Is the millionaire next door dying

[SeattleCPA]

A big part of the reason why I hang out here is the MMMers really aren't as dogmatic as, say, the Bogleheads. Don't get me wrong. I really like some of the people at Bogleheads. Taylor Larimore for one. And the basic message is sound (use passive investing).

But gosh they are cultish about some stuff.

In this thread for example, https://www.bogleheads.org/forum/viewtopic.php?f=2&t=396916&newpost=7102697, a reader asks if small business ownership is still a path to wealth. The discussion starts strong but ends quickly. Because one of the moderators says the thread isn't actionable.

First, it is actionable. The actionable insight? Some career tracks provide a better return on investment than others. That even helps people better execute a Bogleheads investment strategy BTW... Or a MMM strategy.

Second, had the Bogleheads mods allowed the discussion to continue, maybe someone at some point would have pointed to some of the recent research that validates the millionaire next door theory. Like this:

https://www.nber.org/papers/w25442

No forum is perfect. But allowing for different investment strategies (real estate... or equity index funds... or small business ownership) is surely a strength of the MMM forums. Thank you MMM and thank you MMMers.

[nouseforausername]

It's nice having a freer discourse here, but their mod policies over there are clearly delineated: https://www.bogleheads.org/forum/viewtopic.php?t=112988

It's the curse of an open forum to devolve into wumao, grift, and shouts, despite the original intent. Here, there's a critical mass of solid content to keep things informative, but still spicy. Over there, it's straight-up personalized financial talk or you're closed down.

I've read this forum an embrassingly long time (2013) for such a brief posting history, and I've valued the hands off mod approach. So, not criticizing this forum.

[GilesMM]

It is not actionable because it was just posed as an observation about society for discussion and debate. If the OP (was it you?) had asked for advice along the lines of  “should I start a small business or work in tech?” It would have been fine.


I like the BH moderation as it keeps things focused.

[Psychstache]

I think the BH moderation is far too heavy handed on squelching topics and the community is weirdly prudish about cursing. I occasionally learn some interesting stuff, but I check the forum rarely and don't engage at all. Still, it is working for plenty of others and I like the vibe here, so to each their own.

[SeattleCPA]

It is not actionable because it was just posed as an observation about society for discussion and debate. If the OP (was it you?) had asked for advice along the lines of  “should I start a small business or work in tech?” It would have been fine.


I like the BH moderation as it keeps things focused.

I don't participate in Bogleheads. Haven't for a long time. When I did, I used SeattleCPA as my name.

BTW I disagree about the lack of actionability. Small business ownership should be discuss-able as an element in someone's retirement plan. It is, as I've noted many times before, the most common way for someone to become wealthy.

It's nice having a freer discourse here, but their mod policies over there are clearly delineated: https://www.bogleheads.org/forum/viewtopic.php?t=112988

I have read the forum rules before. But reread them just now. And I still think the moderation is pretty arbitrary.

Maybe the author needed to preface his remarks with, "I'm thinking about leaving a regular job and starting my own business. I believe that would let me ultimately earn more thus save and over a longer time interval and thus increase the amount I accumulate in my retirement nest egg... It would also allow me to include an alternative asset investment in my portfolio... one with a low correlation to the traditional asset classes Bogleheads commonly use... etc"

But having to justify a discussion in this sort of way... Yikes.

And one final comment: I'm glad we can at this forum have this discussion. Sorry to repeat a cliche, but the scissor blades sharpen each other.

[Mustache ride]

I think each forum has it's place, and I use both. I can appreciate the differences in philosophy and usually bounce back and forth so I can keep an open mind and get different perspectives. I happen to fall in between the stereotypical MMM/Boglehead, which is probably why I feel the way I do.

[nereo]

There's a great deal of excellent information over at Bogleheads, but I've found the extremely heavy-handed approach towards forum moderation to limit real discussion, which has led to a pretty narrow view on life and personal finances.

I agree the moderation there is very arbitrary.  Basically I can summarize it as "the moderators will frequently shut down any discussion which might become acrimonious preemptively."  The result is a rather sterile environment which runs away from critical discussions. I've learned far more about divergent opinions here at MMM, and have routinely had my assumptions challenged (and several times changed)  I just don't see that happen very frequently over at BH.

