People who grew up without much money , how does that influence your lifestyle choices?

[aja8888]

I remember those big, heavy, leather bags, with way more than the PGA allowed number of clubs in them.

I recall that some of the big, heavy bags I carried had liquid adult beverages" in them for the players!

 

[COcheesehead]

My parents made it clear that what I saw surrounding me “was not the real world”. I thought they were smoking dope.

Even in my existence now, far removed from where I grew up, I don’t think I know anyone personally with an 8 figure net worth (but how would I know for sure) let alone 9 figures or 10. But, why is it unrealistic for me to expect that? Did anyone tell those individuals with a 9 or 10 figure net worth that that’s impossible?

I know a handful with 8+ figure NW’s. One inherited it. One got it through a whistleblower lawsuit. One owned a casino. The rest earned it through owning a construction business, one building oil field infrastructure and another owning a candy company, though started by her father.
How do you know? The inherited one is a close friend. The whistle blower wrote a book about. The rest live in multiple houses, huge houses in some cases and other than the candy folks, none of them work any more.

 

[Gumby]

T

This is where caddied. Beautiful, old course. Every year they hosted the Vince Lombardi classic to raise funds for colon cancer. I met Bart Starr, Pres Gerald Ford, Lee Majors, Bob Hope, etc. As a 12 year old, that was pretty cool.

Home | North Hills Country Club

www.nhccwi.com

This is where I caddied. Home - Shoreacres

 

[RetiredHappy]

My parents made it clear that what I saw surrounding me “was not the real world”. I thought they were smoking dope.

Even in my existence now, far removed from where I grew up, I don’t think I know anyone personally with an 8 figure net worth (but how would I know for sure) let alone 9 figures or 10. But, why is it unrealistic for me to expect that? Did anyone tell those individuals with a 9 or 10 figure net worth that that’s impossible?

So, maybe you were smoking dope when you didn't believe your parents.

It's unrealistic for you to expect to achieve that level of wealth because you don't have special skills, vision and drive. I am absolutely not a Taylor Swift fan, in fact I don't even think any of her "music" has melody, but she is a billionaire. Why? She has the vision and drive to invent herself so that it appeals to a large audience. I live amongst the likes of her in my community, famous celebrities, hall of famers (retired athletes), top executives and famous attorneys. When I look at them and myself, I just don't see myself achieving their level of success and money. I have enough drive to make the money that I made but not at their level. We have to know our own ability. It sounds to me that you have not been inner focused to understand your abilities and what you can realistically achieve. Pipe dreams don't do us any good.

 

[COcheesehead]

This is where I caddied. Home - Shoreacres

Wow!

 

[Diogenes]

I know a handful with 8+ figure NW’s. One inherited it. One got it through a whistleblower lawsuit. One owned a casino. The rest earned it through owning a construction business, one building oil field infrastructure and another owning a candy company, though started by her father.

But curiously, nobody on your list was a W2 employee who saved his or her nickels and invested Boglehead style... that is, buy-and-hold over say 3-4 decades. Everybody either was a principal in a business, or had some sort of windfall.

The romantic appeal of the quest to build wealth, is that there is - at least purportedly! - a realistic chance to do so, without any noteworthy talents, connections or luck... merely tenacity and patience. If these latter two traits are in fact insufficient - if indeed, one needs some magical brew of specialness - then the romantic appeal collapses.

 

[Gumby]

If I had started in the practice of law at 24 (as the vast majority of my law school classmates did) instead of at 33, and if I had stayed in private practice at the big NYC law firm instead of switching to public service in the latter years of my career, there is a very good chance that I would now have an 8 figure net worth, doing nothing more than the Boglehead style investing that I have always done. And I'm sure it would not make me any happier.

 

[MrBojangles]

But curiously, nobody on your list was a W2 employee who saved his or her nickels and invested Boglehead style... that is, buy-and-hold over say 3-4 decades. Everybody either was a principal in a business, or had some sort of windfall.

