7 ms·

Easiest way: No kids. Two good incomes. Reliably saving 20%. Mid 40s. No college debt or health issues. That should get you to about a million in assets.

by smackfu 15y ago

inerte 15y ago
Maybe that's the easiest, but not the most common. According to Millionaire Next Door, there are kids, sometimes only one income, savings of 15%+, and late 50s.
- smackfu 15y ago
  Right. Kids do tend to be a quadruple whammy though: * Basic living costs (food and clothing and fun). * Childcare requires either expensive daycare or a parent not working / limited working. * Money needs to be saved for college. * Require more bedrooms, which drives up housing costs although it's arguable whether this has an impact on net worth. (This may be double-counting the first point, but going from a $100k condo to a $400k house because of a child is more than just living costs.) Add those up and yes it probably takes another 10-20 years to meet your net worth goals. OTOH, you have a safety net when you get older. And, you know, a kid.
  - guga31bb 15y ago
    Also in some areas housing is much more expensive in areas with good public school districts.
- alanfalcon 15y ago
  Yes, the single biggest factor is age. You want a net-worth distribution where the wealthiest people are at retirement age because they're going to quit working and then that wealth will be spent in their retirement. It's like a roller coaster, you want to be moving the fastest right before you enter the loop so that you can be sure not to stall right when you're upside down (or embarrassingly fail to make it even that far and end up rolling backwards.) If everyone was going the same speed all the time, we'd just have boring flat tracks and there would be no point in going on the ride.
seclorum 15y ago
Kids are cool to have whether you have money or not. Well, if you decide to have kids, anyway, and are responsible for the act of raising a family, either poor or rich or somewhere in between, then its great whether you're saving for your first million or not saving at all .. no amount of money will ever buy the pure joy of raising ones family and watching the growth daily, hand in hand. Its something all humans have the potential to have in common with each other. Life is a struggle, even for the rich. Debt is definitely the first thing to avoid. I've made my riches, modestly, by working hard. Hard work, being paid to do things you like to do, having a strong investment in the tools one needs to work hard, then getting on with it. By work, I mean, 'do something that someone else needs done, well'. Also: get paid. The world is a big, wild, woolly place, and if someone is going to pay you well to haul bricks all day, get out there and haul bricks, to get PAID. Doing a good job means also, getting paid well. Because the person you are working for wants to pay you well, and for little other reason than that your hard work is valuable to them. This is the nature of the realms in which money, our subject today, becomes of any use: someone else thinks its worth it to do/make BLAH, even if you personally don't.
- mellifluousmind 15y ago
  Kids are cool to have? Nah, I have too much emotional burden to even become a father figure. It is a lot of responsibility, and I bet the joy of having kids is priceless. Cool? not so much.
  - HeyLaughingBoy 15y ago
    If it makes you feel better, it's not so joyous most of the time and the coolness comes in measured doses. Imagine for the millionth time that day, you're yelling at your older kid to do his chores, feed his pets, practice his instrument, do his homework, etc. Or the younger one smells like ass and he's having a meltdown because you want to change his diaper and he'd rather keep playing I swear, some days I come home and feel like turning around and heading off back to work. So, no, it's not all wine and roses. But then they do something that shows you're at least semi-competent at raising them and it makes your day.
  - 15y ago
Jun8 15y ago
I fulfill all the above (except that I have a son, but he's young so the only big cost is daycare, around 13K/year), so where's my million!? In order to develop a successful model, one should also have negative examples, i.e. people who could have had ~$1M in their mid 40s but do not. The greatest mistakes I made that I see with hindsight are (i) doing a PhD in EE where a MS was more than enough and then taking too long to finish that and (ii) taking too long to get acquainted with the concept of creating wealth, a la http://paulgraham.com/wealth.html http://paulgraham.com/wealth.html; I'd say that, had I read Hackers and Painters 15 years ago (it wasn't printed at that time or course), my life would have been different (or maybe not, it's easy to get caught with might have beens). That's why I buy a copy of this book to many young people I know who are starting life.
- smackfu 15y ago
  Yes, I mistakenly left out "start working at 21" when I referenced the ages. Because even if you have a net-worth-neutral graduate education, you are not saving and investing money during those years.
- deleted 15y ago
  [deleted]
- jakejake 15y ago
  Not having kids seems to be the first item in the list for that particular plan, so having a son disqualifies you! Not to say that's a great plan. Having a life without kids wouldn't be a satisfying life for most people, and so if its a choice between kids and wealth, then most would choose kids. I do think having kids early probably makes it much, much harder to become wealthy. My friends who had kids in their early 20's are generally poorer than my friends who waited until their 30's. I think a more realistic plan would be something that includes children, but waiting until you've had time to get some type of career started.
- patrickd 15y ago
  Thanks for that link... enjoyed it a lot. [9]This is a good plan for life in general. If you have two choices, choose the harder. If you're trying to decide whether to go out running or sit home and watch TV, go running. Probably the reason this trick works so well is that when you have two choices and one is harder, the only reason you're even considering the other is laziness. You know in the back of your mind what's the right thing to do, and this trick merely forces you to acknowledge it.
vaksel 15y ago
kids are an investment...they are your safety net...worse comes to worst, you can rely on them to support you in your late days if things go terribly wrong. its a good way to avoid ending up on the street...you'll always be able to get room and board with your kids. Since our generation won't get any social security or pensions to live off, we are going to need all the help we can get if things go south.
- laaph 15y ago
  You can not rely on your kids to support you. I would not be making plans as such. Be nice to your kids, and hopefully they will give you room and board in case of emergency -- but I've tried to help my parents many time only to regret it.
  - vaksel 15y ago
    I guess i should have mentioned that this relies on you actually having a good relationship with your kids. So try to avoid beating them for fun...and you'll be fine. I'm not talking about relying on your kids to pay your bills etc...but more of an extreme situation where you are just making sure you don't end up begging on the streets
- alttag 15y ago
  Years ago I asked my mother about her retirement investments (she's been a career stay-at-home mom, for which I was grateful). She responded that she had eight retirement plans, and I was the oldest.
- mellifluousmind 15y ago
  Maybe in Asia, this "taking care of elderly" mentality is strong. Here in States, I actually think that you are on your own is more true. You can't depend on your kids to take care of you. If you do, you can still end up being on the street. In my view, kids are not investment. They take out much resources from you, and you do so willingly because you love them. As they get older, they may or may not show appreciation, depends on your relationship with them.

