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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?

#151

Post by erikpukinskis »

gnosis wrote: post #146
aresant wrote: post #84

Earlier quoted context omitted.

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.

There are about 1,600 people who win a million dollars in the lottery each year[1]. There 2 million+ businesses in the U.S. with 5 or more employees[2]. It seems safe to say you've got a better chance at starting a successful business. Although I was surprised at how close the numbers were.

That said, consistent application of intelligent effort will only meaningfully increase your odds in one of those games.

[1] http://ezinearticles.com/?Lottery-Millionaires---How-Many-Pe...

[2] http://www.census.gov/econ/smallbus.html

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

#152

Post by yogrish »

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…

The love and affection what you gave to ur kids is priceless and much more valuable than the money (1.5-2% earnings)you drained. So, Don't even account it. With out these (spending time with kids taking off etc) how much ever you earn, you are still poor.

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

#153

Post by rudiger »

smackfu wrote: post #38
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.

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 is it even possible to spend $500 in one night at a club? That's 50 drinks, at least!

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

#154

Post by replax »

rudiger wrote: post #153
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 is it even possible to spend $500 in one night at a club? That's 50 drinks, at least!

Well, as you probably knew when you wrote this comment, there are locations which are more expensive.

If you would want to, you could probably spend double that and not even get drunk, by e.g. booking a table or w/e...

Whether it is rational/reasonable to do that is something I cannot answer generally (obviously) but to me it is not. However, as such things exist they have to be reasonable enough to some one, as they are being used.

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

#155

Post by replax »

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?

He was referring to the first six months of child raising. Therefore, the total cost is definitely higher and may well trump taxes, depending on when your definition of "child raising" stops.

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

#156

Post by read_wharf »

zalew wrote: post #23
freehunter wrote: post #4

WRT the top post there (as of right now), you have to be pretty lucky if driving a 20+ year old car is a net gain. Especially if you weren't the owner of that car for the majority of its life. Like with old codebases, there's a lot that can go wrong at any moment and be so difficult and expensive to maintain that it's worth it to just throw it out and get a certified pre-owned. Depends on the car, I guess, I ditched…

> you have to be pretty lucky if driving a 20+ year old car is a net gain. I can't imagine a 20+yr old car which is a gain, and I'm a fan of classics and owner of an '84 BMW. In terms of money eating vintage cars are worse than gold-diggers unless you let them rot. One must be overentusiastic by their hobby not to see that's a sinkhole, been there done that ;)

I drive a 22 year old nothing special, original owner. That's four cars that I didn't buy, at 5 years, 10 years, 15 years and 20 years. Four expenses avoided, four consumptions of steel and other resources avoided. I get 36 MPG, plus or minus a few.

I don't know if that's lucky, but I think it's worked out very well.

I am, however, not rich.

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

#157

Post by replax »

vaksel wrote: post #10
freehunter wrote: post #4

WRT the top post there (as of right now), you have to be pretty lucky if driving a 20+ year old car is a net gain. Especially if you weren't the owner of that car for the majority of its life. Like with old codebases, there's a lot that can go wrong at any moment and be so difficult and expensive to maintain that it's worth it to just throw it out and get a certified pre-owned. Depends on the car, I guess, I ditched…

with cars you can just buy them used and sell them before they depreciate too much. Buy a 3 year old car, keep it for 1-2 years, then sell it. (if that's still too rich for your blood...get a 5 year old car and keep that for 2 years) Just look at the cars as the cost to own...not actual price you pay. So even if a car depreciates 20% in that time period, you can still drive something decent. A $10,000 used car...will…

While your calculation is correct, you do not include a rather important fact. Owning a car which you intend to sell in a couple years is a risk. Even though the cost of ownership of a $100k car and $40k car might not be much, it will turn out to be significant at the moment you crash it.

Which will then inevitably lose you the full value.

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

#159

Post by notphilatall »

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…

"3) ... There are plenty of parts of the country where you can earn a combined six figure income while spending less than $100/sqft for a home in a good neighborhood."

Where are these magical lands? I've lived in Atlanta and the SF Bay Area, and the salary difference between the two for engineers is around 30%, although house prices aren't much cheaper in the former - unless you want to live in the suburbs, and then you make up the difference in gas.

Medical specialists are tied to hospitals, some of which may be more affordable areas, but technologists (who this site arguably caters to) tend to be bound to tech hotspots, where house prices near $1MM don't raise eyebrows.

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

#160

Post by ajju »

notphilatall wrote: post #159
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…

"3) ... There are plenty of parts of the country where you can earn a combined six figure income while spending less than $100/sqft for a home in a good neighborhood." Where are these magical lands? I've lived in Atlanta and the SF Bay Area, and the salary difference between the two for engineers is around 30%, although house prices aren't much cheaper in the former - unless you want to live in the suburbs, and then…

Hmm..I think we went to Tech around the same time.

Regardless, prices in Atlanta suburbs are less than 1/3rd of the prices in the bay area - and I am talking about suburbs just outside 285 - like Dunwoody that are A $300K house in Dunwoody would easily cost more than $1MM in almost all of south bay.

There's no way you can make that difference up in gas - unless you go back and forth 5 times a day.

Having said that, your expected income in the bay area more than makes up for that difference if you are working in technology and entrepreneurial.

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