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How to get rich without getting lucky

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Re: How to get rich without getting lucky

#231

Post by falcolas »

11thEarlOfMar wrote: post #195
falcolas wrote: post #187

Earlier quoted context omitted.

Counterpoint: Your chances of dying before "making it big" and retiring are somewhere in the 1-in-10 range. Investing works mostly because of the current trend of artificially propping up the stock market. Any failure in your investment strategy leave you in the same boat as the current boomer retirees who are trying to get back in the workforce. Not to mention, your life is going to be pretty miserable if you're wor…

I have no mustache and was born with no silver spoon, Had to work my way through college. This approach to building wealth worked for me.

> I have no mustache and was born with no silver spoon, Had to work my way through college.

My parents said this quite a bit.

Of course, my dad did blue collar labor for an inflation-adjusted $30 per hour (the same position today pays around $11 an hour), plus overtime and a pension. My mom was a part time waitress to pay her way through 4 years of college.

It was surprising how quickly they stopped saying that when they looked at the cost of a new house because they had to move. Or when they looked at what it would cost to put their granddaughter through the same college my mom went to.

Re: How to get rich without getting lucky

#232

Post by frockington »

y4mi wrote: post #214
encoderer wrote: post #207

Earlier quoted context omitted.

> Investing works mostly because of the current trend of artificially propping up the stock market. This belief could cost you a lot of money.

it can also save him from wasting even more.

Just like there "could" be dinosaurs living underneath the earth's crust plotting for revenge against all mamals

Re: How to get rich without getting lucky

#233

Post by falcolas »

mistermann wrote: post #212
encoderer wrote: post #207

Earlier quoted context omitted.

> Investing works mostly because of the current trend of artificially propping up the stock market. This belief could cost you a lot of money.

At this current point in time, you are both correct. It's gotten to the point where I'm genuinely starting to wonder if this state might be permanent, even though it's theoretically "impossible" because there will "always" be a reversion to the mean.

Yeah. It's gone on long enough that I'm wondering the exact same thing. Of course, if it doesn't, that return to mean is going to be a real bitch to ride out.

Re: How to get rich without getting lucky

#235

Post by rdiddly »

falcolas wrote: post #187
11thEarlOfMar wrote: post #158

The highest probability for success for the 'everyday person': - Earn as much as you can from your own work. Take a 2nd job, change to a higher paying job, ask for more responsibility and a raise at your current job, go back to school for a more lucrative degree, ... - Spend much less than you earn. Economize, share an apartment, buy an inexpensive car, shop at Trader Joe's and Costco, .... - Learn how to invest. Thi…

Counterpoint: Your chances of dying before "making it big" and retiring are somewhere in the 1-in-10 range. Investing works mostly because of the current trend of artificially propping up the stock market. Any failure in your investment strategy leave you in the same boat as the current boomer retirees who are trying to get back in the workforce. Not to mention, your life is going to be pretty miserable if you're wor…

If I recall right, Mr. M.M. defines retirement basically as financial independence, regardless of how you spend your time. Working because you want to is very different from working because you have to, so I'll buy it.

And as far as I know, he and his wife earned their money in tech jobs. The math is believable: let's say your household makes $130,000 a year (which I haven't done), and lives on $30,000 a year (which I've done... not fully voluntarily mind you but it wasn't hell on Earth either). You're saving $100,000 a year. In about 10 years you're a millionaire and could continue living on $30,000 forever without working. (Assuming 3% interest, which is doable without much investing effort, luck or expertise.) That's financial independence. Keep working at that point, and you only improve your lot. You can earn $10,000 a year as a full-time musician and live on $40,000. Or stay in tech and put 100% of your salary into principal while interest or dividends pay your living expenses.

Increase your monetary needs, i.e. your financial dependence, and it takes longer. Which is what most people do.

