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General Discussion => Share Your Badassity => Topic started by: Bigote on October 24, 2013, 11:25:48 AM

Title: The first million is the hardest
Post by: Bigote on October 24, 2013, 11:25:48 AM
Seeing the 100k thread got me thinking about the million dollar thresholds.

I started working in 1990.   I crossed a million in net worth in 2001. 

It took me until 2006 to cross 2MM.  I dipped below briefly during the crisis, but for the most part stayed between 2-3 until 2010.

I hit 3MM in 2010.

I hit 4MM in 2012.   

I hit 5MM in 2013.

So basically it took me 11 years to get to the 1st million, 5 years to the 2nd, 4 years to the 3rd, 2 years to the 4th, and 1 year to the 5th.

I'm defining net worth conservatively, I'm not including home equity but I did subtract mortgage debt for the years that I had it.


Any other 2 comma club members want to chime in?
Title: Re: The first million is the hardest
Post by: mpbaker22 on October 24, 2013, 01:08:32 PM
Where do you work and why are you still working (I assume you love your job)?  Most mustachians don't even need 1 Million;  I don't ever plan to hit that number.
Title: Re: The first million is the hardest
Post by: Bigote on October 24, 2013, 01:22:44 PM
I'm fully retired now and have been semi-retired for several years.  True most here are shooting for 1MM or less but I'm pretty sure I've heard from other 2 comma club members. 
Title: Re: The first million is the hardest
Post by: Bigote on October 24, 2013, 01:25:30 PM
I don't ever plan to hit that number.

Well, keep in mind safe withdrawal rates are designed for near worst-case scenarios.   If you experience average or good market years post retirement your stache will just grow and grow.   I never planned to go above 3MM.  It just happened. 
Title: Re: The first million is the hardest
Post by: mpbaker22 on October 24, 2013, 01:27:37 PM
I'm fully retired now and have been semi-retired for several years.  True most here are shooting for 1MM or less but I'm pretty sure I've heard from other 2 comma club members.

More on topic, of course the 2nd is easier than the 1st, 3rd easier than 2nd.  1,000,000 is infinitely higher than 0. 2,000,000 is 100% more than 1,000,000, etc.  Based on my returns since i started working Jan/2012, 1,000,000 would now be 1.5M on investments alone.
Title: Re: The first million is the hardest
Post by: catccc on October 24, 2013, 02:30:27 PM
I'm very excited about that easy 2nd million.  I'm only at 440K right now, but you know, it's going to be hard to get to that 1st million...
Title: Re: The first million is the hardest
Post by: desk_jockey on October 25, 2013, 06:54:30 AM
T. Boone Pickens: "The first billion is a helluva lot harder"

https://twitter.com/boonepickens/status/207984741260070914

Title: Re: The first million is the hardest
Post by: pac_NW on October 25, 2013, 08:39:37 AM
I am finding the same pattern. It is amazing how quickly the stash grows as you go.  It does get more comforting. Yet, I have not been able to semi-retire yet because, I cannot quite pull the trigger.  Being a ninny about it!!  At what point in your stash-ness level did you semi-retire?
Title: Re: The first million is the hardest
Post by: dragoncar on October 25, 2013, 11:41:01 AM
I'm very excited about that easy 2nd million.  I'm only at 440K right now, but you know, it's going to be hard to get to that 1st million...

Hopefully the second 500k is easier than the first 500k :)
Title: Re: The first million is the hardest
Post by: kkbmustang on October 28, 2013, 09:56:39 PM
I'm very excited about that easy 2nd million.  I'm only at 440K right now, but you know, it's going to be hard to get to that 1st million...

Hopefully the second 500k is easier than the first 500k :)

Dude, word.
Title: Re: The first million is the hardest
Post by: Bigote on October 29, 2013, 12:34:29 PM
At what point in your stash-ness level did you semi-retire?

Between 2-3.  Semi retirement for me was taking long breaks (year or so) from work, then diving back in full bore, rather than the more typical part time approach. 
Title: Re: The first million is the hardest
Post by: rocketman48097 on October 29, 2013, 03:18:01 PM
I will have to say that as someone that graduated with student loans and credit card debt, I am happily over 800k, in part by marrying another professional who was also a saver.  I know the first million is the hardest, but I must say I track our net worth on a spreadsheet and in my opinion, until the market crashes, this wealth creation stuff is getting easier and easier as the numbers go higher.

It's so nice knowing we have so much money in investments.  I have hinted to people every now and then that we are quite wealthy, and the fact is, no one actually believes me because I drive a 12 year old car (long paid for) and my wife drives an almost new 5 year old family Sedan.  Oh well, as Buffett would say, we measure our success on an internal scorecard, not an external one. 
Title: Re: The first million is the hardest
Post by: frugalecon on October 30, 2013, 11:05:14 AM


It's so nice knowing we have so much money in investments.  I have hinted to people every now and then that we are quite wealthy, and the fact is, no one actually believes me because I drive a 12 year old car (long paid for) and my wife drives an almost new 5 year old family Sedan.  Oh well, as Buffett would say, we measure our success on an internal scorecard, not an external one.

This "hinting" seems risky. You have the perfect cover by appearing as someone of modest means. I made the mistake of responding truthfully once to a friend who asked how much I made, and his response was "With your salary, I know who I can borrow from when I am in trouble."

I would be terrified if my sisters knew my net worth. It would be a real drag to have to deal with that repeatedly.
Title: Re: The first million is the hardest
Post by: sol on October 30, 2013, 11:39:57 AM
All of my spreadsheet projections look like the OP's path, with net worth growing like crazy once we no longer need it to. I find it slightly distressing and I expect it to keep me working longer than necessary.  One more year and I can buy a yacht! One more year and my grand kids also get free college. One more year and I can endow a scholarship. One more year and I can feed 1000 starving African families forever.  The payoff just goes up and up.
Title: Re: The first million is the hardest
Post by: galaxie on October 30, 2013, 01:17:31 PM
All of my spreadsheet projections look like the OP's path, with net worth growing like crazy once we no longer need it to. I find it slightly distressing and I expect it to keep me working longer than necessary.  One more year and I can buy a yacht! One more year and my grand kids also get free college. One more year and I can endow a scholarship. One more year and I can feed 1000 starving African families forever.  The payoff just goes up and up.
Eventually, the payoff will be huge whether you're working or not.  Bonus!
Title: Re: The first million is the hardest
Post by: little stache on October 30, 2013, 06:16:06 PM
So, how do you factor in a "fixed pension" into this net worth calculation. Would it be valued at what you would need to get similar amount on a 4% withdrawal or do you drop it from the assessment?  Do you drop the house since it is not a liquid asset? Do you not a count the tax advantaged funds since they don't help you retire "early"?  There is a million and then there is a MILLION. I am long way from MILLION in liquid assets I can use when and however I want.

If I count the money available when I am 55, I am there. Does not feel so special really.
Title: Re: The first million is the hardest
Post by: RootofGood on November 01, 2013, 05:48:13 PM
Hi from another dual comma enhanced 'stashe.  I pretty much called it quits right after I hit a million.  That was "enough".

With a withdrawal rate under 3%, there is a good likelihood our NW will keep rising over time.  A decade of 8.5% per annum investment returns will see us cross the 2 MM mark, for example. 
Title: Re: The first million is the hardest
Post by: Baylor3217 on November 01, 2013, 11:16:50 PM
Impressive speed. What industry are you in?  Wage slave?  Stock options?

Seeing the 100k thread got me thinking about the million dollar thresholds.

I started working in 1990.   I crossed a million in net worth in 2001. 

It took me until 2006 to cross 2MM.  I dipped below briefly during the crisis, but for the most part stayed between 2-3 until 2010.

I hit 3MM in 2010.

I hit 4MM in 2012.   

I hit 5MM in 2013.

So basically it took me 11 years to get to the 1st million, 5 years to the 2nd, 4 years to the 3rd, 2 years to the 4th, and 1 year to the 5th.

I'm defining net worth conservatively, I'm not including home equity but I did subtract mortgage debt for the years that I had it.


Any other 2 comma club members want to chime in?
Title: Re: The first million is the hardest
Post by: SnackDog on November 02, 2013, 05:40:03 AM
The magic of compounding, guys; just graph it up.  Once you have $4MM, a good year in the stock market can give you another million.  It's funny how it always seems to be a bit of a hockey stick forecast with the great figures just a few more years ahead.  And the funny thing for us is that the numbers are just numbers.  I won't retire particularly early because work is too fun and when I do retire, we won't spend 4% because it will just be a ridiculous amount of money to spend in a year.
Title: Re: The first million is the hardest
Post by: Baylor3217 on November 02, 2013, 10:28:26 AM
The magic of compounding, guys; just graph it up.  Once you have $4MM, a good year in the stock market can give you another million.  It's funny how it always seems to be a bit of a hockey stick forecast with the great figures just a few more years ahead.  And the funny thing for us is that the numbers are just numbers.  I won't retire particularly early because work is too fun and when I do retire, we won't spend 4% because it will just be a ridiculous amount of money to spend in a year.

The challenge for most is that to "have" $4MM (even if you never invested and didn't lose a nominal dollar) would require you to next $100,000 per year for 40 years.  Most never make 6 figures and certainly don't sustain it for 40 years.  Of course, to net $100,000 requires earning significantly more than $100,000.

I agree completely with your statement above, but the number of people that attain that kind of wealth is in a very small percentage.  Fortunately, that much wealth is not required to be FI.
Title: Re: The first million is the hardest
Post by: Bigote on November 02, 2013, 01:21:38 PM
Impressive speed. What industry are you in?  Wage slave?  Stock options?

Today I'm in the leisure industry.  :)

My career was variously in investment banking and consulting.   
Title: Re: The first million is the hardest
Post by: Another Reader on November 02, 2013, 05:12:12 PM
Or leverage and tax advantages, i.e. real estate.  I don't remember that second comma, because the home equity was included in the tally for a long time before and after that.  The trajectory looked like 8 figures was doable until the real estate market fell apart.   Who knows, it may still happen.  However, I may be too old to care if and when it does!

In the end, it's more about the income the assets generate than the assets themselves.  If you are old school like I am, you don't spend the assets themselves, just the income they generate.  If you are clipping equity dividend coupons, $5M only gets you around $150k at a 3 percent average yield and no tax shelter.  Real estate generates more and offers some shelter from those greedy spendthrifts in Washington and Sacramento.  Of course if you are Mitt Romney or Bigote you probably have access to even better income generators and tax shelters....
Title: Re: The first million is the hardest
Post by: chasesfish on November 04, 2013, 04:34:58 AM
I'm aiming for two commas, primarily because I'm not sure about getting the spending below 40k with as much as I travel, and almost all of my NW is in retirement accounts, which are just a little more painful to access.
Title: Re: The first million is the hardest
Post by: acroy on November 04, 2013, 11:12:45 AM
Very nice growth. I'm at about the 500k mark, but it is getting interesting how fast it's starting to go up. Laid on top of a graph of the national debt, the curve looks similar ;)
Title: Re: The first million is the hardest
Post by: catccc on November 04, 2013, 12:02:52 PM
I'm very excited about that easy 2nd million.  I'm only at 440K right now, but you know, it's going to be hard to get to that 1st million...

Hopefully the second 500k is easier than the first 500k :)

Dude, word.

ditto.  I should track the speed of that 2nd 500K.  After I hit the first 500K.  Scheduled for early next year.
Title: Re: The first million is the hardest
Post by: yahui168 on November 05, 2013, 01:07:37 AM
Two income household. Started work in 1999 and reached 1MM in 2012 counting home equity. So 13 years to reach 1MM. It was hard. Could've done better but could've done a lot worse.
Title: Re: The first million is the hardest
Post by: kmm on November 15, 2013, 08:49:33 PM
Seeing the 100k thread got me thinking about the million dollar thresholds.

I started working in 1990.   I crossed a million in net worth in 2001. 


You were much faster than me! I started working in 1991 but didn't hit $1M until 2010. Though I didn't start saving in earnest until 1999 after paying off my student loans.

Things are going more quickly now though, I passed $1.5M earlier this year.
Title: Re: The first million is the hardest
Post by: SnackDog on November 16, 2013, 12:39:50 AM
First million took my whole life. Second million only four more years. The magic of compounding, in part.
Title: Re: The first million is the hardest
Post by: luigi49 on November 16, 2013, 12:19:48 PM
First million took my whole life. Second million only four more years. The magic of compounding, in part.

Could you provide data how in 4 years it becomes 2 million?  Thanks
Title: Re: The first million is the hardest
Post by: RootofGood on November 16, 2013, 08:01:16 PM
First million took my whole life. Second million only four more years. The magic of compounding, in part.

Could you provide data how in 4 years it becomes 2 million?  Thanks

The stock market doubling between 2009 and 2013 probably?  Plus new contributions.
Title: Re: The first million is the hardest
Post by: iris lily on November 16, 2013, 08:51:33 PM
Seeing the 100k thread got me thinking about the million dollar thresholds.

I started working in 1990.   I crossed a million in net worth in 2001. 

