Meh at hitting a million

[Major Tom]

BTW aaron - I'd love to have 1,000 sq ft for the rent you pay. Maybe a move to WI is in order!

 

[W2R]

For the first 5 years, the rent was constant, at $640/month including electricity. A couple of months ago, he apologized profusely that, due to the rising cost of everything, he had no choice but to raise the rent - to $651. Needless to say, I'm quite happy with my first rent increase in 5 years

Wow, I'll bet you were SO relieved when he told you the new rent! It could have been so much higher. If I had been in your shoes, I would have been freaking out, thinking of where to move and how, until finding out that the increase was so small. He sounds like a very nice old man.

Last week, my SIL took me as a guest on her membership to SFMOMA. It has recently re-opened, and is well worth a visit. As a thanks for getting me in, I bought her lunch. I have spent the last few days building some neat portable ham radio gear (my hobby). This morning, I built and tested a lightweight antenna. Next week, I'll stuff it into my backpack and cycle to Volmer Peak, a local high spot up in the hills above Berkeley, with a great view of the Bay Area, and test out the radio gear. This weekend, my best friend is coming over. We'll have some snacks, drink a little wine (well, maybe more than a little), watch the new episode of SVU, listen to music, and generally chat and have fun. She is staying over the night. I'm sure you'd find that terribly boring, but it doesn't cost much, and we like it

Yes, it's a very dull life

Sounds fun to me, a perfect retirement.

 

[Major Tom]

Wow, I'll bet you were SO relieved when he told you the new rent! It could have been so much higher. If I had been in your shoes, I would have been freaking out, thinking of where to move and how, until finding out that the increase was so small. He sounds like a very nice old man.

As it happens, we're on fairly strict rent control here, so there is a limit to how much he can raise it. I don't think he's very familiar with the details of the rent control laws though - it's just that his rent increases are so few and far between that historically, he hasn't raised the rent as much as the law will allow. This particular raise was pretty close to the allowed maximum in one year but, given that the rent was low to begin with, and he hasn't raised it in the 5 years I've been here, I was quite happy to pay the new amount!

My neighbors in the house and I are more concerned about what will happen when he's no longer able to manage his properties, and the property passes into new hands. I think that's the point at which we'll be looking for new places to live. It's a lovely old house, but it's very likely a new owner would be more interested in putting a new building on the site, than maintaining this characterful old structure that will need quite a lot of work at some point in the future.

Sounds fun to me, a perfect retirement.

It really is. Once you have the basics taken care of the rest, I think, is up to your imagination and your knowledge of what it takes to make you happy.

 

[DrRoy]

A household at the income level of 56,500 per year is not going to come close to saving $1 million in retirement accounts During a working career

Unless They live in a van down by the river or follow Mr. mustache And drive a 10-year old. Beater and live in a tiny house for the rest of their lives . Or maybe live in someone's basement

That's a lower middle-class wage Yes the stories of the struggling middle class are true

But typically in this early retirement.org community people will start talking about how the middle-class over spends and they shouldn't buy iPhones and Starbucks And the wonderful phenomenon of shareholder value economics and globalization Low wage Math is somehow ignored

I started out on $24K/yr and by age 40 had DW, 2 kids, 2 cars, a typical mortgage, and also hit $1 million in investments. My pay by then was above $54.5K but the average over those years was less. My savings rate had been between 10 and 20%. It can be done.

I also agree that most people today will not do it. I do believe that in part it is because the average person is not sufficiently disciplined to save enough. However, some costs are higher today like energy and health care, and I also think that future stock and bond returns will be lower that what I saw due to changes in the condition of the economy going forward.

 

[daylatedollarshort]

In many major metropolitan areas, once you have the cost of housing taken care of, there are a lot of things to do that cost very little. We're lucky in the SF Bay Area that we have a lot of opportunities for outdoor recreation at minimal or no cost.

Same here. Our housing is taken care of and we also find a lot of free and cheap things to do, outside and inside. This week it is drinks and a play in San Francisco with friends, lunch in Berkeley's gourmet ghetto, a visit to the Berkeley Art and Film Museum, and a group dinner at an Italian restaurant planned so far. With Groupons bought during sales, free event passes through the libary, seat filler memberships, etc. we can go out every day some place fun and not spend much.

 

[YVRRocketSurgery]

I have a relative that lives on about $17-20k CDN/yr. She's not retired but lives a very cost controlled life. Doesn't mean she doesn't go out and have fun though. Somewhat similarly as Major Tom, she lives in a basement suite with a very inexpensive rent; no increases since she's been there as she's a good tenant. I suppose there's a bit of luck at play with the cheap rent (and I suppose good health) but it's also about being able to enjoy life without needing to throw money at it.