Easiest way: No kids. Two good incomes. Reliably saving 20%. Mid 40s. No college debt or health issues. That should get you to about a million in assets.

by smackfu 15y ago

Easiest way: No kids. Two good incomes. Reliably saving 20%. Mid 40s. No college debt or health issues. That should get you to about a million in assets.

inerte 15y ago

Maybe that's the easiest, but not the most common. According to Millionaire Next Door, there are kids, sometimes only one income, savings of 15%+, and late 50s.

smackfu 15y ago
Right. Kids do tend to be a quadruple whammy though: * Basic living costs (food and clothing and fun). * Childcare requires either expensive daycare or a parent not working / limited working. * Money needs to be saved for college. * Require more bedrooms, which drives up housing costs although it's arguable whether this has an impact on net worth. (This may be double-counting the first point, but going from a $100k condo to a $400k house because of a child is more than just living costs.) Add those up and yes it probably takes another 10-20 years to meet your net worth goals. OTOH, you have a safety net when you get older. And, you know, a kid.
- guga31bb 15y ago
  Also in some areas housing is much more expensive in areas with good public school districts.
alanfalcon 15y ago
Yes, the single biggest factor is age. You want a net-worth distribution where the wealthiest people are at retirement age because they're going to quit working and then that wealth will be spent in their retirement. It's like a roller coaster, you want to be moving the fastest right before you enter the loop so that you can be sure not to stall right when you're upside down (or embarrassingly fail to make it even that far and end up rolling backwards.) If everyone was going the same speed all the time, we'd just have boring flat tracks and there would be no point in going on the ride.

seclorum 15y ago

Kids are cool to have whether you have money or not. Well, if you decide to have kids, anyway, and are responsible for the act of raising a family, either poor or rich or somewhere in between, then its great whether you're saving for your first million or not saving at all .. no amount of money will ever buy the pure joy of raising ones family and watching the growth daily, hand in hand. Its something all humans have the potential to have in common with each other. Life is a struggle, even for the rich. Debt is definitely the first thing to avoid. I've made my riches, modestly, by working hard. Hard work, being paid to do things you like to do, having a strong investment in the tools one needs to work hard, then getting on with it. By work, I mean, 'do something that someone else needs done, well'. Also: get paid. The world is a big, wild, woolly place, and if someone is going to pay you well to haul bricks all day, get out there and haul bricks, to get PAID. Doing a good job means also, getting paid well. Because the person you are working for wants to pay you well, and for little other reason than that your hard work is valuable to them. This is the nature of the realms in which money, our subject today, becomes of any use: someone else thinks its worth it to do/make BLAH, even if you personally don't.