Due to the crazed stock market this year we may hit multi-m status on Jan.1. We are giggling about it, but when I step back and consider it, it's only a figure on paper. A figure that I don't trust given the aforementioned crazed market. And a figure that can disappear in the breeze as did some of it back in '08.
Title: Re: The first million is the hardest
Post by: Dicey on November 17, 2013, 11:26:22 AM
IMHO, this is why it pays in the long run to let the (cheap fixed) mortgage ride and stuff the savings vehicles full. We saved our first million and then after it continued to accumulate, sold our house and paid cash for a new one that better suits our present needs. Now we have a million plus, an almost as expensive house, too many paid-for cars and a pension coming in ten years.

It is incredibly awesome not to worry about money any more. We don't spend like fools, but we don't want for anything either. We sleep incredibly well at night. I'm RE, but husband loves his job. He works limited, well-defined hours with lots of vacation and holidays. The job comes with unbelievable medical benefits and is only three blocks from our new house.

All those years of saving and avoiding consumer debt were absolutely worth it.
Title: Re: The first million is the hardest
Post by: Stackfault on November 17, 2013, 02:39:07 PM
I thought I was doing well until I saw the original post.  Very impressive! 

l also started work in 1990. The first million (including home equity) took me 17 years, attained at the age of 40.  Looks like the second will take 8-10 years, only 2-4 years away.  I haven't made any big mistakes but I have missed some opportunities in the market by moving to cash and paying off my house while the bulls continued to run.  I've made six figures since my late 30痴 while my wife stayed home with our kids.  Our spending is good in some areas but awful in others (paying cash for base model used cars but spending $1000/month for groceries, fast food, and dining out). 

Maybe I'm an example of what happens when you get it partially right.
Title: Re: The first million is the hardest
Post by: fmzip on November 18, 2013, 08:33:07 PM
I too feel that I got it partially right!

After years of investing/gambling in the market, I finally gave in to having my cousin manage my money. Although his fees are high, I feel I am guarded from a large downside risk of a market. I am still on the fence watching the market soar with my mediocre returns this year.

Our next worth at 47/49 is $830K including home equity. We have a modest home of about $225K with a small mortgage of $45K. Although I have 2 BMW's both are 2001's, one I bought new and the other in 2005. I used to drive a new car every few years, got a little wiser. We have no credit card debt, no loans and max both 401K's.

We've burned a lot of cash over time. No regrets really but nw that I've seen the light, I can see we can do much much better.

I can't imagine making the returns posted above at our age. 25-50% returns per year??? I don't have the stomach for that kind of gambling.

AGI last year was $178K
Title: Re: The first million is the hardest
Post by: deWitt on November 18, 2013, 09:01:44 PM
I don't think that it's the case that people are making 25-50% returns per year. There might be some good years where you achieve that, but I don't think anyone is claiming to make much more than a 10% compound annual growth rate. People around here tend to have somewhat aggressive asset allocations, but we tend to stay pretty grounded in low cost index funds or ETFs--very much the opposite of gambling.

I think what you're seeing is that people keep their expenses constant even as they make more money--so that they're able to contribute more than ever before. On top of that they're seeing a ~7% compound annual growth rate over long periods of time, with some bad years and some stellar years when they get up in the 25-50% range that you mentioned earlier.
Title: Re: The first million is the hardest
Post by: fmzip on November 18, 2013, 09:35:01 PM
The OP stated

I hit 3MM in 2010.

I hit 4MM in 2012.   

I hit 5MM in 2013.


If he/she didn't make 25% return 2012-2013, how much was contributed?? I'm assuming that's aggressive investing,  not in the 7-8%
Title: Re: The first million is the hardest
Post by: fmzip on November 19, 2013, 06:05:21 AM
^^^^^Thanks for sharing

Glad to see you aren't gambling in the market to make those kind of gains
Title: Re: The first million is the hardest
Post by: MgoSam on November 19, 2013, 11:06:31 AM
This has got me thinking about how long it should take me. Anyone here capable of helping me calculate this? My investments are all with index funds at Vanguard, I currently have $230,000 there and am contributing $480 per week, or about $25,000 a year.

Ideally, I would love to retire once I hit 1M. I think I could.
Title: Re: The first million is the hardest
Post by: fmzip on November 19, 2013, 11:42:45 AM
at 2083 per month with 7% annual interest, 12 years

http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx
Title: Re: The first million is the hardest
Post by: MgoSam on November 19, 2013, 02:33:24 PM
at 2083 per month with 7% annual interest, 12 years

http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx

Thanks!
Title: Re: The first million is the hardest
Post by: fmzip on November 19, 2013, 02:49:43 PM
After years of investing/gambling in the market, I finally gave in to having my cousin manage my money. Although his fees are high, I feel I am guarded from a large downside risk of a market. I am still on the fence watching the market soar with my mediocre returns this year.


I'm not sure why you keep pointing out that other people are "gambling in the market."  So are you.  You may be guarded from the downside (though I have my doubts about that), but you are also missing out on the upside.  Why is your cousin's high-fee, "low risk" approach better than a good asset allocation and a solid emergency fund?  If you have the cash on hand, you can score big in a market downturn -- you are buying at sale prices when everyone else is selling in a panic.  That is exactly what we did in 2008-09 and is one of the main reasons behind our amazing net worth growth in the past 5 years.

I'm not sure why you are saying that I keep pointing something out? This is just my second day on the forum.

With a 25% return in one year from 4-5 million, I thought the OP was solely invested in stocks which was not the case.

I used to gamble big in the market. Puts and calls, options that would expire to zero, investing in things "I thought" were good. Thing I came to realize, I was gambling. I was not schooled on the topic of money management, and I felt the average Joe investor like myself ultimately gets burned

I lost faith in my ability to manage my own money, I've lost more than I've ever made. Paying someone else to do it doesn't sit well either but I feel like I am caught between a rock and hard place. I just hate to see people get slammed by being 100% in anything. The market will crash and until you get burned, some people think 25% annual returns are normal.

You are absolutely right, I buy on the dips all the time. I send chunks of money into my 401K on the days the market slides. That's about the extent of my investing strategy for now. My net worth stands at $823K and I can only imagine how nice life would be if I ever got some sizeable returns! I am on the fence of managing it again as I watch the market soar but I can't stomach losing a big chunk of my portfolio again. At age 47/49, we want to retire soon, time is not on our side to get too crazy IMHO
Title: Re: The first million is the hardest
Post by: 2527 on November 19, 2013, 07:09:50 PM
This has got me thinking about how long it should take me. Anyone here capable of helping me calculate this? My investments are all with index funds at Vanguard, I currently have $230,000 there and am contributing $480 per week, or about $25,000 a year.

Ideally, I would love to retire once I hit 1M. I think I could.

Sit down with paper and a calculator.  230,000*1.08+25,000 is what you will have after one year (on average).  Take that number, multiply it by 1.08 and add 25,000.  That is the end of year two.  Do this till you hit $1M.  The 1.08 represents an average stock market return.  Use a lower or higher number, whatever you think is accurate.  Of course, the market doesn't return a fixed amount every year, but this will produce an estimate, and for long term projections, it produces an OK ballpark result.  I bet it will take about 13 years.

You can do this in a more elegant way with Excel, if you have some experience with it. 

Enjoy! 
Title: Re: The first million is the hardest
Post by: fmzip on November 19, 2013, 08:08:17 PM
This has got me thinking about how long it should take me. Anyone here capable of helping me calculate this? My investments are all with index funds at Vanguard, I currently have $230,000 there and am contributing $480 per week, or about $25,000 a year.

Ideally, I would love to retire once I hit 1M. I think I could.

Sit down with paper and a calculator.  230,000*1.08+25,000 is what you will have after one year (on average).  Take that number, multiply it by 1.08 and add 25,000.  That is the end of year two.  Do this till you hit $1M.  The 1.08 represents an average stock market return.  Use a lower or higher number, whatever you think is accurate.  Of course, the market doesn't return a fixed amount every year, but this will produce an estimate, and for long term projections, it produces an OK ballpark result.  I bet it will take about 13 years.

You can do this in a more elegant way with Excel, if you have some experience with it. 

Enjoy!


His question was already answered:

at 2083 per month with 7% annual interest, 12 years

http://www.bankrate.com/calculators/savings/simple-savings-calculator.aspx
Title: Re: The first million is the hardest
Post by: fmzip on November 20, 2013, 06:17:18 AM
Glad we cleared that up :)

I'd like to ditch my cousin, just need to gain some confidence in building a balanced portfolio. What is this "FIRE" target you speak of and is that bogle forum on this site?

Thanks for the input and vote of confidence, much appreciated!
Title: Re: The first million is the hardest
Post by: Bigote on November 20, 2013, 11:00:00 AM
The OP stated

I hit 3MM in 2010.

I hit 4MM in 2012.   

I hit 5MM in 2013.


If he/she didn't make 25% return 2012-2013, how much was contributed?? I'm assuming that's aggressive investing,  not in the 7-8%


Actually I added over a million in one day by downsizing my primary residence.   (See the 'making a $2MM deposit in your checking account' thread). 

In general, though, my gains were a mix of large contributions and decent - not preternatural - gains.   I've been a Boglehead investor since the dot com crash. 
Title: Re: The first million is the hardest
Post by: fmzip on November 20, 2013, 01:03:56 PM
Thanks for clarifying.

I just started looking at the Boglehead forum as well. Very tempted to start handling my money again as I know it's costing me too much to have in managed for me

Title: Re: The first million is the hardest
Post by: Exflyboy on November 20, 2013, 02:22:01 PM
Started saving when I emigrated to the US in '97 when I took out a 160k mortgage... then started paying that off which took 7 years.

So roughly I was at zero net worth in 97 +7 = 2004.

Not sure when I hit 1M.. 18months ago I took a package from my previous employer that stuffed $106K into my 401k.

So looks like my first (and only) million took 10 years

 Now at just shy of $1.25M, not including the house.

Of course this is funny money.. I have a large exposure to stock ETF's and we know a significant pullback is coming and probably soon.

Can't bring myself to pull out of the market though and have about $50k in cash ready to buy on a big dip.

Still planning to retire next April.. Just hope the big crash doesn't happen right before I quit..:)

Frank
Title: Re: The first million is the hardest
Post by: Mazzinator on November 20, 2013, 03:54:38 PM
Thanks for clarifying.

I just started looking at the Boglehead forum as well. Very tempted to start handling my money again as I know it's costing me too much to have in managed for me

Hello and welcome!

I'd suggest starting a new post in Investor Alley or Ask a mustachian. You don't need to show your numbers, you can use percentages, if you don't feel comfortable.

From what I've seen on here, it takes most people about a yr to fully understand the ideals here (and personal finance in general) So, I would say, take a few months to "study" before making any drastic changes. And especially if you don't feel you can control yourself. Know thyself!!

These folks on here are plenty generous (of their time and knowledge) and would LOVE to help you out and answer basic and complex questions.

Good luck!!!

ETA: this thread is a mega inspiration to me! One day..one day..
Title: Re: The first million is the hardest
Post by: isleofthorns on November 24, 2013, 01:01:35 PM
Am I alone in finding the whole "double comma" thing just a little crass?

As regards the topic, I would think it fairly obvious that the first million is likely the hardest for most who've achieved that or more. Similarly, further down the scale, I'm sure there are plenty more folk with negative or no assets and modest incomes would view a few thousand as a veritable mount Everest of targets!

My impression from this forum is one of above average earning professionals, able to save and grow their net worth, year-on-year, often in considerable leaps and bounds. Whilst everyone can benefit from taking steps to improve their finances, there is a large proportion of the population for whom a million USD is not realistic or feasible.





Seeing the 100k thread got me thinking about the million dollar thresholds.

I started working in 1990.   I crossed a million in net worth in 2001. 

It took me until 2006 to cross 2MM.  I dipped below briefly during the crisis, but for the most part stayed between 2-3 until 2010.

I hit 3MM in 2010.

I hit 4MM in 2012.   

I hit 5MM in 2013.

So basically it took me 11 years to get to the 1st million, 5 years to the 2nd, 4 years to the 3rd, 2 years to the 4th, and 1 year to the 5th.

I'm defining net worth conservatively, I'm not including home equity but I did subtract mortgage debt for the years that I had it.


Any other 2 comma club members want to chime in?
Title: Re: The first million is the hardest
Post by: Bigote on November 24, 2013, 03:45:42 PM
It is certainly off limits as dinner party conversation goes but it is entirely ok in the 'share your badassity' forum on MMM.   This is a site where we can talk about accomplishments in saving, cutting spending, exercise, efficient living, or anything else that makes up the Mustachian lifestyle.   
Title: Re: The first million is the hardest
Post by: Honest Abe on November 24, 2013, 03:46:26 PM
Am I alone in finding the whole "double comma" thing just a little crass?
My impression from this forum is one of above average earning professionals, able to save and grow their net worth, year-on-year, often in considerable leaps and bounds. Whilst everyone can benefit from taking steps to improve their finances, there is a large proportion of the population for whom a million USD is not realistic or feasible.

While I agree that a 7-figure NW is a formidable goal for many, $1mil is doable on a modest income if a person 1) starts early enough and 2) does it right.
Title: Re: The first million is the hardest
Post by: Dicey on November 24, 2013, 03:47:26 PM
Any other 2 comma club members want to chime in?


Am I alone in finding the whole "double comma" thing just a little crass?

