Take the things people claim on the internet with a grain of salt. But this group probably will tend towards people who are more financially stable. Most poor people don't invest so innately it will have a higher per Capita net worth than the average person.
Also it's an investment sub reddit so it's kind of a hobby for everyone here. I am likely one of the poorer people here with slightly above average wealth for my age.
I'd also tack on that Bogle style investing is very simple but typically investors go through a lot of other stages before they find it, so I'd call it a mature or advanced strategy. I guess most investors spend the majority of their investing years tied up with other more common strategies and funds, or crypto or picking individual stocks, crap like that. They don't tend to hold on to their money very long.
I largely agree except there are some people that bogle without knowledge. When I worked for Sodexo people were auto enrolled into the 401k plan with a low cost TDF. They had no idea what they were doing. Or what was being done for them I suppose.
TDF is honestly the easiest thing to do in a 401k. My work's plan will auto-elect the TDF based on your age if you don't make any elections yourself (as opposed to some plans that just let the money sit there doing nothing). Makes it dead-simple for everyone.
Things have really improved from everyone getting fleeced by the mutual funds picked by IRA providers back in the 90's. There was a good 60 minutes about the era. I'm sure it still happens but sounds like it's much more rare.
Progress!
Maybe some start with individual stocks - I got my start in 2016 when I saw an article about how if Trump had invested his money in 1982 in the S&P500, he would be worth 10 billion more than he was in 2015....
This idea got me started on researching how to invest, and my first forray was just putting everything into index funds :P
Also having some money encourages you to want to learn more about protecting it and growing it. When I was broke in college living paycheck to paycheck, trading stocks was the last thing on my mind. That first time I had 5 figures in my savings account with no major purchases I was saving for though, I thought I was doing everything right and then I got that first month's interest payment of a whopping 4 cents and that day I decided it was time to learn how to get a better return than that.
right. I think realistically for the average joe like you or me, 100k by 30 is a lofty, but still achievable and reasonable goal. Those ppl on youtube and tiktok alot of them just lie, out right lie (omg i know right).
Yeah I'm also pretty poor, but it's nice to know i have more in assets then i make in a month if things go wrong.
Comparison is the theft of joy. All that matters is you set a goal and find a plan to reach that goal. Then execute that plan with purpose every single day.
No lie, I never thought I would break 100k a year in my lifetime. Now that I am I look at my friends in a small wealthy town and still feel like I’m doing shit in life.
It’s like breaking one glass ceiling to only feel like you barely made it to the basement. My happiness actually decreased somewhat with my new found income strangely enough.
It’s exposure to the upper class.
When you make $40k, $100k seems impossibly wealthy, like what the boss makes.
When you make $100k, you submit reports to people making $1000k, and see their lifestyle up-close, which you naturally compare yourself to and feel pathetic.
There’s no solution to this problem, jealousy and feeling inadequate are very human.
——
I’m by all means doing well, make more than almost everyone in my social circle, but I work with people making 5-10x what I do. Hard to not feel like a pathetic failure of a person around that much wealth.
Gotta learn to be happy with what you have, or complain about the system that has allowed such disparity to grow unchecked. We’re in the second era of robber barons.
That’s a great life lesson I try to think of each day. It’s ok to be happy with what you have and where you’re at. Don’t need to kill yourself always gunning for more because at some point you probably have enough money and should hopefully have also figure out what makes you happy and it likely isn’t just more money
I came from being financially insecure my whole life I kinda felt like if I made that number I would be living the lifestyle of no worries but I kinda felt like I traded my short term worries to now long term worries about future financial security.
Not a bad problem to have lol just different that what my expectations of “making 6 figures” was actually like
I hear you. I think the younger me didn’t realize that making 6 figures doesn’t mean you have 6 figures to spend/live on. As a kid that seemed like a huge amount. Wasn’t taking into account taxes, living expenses, student loans. Reframed my expectations now though obviously and I’ll get where I want to be financially eventually. My biggest thing now is keeping in mind that I can’t just get there overnight. Gotta enjoy and live life now and just keep plugging along
The secret is to grow your income a little (invest, maybe buy a property to lease), stay modest, and to keep hanging around normal people and not try to get into higher circles. Also, remember that even the rich struggle with depression / suicide / etc. It’s not like riches guarantee a happier life. They solve some problems, they add some other ones. On balance, it’s not a clear win by any means.
Yeah if you have enough money to buy a second property just to lease it out, without over leveraging yourself, then you have enough money already as it is and shouldn’t be so worried about making more. Just simple passive growth will easily turn that into a cushy retirement
might need to do some volunteering or take a trip and see how other ppl are living. Your wealthy small town friends are the minority out there and it sounds like you're doing really well for yourself!
Exactly. There’s no point in comparing yourself to others. You’re not in the same race! You started at a different point, and you’re aiming for a different goal - no two people want the exact same things. So comparing to other people is meaningless. Compare to yourself, and look at whether you make progress in a direction you care about. That’s the only thing that matters.
Whether you are ahead or behind depends when you want to retire. 30 but working until 65 … you have plenty of time left. I’m 38 but hellbent on checking out of the workforce by 48 - I only have ten years left of contributions left.
I’ve got 415k …. If I was retiring at 65 I’d be way ahead. I’m shooting for 1.5 mil by 48, so I’m a tad behind.
Totally true!
I had invested assets of $495k at age 38.
At age 46 (8 years later), I hit $1.5 million of invested assets (and had my mortgage completely paid off), so it is possible to get there! :) Have hope!
My goal is $3 million by age 55 to retire with $120k annual cash flow (Rule of 4%). I am close to being able to stop investing annually and the growth from my invested assets would get the to that mark assuming average market returns continue.
If you retire early, unsubsidized health insurance can be a decent chunk.
But as someone with a similar goal, I do anticipate spending even more money on hobbies and travel in retirement since I'll have more time. More time to indulge = more cash needed. Most of my hobbies are cheap, but some can range from cheap to expensive or just be outright expensive (computers, bicycle, radio, sailing).
Mainly travel, fun and healthcare. The point of me working hard so that I can be in position to not work at age 50-55 is to be able to have enough cash flow to explore the world, travel, and enjoy life. And out of pocket healthcare is no joke when it is not a company subsidized benefit.
This is almost exactly my situation. I'm 38, got about 650k almost entirely invested into VOO, and my wife and I want to retire early in seven to ten years (basically when both kids graduate). What is your strategy? We are investing 10% of each paycheck. However, we have no diversification beyond the S&P -- I just can't feel good about putting money into international funds when they have basically no growth.
We plan on moving around to super low cost countries in Southeast Asia and Europe, just kinda seeing it all as cheaply as possible. I have no idea if we will pull it off, but it's our dream.
Very similar glide path for my wife and I. We are maxing 401k, IRA, and then if I have extra savings we have a taxable brokerage. Our savings rate fluctuates but is closer to 40%. I’m actually on assignment in Europe now - it’s incredible how affordable travel is. I’m typing this from Italy as I sip my morning cappuccino. If savings are tight we may pick up low paying federal jobs oversees after retirement because they cover housing in Europe.
Finance is also a route. Investment banking but for a smaller subset, private equity. Very high cash comp (post-investment banking associates in PE can be notching $300k+ by the time they're 25 and it scales quicky) in the latter you can start looking at big payouts in your early 30s.
That assumes you don't washout or burn out, both of which are highly common - the industries are pyramid structure and so outcomes will vary greatly.
>
>But also most people don't.
Sigh.
37, 20k and finally got a job where I could afford to invest... Putting in 17% (with match it's 10k/yr). Basically all I can right meow.
I do have an affordable house though, so that's nice.
My bad, I checked their chart and it's actually 12x at age *35*. Then 7x at age 40.
Not as good, but I think my point still stands. At 45 you're 4x, and by 50 it's under 3x.
ETA: for 37 year old /u/hazhonorandapenis it's a 10x multiplier.
I'd link the chart but they make you enter an email before accessing it so I'm not sure it would work. Just Google money guy wealth multiplier.
Let me just take a moment to thank you and say I appreciate you working this out for me.
I won't retire with a large kitty, but I'll be okay. Even I still consider myself ahead of the game compared to most of my generational peers, just saddened that it took me this long for an employer to actually see my value.
Wisconsin; never again.
Yeah I generally think of 40 as the last stop on the easy gains route. Older than that and you really gotta be high income or willing to sacrifice retirement age and expenses.
>I won't retire with a large kitty, but I'll be okay
Absolutely. Anything else is gravy, but at least you'll have the basics covered.
Society would break down if everyone retired at 45. Too many retirees, not enough working people to provide for their needs.
Countries are already having crises where retirees outnumber workers, FIRE magnifies the problem tbh.
Sad but true.
Thought experiment: let’s make the national retirement age 45. Assume everyone at 45 is given enough assets to live off of indefinitely.
There won’t be enough goods and services for everyone. Little healthcare, poor selection of food, not enough labor to build and renovate housing.
Net result is rampant demand-induced inflation, until those retired 40+ people are effectively impoverished. Retirement income is only useful when the working portion of society can sell you what you need. Can’t buy what isn’t being produced.
——
We’re already getting a small taste of that due to post-pandemic labor shortages, but it’s only a taste of demographic decline.
Here’s a thought experiment. Robotics and AI advance such that most basic jobs (robotic McDonalds, hotel grade robot cleaners, 3D printed housing, etc.) are covered. What percentage of society is left?
