Breadwinner or single millionaires: Tell me your story

[longranger]

Assets 2.5 M. Accumulated mainly by contribution to pension and profit sharing plan. Also increasingly LBYM over the years. Would be closer to 5M if I were as disciplined from 25-35 as I am now.

 

[mountaintosea]

Single, no kids, >1.6 m liquid assets. Have pension but not included, nor residence. Parents still alive. Started saving early 40s. Mostly stock market and LBYM.

 

[Jerwin]

Single, 54, No kids. NW>1.9M (~1.2 in retirement accts, the rest in taxable accts) - FIRE'd at 51 from MegaCorp after 30yr career - lucky to also have DB pension of ~5k/month starting age 55. Always maxed tax deductible contributions, got 4% match, paid off mortgage in about 13 yrs then put pmts to extra investments, Did non-deductible IRAs and then converted to Roths when that became an option. Always invested raises - figured I didn't need the money since I had what I needed already. Everything was automated - never had to think about it except for regular rebalancing. Besides 401k, use Vanguard, Credit Unions, and Treasury Direct accts. Towards the end of my career, my income was distributed ~1/3 investments, 1/3 taxes, 1/3 spending.
Unfortunately, I did just receive today ~$140K check from an inherited 401k - my boyfriend recently passed but that amount is not counted above (and we did not live together/share expenses - so don't think he helped in the $ department - in fact just the opposite - I helped him!) Talk about women not being good with money just pisses me off!

 

[wingfooted]

With the amounts of investable assets mentioned in this thread, there are probably several folks who made one million dollars in just one year with their investments alone in 2013. ….

The killer is taxes and recent changes in the top marginal rate plus an additional 3.8% ACA tax on investment income - doesn't make it any easier.


Sent from my iPad using Early Retirement Forum

 

[aim-high]

Married, one income, no real estate (other than primary residence.) Freelancer, IT Consultant = high income / large SEP contribution for 10 years (mostly converted to Roth in 2010). One stock = High Risk (luckily high return.) All together = FIRE at 48 if I can divest enough in the next 4 months. DW is SAHM, youngest child enters college this fall.

My girlfriend and I are ready to party!

 

[Badger]

I'm not sure the reason to differentiate between one or two incomes when one income may be more than combined. Our combined income (5 figures) was quite a bit less than most of our friends single income. We surpassed our goals by contributing the maximum to 401k, 403b, Roth, then more to a taxable account, while LBYM. We bought and drove used cars (a couple until they were almost 20 years old), bought and paid off early our small home (but in a nice location/neighborhood), and vacationed with tent camping trips that we enjoyed.

Now we can buy new cars/trucks, travel internationally, eat in restaurants other than fast food, not worry about costs, and donate to local animal charities. Keeping in mind that we still have that LBYM attitude, are still frugal and shop for value.

Cheers!

 

[LOL!]

The killer is taxes and recent changes in the top marginal rate plus an additional 3.8% ACA tax on investment income - doesn't make it any easier.

If one is paying much in the way of taxes on their investment gains, then they need to figure out how not to do that. We have seen over and over again that folks have figured out how to not pay taxes.

 

[bentley]

NW - $2.4mm, investable - $1.9. Married (same lady sahm) 41 years, 2 kids, both doing well. Single income, started saving the second year of my 35 year career by matching the company match. A few years later, my contribution was double the match, and the last five years of career, my contribution was 3 times the co match so that I was contributing the max. Took advantage of each ESOP offering. Two paid for rental units. Everything we own including home, cars, etc all paid for. Always lived below our income, and drove cars/trucks for ten + years. Never lived lavishly. We moved a lot following the paycheck. We lived nicely and comfortably, and always bought homes well under what we qualified for, which usually frustrated the realtors. And one of our first savings goals was an emergency fund, and term life to protect the family.

 

[mjs111]

40 years old, net worth about $2.1 million. Single, no kids.