Whilst everyone can benefit from taking steps to improve their finances, there is a large proportion of the population for whom a million USD is not realistic or feasible.


isleofthorns: The phrase is from the 2000 movie "Finding Forrester", in which an impoverished but smart inner-city kid finds success through hard work and the help an unexpected mentor. It's actually a brilliant reference, in no way crass. You can watch the movie and decide for yourself. With mentors like MMM and the members of the forum, I believe anyone can succeed, no matter where their starting point.

BTW, it's not "double comma", it's "two comma".

Bigote: Thanks for the reminder. I love this movie. Think I'll watch it again over the Thanksgiving weekend.



Title: Re: The first million is the hardest
Post by: isleofthorns on November 24, 2013, 05:16:53 PM
I haven't seen that movie.

I first heard it used in reference to the trustafarian kids of NY, starting out life with substantial means and privilege - so, the exact opposite perhaps to the reference point you mention. From my perspective (and perhaps in part it reflects a difference between the UK / USA), giving your financial position a status-moniker as such, is unnecessary and a little crass. Personal taste perhaps.

Whilst I agree anyone can succeed, and I certainly don't belittle the powerful effect a few changes in perspective and effort can have on one's own personal situation, the reality is that for everyone who achieves a sizable stash, there will be a multiple more stuck in debt and finanical precariousness. That is the nature of the game. Money and debt are intrinsically linked.

I've worked alongside and employed people who will barely earn that amount gross in thirty years of work, and in countries where social and financial mobility is barely possible. I think the notion that your first million dollar "two comma" stash is the easiest two-comma stash to make will be wasted on most people (notwithstanding the ability of your Fed to print enough dollars that everyone can soon be in the two comma club!).


Title: Re: The first million is the hardest
Post by: Bigote on November 24, 2013, 08:07:00 PM
Yes it will be wasted on most people.   So will posts about achieving a 65% savings rate.   So will posts about making your own soap.   So will posts about biking to work.

But this site isn't for most people - it is for Mustachians or mustachian wannabes.  So we get to talk about those things. 
Title: Re: The first million is the hardest
Post by: dragoncar on November 25, 2013, 04:04:01 AM
Yes it will be wasted on most people.   So will posts about achieving a 65% savings rate.   So will posts about making your own soap.   So will posts about biking to work.

But this site isn't for most people - it is for Mustachians or mustachian wannabes.  So we get to talk about those things.

What I love about this forum is that we have such a wide variety of people with different goals.  Sure, a million dollars is more than anyone "needs".  From the latest poll, it seems that about half of us are shooting for less than $1 million, and half over.  So I don't think this thread is "wasted" on most people any more than a thread on making your own laundry detergent is wasted.  We are pretty diverse here although I agree we tend towards higher earning professionals.
Title: Re: The first million is the hardest
Post by: isleofthorns on November 25, 2013, 01:29:48 PM

I guess I should endeavour to embrace the concept of badassity, rather than my default "modest-ity".....

How's this?

I worked out today that, in 13 years of running my own business, I have retained and reinvested an average of 80% (savings rate) of my post-tax profits, year on year.......   does that sort of thing qualify?!

As regards the fact that this site is for mustachaians or like, this leads me to pose the question of how would one define the concept? (succinctly if possible!). I'm intrigued as to whether I'm remotely mustachaian.....


Yes it will be wasted on most people.   So will posts about achieving a 65% savings rate.   So will posts about making your own soap.   So will posts about biking to work.

But this site isn't for most people - it is for Mustachians or mustachian wannabes.  So we get to talk about those things.
Title: Re: The first million is the hardest
Post by: 2527 on November 25, 2013, 05:23:18 PM
I don't think it is crass within the context of this website.  I sometimes mention it on this website because it is the only place I can, I don't know any of you in 3DLand, and it might inspire somebody to know what other ordinary people have achieved. 

My income has been on the high side of middle class, but not upper middle class.
Title: Re: The first million is the hardest
Post by: bigchrisb on November 25, 2013, 08:09:28 PM
I hit my $1M at age 31 (started working full time at 23, switched on to financial growth at 25).

Net worth was:
23: -$30k (car loans, student loans)
24: $11k
25: $48k
26: $55k (2008 - GFC & margin calls)
27: $183k
28: $415k (bought into employer)
29: $649k
30: $884k
31: $1,150k

My net worth growth has been:
Capital gain on listed stocks: $240k
Capital gain on private company: $390k
Retirement savings / growth: $155k
Savings/investment/debt repayment: $365k

So roughly 45% from savings and roughly 55% from investment returns.  I've certainly noticed that portfolio returns are now having a large impact compared to my savings (as opposed to the start, where the savings rate was the biggest driver).  However, the savings rate is the only one I have any control over, so the one that I still focus on!

Hopefully I can report back in a couple of years about how the second million fares.
Title: Re: The first million is the hardest
Post by: imustachemystash on November 25, 2013, 08:20:40 PM
I like this thread because I find it interesting to read about how people went about getting their first million.  It's something I don't hear people talk about in real life, so I'm glad there are people here willing to share.
Title: Re: The first million is the hardest
Post by: zinethstache on January 09, 2014, 11:28:25 AM
+1

I am approaching that 1m mark...it is a mix of retirement savings and real estate. Loved reading the thread. Definitely not your casual conversation.
Title: Re: The first million is the hardest
Post by: dude on January 09, 2014, 01:19:47 PM
Yes it will be wasted on most people.   So will posts about achieving a 65% savings rate.   So will posts about making your own soap.   So will posts about biking to work.

But this site isn't for most people - it is for Mustachians or mustachian wannabes.  So we get to talk about those things.

Yep, that's it in a nutshell really.  This is the place where you can anonymously get some feedback, or support, or a pat on the back, for efforts that you can't talk about in polite society or with your family and friends, and where you can learn from and marvel at those who've crossed that FIRE line, or who are closing in on it.  No two people do it the same way, but there are certainly some common denominators, and I for one, love to hear about the success stories.  Very motivating.
Title: Re: The first million is the hardest
Post by: Poorman on January 09, 2014, 03:02:32 PM
Of course this is funny money.. I have a large exposure to stock ETF's and we know a significant pullback is coming and probably soon.

I was just thinking the tone of this thread would be a lot different if stocks had suffered a negative return in 2013.  Bull markets tend to make geniuses of us all.
Title: Re: The first million is the hardest
Post by: marty998 on January 10, 2014, 03:57:04 PM


28: $415k


hmmm...I am actually right here....28 and $415k-$420k.

If I got to $1,150k in 3 years time it's likely there will also be flabby pink animals cruising past at altitude. But stranger things have happened  ;)
Title: Re: The first million is the hardest
Post by: Blindsquirrel on January 12, 2014, 07:06:12 PM
   First million is definitely the hardest. I do not find the OP crass, this is share your badassity and the dude is bad ass! Our first $1,000,000 at around 2005 was saved by investing in stocks and SFR real estate with a 4 flipped houses. Lots of work and a few poor decisions for sure. We dropped below 1M but kept saving and investing. We went from 1.6 to 2.2 in the last 2 years while picking up 3500 a month in passive income. (debt reduction and 4 sfrs) Once you cross the event horizon of compound interest it goes nuts. To do the first million we each never made more than 60k from our jobs but had great company 401k contributions. We now pay more in total taxes (100K) than we made 10 years ago. I will exit work at the paid off house and $3,000,000 mark at around 50. We may well pull the plug on jobs sooner than that.  You can do it. Real estate and SPY can get you there. It is not a race but once it happens, it happens fast. I had done the calculations and the math but when it actually happens to you 1. It is amazing. 2. It is a really good feeling. 3. Congrats and major props to the OP for having great big brass ones during the financial cricis.
Title: Re: The first million is the hardest
Post by: libertarian4321 on January 27, 2014, 03:15:34 PM
Our growth rate has slowed a lot because we just don't try as hard anymore.

I was obsessed with making money when I was young (I started working full time in '85)- spent all my free time investing and researching, and did very well on a fairly modest income.

But at some point, we realized we had more than we needed, that we don't need to work unless we want to, and stopped obsessing about it.  I used to know my net worth to the penny every day, now I honestly don't know what it is, I would guess somewhere between 2.5 and 3 million.

I retired early in 2006, went back to work in 2010 (yeah, I know, I'm nuts :) but give most of my salary to charity- though with my wife's salary and investment returns, our net worth is still rising.
Title: Re: The first million is the hardest
Post by: Another Reader on January 27, 2014, 05:11:25 PM
+1 to Blind Squirrel's comments.

I retired and promptly took a big hit to my net worth because of what happened to the real estate market and then the stock market.  The important lesson I learned is the rent and dividend checks still show up for the most part (along with the pension checks in my case), and as long as that happens, you will survive.  At some point, you will recover. 

Leverage and compounding are your friends and can alter the event horizon in your favor.  As long as you do not put yourself in a position where you lose the underlying income producing assets when the SHTF, you will be just fine.

Title: Re: The first million is the hardest
Post by: anisotropy on April 16, 2014, 12:58:38 PM
post of resurrection !!!

i've actually noticed as the stash gets bigger and bigger the % of tax actually goes down (thanks to the preferential treatment of investment income). i am unsure how fair that is.....

ethics aside, last year we paid 15% average tax, had we "made" the same amount from employment income our average tax would have been around 40%.

lesson? yes, the first million is the hardest, after that, not only do we "make" more, we also get to keep more.
Title: Re: The first million is the hardest
Post by: Exflyboy on April 16, 2014, 03:56:16 PM
Yes an old thread but  a good one.

The obvious advantage of hitting $2M is if 2008 happens again then that $2M will become a little over $1M.. Enough to still give a decent salary at 4% SWR.

At the market peak a couple of weeks back I was at $1,325,000.

Although very much a first world problem the thing that worries me just a little is that if 2008 happens now I'll only be worth a little over $600k.

Frank
Title: Re: The first million is the hardest
Post by: Baylor3217 on April 16, 2014, 07:45:42 PM
This is my concern as well. I know it's going to happen eventually just who knows when. Maybe ill be retired and go back to work for 3-4 years until the politicians find a way to goose it back up again.

Yes an old thread but  a good one.

The obvious advantage of hitting $2M is if 2008 happens again then that $2M will become a little over $1M.. Enough to still give a decent salary at 4% SWR.

At the market peak a couple of weeks back I was at $1,325,000.

Although very much a first world problem the thing that worries me just a little is that if 2008 happens now I'll only be worth a little over $600k.

Frank
Title: Re: The first million is the hardest
Post by: dan@themadrealworld on April 17, 2014, 01:43:45 PM
Happy for all of you with the high net worth. Mine is about $270k right now but it is growing and at a faster and faster rate as I continue to purchase rental properties.  In the last year I have cut down on working at my job big time and gone long periods without working and my net worth keeps going up!

It is a great feeling and provides flexibility to work on other things and spend more time with my family.

Question for people with $1 million+.  Was there a point when net worth started growing on autopilot?  When did you decide to retire and what have you done in retirement?
Title: Re: The first million is the hardest
Post by: mjs111 on April 17, 2014, 02:14:13 PM
Was there a point when net worth started growing on autopilot?

Yes in the sense that a 5% return on $1M or $2M is a lot of money in an absolute sense, making that second million (or whatever your next milestone is) that much easier.  The compounding machine really kicks into high gear when you start dealing with principal amounts in the high six figures/low seven figures.

No in the sense that you need to make sure not to get too cocky and comfortable, truly leaving your finances on autopilot. Whatever due diligence you used to get to that first milestone makes sense to keep in place to get to that next milestone.

Mike

Title: Re: The first million is the hardest
Post by: FIreDrill on April 17, 2014, 02:42:54 PM
Hitting a million seems so far away but I have loved reading through this thread.  I'm going for 100k at the moment but someday.... I'll get there....
Title: Re: The first million is the hardest
Post by: Jon_Snow on April 17, 2014, 04:54:36 PM
My wife and I hit 1M net worth when we were 35, largely due to a prodigious ability to save money, with a nice assist from the phenomenon known as Vancouver Real Estate.

We passed 2M net worth just a few months ago, around my 42nd birthday. The difference now is that in addition to a ridiculous savings rate (80%), we now have a considerable stream of investment income that we reinvest diligently - Einstein wasn't kidding when he extolled the virtues of compound interest. Amazing to watch.

I sometimes wonder what our finances would look like if I could keep it together and work another 5 years... but this feeling passes quickly. I intend to ER this year, while my wife wants to continue to work for a spell. I think by the time she joins me, our NW should be around 3M...
Title: Re: The first million is the hardest
Post by: Bigote on April 18, 2014, 07:38:25 AM
Was there a point when net worth started growing on autopilot?  When did you decide to retire and what have you done in retirement?

Yeah, though autopilot can work both ways!  But the portfolio momentum can start to dwarf typical earnings easily enough.   My portfolio swings are very often 5 figures on any given day (up 12k yesterday, for example).   

I have been doing my own version of semi-ER for close to 10 years, but rather than being part time work its been working on and off.   I took a couple of sabbaticals and changed jobs twice, each time with a gap year between jobs.   Finally a year ago I pulled the plug for good.   My life now is like MMMs but without all the construction stuff :)   Seriously though I spend a lot of time with my boy, and a lot of time in the community.   
Title: Re: The first million is the hardest
Post by: Gin1984 on April 19, 2014, 10:00:36 AM
Am I alone in finding the whole "double comma" thing just a little crass?

