part-time contracting work for 10 years until I quit for real at 55.

Thinking back, I realized that I had 401k with company matching for only the first 15 years of my career. Would have much more money, and a pension to boot, if I spent my entire 30 working years at one of the megacorps I worked. Instead, worked for no pay for a few years, trying to save my company. Then, worked only part-time, and on-off at that because it was my choice, until I ER'ed at 55.

It's amazing that I have this much money now. I often wonder how my former colleagues do. Some were still working last I knew a couple of years ago (megacorp still wanted me back). I am sure some of them had more income (from pension) and money (easily approaching $10M). On the other hand, I know some who squandered all that they made, and will have to work until they croak or get thrown out.

Just a bit curious, that's all. I have plenty, more than I could imagine back in 2002 when I handed the office keys of the leased suite back to the property manager, closing out the business for good, along with a chapter of my life. Had mixed feelings then. Sad that it did not work out. Glad that it was over.

 

[NW-Bound]

We don't share net worth in the family, but I think my married daughter and her husband may be 3/4 mil or so. My younger single son is probably 1/2 that.

They are above mid 30s, have good professional jobs with graduate degrees, but don't make a gazillion dollars. I helped them get through college without any debt, even helped them with their home purchase.

They got a good start. They realized that now, and are grateful. It's the right thing for me to do for them. My parents could not do more for me due to their circumstances, though if they could, they would.

 

[Another Reader]

Real estate is the biggest factor by far. Had as many as two dozen rentals, although I sold a couple to pay off the remaining mortgages more recently. I was very lucky to buy in an appreciating market. Bought more for cash when that market plunged in 2009-2012.

Two small gubmint pensions, one with a substantial health insurance allowance and access to good Medicare supplements. Inherited an IRA, some savings, and a property from parents. No kids so that leak was plugged.

Still have a mortgage on my house. Refi'd in 2012 at 3.125. Will pay off if the interest becomes non-deductible.

 

[eytonxav]

I forgot to mention, but what I miss most about being retired is there is no EIP bonuses like megacorp paid me. Some of those bonuses that I was lucky enough to receive were equivalent to a decent paying salary.

 

[aaronc879]

Hopefully after tonight I'll be able to say Lottery.

I hope it is because of the lottery on 8/8 but I won't say it was because of that. I will say i'm a private portfolio manager. Only my immediate family will know different.

 

[tryan]

Spent most of my money on booze, women and motorcycles...I wasted what was left

It's more fun doing that on the back end. lol

 

[frank2009]

I was never a super high earner but I did OK. Invested what I could in my works 457 plan and some into a Vanguard IRA. Overwhelmingly into stock mutual funds.

One day at age 59, I checked my Vanguard accounts page and figured out that I had (just barely) a 7 figure net worth. Took me 30 years to reach that number.

 

[Andre1969]

For me, it was a combination of things, but mostly just working and socking away as much as I could, in both tax deferred and after-tax investments. I did have some help from family, though. For instance, after a bad divorce in 1996, I moved in with my Grandmom, and rented out my condo. Early in my career I tended to work a second job, but in 1996 when it was getting bad, I started delivering pizzas in the evenings, and that brought in some pretty good money. Sometimes I'd actually take home more from the delivery job than the main job. However, the main job paid for my insurance, 401k, etc, so that's not entirely a fair comparison.

In late 2003, I moved into the house across the street from Grandmom, that had been in the family since before the Civil War. Well, the property at least. The house had been built in 1916, and Grandmom and Granddad inherited it in the 1960s. Grandmom had been using it as a rental, but as she got older, and the house too, it was getting to be a hassle. So, she put my name on the title, as well as my uncle, so that he didn't get screwed out of his ultimate inheritance.

Getting the house basically for free allowed me to take the proceeds from the condo and invest them. I also took out an HELOC on the house, and some of that went into investments. When Grandmom passed away in 2015, I think I got about $60,000. Plus the house went from 1/3 mine, 1/3 hers, and 1/3 my uncle's, to 50/50 me/uncle. The $60K was nice, but at that point I was over $1M in invested assets, so it wasn't life changing. Being able to live in the house rent free, and take out that HELOC and invest, plus investing the proceeds from the condo were a bigger game changer. So, I put this under "help from family," although I guess others might call it "getting my inheritance early".

