asdfg34 wrote:
No, he gave advice for being comfortably middle while living like a college student for your entire life. NOT what I asked for.
Quit worrying about it. With your attitude you will never be wealthy. Just accept being broke and enjoy it.
NEVER, EVER buy avocado toast*
(* might apply only to Millennials seeking to become homeowners)
I was not a fan of this book.
Just seemed to be a collection of anecdotes about a guy who saved a few dollars here and there. It all reads like "instead of paying $100 for a new tire, buy a used one for $50 and pocket the savings."
Well, economic choices are always a trade-off. Hunting around for that used tire, getting it installed, etc may wind up being more expensive than the new.
Here's a common one: "instead of paying $5 for your Starbucks every morning . . . "
But that purchase isn't all that bad. Perhaps that purchase gets you up and out every day. Maybe you meet people (or enjoy life) by doing so versus mixing a cup in your home. Maybe it gives you the chance to meet someone to discuss the world around, possibly netting you a better opportunity.
The general principles of The Millionaire Next Door (and Dave Ramsey) are solid. People tend to equate them with never having fun, or never spending any money, but that's not correct.
I'm 36, married with two kids. We follow the Ramsey baby steps. We've paid off all debt, except our house, and have an emergency fund equal to 6 months of expenses. Every month, we save 10% of our income for retirement, and are fully funding our kids' 529 plans. We still have extra money, and use it for fun. The key is that we budget those activities (including vacations), and pay for them in full. We put anything extra toward our mortgage principal. No one would mistake us for living like college students. We are well on our way to becoming millionaires, and I suspect we'll be there by the time I'm in my early 40s.
Make a budget and stick to it. Budget for "quality of life" things, but not at the expense of getting out of debt. You'll have so much more money for fun if you're not paying banks a big chunk of your income every month.
Runners Coach wrote:
9. Pay cash for everything (ie. leave your credit cards at home
That's stupid. It should be:
Get the best cash back/rewards credit card you can get and put everything on that. Pay it off in full each month and cash in on all the rewards.
Honest answer? It is for all intents and purposes impossible to become truly wealthy prior to the traditional retirement years in one generation. There are a few paths - namely wining the founder lottery in Silicon Valley, breaking into high finance, or surviving a couple decades in Biglaw, MBB consulting, or similar - but these are viable only for a vanishingly small number of people born/living in the right places (SF, NYC, etc.), with IQs well above average, and the necessary parental support system in place to pursue such opportunities.
I know that on this board you'll get a lot of "Millionaire Next Door bro" type responses. However, in my experience the Millionaire Next Door is largely bulls&*!. Yes, the great majority of millionaires in the US are just normal people who saved over a long period of time. They are also almost all retirees living on the coast who bought homes in the 70s, and who have paid off their mortgages, but who also have very little in the way of truly liquid assets. My parents are these kinds of people. They own a home on the water a hour or so outside of NYC worth a bit over a million dollars outright. Outside of the equity in their home, their net worth is on the order of $50K. The house is nothing fancy, just a simple 3 bed 2 bath built in 1974 that is in a semi-neglected state because they can't afford to maintain it properly. My wife and I send the $1K a month to cover basic living expenses. They're millionaires technically, but no one would call them rich/wealthy based on their lifestyle. This is your typical "millionaire next door". They are not the same people you see driving their new Porsche to the country club. Not saying you shouldn't follow the books advice - it is good advice - but be aware that it is not the path to a baller lifestyle in your 40s/50s and beyond.
My advice, give up on becoming rich and focus on being happy. Build a career you find rewarding that is sufficiently remunerative to support yourself / you family while building some savings. Spend time with your kids, and over time use some of your savings to give them a secure financial platform for their careers. If you can get them started without tons of student loan debt, some down payment assistance for their first home, and a good head on their shoulders, maybe they will be your family's first wealthy generation.
are we all going to ignore the fact that the op said he could double his salary in a year if he actually worked at it but instead chooses not to?
actual talent wrote:
Runners Coach wrote:9. Pay cash for everything (ie. leave your credit cards at home
That's stupid. It should be:
Get the best cash back/rewards credit card you can get and put everything on that. Pay it off in full each month and cash in on all the rewards.