As regards the topic, I would think it fairly obvious that the first million is likely the hardest for most who've achieved that or more. Similarly, further down the scale, I'm sure there are plenty more folk with negative or no assets and modest incomes would view a few thousand as a veritable mount Everest of targets!

My impression from this forum is one of above average earning professionals, able to save and grow their net worth, year-on-year, often in considerable leaps and bounds. Whilst everyone can benefit from taking steps to improve their finances, there is a large proportion of the population for whom a million USD is not realistic or feasible.





Seeing the 100k thread got me thinking about the million dollar thresholds.

I started working in 1990.   I crossed a million in net worth in 2001. 

It took me until 2006 to cross 2MM.  I dipped below briefly during the crisis, but for the most part stayed between 2-3 until 2010.

I hit 3MM in 2010.

I hit 4MM in 2012.   

I hit 5MM in 2013.

So basically it took me 11 years to get to the 1st million, 5 years to the 2nd, 4 years to the 3rd, 2 years to the 4th, and 1 year to the 5th.

I'm defining net worth conservatively, I'm not including home equity but I did subtract mortgage debt for the years that I had it.


Any other 2 comma club members want to chime in?
I personally don't think one million is something that is hard to obtain.  A million dollars using the 4% rule only gives you $40,000 so I would think that most Americans will need that to retire.  Saving $400 from 25-65 gives you that million. 
http://budgeting.about.com/od/Why_Budget/a/How-To-Be-A-Millionaire.htm
Title: Re: The first million is the hardest
Post by: paddedhat on April 20, 2014, 06:09:17 AM
After years of investing/gambling in the market, I finally gave in to having my cousin manage my money. Although his fees are high, I feel I am guarded from a large downside risk of a market. I am still on the fence watching the market soar with my mediocre returns this year.


I have to admit, this is tough to read. I'm glad that you clarified the difference between your actual gambling in the market, and the way the word is used by most. For example, I watch family members struggle, and work hard well into their 60s, with no real strategy, as they tell me that they have their money in the bank since they won't "gamble in the market". I hope you take the time to stop by a friend of this forum, and read what he has to say about the market and investing. Go to  http://jlcollinsnh.com and read his "stock series".

To illustrate the difference between his thinking and staying with a "pro" and all the high fees and poor performance they often bring to the table, I can offer a stunning personal experience. I was pushed into using a "great guy" from one of the mega-banks. He came highly recommended by a friend, who is a estate lawyer and does a lot of client business with him.  After far too much churning of my account, high fees and little to show for it, I pulled 80% of my funds and went with Vanguard. Two years later I was up 51% with Vanguard and 9% with my advisor. My advisor got 1/3rd of the pathetic gain as a fee for his dismal performance. Vanguard's fees were a tiny fraction of his. During that time period I threw away $2K a month on a very well regulated and vetted "investment professional", who, like most of them, was unable to get CLOSE to matching the index on a bull market as he did stupid shit like leaving cash on the sidelines and buy gold mining stock, etc.....
   Not a personal attack on your cousin in the least, but you can move to Vanguard, select whatever risk you are comfortable with, and forget about it. You will save thousands yearly in fees, be invested in a rock solid company that was built for the "little guy" and end up far wealthier in the end. Good luck.
Title: Re: The first million is the hardest
Post by: sleepyguy on April 20, 2014, 07:22:15 PM
TEACH ME MASTER! ;) j/k

A million doesn't seem to far from us currently, but 2-3-4... seems pretty out of reach.  We'll be semi-retiring once we reach about 1-1.2 in equities.

that's pretty awesome man tks for sharing... enjoy life!
Title: Re: The first million is the hardest
Post by: dan@themadrealworld on April 20, 2014, 07:24:49 PM
Quote
After years of investing/gambling in the market, I finally gave in to having my cousin manage my money. Although his fees are high, I feel I am guarded from a large downside risk of a market. I am still on the fence watching the market soar with my mediocre returns this year.


Quote
I have to admit, this is tough to read.

I agree.  If you are going to invest, invest with low cost index funds.  You don't need someone to manage your money.

It is a mistake to keep too much cash out of fear but you don't have to invest in stocks either.  I invest most of my money in real estate at this point in time.
Title: Re: The first million is the hardest
Post by: Thomas54 on April 20, 2014, 09:18:31 PM
It is certainly off limits as dinner party conversation goes but it is entirely ok in the 'share your badassity' forum on MMM.   This is a site where we can talk about accomplishments in saving, cutting spending, exercise, efficient living, or anything else that makes up the Mustachian lifestyle.

I understand completely about not talking finances at a gathering.  Since I retired from my federal job a couple of years ago and since I live in a modest 1900 sq. ft. home (which is paid for), most folks figure that we are your average Joe's.  What I don't advertise very often is that we were 125K in debt nine years ago.  I had just turned 50 and I had an epiphany one evening while looking over our financial spreadsheet.  I realized that we were going more and more negative every month and that I was never going to be able to retire. 

I proceeded to walk into our living room and I told my wife that the buck stops with me and that I need her help if we are to ever retire.  She bought in and we shredded every credit card that night.  We put ourselves on a $100 a week allowance for gas and lunch, and went from eating out 3 nights a week to 1 night per week.

We paid off the highest credit card first and then went down the line.  We went into 'debt free' status 2 years after my epiphany.  Had I known that debt free felt so great, I think that we would have done it several years sooner.

I'm not certain how to figure in my pension into my net worth or whether I should.  I know that between the house, cash, savings, some small investments, and toys, our net worth is in the 500K range.  If I figure the pension in, it is probably in the 3mil ballpark.  Now all I have to do is live to 90 like most of the men in my family.

Thomas

Title: Re: The first million is the hardest
Post by: NewStachian on April 21, 2014, 03:54:12 PM
I will caveat with I am not at $1M yet, but I have a little advice that I think might be relevant.

I got married last year. I had been doing pretty well savings, but was definitely a wasteful spender. I had been tracking my net worth and it appreciated at 19% over the last 10 years, so my savings rate was an icky 12-ish% if you include my other returns in the market.

Getting married at 30 made me realize that if my wife and I want to have kids, it will happen in the next 2-3 years. Being dual income and continuing to live a frugal lifestyle allowed us to stash over $100k last year and really feed the principal beast. If any of you are young, keep in mind this double income trick. Even if you can only do it for a few years, it will pay off huge down the road. We should be able to hit $1M in the next 2-3 years given normal market returns and go down to single income to have a stay at home parent (not FIRE. expensive house. don't ask ;)
Title: Re: The first million is the hardest
Post by: dan@themadrealworld on April 21, 2014, 05:59:49 PM
I have done everything so far on my income alone.  Would have been great to have another strong income.  I may have been at that $1 million mark by now.
Title: Re: The first million is the hardest
Post by: Blindsquirrel on April 21, 2014, 06:51:40 PM
   Dan, has a really good point. Most fixed costs remain the same when you go from a one person household to a two person household. Having a second powerful earner really gives you a firehose of cash every month to invest. Once you have a good size stash, the firehose of income along with income from your investments really cranks up. On the flip side, if you marry a spendy spouse with a ton of debt and low income, it can stunt your stash. 
Title: Re: The first million is the hardest
Post by: dan@themadrealworld on April 21, 2014, 07:17:31 PM
Definitely.  Best to find a partnet with similar financial habits.
Title: Re: The first million is the hardest
Post by: RMD on April 22, 2014, 06:25:39 AM
For those who have made it through...was there a spot where you felt stuck?

I feel like I've been hanging at 250,000 for forever.
Title: Re: The first million is the hardest
Post by: Gin1984 on April 22, 2014, 06:58:06 AM
   Dan, has a really good point. Most fixed costs remain the same when you go from a one person household to a two person household. Having a second powerful earner really gives you a firehose of cash every month to invest. Once you have a good size stash, the firehose of income along with income from your investments really cranks up. On the flip side, if you marry a spendy spouse with a ton of debt and low income, it can stunt your stash.
Or a kid, lol.
Title: Re: The first million is the hardest
Post by: soccerluvof4 on April 22, 2014, 08:25:45 AM
i Was in and out of the 1M club to 1.5 from 32 to about 42 and took a huge real estate hit. Changed alot of things around, went into protectionism as I called it and crossed well over the 2M last fall.  Mostly by selling shit I wasnt using. I starting hitting the Index funds hard just about 4 months ago. Hopefully with my shit together and the help of people on these boards I can keep it on the rise for the next 3. 5 years. I am in ER but wife is still overseeing 25 hrs a week our business so we can max out 401ks etc...Simply by her choice.
Title: Re: The first million is the hardest
Post by: HAULIN3 on April 22, 2014, 03:13:45 PM
I'm very excited about that easy 2nd million.  I'm only at 440K right now, but you know, it's going to be hard to get to that 1st million...

Hopefully the second 500k is easier than the first 500k :)

Dude, word.

Double WORD!!!
Title: Re: The first million is the hardest
Post by: dragoncar on April 22, 2014, 03:55:25 PM
I'm very excited about that easy 2nd million.  I'm only at 440K right now, but you know, it's going to be hard to get to that 1st million...

Hopefully the second 500k is easier than the first 500k :)

Dude, word.

Double WORD!!!

So for not so good for my second $500k... I'm a terrible investor.
Title: Re: The first million is the hardest
Post by: EscapeVelocity2020 on April 22, 2014, 09:27:03 PM
I'm commenting to the first page and a half of the thread, so I may be off topic a bit in my reply, but my inner thoughts on the earlier comments is that the feelings are very temporal.  Sure, it's easy to go from 1 to 2 to x mil if you started with the 1+ at the S&P 666 on March 2009.  I was well below a mil and it's been a matter of not paying attention until now to get above a mil.  And if the market continues to run, you'll have more people piling onto this thread that investing and real estate is easy.  But there was that pesky tech stock collapse in 2000/01, and then the financial collapse in 2008/09.  I'm betting another rain-cloud will roll in before I'm in the ground...  But there's always the hope that America enjoys a pleasant, if not somewhat boring plateau after this bull run...

In the meantime, I'm enjoying the caviler attitude discussing huge sums money in a MMM forum, so I'm posting to see where this goes next!  Maybe WestchesterFrugal will pop up?
Title: Re: The first million is the hardest
Post by: mjs111 on April 30, 2014, 10:26:01 AM
Congrats, Cottonswab!

A few other fun psychological things to watch out for in addition to the ones you mentioned:

1.  In the next market downturn that takes your portfolio just a bit below $1 million you might feel poor and perhaps slightly depressed, even though from a practical standpoint your financial position hasn't really changed.

2.  The next time you go above $1 million you won't have the same feeling of accomplishment the first time you did. It'll feel more like relief that you "recovered" to $1 million vs. attaining it.

3. You might start feeling like $1 million isn't all that much money, now that you have it: a monetary-based "familiarity breeds contempt."


Really awesome job! Just watch out for all the mental hobgoblins out there. :)


Mike
Title: Re: The first million is the hardest
Post by: Cottonswab on April 30, 2014, 03:09:05 PM

A few other fun psychological things to watch out for in addition to the ones you mentioned:

1.  In the next market downturn that takes your portfolio just a bit below $1 million you might feel poor and perhaps slightly depressed, even though from a practical standpoint your financial position hasn't really changed.

2.  The next time you go above $1 million you won't have the same feeling of accomplishment the first time you did. It'll feel more like relief that you "recovered" to $1 million vs. attaining it.

3. You might start feeling like $1 million isn't all that much money, now that you have it: a monetary-based "familiarity breeds contempt."


Really awesome job! Just watch out for all the mental hobgoblins out there. :)

Good points. 

I am already starting to experience goal creep.  My FI target used to be $1.25M.  However, I am mentally starting to nudge that number higher with "what ifs".  Hello, Indeterminate Safety Cushion!

I am already hedging against the next major stock market downturn, so I hope it won't be too depressing!  The constant/increasing dividend income should keep my spirits high!

Title: Re: The first million is the hardest
Post by: Workinghard on April 30, 2014, 04:50:21 PM

A few other fun psychological things to watch out for in addition to the ones you mentioned:

1.  In the next market downturn that takes your portfolio just a bit below $1 million you might feel poor and perhaps slightly depressed, even though from a practical standpoint your financial position hasn't really changed.

2.  The next time you go above $1 million you won't have the same feeling of accomplishment the first time you did. It'll feel more like relief that you "recovered" to $1 million vs. attaining it.

3. You might start feeling like $1 million isn't all that much money, now that you have it: a monetary-based "familiarity breeds contempt."


Really awesome job! Just watch out for all the mental hobgoblins out there. :)

Good points. 

I am already starting to experience goal creep.  My FI target used to be $1.25M.  However, I am mentally starting to nudge that number higher with "what ifs".  Hello, Indeterminate Safety Cushion!

I am already hedging against the next major stock market downturn, so I hope it won't be too depressing!  The constant/increasing dividend income should keep my spirits high!

I appreciate the points too. We're not at 1m yet, but I've already notice the "creep" factor.
Title: Re: The first million is the hardest
Post by: mjs111 on April 30, 2014, 05:46:52 PM

I am already hedging against the next major stock market downturn, so I hope it won't be too depressing!  The constant/increasing dividend income should keep my spirits high!

Just think of a big market downturn as a sale on some of the best companies out there. The stock market is the only place where a big sale makes people run for the exits.*


*I didn't make up this clever phrase, wish I did.  I think it's a Warren Buffett-ism.