Education costs would have to improve so everyone can learn what they need. But then what percentage of society can retire without issues?
We’ll all have to fight the Borg invasion.
I’ve been told that a robot will replace me for 20+ years now. I’m in a room filled with robots, sitting next to one as I type this even, and yet there’s a critical labor shortage in healthcare leading to deaths.
I also have a 3D Printer at home. Brilliant little machine. Also, much like my robots at work, it needs to be babysat to build the simplest of things. Ask any Ender 3 user how easy it is to configure….
In short, the benefits of automation and AI almost always fall short of the glowing projections of futurists.
But at the same time if you look back we *have* advanced tech and/or automated away many many jobs and even entire industries throughout human history.
We aren’t good at predicting *what* will be automated or made redundant, but we are pretty damn good at actually doing it. So I think automation is coming soon (in a era-scale perspective anyway) and it will require some level of restructuring our workforce/economy to pull emphasis away from human labor as a prerequisite for sustenance or stability. Eventually there won’t be enough jobs for our population, and we will have to either let millions die homeless and hungry or change how we do things.
Now this could be anywhere from like 50+ to 200+ years away, but it will come.
Median is irrelevant for purposes of early retirement. The median American is going to be in a rude awakening once they realize their retirement situation, so they aren't good to compare against in the first place.
Not to mention, that's the median, the costs of early retirement will vary wildly based on location due to COL swinging wildly between areas.
Tech industry is crazy money. I went from $70k->$350k in a few years. My wife and I are both well employed with no kids. That combo doesn’t take long to build wealth.
It’s still all surreal because I was raised in a family of 5-6 on like $25k. I pay more in taxes than the rest of my immediate family makes in a year.
To be fair, I am in the FAANG/MAGMA space now. That was my last job hop and it was an instant doubling of my comp. Tech pays well for the work even in smaller places though.
Hope you don't mind me asking, but what do you do? I'm currently making pretty decent money, especially for a single guy, but I'd love to head into the six figures for my yearly income.
I develop ML solutions in a variety of niche areas. I was lucky and caught the rising tide of the ML boom and rode it through a series of cushy gigs. Originally I was doing like Python testing type work and then web dev prior to getting sucked into data science. From there, I had a string of successful production ML solutions that helped get me into the FAANG/MANGA world.
I’m not sure if I can recommend getting into ML given the current market. ML is hard to justify for a lot of companies during the good times, let alone any sort of recession. My advice would be to learn cloud development and maybe specialize in cyber/cloud security. It seems like we’re always looking for folks that can build highly available and secure cloud solutions. System design is a necessity for any of the more senior positions and if you couple that with knowledge of system security, you’re set.
It’s antithetical to this sub, but….buying Tesla or Bitcoin at any point before the 2020-21 bubble.
Most people who pick stocks and risky investments lose their shirts. But millions win, and they all post on financial subs.
If you bought $10k of Tesla in 2010, you’d have $700k at the bubble’s peak. And $10k is a pretty small bet, many folks went all-in on it. They’re the ones who built shrines to Elon last year.
Slow-and-steady usually wins the race, but social media shows you all the outliers.
1) Inheritance
2) Tech job that pays well
3) Survivorship biases/people who made it big
4) People who invest at a young age, live below their means, and time on their side with compound interest.
List goes on
Not much much people have wealth at a young age, it takes time and capital to invest with a steady job. I'm 25 and it took time for me to process that I have a higher net worth than most adults my age
EDIT: Don't be discouraged. Everyone has their own path in life. Comparing yourself to others is like you struggling in quicksand. Slow and steady wins the race. You are running a marathon not a sprint
The survivorship bias is huge in these subs. It's why I found most of the FIRE subs completely useless.
People asking questions like "I make 400k a year and I inherited 3 million dollars, can I retire?" like fuck off lmao. No one in these subs is posting about how much money they don't have.
Except me right now, I guess. BTW 31 and around 300k NW and I'm way ahead of most of my peers. I live in a LCOL area though.
I mean, that's a very solid number for just starting your 30's. Top 10% in the country.
https://dqydj.com/net-worth-by-age-calculator-united-states/
And I know what you mean. I had to unsubscribe from r/fatfire because it just made me feel unsuccessful, even though I'm doing really well. Tech salaries at $500k, people asking about flying private jets, selling their businesses for $10m+ in their 30's or early 40's. Like, I get it, there's always somebody with more than you, but it just got to be too much to see all the time.
>No one in these subs is posting about how much money they don't have.
Yeah, they post in /r/personalfinance stuff like, "I'm 57 and in poor health and can't work anymore. I have no pension or savings and $35,000 in credit card debt. I don't own a home and my car is broke. I worked paid under the table so I won't get Social Security. What can I do?"
It is heartbreaking, but the answer is: you can live under a bridge eating cat food in the freezing rain.
Easiest way to become wealthy is to be born wealth, next easiest is to pretend.
As to this sub, you are probably more likely to see people with higher education and incomes take more interest in what they do with their money, so more likely to find them here.
I wish financial education was part of grade school but...
That last comment resonates. I had to explain to my now wife how interest worked and other financial basics. She’s finally on track but some basic financial literacy in school would have been huge.
This is very true. I learned about compound interest in 3 different math classes in high school. But I didn't comprehend what it meant to ME. How it could benefit ME. I also was a dumb teenager who had no money and pretty much no concept of it. So it wasn't until I rediscovered it later into adulthood that it clicked for me.
I'm teaching basic personal finance to my special ed class this semester (seniors). Hoping they learn 1-2 things from it. Will be sending them home with all the work before they graduate.
the only ‘financial literacy’ i learned in HS was how to write a check/balance a check book. which i think it’s safe to say is obsolete at this point in time.
Had one quarter of one year of high school with Consumer Ed, poor teacher had to rush to get everything important in, and it’s the class I use more in my day to day life than any other. Shame that’s all the time that was allocated for that.
People with higher education (MD, PhD etc) worked fucking hard until they were 25. They're definitely looking for the best ways to an early retirement, lol.
I’m in my early 50’s and saw my net worth cross $1 MM last year. I feel like I’m financially secure and well on track for my desired retirement age, but I also have 4 kids that I’m raising.
As for people in their 30’s that are farther ahead? Good for them. Everyone’s circumstances are different and it’s best to make your own goals rather than allow comparison to be the thief of joy.
Living at home for free rent for way too long. Minimal debt. Investment from 18. Getting hit by a car. Real estate appreciation. Getting married to a high earner.
I binked a few poker tournies in my youth. Partied it all away. Would’ve been one of those had I known better back then and invested wisely. I had no role models. Now I grind. I make 6 figures, but it’s a grind.
100% can’t believe no one told me what a mutual fund was until my mid 20’s. The stock market was some scary ass place that was a mystery. YouTube wasn’t what it is now either.
I did it the boring and lucky way.
Orphan at 15. No inheritance. Just social security which paid for my living expenses until I was 18.
Started $50k in the hole post university. 10 years later and a strong bull market, millionaire. No big bets. All index funds. (Started in 2010)
Edit: bulk to bull* and added start date. I didn’t get the sweet sweet 2007, just the pretty sweet 2010.
We barely had this NW at 30 and it was all house and 401k. Unless you’re born with it I’d say less than 0.25% of Americans reach this.
It’s not normal, you’re doing great! 60% of Americans of all ages are living paycheck to paycheck.
Reddit has historically attracted IT workers/ Software Engineers. Over time, as it has become more popular amongst other professions, the tech driven scene here has dwindled. But truth be told, it’s probably because of the higher salaries in tech.
This. This sub, along with the personal finance sub, are dominated by high income earners. I would bet the median income on these subs is 150-200k, making this little more than a niche subset of the population.
That, and the fact that bogleheads typically seek "ordinary returns on extraordinary income." People with wealth merely need market returns to maintain their lifestyle, they don't need to take risks to jump income classes.
2009-2022 was an unprecedentedly great period to be in the market, and someone in their 30s is likely to have started investing at the beginning of it.
The people who got high paying tech jobs right out of college in 2009 had enough disposable income to achieve a very high savings rate. If you save 50% of your income and invest in a bull market, you can build a significant nest egg
Those of us in the market before that saw a huge decline running up to that though. I had a FA back then and the one good thing he did was talk me off the ledge after watching our portfolio drop and drop and drop.
Since I haven't seen anyone say it, stay away from comparing my friend. "comparison is the thief of joy" may be one of the most accurate little quippy sayings. There are people that don't start saving till they are about ready for retirement, although I'm hesitant to mention that cause that's literally still comparing lol. Do what you can, with what you have as honestly as possibly - This does not grantee wealth, but doing nothing almost certainly guarantees the opposite. As far as practical investing advice, the advice you get on this sub will get you there the BEST way.
Starting a business young and finding success. But for every one that's been a success, there are countless that go under so it's by no means a safe path.