The romantic appeal of the quest to build wealth, is that there is - at least purportedly! - a realistic chance to do so, without any noteworthy talents, connections or luck... merely tenacity and patience. If these latter two traits are in fact insufficient - if indeed, one needs some magical brew of specialness - then the romantic appeal collapses.

It’s difficult to be anything other than a W-2 employee. That’s what I didn’t understand. You need wealth to buy an existing business, or at least the skills to eventually buy into that business, a really good idea, to start your own business, or enough family wealth to work for a family business or have financial support from your family so you can start a company and not worry about an income stream.

Or, someone who realizes you show promise and takes you under their wing. I kind of was hoping for that, all it takes is for ONE wealthy individual with connections in NYC to give you a start, a chance…. Easier said than done. But, as a W-2 employee, unless you can rise to the ranks of CEO, you aren’t going to be tremendously wealthy. Which shows you just how much most W-2 employees are taken advantage of.

 

[ransil]

I was a caddy too. At a young age I caddied . Some were nice. All had big a*s heavy bags. LOL.

same

 

[COcheesehead]

But curiously, nobody on your list was a W2 employee who saved his or her nickels and invested Boglehead style... that is, buy-and-hold over say 3-4 decades. Everybody either was a principal in a business, or had some sort of windfall.

The romantic appeal of the quest to build wealth, is that there is - at least purportedly! - a realistic chance to do so, without any noteworthy talents, connections or luck... merely tenacity and patience. If these latter two traits are in fact insufficient - if indeed, one needs some magical brew of specialness - then the romantic appeal collapses.

I also know many who have 7 figure NW’s. Many just by investing. Putting them in the top 2-3% of Americans. Is that not wealth too? Do you have to be a 1% er to be wealthy? Perhaps we need a poll.
When is enough, enough?

 

[COcheesehead]

It’s difficult to be anything other than a W-2 employee. That’s what I didn’t understand. You need wealth to buy an existing business, or at least the skills to eventually buy into that business, a really good idea, to start your own business, or enough family wealth to work for a family business or have financial support from your family so you can start a company and not worry about an income stream.

Or, someone who realizes you show promise and takes you under their wing. I kind of was hoping for that, all it takes is for ONE wealthy individual with connections in NYC to give you a start, a chance…. Easier said than done. But, as a W-2 employee, unless you can rise to the ranks of CEO, you aren’t going to be tremendously wealthy. Which shows you just how much most W-2 employees are taken advantage of.

I started my business with $32,000. Hardly what some would consider wealth. I didn’t really even have a good idea. What I had was market knowledge. I knew from my own efforts that millions of dollars of the product we eventually produced were being sourced out of state. I just needed to tap into that market and have customers source it locally. Saving time and money. I also had the prospect contacts.
I tell everyone who asks me about how to start a business, know where your first order is coming from. That makes a big difference. I never had a bad year. Profitable every year. Grew every year, all from $32,000 in starting capital. I sold it for millions 23 years later.

 

[pjigar]

But curiously, nobody on your list was a W2 employee who saved his or her nickels and invested Boglehead style... that is, buy-and-hold over say 3-4 decades. Everybody either was a principal in a business, or had some sort of windfall.

The romantic appeal of the quest to build wealth, is that there is - at least purportedly! - a realistic chance to do so, without any noteworthy talents, connections or luck... merely tenacity and patience. If these latter two traits are in fact insufficient - if indeed, one needs some magical brew of specialness - then the romantic appeal collapses.

As they say in motorcycle circles: "There is no replacement for displacement" referring to the size of engine. So yes, having a big income-generating "engine" is required by necessity to propel you into 9 digit club starting from zero. And no, I personally know people with just tenacity and patience who propelled into 9 digit club with "boring" and "grunt work" businesses. And yes, it is possible to start the journey from scratch. The people I know have done it starting from scratch in a single generation.

