Great article on how the "Rich" do it...

[unclemick]

Hmmm - 1976 -1993, max 401k, IRA. Last salary 60k. Index 500 and guaranteed insurance contracts varied between 50/50 Ben Graham, 60/40 'da policy portfolio' and a stint at 100% index. Passed 1 mil in 2000. Then down, then up, etc.

Average joe space engineer - one of the toiling minions.

Ho hum compounding , time in the market, yadda, yadda.

Never been asked/interviewed - wouldn't be prudent - too boring.

heh heh heh - oh and lest I forget - Pssst Wellesley! .

 

[Ed_The_Gypsy]

A person with only $1mm and little else is barely OK, or perhaps not OK depending on how things go. He or she will certainly not be eating much foie gras.

Ha

Yeah, I know. Please don't rub it in.

 

[unclemick]

Yeah, I know. Please don't rub it in.

Foie gras is stinking liver - expensive but liver and caviar is fish eggs no matter how you spread it.

Cheap bastardhood like the above or good scotch is an acquired taste and - I repeat - much cheaper if you do it rite!

heh heh heh - Heck if the rest of the country tumbled to the true inside skinny - the economy would grind to a halt cause we'd all be retired. On second thought - everybody stay working - I'll keep the light on for ya.

 

[2B]

I probably have more assets than all of my two brothers and two sisters plus spouses combined. I am definitely in a decent spot financially and could probably not change my lifestyle at all if I truly retired. I don't consider myself "rich" but I guess my siblings would probably think I am if they don't already.

A major part of my "wealth" is a relatively frugal lifestyle but not where I find anything lacking due to money. Another big factor is where I live and plan on living in the future. Housing is a major expense and Texas is much cheaper than California. My nominal $240K house in Houston is a mansion by California standards and probably cost many times the price there. If I had to adjust my lifestyle to California prices I'd no longer be "rich."

My kids have all recently gotten out of college. The total cost was under $15,000 per year and about $5,000 of that was tuition and fees.They were living pretty well on $10,000 per year but I bought the car and covered health insurance.

I think I could live pretty well on $10,000 per year if I lived where I could walk to where I needed to go or take cheap public transportation. If I got sick, I would have to die.

 

[free4now]

My previous research agrees with the OP and CFB... most rich people did indeed get that way by their own efforts rather than inheritance. The formula for getting really rich seems to be EDUCATION + DRIVE + RISKTAKING. People who come from wealthy families do get great education, and due to the ability to fall back on the family, they can take on risky businesses. Something that hasn't been mentioned is that people raised in entrepreneurial families are probably much better at judging risks than all the yahoos who thought they could get rich by applying for some liar loans a few years ago.

But living on $10k? Man, that's a risk I wouldn't want to take. I suspect that those who remember living on $10k were counting on some outside help, whether it was a paid off car, health insurance, or free lodging on a friend's couch.

I think I could live pretty well on $10,000... If I got sick, I would have to die.

Well said. I don't consider a living situation where minor sicknesses lead to death to be good living but that's just old fuddy duddy me.

 

[tuixiu]

The formula for getting really rich seems to be EDUCATION + DRIVE + RISKTAKING.

I don't know about the risk part, I guess it depends on where you put the marker for being classified as rich.

A married couple both with professional jobs and no kids who live simply can certainly become rich by most people standards after 30+ years of manning the oars.

Education yeah probably (although not necessarily) and a fair bit of drive, but showing up at 8:00, going home at 5:00 without too much risk it can be done.

 

[dex]

"Quote:
The formula for getting really rich seems to be EDUCATION + DRIVE + RISKTAKING."

Studies have shown that Postponement of Gratification is a key marker for success.

 

[v5200]

$2mm gives you a SWR of $80k a year. More than many of us (myself included) live on, but less than the household AGI for many people here as well.

You know, that's probably where I would consider someone rich, when their SWR from their portfolio puts them in the top 1% of households.

This actually sounds like a very pragmatic definition of "rich" to me too... so does it sound right that if 1.5% of US huseholds make 250k+ per year, then the definition of "rich" is roughly 6.2 million (assuming a 4% SWR)?