Mike
Title: Re: The first million is the hardest
Post by: warfreak2 on April 30, 2014, 05:57:49 PM
*I didn't make up this clever phrase, wish I did.  I think it's a Warren Buffett-ism.
OTOH, Warren Buffett is still in the accumulation phase (we're wondering how long he has left to go...), and your perspective will probably be different once you're in the withdrawal phase.
Title: Re: The first million is the hardest
Post by: mjs111 on April 30, 2014, 06:06:28 PM
*I didn't make up this clever phrase, wish I did.  I think it's a Warren Buffett-ism.
OTOH, Warren Buffett is still in the accumulation phase (we're wondering how long he has left to go...), and your perspective will probably be different once you're in the withdrawal phase.

Very true.  As long as you're a net buyer of stocks, take advantage of the sales as they come.

Mike
Title: Re: The first million is the hardest
Post by: Lukim on April 30, 2014, 09:14:27 PM
I broke through the $1M barrier today.  Here's to an easier second million!

I suspect that financial complacency and hedonic adaptation will set in, making the second million more difficult.  We shall see!

No, if you made it to the first $1m then it will be easy to build on from there.

Sure, you feel you can spend a bit more but you can afford to spend more and if you established the habits to get you to the first $1m (assuming you did not get it winning the lottery), you will be right to build on it.
Title: Re: The first million is the hardest
Post by: Jon_Snow on May 01, 2014, 08:57:11 AM
Our 3rd million will likely take just as long as the second, perhaps longer since we will be down to one income (wife's). So much will depend on market performance - it used to be that we saved so much due to LBYM that markets didn't matter too much. This is about to change with my impending ER. Bit nervous - though logically it doesn't make sense to be so... I'm just wired this way. :)
Title: Re: The first million is the hardest
Post by: mjs111 on May 01, 2014, 10:26:51 AM
Our 3rd million will likely take just as long as the second, perhaps longer since we will be down to one income (wife's). So much will depend on market performance - it used to be that we saved so much due to LBYM that markets didn't matter too much. This is about to change with my impending ER. Bit nervous - though logically it doesn't make sense to be so... I'm just wired this way. :)

That's true.  Once the portfolio gets big enough the dollar amount it can move in a day can be significant relative to the amount of new money you're putting in. A 1% move up or down on a $2 million portfolio is $20,000, which might equate to half a year's worth or more of active savings. 


Mike
Title: Re: The first million is the hardest
Post by: slothman on May 06, 2014, 06:19:04 AM
If all goes to plan, I hope to break the $1M networth mark in 4 years, excluding the home.

I currently hold:
~$1.7M in investment property, with $500K in equity
~$90K in shares, mainly in listed investment companies (essentially low cost passive-ish mutual funds that pay fully franked dividends)

I've been racking my brain to try to figure out how to FIRE from a heavy property portfolio, particularly one with debt. My thinking is to sell one or two properties to clear some debt, cash in some of that equity, and purchase more shares for better cashflow.
Title: Re: The first million is the hardest
Post by: soccerluvof4 on May 06, 2014, 01:57:41 PM
Our 3rd million will likely take just as long as the second, perhaps longer since we will be down to one income (wife's). So much will depend on market performance - it used to be that we saved so much due to LBYM that markets didn't matter too much. This is about to change with my impending ER. Bit nervous - though logically it doesn't make sense to be so... I'm just wired this way. :)

That's true.  Once the portfolio gets big enough the dollar amount it can move in a day can be significant relative to the amount of new money you're putting in. A 1% move up or down on a $2 million portfolio is $20,000, which might equate to half a year's worth of more of active savings. 



yea, thats a really good point. I never really looked at it that way but better start!


Mike
Title: Re: The first million is the hardest
Post by: Exflyboy on May 07, 2014, 09:59:13 AM
Of course eventually your money will work harder than you can.. or at least what you are throwing in the savings pot becomes small.

Say you have a $1M portfolio, an  d its making 10% on average... That $100k per year.

If your saving $17.5K in your 401k, then thats pretty small in comparison.

But of course, watching the daily wild swings in my portfolio kinda makes finding this weeks special price on beans at the supermarket seem a bit trivial...:)


Frank
Title: Re: The first million is the hardest
Post by: FiveSigmas on May 07, 2014, 10:26:51 PM
But of course, watching the daily wild swings in my portfolio kinda makes finding this weeks special price on beans at the supermarket seem a bit trivial...:)

Yet another reason not to pay daily attention to the market and instead just focus on things you can control (like asset allocation... and grocery bills) :-).
Title: Re: The first million is the hardest
Post by: FireYourJob on December 31, 2014, 01:03:58 AM
Been a while since we got an update bigote
Title: Re: The first million is the hardest
Post by: Workinghard on December 31, 2014, 03:35:48 AM
I'm beginning to think the last 50k of the first million is the hardest! We've been up and down due to fluctuations with our home (we're including it-currently prepping for sale) and stock market,  wedding, college money for a grandkid. Didn't make it this year, but since my original goal was 900k at year end, we're still ahead. Still...
Title: Re: The first million is the hardest
Post by: gnomemom on December 31, 2014, 09:38:59 PM
I love this thread!  I can't wait to be a member of the two comma club!
Title: Re: The first million is the hardest
Post by: Davids on January 01, 2015, 10:32:26 AM
I crossed the $600K mark last month, cannot wait till I hit the $1M mark.
Title: Re: The first million is the hardest
Post by: chuckaluck on January 01, 2015, 11:37:09 AM
I am blown away by how fast some have hit the million mark.  Congratulations!  This is my journey along with major expenses that slowed the accumulation rate a bit (but NO regrets): 

Started first real job in 1980
Married in 1990, Kiddos in 1990 and 1995.
Wife completed masters degree 1992
I completed doctorate in Jan 1996
500K net worth in May 1999
1 mil in Feb 2005
Kiddo 1, 4 years of private college (pd cash)
1.5 mil in Jan 2011
Retired at 58 yrs old in Dec 2012
Kiddo 2, Began 4 years of private college 2012 (pd, will pay cash)
2.0 mil in Oct 2013
2.2 mil in Dec 2014

Also along the way, two major additions onto home, vacations, various certifications for different fields, etc (all cash pd)







Title: Re: The first million is the hardest
Post by: Exflyboy on January 01, 2015, 12:37:54 PM
Thats an amazing rate of growth Chuck.. What sort of salary were you making in recent years?

Frank
Title: Re: The first million is the hardest
Post by: ysette9 on January 02, 2015, 09:31:39 AM
We just recently hit that mark and I have to say that looked by back on it, the ability to build net worth really took off after we got married. It took 10 years to reach that mark from when we first entered the workforce. I had estimated it would take another ten years for the second million and with it, FI. I certainly hope it comes more quickly than that!
Title: Re: The first million is the hardest
Post by: JLee on January 02, 2015, 11:47:22 AM
We just recently hit that mark and I have to say that looked by back on it, the ability to build net worth really took off after we got married. It took 10 years to reach that mark from when we first entered the workforce. I had estimated it would take another ten years for the second million and with it, FI. I certainly hope it comes more quickly than that!
I am really looking forward to two incomes. Unfortunately we have an international border to cross for that, but hopefully soon.
Title: Re: The first million is the hardest
Post by: chuckaluck on January 02, 2015, 11:50:36 AM
Thats an amazing rate of growth Chuck.. What sort of salary were you making in recent years?

Frank

Gross salaries only, my wife and I pulled in 200K + in each of the 5 years or so before I semi-retired at 58 years old.   By Mustachian standards, we did not do as well as we could have with regard to saving.  But to be honest, when we knew we were FI about 4 to 6 years ago (after being pretty Mustachian for many years), we kind of let up and did some of the things that we were going to do "some day".  No regrets for taking vacations, for example, while we are still healthy enough to enjoy it.   
Title: Re: The first million is the hardest
Post by: Exflyboy on January 02, 2015, 01:55:52 PM
Thats an amazing rate of growth Chuck.. What sort of salary were you making in recent years?

Frank

Gross salaries only, my wife and I pulled in 200K + in each of the 5 years or so before I semi-retired at 58 years old.   By Mustachian standards, we did not do as well as we could have with regard to saving.  But to be honest, when we knew we were FI about 4 to 6 years ago (after being pretty Mustachian for many years), we kind of let up and did some of the things that we were going to do "some day".  No regrets for taking vacations, for example, while we are still healthy enough to enjoy it.   

Well done! Absolutely.. No shame in that at all.. I am 53 and we expect to have pensions of about $42k a year in 8 years from now.

Currently have a stash of just shy of $1.5M.. Plus have some rent, a part time (and very well paid) job for me and the Wife will work for another 2 years.. So without touching the stash we should be fairly close to where you guys are.

Frank

Title: Re: The first million is the hardest
Post by: RyanAtTanagra on January 02, 2015, 03:04:53 PM
All of my spreadsheet projections look like the OP's path, with net worth growing like crazy once we no longer need it to. I find it slightly distressing and I expect it to keep me working longer than necessary.  One more year and I can buy a yacht! One more year and my grand kids also get free college. One more year and I can endow a scholarship. One more year and I can feed 1000 starving African families forever.  The payoff just goes up and up.

Fret not, there is probably a natural stop to this with the second 'number'.  The first being the point where your investment income equals your expenses.  If you keep working you'll eventually hit a point where your it equals your wage income.  Eventually your wage income will be dwarfed by your investment income, at which point it will feel more and more pointless to keep working ;-)
Title: Re: The first million is the hardest
Post by: Bigote on March 22, 2015, 03:10:53 PM
Seeing the 100k thread got me thinking about the million dollar thresholds.

I started working in 1990.   I crossed a million in net worth in 2001. 

It took me until 2006 to cross 2MM.  I dipped below briefly during the crisis, but for the most part stayed between 2-3 until 2010.

I hit 3MM in 2010.

I hit 4MM in 2012.   

I hit 5MM in 2013.

So basically it took me 11 years to get to the 1st million, 5 years to the 2nd, 4 years to the 3rd, 2 years to the 4th, and 1 year to the 5th.

I'm defining net worth conservatively, I'm not including home equity but I did subtract mortgage debt for the years that I had it.


Any other 2 comma club members want to chime in?


Finally hit 6MM on Friday.   So it took two years from 5MM->6MM.  But it just barely crossed the line, so it could drop back below on Monday easily.    Anyway, this is the only place I can share the milestone, so I thought I would. 

Title: Re: The first million is the hardest
Post by: dragoncar on March 22, 2015, 03:46:12 PM
Seeing the 100k thread got me thinking about the million dollar thresholds.

I started working in 1990.   I crossed a million in net worth in 2001. 

It took me until 2006 to cross 2MM.  I dipped below briefly during the crisis, but for the most part stayed between 2-3 until 2010.

I hit 3MM in 2010.

I hit 4MM in 2012.   

I hit 5MM in 2013.

So basically it took me 11 years to get to the 1st million, 5 years to the 2nd, 4 years to the 3rd, 2 years to the 4th, and 1 year to the 5th.

I'm defining net worth conservatively, I'm not including home equity but I did subtract mortgage debt for the years that I had it.


Any other 2 comma club members want to chime in?


Finally hit 6MM on Friday.   So it took two years from 5MM->6MM.  But it just barely crossed the line, so it could drop back below on Monday easily.    Anyway, this is the only place I can share the milestone, so I thought I would.

Sweet - remind us, are you still working?  Or is this including draw-downs?
Title: Re: The first million is the hardest
Post by: Bigote on March 22, 2015, 03:51:01 PM
I'm not, my wife is even though she doesn't need to.   So no draw downs yet, though no significant additions either.
Title: Re: The first million is the hardest
Post by: imustachemystash on March 22, 2015, 03:57:58 PM
Bigote, you are so inspiring.  Thanks for keeping us posted so we can live vicariously through you. 
Title: Re: The first million is the hardest
Post by: Workinghard on March 22, 2015, 04:02:23 PM
We finally broke through the 1m NW barrier. Have to admit I'm exhausted with working OT. We put 75k into savings last year and I want to do so again before my dh retires next year. It took us 23 years, starting out negative (dh not me), and living on one income of about 50-60k for 10 of those years.
Title: Re: The first million is the hardest
Post by: FrontRanger on March 22, 2015, 05:48:27 PM
I wish that I would have tracked NW all the way to this point. I think I was about $850K in 2008 and am at $1.97MM today. The last $30K is teasing me badly, but agree the first $1MM was the long haul.