I think most people will rather take certainly of a pay check than uncertainty of running a business and hence most don't try. Starting and running a business is no child play, requires many sacrifices, effort, stress, etc. It's a whole another level of tenacity/hardwork so most people will not sign up for it. I know I didn't dare to sign up (I had many opportunities and still do thanks to my friends) even after knowing success and inner-workings of so many business owner friends. I value my time more so I picked a regular paycheck from a relatively high paying job. And I don't regret it, I like to have my cake and eat it too. So many business owners have literally sacrificed their prime years (sometimes not spending much time with growing kids and spouses) building the businesses. Many have no hobbies and don't know what else to do now that they do have time. They just keep starting new businesses because they don't know what else they can do with their time.

Oh, here is another reason why you will see many business owners in 9+ digit club. Private businesses typically have higher returns compared to stocks. We are talking 20-40% return on capital. Try doing compounding using high returns like these, it's truly magical.

 

[lem1955]

It occurs to me, reading these stories, that these are specific reports of the ability of Americans to improve their class status. Upward mobility has been more possible in the USA than anywhere else in the world. Much of that I presume has to do with accessibility of higher education, at least through the 1970's. Gen X and Millenials may benefit more from inheritance from Baby Boomer parents. But I worry for the following generations of Americans.

 

[Diogenes]

I also know many who have 7 figure NW’s. Many just by investing. Putting them in the top 2-3% of Americans. Is that not wealth too? Do you have to be a 1% er to be wealthy? Perhaps we need a poll.
When is enough, enough?

"Enough" is more a matter of whether a person feels justified in tapering-off additional effort, rather than, if the wealth-number hits some threshold. Point being, that maybe I wasn't all that successful in absolute terms, but even so, I grow tired of the effort, and declare "enoughness"... or on the contrary, maybe I'm doing fabulously well, but insist on going further, not because of greed or competitive zeal, but because I'd feel guilty or self-disabling, by giving it a rest.

As for 1% or 2% or whatever, that is facile and meaningless comparison. Even in raw numbers, it ignores things like household size. Suzie is single and has no kids, but has $10M. Joe is married with four children, and the family has $20M. Who is richer? Are such things per-capita or per-person? Do we include imputed value of pensions? What about real estate? And so on. Then, even if we could agree on a metric for measurable wealth, we have COL variations. In my local market, $1.2M buys you a 1700 sq ft house on a 6000 sq ft lot. Elsewhere, that's a genuine mansion. Gas is >$5/gallon here; elsewhere, half as much. And so on.

Point being, that even if we're crass materialists and only care about the dollar-dollar-dollar, even under such narrow criteria, we can't have a frat-boy locker room comparison.

But as for "what is wealth", I'd say, we might equate raw dollar wealth with what historically was aristocratic privilege. In say 17th century England, how many Peers of the Realm were there? How many dukes and counts and so on, in Louis XIV's court? Or in any other such pre-democratic regime, where a writ of nobility determined one's station in life? My guess... England had maybe 10M people, and a few hundred peers; maybe 1000. So, one would have to be a 0.01%-er to qualify as "wealthy".

Back to my earlier question... I think that a $10M or $20M threshold in today's dollars is achievable with a good but not extraordinary W2... things like a senior engineer making $250K/year, sustained over decades. but to cross $100M, it would have to be a C-suite W2, or business ownership, or a windfall.

 

[NomDeER]

I started my business with $32,000. Hardly what some would consider wealth.

For some people, even $32,000 is very difficult. I got loans for college. I don't think anyone would have loaned me $32,000 for a business. And then I had to pay off student loans. So, it was quite some time before I had $32,000 (and did not own a home). It would have been even longer if I had kids to support and had a house. Even if I had 32k and were willing to gamble a house and the financial security for the kids, it would have been difficult. Most of the people I have known who have been willing and able to take big financial gambles with businesses and careers are people who had family and others who could help them out and be a safety net for them if they failed.

