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Ask HN: Are you a millionaire? If so, how'd you get there?

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Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#61

Post by ridiculousgame »

I'm naturally very frugal - prefer to have housemates, don't own/want a car, rarely eat out, have cheap hobbies. I was lucky enough to land a good software dev job at a big tech company right after college - high-five-figure salary plus a good chunk of stock. Saved/invested everything I didn't spend, for a savings rate well above 80%. Investments were mostly Vanguard index funds, nothing special.

High income plus low spending adds up fast. I "retired" (to work on my own unprofitable projects instead) around age 30 with about $700k invested. It's grown steadily since I stopped working, and very recently hit $1m.

If you're interested in this sort of approach, The Millionaire Next Door, the Mr. Money Mustache blog, and /r/financialindependence are good reads.

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#62

Post by subatomic »

leifaffles wrote: post #15

Here are some things that help: * Frugality: deeply understanding the things that bring you satisfaction and skipping the rest * Aggressively saving and investing money * Building a mastery in personal finance But becoming a millionaire isn't a math problem. Most people on here are capable of doing so many times over without any great career home run. However, achieving such a milestone will require you to (on an ong…

> However, achieving such a milestone will require you to (on an ongoing basis) look deeply inwards, answer fundamental questions about yourself, and change your life.

> most people haven't even figured out what they want and so they default to mainstream consumerism

Not everyone defaults to mainstream consumerism. Some of us just don't understand and cannot comprehend why others are such consumers. Keeping up with the Joneses? Why?

For my family at least, we require no deep inward analysis, fundamental questions about ourselves or changing of our lives. To sum up: this is just how we are.

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#63

Post by hota_mazi »

leifaffles wrote: post #59
hota_mazi wrote: post #55

Earlier quoted context omitted.

> Also, debt is bad. Debt is the ultimate "blue pill". Nonsense. Debt managed carefully is exactly how you join the million dollar club. Twenty years ago, my grandfather told me that he had never been in debt, ever. He always paid cash. Always. He was strangely proud of this. My immediate reaction, even though I barely knew anything about finances: "Well, that sounds like a dumb, dogmatic principle to follow". A few…

Everything you say is 100% factual. (Except the part about how debt is "how you get rich") And yet, I'd wager than 90% of people who attempt to replicate your success story would wind up worse off for having tried it. The problem is that it comes with a huge risk of screwing with your head. And it's very difficult to detect and correct when this is happening. I've had my success stories playing games with debt too. G…

Agreed.

"Carefully managing debt" can be summed up as one single principle: be aware of deadlines.

It's ok to use a credit card as long as you know the deadline to pay it in full and you do so diligently in order to avoid insane interest rates. If you can pull this off, you can actually earn money with credit and debt (e.g. rolling credit card over new credit card with 0% interest, over and over). Just make sure you don't miss any of the deadlines.

Same goes for my little anecdote above: it works great if you're aware of simple deadlines (how long I needed these $30k to be in the account) and elementary level math to compare 1.5% and 3%.

I used to think everyone should be able to handle this simple math approach but if the US population is any indication, I am dead wrong.

Debt is good. Don't be afraid of it: tame it and you'll start earning easy money.

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#64

Post by forthefuture »

hota_mazi wrote: post #55
leifaffles wrote: post #45

Earlier quoted context omitted.

Also, debt is bad. Debt is the ultimate "blue pill". Ignoring the obvious issues with compound interest in reverse, the far more consequential problem is that it fucks with your head in ways that normally require CIA-style brainwashing and mind control. Debt justifies and rewards your worst impulses, encourages poor, short-term decision making, and alters your frame of reference to a degree that even the smartest, mo…

> Also, debt is bad. Debt is the ultimate "blue pill". Nonsense. Debt managed carefully is exactly how you join the million dollar club. Twenty years ago, my grandfather told me that he had never been in debt, ever. He always paid cash. Always. He was strangely proud of this. My immediate reaction, even though I barely knew anything about finances: "Well, that sounds like a dumb, dogmatic principle to follow". A few…

Are those numbers ball parked or just for example?

The average car loan has a 4% interest rate[1], and the average bank gives a paltry 0.06% interest rate[2].

I agree that if you can make a higher return investment than the rate on your debt, that's certainly profitable. I just disagree that it can be done so passively, at least today.

[1] https://www.valuepenguin.com/auto-loans/average-auto-loan-in...

[2] https://www.valuepenguin.com/banking/average-bank-interest-r...

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#65

Post by mcgoo »

hota_mazi wrote: post #63
leifaffles wrote: post #59

Earlier quoted context omitted.