I'm 37, married, and 3 small kids, so I will be in the working game another 10 years or so.
Title: Re: The first million is the hardest
Post by: Money Badger on March 22, 2015, 09:25:52 PM
Truly badass stories on moving up from 1M onwards on here...   What are the 3 best ways to accelerate from 1M though?   We're hoving at the 1M net mark (inclusive of home equity) but I have 6 years of college coming at me from 2 kids and am trying to keep the stash from taking a beating...   They're smart kids, and will go to a state school to max value of the education.  But the math says books/incidentals/housing are going to eat our monthly safety margin even after MMM lifestyle trimming in the overlapping 2 years.  Seems the best ways to get to 2M are:

1. Compounding.    Resist the urge to spend the cash flow/divy's from after tax accounts.
2. Real Estate Rental Income (after 1M).   Requires all the hard work/time/risk of rental property
3. Inherit.   Making it the old fashioned way is not likely given today's life expectancies...
4. What else did you really focus your energy on to get to 2M and beyond more effectively?
Title: Re: The first million is the hardest
Post by: Gin1984 on March 22, 2015, 09:39:15 PM
Truly badass stories on moving up from 1M onwards on here...   What are the 3 best ways to accelerate from 1M though?   We're hoving at the 1M net mark (inclusive of home equity) but I have 6 years of college coming at me from 2 kids and am trying to keep the stash from taking a beating...   They're smart kids, and will go to a state school to max value of the education.  But the math says books/incidentals/housing are going to eat our monthly safety margin even after MMM lifestyle trimming in the overlapping 2 years.  Seems the best ways to get to 2M are:

1. Compounding.    Resist the urge to spend the cash flow/divy's from after tax accounts.
2. Real Estate Rental Income (after 1M).   Requires all the hard work/time/risk of rental property
3. Inherit.   Making it the old fashioned way is not likely given today's life expectancies...
4. What else did you really focus your energy on to get to 2M and beyond more effectively?
Don't assume a state school is the best idea.  My friends who went to private universities paid less  overall than public because the aid packages were better.
Title: Re: The first million is the hardest
Post by: FOBStash on March 22, 2015, 10:28:06 PM
bigote, what is your age?

Inspiring thread
Title: Re: The first million is the hardest
Post by: FrontRanger on March 23, 2015, 06:14:45 AM
Truly badass stories on moving up from 1M onwards on here...   What are the 3 best ways to accelerate from 1M though?   We're hoving at the 1M net mark (inclusive of home equity) but I have 6 years of college coming at me from 2 kids and am trying to keep the stash from taking a beating...   They're smart kids, and will go to a state school to max value of the education.  But the math says books/incidentals/housing are going to eat our monthly safety margin even after MMM lifestyle trimming in the overlapping 2 years.  Seems the best ways to get to 2M are:

1. Compounding.    Resist the urge to spend the cash flow/divy's from after tax accounts.
2. Real Estate Rental Income (after 1M).   Requires all the hard work/time/risk of rental property
3. Inherit.   Making it the old fashioned way is not likely given today's life expectancies...
4. What else did you really focus your energy on to get to 2M and beyond more effectively?

I would say invest in the market when others are fearful. I was smart enough to pile cash into the market from 2007-2010 and am  thankful I did.

Also, continue to find ways to maximize both earnings and spending. I have a personal mantra of growing my income at 2x my spending rate. Resulted in 65% savings rate to date.
Title: Re: The first million is the hardest
Post by: Candace on March 23, 2015, 07:42:52 AM
Yep, I'm in the two-comma club if I include home equity. Investments that are in the stock market total about $875K. So right now my portfolio generates more additional stache money than I can, at least in a decent market year. It doesn't stop me from trying to save all I can though. I can't relax just because my money is on autopilot. Saving will still get me to FI earlier. I want a lifestyle that includes frequent travel, and that costs money, so I'm working longer to achieve that.
Title: Re: The first million is the hardest
Post by: dude on March 23, 2015, 07:59:08 AM
Seeing the 100k thread got me thinking about the million dollar thresholds.

I started working in 1990.   I crossed a million in net worth in 2001. 

It took me until 2006 to cross 2MM.  I dipped below briefly during the crisis, but for the most part stayed between 2-3 until 2010.

I hit 3MM in 2010.

I hit 4MM in 2012.   

I hit 5MM in 2013.

So basically it took me 11 years to get to the 1st million, 5 years to the 2nd, 4 years to the 3rd, 2 years to the 4th, and 1 year to the 5th.

I'm defining net worth conservatively, I'm not including home equity but I did subtract mortgage debt for the years that I had it.


Any other 2 comma club members want to chime in?


Finally hit 6MM on Friday.   So it took two years from 5MM->6MM.  But it just barely crossed the line, so it could drop back below on Monday easily.    Anyway, this is the only place I can share the milestone, so I thought I would.

Holy shit!  What are you doing with ALL THAT MONEY???!  Do you pull 4%?  Less?  More?  I mean, shit dude, I'd with $240K/year in passive income, I'd be freakin' traveling the globe non-stop!
Title: Re: The first million is the hardest
Post by: dude on March 23, 2015, 08:10:08 AM
Yep, I'm in the two-comma club if I include home equity. Investments that are in the stock market total about $875K. So right now my portfolio generates more additional stache money than I can, at least in a decent market year. It doesn't stop me from trying to save all I can though. I can't relax just because my money is on autopilot. Saving will still get me to FI earlier. I want a lifestyle that includes frequent travel, and that costs money, so I'm working longer to achieve that.

Yeah, ditto here as well, though I don't focus on net worth so much as I do on invested assets.  DW and I are somewhere just north of $700K. But I'm one of the fortunate folks left in America who have a pension benefit, which I'll be eligible for in about 4 years that's worth $1.5M or better if you use the 4% rule to estimate the annual benefit. Hard to overstate the good fortune of that situation.
Title: Re: The first million is the hardest
Post by: Bigote on March 23, 2015, 08:45:39 AM
bigote, what is your age?

Inspiring thread

Thanks.   I'm 46.
Title: Re: The first million is the hardest
Post by: Bigote on March 23, 2015, 08:50:18 AM
Holy shit!  What are you doing with ALL THAT MONEY???!  Do you pull 4%?  Less?  More?  I mean, shit dude, I'd with $240K/year in passive income, I'd be freakin' traveling the globe non-stop!

Well, I'm not actually pulling money out yet.  My wife is still working!  She likes her job.   That and a small child keeps us from traveling the world full time, but we do take nice vacations. 

Having said that we are, if not exactly mustachian, very much LBYM types.  One of our two cars turns 18 this year.   :)

Another thing I'll say - the 4% rule is traditionally based on a 30yr 'normal' retirement.   For planning purposes, I much prefer to think of 3%, though we won't come close to spending that much under ordinary circumstances.
Title: Re: The first million is the hardest
Post by: Exflyboy on March 23, 2015, 10:38:30 AM
This for me is the next interesting phases of MMM-ness.. I.e that point where you have saved so much that money is completely  irrelevant! You seriously could buy almost anything you want, new car every year, I could buy my airplane back, add a couple more and hire a mechanic to maintain them. Health insurance?.. Who cares what it costs?

Of course I'd never personally do this as its just not in my nature.

Not sure at what point ($2M, $5M??) this actually occurs, a lot of folks argue on this forum that I am at that place already, but I am nowhere near Bigote's financial position and I still worry about money.

Maybe its the point at which one actually stops worrying perhaps??...:)
Title: Re: The first million is the hardest
Post by: starguru on March 23, 2015, 02:17:59 PM
Holy shit!  What are you doing with ALL THAT MONEY???!  Do you pull 4%?  Less?  More?  I mean, shit dude, I'd with $240K/year in passive income, I'd be freakin' traveling the globe non-stop!

Well, I'm not actually pulling money out yet.  My wife is still working!  She likes her job.   That and a small child keeps us from traveling the world full time, but we do take nice vacations. 

Having said that we are, if not exactly mustachian, very much LBYM types.  One of our two cars turns 18 this year.   :)

Another thing I'll say - the 4% rule is traditionally based on a 30yr 'normal' retirement.   For planning purposes, I much prefer to think of 3%, though we won't come close to spending that much under ordinary circumstances.

With a stache that size, how do you have it arranged?  Do you manage it all yourself?  Do you use a 3 fund portfolio?
Title: Re: The first million is the hardest
Post by: Workinghard on March 23, 2015, 04:23:17 PM
I still can't believe we actually did it. It just seems surreal. I don't think we'll ever hit 2m as I'm not willing to keep up our current pace, we're older, and I want some "good" retirement years. Still...we have another year of saving 75k.
Title: Re: The first million is the hardest
Post by: Bigote on March 23, 2015, 04:43:07 PM
With a stache that size, how do you have it arranged?  Do you manage it all yourself?  Do you use a 3 fund portfolio?

I am almost completely Boglehead in my investing, mostly index ETFs but I do buy a lot of single issue bonds (TIPs).   I was an asset class slice and dicer early on.  In hindsight I'd probably simplify things some more (maybe not three fund, but close) but now there's too much tax drag for me to change much. 

One thing about the larger portfolios, most of it tends to be outside of the tax sheltered accounts.   So selling anything can create a tax liability. 
Title: Re: The first million is the hardest
Post by: zephyr911 on March 24, 2015, 11:28:13 AM
The first [whatever increment] will always be the hardest. Exponential growth looks the same on any scale.
I recently graphed my last few years by quarter, and can say the same per 100k: the first increment took over 4 years, the second just 2, and we've grabbed nearly a third of #3 this quarter. Even if the market slacks off, we could hit 300 this year.
Wherever you find yourself, just keep pushing that ball till it starts pulling you forward. ^_^
Title: Re: The first million is the hardest
Post by: dude on March 24, 2015, 12:21:20 PM
Wherever you find yourself, just keep pushing that ball till it starts pulling you forward. ^_^

I like this conceptualization!
Title: Re: The first million is the hardest
Post by: RWD on March 24, 2015, 12:22:44 PM
The first [whatever increment] will always be the hardest. Exponential growth looks the same on any scale.

While this is true of pure exponential growth, you have to consider contributions as well. Assuming mostly constant contributions your first <smaller increment> will be easier than your first <larger increment>. This makes sense. If you're saving $10k per year then your first $10k will be accomplished in just under a year with almost no help from compounded growth.

At $10k saved per year compounded at 7%:
 - $10k saved takes 12 months
 - $20k saved takes 23 months
 - $100k saved takes 91 months
 - $200k saved takes 150 months
 - $1 million takes 357 months
 - $2 million takes 465 months

Therefore (with these assumptions), the first $10k is almost as easy as the second $10k. The first $100k is 54% harder than the second $100k. And the first $1 million is more than three times as hard as the second $1 million.

Obviously these numbers shift with different assumptions, but the first <larger increment> will always be relatively harder compared to the second <larger increment> than with a <smaller increment>.
Title: Re: The first million is the hardest
Post by: Bigote on March 24, 2015, 02:21:04 PM
Sure enough, I'm back below the threshold today.   I think I'll get to relive this milestone a bunch of times.   :)
Title: Re: The first million is the hardest
Post by: Exflyboy on March 24, 2015, 03:12:23 PM
Sure enough, I'm back below the threshold today.   I think I'll get to relive this milestone a bunch of times.   :)

Haha.. yup, its a hard life for sure..:)
Title: Re: The first million is the hardest
Post by: starguru on March 24, 2015, 03:27:54 PM
How much were you saving each year?  Was it large savings or good returns or both that allowed you to achieve that number? 
Title: Re: The first million is the hardest
Post by: starguru on March 24, 2015, 03:28:25 PM
How much were you saving each year?  Was it large savings or good returns or both that allowed you to achieve that number? 
Title: Re: The first million is the hardest
Post by: ScroogeMcDutch on March 25, 2015, 01:54:59 AM
Lovely thread and congratulations Bigote

I get frustrated and sometimes wish time would pass faster so I could see that growth happening, even though I have also returned 20% in 9 months that I am in the market. Can't go fast enough for me, but I know I should refrain from taking bigger risks than I am. Reading stories of people getting there is nice.

Currently at about 200k euros NW @ 34 and able to save a 50-60k a year.
Title: Re: The first million is the hardest
Post by: Bjorn on March 25, 2015, 04:14:23 AM
Congrats with your badassity Bigote, it surely is inspiring to read!

I get the feeling you will never spend those $6MM, or whatever amount you will accumulate with time. So where exactly will this money end up? Will you donate it, pass it on to your next generation, spend it on something?
Title: Re: The first million is the hardest
Post by: Jakejake on March 25, 2015, 05:05:21 PM
I went back and looked at our spreadsheets. Our first one was in 1997 when we had $200k. It took until 2010 to reach a million (13 years for that 800k). In Dec 2014 we ended at 1.7 million; 4 years for 700k is pretty good considering we didn't earn that much in salaries in 4 years.  I'm hoping to hit 2 million by the end of this year. We're planning to retire in 4 years when the house is paid off. It's unbelievable to me that we could have 3 million by then or even maybe 4, but that's the trajectory.
Title: Re: The first million is the hardest
Post by: Murdoch on March 26, 2015, 05:33:25 AM
Inspiring thread. Cheers.
Title: Re: The first million is the hardest
Post by: NearlyThere on March 26, 2015, 10:57:41 AM
I am just shy of 50% (47%) of my first FI target and things really seem to be taking hold. It's taken me two years to get here, but I can see the second 2 years or less becoming less of a struggle - markets pending. I have another 30% available in an offset mortgage, so I intend to invest fully on the next big market correction. For now though its saving me 5.49% on mortgage rates, so I'm happy keeping it where it is.

One thing I have decided on however is to not wait till FI to make big changes in my life. We've decided to spend two months in Spain (working remotely) and then take the winter season in the Alps, again working remotely, but much less. This will probably happen to coincide with FI, but the plan is to come back work for a little while longer and really build a buffer. The trips are really to prove to myself I can leave the business for an extended period, without the commitment of actually retiring.

