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?

#141

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

astine wrote: post #78

kylebrown wrote: post #74

Earlier quoted context omitted.

I'm not sure why you would find that quote so offensive, but to be fair, the disillusioned youth on Reddit are probably just as sensitive to the "anyone can pull themselves up by their own bootstraps" assertions by smug boomers (like the GP). Such a world-view is increasingly at odds with an economic reality in which income inequality is higher than its been in decades, and growing.

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

But high income inequality and low social mobility (low social mobility isn't particularly in question) together as facts are at odds with a significant likelihood of folks to lift themselves out of poverty. Proving the "ability" is an existence proof about the future probability of anyone in the class escaping poverty being nonzero, and sets a very low bar for what is acceptable for society, in my opinion.

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

#142

Post by [deleted] » Thu, Apr 05, 2012, 2:17 AM UTC

ryguytilidie wrote: post #137

ajross wrote: post #112

Earlier quoted context omitted.

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?

[deleted]

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

#143

Post by Klinky » Thu, Apr 05, 2012, 2:25 AM UTC

paulhauggis wrote: post #127

Klinky wrote: post #107

Earlier quoted context omitted.

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.

Again you're using absolutes. Just because someone complains that "The System" is unfair does not mean they are sitting on their butt doing nothing about it or their current situation. Venting is a common trait & for some it is completely justified.

Even making "good choices" your entire life things may still go the wrong way. Sometimes this is life, sometimes this is "The System". Sometimes "bad choices" make you rich as well(drug dealer, ponzi scheme).

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

#144

Post by orangecat » Thu, Apr 05, 2012, 2:38 AM UTC

rorrr wrote: post #66

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…

This is a joke. What's the point of saving up $1M while living in a shitty cheap area, cheap shitty house, no going out, no fun hobbies. Even if you do make six figures (and most people don't), it will take you decades to get $1M, and by then it will not be worth that much. Inflation is a bitch.

If you have an above average income like many on HN, people who earn 15 or 20 percent less than you are not generally living in cheap shitty houses and never having fun.

Inflation is a bitch.

Fortunately, there are alternatives to keeping your savings in your mattress.

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

#145

Post by gnosis » Thu, Apr 05, 2012, 2:54 AM UTC

rwhitman wrote: post #130

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.

"everything I've heard indicates a single owner LLC is rarely enough protection in court"

What about a single-owner C-corp?

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

#146

Post by gnosis » Thu, Apr 05, 2012, 2:56 AM UTC

aresant wrote: post #84

jberryman wrote: post #69

Earlier quoted context omitted.

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"?

Here's a shorter answer to "how to get rich" - be a successful entrepreneur. But applying the above: let's say you're at a low-wage, hand-to-mouth style job today. a) Today commit to being smart about taxation since that is one of your most addressable costs (and study it, there are literally THOUSANDS of loopholes) b) As a result, save up enough "runway" over several years to go take a swing at a start-up. c) Reinve…

"Here's a shorter answer to "how to get rich" - be a successful entrepreneur."

Even shorter answer: win the lottery.

Don't know which is more likely.

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

#147

Post by gnosis » Thu, Apr 05, 2012, 3:07 AM UTC

tmh88j wrote: post #30

mikeryan wrote: post #24

Earlier quoted context omitted.

I have to say I almost wondered if this plan was meant as a bit of a joke. I'd rather spread my income around now on a nice(r) house, some fun hobbies and a bit of abject consumerism, and enjoy life more evenly then save now not have as much fun but end up with more money in the bank later. You'll never get your younger years back.

>You'll never get your younger years back. While I do agree to an extent, a very wealthy uncle of mine has always told me "the hallmark of maturity is the ability to delay immediate gratification."

Is attaining "maturity" what life is all about?

Is the life of a "mature" individual necessarily more worth, fulfilling, happy, or "successful" than that of an "immature" individual?

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

#148

Post by tayl0r » Thu, Apr 05, 2012, 3:10 AM UTC

nitrogen wrote: post #136

marshallp wrote: post #111

Earlier quoted context omitted.

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?

That is the zillion dollar question right there. We're facing it now and it's only going to get worse.

The economic system we have in place now seems like it breaks down when a portion of your population cannot join the workforce in any sort of useful fashion.

I don't think you can solve this problem with the current ideologies of the common American. It goes against the "core values" of many Americans so any attempt to change the system will be met with much opposition.

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

#149

Post by larrys » Thu, Apr 05, 2012, 3:16 AM UTC

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…

"Unfortunately, for single-member LLCs or sole-owner S-Corps, creditors will generally require the owner to contractually waive such protections."

Relates to contracts you sign (and getting a credit or charge card which you end up signing personally even though it's a "business" card) but not necessarily to expenses or everyday debts (the local printer, the coffee company, merchandise on net 30 terms etc.) In short you can have debt that is shielded as a corporation.

"In contrast, it is extremely difficult to sell an unincorporated/unorganized business,"

Don't agree with this at all. I sold one (20 person company) and the fact that it was a sole proprietorship didn't make it any harder to sell from my experience.

Agree with the other things you said and correctly pointing out that you can deduct business expenses as an individual.

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

#150

Post by ebaysucks » Thu, Apr 05, 2012, 3:23 AM UTC

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…

Coming out of college, I used to be a "Boglehead" like this - had a job at a top 3 management consulting firm and put as much as I could into Vanguard index funds, up to 80% of my net income in certain months.

After a year I realized the real psychological reason for my extreme saving habit was that I hated my job.

The lesson I learnt is this: If you calculate every expense in terms of hours of life worked to attain it, you probably don't like your job very much and you are better off (in the long run) by quitting.

Edit: Now that I run my business, I will spend lavishly on my childhood boy dreams once I can afford it. For me that's cars, and compared with employing people stuff like leasing a top of the range BMW (400 pounds a month deal on a 640d 2 months ago) or even stuff like participating in the Volkswagen Race Cup (15K pounds for second hand race car, 10K pounds a year to run and it's televised advertising) are really very attainable. It also makes for a more interesting life story.