Everything you say is 100% factual. (Except the part about how debt is "how you get rich") And yet, I'd wager than 90% of people who attempt to replicate your success story would wind up worse off for having tried it. The problem is that it comes with a huge risk of screwing with your head. And it's very difficult to detect and correct when this is happening. I've had my success stories playing games with debt too. G…

Agreed. "Carefully managing debt" can be summed up as one single principle: be aware of deadlines. It's ok to use a credit card as long as you know the deadline to pay it in full and you do so diligently in order to avoid insane interest rates. If you can pull this off, you can actually earn money with credit and debt (e.g. rolling credit card over new credit card with 0% interest, over and over). Just make sure you…

You have to pay income tax on the 3% though right? Do you get a tax credit for the interest on the loan?

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#66

Post by simonsarris »

forthefuture wrote: post #64
hota_mazi wrote: post #55

Earlier quoted context omitted.

> Also, debt is bad. Debt is the ultimate "blue pill". Nonsense. Debt managed carefully is exactly how you join the million dollar club. Twenty years ago, my grandfather told me that he had never been in debt, ever. He always paid cash. Always. He was strangely proud of this. My immediate reaction, even though I barely knew anything about finances: "Well, that sounds like a dumb, dogmatic principle to follow". A few…

Are those numbers ball parked or just for example? The average car loan has a 4% interest rate[1], and the average bank gives a paltry 0.06% interest rate[2]. I agree that if you can make a higher return investment than the rate on your debt, that's certainly profitable. I just disagree that it can be done so passively, at least today. [1] https://www.valuepenguin.com/auto-loans/average-auto-loan-in... [2] https://ww…

When I bought a car in 2014 I got a 0.69% interest rate from USAA and kept the "car cash" in Target stock (see the dividend) instead. It worked out nicely.

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#67

Post by leifaffles »

hota_mazi wrote: post #63
leifaffles wrote: post #59

Earlier quoted context omitted.

Everything you say is 100% factual. (Except the part about how debt is "how you get rich") And yet, I'd wager than 90% of people who attempt to replicate your success story would wind up worse off for having tried it. The problem is that it comes with a huge risk of screwing with your head. And it's very difficult to detect and correct when this is happening. I've had my success stories playing games with debt too. G…

Agreed. "Carefully managing debt" can be summed up as one single principle: be aware of deadlines. It's ok to use a credit card as long as you know the deadline to pay it in full and you do so diligently in order to avoid insane interest rates. If you can pull this off, you can actually earn money with credit and debt (e.g. rolling credit card over new credit card with 0% interest, over and over). Just make sure you…

I still don't think you're appreciating or demonstrating an understanding of how debt affects people's thinking and behavior.

I have dozens of friends and family who are in the top 5% of the US population in terms of math skills who have all tried to play "smart" games with debt and come out as big losers as they continued to play. I'm talking software engineers, dentists, doctors, pharmacists, tenured math professors, and so on.

The problem is not math skills. The problem is not managing deadlines. The problem is that these people are human and are not immune to the pernicious effects of debt. Even you. Even me.

Here are some things you haven't considered or acknowledged:

* How debt influences the choices we make. Would you have bought such an expensive car if you had to pay cash? Statistically, the answer is no. If forced to use cash, might you have opted to buy a less expensive used car? Are you sure you didn't buy thousands of dollars more car in order to "save" a few hundred bucks?

* How managing debt takes over space in our minds. What could you be if you could free up mental capacity for other things?

* How debt warps our perspective and plays to our human weaknesses and short-term desires. Are you sure you're coming out ahead? How do you know?

You can't run an A/B test on yourself, but you can open your eyes and take a look around. It's not pretty out there.

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#68

Post by stolk »

Madmallard wrote: post #33
stolk wrote: post #18

Mobile games, iOS in 2010, later on Android. Spent it on expensive RE though, so no longer in chequeing account.

Do you think this is still possible or is the market totally oversatured at this point?

Well, even if it is not impossible today, the likelihood of making it big approaches zero.

In 2010, people were hungry for iOS games, but the supply of quality games was limited. There were few people who were able to write good OpenGL ES2 apps. Now, there is the Unity engine and others.

For several years now, the market has been saturated. Years ago, I already saw a 1000 new games per week in Apple's iOS store. I suspect this number is larger now.

The one-man app-store hit days are over.

Also... Apple no longer gives you free visibility in "new releases." Worse... it makes you bid on the search results (!!!!)

Re: Ask HN: Are you a millionaire? If so, how'd you get there?

#69

Post by aoeusnth1 »

petilon wrote: post #22

Save $1500 per month, invest in index funds, such as QQQ. If you are lucky and your investments grow 15% every year then in 15 years you will be a millionaire. More realistically, if you assume 9% growth then in 20 years you will be a millionaire. Use this compound interest calculator to run your own simulations: https://www.investor.gov/additional-resources/free-financial...

"Past returns are not predictive of future gains." After taxes, im pretty sure you'd be lucky to get 5% amortized yearly returns.
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