By heck I'm excited.
Title: Re: The first million is the hardest
Post by: frugaljo on March 29, 2015, 03:41:42 PM
I am just shy of 50% (47%) of my first FI target and things really seem to be taking hold. It's taken me two years to get here, but I can see the second 2 years or less becoming less of a struggle - markets pending. I have another 30% available in an offset mortgage, so I intend to invest fully on the next big market correction. For now though its saving me 5.49% on mortgage rates, so I'm happy keeping it where it is.

One thing I have decided on however is to not wait till FI to make big changes in my life. We've decided to spend two months in Spain (working remotely) and then take the winter season in the Alps, again working remotely, but much less. This will probably happen to coincide with FI, but the plan is to come back work for a little while longer and really build a buffer. The trips are really to prove to myself I can leave the business for an extended period, without the commitment of actually retiring.

By heck I'm excited.

damn that's exciting MajorFacepunch! I love seeing someone make a inspiring plan and make it happen!
Title: Re: The first million is the hardest
Post by: clarkfan1979 on March 30, 2015, 06:02:33 AM
Thank you for the interesting goal of 1 million in 11 years. I got my first real job in August 2011. I was in grad school full-time from August 2004 to May 2011. I bought a house in May 2007 and got married in August 2012. Based on my first 3 years and 8 months of working full-time, our net worth is 276K. In order to hit 1 million in 11 years, we would have to average $99K per year for the next 7.33 years. Our net worth increased 113K during the past 12 months, so it's doable.   
Title: Re: The first million is the hardest
Post by: Bigote on March 30, 2015, 06:21:45 AM
That's right, just financial assets.   I don't have any investment properties. And I excluded my residence. 
Title: Re: The first million is the hardest
Post by: ender on March 30, 2015, 06:36:15 AM
Thank you for the interesting goal of 1 million in 11 years. I got my first real job in August 2011. I was in grad school full-time from August 2004 to May 2011. I bought a house in May 2007 and got married in August 2012. Based on my first 3 years and 8 months of working full-time, our net worth is 276K. In order to hit 1 million in 11 years, we would have to average $99K per year for the next 7.33 years. Our net worth increased 113K during the past 12 months, so it's doable.   

The way I have looked at my net worth, now that I have enough data, is "what is the increase from one year ago?" which imo provides an interesting perspective.

Knowing your net worth increased $50k/year means at that pace in 20 years you'll be at 1M.

Or $100k puts you there in 10 years (!).
Title: Re: The first million is the hardest
Post by: ender on March 31, 2015, 06:21:56 AM
You mean $50K/year right?

Haha. Yeah :)

$50/year would take a while...
Title: Re: The first million is the hardest
Post by: BlueMR2 on March 31, 2015, 10:02:16 AM
While I agree that a 7-figure NW is a formidable goal for many, $1mil is doable on a modest income if a person 1) starts early enough and 2) does it right.

This.  I have reasonable enough income, but I started late.  Also, in my career path, income and jobs tend to go down as time goes on.  Combine that with the terrible economic conditions in the USA today and it's bad timing (I know the newspapers are pushing good employment numbers, but they don't reflect reality, totally missing the fact that so many people don't show up in there due to having completely run out all their benefits).  Things will probably pick up again right when we can't take advantage.  Currently my wife and I put together make less than I made by myself back in 2005/6.
Title: Re: The first million is the hardest
Post by: mr_orange on August 23, 2015, 07:37:17 PM
Cool thread.  Thanks for starting it.  It is nice to see folks prospering. 

It took us 13 years to hit $1M.  Our business is booming this year and it is becoming a greater and greater portion of our net worth gains year to year.  I expect to hit the 2nd million fewer than 2 years after the first; 3 tops. 

Hopefully our 3rd, 4th, and nth will come faster and faster.  After this point it doesn't seem like it would be too hard.  You just need to make your accumulated equity grow 20% or so per year, which would generally happen for us in average years given our access to real estate projects. 
Title: Re: The first million is the hardest
Post by: Exflyboy on August 25, 2015, 09:35:06 PM
Call me a thread ressurector.. but I thought it would be interesting to read thru this thread with its positive and upbeat tone.

How do we feel about this all now. Today the DOW was down 14% from its peak.

I will admit (as a financial worry guts) to a slight twinge of dread, even though I know -14% is a perfectly normal event.. and I won't be changing anything except to maybe roll some bonds to cash at the 20% down point, if it comes.

What say you with modest sums that have FIRED.

Sense of fear, don't care, maybe even joy at the thought of picking up some more stock cheap?
Title: Re: The first million is the hardest
Post by: Exflyboy on August 25, 2015, 10:54:00 PM
Yeah we must be over 6 figures paper loss.. Looking to roll some more into stock at 20% down... 6% more to go..:)
Title: Re: The first million is the hardest
Post by: sol on August 25, 2015, 10:59:07 PM
Yeah we must be over 6 figures paper loss.. Looking to roll some more into stock at 20% down... 6% more to go..:)

Why wait?  If you're just rebalancing, what's the problem with doing it more often?  Capital gains you're trying to avoid?
Title: Re: The first million is the hardest
Post by: Dicey on August 25, 2015, 11:04:40 PM
Have no idea what my account balances are and I'm not going to look. My only decisions are how much cash to dump in and how long I should wait before doing it.
Title: Re: The first million is the hardest
Post by: Salim on August 26, 2015, 04:50:10 AM
Call me a thread ressurector.. but I thought it would be interesting to read thru this thread with its positive and upbeat tone.

How do we feel about this all now. Today the DOW was down 14% from its peak.

I will admit (as a financial worry guts) to a slight twinge of dread, even though I know -14% is a perfectly normal event.. and I won't be changing anything except to maybe roll some bonds to cash at the 20% down point, if it comes.

What say you with modest sums that have FIRED.

Sense of fear, don't care, maybe even joy at the thought of picking up some more stock cheap?

That's a good question. We are looking for more ways to cut spending to make it easier to ride out the downturn, while carefully moving ahead with rehabing our property now that we have more "free" time. I guess we are cautiously optimistic.

Our portfolio is about 50/50 and we rebalance a couple of times per year. We will likely invest a little bit more soon since stocks are on sale. It's just, all the numbers are smaller now since we only have sporadic freelance work. Smaller income means smaller spending and smaller savings.
Title: Re: The first million is the hardest
Post by: dragoncar on August 26, 2015, 01:05:24 PM
Yeah we must be over 6 figures paper loss.. Looking to roll some more into stock at 20% down... 6% more to go..:)

Why wait?  If you're just rebalancing, what's the problem with doing it more often?  Capital gains you're trying to avoid?

Momentum?  Having set rebalancing bands is also a good way to avoid the psycologically issues with market timing
Title: Re: The first million is the hardest
Post by: dragoncar on June 28, 2016, 06:38:25 PM
I'm very excited about that easy 2nd million.  I'm only at 440K right now, but you know, it's going to be hard to get to that 1st million...

Hopefully the second 500k is easier than the first 500k :)

Dude, word.

Turns out it was
Title: Re: The first million is the hardest
Post by: FIREby35 on June 29, 2016, 06:34:38 PM
I'm just coming up on 500k, so I'll hope what was true for you will be true for me!
Title: Re: The first million is the hardest
Post by: spud1987 on June 30, 2016, 11:57:59 AM
I remember reading this thread a couple of years back and thinking how 1M seemed so far off. Now I am on the cusp of 1M and it was much faster than I ever imagined. Here's to hoping 2M comes even faster!
Title: Re: The first million is the hardest
Post by: Davids on July 01, 2016, 12:21:14 PM
I officially hit the $750K net worth mark as of 6/30/16. Hopefully this time 2 years from now I will be at the $1M mark.
Title: Re: The first million is the hardest
Post by: mr_orange on July 01, 2016, 01:00:02 PM
Just passed $1.3M.  I'm hoping to pass $2M in 2018, or in about 2.5 years. 
Title: Re: The first million is the hardest
Post by: CHF on July 06, 2016, 01:55:54 AM
An extract from my spreadsheet:

Date   Age   NAV   Difference
1.1.2016   48   1,400,369   209,828
1.1.2015   47   1,190,540   242,764
1.1.2014   46   947,776   192,572
1.1.2013   45   755,204   79,044
1.1.2012   44   676,160   49,172
1.1.2011   43   626,987   64,074
1.1.2010   42   562,913   87,557
1.1.2009   41   475,356   42,876
1.1.2008   40   432,480   63,989
1.1.2007   39   368,492   41,717
1.1.2006   38   326,775   32,629
1.1.2005   37   294,146   117,088
1.1.2004   36   177,058   73,985
1.1.2003   35   103,074   86,700
1.1.2002   34   16,373   11,706
1.1.2001   33   4,667   4,667
The NAV is in CHF=US$.
Until 2004 I was the usual spendypants. Then we bought our house and we started paying back our mortgage. In 2013 I found the MMM blog and increased my saving rate from 20% to 80%. Hopefully, I'll retire before I reach CHF2M.
Title: Re: The first million is the hardest
Post by: MsRichLife on July 06, 2016, 05:20:55 AM
I started working fulltime in 1999. As a couple we hit $1M around 2008, and then promptly went backwards quite significantly. I think we hit a net worth of $2m around 2013 when I was 36. DH FIREd in 2014. I'm out in less than 4 months.
Title: Re: The first million is the hardest
Post by: Roboturner on July 06, 2016, 08:25:20 AM
took us 4 years for 500k, hoping the next comes in 2-3 :l when it adds a comma we're out for good!
Title: Re: The first million is the hardest
Post by: dragoncar on July 06, 2016, 10:35:45 AM
Unfortunately we are "due" for another bear market*-- 3-10 years of negative/flat returns will put a damper on net worth increases.  So be prepared to watch your net worth stagnate, but take heart that you are accumulating at lower cost and during the next boom cycle your account will explode.  At least that's how it seems to go.



*we are in the second longest bull market in a century.
Title: Re: The first million is the hardest
Post by: FIREby35 on July 07, 2016, 07:05:28 AM
I've been thinking that about the bear market, but does it count that the last 24 (ish) months have basically been 0% to 1% rate of return? I'm basing the rate of return on the S&P500. In August 2014 it was trading at 2007 and today it is 2099. That is nearly two years of flatness, so I'm hoping the boom is right around the corner :)

A large portion of my investing has been during this time so I think of my current portfolio as pretty "strong" because it is not based on large returns. Time will tell, of course.
Title: Re: The first million is the hardest
Post by: dragoncar on July 07, 2016, 10:34:04 AM
I don't know the criteria they use for bear market, but I'd suspect it's something like 15% down from peak? 
Title: Re: The first million is the hardest
Post by: spud1987 on July 07, 2016, 11:11:22 AM
I don't know the criteria they use for bear market, but I'd suspect it's something like 15% down from peak?

I think a 20% drop is generally considered a bear market. The S&P500 got close in August 2015 and February 2016. The Russell 2000, which includes a number of small cap stocks and is broader than the S&P500, dropped over 20% earlier this year.
Title: Re: The first million is the hardest
Post by: BTDretire on July 17, 2016, 03:24:49 PM

After years of investing/gambling in the market, I finally gave in to having my cousin manage my money. Although his fees are high, I feel I am guarded from a large downside risk of a market. I am still on the fence watching the market soar with my mediocre returns this year.

  What magic does your cousin possess* that you don't?  How can he guard against downside risk?
Oh, maybe he has you in a less aggressive portfolio, less risk/less reward which is fine, if that is your tolerance,
or position/age in life. But why can't you recreate the same less risky portfolio and save that commission/fee that will be two, three or more years of retirement spending when that time comes.
  Hope that isn't to hard of a face punch, I just hate to see people paying others to invest their money, when
they can do no better and get paid to do no better.
  Vanguard has all you need to be aggressive or conservative.

* successful salesman
Title: Re: The first million is the hardest
Post by: BTDretire on July 17, 2016, 04:21:12 PM
Am I alone in finding the whole "double comma" thing just a little crass?
Building a networth is what is required to FIRE, that's what we talk about.
Quote
As regards the topic, I would think it fairly obvious that the first million is likely the hardest for most who've achieved that or more. Similarly, further down the scale, I'm sure there are plenty more folk with negative or no assets and modest incomes would view a few thousand as a veritable mount Everest of targets!
Everyone starts somewhere!
Quote
My impression from this forum is one of above average earning professionals, able to save and grow their net worth, year-on-year, often in considerable leaps and bounds. Whilst everyone can benefit from taking steps to improve their finances, there is a large proportion of the population for whom a million USD is not realistic or feasible.
My wife and I have an average income of $43k combined over the last 34 years of marriage.
 We now have more than $43k x 34yrs in networth. It doesn't take an extremely high income to do it, it takes a low spending rate.
  Our first year of marriage we grossed $18K and saved $6k, OK $5,400 because we had $600 of wedding presents.
The last 5 yrs* have been good to us, in that our income has been $100k and the market did great.

* This last year has not been so good, but still moving ahead.
   






Seeing the 100k thread got me thinking about the million dollar thresholds.

I started working in 1990.   I crossed a million in net worth in 2001. 

It took me until 2006 to cross 2MM.  I dipped below briefly during the crisis, but for the most part stayed between 2-3 until 2010.

I hit 3MM in 2010.

I hit 4MM in 2012.   

I hit 5MM in 2013.

So basically it took me 11 years to get to the 1st million, 5 years to the 2nd, 4 years to the 3rd, 2 years to the 4th, and 1 year to the 5th.