I learned good frugal living and personal finance habits from my parents. I was taught to save money as a kid and did odd jobs like lawnmowing for extra money. I worked a part time job in high school. The key concepts of saving and spending less than I made were instilled very early.

I went to a state school about half-funded on scholarships, funding the rest with part time jobs, graduating with no debt. This was back in the early 90's when in-state tuition at state colleges was still cheap enough to swing this. It would be much harder to do the same thing now.

My first job out of college didn't pay much ($15,000 a year in 1994) but my boss there introduced me to a key concept: saving and investing for retirement through the magic of compound interest. He sat me down and showed me mathematically how this all worked, making it clear that small amounts could compound into very large amounts given enough time.

Since I was already a cheapskate and liked making money it didn't take that much convincing, and I started investing at around the age of 21. I made lots of mistakes along the way. For example, one of my first fund investments was in what was essentially an S&P 500 index fund with a 5% front end load. This was before the internet really took off and information was much harder to come by.

After some false starts with expensive, actively managed mutual funds, I graduated to low cost index fund investing (VFINX), then gradually over time learned the basics of value investing, company valuation, and how to invest properly in individual stocks and bonds. I studied Graham and Dodd, Lynch, Buffett, Klarman, Munger, Fisher, Greenblatt, Berkowitz, Damodaran. These men are quite generous with their knowledge, writing books and notes about their process even though any money they make (if any) from these books and notes pales in comparison to what they already make and have. if you have the time to study what they took the time to write down it's a goldmine.

At 23 I got a job offer for considerably more money, bumping my pay up from $23,000 to $55,000 in 1996. Over time that gradually rose to around $160,000 in the mid 2000's and has stayed there since as I've about topped out for what I do. With interest and dividends my realized income is now around $200,000. I didn't raise my standard of living too much even though I moved to a higher cost of living area. I was saving about 70% of my after tax income by the time I reached the upper range of my salary limit.

I invested heavily in the 2008/2009 downturn. I didn't perfectly time the bottom by any means but I was buying large amounts of shares of quality companies (Berkshire, Microsoft, Johnson and Johnson, American Express) while they were selling at prices I estimated were at least half off relative to a conservative fair value estimate. Later in 2011 I started buying large positions in some of the big financial companies (Bank of America, AIG, Goldman), which were generally selling at prices like they were all going to go out of business. Those actions plus continual saving served as a springboard, quadrupling my portfolio value over the course of 5 years between 2008 and 2013.

It took about 17 years to make the first million but only took 3 years to make the second million due to a rapidly rising stock market creating double digit returns on a million dollar capital base, higher salary, and better investing technique than when I started way back in 1994. Given where the stock market is valued today I'd wager the third million will take longer than the second million took to build. There's just not much out there selling cheaply these days, and I wouldn't be surprised if some of these recent gains are given back in the next ebb.


Mike

 

[Neecy]

I'm not sure the reason to differentiate between one or two incomes when one income may be more than combined. Our combined income (5 figures) was quite a bit less than most of our friends single income. We surpassed our goals by contributing the maximum to 401k, 403b, Roth, then more to a taxable account, while LBYM. We bought and drove used cars (a couple until they were almost 20 years old), bought and paid off early our small home (but in a nice location/neighborhood), and vacationed with tent camping trips that we enjoyed.

Now we can buy new cars/trucks, travel internationally, eat in restaurants other than fast food, not worry about costs, and donate to local animal charities. Keeping in mind that we still have that LBYM attitude, are still frugal and shop for value.

Cheers!

You have a good point. I wanted to differentiate because:

1. There is another thread that doesn't.
2. It reflects my current situation.
3. True, one person can make $200,000 and reached their FI sooner. But sometimes when I see "we reached $500,000 at age 32," I'm not sure if both partners contributed or not.

Nevertheless, awesome job on your current situation!

 

[Neecy]

40 years old, net worth about $2.1 million. Single, no kids.

