Ask HN: Are you a millionaire? If so, how'd you get there? • Hacker News Board

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#81

Post by otp124 » Sun, Sep 03, 2017, 3:06 PM UTC

simonsarris wrote: post #66

forthefuture wrote: post #64

Earlier quoted context omitted.

Are those numbers ball parked or just for example? The average car loan has a 4% interest rate[1], and the average bank gives a paltry 0.06% interest rate[2]. I agree that if you can make a higher return investment than the rate on your debt, that's certainly profitable. I just disagree that it can be done so passively, at least today. [1] https://www.valuepenguin.com/auto-loans/average-auto-loan-in... [2] https://ww…

When I bought a car in 2014 I got a 0.69% interest rate from USAA and kept the "car cash" in Target stock (see the dividend) instead. It worked out nicely.

How did that work out nicely? Target's stock price is lower today than it was in August 2014. And it has underperformed the market index.

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#82

Post by bane » Sun, Sep 03, 2017, 3:36 PM UTC

yojo wrote: post #58

bane wrote: post #20

Yes, just barely but in actual assets. Meaning, if you take a complete accounting of my net worth, subtract out debts and ignore options etc and count retirement accounts and stocks and so on. I make out to just above that number by a little bit. Not terribly impressive if you make over $100k/yr for 15-20 years, live below your means, pay off all your debts and own where you live. But I guess I've managed not to squa…

I just bought a car with a 6 year, 0.9%APR loan. I literally make more in an FDIC insured bank account. If you have a mortgage on your primary residence on the US, the interest is tax deductible. This can make your effective rate extremely low, and it's not hard to find an investment with better returns. Not all loans are bad; some are subsidized. It often makes sense to keep those ones.

I actually agree with this.

It's more a matter of personal preference for me, I just prefer to have all the cash liquid instead of obligated somewhere. I usually just stuff it all in the FDIC insured bank account until I decide to invest it somewhere or spend it.

But it does make it much easier to go "you know what, I'm going to go to France next month." and then do it.

On the house front, I'm actually in the middle of a search for a new home so I can start enjoying those sweet tax breaks again and then get somebody to rent my first home so I'll basically get the new home for almost free.

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#83

Post by bane » Sun, Sep 03, 2017, 3:38 PM UTC

soared wrote: post #29

bane wrote: post #20

Yes, just barely but in actual assets. Meaning, if you take a complete accounting of my net worth, subtract out debts and ignore options etc and count retirement accounts and stocks and so on. I make out to just above that number by a little bit. Not terribly impressive if you make over $100k/yr for 15-20 years, live below your means, pay off all your debts and own where you live. But I guess I've managed not to squa…

Isn't this effectively the wrong strategy though? For a portion of my loans I would earn more investing and paying the minimum amount than I would paying them off sooner.

It can be. It's not really point of strategy more than a personal preference. I just really really don't like servicing debt.

On the flip side I get more liquid cash and more "fuck this, I quit" job flexibility which is basically what I'm buying.

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#84

Post by gmays » Sun, Sep 03, 2017, 7:01 PM UTC

Net worth is low millions. Have a well paying job, but made most of our wealth investing in real estate while in the military.

TL;DR had extra capital to invest during the recession. Had most properties appreciate 2-3x since then + rental income. We bought most of them cash, but if we could do it over again would probably borrow more for a higher return. But we were new to it and afraid of debt.