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Redditors who are rich (net worth $1 million+) - how did you get rich?

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Re: Redditors who are rich (net worth $1 million+) - how did you get rich?

#111

Post by marshallp »

stevear wrote: post #58
dwc wrote: post #27

There's a sad undercurrent to this, as some redditors respond that they find this depressing. While I understand their plight, I do not understand the sustained pessimism for most of the depressed ones. I went to work right out of high school at menial jobs. No college, no big family business. Paycheck-to-paycheck, and any minor emergency like a dead car battery was a financial crisis. I did not "get lucky" on stocks…

I am really glad someone else has noticed this and feels the same way. This quote from that thread pissed me off all morning: "If you told the common man any time in history other than the baby boomer generation, that the way to get rich was 'hard work' and 'Budgeting' they would die of laughter." Every day I feel more and more alienated by the victim mentality on Reddit. It seems to be the only tangible by-product o…

That's not "rich". That's called working for the man. It is depressing because of the jobs out there are bullshit jobs. No one needs to be stacking shelves at walmart or the gap - people can click on amazon.

If you take a real look around much of the economy is this b.s. burger flipping and shelf stacking, and much of the rest are the welfare queens otherwise known as government employees and corporate managers. There is such an epic wastage of the world's human resources that anyone in the know would cry themselves to sleep. Occupy Wall Street is nothing in comparison to the scale of the problem.

Re: Redditors who are rich (net worth $1 million+) - how did you get rich?

#112

Post by ajross »

rprasad wrote: post #90
aresant wrote: post #50

The #1 expense over your lifetime won't be your house, your entertainment, or your cars. It will be TAXES. If you build a career path that can take advantage of tax breaks you wind up with a huge advantage from the start. For tech entrepreneurs - focus on building your enterprise value. Reinvest profits into GROWTH so that you wind up paying the bulk of your taxes in capital gains vs. personal income tax. On $1m or 2…

As a tax lawyer, I can say with complete certainty that healthcare costs will trump taxes as the #1 lifetime expense for almost everyone (except the Buffets and Gates). #2 will be costs associated with childraising. Taxes are a distant #3, and for people with sufficient debt (mortage and/or student loan), may actually fall to #4. Also, while the rest of your advice is sound, it is unncessary to organize an LLC or inc…

Amen to the childraising point. My wife and I took a total of six months of leave for each of our two kids (mostly her, though I did a 1-1.5 months at the end too). That's a year's salary down the toilet. We're mid-career (i.e. unlikely to see an increase in real income unless we get lucky or change career paths). So that's probably 1.5-2% of our lifetime earnings right there: even before the kids started daycare, and long before they'll go to college.

Re: Redditors who are rich (net worth $1 million+) - how did you get rich?

#113

Post by UK-AL »

dirkdeman wrote: post #106

It's funny how RICH is defined in a monetary value. I live a very rich life (including kids, those of you who don't have them yet: you'll get it when you have them), can afford everything I need and most of the stuff I want. I never got the lavish spending of the wealthy, why on earth would someone buy a Ferrari or 50,000 dollar pool table? What I'm trying to say is money is just the means to fulfilling a desire. I k…

A whole life to to amass 10000 Euros?

Re: Redditors who are rich (net worth $1 million+) - how did you get rich?

#114

Post by sukuriant »

hkarthik wrote: post #22

Our path to be on track for a net worth of $1 mil: 1) Two good incomes on the professional track. We both have good degrees from universities and don't plan on taking any breaks in employment. Even with kids, there are plenty of great childcare options available. Living near family helps too. 2) Drive paid off cars. Buy new cars if you want, but structure your costs so you can pay them off in 2-3 years max and then d…

6) Avoid expensive hobbies/activities that consume a lot of time and don't contribute much to your marketable skills. If a hobby requires spending a considerable chunk of your monthly income, reconsider whether it's really worth it.

I only have an issue with this remark. But perhaps it's because when I "reconsider whether it's really worth it", I consistently find that yes, yes it is worth it. I rather enjoy extreme sports, and spending $100 on a trip to the mountains + gas is quite a lot of money. (It'll be dropping to around $50 + gas when I buy a snowboard).

I suppose it could also be added that, while certain hobbies may start expensive (snowboarding at $600 for a good board + bindings + other snow gear if it's your first time; or, photography for $1100 for camera + $2000 for a few lenses specialized to your primary interests), they become much, much less expensive as time goes on. (I pay virtually no maintenance on my camera and haven't needed a new lens in a while; so, my camera hasn't cost me any more money in a while. I haven't bought new snowboarding clothes either; and after I buy my board I probably won't buy another for a couple-few years)

That has to be considered as well.

TL;DR: I do have a bit of a problem with #6, but it's probably my own personal issue; and, rare/one-time costs are just that. rare/one-time costs.

Re: Redditors who are rich (net worth $1 million+) - how did you get rich?

#115

Post by lancewiggs »

joevandyk wrote: post #57
hkarthik wrote: post #22

Our path to be on track for a net worth of $1 mil: 1) Two good incomes on the professional track. We both have good degrees from universities and don't plan on taking any breaks in employment. Even with kids, there are plenty of great childcare options available. Living near family helps too. 2) Drive paid off cars. Buy new cars if you want, but structure your costs so you can pay them off in 2-3 years max and then d…

For what it's worth, I just bought a new car for $35k. Came with a 5 year interest free loan with nothing down. If you can get that type of loan, you don't want to pay it off quickly.

You bought a $35,000 depreciating asset on finance, and one that is substitutable by something for $5000. If you had to sell the car in a year's time then it's very likely that you may not even make back the value of the loan.