 

[Major Tom]

lunch in Berkeley's gourmet ghetto,

I have eaten in that area quite a few times, though didn't know it was referred to that way. My best friend, who is an Oakland native, gave me a "You didn't know that?" look

I suppose there's a bit of luck at play with the cheap rent (and I suppose good health) but it's also about being able to enjoy life without needing to throw money at it.

I think there's a mixture of luck and diligent work in finding a place if you're looking in a pricey market. For others, it might simply be a case of finding a market-rate apartment in a rent-controlled area, and staying in it for a long time. We're putting ourselves partially at the mercy of our landlords and the movements of the market but, as with anything, a good plan B is a handy secret weapon.

 

[purplesky]

I started out on $24K/yr and by age 40 had DW, 2 kids, 2 cars, a typical mortgage, and also hit $1 million in investments. My pay by then was above $54.5K but the average over those years was less. My savings rate had been between 10 and 20%. It can be done.

I also agree that most people today will not do it. I do believe that in part it is because the average person is not sufficiently disciplined to save enough. However, some costs are higher today like energy and health care, and I also think that future stock and bond returns will be lower that what I saw due to changes in the condition of the economy going forward.

So it sounds like your income must've really jumped big time as you approached age 40 ?

A savings rate of 10 to 20% at $55,000 Per year income is definitely not going to get it done to get to $1million in 20 years.

 

[purplesky]

Why would one want to live on only 17k = boring.

Without kids $17,000 per year might be doable if you drink enough cheap wine

With children living only on $40,000 or less by choice I wouldn't feel comfortable Setting that kind of Poor work ethic example if you're choosing to just sit around and hang out doing nothing

My millennial DS is old enough to do the math.

My DS does not have one college classmate that wants to work just 10 years and then sit around doing nothing.

So whatever.

I don't think sponging off other people is something to brag about. I just don't get it.

 

[aaronc879]

BTW aaron - I'd love to have 1,000 sq ft for the rent you pay. Maybe a move to WI is in order!

Better pack a winter coat. The weather is just a bit different here.

 

[bow-tie]

... Anyone else feel that "millionaire next door" moment was anti-climactic?...

At least my wife is still only 40 (I turn 42 next month) so she can say, "million by 40".

I turned 40 earlier this spring and my wife turned 40 a few weeks ago. I told her "you can say you were a millionaire at 40". She said "who would ask me that?". That's not the point... I clearly found it more exciting then she did. So you are not alone Laurence. Regardless of the lack of awesome-ness, congrats!

 

[DaCounselor]

Yeah with three kids under 12 right now, a million falls well short for us to ER, but it's San Diego. I think 2 million will be the number that gets me really excited, as that will be when we could make it if we really had to. We'd like to be in the 3-4 range before we both quit earning completely, however. Our high income friends think that's a far too risky, poverty wage NW for their comfort. I just can't believe the numbers they are coming up with - 7,8,9,10, 20 million, even!

________________

I'm in San Diego as well. I feel your pain. I have a 6 yr old and a 3 yr old and we are already have an aggregate of about $400K in added expenses. When we get done with child care, we will be looking at braces, car insurance and then (gulp) college tuition.

Even if our house was paid off, I still have about $2K/month budgeted for taxes, insurance, HOA, utilities and the occasional repair. It never ends.

I can understand your friends who are coming up with numbers in the high 7 figures. If you want to live in a place like San Diego and you have kids, want to travel, switch cars every so often, remodel a room every now and then, etc., and help kids with college/launching, you can calc out > $5mil pretty easily.

 

[laurence]

________________

I'm in San Diego as well. I feel your pain. I have a 6 yr old and a 3 yr old and we are already have an aggregate of about $400K in added expenses. When we get done with child care, we will be looking at braces, car insurance and then (gulp) college tuition.

Even if our house was paid off, I still have about $2K/month budgeted for taxes, insurance, HOA, utilities and the occasional repair. It never ends.

I can understand your friends who are coming up with numbers in the high 7 figures. If you want to live in a place like San Diego and you have kids, want to travel, switch cars every so often, remodel a room every now and then, etc., and help kids with college/launching, you can calc out > $5mil pretty easily.

The big social norm/stigma seems to be that everyone will pay all college expenses for their children. We plan on helping - a lot. But the reactions from friends that we're going to make them take out some loans is something along the lines of, "I guess that's not child abuse, technically."

We live in north county and our neighborhood has a $45/month HOA and a $140/month mello roos (local property tax) that expires next year. The uppity neighborhood south of us has payments in the $600-$800 range - forever. But it's very prestigious! They even pretend they aren't part of our city, too good for us I guess.

San Diego is definitely one of those places where you need to step off the status treadmill to enable ER. Keep the old car, don't move to a bigger house, learn to fix things yourself, etc.