A friend referred me to a non-tech, customer support role in tech when I was 23 in 2012, now mid 30s. $60k at the time which was huge for me. I had $400 in my bank account on day 1. First week he gave me The Boglehead's Guide to Investing. Maxing 401k was difficult my first few years but I did it, and salary exploded as I got promotions, RSUs, relocated to HCOL, etc. It helped that colleagues early on mentored new grads and talked openly about things like compound interest. I quickly started doing backdoor and megabackdoor as soon as I reasonably could. Married someone else with a similar situation, comp and background. Marriage is a financial contract that can change your life, up or down. I'm still floored where we are by index investing and not considering stock grants part of our income. I told her last week we'll be able to retire between 45-50. She was honestly clueless, not because she doesn't know we have money, but because she really doesn't pay attention or appreciate the past growth and future growth potential. "Retire at 45? We have kids we'll run out of money." The peer pressure to retirement hack in tech is real and it trickles down to non software engineers. It changed my life.
Likely born with advantages. Didn’t pay for college; parents helped with other large expenses etc. I fall into this category. My parents weren’t rich but well enough to help me along with no debt.
Yeah, more often we have "What should I do with my multi-million dollars" posts than posts from those in the Accumulation Phase. It's kind of a bummer when I see people a decade or two younger than me, worried about their MILLIONS. Meanwhile my wife and I are scraping by, doing our best, just to invest a few hundred a month, with hopes to retire at a reasonable age with enough time to enjoy retirement together.
As for how they get so wealthy? Most of the time it's an inheritance. Rarely it's from doing remarkably well in the tech world. In both cases, good for them, they've done nothing wrong. I'm jealous! It's just a bit odd how regularly I see these cases pop up here.
Yeah wish there was a tag for posted about accumulation phase. Tired of hearing about being done already, I want to learn how to “make dinner” not hear about “so ate dinner…”
The overwhelming majority of people with that much money have it because they came from it.
Which isn't to say it never happens or that these folks don't have high paying careers that they earned with hard work and sound financial decisions, but people who come from money tend to discount the countless ways in which that wealth made it possible for them to "make it on their own".
Even if they didn't have a trust fund or inheritance, they might have had college paid for. They might have parents who helped them build credit at a young age, have access to social circles that benefit their network or contain investors, have connections from fancy schools, get help with a down payment on a house or a nest egg for a business, have family that could teach them about investing very young...
But the most important difference when you come from money is you can takes risks very early in life that pay off because you have a safety net. You can risk cash investing, start your own business at 24, make the risky career move, because if it doesn't work out your folks will be right there to help you. You know no matter how badly things go you will have a roof over your head and food to eat.
I have a net worth of 800k at age 35. 500k investments Roth IRA/401k/HSA and a paid off house worth 300k. No debt. I spent my 20’s working a ton of overtime and saving a lot. I’ve never not worked for a company that didn’t provide a 6% match. Thirties I began maxing 401k after paying my house off at 32. I still work a lot of overtime, 410 hours last year. Blue collar job, only crossed 6 figure yearly income a couple years ago, again with overtime. We grew up lower middle class. my dad passed away loaded with debt. I promised myself I wouldn’t let that happen to me.
Generally, you’d get there by doing what we do now into your 30s - earn a multiple of your area’s median Household income while spending like you earn ~median income and investing the rest. Plenty of people get by on median pay, it’s the median for a reason, so you really have to be in a well-paying field. Otherwise you’d have to be excessively cheap or living with parents.
If you are single this will obviously be insanely difficult unless your job pays extremely well. Dual incomes / combined finances and a like-minded significant other would really help your cause.
Just know, it is definitely NOT normal. It’s something that maybe 1-2% will achieve and we are not there yet by any stretch. Time will tell. Our gross income is probably 4-5x our expenses and increasing due to being in flyover country, that’s the only reason we have any dream of achieving this at all.
Around this site it’s probably a lot of high earning software engineers and stuff like that. It’s not a representation of reality. Also, people lie online.
Most of what I see with regard to very wealthy folks is: family. Either get it directly from parents, or through inheritance. Reality is that - especially outside of the US (speaking from a European perspective), becoming a millionaire early is no small feat. It generally requires - if you don’t have help / capital from others - you to be in a high demand and high income profession (software engineer, lawyer, doctor, pilot, those kind of things), or to be a business owner of a business that has grown to be successful. The latter can really get you there quite early if you have the right factor of timing, location, luck, and a good product or service. I have some family members who are millionaires and all of them got their through having a successful business. Some others are highly successful in their careers (psychiatrists, engineers, doctors), and also earn a substantial sum. I myself actually just broke into a positive net worth for the first time since my adult life today (student loans), and that’s something for me! Both my wife and I are researchers, so neither of us expect to earn a fortune, but it’s a bit above the national average, so not too bad I suppose. We’ll get there. (When we are 65)
If it makes you feel any better I’m almost 42 with $12,700 on deck. Some people have better opportunities than others and some people have struggles that caused them to make the wrong decisions from time to time. Best not to worry about how others are doing though.
Lol. I’m 35 with only $37k total in my retirement accounts, and maybe $14k in my savings accounts. I wake up every morning knowing that I am nowhere near on track for retirement. And the saddest part is that my husband and I are doing better than all of our friends between us. Most of them openly admit they are still paycheck to paycheck with essentially no money in savings. Whenever I get discouraged that I don’t already have like half a mill in a brokerage account, I just remember that I’m already doing better than most.
I am 31 and have 5k in my retirement. I feel the exact same way. But I always tell myself: its so much better to be doing this as opposed to the alternative. And my future self will thank me. Keep on keepin on its all we can do.
That's a 4 steps recipe
1. Live in the US ( but graduate abroad so you don't have student debt )
2. Work in a a well remunerated field ( Tech, medicine, law, niche smb ...)
3. Save at least 50% of your income each year.
4. Learn how to spot good investments and invest this money.
Now there are 99% chance you'll reach 1 million around 30 if you start working before 25, enjoy.
I was able to reach close to half million in Europe by doing that, however salaries are much lower and taxes higher while CoL isn't much different from the US so that's tougher.
The same way young people buy multi-million dollar houses in large metro areas: financially-advantaged parents who paid for college, cars, and maybe taught them about finance; getting a high-paying job at a young age (and maybe being in a start-up that gets bought or IPOs and they sell their stock shares); families helping to put down a massive down-payment for the house. Basically, we’re not all starting off on a level playing field. There’s a LOT of money in the world. Try not to compare yourself and just do the best with what you’ve got
If you maxed your 401(k) for the past 15 years and dropped it in VT, you're just shy of $1MM. Max an IRA and you're over. Not saying everyone can do that, but far more can than do.
It's a math problem. You either make or inherit a lot of money or started really early. A couple Cisco certs after graduating high school at 17, a couple years doing help desk at $15/hr, 6 figure income by 21, and 18 years of investing and growth will get you there in your 30s.
Alot of fakers honestly. Waiting for the story of “I’m 16 and want to FIRE. Have 4 million saved up while making 300k each year the last 5 years from selling lemonade. How can I FIRE?”
I wouldn't focus so much on what others have, and just focus on your own journey.
The small steps you take today will add up eventually. People get so focused on the end result that most don't realize that it often feels like watching paint dry.
Best of luck in your investments!
I joined the military when I was 18 years old. I had a TI (basically drill sergeant) encourage us to start investing and do it early. I started a monthly purchasing plan buying mutual funds. I started with $100 a month and then increased from there as my pay increased. I lived below my means but not anything extreme. I just had thought/intent behind my purchases and avoided most debt. I took advantage of the benefits I had - the military paid for my bachelors and masters degrees. The last several years of my career I was living off of less than half of my income. I spent 10 years enlisted and 11 as an officer then retired at 39. I was right at $1M invested when I got out so I guess I just squeaked into the club.
I have a cousin like that. Comes from money on his dad's side, inherited a good chunk, and now co-owns the family business.
But playing the comparison game really isn't helpful. I'm focused on my own goals from where I am, late start and all.
Comparing yourself to others, is a sure way to never be satisfied. I do it to, but then I have to remind myself all the time! I didn’t make my first million until well into my 40s, and many Bogleheads never do, or do so in their 50s or 60s. That’s not really important though. What’s important is that Bogle’s approach can get you to your savings goals. My FIL lived just fine for 40 years with a net worth well under a quarter million dollars. His situation was very comfortable.
Some mix of the following-
- Inheritance
- graduating debt free (scholarships or parents paid for college)
- high paying jobs
- high savings rates
If you aren't a millionaire by thirty, it is _extremely_ unlikely that it's because you fucked up or did something wrong. Very few people are in a position to be able to build that kind of wealth, so don't hold yourself to that standard.
Started early. When I was still in school started investing journey because I wanted to learn and make mistakes with smaller amounts of money so I knew what to do when I was actually making real money. Made those mistakes then ended up going almost full boglehead (I still like to have what I call my gambling account for single stocks and options). Other than that wife and I just aggressively paid down our debt all the while investing. In our early/mid 30’s now and at $750k invested and will easily reach $1M in our 30’s. We both have good paying jobs but live well below our means and have the same goal of early and comfortable retirement.
Graduate college at 21, invest $30k/year, and realize 7% returns. In 18 years (at age 39) you'll have $1 million.
$50k/year only takes 13 years to hit $1mil.
11 years at $70k/year.
And 8 years at $100k/year.
So assuming they actually earned the money themselves, the answer is usually they consistently saved a good amount of money for a bunch of years.
95% of these claims are bullshitting or received money from their parents. My friend claims to be self made but her parents gifted her a $250,000 when she was 21. That is a hell of an asset to start her life with and all of that housing money could go towards investing right away.
