How I got wealthy without working too hard • Hacker News Board

Re: How I got wealthy without working too hard

#251

Post by bluecalm » Thu, Nov 18, 2021, 6:38 PM UTC

claudiulodro wrote: post #199

bluecalm wrote: post #111

Earlier quoted context omitted.

There are many other things you need other then hard work or luck. For example if you work very hard as an elementary school teacher no amount of luck will make you a millionaire. I think there is a lot of skill involved in getting into spots where you are even exposed to the opportunity and then you need luck but maybe less then you think as there are so many opportunities around it would be just very unlucky to not…

Interestingly, Ramsey Solutions' study of 10,000 millionaires found that teacher is actually one of the top 5 careers for millionaires: https://www.ramseysolutions.com/retirement/the-national-stud... (Disclaimer: there may be confounding variables the study didn't account for)

That is very interesting but I hard time believing that includes many elementary school teachers who didn't switch careers at some point. It would be interesting to see some details on it.

Re: How I got wealthy without working too hard

#252

Post by PaulDavisThe1st » Thu, Nov 18, 2021, 6:40 PM UTC

gnicholas wrote: post #240

nostrademons wrote: post #209

Earlier quoted context omitted.

$40K is more than the median personal income in the U.S ($35K as of 2019). Plenty of people would consider $40K/year without having to work wealthy. Even in VHCOL areas, $40K/year is fine if you own your own home and your kids are out of childcare years. VHCOL areas are typically VHCOL because of housing prices and their effect on service-provider wagss. If you take them out of the equation and only need to pay for f…

> Even in VHCOL areas, $40K/year is fine if you own your own home and your kids are out of childcare years. Are you considering "childcare years" to include college? Also, in CA/IL/NJ you could easily spend $15k/yr in property taxes alone. That would leave $25k for everything else. Lastly, the average price of a new car sold in the US is $40k. You can buy used, sure, but these days even those are getting more expensi…

So fine, US$40k/yr isn't comfortable living in some places. But it's very comfortable living (given the lack of any need to do paid work) in many others. Context is everything. If you really must live in an expensive part of the USA, then $1M in the bank is not going to cut it.

Re: How I got wealthy without working too hard

#253

Post by prirun » Thu, Nov 18, 2021, 6:40 PM UTC

ixacto wrote: post #220

PragmaticPulp wrote: post #129

Earlier quoted context omitted.

> Why do you think that? All the numbers work out. Even in your hypothetical scenario, investing 100k for 7 years, especially in the last 7 years, would easily bring you 1M total investments. My point was that to show that the only way to get this to work out was to make everything work out perfectly, from getting the authors highest quoted day rate of $1000/day on every single day of every single contract from the s…

Get done with college at 22, work 7 years and retire at the age of 29. This is not impossible. Just most people don't want to do it, but it's totally available.

And "don't have kids". Children are a huge time & money suck. Not saying they don't have their rewards too, because they do, but they are also a huge cost.

Re: How I got wealthy without working too hard

#254

Post by b20000 » Thu, Nov 18, 2021, 6:40 PM UTC

csdvrx wrote: post #124

b20000 wrote: post #54

Earlier quoted context omitted.

i have the impression the max contracting rate is 175/hr. when you ask for more, “HR says they never seen such high rates”… that doesn’t leave you with much in california. and i think that once you move to a cheaper place you cannot demand that rate. so how can you increase your rate as a software engineering contractor?

> “HR says they never seen such high rates” The company isn't desperate enough! When SHTF, other concerns take precedence. Like if they have a deadline they can't hold, or a problem that has been messed up before. > so how can you increase your rate as a software engineering contractor? Increase steadily every year, to select companies that value your rare skillset. If you are asked at inconvenient times, practice su…

thanks. when I was thinking of higher rates, I meant 400-500/hr, sustained, basically working full time for a client or half time for 2 clients each. your full refund clause sounds interesting. has that helped win clients over who would otherwise not have brought you in?

