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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?

#121

Post by sliverstorm »

ken wrote: post #32
eli_gottlieb wrote: post #15

Earlier quoted context omitted.

9/10 start-ups fail, just like most other forms of new business. I believe we could apply Bayes' Law here...

But that doesn't mean 9/10 of startup founders fail. Most of the successful startups I know today are not the founder's first startup. Everybody says doing a startup, even (especially?) if it fails, is extremely educational. The most common pattern I see is doing a startup, failing, but learning enough about how to do it right, and then trying again and having moderate success with #2 or #3. 9/10 of startups failing…

Yes, but much as 9/10 employees won't ever make 7 figures, 9/10 startup founders won't ever cash out for 7 figures. Plus, in a cycle of invest-boom-invest-bust, your previous successes can be wiped out, making stable growth more difficult.

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

#122

Post by carguy1983 »

aresant wrote: post #85
grandalf wrote: post #76

Earlier quoted context omitted.

What you're describing is the distorted landscape created by corrupt tax policy... it's not a good thing, but I suppose someone has to exploit it. To my knowledge single employee S-Corps are more and more risky (likely to result in an audit).

I've been through three audits (of businesses) in the past 12 years. Their purpose is to "uncover the truth", not to hose you needlessly. You CAN write off a home office, you CAN write of computers, car miles, travel and entertainment, business meals, etc. As long as these are legitimate business-related expenses you're in the clear. As a single-employee S-Corp there shouldn't be such an overwhelming amount of docume…

I've also been audited. If you didn't cheat in the first place, you're not going to be in trouble or have to pay a lot of money.

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

#123

Post by [deleted] »

laaph wrote: post #51
mfieldhouse wrote: post #37

Earlier quoted context omitted.

To sum up the average discussion about jobs and money on reddit: a victim mentality and belief that we live in the hardest time ever to get a job because of events outside of our control.

It's easy to get that mentality. I am in a broke period of my life right now. One can easily tell me about how much it is all my fault, but I thought I had enough money to last for two years when I quit my job, I thought I could find a job within six months in the bay area, people could argue that I am generous to a fault and people I have lent and given money to in the past can't or won't help me out now. So it is e…

[deleted]

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

#124

Post by rprasad »

lacker wrote: post #119
rprasad wrote: post #90

Earlier quoted context omitted.

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_…

The GDP numbers are not segregated by the source of taxes paid. Those GDP tax numbers include corporate taxes. Even after all of the tax breaks, the U.S. does have the highest corporate tax rate in the Western world at 35%, and most corporations are not able to avoid taxes like GE. [EDIT: inserted not]

Furthermore, though the top 1% pays a quarter of all taxes paid by individuals, the next 9% (salaries down to roughly $110k) pay 50% of taxes. In other words, 10% of the country pays 70% of the taxes! For this 10%, taxes may trump healthcare. http://www.ntu.org/tax-basics/who-pays-income-taxes.html http://www.heritage.org/budgetchartbook/top10-percent-income... http://www.american.com/archive/2007/november-december-magaz...

For everyone else, healthcare costs will defintely trump taxes.

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

#125

Post by Domenic_S »

colmmacc wrote: post #60
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.

There is an interest rate on the financing, a cost for payment insurance, and almost certainly a margin on top of both, but they've both been built into the price of the car. It's very likely you could have gotten additional savings for paying cash up-front. It's usually cheaper to pass up these offers and negotiate the price down.

> It's very likely you could have gotten additional savings for paying cash up-front.

Payment method doesn't change your all-in cost significantly. The dealership has a minimum margin, and you'll pay it either on the front end (higher cash price) or on the back end (loan interest).

Generally speaking, car dealerships are in the business of selling loans -- not cars. If you want to pay cash they'll sell you a car, obviously, but the cost benefit of writing a check is way overblown.

Source: I sold cars in another life.

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

#126

Post by paulhauggis »

alex_c wrote: post #89
astine wrote: post #78

Earlier quoted context omitted.

High income inequality is not at odds with the ability for folks lift themselves out of poverty or social mobility in general.

It may not be inherently at odds, no, but I haven't seen any evidence or studies that social mobility is in any way increasing - and it does seem counter-intuitive that social mobility could increase at the same time as income inequality. http://www.economist.com/node/15908469 "How rising inequality affects social mobility is still unclear. Those born since inequality started to rise sharply are only just now becomin…

"It may not be inherently at odds, no, but I haven't seen any evidence or studies that social mobility is in any way increasing - and it does seem counter-intuitive that social mobility could increase at the same time as income inequality."

The Internet has given many more people opportunities..if they choose to take it. There is so much free information out there..there's no reason why more people aren't able to pick up a new skill and bring themselves out of poverty.

If you don't have the Internet, pretty much every city in the US has free access at a library.

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

#127

Post by paulhauggis »

Klinky wrote: post #107
jacoblyles wrote: post #94

Earlier quoted context omitted.

I blame politics. A lot of young people are emotionally invested in the idea that "the System" is responsible for some people being poor and others being rich. If you acknowledge that some choices are good and others are bad, it challenges the view that wealth is predetermined and that income inequality is caused by fate/bias.

I don't think blaming it all on good choices/bad choices is any more reasonable than blaming it entirely on "The System". They both play a role in where someone will end up.

"I don't think blaming it all on good choices/bad choices is any more reasonable than blaming it entirely on "The System". They both play a role in where someone will end up"

I suppose. However, the system will never make you rich. Your good choices will. People tend to put too much blame on "The system" and nobody wants to take personal responsibility.

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

#128

Post by paulhauggis »

toddmorey wrote: post #14

Entrepreneurism seems under-represented: most of the responses seem to be inheritance or stock investments. I'm wondering if that reflects on the reddit community makeup, the type of people who would answer this question, or just that growing a successful startup is really hard / rare.

Reddit is mostly anti-capitalist and anti-business (aside from some subreddits). I imagine many have been turned off by this sort of community ages ago.

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

#129

Post by furyofantares »

rprasad wrote: post #124
lacker wrote: post #119

Earlier quoted context omitted.

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_…

The GDP numbers are not segregated by the source of taxes paid. Those GDP tax numbers include corporate taxes. Even after all of the tax breaks, the U.S. does have the highest corporate tax rate in the Western world at 35%, and most corporations are not able to avoid taxes like GE. [EDIT: inserted not] Furthermore, though the top 1% pays a quarter of all taxes paid by individuals , the next 9% (salaries down to rough…

But how do healthcare costs scale with income?

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

#130

Post by rwhitman »

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…

A single member LLC does nothing to shelter you from taxes over a sole proprietorship, and in many states requires you to file for additional taxes and fees. It also makes your taxes unnecessarily complicated without any real benefit.

The supposed benefit of being an LLC over a sole proprietor is liability protection, but everything I've heard indicates a single owner LLC is rarely enough protection in court.

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