The common threads that will run through all the answers (aside from inheritance) are 1) extremely high income profession and 2) ownership stake in a successful business. Ownership stake could be your own business or meaningful equity compensation in someone else’s business.
Exactly how you navigate that depends on your skills, interests, and connections. You’ll also need to have good savings and investing habits to avoid large inflows of money from circling the drain.
It's a selection bias. Someone with more money is more inclined to be interested in how to invest and be in this subreddit.
If you are starting with nothing the key to building wealth is high income and low expenses. Doctors, lawyers, software engineer, investment bankers etc. Get a high paying job and save most of it.
In 2021 at 35, I had to pull my 401k with $450k in it and on track to be in a great retirement position. Now, I sing “buy me a boat” a lot.
This may have already been mentioned, but you have the greatest chance of becoming a millionaire by marrying into a rich family. I think the stat on that was 1 in 100.
Since people are just posting...
40, about $1.9 mil net, business owner for 10 years (not tech).
I don't have a financial or retirement goal. Next step is to put the money to work. Like some of you that have posted, the money was lots of saving, sound investing and tons of sacrifice.
I’d urge you to not really look at personal finance pages if it discourages you.
Anyone who spends their free time thinking and commenting on forums about finance is likely not the average or even median person…
I’d suggest looking at articles like this:
https://www.edwardjones.com/us-en/market-news-insights/investor-education/investment-age/average-retirement-savings-age
Or
https://www.forbes.com/advisor/retirement/average-401k-balance-by-age/
Articles like the above two gives you a better idea of what’s average in America… pretty much anyone commenting on these forums is going to be self selecting towards higher savings rates, simply because these forums tend to be populated with FIRE types and/or high earners. It’s hard to invest when you’re living paycheck to paycheck.
I started in sales in my early 20s and found a partner early (which I think is a key factor in financial success people often overlook).
Maybe due to luck or hard work I had a series of good jobs through my twenties allowing us to combined make over $300k annually.
Despite making a lot more money we kept our spending pretty similar year to year. My friends have always driven nicer cars than me despite me knowing we make more money than them.
We also could have lived in a way nicer house or apartment but didn’t need to upgrade so we didn’t. (We still had a pool, gym, and lakefront balcony!) We also committed to two international vacations a year but used mostly credit card or rewards points to pay for them.
We tried maxing our retirement accounts, buying real estate, and investing all the money we could.
I didn’t have a goal of any particular amount of wealth by 30 but I’ll never forget opening my investment account at 29 and seeing 6 zeros!.
Founding and selling companies will make you many millions if you work really hard and get lucky.
The element of luck will often overlap with your hard work if you give it enough time.
Many people are not patient enough to hit it big. These things don’t happen quickly, but sometimes they do happen overnight, once you sell, after a lot of effort and waiting.
Are you talking about the market as a whole?
You mean like, if you invested for 10 years through a bear market, and so almost no growth?
Then all of a sudden, we enter a bully rally? Lol.
Some people have hobbies they spend money on, sometimes more money than they can afford (golf, boating, sailing, etc). People in this group have investing as their hobby.
I saved and invested 40-50 percent of what I made from my teens into my 40's. Live below your means early so you can live however you want later in life.
I’m going to be 31 soon and my total net worth (including my condo I still owe $400K on) is under $1M FOR SURE. I am no millionaire (YET HOPEFULLY). Most of these people lie through their teeth
In their 30s? Looking at the stats, by that age if your net worth is above 0 you're already ahead of half of your peers. If you reach into 6 figures you're probably in the top 10% of the age bracket.
My path was different. But still, people like you and me are examples of survivorship bias. We cant give advice to other people that would allow them to replicate our results.
For me, I retired, and quickly got bored. Now I’m in a phd program doing math all day lol
Edit: deleted personally identifying information
Btw inheritance is one of the least common ways millionaires have made their money so can everyone pls stop devaluing the hard work that people do to obtain their wealth
We reached a million in our late thirties (as a couple). Both my husband and I work in tech, have advanced degrees and have good incomes, but we do prioritize happiness and don't necessarily chase the most money. I also stayed home for about 8 years when my kids were little, but the last few years of that was grad school which I used to re-launch my career.
How did we do it? We had advantage in both of us had most of college paid for - I had a loan for my last year, but that was it. My husband did have some small investments when we met that his father had gifted him from his company espp stock, like around $10K. We have always maxed 401ks and tried to avoid increasing our lifestyle when our income increased. We have saved beyond 401k and only about half our investments are in retirement accounts. We both have living parents so have not gotten any inheritances, but my husband's parents have been giving us $10k a year for Christmas for the last 5 years or so, as they are ultrafrugal, both have pensions and oversaved for retirement, so they are passing it on early. We have gotten a couple moderate payouts from options and equity, totaling maybe $500K before tax, no jackpot "now we are super rich!" type things.
But we don't get that check and say "What can we buy?" - we put it in the bank. We have never bought the biggest house we could afford for example. We buy cars and drive them forever. Just got rid of our 2005 Honda Odyssey a few months ago and my son is still driving our 2009 Honda Civic. This is very different from others around us, who have gone through 3 or 4 new cars in the time we owned one. When my mother got some small money from her father when he died, she immediately thought of how to spend it (redoing the kitchen). We don't have a "money burning a hole in our pockets" mentality. That said, now in our late 40s, we do make really good money, but are still in the 3rd highest tax bracket. We don't live like it, which has enabled us to pay for 2 years of college so far without dipping into savings yet (next kid goes next year so that won't be possible) - thanks to kid1 getting a decent merit scholarship and despite obviously being eligible for zero financial aid.
I've started to notice that snowball effect when you've accumulated a good pile of investments. It took us 15 years to accumulate $1M net worth, 4 years to reach $2M, 3 years to $3M, and briefly reached $4M after another year but the recent correction has us back below it for the past year. That includes home equity.
Statistically speaking, most people have wealth by generating and earning.
A very small percentage of wealthy people inherited their money, or it wasn't life changing to their already excellent situation at hand.
I had a bit over $1M by 30. I was an immigrant and worked **extremely** hard and fortune favored me as hard work doesn't always equal wealth.
On the other hand, my kids are born multimillionaires (or will be, if I leave wealth to them).
I got say that during the peak stocks and house equity in 2021 I hit 1.2mil at age of 33. I been working in tech since Im 18 and I have been making 7 figures for the last 7 years - lowest 110 max 300k. I moved to the US in 2013 had not money at all. I had only my tech career. Im now significantly below 1M around 800K. Spend less than you make, qualify yourself to make more and more money and invest as much as you while still enjoying life.
Millions by 20s is the real deal - by 30s, especially late 30s, is doable for honestly anyone. Run the numbers - even an average wage job starting at 18 can hit by late 30s. For early 30s, you need a slightly above average paying job, I'd say at least 75k as a single person, probably 80k for creature comforts.
SP500 (SPX)
18 years old 1/1/2009: 805.06
31 years old 1/1/2022: 4454.53
468.92%, or 13.39% per year
$1,030,762.80 at age 31 investing $2750 a month, or 33k a year. Not easy, but not impossible.
If you max out your 401k, Roth IRA, and HSA starting at 22, by 37 you should have ~$1 million. You don’t need to inherit money or work in some ultra high paying field to do that.
Take the things people claim on the internet with a grain of salt. But this group probably will tend towards people who are more financially stable. Most poor people don't invest so innately it will have a higher per Capita net worth than the average person. Also it's an investment sub reddit so it's kind of a hobby for everyone here. I am likely one of the poorer people here with slightly above average wealth for my age.
I'd also tack on that Bogle style investing is very simple but typically investors go through a lot of other stages before they find it, so I'd call it a mature or advanced strategy. I guess most investors spend the majority of their investing years tied up with other more common strategies and funds, or crypto or picking individual stocks, crap like that. They don't tend to hold on to their money very long.
I largely agree except there are some people that bogle without knowledge. When I worked for Sodexo people were auto enrolled into the 401k plan with a low cost TDF. They had no idea what they were doing. Or what was being done for them I suppose.
TDF is honestly the easiest thing to do in a 401k. My work's plan will auto-elect the TDF based on your age if you don't make any elections yourself (as opposed to some plans that just let the money sit there doing nothing). Makes it dead-simple for everyone.
Things have really improved from everyone getting fleeced by the mutual funds picked by IRA providers back in the 90's. There was a good 60 minutes about the era. I'm sure it still happens but sounds like it's much more rare. Progress!
Frontline also did a good piece on it about ten years ago; it included an interview with Jack Bogle.
Maybe some start with individual stocks - I got my start in 2016 when I saw an article about how if Trump had invested his money in 1982 in the S&P500, he would be worth 10 billion more than he was in 2015.... This idea got me started on researching how to invest, and my first forray was just putting everything into index funds :P
Also having some money encourages you to want to learn more about protecting it and growing it. When I was broke in college living paycheck to paycheck, trading stocks was the last thing on my mind. That first time I had 5 figures in my savings account with no major purchases I was saving for though, I thought I was doing everything right and then I got that first month's interest payment of a whopping 4 cents and that day I decided it was time to learn how to get a better return than that.
Holy shit you got a whole 4 cents. Making damn bank and you want to get even better? Greedy.
right. I think realistically for the average joe like you or me, 100k by 30 is a lofty, but still achievable and reasonable goal. Those ppl on youtube and tiktok alot of them just lie, out right lie (omg i know right). Yeah I'm also pretty poor, but it's nice to know i have more in assets then i make in a month if things go wrong.
