my last response didn't post, so here's the link of an ordinary person doing it: It's the invest a little and wait a long time approach:
96-Year-Old Secretary Quietly Amasses Fortune, Then Donates $8.2 Million
https://www.nytimes.com/2018/05/06/nyregion/secretary-fortun...
How to get rich without getting lucky
451–460 of 527 posts
Re: How to get rich without getting lucky
#452Earlier quoted context omitted.
Thanks for the advice. How many new jobs have you taken in the last three years? I've had 8.
When I see a resume of someone who has had 8 jobs in 3 years I immediately think "liability". You won't deeply learn anything. You won't be able to think long term. I won't be able to give you an important project because you likely won't be around by the time it hits market and needs to be shepherded to success. Your job hopping is only going to work for so long. If I were you I would focus on building up your stayi…
7 years and $1 million saved so far.
I'm sure I'm doomed any day now.
Just a question: For your deep learning, long term thinking, and leading important projects, how much are you currently getting paid?
Re: How to get rich without getting lucky
#453Earlier quoted context omitted.
To live off of $30k/year, you only need $750k saved, not $1MM (@ 4% annual withdrawal rate).
Don't forget to include the percentage required to offset inflation. EDIT: Missed that this was for a fixed period of time - 30 years. But... what happens if you live more than 30 years past your retirement? It would really suck to retire on $750,000 (or $1M) savings at 45, and live to be 100.
Some research suggests that a 3.5% withdrawal rate will last basically forever.
See, e.g. https://www.kitces.com/blog/adjusting-safe-withdrawal-rates-...
Re: How to get rich without getting lucky
#454Earlier quoted context omitted.
This is a very important point because taxes affect decisions around money. For example, the ability to contribute to a 401k plan can defer $18,500 a year from taxes per person (more if over age 50, and more if there is a company match). For someone with a $130k gross, the employer having a 401k plan or not could affect the choice of which job they choose.
Only per person if you are are dual or multiple income. For some asinine reason 401k limits are not only very low, but don't take into account how many people are going to depend on that 401k.
In what world are 401k limits low? Between you and your employer, you can contribute up to $55.5k/yr to a 401k, more if you are over a certain age, I think it's 50.
Re: How to get rich without getting lucky
#455Earlier quoted context omitted.
That's right. For example, an expensive new car isn't much better than a 3 year old used one, and the difference is a big chunk of money to invest. (And also being able to invest money rather than spend it on the interest on car payments.)
This is a perfect example. I have had the same car for 6 years which I bought used and am hoping to squeeze another 5 out of it. Cars are one of those things I hate spending money on.
Don't forget to calculate the increasing maintenance cost, gas cost, and risk of using an older car.
Re: How to get rich without getting lucky
#456Earlier quoted context omitted.
You can learn car & auto repair & maintenance. As someone who knows a lot about car and motorcycle maintenance, repair, and modification, this is not good advice, and I see it all over. You're far better off simply buying a new, cheap compact and taking it to Walmart for oil changes. You will come out far ahead of the person who invests money in tools and space, and time into learning how to do something that is so e…
Care to actually back up this claim with some numbers? As someone who buys reliable used cars (Hondas), maintains them himself, and owns them for 10+ years at a time this doesn't seem to be true. For just the depreciation cost of a new vehicle one could purchase every home auto repair tool they would likely need for a very long time.
If you enjoy doing it, then it's a great incentive. If you do it because it saves money, then how else can you earn more money instead?
Re: How to get rich without getting lucky
#457Earlier quoted context omitted.
Counterpoint: Your chances of dying before "making it big" and retiring are somewhere in the 1-in-10 range. Investing works mostly because of the current trend of artificially propping up the stock market. Any failure in your investment strategy leave you in the same boat as the current boomer retirees who are trying to get back in the workforce. Not to mention, your life is going to be pretty miserable if you're wor…
The reality is you need to increase your top line earning power. Working for decades earning average compensation for your location will get you an average outcome (which means a late in life, short retirement, at best). You need to super charge your earnings and savings for a number of years. Ideally through doing higher value work, as opposed to simply working more hours. If you’re not making enough, and having fin…
The fastest rate of return in the public markets is betting on the contract market not holding stocks long term, imo.
Re: How to get rich without getting lucky
#458The highest probability for success for the 'everyday person': - Earn as much as you can from your own work. Take a 2nd job, change to a higher paying job, ask for more responsibility and a raise at your current job, go back to school for a more lucrative degree, ... - Spend much less than you earn. Economize, share an apartment, buy an inexpensive car, shop at Trader Joe's and Costco, .... - Learn how to invest. Thi…
Hmm... I’m still sitting here waiting for that “magic” of compounding interest to take effect. So often HN (and r/personalfinance) investment advice reminds me of the ol’ Draw the Rest of the Owl meme[1]. Just “do mutual funds” and you’ll one day be a millionaire because Compounding Interest. Ok well thanks to a few recessions, poor timing of grad school and bouts of unemployment, my retirement is not much more than…
Look into the options market. Especially in choppy markets you can make a lot of money.
Edit: To add to this instead of using the mutual funds as a store value and being scared of holding stocks, you can buy puts as protection on your stock. Or you can buy spreads on stocks you like.
Re: How to get rich without getting lucky
#459Earlier quoted context omitted.
Counterpoint: Your chances of dying before "making it big" and retiring are somewhere in the 1-in-10 range. Investing works mostly because of the current trend of artificially propping up the stock market. Any failure in your investment strategy leave you in the same boat as the current boomer retirees who are trying to get back in the workforce. Not to mention, your life is going to be pretty miserable if you're wor…
>Your chances of dying before "making it big" and retiring are somewhere in the 1-in-10 range. I'd like to see how you came to this conclusion. Painting with broad strokes, one can retire after working in tech for 15-25 years. Start at 25 and they are done by 50. Current death rates for dying between 25 and 50 are less than 0.7% [0]; that's not even correcting for the fact that the wealthy likely have a reduced morta…
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Re: How to get rich without getting lucky
#460The highest probability for success for the 'everyday person': - Earn as much as you can from your own work. Take a 2nd job, change to a higher paying job, ask for more responsibility and a raise at your current job, go back to school for a more lucrative degree, ... - Spend much less than you earn. Economize, share an apartment, buy an inexpensive car, shop at Trader Joe's and Costco, .... - Learn how to invest. Thi…
Counterpoint: Your chances of dying before "making it big" and retiring are somewhere in the 1-in-10 range. Investing works mostly because of the current trend of artificially propping up the stock market. Any failure in your investment strategy leave you in the same boat as the current boomer retirees who are trying to get back in the workforce. Not to mention, your life is going to be pretty miserable if you're wor…
Look at the S&P 500 for the last 100 years. Does it always recover. Your scenario is far out and would require the entire society to change. Might as well take advantage of the fact you know this information, if true.