Re: How I got wealthy without working too hard

#255

Post by PaulDavisThe1st » Thu, Nov 18, 2021, 6:41 PM UTC

marktangotango wrote: post #110

jacobmischka wrote: post #84

Earlier quoted context omitted.

I absolutely can and will call $1M wealthy. Anyone who thinks it isn't is absolutely living in a bubble.

I once shared this outlook, but when one considers their own ideas about the lifestyle "wealthy" entails, and run some numbers, specifically determine the annual spend for that lifestyle, one will quickly realize the truth. A million can be blown in a year, or SWR'd (safe withdrawal rate) at $40k a year indefinitely. Can you retire on $40k a year? Would you want that level of income and lifestyle? Of course this depe…

$40k/yr on $1M is a 4% rate of return. Where are you seeing a guaranteed rate of 4% at this time?

Re: How I got wealthy without working too hard

#256

Post by moonchrome » Thu, Nov 18, 2021, 6:43 PM UTC

PragmaticPulp wrote: post #68

moonchrome wrote: post #57

Earlier quoted context omitted.

> But contractor income is not comparable to normal career income because you have to handle additional taxes and health insurance, so this is more like a $150K (plus or minus) full time job once you subtract self-employment taxes and pay for health insurance. What ? I've never heard of a scenario where you get less money after tax as a contractor vs employee, even without doing things like claiming a bunch of everyd…

> What ? I've never heard of a scenario where you get less money after tax as a contractor vs employee It’s called self-employment tax: https://smartasset.com/taxes/self-employment-tax It’s not actually a separate tax. Normally your employer pays these taxes but you don’t see it. When you are a contractor you are self-employed, so as an employer of yourself you have to pay these taxes like any other employer. Some pe…

>It’s one of those tax tricks that works as long as nobody ever looks to closely at your tax returns, but if you’re caught you have to pay it back plus penalties.

How is that a tax trick ? Pretty much anyone owning a company pays himself a tax minimum and extracts the rest through profits, etc.

Re: How I got wealthy without working too hard

#257

Post by PaulDavisThe1st » Thu, Nov 18, 2021, 6:45 PM UTC

lkbm wrote: post #237

marktangotango wrote: post #110

Earlier quoted context omitted.

I once shared this outlook, but when one considers their own ideas about the lifestyle "wealthy" entails, and run some numbers, specifically determine the annual spend for that lifestyle, one will quickly realize the truth. A million can be blown in a year, or SWR'd (safe withdrawal rate) at $40k a year indefinitely. Can you retire on $40k a year? Would you want that level of income and lifestyle? Of course this depe…

TL;DR: $40k/year in exchange for working full time = not wealthy. $40k/year without having to work = wealthy. I consider $40k/year pretty good, and definitely enough for me to live comfortably on here in Austin TX (Source: I've lived here for 13 years now, and I'm only just now getting close to spending+taxes [retirement+charity excluded] exceeding $40k as I've started spending more liberally.) I've got friends here…

I agree with everything you wrote here except this:

> However, having enough money in savings that you get $40k/year without having to work is something else entirely. A 65-year-old with that nest egg is borderline-wealthy. A 40-year-old with that level of savings is solidly wealthy.

Why the difference? The 65 year old is going to be able to actually draw down some of the nest egg much sooner than the 40 year old. The 40 year old will be 65 some day. Could you explain what you mean? Is it just that the 40 year may still earn/save even more money, despite not actually needing to?

Re: How I got wealthy without working too hard

#258

Post by nostrademons » Thu, Nov 18, 2021, 6:45 PM UTC

gnicholas wrote: post #240

nostrademons wrote: post #209

Earlier quoted context omitted.