I also use cc for everything and always pay it off every month, but I think the advice is solid for loads of people who do not have the discipline to control cc spending to the extend they can pay it off every month. The extent of cc debt is astonishing. If you pay with cash you cannot run up debt on a cc, obviously.
crazy bag lady wrote:
are we all going to ignore the fact that the op said he could double his salary in a year if he actually worked at it but instead chooses not to?
LOL. Good shout.
actual talent wrote:
Runners Coach wrote:9. Pay cash for everything (ie. leave your credit cards at home
That's stupid. It should be:
Get the best cash back/rewards credit card you can get and put everything on that. Pay it off in full each month and cash in on all the rewards.
the benefit of cash is that you spend less. When people pay with credit cards they spend far more than the 1% they might get back from rewards programs.
On my way wrote:
The general principles of The Millionaire Next Door (and Dave Ramsey) are solid. People tend to equate them with never having fun, or never spending any money, but that's not correct.
I'm 36, married with two kids. We follow the Ramsey baby steps. We've paid off all debt, except our house, and have an emergency fund equal to 6 months of expenses. Every month, we save 10% of our income for retirement, and are fully funding our kids' 529 plans. We still have extra money, and use it for fun. The key is that we budget those activities (including vacations), and pay for them in full. We put anything extra toward our mortgage principal. No one would mistake us for living like college students. We are well on our way to becoming millionaires, and I suspect we'll be there by the time I'm in my early 40s.
Make a budget and stick to it. Budget for "quality of life" things, but not at the expense of getting out of debt. You'll have so much more money for fun if you're not paying banks a big chunk of your income every month.
i'm a few years ahead on you but on the same plan. and it can work. a great recent bull market sure hasn't hurt.
i'm mid-40s, only debt mortgage, 1.5M in 401k/IRA/stock. 529 pretty flush. some extra property rental. etc. all in at 2M net assets now.
i don't though pour extra savings into mortgage. why? my mortgage is like 3.2%. i am killing that in the market. so i pour any extra into a S&P500ETF. IMHO.
keep up the good work.
actual talent wrote:
Runners Coach wrote:9. Pay cash for everything (ie. leave your credit cards at home
That's stupid. It should be:
Get the best cash back/rewards credit card you can get and put everything on that. Pay it off in full each month and cash in on all the rewards.
I've gotten free flights and hotel rooms by doing this...
Common Cents wrote:
actual talent wrote:That's stupid. It should be:
Get the best cash back/rewards credit card you can get and put everything on that. Pay it off in full each month and cash in on all the rewards.
I've gotten free flights and hotel rooms by doing this...
flew and stayed in europe for the whole family TWICE on points....
Getting Old wrote:
Honest answer? It is for all intents and purposes impossible to become truly wealthy prior to the traditional retirement years in one generation. There are a few paths - namely wining the founder lottery in Silicon Valley, breaking into high finance, or surviving a couple decades in Biglaw, MBB consulting, or similar - but these are viable only for a vanishingly small number of people born/living in the right places (SF, NYC, etc.), with IQs well above average, and the necessary parental support system in place to pursue such opportunities.
I know that on this board you'll get a lot of "Millionaire Next Door bro" type responses. However, in my experience the Millionaire Next Door is largely bulls&*!. Yes, the great majority of millionaires in the US are just normal people who saved over a long period of time. They are also almost all retirees living on the coast who bought homes in the 70s, and who have paid off their mortgages, but who also have very little in the way of truly liquid assets. My parents are these kinds of people. They own a home on the water a hour or so outside of NYC worth a bit over a million dollars outright. Outside of the equity in their home, their net worth is on the order of $50K. The house is nothing fancy, just a simple 3 bed 2 bath built in 1974 that is in a semi-neglected state because they can't afford to maintain it properly. My wife and I send the $1K a month to cover basic living expenses. They're millionaires technically, but no one would call them rich/wealthy based on their lifestyle. This is your typical "millionaire next door". They are not the same people you see driving their new Porsche to the country club. Not saying you shouldn't follow the books advice - it is good advice - but be aware that it is not the path to a baller lifestyle in your 40s/50s and beyond.