I'm defining net worth conservatively, I'm not including home equity but I did subtract mortgage debt for the years that I had it.


Any other 2 comma club members want to chime in?
[/quote]
Title: Re: The first million is the hardest
Post by: Another Reader on July 17, 2016, 05:27:58 PM
Haven't heard much from Bigote recently.  I think he FIRE'd, but he should still be close to crossing over into 8 figures.
Title: Re: The first million is the hardest
Post by: CharlesBronzee on June 01, 2021, 12:09:41 PM
Reviving an old thread. I知 getting close to $1M in investments ($900k). I知 finding myself updating my investments in Quicken every few days now, lol. I used to do this every few months.

Not a hardcore mmm-er as it took me almost 27 years to get here. But it痴 amazing how growth accelerates as you get closer to $1M. In May 2019, I was just at $740k. My investments are all in index funds and ETFs, with a 60/40 equity/bonds allocation.

Anyone else in the same boat?
Title: Re: The first million is the hardest
Post by: Sandi_k on June 01, 2021, 12:26:32 PM
Reviving an old thread. I知 getting close to $1M in investments ($900k). I知 finding myself updating my investments in Quicken every few days now, lol. I used to do this every few months.

Not a hardcore mmm-er as it took me almost 27 years to get here. But it痴 amazing how growth accelerates as you get closer to $1M. In May 2019, I was just at $740k. My investments are all in index funds and ETFs, with a 60/40 equity/bonds allocation.

Anyone else in the same boat?

Yes! We have been plugging away for some time now, and getting close to $1M in investable assets. I do an update monthly, on the first of the month. Last year, however, I stopped looking in March, April, May...I knew from the newsradio reports that the DJIA was down under 20k, so I made a pledge not to look until it was up above 26k again.

That happened on June 4, 2020.

In the year since - we are up 27.22% - and up 28% if you count our monthly DCA'd contributions.

The combo of bigger paychecks - and a higher percentages of income directed to investments - is euphoria-inducing. ;)

ETA - I went back to my May 2019 spreadsheet. Our investment account was at $627k that month, on May 3. We were at $875k on Friday last week. (!!!!!)
Title: Re: The first million is the hardest
Post by: RyanAtTanagra on June 01, 2021, 12:39:33 PM
Reviving an old thread. I知 getting close to $1M in investments ($900k). I知 finding myself updating my investments in Quicken every few days now, lol. I used to do this every few months.

I don't know if Quicken has the equivalent (I would imagine it does), but google sheets has a googlefinance() function that taps into real-time market data, so my spreadsheet values keep up to date automatically (just have to input the buys so the #shares get updated).
Title: Re: The first million is the hardest
Post by: ender on June 01, 2021, 12:58:28 PM
Reviving an old thread. I知 getting close to $1M in investments ($900k). I知 finding myself updating my investments in Quicken every few days now, lol. I used to do this every few months.

Not a hardcore mmm-er as it took me almost 27 years to get here. But it痴 amazing how growth accelerates as you get closer to $1M. In May 2019, I was just at $740k. My investments are all in index funds and ETFs, with a 60/40 equity/bonds allocation.

Anyone else in the same boat?

Be wary of recency bias!

Market in the last decade has basically gone up significantly.

Compounding at 10% a year makes it easy to accelerate growth :)  but so it also does for declining at 10% YoY.
Title: Re: The first million is the hardest
Post by: CharlesBronzee on June 01, 2021, 04:22:38 PM
Reviving an old thread. I知 getting close to $1M in investments ($900k). I知 finding myself updating my investments in Quicken every few days now, lol. I used to do this every few months.

Not a hardcore mmm-er as it took me almost 27 years to get here. But it痴 amazing how growth accelerates as you get closer to $1M. In May 2019, I was just at $740k. My investments are all in index funds and ETFs, with a 60/40 equity/bonds allocation.

Anyone else in the same boat?

Yes! We have been plugging away for some time now, and getting close to $1M in investable assets. I do an update monthly, on the first of the month. Last year, however, I stopped looking in March, April, May...I knew from the newsradio reports that the DJIA was down under 20k, so I made a pledge not to look until it was up above 26k again.

That happened on June 4, 2020.

In the year since - we are up 27.22% - and up 28% if you count our monthly DCA'd contributions.

The combo of bigger paychecks - and a higher percentages of income directed to investments - is euphoria-inducing. ;)

ETA - I went back to my May 2019 spreadsheet. Our investment account was at $627k that month, on May 3. We were at $875k on Friday last week. (!!!!!)

I did the same - I did not look at my portfolio for several months last year when the market was way down.  I also tend to update my portfolio when the market is up for the day (yay, I知 $5k richer today!) - I consider it life痴 little pleasures, lol.
Title: Re: The first million is the hardest
Post by: CharlesBronzee on June 01, 2021, 04:26:20 PM
Reviving an old thread. I知 getting close to $1M in investments ($900k). I知 finding myself updating my investments in Quicken every few days now, lol. I used to do this every few months.

I don't know if Quicken has the equivalent (I would imagine it does), but google sheets has a googlefinance() function that taps into real-time market data, so my spreadsheet values keep up to date automatically (just have to input the buys so the #shares get updated).

Yes, Quicken can automatically update your portfolio using real time data. It also generates bar graphs showing your portfolio value over time, a pie chart showing your asset allocation.
Title: Re: The first million is the hardest
Post by: Scandium on June 08, 2021, 01:56:10 PM
Reviving an old thread. I知 getting close to $1M in investments ($900k). I知 finding myself updating my investments in Quicken every few days now, lol. I used to do this every few months.

Not a hardcore mmm-er as it took me almost 27 years to get here. But it痴 amazing how growth accelerates as you get closer to $1M. In May 2019, I was just at $740k. My investments are all in index funds and ETFs, with a 60/40 equity/bonds allocation.

Anyone else in the same boat?

Be wary of recency bias!

Market in the last decade has basically gone up significantly.

Compounding at 10% a year makes it easy to accelerate growth :)  but so it also does for declining at 10% YoY.

This is all too true! I expect this run to end (horribly!) anyday now. As I have for at least 4 years..
I'm not close to a mill (since I don't count home equity), but in the last year I passed:
$400k July 2020
$500k Dec 2020
$600k june 2021

:O seriously? I guess I can really see that the first 500k is the hardest ;)
(to be clear I was just over 400k before the "covid drop" in early 2020)
Title: Re: The first million is the hardest
Post by: jinga nation on June 10, 2021, 07:26:30 AM
I think the subsequent millions, after the first one, are easier because the little green army is gaining momentum and grows faster due to stock market gains and dividend reinvesting. Even when the green army takes a few hits and has casualties, the momentum helps put the army back on the gain path. Keep calm and keep the green army marching.
Plus, your habits have been iterated over the first million to maximize savings and remove impulses, acting only on budgets and needs, eliminating the wants and cravings. Removing those roadblocks helps the army march to a regular cadence over fewer obstacles on a flattish course.
Title: Re: The first million is the hardest
Post by: marty998 on June 19, 2021, 02:50:09 AM
Unfortunately we are "due" for another bear market*-- 3-10 years of negative/flat returns will put a damper on net worth increases.  So be prepared to watch your net worth stagnate, but take heart that you are accumulating at lower cost and during the next boom cycle your account will explode.  At least that's how it seems to go.



*we are in the second longest bull market in a century.

@dragoncar was the top in? :)

(I confess I've felt the same way... every year since 2016!)
Title: Re: The first million is the hardest
Post by: Simpli-Fi on June 19, 2021, 08:48:12 AM
I知 coming up on a 20 year anniversary of investing next year (wish I paid as much attention then as I do nowbut whatever).  Took around 14-15 years to hit $1M, I hit $2M right as I downshifted / COVID (planned downshift)then planned to COAST, bought a primary residence and refi壇 rental; the last 12 months NW is up $800k which is insane.
Title: Re: The first million is the hardest
Post by: dragoncar on June 24, 2021, 11:02:35 PM
Unfortunately we are "due" for another bear market*-- 3-10 years of negative/flat returns will put a damper on net worth increases.  So be prepared to watch your net worth stagnate, but take heart that you are accumulating at lower cost and during the next boom cycle your account will explode.  At least that's how it seems to go.



*we are in the second longest bull market in a century.

@dragoncar was the top in? :)

(I confess I've felt the same way... every year since 2016!)

lol, clearly I知 no thorstach


But guys. We are 電ue for a bear market*.  So be prepared to watch your net worth stagnate.  Or don稚 .  I知 not your dad.

*This has been the longest bull market in a century
Title: Re: The first million is the hardest
Post by: magus on September 30, 2021, 06:13:44 PM
Unfortunately we are "due" for another bear market*-- 3-10 years of negative/flat returns will put a damper on net worth increases.  So be prepared to watch your net worth stagnate, but take heart that you are accumulating at lower cost and during the next boom cycle your account will explode.  At least that's how it seems to go.

*we are in the second longest bull market in a century.

@dragoncar was the top in? :)

(I confess I've felt the same way... every year since 2016!)

lol, clearly I知 no thorstach


But guys. We are 電ue for a bear market*.  So be prepared to watch your net worth stagnate.  Or don稚 .  I知 not your dad.

*This has been the longest bull market in a century

M2 money supply is up 65% since 2016 and interest rates are at record lows. Markets will keep moving forward in nominal terms until the Fed Res cuts the money supply
https://fred.stlouisfed.org/series/M2SL

Bonds are a bigger bubble than stocks and cash currently has a -6% real yield so stocks and real assets it is. Until the Fed Res changes positions, no reason to fight inflation with investments. They threw ~$5T last spring with the shutdowns at keeping the market afloat. Apparently, the market is too big to fail and the Fed reserve will do everything to keep it from failing.
Title: Re: The first million is the hardest
Post by: Roboturner on October 08, 2021, 10:32:59 AM
took us 4 years for 500k, hoping the next comes in 2-3 :l when it adds a comma we're out for good!


Well shit. We didn't do what we said we'd do. That being said, interesting to look back 5 years:

YE2011 - <50k
July 6th, 2016 - 500k (4.5 years)
YE 2017 - $1MM (1.5 years)
Q3 2020 - $2MM (2.75 years)
Q3 2021 - $3MM (1 year)

SO just FIRE'd last month, I'm looking at soonTM things apparently do pick up quick!

Title: Re: The first million is the hardest
Post by: lcmac32 on October 12, 2021, 11:47:29 AM

Fret not, there is probably a natural stop to this with the second 'number'.  The first being the point where your investment income equals your expenses.  If you keep working you'll eventually hit a point where your it equals your wage income.  Eventually your wage income will be dwarfed by your investment income, at which point it will feel more and more pointless to keep working ;-)
[/quote]

This is an older post, but I just reread through this thread and love what was said in this quote.  I am now 50, but defined truly wealthy in my mid-20's the point at which your investment income exceeds your normal wage income earnings ability.  Then the only reason to work is for the joy of working and being productive...money is no longer in the equation.
Title: Re: The first million is the hardest
Post by: moof on October 12, 2021, 01:54:26 PM
Hit 1M about 2 years ago, felt very anticlimactic.  Now at 1.57M, and aiming to pull the plug at $2M.  Seeing earnings dwarf contributions creates some nihilistic sense that my efforts to work/save are increasingly pointless.
Title: Re: The first million is the hardest
Post by: FIREby35 on December 12, 2021, 07:51:50 AM
Hit 1M about 2 years ago, felt very anticlimactic.  Now at 1.57M, and aiming to pull the plug at $2M.  Seeing earnings dwarf contributions creates some nihilistic sense that my efforts to work/save are increasingly pointless.

Existential anxiety brought on by long term prosperity! I think it's a part of the journey!

I hear you though. All my worldly anxiety about money feels sort of ridiculous when I look at my investment accounts nowadays. I am definitely feeling the exponential growth some others have posted about. It feels great!
Title: Re: The first million is the hardest
Post by: EscapeVelocity2020 on December 12, 2021, 11:09:23 AM
Hit 1M about 2 years ago, felt very anticlimactic.  Now at 1.57M, and aiming to pull the plug at $2M.  Seeing earnings dwarf contributions creates some nihilistic sense that my efforts to work/save are increasingly pointless.

Yeah, I think I enjoyed the journey more when my contributions outmatched the effortless, inevitable market gains. 

Nowadays, I mostly worry about what my kids will think of the working world.  I'm not sure the 'working world' is even the right thing to call it anymore.
Title: Re: The first million is the hardest
Post by: DoneFSO on December 13, 2021, 10:33:29 PM
I am 42.  I hit the first million earlier this year.  I got my first salaried job after grad school in 2006 at the age of 26, and it took 11 years from that point to reach the first half-a-million (in 2017), and then four years later I reached the first million (this year).  I have only ever earned W-2 income.  I have always maxed 401(k) (TSP) contributions, maxed Roth IRA contributions, lived frugally, and put saved after-tax income into my taxable account.  I have saved as much as 82% of my income in some years, but never below 50%.  All of my investments are in Vanguard or TSP index funds.

Out of curiosity, I checked where my net worth stood at the time this thread was started in 2013, when I was 33, long before I joined this forum, and it was worth about $237,000.  It is not impossible that I might have read this thread as a lurker back then and thought to myself, 典he first million seems a long way off.  I note with interest the posters in the early days of this thread who shared portfolio values similar to mine at that time and who expressed the trepidation I was feeling at the time.