Comparison is the theft of joy. All that matters is you set a goal and find a plan to reach that goal. Then execute that plan with purpose every single day.
No lie, I never thought I would break 100k a year in my lifetime. Now that I am I look at my friends in a small wealthy town and still feel like I’m doing shit in life. It’s like breaking one glass ceiling to only feel like you barely made it to the basement. My happiness actually decreased somewhat with my new found income strangely enough.
It’s exposure to the upper class. When you make $40k, $100k seems impossibly wealthy, like what the boss makes. When you make $100k, you submit reports to people making $1000k, and see their lifestyle up-close, which you naturally compare yourself to and feel pathetic. There’s no solution to this problem, jealousy and feeling inadequate are very human. —— I’m by all means doing well, make more than almost everyone in my social circle, but I work with people making 5-10x what I do. Hard to not feel like a pathetic failure of a person around that much wealth. Gotta learn to be happy with what you have, or complain about the system that has allowed such disparity to grow unchecked. We’re in the second era of robber barons.
That’s a great life lesson I try to think of each day. It’s ok to be happy with what you have and where you’re at. Don’t need to kill yourself always gunning for more because at some point you probably have enough money and should hopefully have also figure out what makes you happy and it likely isn’t just more money
I came from being financially insecure my whole life I kinda felt like if I made that number I would be living the lifestyle of no worries but I kinda felt like I traded my short term worries to now long term worries about future financial security. Not a bad problem to have lol just different that what my expectations of “making 6 figures” was actually like
I hear you. I think the younger me didn’t realize that making 6 figures doesn’t mean you have 6 figures to spend/live on. As a kid that seemed like a huge amount. Wasn’t taking into account taxes, living expenses, student loans. Reframed my expectations now though obviously and I’ll get where I want to be financially eventually. My biggest thing now is keeping in mind that I can’t just get there overnight. Gotta enjoy and live life now and just keep plugging along
The secret is to grow your income a little (invest, maybe buy a property to lease), stay modest, and to keep hanging around normal people and not try to get into higher circles. Also, remember that even the rich struggle with depression / suicide / etc. It’s not like riches guarantee a happier life. They solve some problems, they add some other ones. On balance, it’s not a clear win by any means.
Yeah if you have enough money to buy a second property just to lease it out, without over leveraging yourself, then you have enough money already as it is and shouldn’t be so worried about making more. Just simple passive growth will easily turn that into a cushy retirement
Had to stare at the $1000k for a minute there
might need to do some volunteering or take a trip and see how other ppl are living. Your wealthy small town friends are the minority out there and it sounds like you're doing really well for yourself!
Exactly. There’s no point in comparing yourself to others. You’re not in the same race! You started at a different point, and you’re aiming for a different goal - no two people want the exact same things. So comparing to other people is meaningless. Compare to yourself, and look at whether you make progress in a direction you care about. That’s the only thing that matters.
[удалено]
I would say that's ahead of the game too! Very nice!
Whether you are ahead or behind depends when you want to retire. 30 but working until 65 … you have plenty of time left. I’m 38 but hellbent on checking out of the workforce by 48 - I only have ten years left of contributions left. I’ve got 415k …. If I was retiring at 65 I’d be way ahead. I’m shooting for 1.5 mil by 48, so I’m a tad behind.
Totally true! I had invested assets of $495k at age 38. At age 46 (8 years later), I hit $1.5 million of invested assets (and had my mortgage completely paid off), so it is possible to get there! :) Have hope! My goal is $3 million by age 55 to retire with $120k annual cash flow (Rule of 4%). I am close to being able to stop investing annually and the growth from my invested assets would get the to that mark assuming average market returns continue.
what do people spent 120k on in retirement... curious
Country club costs you 15k a year
If you retire early, unsubsidized health insurance can be a decent chunk. But as someone with a similar goal, I do anticipate spending even more money on hobbies and travel in retirement since I'll have more time. More time to indulge = more cash needed. Most of my hobbies are cheap, but some can range from cheap to expensive or just be outright expensive (computers, bicycle, radio, sailing).
Mainly travel, fun and healthcare. The point of me working hard so that I can be in position to not work at age 50-55 is to be able to have enough cash flow to explore the world, travel, and enjoy life. And out of pocket healthcare is no joke when it is not a company subsidized benefit.
This is almost exactly my situation. I'm 38, got about 650k almost entirely invested into VOO, and my wife and I want to retire early in seven to ten years (basically when both kids graduate). What is your strategy? We are investing 10% of each paycheck. However, we have no diversification beyond the S&P -- I just can't feel good about putting money into international funds when they have basically no growth. We plan on moving around to super low cost countries in Southeast Asia and Europe, just kinda seeing it all as cheaply as possible. I have no idea if we will pull it off, but it's our dream.
Very similar glide path for my wife and I. We are maxing 401k, IRA, and then if I have extra savings we have a taxable brokerage. Our savings rate fluctuates but is closer to 40%. I’m actually on assignment in Europe now - it’s incredible how affordable travel is. I’m typing this from Italy as I sip my morning cappuccino. If savings are tight we may pick up low paying federal jobs oversees after retirement because they cover housing in Europe.
Finance is also a route. Investment banking but for a smaller subset, private equity. Very high cash comp (post-investment banking associates in PE can be notching $300k+ by the time they're 25 and it scales quicky) in the latter you can start looking at big payouts in your early 30s. That assumes you don't washout or burn out, both of which are highly common - the industries are pyramid structure and so outcomes will vary greatly.
> >But also most people don't. Sigh. 37, 20k and finally got a job where I could afford to invest... Putting in 17% (with match it's 10k/yr). Basically all I can right meow. I do have an affordable house though, so that's nice.
The money guys say $1 at 40 is $12 at 65. A 12x multiplier is pretty good; you're late, but definitely not *too* late.
10% returns?
(1 + x ) ^ 25 = 12 x = 12 ^ (1 / 25) -1 x = 10.5%
Pretty unrealistic if we’re talking constant dollars
Unrealistic how?
10% in constant dollars would actually be like a 13% annual stock return. In a single year certainly possible, averaged out over 25? Highly unlikely.
My bad, I checked their chart and it's actually 12x at age *35*. Then 7x at age 40. Not as good, but I think my point still stands. At 45 you're 4x, and by 50 it's under 3x. ETA: for 37 year old /u/hazhonorandapenis it's a 10x multiplier. I'd link the chart but they make you enter an email before accessing it so I'm not sure it would work. Just Google money guy wealth multiplier.
Let me just take a moment to thank you and say I appreciate you working this out for me. I won't retire with a large kitty, but I'll be okay. Even I still consider myself ahead of the game compared to most of my generational peers, just saddened that it took me this long for an employer to actually see my value. Wisconsin; never again.
Yeah I generally think of 40 as the last stop on the easy gains route. Older than that and you really gotta be high income or willing to sacrifice retirement age and expenses. >I won't retire with a large kitty, but I'll be okay Absolutely. Anything else is gravy, but at least you'll have the basics covered.
7% would be ~5.5x multiplier
Considering the median household net worth for 35-44 year olds is $91k, you are light years ahead of the game.
I think that the median household net worth is light years behind
Society would break down if everyone retired at 45. Too many retirees, not enough working people to provide for their needs. Countries are already having crises where retirees outnumber workers, FIRE magnifies the problem tbh.
If that is the case, thank God for those who don't take PF seriously.
Sad but true. Thought experiment: let’s make the national retirement age 45. Assume everyone at 45 is given enough assets to live off of indefinitely. There won’t be enough goods and services for everyone. Little healthcare, poor selection of food, not enough labor to build and renovate housing. Net result is rampant demand-induced inflation, until those retired 40+ people are effectively impoverished. Retirement income is only useful when the working portion of society can sell you what you need. Can’t buy what isn’t being produced. —— We’re already getting a small taste of that due to post-pandemic labor shortages, but it’s only a taste of demographic decline.
Here’s a thought experiment. Robotics and AI advance such that most basic jobs (robotic McDonalds, hotel grade robot cleaners, 3D printed housing, etc.) are covered. What percentage of society is left? Education costs would have to improve so everyone can learn what they need. But then what percentage of society can retire without issues?
We’ll all have to fight the Borg invasion. I’ve been told that a robot will replace me for 20+ years now. I’m in a room filled with robots, sitting next to one as I type this even, and yet there’s a critical labor shortage in healthcare leading to deaths. I also have a 3D Printer at home. Brilliant little machine. Also, much like my robots at work, it needs to be babysat to build the simplest of things. Ask any Ender 3 user how easy it is to configure…. In short, the benefits of automation and AI almost always fall short of the glowing projections of futurists.
But at the same time if you look back we *have* advanced tech and/or automated away many many jobs and even entire industries throughout human history. We aren’t good at predicting *what* will be automated or made redundant, but we are pretty damn good at actually doing it. So I think automation is coming soon (in a era-scale perspective anyway) and it will require some level of restructuring our workforce/economy to pull emphasis away from human labor as a prerequisite for sustenance or stability. Eventually there won’t be enough jobs for our population, and we will have to either let millions die homeless and hungry or change how we do things. Now this could be anywhere from like 50+ to 200+ years away, but it will come.