Even in my existence now, far removed from where I grew up, I don’t think I know anyone personally with an 8 figure net worth (but how would I know for sure) let alone 9 figures or 10. But, why is it unrealistic for me to expect that?

If you don't know anyone with an 8 figure net worth, why would you expect to be the exception? Given how few people have 8, 9, and 10 figure net worths, why would you think it is realistic for you to expect to have that kind of net worth? Realistically, very few people are going to reach that level of wealth.

I think there is a lot of income inequality and American CEOs get paid outrageous amounts of money while there are people working very hard and earning very little. But, I don't expect everyone to have 8 figure net worths, and I certainly don't think it is necessary in order to be happy. I never expected to have an 8 figure net worth and am not bitter that I have "only" a 7 figure net worth as a result of working hard at w-2 jobs, living below my means, and investing. TBH, I know plenty of people with less money than I have who are just as happy or happier.

For me, after having so much financial insecurity when I was young, the biggest luxury is financial security and not having to worry if I will be able to pay the bills or be able to retire or have adequate health insurance.

 

[COcheesehead]

For some people, even $32,000 is very difficult. I got loans for college. I don't think anyone would have loaned me $32,000 for a business. And then I had to pay off student loans. So, it was quite some time before I had $32,000 (and did not own a home). It would have been even longer if I had kids to support and had a house. Even if I had 32k and were willing to gamble a house and the financial security for the kids, it would have been difficult. Most of the people I have known who have been willing and able to take big financial gambles with businesses and careers are people who had family and others who could help them out and be a safety net for them if they failed.

The $32k represented my life savings at the time. I had no safety net, but I was employable so I had that to fall back on.
It takes a bit of confidence, a survivor attitude I believe to start a business. Some have it, some don’t.

 

[RetiredHappy]

But, as a W-2 employee, unless you can rise to the ranks of CEO, you aren’t going to be tremendously wealthy. Which shows you just how much most W-2 employees are taken advantage of.

You are still not getting the point. W2 employees are paid to do the work that they do. If you are not happy with your work, you are free to go work elsewhere. Believing that most W2 employees should be paid alot more than they are, is just out to lunch. There are many businesses that are profitable, but even more that are not.

If everyone is paid the same, it sounds like communism, which in fact, everyone is poor.

 

[pjigar]

But, as a W-2 employee, unless you can rise to the ranks of CEO, you aren’t going to be tremendously wealthy. Which shows you just how much most W-2 employees are taken advantage of.

To put it little differently: cost of labor is decided by the supply and the demand of labor. A business will pay an employee the least amount possible for which an employee will take or keep a given job. This is very normal in a free market economy. Like others have said, no-one is entitled to nothing. It's just business. Pun intended.

 

[athena53]

You are still not getting the point. W2 employees are paid to do the work that they do. If you are not happy with your work, you are free to go work elsewhere.

I agree. I was W-2 all my life, never reached the C-suite. I was OK with that. LBYM, learning early about investing and a few highly-profitable primary home transactions got me where I am now. I saw what was involved in C-suite jobs- more stress, road-warrior travel schedules, less time with family, having to answer to the parent company or shareholders when things went south. I worked for a small consulting firm and saw the owner borrowing to make payroll sometimes. It eventually folded even after he'd taken out a personal loan to keep it afloat. For every successful entrepreneur I'm sure there are many more who took those risks and lost everything.

Seven figures is fine for me.

 

[MrBojangles]

To put it little differently: cost of labor is decided by the supply and the demand of labor. A business will pay an employee the least amount possible for which an employee will take or keep a given job. This is very normal in a free market economy. Like others have said, no-one is entitled to nothing. It's just business. Pun intended.