I learned good frugal living and personal finance habits from my parents. I was taught to save money as a kid and did odd jobs like lawnmowing for extra money. I worked a part time job in high school. The key concepts of saving and spending less than I made were instilled very early.

I went to a state school about half-funded on scholarships, funding the rest with part time jobs, graduating with no debt. This was back in the early 90's when in-state tuition at state colleges was still cheap enough to swing this. It would be much harder to do the same thing now.

My first job out of college didn't pay much ($15,000 a year in 1994) but my boss there introduced me to a key concept: saving and investing for retirement through the magic of compound interest. He sat me down and showed me mathematically how this all worked, making it clear that small amounts could compound into very large amounts given enough time.

Since I was already a cheapskate and liked making money it didn't take that much convincing, and I started investing at around the age of 21. I made lots of mistakes along the way. For example, one of my first fund investments was in what was essentially an S&P 500 index fund with a 5% front end load. This was before the internet really took off and information was much harder to come by.

After some false starts with expensive, actively managed mutual funds, I graduated to low cost index fund investing (VFINX), then gradually over time learned the basics of value investing, company valuation, and how to invest properly in individual stocks and bonds. I studied Graham and Dodd, Lynch, Buffett, Klarman, Munger, Fisher, Greenblatt, Berkowitz, Damodaran. These men are quite generous with their knowledge, writing books and notes about their process even though any money they make (if any) from these books and notes pales in comparison to what they already make and have. if you have the time to study what they took the time to write down it's a goldmine.

At 23 I got a job offer for considerably more money, bumping my pay up from $23,000 to $55,000 in 1996. Over time that gradually rose to around $160,000 in the mid 2000's and has stayed there since as I've about topped out for what I do. With interest and dividends my realized income is now around $200,000. I didn't raise my standard of living too much even though I moved to a higher cost of living area. I was saving about 70% of my after tax income by the time I reached the upper range of my salary limit.

I invested heavily in the 2008/2009 downturn. I didn't perfectly time the bottom by any means but I was buying large amounts of shares of quality companies (Berkshire, Microsoft, Johnson and Johnson, American Express) while they were selling at prices I estimated were at least half off relative to a conservative fair value estimate. Later in 2011 I started buying large positions in some of the big financial companies (Bank of America, AIG, Goldman), which were generally selling at prices like they were all going to go out of business. Those actions plus continual saving served as a springboard, quadrupling my portfolio value over the course of 5 years between 2008 and 2013.

It took about 17 years to make the first million but only took 3 years to make the second million due to a rapidly rising stock market creating double digit returns on a million dollar capital base, higher salary, and better investing technique than when I started way back in 1994. Given where the stock market is valued today I'd wager the third million will take longer than the second million took to build. There's just not much out there selling cheaply these days, and I wouldn't be surprised if some of these recent gains are given back in the next ebb.


Mike

Wow, cool story! Thanks.

 

[scrabbler1]

Single, no kids, age 51, been ERed since late 2008 at age 45. NW is just over $1.3M. I got there thanks to LBYM, maxing out my 401k most years, and the $300k I cashed out of company stock, stock whose value grew by a factor of 30 (3000%) from 1997-2008. By cashing out the company stock, I went from 1/3 taxable and 2/3 tax-deferred to 2/3 taxable and 1/3 tax-deferred, a better ratio to retire at 45 because only the taxable account is providing monthly dividends to pay my expenses.

 

[Fedup]

Each of my kids worth at least $1M, so if we did have 2, our net worth would be 2MM>
::wink::

 

[kypix]

. . . Do not count a pension or real estate values. . .

Got there investing in real estate. But, by your rules, I cannot tell you about it.

kypix

 

[Senator]

Single, no kids. NW conservatively $2.5M

$1M in investable assets. RE equity of ~$1.5M in RE, including 2 paid off duplexes, 1 paid off 4-plex, and my home. 4 other 4-plexes with ~125K equity each.