Meanwhile you could have taken the $30,000 difference, and automatically paid those earnings that would have otherwise paid off the loan into savings, a 10K or a start-up.

Yu could also have purchased a motorcycle (for the fun) and a cheap box car (for the practicality). And let's not get into the running costs, the decision to drive every day, insurance and so forth.

Buying depreciating assets with anything but spare cash is really sad.

(When I lived in the US I purchased 2 cars - for a total sum of $2000.)

Re: Redditors who are rich (net worth $1 million+) - how did you get rich?

#116

Post by sliverstorm »

jberryman wrote: post #69
aresant wrote: post #50

The #1 expense over your lifetime won't be your house, your entertainment, or your cars. It will be TAXES. If you build a career path that can take advantage of tax breaks you wind up with a huge advantage from the start. For tech entrepreneurs - focus on building your enterprise value. Reinvest profits into GROWTH so that you wind up paying the bulk of your taxes in capital gains vs. personal income tax. On $1m or 2…

Respectfully, as someone who doesn't know anything about getting rich, isn't your advice more "how to get richer" rather than "how to get rich"?

Most studies I've read found that most of the middle-class rich got there by getting slowly, steadily wealthier, not with runaway successes.

Re: Redditors who are rich (net worth $1 million+) - how did you get rich?

#117

Post by sliverstorm »

sukuriant wrote: post #114
hkarthik wrote: post #22

Our path to be on track for a net worth of $1 mil: 1) Two good incomes on the professional track. We both have good degrees from universities and don't plan on taking any breaks in employment. Even with kids, there are plenty of great childcare options available. Living near family helps too. 2) Drive paid off cars. Buy new cars if you want, but structure your costs so you can pay them off in 2-3 years max and then d…

6) Avoid expensive hobbies/activities that consume a lot of time and don't contribute much to your marketable skills. If a hobby requires spending a considerable chunk of your monthly income, reconsider whether it's really worth it. I only have an issue with this remark. But perhaps it's because when I "reconsider whether it's really worth it", I consistently find that yes, yes it is worth it. I rather enjoy extreme…

The real question I struggle with is related to this. Quite simply, what use is a million bucks just sitting in the bank? Once you've got your retirement, mortgage and rainy day fund covered, money you never use is a piece of your life you traded away for... nothing.

So I guess what you could say is, if you grow to a million in net worth because you have a booming business with great returns, that's wonderful. But I wonder if getting to a million (or whatever number) over a lifetime by simply saving every possible dime is simply wasted opportunity.

Re: Redditors who are rich (net worth $1 million+) - how did you get rich?

#118

Post by sliverstorm »

lancewiggs wrote: post #115
joevandyk wrote: post #57

Earlier quoted context omitted.

For what it's worth, I just bought a new car for $35k. Came with a 5 year interest free loan with nothing down. If you can get that type of loan, you don't want to pay it off quickly.

You bought a $35,000 depreciating asset on finance, and one that is substitutable by something for $5000. If you had to sell the car in a year's time then it's very likely that you may not even make back the value of the loan. Meanwhile you could have taken the $30,000 difference, and automatically paid those earnings that would have otherwise paid off the loan into savings, a 10K or a start-up. Yu could also have pu…

First, while cars are depreciating assets, the depreciation curve is a decaying exponential. This means that while the first year you go into the red, after 3-4 years you are back around the black again.

Second, interest free loans are practically better than spare cash. How do you know your parent didn't have $35,000 in spare cash, but wisely took the interest-free loan to leverage himself? You certainly cannot dismiss the possibility, as the poster must at least have respectable credit and/or income to qualify.

Third, your parent was merely making an observation on interest-free loans, which was pertinent to the parent of said post. Where do you fit in, criticizing his/her financial decisions and telling them what they should be doing with their money?

(My first two cars cost a total sum of $1200)

Re: Redditors who are rich (net worth $1 million+) - how did you get rich?

#119

Post by lacker »

rprasad wrote: post #90
aresant wrote: post #50

The #1 expense over your lifetime won't be your house, your entertainment, or your cars. It will be TAXES. If you build a career path that can take advantage of tax breaks you wind up with a huge advantage from the start. For tech entrepreneurs - focus on building your enterprise value. Reinvest profits into GROWTH so that you wind up paying the bulk of your taxes in capital gains vs. personal income tax. On $1m or 2…

As a tax lawyer, I can say with complete certainty that healthcare costs will trump taxes as the #1 lifetime expense for almost everyone (except the Buffets and Gates). #2 will be costs associated with childraising. Taxes are a distant #3, and for people with sufficient debt (mortage and/or student loan), may actually fall to #4. Also, while the rest of your advice is sound, it is unncessary to organize an LLC or inc…

healthcare costs will trump taxes as the #1 lifetime expense for almost everyone

This is hard for me to believe, since health care is around 15% of GDP and taxes are around 25% of GDP. The top 1% only pays about 28% of taxes, so even "taxes paid by the non-1%" are more money than all expenditure on health care.

sources:

http://en.wikipedia.org/wiki/File:International_Comparison_-...

http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenu...

http://economix.blogs.nytimes.com/2009/04/08/how-much-americ...

Re: Redditors who are rich (net worth $1 million+) - how did you get rich?

#120

Post by tbsdy »

My favourite thread:

My uncle put down 500k for a new lambo, and makes around a million a year. The semi-mansion he lives in with my other uncle is fully paid off, the kids colleges funds are full and so is retirement, so a purchase like that is very affordable for him.

Response: What does your uncle do?

Answer: Lives at the bro-mansion and drives a fuckin Lamborghini all day, am I the only one who reads?!

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