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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?

#181

Post by [deleted] »

larrys wrote: post #149
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…

"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 y…

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

#182

Post by hkarthik »

tedunangst wrote: post #140
hkarthik wrote: post #101

Earlier quoted context omitted.

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.

Point taken. Keeping a larger balance for investments does make sense.

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

#183

Post by hkarthik »

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…

If you talk about Urban living, the costs are universally high, and only get worse once you have a family.

Suburbs get a bad rap, but they are way more economical once you have kids. And not everyone has to commute. Plenty of us work from home or work in nearby Suburban office parks.

I live in Dallas where costs are similar to Atlanta. Living in the Bay Area would mean four times the cost for family friendly housing at maybe a 40% increase in salary.

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

#184

Post by lacker »

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…

Here's another source of data.

http://www.npr.org/blogs/money/2012/04/05/149997097/what-ame...

This shows that people spend more on each of transportation, housing, and food than they do on health care.

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

#185

Post by hippee-lee »

car wrote: post #104
hippee-lee wrote: post #62

Earlier quoted context omitted.

I haven't read the book but my wife and I started investing in our mid twenties and were blessed with generous matched contributions from our employer. We both maxed out the 401k contributions and (she) still does. We also do ROTH's as much as we can. She is into finance and 'manages' it by logging into the accounts 2x per year, looking at performance and making adjustments as needed. The growth in the past few years…

If you want to improve the returns on your 401k, a buddy of mine runs http://kivalia.com , where they provide advice on allocating the money to funds available in many companies 401k's. If your company is not listed, you can easily create a new plan (clever crowd-sourcing ;), which then gets optimized. You can also get feedback on your current allocations. HTH.

Cool site. I'll pass it along to my CFO.
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