Big numbers (serious question)

Urfe

Confused about dryer sheets
Joined
Oct 12, 2024
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San Rafael
I see a lot of posts by people planning early retirement....Often, say, someone in their 40s who says they have anywhere from 2 to 3 million in total assets. Sometimes, they say their annual income is less than $200 k, which must mean they were saving close to half of that for the better part of two decades. Are these numbers real? How is this really possible? Seems like some of these numbers are inflated, but can't understand why someone has any incentive to do that.....
 
Some people are savers and graduated college with little debit. Throughout my 35+ year working career, I routinely save 30%-50% of my paycheck, yet never made 6 figure salary - though got really close. If you invested a portion in a SP500 or similar fund, which has returned on average 10% per year for the past 30 years, these numbers make sense.
 
We've had a few imposters, and they were pretty quickly sniffed out. But suppose a lot of people are embellishing or flat out lying...how does this affect you? Run your own numbers and make your own decisions. I don't think many at all are lying though.

In my case, employee stock options were the main net worth boosters.
 
The "miracle" of compounding can make an average wage earner a millionaire in 25 years. All it takes is the discipline to save regularly and invest by putting off gratification. Never go into "bad" debt (defined as consumer debt for the most part, like credit cards.) Mortgages on a reasonable sized house are fine. I never earned 6 figures either - heh, heh, until I retired! Now my "stash" does that for me. Who knew? It helps if both members of a couple are on the same page as far as spending and saving are concerned.

Oh, and no guarantees because YMMV.
 
Dual income, diligent saving, and inheritance. Oh .. and pensions. Military, teachers, cops, etc are often pension recipients that allow someone to retire with a smaller nest egg than someone without a pension.

I was able to retire about 3 years earlier than planned because of an inheritance. Had planned for age 55 and was aggressively saving for that goal, but the inheritance gave me the cushion to walk away when my boss changed my work environment negatively.

Also the folks on this board fall into a diverse range of retirement lifestyles. Plenty of fat FIRE members, but also plenty of lean or skinny FIRE members .. who were able to RE due to careful budgeting and scrimping.

No single solution for reaching FIRE.
 
I see a lot of posts by people planning early retirement....Often, say, someone in their 40s who says they have anywhere from 2 to 3 million in total assets. Sometimes, they say their annual income is less than $200 k, which must mean they were saving close to half of that for the better part of two decades. Are these numbers real? How is this really possible? Seems like some of these numbers are inflated, but can't understand why someone has any incentive to do that.....
Welcome to the FIRE Forum, Ufre.

Please introduce yourself here and share as much information as you are comfortable sharing.

 
Dual income, diligent saving, and inheritance. Oh .. and pensions. Military, teachers, cops, etc are often pension recipients that allow someone to retire with a smaller nest egg than someone without a pension.

I was able to retire about 3 years earlier than planned because of an inheritance. Had planned for age 55 and was aggressively saving for that goal, but the inheritance gave me the cushion to walk away when my boss changed my work environment negatively.

Also the folks on this board fall into a diverse range of retirement lifestyles. Plenty of fat FIRE members, but also plenty of lean or skinny FIRE members .. who were able to RE due to careful budgeting and scrimping.

No single solution for reaching FIRE.
Yeah, I became Financially independent at 51 because my Megacorp had a modest pension AND supplemented retiree health insurance (guaranteeing me to be insured at standard rates at "reasonable" - not cheap - rates.)

The 401(k) had anywhere from 0 to 100% match (usually 50%) up to 6% of what I invested. The plan had several funds to use so NOT being invested in it was foolish in the extreme though I knew some folks who did not invest.

Thus I ended up with over a million at age 51 and then I waited longer because I was still having fun. I retired pretty much the day it was no longer fun.

Believe me it is still possible. You just have to want it badly enough to make it happen. I would grant you that it's harder now than when I started out. I only w*rked one place. Most people now have to change j*bs a few times to get ahead. YMMV
 
We were married in 96 & started at zero (debt, assets). 25 years later (removed 2012-15 on sabatical) and we fall into your post's #s. We didn't even attend college and put DD through college and marriage. It took about 15 years to get to the first M.

We lived on the smaller salary and saved the larger, maxing out 401ks and HSA. The past year had banner growth of $400k (after living expenses of $75k) and only $200k after tax income. The growth will eventually take over on the overall numbers.
 
I would question why you stopped working at 40 with 2M-4M. Most of these folks have salaries greater than 200K, so why not work until 50 and double their money?
 
Are these numbers real? How is this really possible?
This is a most interesting forum.
  • Some of us were fortunate enough to retire early (and we get to define "early" however we like).
  • Some of us are working towards early retirement (same definition standard).
  • Some of us don't fall into either group; we just like the company here.
There are also a great many ways of getting to FIRE, but which avenue we took doesn't really matter in the end.
 
I would question why you stopped working at 40 with 2M-4M. Most of these folks have salaries greater than 200K, so why not work until 50 and double their money?
Huge difference in quality of life? Getting to do what you want? It’s always a more time versus more money decision.
 
