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

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

#131

Post by rmrm » Thu, Apr 05, 2012, 1:50 AM UTC

spindritf wrote: post #81

smackfu wrote: post #38

Earlier quoted context omitted.

There's a middle ground between not spending and spending extravagantly. So many people with large incomes just waste it away and end up with nothing at the end. We're not talking about a single $500 iPad. We're talking about a $500 night at a club.

How great a night we're talking here? Because, in general, experiences are worth more than gadgets (see below what I mean). Though (sky)diving lessons or vacation would probably be better than a night out. "Asked which of the two purchases made them happier, fully 57% of respondents reported that they had derived greater happiness from their experiential purchase, while only 34% reported greater happiness from their…

indeed. Spend money on meaningful experiences and appreciating assets.

Minimize money spent on ho-hum experiences and depreciating assets.

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

#132

Post by alanfalcon » Thu, Apr 05, 2012, 1:51 AM UTC

zcid wrote: post #91

vbtemp wrote: post #82

Earlier quoted context omitted.

> I decided I definitely did NOT like being poor "Money doesn't buy happiness, but having no money can sure buy a lot of misery." On a related note, it really grinds my gears when I hear well-to-do young adults from middle class families say money doesn't matter when they've never struggled to pay rent or for basic medical care.

As someone who struggles for rent and basic medical care, it really grinds my gears listening to someone's victim mentality. I struggle right now because of my poor decisions. I am improving my lot in life through consistently good choices. Sure, life happens, but ultimately, I am in control of my own destiny.

Sometimes when advanced medical care comes into the picture then people really aren't in control of their financial destiny (and life for them and anyone who shares financial responsibility with them can be truly miserable). But I agree with the broad point!

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

#133

Post by rprasad » Thu, Apr 05, 2012, 1:51 AM UTC

furyofantares wrote: post #129

rprasad wrote: post #124

Earlier quoted context omitted.

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?

They don't, generally, as healthcare costs are bounded but income is not. So the rich ultimately pay proportionately less for healthcare relative to their income (though on an absolute sense, they pay significantly more).

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

#134

Post by nitrogen » Thu, Apr 05, 2012, 1:58 AM UTC

paulhauggis wrote: post #126

alex_c wrote: post #89

Earlier quoted context omitted.

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 pic…

There's more to social mobility than just skill, however. As a hypothetical example, if a currently poor person who is genetically/psychologically predisposed to shyness and introversion learns a new skill, they'll still have the difficulty of forming the social connections necessary to know how to apply that skill toward generating life-altering levels of income.

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

#135

Post by alanfalcon » Thu, Apr 05, 2012, 1:59 AM UTC

patrickd wrote: post #83

Jun8 wrote: post #20

Earlier quoted context omitted.

I fulfill all the above (except that I have a son, but he's young so the only big cost is daycare, around 13K/year), so where's my million!? In order to develop a successful model, one should also have negative examples, i.e. people who could have had ~$1M in their mid 40s but do not. The greatest mistakes I made that I see with hindsight are (i) doing a PhD in EE where a MS was more than enough and then taking too l…

Thanks for that link... enjoyed it a lot. [9]This is a good plan for life in general. If you have two choices, choose the harder. If you're trying to decide whether to go out running or sit home and watch TV, go running. Probably the reason this trick works so well is that when you have two choices and one is harder, the only reason you're even considering the other is laziness. You know in the back of your mind what…

Fantastic pull quote. I'm reading this on my iPhone and felt too lazy to bring up this page on my phone to copy/paste the text to send to a friend, so I just voice dictated it. (Which I guess is a reminder that there's also the possibility that sometimes the harder choice is also simply the less efficient.)

To add some value to this anecdote, I'll share that I've been using voice dictation more often, both for convenience (as here) and also as a tool to help improve my diction. I tend to swallow my words and speak unclearly, so by having a computer check me I'm slowly learning to enunciate a little better and specifically figuring out which areas I need the most work. I am not speaking to the phone robotically, the only change from my conversational tone is the speaking of punctuation. (As for the pain of to/too/two and similar homonyms, the iPhone helpfully underlines these in blue and makes it a snap to tap and pick the correct version, a trick it took me a while to learn so I thought I should share.)

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

#136

Post by nitrogen » Thu, Apr 05, 2012, 2:01 AM UTC

marshallp wrote: post #111

stevear wrote: post #58

Earlier quoted context omitted.

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. Ther…

Though your post was probably downvoted for its unrealistic pessimism, I have to agree with the idea that much of humanity's labor is wasted. The question remains, however, what do people do with their time, and how do they feed themselves, when their labor is entirely replaced by machines?

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

#137

Post by ryguytilidie » Thu, Apr 05, 2012, 2:05 AM UTC

ajross wrote: post #112

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…

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, an…

Are you saying 1.5-2% of your lifetime earnings is higher than what you will be paying in taxes? I assume youre in a higher tax bracket than 2% right?

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

#138

Post by ryguytilidie » Thu, Apr 05, 2012, 2:07 AM UTC

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…

Yeah I don't know how a country full of people who have been conned by their government over and over again could feel like victims...

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

#139

Post by alanfalcon » Thu, Apr 05, 2012, 2:07 AM UTC

inerte wrote: post #12

smackfu wrote: post #9

Easiest way: No kids. Two good incomes. Reliably saving 20%. Mid 40s. No college debt or health issues. That should get you to about a million in assets.

Maybe that's the easiest, but not the most common. According to Millionaire Next Door, there are kids, sometimes only one income, savings of 15%+, and late 50s.

Yes, the single biggest factor is age. You want a net-worth distribution where the wealthiest people are at retirement age because they're going to quit working and then that wealth will be spent in their retirement. It's like a roller coaster, you want to be moving the fastest right before you enter the loop so that you can be sure not to stall right when you're upside down (or embarrassingly fail to make it even that far and end up rolling backwards.) If everyone was going the same speed all the time, we'd just have boring flat tracks and there would be no point in going on the ride.

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

#140

Post by tedunangst » Thu, Apr 05, 2012, 2:14 AM UTC

hkarthik wrote: post #101

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.

what's the benefit in not paying it off quickly if you can? That monthly payment is extra cash you could put away into savings or other investments, presumably at a positive interest rate. Even if the market sucks and interest rates on most banks are terrible right now, at the very least, it's still money you could have invested in yourself with some positive return.

You basically just advised doing exactly the opposite of what you wanted to advise. The money used to pay it off quickly is the extra cash you put away in other investments. If your choices are pay off a zero percent loan or invest for a positive return, you don't pay off the loan.