Now, my paternal Granddad, and then Dad, died within 6 months of each other. What I got from that was pretty substantial. And, I guess you could say it was life changing. The HELOC had converted to a 10 year fixed mortgage, starting in early 2015. I had been paying it down somewhat aggressively, but once the inheritance cleared, I had it paid in full, around Jan/Feb of 2018. I also used a good chunk of it as the down payment on my current house, and having the old place mortgage free, I was able to keep both properties, and take my time clearing the old house out.

I finally sold the old house October of last year. The check they cut me, for my portion of the proceeds, was something like $157K. It did trigger a bit of a tax bill, but it wasn't too horrible because I was able to write some stuff off against it, and take some strategic stock losses. So, maybe $140-150K is what I cleared, after taxes. A nice boost, but at that point I had about $2M in invested assets, so it didn't seem like it changed my life in an earth shattering way. Actually, not having to deal with the house anymore, plus the carrying costs (taxes, insurance, minimum utilities) cutting the grass, worrying about it getting broken into/squatters, etc was a bigger peace-of-mind than getting that check at settlement.

If Grandmom hadn't let me move into the house back in 2003, I'm sure I would have moved into something of a step-up house. Perhaps a modest single-family home, with a 2-car garage. And, if I'd never gotten any inheritance from her, nor my Grandad and Dad, I'd still be doing fairly well now. But, my life would definitely have taken a different course. I'm pretty sure I wouldn't be in the house I am, currently, at least. I might have moved from my theoretical step-up house to something a bit nicer, but it probably wouldn't be a nice as what I have now.

So I guess I'd put the factors of my wealth accumulation, in order of importance:
1) saving/investing from working for the man/megacorp.
2) family help
3) inheritance.
Edit: 4) almost forgot: taking in housemates. That has definitely helped to some degree, over the years. Moreso in the early years, but even now, the income is a nice bonus.

 

[NW-Bound]

Spent most of my money on booze, women and motorcycles...I wasted what was left

It's more fun doing that on the back end. lol

I never did, and still don't. Even on booze, my daughter and son-in-law bought me a bottle of Louis XIII, before I could bring myself to splurge for one.

PS. About women, my bride of 43 years, although she did not have a high-paying job and quit at 50, still managed to have retirement accounts totaling in the 7 figures. I have power of attorney to manage them for her, as she does not care to learn about investing. She's too interested in cooking, gardening, and watching YouTube to do much else.

 

[Jeffman52]

My story is similar to many here.

My parents left nothing but debt behind. So zero inheritance.

Grew up extremely poor and very rural. No chance at college, dropped out of Highschool. Most work was baling hay, and tractor work on peoples property. Later I worked in the cotton mills at 16 - 18 years old, then joined the service. Did a short stent in, and then went to tech school (electronics technology). Worked on circuit boards for about a year, that job dried up and I ended up in the copier industry. It was a decent job but no one is getting rich there. But I stayed in that industry for 15 years until I saw the writing on the wall and went back to night school (tech school again), this time I got certifications that I thought would get me into a field that I never got into MCSE, Comptia, Net+, Cisco certification.

Fast forward wife and a couple of kids, house payment, two car payments, many credit cards way over extended, and I owe, I owe, so its off to work I go.

Got out of the copier industry and went into Distribution supply chain. first on a help desk for their old POS system. (They hired me for my DOS knowledge). Stayed at Mega Corp and went from there to Systems analyst, to Sr Systems Analyst, to Manager Inventory and Systems, then Sr Manager Inventory North America, finally to Asset Protection Inventory services.

Divorced by 42 and moved into an apartment with very little in retirement savings (about 20K) a truck payment and 6 CC's. Lots of debt. Running on the hamster wheel and getting no where fast. A few years later I married my now DW, she also was deep in debt. We got on the same page, knuckled down, paid all the debt. Lived way below our means and invested heavily in our 401K's.

In late 2008 when we married (45 years old at the time) to current and here we are now out of debt own our home (500K), and have $1.7M in our 401K, 100K in CD's, and another 100K in other liquid assets.



For those that get a late start. I will tell you it can still be done. Make the hard decisions. Cut your lifestyle until it hurts. Save and invest for the long term. You can still have fun and do fun stuff while preparing for a future that will be here before you know it.