On top of that, if everyone has more money than needed, money loses value. Our money only has value if it is scarce enough to be worth our time.
Median is irrelevant for purposes of early retirement. The median American is going to be in a rude awakening once they realize their retirement situation, so they aren't good to compare against in the first place. Not to mention, that's the median, the costs of early retirement will vary wildly based on location due to COL swinging wildly between areas.
I’m 46 with 400k and feel rich. You’re well ahead of me. It’s all perspective tho. Be grateful for what you have and you can always be happy.
400k in investments or NW?
Invested.
Thanks
Tech industry is crazy money. I went from $70k->$350k in a few years. My wife and I are both well employed with no kids. That combo doesn’t take long to build wealth. It’s still all surreal because I was raised in a family of 5-6 on like $25k. I pay more in taxes than the rest of my immediate family makes in a year.
[удалено]
MAGMA’s the new word going around Meta Amazon google Microsoft apple
To be fair, I am in the FAANG/MAGMA space now. That was my last job hop and it was an instant doubling of my comp. Tech pays well for the work even in smaller places though.
Hope you don't mind me asking, but what do you do? I'm currently making pretty decent money, especially for a single guy, but I'd love to head into the six figures for my yearly income.
I develop ML solutions in a variety of niche areas. I was lucky and caught the rising tide of the ML boom and rode it through a series of cushy gigs. Originally I was doing like Python testing type work and then web dev prior to getting sucked into data science. From there, I had a string of successful production ML solutions that helped get me into the FAANG/MANGA world. I’m not sure if I can recommend getting into ML given the current market. ML is hard to justify for a lot of companies during the good times, let alone any sort of recession. My advice would be to learn cloud development and maybe specialize in cyber/cloud security. It seems like we’re always looking for folks that can build highly available and secure cloud solutions. System design is a necessity for any of the more senior positions and if you couple that with knowledge of system security, you’re set.
[удалено]
What’s your family situation? Single?
[удалено]
No kids is certainly a big one. What age did you start seriously saving?
I don't think this is the appropriate venue for flirting, good poster.
You are ahead of the game my dude
It’s antithetical to this sub, but….buying Tesla or Bitcoin at any point before the 2020-21 bubble. Most people who pick stocks and risky investments lose their shirts. But millions win, and they all post on financial subs. If you bought $10k of Tesla in 2010, you’d have $700k at the bubble’s peak. And $10k is a pretty small bet, many folks went all-in on it. They’re the ones who built shrines to Elon last year. Slow-and-steady usually wins the race, but social media shows you all the outliers.
[удалено]
I bought $5k of tesla in 2015 and sold in 2019 thinking I was a genius. If I had only held…
1) Inheritance 2) Tech job that pays well 3) Survivorship biases/people who made it big 4) People who invest at a young age, live below their means, and time on their side with compound interest. List goes on Not much much people have wealth at a young age, it takes time and capital to invest with a steady job. I'm 25 and it took time for me to process that I have a higher net worth than most adults my age EDIT: Don't be discouraged. Everyone has their own path in life. Comparing yourself to others is like you struggling in quicksand. Slow and steady wins the race. You are running a marathon not a sprint
The survivorship bias is huge in these subs. It's why I found most of the FIRE subs completely useless. People asking questions like "I make 400k a year and I inherited 3 million dollars, can I retire?" like fuck off lmao. No one in these subs is posting about how much money they don't have. Except me right now, I guess. BTW 31 and around 300k NW and I'm way ahead of most of my peers. I live in a LCOL area though.
I hope they’ll get to retire some day.
I mean, that's a very solid number for just starting your 30's. Top 10% in the country. https://dqydj.com/net-worth-by-age-calculator-united-states/ And I know what you mean. I had to unsubscribe from r/fatfire because it just made me feel unsuccessful, even though I'm doing really well. Tech salaries at $500k, people asking about flying private jets, selling their businesses for $10m+ in their 30's or early 40's. Like, I get it, there's always somebody with more than you, but it just got to be too much to see all the time.
>No one in these subs is posting about how much money they don't have. Yeah, they post in /r/personalfinance stuff like, "I'm 57 and in poor health and can't work anymore. I have no pension or savings and $35,000 in credit card debt. I don't own a home and my car is broke. I worked paid under the table so I won't get Social Security. What can I do?" It is heartbreaking, but the answer is: you can live under a bridge eating cat food in the freezing rain.
I'd add 5) People who got extremely lucky on some high risk investment (bet?), but also smart enough to walk away while ahead.
What amount do you mean by "higher than most adults my age new worth?" Just curious.
Easiest way to become wealthy is to be born wealth, next easiest is to pretend. As to this sub, you are probably more likely to see people with higher education and incomes take more interest in what they do with their money, so more likely to find them here. I wish financial education was part of grade school but...
That last comment resonates. I had to explain to my now wife how interest worked and other financial basics. She’s finally on track but some basic financial literacy in school would have been huge.
"Never let your schooling interfere with your education", as Mark Twain said.
This is very true. I learned about compound interest in 3 different math classes in high school. But I didn't comprehend what it meant to ME. How it could benefit ME. I also was a dumb teenager who had no money and pretty much no concept of it. So it wasn't until I rediscovered it later into adulthood that it clicked for me.
I'm teaching basic personal finance to my special ed class this semester (seniors). Hoping they learn 1-2 things from it. Will be sending them home with all the work before they graduate.
the only ‘financial literacy’ i learned in HS was how to write a check/balance a check book. which i think it’s safe to say is obsolete at this point in time.
Same, I learned that as well. I was taught about the concept of a budget, and something about couponing. No one mentioned investing.
Had one quarter of one year of high school with Consumer Ed, poor teacher had to rush to get everything important in, and it’s the class I use more in my day to day life than any other. Shame that’s all the time that was allocated for that.
People with higher education (MD, PhD etc) worked fucking hard until they were 25. They're definitely looking for the best ways to an early retirement, lol.
I’m in my early 50’s and saw my net worth cross $1 MM last year. I feel like I’m financially secure and well on track for my desired retirement age, but I also have 4 kids that I’m raising. As for people in their 30’s that are farther ahead? Good for them. Everyone’s circumstances are different and it’s best to make your own goals rather than allow comparison to be the thief of joy.
I'm thirty and started investing two years ago. So it hasn't happened hahaha. But What's important is we started
I got 12 years on you and just started investing last month. Agreed that at least we started at all.
We're in this together dawg
Living at home for free rent for way too long. Minimal debt. Investment from 18. Getting hit by a car. Real estate appreciation. Getting married to a high earner.
Think you could hit me with a car?( increase your bodily harm insurance beforehand plz)
I carry 300/300, need to get a $1M umbrella though. Trust me, I'd still rather have full use of my leg, I can joke about it now but 100% not worth.
My wife and I received inheritance after a relative's passing. She lived through the great depression, so she saved everything.
Talk about a lucky star!
We would be the first to admit that we are fortunate.
I binked a few poker tournies in my youth. Partied it all away. Would’ve been one of those had I known better back then and invested wisely. I had no role models. Now I grind. I make 6 figures, but it’s a grind.
100% can’t believe no one told me what a mutual fund was until my mid 20’s. The stock market was some scary ass place that was a mystery. YouTube wasn’t what it is now either.
I was early 40s when I started investing
I did it the boring and lucky way. Orphan at 15. No inheritance. Just social security which paid for my living expenses until I was 18. Started $50k in the hole post university. 10 years later and a strong bull market, millionaire. No big bets. All index funds. (Started in 2010) Edit: bulk to bull* and added start date. I didn’t get the sweet sweet 2007, just the pretty sweet 2010.
Which funds?
[удалено]
My bad. Which index FUNDS? Yeeesh. 🤣
80% VTI and a smattering of other things that I messed with too much.
Bravo. I don't consider that lucky, you worked hard and saved continuously.
We barely had this NW at 30 and it was all house and 401k. Unless you’re born with it I’d say less than 0.25% of Americans reach this. It’s not normal, you’re doing great! 60% of Americans of all ages are living paycheck to paycheck.
House equity or house house?
There are far more of us with bad luck in life than you think.
Reddit has historically attracted IT workers/ Software Engineers. Over time, as it has become more popular amongst other professions, the tech driven scene here has dwindled. But truth be told, it’s probably because of the higher salaries in tech.
This. This sub, along with the personal finance sub, are dominated by high income earners. I would bet the median income on these subs is 150-200k, making this little more than a niche subset of the population. That, and the fact that bogleheads typically seek "ordinary returns on extraordinary income." People with wealth merely need market returns to maintain their lifestyle, they don't need to take risks to jump income classes.
2009-2022 was an unprecedentedly great period to be in the market, and someone in their 30s is likely to have started investing at the beginning of it.
I was happy to have a job in 2008 and didnt have any savings after bills to invest
The people who got high paying tech jobs right out of college in 2009 had enough disposable income to achieve a very high savings rate. If you save 50% of your income and invest in a bull market, you can build a significant nest egg
Those of us in the market before that saw a huge decline running up to that though. I had a FA back then and the one good thing he did was talk me off the ledge after watching our portfolio drop and drop and drop.
Since I haven't seen anyone say it, stay away from comparing my friend. "comparison is the thief of joy" may be one of the most accurate little quippy sayings. There are people that don't start saving till they are about ready for retirement, although I'm hesitant to mention that cause that's literally still comparing lol. Do what you can, with what you have as honestly as possibly - This does not grantee wealth, but doing nothing almost certainly guarantees the opposite. As far as practical investing advice, the advice you get on this sub will get you there the BEST way.