Our day care costs, now that I'm part time and they are older, have gone from a high of $3k/month to $200 for after school activities. We will never see a raise like that again!! Braces (just put the first one in them) is a laugher of an expense compared to that!

 

[daylatedollarshort]

The big social norm/stigma seems to be that everyone will pay all college expenses for their children. We plan on helping - a lot. But the reactions from friends that we're going to make them take out some loans is something along the lines of, "I guess that's not child abuse, technically."

California has a lot of good value public 4 year schools combined with maybe some combination of financial aid, paid internships, community college credits, online credits, meetup networking during college, an in demand major and Bob's your uncle. You can ER and not deprive your kids of a good education or have any huge loans for you or them to have to pay back.

 

[redduck]

I remember feeling a sense of deep satisfaction (and relief and hope) when I hit $100,000 (as opposed to $1M) invested in the stock market. Didn't see the need to celebrate it. Same with my reaching any other common financial investment markers--they still give me a good inner-feeling (and relief and hope).

Very, very far from "meh."

 

[bada bing]

This is an interesting thread. Lots of different viewpoints.

I have been an underachiever my whole life and passed the $1MM mark a couple years ago at age 54, which seems late. I passed $1MM in invested assets just two weeks ago. I'm hoping to be retiring in ~4 years with hopefully ~$1.6MM in investments and at age 62.

Passing $1MM was a little bit of a time for reflection, but it didn't feel like that much of an accomplishment for me either. The feeling I get is how much easier it would be if I had it to do over again, how mediocre my personal finance performance has been. I had a negative $50K net worth at age 32, coming out of a divorce and was technically homeless for a few months, couch surfing with friends. I don't have much more knowledge about the workings of personal finance now than I did then, but I have so much more wisdom. The school of hard knocks teaches memorable lessons. Over the intervening years I've made a good "hourly wage" income of probably $125K/yr average over 25 years, with some very good employer benefit programs I didn't fully utilize. So when I passed $1MM, it was actually a bit of an embarrassment that it had taken that long considering the good fortune I had enjoyed along the way. But I did enjoy it and *maybe* have a shot at a good retirement in spite of myself.

 

[nash031]

Putting my money where my mouth is, DW and I entered the two-comma club (for the first time, I'm sure not the last), just after the new year. It didn't change anything for us (as has been discussed), but we opened a nice bottle of wine and I made a good dinner and we toasted the accomplishment nonetheless!

 

[W2R]

Putting my money where my mouth is, DW and I entered the two-comma club (for the first time, I'm sure not the last), just after the new year. It didn't change anything for us (as has been discussed), but we opened a nice bottle of wine and I made a good dinner and we toasted the accomplishment nonetheless!

Congratulations, Nash031!! It's a great accomplishment and a nice, secure feeling to know you have a substantial nestegg in addition to your other income streams.

 

[HawkeyeNFO]

Congrats Nash! The compounding effects become larger and larger. Pretty soon you'll have a few hundred thou on top of that.

 

[gauss]

Congrats Nash!

"The first M is the hardest" -- or so I have heard. <wink>

-gauss

 

[Gumby]

BZ, Nash.

 

[injera]

Thought i'd chime in as i'm new to this forum.

We took a look at our financial picture on 1/1 and also surpassed the $1m mark for the first time. Of course $500k of that is in 401ks that we cant touch and another $400k is tied up in real estate equity which we can't tap into until until we sell (if we sell) our home as well as an investment property.

I'm 35, about to be 36. I know this $1M mark is sort of meaningless but it does feel like a good accomplishment on my way to financial independence and an early retirement.

 

[nash031]

Thought i'd chime in as i'm new to this forum.

We took a look at our financial picture on 1/1 and also surpassed the $1m mark for the first time. Of course $500k of that is in 401ks that we cant touch and another $400k is tied up in real estate equity which we can't tap into until until we sell (if we sell) our home as well as an investment property.

I'm 35, about to be 36. I know this $1M mark is sort of meaningless but it does feel like a good accomplishment on my way to financial independence and an early retirement.

As I said in an earlier post, it's a sum that the vast majority of people will never see. While it doesn't change your life, I still think it's worth celebrating because that's what you should do with life: celebrate it!

Congrats!

 

[YVRRocketSurgery]

Congrats Nash.

FWIW, your post about it being an accomplishment worth celebrating in that most people being won't able to reach this level did resonate with me. Good perspective.

 

[redduck]

BZ, Nash.

For the rest of us:

Bravo Zulu

The bravo and zulu signal flag Bravo Zulu, also referred to as "BZ," is a naval signal, typically conveyed by flag hoist or voice radio, meaning "Well Done"; in addition to U.S. naval forces, it has also been used as part of vernacular slang within NATO and other Allied naval forces.

source: from a Wiki (I don't recall which one)