The first million is the hardest

[mr_orange]

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. 

[Exflyboy]

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?

[Exflyboy]

Yeah we must be over 6 figures paper loss.. Looking to roll some more into stock at 20% down... 6% more to go..:)

[sol]

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?

[Dicey]

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.

[Salim]

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.

[dragoncar]

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

[dragoncar]

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

[FIREby35]

I'm just coming up on 500k, so I'll hope what was true for you will be true for me!

[spud1987]

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!

[Davids]

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.

[mr_orange]

Just passed $1.3M.  I'm hoping to pass $2M in 2018, or in about 2.5 years. 

[CHF]

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.

[MsRichLife]

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.

[Roboturner]

took us 4 years for 500k, hoping the next comes in 2-3 :l when it adds a comma we're out for good!

[dragoncar]

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.

[FIREby35]

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.

[dragoncar]

I don't know the criteria they use for bear market, but I'd suspect it's something like 15% down from peak? 

[spud1987]

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.

[BTDretire]

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

[BTDretire]

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.

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!

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]

[Another Reader]

Haven't heard much from Bigote recently.  I think he FIRE'd, but he should still be close to crossing over into 8 figures.

[CharlesBronzee]

Reviving an old thread. I’m getting close to $1M in investments ($900k). I’m 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’s 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?

[Sandi_k]

Reviving an old thread. I’m getting close to $1M in investments ($900k). I’m 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’s 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. (!!!!!)

[RyanAtTanagra]

Reviving an old thread. I’m getting close to $1M in investments ($900k). I’m 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).

[ender]

Reviving an old thread. I’m getting close to $1M in investments ($900k). I’m 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’s 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.

[CharlesBronzee]

Reviving an old thread. I’m getting close to $1M in investments ($900k). I’m 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’s 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’m $5k richer today!) - I consider it life’s little pleasures, lol.

[CharlesBronzee]

Reviving an old thread. I’m getting close to $1M in investments ($900k). I’m 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.

[Scandium]

Reviving an old thread. I’m getting close to $1M in investments ($900k). I’m 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’s 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)

[jinga nation]

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.

[marty998]

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!)

[Simpli-Fi]

I’m coming up on a 20 year anniversary of investing next year (wish I paid as much attention then as I do now…but 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’d rental; the last 12 months NW is up $800k which is insane.

[dragoncar]

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’m no thorstach


But guys…. We are “due” for a bear market*.  So be prepared to watch your net worth stagnate.  Or don’t .  I’m not your dad.

*This has been the longest bull market in a century

[magus]

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’m no thorstach


But guys…. We are “due” for a bear market*.  So be prepared to watch your net worth stagnate.  Or don’t .  I’m 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.

[Roboturner]

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 soon^TM things apparently do pick up quick!

[lcmac32]

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.

[moof]

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.

[FIREby35]

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!

[EscapeVelocity2020]

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.

[DoneFSO]

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, “The 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.