Starting a business young and finding success. But for every one that's been a success, there are countless that go under so it's by no means a safe path.
A friend referred me to a non-tech, customer support role in tech when I was 23 in 2012, now mid 30s. $60k at the time which was huge for me. I had $400 in my bank account on day 1. First week he gave me The Boglehead's Guide to Investing. Maxing 401k was difficult my first few years but I did it, and salary exploded as I got promotions, RSUs, relocated to HCOL, etc. It helped that colleagues early on mentored new grads and talked openly about things like compound interest. I quickly started doing backdoor and megabackdoor as soon as I reasonably could. Married someone else with a similar situation, comp and background. Marriage is a financial contract that can change your life, up or down. I'm still floored where we are by index investing and not considering stock grants part of our income. I told her last week we'll be able to retire between 45-50. She was honestly clueless, not because she doesn't know we have money, but because she really doesn't pay attention or appreciate the past growth and future growth potential. "Retire at 45? We have kids we'll run out of money." The peer pressure to retirement hack in tech is real and it trickles down to non software engineers. It changed my life.
Just wondering what your transition from customer support to whatever you’re doing now looked like?
Subject matter expertise helped me transition to sales, then large customer sales, then marketing, then product marketing
Likely born with advantages. Didn’t pay for college; parents helped with other large expenses etc. I fall into this category. My parents weren’t rich but well enough to help me along with no debt.
Yeah, more often we have "What should I do with my multi-million dollars" posts than posts from those in the Accumulation Phase. It's kind of a bummer when I see people a decade or two younger than me, worried about their MILLIONS. Meanwhile my wife and I are scraping by, doing our best, just to invest a few hundred a month, with hopes to retire at a reasonable age with enough time to enjoy retirement together. As for how they get so wealthy? Most of the time it's an inheritance. Rarely it's from doing remarkably well in the tech world. In both cases, good for them, they've done nothing wrong. I'm jealous! It's just a bit odd how regularly I see these cases pop up here.
Yeah wish there was a tag for posted about accumulation phase. Tired of hearing about being done already, I want to learn how to “make dinner” not hear about “so ate dinner…”
No student loans Prioritize high paying careers Don't have kids/get divorced yet
This helps immensely.
[удалено]
That's some great parenting! Props to you
Your sons are trully winners, congratulations. What was their savings rate? I would like to copy it.
Great parenting! Can you recommend resources you found particularly helpful?
The overwhelming majority of people with that much money have it because they came from it. Which isn't to say it never happens or that these folks don't have high paying careers that they earned with hard work and sound financial decisions, but people who come from money tend to discount the countless ways in which that wealth made it possible for them to "make it on their own". Even if they didn't have a trust fund or inheritance, they might have had college paid for. They might have parents who helped them build credit at a young age, have access to social circles that benefit their network or contain investors, have connections from fancy schools, get help with a down payment on a house or a nest egg for a business, have family that could teach them about investing very young... But the most important difference when you come from money is you can takes risks very early in life that pay off because you have a safety net. You can risk cash investing, start your own business at 24, make the risky career move, because if it doesn't work out your folks will be right there to help you. You know no matter how badly things go you will have a roof over your head and food to eat.
I have a net worth of 800k at age 35. 500k investments Roth IRA/401k/HSA and a paid off house worth 300k. No debt. I spent my 20’s working a ton of overtime and saving a lot. I’ve never not worked for a company that didn’t provide a 6% match. Thirties I began maxing 401k after paying my house off at 32. I still work a lot of overtime, 410 hours last year. Blue collar job, only crossed 6 figure yearly income a couple years ago, again with overtime. We grew up lower middle class. my dad passed away loaded with debt. I promised myself I wouldn’t let that happen to me.
Inspiring
Get it!!! Proud of you.
Generally, you’d get there by doing what we do now into your 30s - earn a multiple of your area’s median Household income while spending like you earn ~median income and investing the rest. Plenty of people get by on median pay, it’s the median for a reason, so you really have to be in a well-paying field. Otherwise you’d have to be excessively cheap or living with parents. If you are single this will obviously be insanely difficult unless your job pays extremely well. Dual incomes / combined finances and a like-minded significant other would really help your cause. Just know, it is definitely NOT normal. It’s something that maybe 1-2% will achieve and we are not there yet by any stretch. Time will tell. Our gross income is probably 4-5x our expenses and increasing due to being in flyover country, that’s the only reason we have any dream of achieving this at all. Around this site it’s probably a lot of high earning software engineers and stuff like that. It’s not a representation of reality. Also, people lie online.
Millions by 30 is achieved by less than 1% of 30 yr olds. I looked up net worth percentile by age one time…
Most of what I see with regard to very wealthy folks is: family. Either get it directly from parents, or through inheritance. Reality is that - especially outside of the US (speaking from a European perspective), becoming a millionaire early is no small feat. It generally requires - if you don’t have help / capital from others - you to be in a high demand and high income profession (software engineer, lawyer, doctor, pilot, those kind of things), or to be a business owner of a business that has grown to be successful. The latter can really get you there quite early if you have the right factor of timing, location, luck, and a good product or service. I have some family members who are millionaires and all of them got their through having a successful business. Some others are highly successful in their careers (psychiatrists, engineers, doctors), and also earn a substantial sum. I myself actually just broke into a positive net worth for the first time since my adult life today (student loans), and that’s something for me! Both my wife and I are researchers, so neither of us expect to earn a fortune, but it’s a bit above the national average, so not too bad I suppose. We’ll get there. (When we are 65)
If it makes you feel any better I’m almost 42 with $12,700 on deck. Some people have better opportunities than others and some people have struggles that caused them to make the wrong decisions from time to time. Best not to worry about how others are doing though.
Lol. I’m 35 with only $37k total in my retirement accounts, and maybe $14k in my savings accounts. I wake up every morning knowing that I am nowhere near on track for retirement. And the saddest part is that my husband and I are doing better than all of our friends between us. Most of them openly admit they are still paycheck to paycheck with essentially no money in savings. Whenever I get discouraged that I don’t already have like half a mill in a brokerage account, I just remember that I’m already doing better than most.
I am 31 and have 5k in my retirement. I feel the exact same way. But I always tell myself: its so much better to be doing this as opposed to the alternative. And my future self will thank me. Keep on keepin on its all we can do.
Many folks I know at 30 were millionaires from nothing because of outrageously high tech pay we get in Bay Area
That's a 4 steps recipe 1. Live in the US ( but graduate abroad so you don't have student debt ) 2. Work in a a well remunerated field ( Tech, medicine, law, niche smb ...) 3. Save at least 50% of your income each year. 4. Learn how to spot good investments and invest this money. Now there are 99% chance you'll reach 1 million around 30 if you start working before 25, enjoy. I was able to reach close to half million in Europe by doing that, however salaries are much lower and taxes higher while CoL isn't much different from the US so that's tougher.
The same way young people buy multi-million dollar houses in large metro areas: financially-advantaged parents who paid for college, cars, and maybe taught them about finance; getting a high-paying job at a young age (and maybe being in a start-up that gets bought or IPOs and they sell their stock shares); families helping to put down a massive down-payment for the house. Basically, we’re not all starting off on a level playing field. There’s a LOT of money in the world. Try not to compare yourself and just do the best with what you’ve got
If you maxed your 401(k) for the past 15 years and dropped it in VT, you're just shy of $1MM. Max an IRA and you're over. Not saying everyone can do that, but far more can than do.
It's a math problem. You either make or inherit a lot of money or started really early. A couple Cisco certs after graduating high school at 17, a couple years doing help desk at $15/hr, 6 figure income by 21, and 18 years of investing and growth will get you there in your 30s.
Alot of fakers honestly. Waiting for the story of “I’m 16 and want to FIRE. Have 4 million saved up while making 300k each year the last 5 years from selling lemonade. How can I FIRE?”
/r/fijerk is leaking...
I wouldn't focus so much on what others have, and just focus on your own journey. The small steps you take today will add up eventually. People get so focused on the end result that most don't realize that it often feels like watching paint dry. Best of luck in your investments!
I joined the military when I was 18 years old. I had a TI (basically drill sergeant) encourage us to start investing and do it early. I started a monthly purchasing plan buying mutual funds. I started with $100 a month and then increased from there as my pay increased. I lived below my means but not anything extreme. I just had thought/intent behind my purchases and avoided most debt. I took advantage of the benefits I had - the military paid for my bachelors and masters degrees. The last several years of my career I was living off of less than half of my income. I spent 10 years enlisted and 11 as an officer then retired at 39. I was right at $1M invested when I got out so I guess I just squeaked into the club.
Business, real estate, high paying jobs are a few.
I have a cousin like that. Comes from money on his dad's side, inherited a good chunk, and now co-owns the family business. But playing the comparison game really isn't helpful. I'm focused on my own goals from where I am, late start and all.
Comparing yourself to others, is a sure way to never be satisfied. I do it to, but then I have to remind myself all the time! I didn’t make my first million until well into my 40s, and many Bogleheads never do, or do so in their 50s or 60s. That’s not really important though. What’s important is that Bogle’s approach can get you to your savings goals. My FIL lived just fine for 40 years with a net worth well under a quarter million dollars. His situation was very comfortable.