Re: How to get rich without getting lucky

#236

Post by 20years »

falcolas wrote: post #187
11thEarlOfMar wrote: post #158

The highest probability for success for the 'everyday person': - Earn as much as you can from your own work. Take a 2nd job, change to a higher paying job, ask for more responsibility and a raise at your current job, go back to school for a more lucrative degree, ... - Spend much less than you earn. Economize, share an apartment, buy an inexpensive car, shop at Trader Joe's and Costco, .... - Learn how to invest. Thi…

Counterpoint: Your chances of dying before "making it big" and retiring are somewhere in the 1-in-10 range. Investing works mostly because of the current trend of artificially propping up the stock market. Any failure in your investment strategy leave you in the same boat as the current boomer retirees who are trying to get back in the workforce. Not to mention, your life is going to be pretty miserable if you're wor…

This is a good counterpoint and something my Dad points out often. He was very frugal, worked long hours and saved as much as he could so him and my mom could have a good retirement. She passed away at 42, so that never happened. He has so many regrets and wishes he invested more of his money & time in experiences with her while she was alive.

I think there needs to be a balance. The trend of working crazy hours to save as much as you can, living overly frugal, etc. will not always lead to happiness or fulfillment. I like to think of it as how can I optimize my time and finances for "life" rather than retirement. That doesn't mean I don't have a nest egg, it just means that not everything is going into that nest egg.

Re: How to get rich without getting lucky

#237

Post by toomuchtodo »

rdiddly wrote: post #235
falcolas wrote: post #187

Earlier quoted context omitted.

Counterpoint: Your chances of dying before "making it big" and retiring are somewhere in the 1-in-10 range. Investing works mostly because of the current trend of artificially propping up the stock market. Any failure in your investment strategy leave you in the same boat as the current boomer retirees who are trying to get back in the workforce. Not to mention, your life is going to be pretty miserable if you're wor…

If I recall right, Mr. M.M. defines retirement basically as financial independence, regardless of how you spend your time. Working because you want to is very different from working because you have to, so I'll buy it. And as far as I know, he and his wife earned their money in tech jobs. The math is believable: let's say your household makes $130,000 a year (which I haven't done), and lives on $30,000 a year (which…

To live off of $30k/year, you only need $750k saved, not $1MM (@ 4% annual withdrawal rate).

Re: How to get rich without getting lucky

#238

Post by jogjayr »

falcolas wrote: post #193
jacquesm wrote: post #22

Earlier quoted context omitted.

Go read mr money Mustache (but take it with a grain of salt and ignore the cult bits) and 'the millionaire next door' https://www.mrmoneymustache.com/ (the older stuff is better, he's making bank through the blog so caveat emptor) https://en.wikipedia.org/wiki/The_Millionaire_Next_Door

Keep in mind MMM started with a sizable inheritance to kickstart his nest egg and currently works full time talking about living frugally. Take from that what you will.

> Keep in mind MMM started with a sizable inheritance to kickstart his nest egg

Please provide proof of this. He's never mentioned it anywhere on his blog.

> currently works full time talking about living frugally.

This he has talked about: http://www.mrmoneymustache.com/2013/02/13/mr-money-mustache-...

The tl;dr for others is basically, what's someone who is hardworking and driven enough to retire at age 31 actually supposed to do with the rest of their life? Sit in front of the TV? Of course he's going to do some things he enjoys (writing, working on houses, hiking, skiing), and maybe some of those activities will make him money - but he doesn't need the money to maintain his current lifestyle.

Re: How to get rich without getting lucky

#239

Post by netsharc »

mmcconnell1618 wrote: post #161
zeth___ wrote: post #141

Earlier quoted context omitted.

Thanks for the advice. How many new jobs have you taken in the last three years? I've had 8.

I agree with the strategy that hopping jobs results in faster income increase than staying put. I'm just saying that in my experience, there is a cap on how much you can make in any salaried job unless you are a very rare person. You may find it difficult to continue to raise your income by job hopping. You may need to think about selling value rather than time to exceed your current pay.

I remember reading someone's observation about web dev/tech but using human flight as an example. In the 70's, people thought because they went from the Wright brothers to the moon within 66 years, by the year 2000 we'd have Mach 5 passenger planes and trips to other planets. But, what do we have nowadays? Passenger jumbo jet speeds have remained steady since.. the 70's/80's?

What he's trying to say is that the growth will usually reach a plateau, but people think it'll be exponential. IMO, Mr. Millionaire upthread is living the Bubble 2.0 demand for tech workers, and thinks the bubble will go on and he's going to the stratosphere...

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