4 ms·

Turns out, earning half a million dollars every year makes it easy to be a millionaire after a few years.

by pyrale 5y ago

sneak 5y ago
Your flip comment seems to belie the fact that he's only earned at least a half a million dollars for one year. Most of his years he earned substantially less than that. The majority of his NW comes from investment and savings, not income. The point of the article is that cutting expenses, saving, investing wisely, and aggressively pursuing pay raises can yield a few million well before retirement age. These sort of casual dismissals negate the educational value of the post.
- lbacaj 5y ago
  Not to mention, he was also living in expensive areas. It’s amazing he saved and invested that much.
- ZephyrBlu 5y ago
  > The point of the article is that cutting expenses, saving, investing wisely, and aggressively pursuing pay raises can yield a few million well before retirement age Most people will have nowhere near the same results as the author by implementing these things. The biggest factors here are: 1) Earn a lot of money 2) Don't spend it all I don't think this post has much educational value at all because I think most people already understand those points, they just can't execute on them in a meaningful way.
  - whimsicalism 5y ago
    I would never make assumptions banking on "most people understanding" anything.
    - Aeolun 5y ago
      Most people in a position to make 500k per year in their thirties already understand these things.
- darkwater 5y ago
  So you have to not enjoy the best years of your life and spend time and energy keeping track of investments to... get bored as hell later because your brain is so used to just work and save and nlt enjoying life that you will feel guilty spending that money? I want to retire at 55 but I'm really skeptical about the FIRE community, especially by the ones in their 20's
  - cutler 5y ago
    Yeah, can't imagine this guy's conversation on a date. Oh, wait - having a partner is an additional expense so out of the question.
    - oblio 5y ago
      Having a partner doesn't have to be an expense. Living expenses tend to grow slower than incomes, as incomes go up. You don't pay 200% rent for 2 people, but for sure you can earn 200% with 2 people.
    - refurb 5y ago
      Huh? My partner was not an expense at all.
- pyrale 5y ago
  > Your flip comment seems to belie the fact that he's only earned at least a half a million dollars for one year. I would say $475k is close enough, in all honesty. > The majority of his NW comes from investment and savings, not income. Sum of (earnings - spent) over the career is $2,611,000. Net worth by the end is $2,400,000. In order for investment returns to be above savings on income, taxes would have to be 42.3% of lifetime earnings, which would be a bit surprising.
  - vjeux 5y ago
    Tech stock is taxed at around 50% when you get it and then 20% of the upswing. So $475k total comp is more like $250k in your bank account in practice.
    - lotsofpulp 5y ago
      If you are going to include the tax rate on the capital gains, then you should include the capital gains in the amount in your bank account. You should also hire a CPA or at least spend some time reading about strategies to minimize taxes if you are paying close to an effective 50% income tax on $500k of income.
      - d23 5y ago
        Do you have any resources you can share? My understanding is it’s pretty difficult to lower your taxes meaningfully if all of it comes from wages.
        lotsofpulp 5y ago
        Bogleheads forums or whitecoatinvestor. Even just 401k, HSA, 529, and megabackdoor roth should help bring down effective tax rate (for the $500k income being discussed). You will not get as low as someone with their own business or S corp, but the tax advantaged savings account should help.
        5y ago
- vanusa 5y ago
  Your flip comment seems to belie fact that he's only earned at least a half a million dollars for one year. 475k == 500k for all practical purposes. The guy averaged 525k for 3 solid years (not "one year") -- which makes the parent comment rather less flip. These sort of casual dismissals negate the educational value of the post. The bottom line is that while saving and investing is certainly smart -- you better damn sure be earning 98 percentile income as well if you want to get as far ahead of the game as this guy has.
soufron 5y ago
Best comment! Nailed it down! :D
sergiotapia 5y ago

Turns out, earning half a million dollars every year makes it easy to be a millionaire after a few years.

by pyrale 5y ago

Turns out, earning half a million dollars every year makes it easy to be a millionaire after a few years.

Your flip comment seems to belie the fact that he's only earned at least a half a million dollars for one year. Most of his years he earned substantially less than that. The majority of his NW comes from investment and savings, not income. The point of the article is that cutting expenses, saving, investing wisely, and aggressively pursuing pay raises can yield a few million well before retirement age. These sort of casual dismissals negate the educational value of the post.

lbacaj 5y ago
Not to mention, he was also living in expensive areas. It’s amazing he saved and invested that much.
ZephyrBlu 5y ago
> The point of the article is that cutting expenses, saving, investing wisely, and aggressively pursuing pay raises can yield a few million well before retirement age Most people will have nowhere near the same results as the author by implementing these things. The biggest factors here are: 1) Earn a lot of money 2) Don't spend it all I don't think this post has much educational value at all because I think most people already understand those points, they just can't execute on them in a meaningful way.
- whimsicalism 5y ago
  I would never make assumptions banking on "most people understanding" anything.
  - Aeolun 5y ago
    Most people in a position to make 500k per year in their thirties already understand these things.
darkwater 5y ago
So you have to not enjoy the best years of your life and spend time and energy keeping track of investments to... get bored as hell later because your brain is so used to just work and save and nlt enjoying life that you will feel guilty spending that money? I want to retire at 55 but I'm really skeptical about the FIRE community, especially by the ones in their 20's
- cutler 5y ago
  Yeah, can't imagine this guy's conversation on a date. Oh, wait - having a partner is an additional expense so out of the question.
  - oblio 5y ago
    Having a partner doesn't have to be an expense. Living expenses tend to grow slower than incomes, as incomes go up. You don't pay 200% rent for 2 people, but for sure you can earn 200% with 2 people.
  - refurb 5y ago
    Huh? My partner was not an expense at all.
pyrale 5y ago
> Your flip comment seems to belie the fact that he's only earned at least a half a million dollars for one year. I would say $475k is close enough, in all honesty. > The majority of his NW comes from investment and savings, not income. Sum of (earnings - spent) over the career is $2,611,000. Net worth by the end is $2,400,000. In order for investment returns to be above savings on income, taxes would have to be 42.3% of lifetime earnings, which would be a bit surprising.
- vjeux 5y ago
  Tech stock is taxed at around 50% when you get it and then 20% of the upswing. So $475k total comp is more like $250k in your bank account in practice.
  - lotsofpulp 5y ago
    If you are going to include the tax rate on the capital gains, then you should include the capital gains in the amount in your bank account. You should also hire a CPA or at least spend some time reading about strategies to minimize taxes if you are paying close to an effective 50% income tax on $500k of income.
    - d23 5y ago
      Do you have any resources you can share? My understanding is it’s pretty difficult to lower your taxes meaningfully if all of it comes from wages.
      - lotsofpulp 5y ago
        Bogleheads forums or whitecoatinvestor. Even just 401k, HSA, 529, and megabackdoor roth should help bring down effective tax rate (for the $500k income being discussed). You will not get as low as someone with their own business or S corp, but the tax advantaged savings account should help.
        5y ago
vanusa 5y ago
Your flip comment seems to belie fact that he's only earned at least a half a million dollars for one year. 475k == 500k for all practical purposes. The guy averaged 525k for 3 solid years (not "one year") -- which makes the parent comment rather less flip. These sort of casual dismissals negate the educational value of the post. The bottom line is that while saving and investing is certainly smart -- you better damn sure be earning 98 percentile income as well if you want to get as far ahead of the game as this guy has.

soufron 5y ago

Best comment! Nailed it down! :D

sergiotapia 5y ago