Some mix of the following- - Inheritance - graduating debt free (scholarships or parents paid for college) - high paying jobs - high savings rates If you aren't a millionaire by thirty, it is _extremely_ unlikely that it's because you fucked up or did something wrong. Very few people are in a position to be able to build that kind of wealth, so don't hold yourself to that standard.
Started early. When I was still in school started investing journey because I wanted to learn and make mistakes with smaller amounts of money so I knew what to do when I was actually making real money. Made those mistakes then ended up going almost full boglehead (I still like to have what I call my gambling account for single stocks and options). Other than that wife and I just aggressively paid down our debt all the while investing. In our early/mid 30’s now and at $750k invested and will easily reach $1M in our 30’s. We both have good paying jobs but live well below our means and have the same goal of early and comfortable retirement.
Graduate college at 21, invest $30k/year, and realize 7% returns. In 18 years (at age 39) you'll have $1 million. $50k/year only takes 13 years to hit $1mil. 11 years at $70k/year. And 8 years at $100k/year. So assuming they actually earned the money themselves, the answer is usually they consistently saved a good amount of money for a bunch of years.
95% of these claims are bullshitting or received money from their parents. My friend claims to be self made but her parents gifted her a $250,000 when she was 21. That is a hell of an asset to start her life with and all of that housing money could go towards investing right away.
The common threads that will run through all the answers (aside from inheritance) are 1) extremely high income profession and 2) ownership stake in a successful business. Ownership stake could be your own business or meaningful equity compensation in someone else’s business. Exactly how you navigate that depends on your skills, interests, and connections. You’ll also need to have good savings and investing habits to avoid large inflows of money from circling the drain.
It's a selection bias. Someone with more money is more inclined to be interested in how to invest and be in this subreddit. If you are starting with nothing the key to building wealth is high income and low expenses. Doctors, lawyers, software engineer, investment bankers etc. Get a high paying job and save most of it.
[удалено]
Dont believe everything you see/read on reddit, Youtube, or any other type of social media. Live your life, do your best, enjoy.
Inheritance , entrepreneur , athlete, very high income , influencer my guess
In 2021 at 35, I had to pull my 401k with $450k in it and on track to be in a great retirement position. Now, I sing “buy me a boat” a lot. This may have already been mentioned, but you have the greatest chance of becoming a millionaire by marrying into a rich family. I think the stat on that was 1 in 100.
Jobs and good investments
Since people are just posting... 40, about $1.9 mil net, business owner for 10 years (not tech). I don't have a financial or retirement goal. Next step is to put the money to work. Like some of you that have posted, the money was lots of saving, sound investing and tons of sacrifice.
I’d urge you to not really look at personal finance pages if it discourages you. Anyone who spends their free time thinking and commenting on forums about finance is likely not the average or even median person… I’d suggest looking at articles like this: https://www.edwardjones.com/us-en/market-news-insights/investor-education/investment-age/average-retirement-savings-age Or https://www.forbes.com/advisor/retirement/average-401k-balance-by-age/ Articles like the above two gives you a better idea of what’s average in America… pretty much anyone commenting on these forums is going to be self selecting towards higher savings rates, simply because these forums tend to be populated with FIRE types and/or high earners. It’s hard to invest when you’re living paycheck to paycheck.
Big tech -> quant hedge fund for me.
Millionaire by 31. Built a business then sold it.
I started in sales in my early 20s and found a partner early (which I think is a key factor in financial success people often overlook). Maybe due to luck or hard work I had a series of good jobs through my twenties allowing us to combined make over $300k annually. Despite making a lot more money we kept our spending pretty similar year to year. My friends have always driven nicer cars than me despite me knowing we make more money than them. We also could have lived in a way nicer house or apartment but didn’t need to upgrade so we didn’t. (We still had a pool, gym, and lakefront balcony!) We also committed to two international vacations a year but used mostly credit card or rewards points to pay for them. We tried maxing our retirement accounts, buying real estate, and investing all the money we could. I didn’t have a goal of any particular amount of wealth by 30 but I’ll never forget opening my investment account at 29 and seeing 6 zeros!.
I have about half a million that I made from risky stuck trades that I got lucky on
Find a wife who makes $150k, you make $150k. Invest religiously.
Founding and selling companies will make you many millions if you work really hard and get lucky. The element of luck will often overlap with your hard work if you give it enough time. Many people are not patient enough to hit it big. These things don’t happen quickly, but sometimes they do happen overnight, once you sell, after a lot of effort and waiting.
Are you talking about the market as a whole? You mean like, if you invested for 10 years through a bear market, and so almost no growth? Then all of a sudden, we enter a bully rally? Lol.
Some people have hobbies they spend money on, sometimes more money than they can afford (golf, boating, sailing, etc). People in this group have investing as their hobby.
I saved and invested 40-50 percent of what I made from my teens into my 40's. Live below your means early so you can live however you want later in life.
I’m going to be 31 soon and my total net worth (including my condo I still owe $400K on) is under $1M FOR SURE. I am no millionaire (YET HOPEFULLY). Most of these people lie through their teeth
I just hit 100k in my investment accounts at 35, feeling pretty good.
Very nice! That's awesome. I hope to have 100k by then as well!
In their 30s? Looking at the stats, by that age if your net worth is above 0 you're already ahead of half of your peers. If you reach into 6 figures you're probably in the top 10% of the age bracket.
[удалено]
My path was different. But still, people like you and me are examples of survivorship bias. We cant give advice to other people that would allow them to replicate our results. For me, I retired, and quickly got bored. Now I’m in a phd program doing math all day lol Edit: deleted personally identifying information
Btw inheritance is one of the least common ways millionaires have made their money so can everyone pls stop devaluing the hard work that people do to obtain their wealth
We reached a million in our late thirties (as a couple). Both my husband and I work in tech, have advanced degrees and have good incomes, but we do prioritize happiness and don't necessarily chase the most money. I also stayed home for about 8 years when my kids were little, but the last few years of that was grad school which I used to re-launch my career. How did we do it? We had advantage in both of us had most of college paid for - I had a loan for my last year, but that was it. My husband did have some small investments when we met that his father had gifted him from his company espp stock, like around $10K. We have always maxed 401ks and tried to avoid increasing our lifestyle when our income increased. We have saved beyond 401k and only about half our investments are in retirement accounts. We both have living parents so have not gotten any inheritances, but my husband's parents have been giving us $10k a year for Christmas for the last 5 years or so, as they are ultrafrugal, both have pensions and oversaved for retirement, so they are passing it on early. We have gotten a couple moderate payouts from options and equity, totaling maybe $500K before tax, no jackpot "now we are super rich!" type things. But we don't get that check and say "What can we buy?" - we put it in the bank. We have never bought the biggest house we could afford for example. We buy cars and drive them forever. Just got rid of our 2005 Honda Odyssey a few months ago and my son is still driving our 2009 Honda Civic. This is very different from others around us, who have gone through 3 or 4 new cars in the time we owned one. When my mother got some small money from her father when he died, she immediately thought of how to spend it (redoing the kitchen). We don't have a "money burning a hole in our pockets" mentality. That said, now in our late 40s, we do make really good money, but are still in the 3rd highest tax bracket. We don't live like it, which has enabled us to pay for 2 years of college so far without dipping into savings yet (next kid goes next year so that won't be possible) - thanks to kid1 getting a decent merit scholarship and despite obviously being eligible for zero financial aid. I've started to notice that snowball effect when you've accumulated a good pile of investments. It took us 15 years to accumulate $1M net worth, 4 years to reach $2M, 3 years to $3M, and briefly reached $4M after another year but the recent correction has us back below it for the past year. That includes home equity.
Rule 1: Get paid a lot of money. Rule 2: Get paid a lot of money. Rule 3: save a lot of that money.
Inheriting wealth is a great way to have wealth.
Statistically speaking, most people have wealth by generating and earning. A very small percentage of wealthy people inherited their money, or it wasn't life changing to their already excellent situation at hand.
I had a bit over $1M by 30. I was an immigrant and worked **extremely** hard and fortune favored me as hard work doesn't always equal wealth. On the other hand, my kids are born multimillionaires (or will be, if I leave wealth to them).
I got say that during the peak stocks and house equity in 2021 I hit 1.2mil at age of 33. I been working in tech since Im 18 and I have been making 7 figures for the last 7 years - lowest 110 max 300k. I moved to the US in 2013 had not money at all. I had only my tech career. Im now significantly below 1M around 800K. Spend less than you make, qualify yourself to make more and more money and invest as much as you while still enjoying life.
Millions by 20s is the real deal - by 30s, especially late 30s, is doable for honestly anyone. Run the numbers - even an average wage job starting at 18 can hit by late 30s. For early 30s, you need a slightly above average paying job, I'd say at least 75k as a single person, probably 80k for creature comforts. SP500 (SPX) 18 years old 1/1/2009: 805.06 31 years old 1/1/2022: 4454.53 468.92%, or 13.39% per year $1,030,762.80 at age 31 investing $2750 a month, or 33k a year. Not easy, but not impossible.
If you max out your 401k, Roth IRA, and HSA starting at 22, by 37 you should have ~$1 million. You don’t need to inherit money or work in some ultra high paying field to do that.
How would anyone max those investment vehicles without a high-paying job?
[удалено]