[SeattleCPA]

There's a great deal of excellent information over at Bogleheads, but I've found the extremely heavy-handed approach towards forum moderation to limit real discussion, which has led to a pretty narrow view on life and personal finances.

I agree the moderation there is very arbitrary.  Basically I can summarize it as "the moderators will frequently shut down any discussion which might become acrimonious preemptively."  The result is a rather sterile environment which runs away from critical discussions. I've learned far more about divergent opinions here at MMM, and have routinely had my assumptions challenged (and several times changed)  I just don't see that happen very frequently over at BH.

+1

[Captain Cactus]

So.... Is the millionaire next door dying?

[dividendman]

So.... Is the millionaire next door dying?

If you live next to me it ain't :P

[DadJokes]

Had OP phrased the post differently, it may have met the forum guidelines.

Instead of "Is the millionaire next door dying," OP could have asked, "Is the millionaire next door still a viable path to wealth? How so?" And the wall of text after the title would need to be one of inquisitiveness, rather than some post-mortem that ends like a LinkedIn post with "agree or disagree."

The second option opens the discussion up to actionable advice, while the first just has people debating whether or not small business owners can still build wealth.


And no, the millionaire next door isn't dying. Just like people focused on flashy job titles (doctor, lawyer, etc.) 25 years ago, they focus on flashy job titles (SWE) today. All the while, a blue-collar business owner can accumulate wealth without needing to appear wealthy with fancy cars and expensive clothes just the same.

[Captain Cactus]

Now that we've saved and invested and have reached a substantial, barely 7-figure NW (more than some, less than many on here), I often think about a move to business ownership.  But in the end I lack the guts to voluntarily remove/disrupt my family's health insurance (my son has a chronic illness) and walk away from a pretty good salary (again, more than some, less than the SWEs...) unless I'm forced out by a layoff, or something like that.

The idea of building an adequate income stream from a few hours of work has always been very seductive. 

[SeattleCPA]

@Captain Cactus You will find these sub-forums littered with messages where I am promoting the idea of small business ownership and entrepreneurship. So I am all for someone having their own business!

However, small business ownership and entrepreneurship in my experience and observation requires lots of learning and lots of attention by owner. So it's basically the opposite of passively investing in a index fund or a set of index funds.

Thus, I can't imagine how someone can do it part-time. (I think if I were to try and run a CPA firm part-time that I would soon see my profits slipping or my quality declining. Even though I have decades of experience doing running a CPA firm.)

[Chris Pascale]

Downloaded the paper. Thanks for posting.

Never been on Bogleheads. I can see them just being all about VTSAX and how Jack Bogle is super, but can't see anyone having much to say after that.

[Telecaster]

There are a lot of really smart, very knowledgeable people at Bogleheads.   But they are very dogmatic.  A $5 million portfolio and a 3% SWR is a barebones retirement to them. 

@SeattleCPA's comments about buying a small business have been very eye opening for me.   Stocks  typically trade at 15-20 times earnings (or more).  A small business might sell for 2-3 times earnings.  Of course, you are buying a job too, so there's that.    But I think buying a small business is a pathway to FI that should be discussed more often.   Selling a small business is something else that might need more examination as well. 

[SeattleCPA]

There are a lot of really smart, very knowledgeable people at Bogleheads.   But they are very dogmatic.  A $5 million portfolio and a 3% SWR is a barebones retirement to them. 

@SeattleCPA's comments about buying a small business have been very eye opening for me.   Stocks  typically trade at 15-20 times earnings (or more).  A small business might sell for 2-3 times earnings.  Of course, you are buying a job too, so there's that.    But I think buying a small business is a pathway to FI that should be discussed more often.   Selling a small business is something else that might need more examination as well.

:-)

[ender]

That post was basically an inflammatory change my mind post.

Feels pretty clear to me why Bogleheads would have locked it.

[Captain Cactus]

There are a lot of really smart, very knowledgeable people at Bogleheads.   But they are very dogmatic.  A $5 million portfolio and a 3% SWR is a barebones retirement to them. 

@SeattleCPA's comments about buying a small business have been very eye opening for me.   Stocks  typically trade at 15-20 times earnings (or more).  A small business might sell for 2-3 times earnings.  Of course, you are buying a job too, so there's that.    But I think buying a small business is a pathway to FI that should be discussed more often.   Selling a small business is something else that might need more examination as well.

:-)

How do people find businesses to buy?