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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?

#171

Post by Klinky »

jacoblyles wrote: post #166
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.

Yep! I completely agree. Making good choices is an (often) necessary but not sufficient condition for success. The rules of the universe are fuzzy and inexact! But if you spend a lot of time arguing that fate/bias determines a person's life, you are going to be less likely to invest the effort in making those good choices. Optimism and pessimism can infect a culture or an age. Lots more things are possible in ages of…

Lots of bad things can happen due to people being overly optimistic. In fact a lot of business blunders have been because people were all smiles while the ship sank. How about the housing crisis? "House prices will always go up!", "I will always make enough to pay off the mortgage I took out", "These securities will make your retirement portfolio/investment firm a lot of money!". You could also point to almost any financial scandal out there and find a bunch of overly optimistic sheep burying their head in the sand or being lead to slaughter. Those sheep who went astray were chastised or booted out.

Pessimism can breed anger and resentment which can eventually lead to changes/revolution. This can be a good or bad thing.

It's a balancing act really, but no one should chuck reality out the window so they can feel overly optimistic or overly pessimistic. That can be a struggle sometimes, depending on your life experiences, the current cultural climate and how much control you feel over your future.

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

#172

Post by replax »

fr0sty wrote: post #169
replax wrote: post #157

Earlier quoted context omitted.

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.

"Which will then inevitably lose you the full value." Not even close. Insurance will reimburse you for the loss (minus a deductable).

I have to admit that I don't know about the situation in the US, but in Europe you generally will not get your full car reimbursed if you drive it against a wall. Unless you have some disgustingly expensive car insurance of course...

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

#173

Post by AutoCorrect »

michaelhoney wrote: post #161
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…

You do understand that taxes are how we pay for the good things, right?

no, it's how government employees pay for the good things, and modify your behavior to match their preconceptions of how you should behave

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

#174

Post by ajross »

yogrish wrote: post #152
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…

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.

Of course it is. The point was to provide some perspective on the cost of taxes, not to put an accounting value on my kids.

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

#175

Post by kbolino »

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?

You're comparing apples to oranges.

The loss of income for 6 months was 1-2% of his lifetime earnings. I strongly doubt that 6 months of taxes will account for >2% of his lifetime earnings.

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

#176

Post by jaxn »

rprasad wrote: post #103
jaxn wrote: post #18

Earlier quoted context omitted.

That is crazy talk. The rate for small businesses as a whole is around 50% failure within the first 5 years. There are exceptions to that rule and ways to increase the odds. As an example, 90% of franchise businesses are still running after 5 years.

Jaxn's data isn't anecdotal -- those numbers were reported in the WSJ earlier this year in an article on franchising.

That's true. They are also in my deck ;)

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

#177

Post by tmh88j »

gnosis wrote: post #147
tmh88j wrote: post #30

Earlier quoted context omitted.

>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?

>Is the life of a "mature" individual necessarily more worth

No, but a mature individual is more likely to make rational decisions leading to achievement of their goals.

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

#178

Post by sliverstorm »

gjm11 wrote: post #170
sliverstorm wrote: post #117

Earlier quoted context omitted.

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…

That "retirement, mortgage and rainy day fund" could very reasonably be more than $1M. Especially as the $1M figure here includes your home, which isn't something you can extract an income stream from without grave risk. (Back of envelope: Suppose you reckon you can safely spend 5% of your initial retirement fund per year, without running out before you die. And suppose you want $50k for medical emergencies, because…

Ok, I agree if we include the house in the figure.

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

#179

Post by nooneelse »

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.

> "However, the system will never make you rich."

Never? What about inheritance and social/family connections into lucrative jobs and investment opportunities? Those parts of 'the system' seem like they contribute the major part to some people's success and wealth. I suppose one could say something like "well, the person made the good choice to take the inheritance or opportunity on the silver platter before them". But that would seem to make the term "good choices" a bit vacuous, imho, as an account of what a person should do to become rich.

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

#180

Post by ckpwong »

Net worth of $1m is hardly "rich" in my definition, since it's not sufficient for most of first-world population to retire on. Heck, that 2500 sq ft down the road was listed for $700k and had multiple offers, and my neighbourhood isn't even considered "rich" (perhaps middle- to upper-middle class).

Net worth of $1m quite easily achievable by 50 with two middle class income, not being a spendrift, and not being a bonehead in investing. (For the record, trading stocks too actively is usually a bonehead move, so is putting all savings in CD's.)

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