I see a lot of posts by people planning early retirement....Often, say, someone in their 40s who says they have anywhere from 2 to 3 million in total assets. Sometimes, they say their annual income is less than $200 k, which must mean they were saving close to half of that for the better part of two decades. Are these numbers real? How is this really possible? Seems like some of these numbers are inflated, but can't understand why someone has any incentive to do that.....
I suppose we fell into your definition more or less 25 years ago. Like RunningBum, company stock options played a large roll in our early retirement. However we seem to be in the minority here. Many, many folks here have done it through lifelong aggressive saving and careful investing and many also with decent pensions, and still being able to retire early.
 
We spent and spend less than we make. Always tried to have our money making money, in our case by buying old crappy beatup places that had some appeal that could be brought out with an infusion of hard work, then renting them out. Never got to early retirement, but not because of the numbers.
 
Are these numbers real? How is this really possible?

Yes, they're probably real. They aren't my numbers, but based on my numbers I can see how it's simple to do. It's two things:

1. LBYM. Most FIRE folks are probably saving anywhere from 10% to 50% of their income.

2. Compounding. Take the savings from LBYM and invest it at 10% annually, and you can get to the numbers you describe pretty easily.

Combine those two things, and over 20 years it's pretty much rocket fuel.
 
I had some bad breaks (spendthrift Ex, divorce with a 12-year old and no child support) but many good ones. Parents paid for my college, continuous employment in a good field (well, one 6-week period of unemployment but I'd gotten 5 months of severance), large profits on two of the houses I've owned. There's also the usual luck or the grace of God, take your pick- DS and I stayed healthy, no major catastrophes, careful spending, no borrowing other than house and car, and always saving.

I retired 10 years ago at 61 because, like many, my BS bucket was full. I'd saved $2.6 million and have far more than that now. I'm VERY glad I didn't keep working to make more money. Already I have more than I need and my happiest problem is how much to give away.
 
I see a lot of posts by people planning early retirement....Often, say, someone in their 40s who says they have anywhere from 2 to 3 million in total assets. Sometimes, they say their annual income is less than $200 k, which must mean they were saving close to half of that for the better part of two decades. Are these numbers real? How is this really possible? Seems like some of these numbers are inflated, but can't understand why someone has any incentive to do that.....
Okay, I gotta ask: Where are YOU coming from with your question(s)? I have no problem with you asking. Certainly good questions. Are you struggling and wonder if you can do the same? Or do you just see those numbers and say "that's impossible?"

It's true that we're somewhat of a select (or more likely a self-selected) group of folks. At some point in our lives, most of us decided that we were NOT going to wait to retire at ages most people retire.

We decided we would make the sacrifices to make it happen. So, it's true MOST people can't or won't end up with 2 to 5 million living the American life-style. BUT they COULD if they made it their priority. (End of spiel.) :cool:


I assure you, it's possible (of course, not guaranteed, as mentioned above.) Is there some reason you don't think YOU can do it too? Does it all seem overwhelming?

Please share your thoughts on your questions. Regards and aloha.:flowers:
 
Here are the numbers for just my 401k: I contributed $286,575. Current balance is $1,617,241. My finance class example worked in real life!
 
I see a lot of posts by people planning early retirement....Often, say, someone in their 40s who says they have anywhere from 2 to 3 million in total assets. Sometimes, they say their annual income is less than $200 k, which must mean they were saving close to half of that for the better part of two decades. Are these numbers real? How is this really possible? Seems like some of these numbers are inflated, but can't understand why someone has any incentive to do that.....
Two income family, perhaps no children.

Also having no debt or close to none, for most of that time.

And you don't have to save half, at first, because what you are saving is growing. DH and I never cleared 200 solo, but we were both good earners and really socked it away the last 5-10 years. Each promotion or raise just increased the savings. Paid off our house instead of moving to a bigger one, stuff like that.

We retired at 46.
 
This site has many folks who saved a very large percentage of their earnings and invested wisely with great overall stock market returns over the years.
This is not typical among the general population. Thus it can seem hard to believe.
 
Some might have been mining crypto.... or bought some... the gains are real if you cash out..
 
Some might have been mining crypto.... or bought some... the gains are real if you cash out..
We don't hear too many stories here of folks who won the lotto or scored big on some stock deal or took an amazing business opportunity. It's mostly folks who have saved diligently, and "paid themselves first" as the saying goes.

Read "The Millionaire Next Door" to get an idea of "how most of us did it."

 
We retired at 60, early to us.
We both had govt jobs with lower income, but great pensions. So we are primarily SIRE.
We don't have millions, but we have had a LBYM lifestyle, bought a smaller home and stayed put for over 30 years, 6% was placed in our pension with a match, we saved anywhere from 5-15% also. Bought both used and new cars but drove them pretty much until they dropped, 150,000-200,000 miles or more. Most vacations with the kids were camping when they were younger, or to the beach, nothing extravagant.

LBYM is probably the primary thing you will read about folks here, so you have the money to save.
Save and invest early, over time compounding does work.
 
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