I have more income from my RE, than most will have in their jobs. Projected out to be ~$130K annually. Plus the $1M.

Whenever I write about this, I wonder why do I keep working?

 

[WannabeRetired]

Hey Senator. I wonder why you keep working, too. : ) You're set!

 

[Senator]

I wonder why you keep working, too

I just started thinking about retiring recently, so it's still a new concept. I think by going until 2016, both me an my DGF of 24 years can leave at the same time.

She is a bit younger, by 12 years. But I am eyeing up 7/1 of next year too. And have been studying RVs and 5th wheels a bit already for some travel.

So, you never know. If I meet my savings goals for this year, I may have to re-assess. The goal is to save ~$175K in 2014. I had $106K saved as of 6/30, which includes my 401K (but not the match). So, it is looking like something could happen sooner.

I should have a higher savings rate the second part of the year too. No house payment, 401K already maxed, no tax payments, no $29K payment to my sister...

 

[Totoro]

I went through the other thread about millionaires and wanted to differentiate between dual incomes and inherited wealth.

How many became a millionaire with one income and no inheritance? Do not count a pension or real estate values. Did you become one by contributing the max to your 401K, TSP, 403b and Roth IRAs and LBYM? I would like to contribute to a Roth TSP but I am afraid of it since I will pay more taxes now and the balance does not seem to grow as fast as a regular TSP(used the calculators).

One income, not $1M yet but reasonably close (>$800k)

Traditional factors: LBYM, low taxes, well paying job for a few years, no children, index investing.

Virtually all my investments are after tax. Don't live in the US though.

 

[robnplunder]

DW retired in her 30s. No inheritance. In fact, I have opposite problem of supporting my parents and other close family members with $$$. I work at Megacorp for a high paying position, did LBYM most of my life, saved good portion of my income every year & let it compound, did so-so with stock market (was too conservative early on, aggressive at the wrong time), had only 1 kid to take care of. With stock market hitting new highs as of this writing, we can call ourselves MMaires (barely).

 

[NgineER]

One income, not $1M yet but reasonably close (>$800k)

Had a couple of years (3.5 out of 7) with dual income, not at $1MM yet either, >$800. Wife ER'd and is home with our three kids. Hoping to hit $1MM next year sometime (while I'm 40).

 

[Big_Hitter]

Do not count a pension or real estate values.

Why not?

 

[steelyman]

I think Nords posted a simple way to estimate present value of a pension based on I-bond yields.

I used it (but I don't "use it") and it seems very reasonable to me. My hesitation comes from uncertainty about pension futures.

 

[calmloki]

Why not?

<not a golfer> because sand trap/water hazard/trees? added layer of difficulty I imagine.

 

[Big_Hitter]

I think Nords posted a simple way to estimate present value of a pension based on I-bond yields.

I used it (but I don't "use it") and it seems very reasonable to me. My hesitation comes from uncertainty about pension futures.

what uncertainty would that be?

if you want to approximate the value of a single life annuity, just calculate an annuity certain payable to the person's life expectancy. That's not the correct way to do it but it is a pretty good approximation.

 

[brett]

Married, one income, no appreciable inheritance, two kids, no silver spoon. All of a sudden I turned 59, realized that we were considered to be high net worth, got a golden handshake...and decided to call the game. Worked hard, acted on some opportunities, invested, and avoided all consumer debt. Our cars are/were 18 and 9 years old respectively-just prior to downsizing to one. People wonder where we get the money to travel since we lead a very unassuming life.

Not it's all our time. Time to travel, take advantage of travel offers, extended vacatons,etc. while we are healthy. The Med for seven weeks in Sept/Octbober and three months in Thailand, Malaysia, Australia, and Fiji over the winter. My thoughts have now shifted to what can I do to secure my children's retirement since I doubt that they will have the opportunities that I had/experienced.