$40K is more than the median personal income in the U.S ($35K as of 2019). Plenty of people would consider $40K/year without having to work wealthy. Even in VHCOL areas, $40K/year is fine if you own your own home and your kids are out of childcare years. VHCOL areas are typically VHCOL because of housing prices and their effect on service-provider wagss. If you take them out of the equation and only need to pay for f…

> Even in VHCOL areas, $40K/year is fine if you own your own home and your kids are out of childcare years. Are you considering "childcare years" to include college? Also, in CA/IL/NJ you could easily spend $15k/yr in property taxes alone. That would leave $25k for everything else. Lastly, the average price of a new car sold in the US is $40k. You can buy used, sure, but these days even those are getting more expensi…

"Are you considering "childcare years" to include college?"

Somewhat. Personally I think college will be obsolete by the time kids today reach college age. It was a bubble in the early 2000s when I graduated (a significant number of my classmates did not get jobs that make back the debt they took out for it), it's certainly a bubble now, and I think the bubble will have burst in 18 years and people will realize that it's stupid to go to college.

But even if you don't believe quite so extreme predictions - the advantage of thinking in balance-sheet terms is that you set aside funds for these expenses and let them compound until you need it. I just ran a NPV calculation on 4 years of college @ $37K/year starting in 18 years with a 7% discount rate, and it's about $40K. [Note that the effect of inflation on this applies to both college tuition and the discount rate; 7% is average real (after inflation) returns to stocks, but if college tuition rises faster than inflation (say an extra 3%, which is consistent with the last 2 decades), you'd subtract that from the discount rate, and the number comes out to about $70K.] So you'd set aside an extra $40K per child when you retire, target $1.08M instead of $1M, and then you have your kids' college funds.

"Also, in CA/IL/NJ you could easily spend $15k/yr in property taxes alone."

Yup property taxes in VHCOL areas are a big issue. The math still works out though - if you take the budget yupper32 posted down-thread and subtract out taxes and rent, you're spending $1570/month on necessities and have about $1800/month for everything else, more than enough for property taxes. Or just don't live in CA/IL/NJ.

"Lastly, the average price of a new car sold in the US is $40k."

Amortized over 10 years, that's $4K/year or about $333/month, probably a little less because of time-valued discounting. That's already in the budget below - they list $300/month as car payment.

Re: How I got wealthy without working too hard

#259

Post by TedDoesntTalk » Thu, Nov 18, 2021, 6:49 PM UTC

yoyohello13 wrote: post #49

shiftpgdn wrote: post #29

Earlier quoted context omitted.

The biggest reality check in my life was working at an engineering firm with a bunch of near retirement baby boomers with no children. They all came across ass listless, unhappy, and living a life with no greater purpose. It was unquestionably one of the ugliest things I have ever seen. As you get older and friends drift and pass away family is one of the most important things in life. I know anti-natalism is hip rig…

I think this is dependent on the people. I’ve also seen many couples who couldn’t have kids that have very fulfilling lives. They volunteer, are active in and well liked by the community. I think meaning can come from many places. Kids are an almost guaranteed source but you can find meaning without children if you look for it. This might just be wishful thinking on my part since I’m unable to have kids, but I’d like…

I had a great uncle and aunt who could not have children. They lived to their mid/late 80s. They were definitely not living a life without meaning. It definitely is possible. I saw it.

Re: How I got wealthy without working too hard

#260

Post by stagger87 » Thu, Nov 18, 2021, 6:49 PM UTC

PragmaticPulp wrote: post #129

stagger87 wrote: post #70

Earlier quoted context omitted.

> So there’s a lot missing from this blog post. I suspect maybe the author got lucky with some outlier investments, but that’s not something that can be conveyed in a “how to” blog post. Why do you think that? All the numbers work out. Even in your hypothetical scenario, investing 100k for 7 years, especially in the last 7 years, would easily bring you 1M total investments. > FIRE type wealth trajectories are possibl…

> Why do you think that? All the numbers work out. Even in your hypothetical scenario, investing 100k for 7 years, especially in the last 7 years, would easily bring you 1M total investments. My point was that to show that the only way to get this to work out was to make everything work out perfectly, from getting the authors highest quoted day rate of $1000/day on every single day of every single contract from the s…

I see what you are saying. Yes, lots of assumptions and luck to get to this position to be able to do this for 7 years. Totally agreed.