My advice, give up on becoming rich and focus on being happy. Build a career you find rewarding that is sufficiently remunerative to support yourself / you family while building some savings. Spend time with your kids, and over time use some of your savings to give them a secure financial platform for their careers. If you can get them started without tons of student loan debt, some down payment assistance for their first home, and a good head on their shoulders, maybe they will be your family's first wealthy generation.
Biglaw is TTT. MBB >>> Biglaw, HTFH
the German inquisition wrote:
Find a family that does have money. Marry into it. Go gay if you have to.
Ha! Post of the day! Nice job.
asdfg34 wrote:
jamoptimist wrote:Would a job paying 10X as much help? If so, get one.
700K jobs aren't exactly plentiful (maybe a few dozen openings in the country for this level at any given time) and are incredibly competitive, incredibly random in terms of who gets them and tend to burn people out very fast.
If I killed myself for a year with learning new skills, networking, etc I'd still probably only be able to crack 150k.
Not random at all. For 99% it's not what you know but who you know.
C.O. Jones wrote:
I was not a fan of this book.
Just seemed to be a collection of anecdotes about a guy who saved a few dollars here and there. It all reads like "instead of paying $100 for a new tire, buy a used one for $50 and pocket the savings."
Well, economic choices are always a trade-off. Hunting around for that used tire, getting it installed, etc may wind up being more expensive than the new.
Here's a common one: "instead of paying $5 for your Starbucks every morning . . . "
But that purchase isn't all that bad. Perhaps that purchase gets you up and out every day. Maybe you meet people (or enjoy life) by doing so versus mixing a cup in your home. Maybe it gives you the chance to meet someone to discuss the world around, possibly netting you a better opportunity.
Do recognize that you are making excuses. You can nit pick individual things...the point is to spend less where it makes sense to, and a little sacrifice never hurt anyone.
Sell stuff that's made by someone else.
My brother tried to get rich, failed horribly, went into six-figure debt, but ended up marrying a rich girl, helping her improve the family business and now they are debt free and making hundreds of thousands per year.
So yea, marry into wealth.
But really, if you aren't wealthy and want to become wealthy, it will take some sort of sacrifice. Whether it is time with your family or current set of friends, hobbies, vacations, excess spending, general leisure activities, running message boards, you will have to sacrifice something.
And the general methods to become wealthy aren't that complex. You will have to work hard and have some luck. Just google "how to get rich" and you will have all the general methods in the first page of results.
Basically get lucky. One of the biggest mortgage lenders in my area is a complete dipsh!t, but got started in that business the first time rates went to historic lows. I think it was in the mid-2000's. He made enough money from that to start his own mortgage lending company, and basically hired a bunch of his friends that couldn't get good jobs. Still doing it, and making a ton of cash.
Another friend who is also a dipshit, but a really nice guy, started doing realty in very expensive areas of California. I don't know that he's wealthy, but he's closing about $5M in homes per month, and I assume taking his 2.8% commission on all those sales, which would mean he's clearing about $140k per month, or $1.68M per year.
Last two friends started in real estate development at the perfect time. Started with a single home that they bought for $250k together. At that time, lending was easy to come by, so they got another loan to remodel the heck out of it, and ended up selling it for $550k. Took that profit and bought a bigger place, and sold their 2nd project for $1.5M. They did most of the work themselves on those first two houses. Worked their asses off. But by the time they sold that second house, I think they had something like $500k in profit. Fast forward a couple years, and investors were coming to them to build 200 condos in ski towns, apartments buildings all over the country, custom $3M homes, etc. The last project they told me about, they bought a $14M building.
I think one other poster said he started flipping homes and acquiring rentals. It's a great way to get started. Especially in a college town. Rent demand doesn't go down in college towns. In a recession, the value of the property might go down, but not the rent. You just ride through the recession collecting your rent checks.
In fact, the two real estate developers do a lot of projects for a guy that got started doing that. He owns whole apartment complexes now, and he just got divorced and it came out that he was making $250k per month in rental income.