I don’t know how true this is because there was a time I was earning $7.00 with a college degree (minimum wage) and I was so desperate for ANY big corporation job that $7.25 an hour would have gotten me. Now, I know few, if any employees at these companies were earning $7.25 an hour so they could easily have laid off someone earning more than that and gotten me for far less, even when you figure out the cost of training. And yet, no job offers…

 

[RetiredHappy]

I don’t know how true this is because there was a time I was earning $7.00 with a college degree (minimum wage) and I was so desperate for ANY big corporation job that $7.25 an hour would have gotten me. Now, I know few, if any employees at these companies were earning $7.25 an hour so they could easily have laid off someone earning more than that and gotten me for far less, even when you figure out the cost of training. And yet, no job offers…

It just means that you were considered not suitable or good enough for their positions. The truth hurts but it really boils down to that.

 

[MrBojangles]

For some people, even $32,000 is very difficult. I got loans for college. I don't think anyone would have loaned me $32,000 for a business. And then I had to pay off student loans. So, it was quite some time before I had $32,000 (and did not own a home). It would have been even longer if I had kids to support and had a house. Even if I had 32k and were willing to gamble a house and the financial security for the kids, it would have been difficult. Most of the people I have known who have been willing and able to take big financial gambles with businesses and careers are people who had family and others who could help them out and be a safety net for them if they failed.


If you don't know anyone with an 8 figure net worth, why would you expect to be the exception? Given how few people have 8, 9, and 10 figure net worths, why would you think it is realistic for you to expect to have that kind of net worth? Realistically, very few people are going to reach that level of wealth.

I think there is a lot of income inequality and American CEOs get paid outrageous amounts of money while there are people working very hard and earning very little. But, I don't expect everyone to have 8 figure net worths, and I certainly don't think it is necessary in order to be happy. I never expected to have an 8 figure net worth and am not bitter that I have "only" a 7 figure net worth as a result of working hard at w-2 jobs, living below my means, and investing. TBH, I know plenty of people with less money than I have who are just as happy or happier.

For me, after having so much financial insecurity when I was young, the biggest luxury is financial security and not having to worry if I will be able to pay the bills or be able to retire or have adequate health insurance.

I didn’t have $32,000 to my name until about age 28 or 29, and that was in a retirement account. Plus there was no way I had any support financially to start a business, because there was no money there to begin with, and I have no safety net. If I have no good idea, how can I pitch that for a loan.

And, the problem is, trying to maximize retirement savings on a low income meant not much money outside of my retirement account. So I have to tap that with a penalty.

Indeed, most of my low 7 figure wealth is in a retirement account that can’t be tapped without penalty until age 59 1/2.

Saving prodigiously for retirement has made me FIRE, but here’s an example of where oversaving for retirement may not be the best idea. Few available funds to pursue other options or ideas, many of which might just cause those funds to evaporate.

 

[MrBojangles]

It just means that you were considered not suitable or good enough for their positions. The truth hurts but it really boils down to that.

That’s what I still don’t understand to this day. Yes, it was 1992 and the economy was bad, but you would have thought some company out there would have seen my ambition. The reality is you need a family member in the company or a mentor, or you will get nowhere unless you have something marketable like engineering.

 

[Gumby]

.......you will get nowhere unless you have something marketable like engineering.

Then it would appear wise to "have something marketable". If you major in engineering in college, you will improve the odds of getting a decent job when you graduate, but college will be a lot more work and a lot less fun. Or you could go on to law/medical school, but again, that's more work in college so you can get good grades and get into a top professional school in the first place. Then, hard work during professional school so you can impress employers and get a good paying job after.

There simply is no easy path to success and financial reward. You have to work hard and be smart. Just showing up will not do it.

 

[YellowSubmarine]

I came from a working class family, oldest of seven. I always had spending money as I worked since age 10 delivering papers, farm work, gas station, etc. But when I moved to Columbus after college, I had $800 (from my first work year after college) and nearly $8000 in college loans. I was a dirt poor college student with no parent support. I knew how to live on a lean budget; and in many ways, I still do. But I now have nearly everything I ever wanted. It's hard to break away from those formative years of our youth.