mellifluousmind 15y ago
Kids are cool to have? Nah, I have too much emotional burden to even become a father figure. It is a lot of responsibility, and I bet the joy of having kids is priceless. Cool? not so much.
- HeyLaughingBoy 15y ago
  If it makes you feel better, it's not so joyous most of the time and the coolness comes in measured doses. Imagine for the millionth time that day, you're yelling at your older kid to do his chores, feed his pets, practice his instrument, do his homework, etc. Or the younger one smells like ass and he's having a meltdown because you want to change his diaper and he'd rather keep playing I swear, some days I come home and feel like turning around and heading off back to work. So, no, it's not all wine and roses. But then they do something that shows you're at least semi-competent at raising them and it makes your day.
- 15y ago

Jun8 15y ago

I fulfill all the above (except that I have a son, but he's young so the only big cost is daycare, around 13K/year), so where's my million!? In order to develop a successful model, one should also have negative examples, i.e. people who could have had ~$1M in their mid 40s but do not. The greatest mistakes I made that I see with hindsight are (i) doing a PhD in EE where a MS was more than enough and then taking too long to finish that and (ii) taking too long to get acquainted with the concept of creating wealth, a la http://paulgraham.com/wealth.html http://paulgraham.com/wealth.html; I'd say that, had I read Hackers and Painters 15 years ago (it wasn't printed at that time or course), my life would have been different (or maybe not, it's easy to get caught with might have beens). That's why I buy a copy of this book to many young people I know who are starting life.

smackfu 15y ago
Yes, I mistakenly left out "start working at 21" when I referenced the ages. Because even if you have a net-worth-neutral graduate education, you are not saving and investing money during those years.
deleted 15y ago
[deleted]
jakejake 15y ago
Not having kids seems to be the first item in the list for that particular plan, so having a son disqualifies you! Not to say that's a great plan. Having a life without kids wouldn't be a satisfying life for most people, and so if its a choice between kids and wealth, then most would choose kids. I do think having kids early probably makes it much, much harder to become wealthy. My friends who had kids in their early 20's are generally poorer than my friends who waited until their 30's. I think a more realistic plan would be something that includes children, but waiting until you've had time to get some type of career started.
patrickd 15y ago
Thanks for that link... enjoyed it a lot. [9]This is a good plan for life in general. If you have two choices, choose the harder. If you're trying to decide whether to go out running or sit home and watch TV, go running. Probably the reason this trick works so well is that when you have two choices and one is harder, the only reason you're even considering the other is laziness. You know in the back of your mind what's the right thing to do, and this trick merely forces you to acknowledge it.

vaksel 15y ago

kids are an investment...they are your safety net...worse comes to worst, you can rely on them to support you in your late days if things go terribly wrong. its a good way to avoid ending up on the street...you'll always be able to get room and board with your kids. Since our generation won't get any social security or pensions to live off, we are going to need all the help we can get if things go south.

laaph 15y ago
You can not rely on your kids to support you. I would not be making plans as such. Be nice to your kids, and hopefully they will give you room and board in case of emergency -- but I've tried to help my parents many time only to regret it.
- vaksel 15y ago
  I guess i should have mentioned that this relies on you actually having a good relationship with your kids. So try to avoid beating them for fun...and you'll be fine. I'm not talking about relying on your kids to pay your bills etc...but more of an extreme situation where you are just making sure you don't end up begging on the streets
alttag 15y ago
Years ago I asked my mother about her retirement investments (she's been a career stay-at-home mom, for which I was grateful). She responded that she had eight retirement plans, and I was the oldest.
mellifluousmind 15y ago
Maybe in Asia, this "taking care of elderly" mentality is strong. Here in States, I actually think that you are on your own is more true. You can't depend on your kids to take care of you. If you do, you can still end up being on the street. In my view, kids are not investment. They take out much resources from you, and you do so willingly because you love them. As they get older, they may or may not show appreciation, depends on your relationship with them.