Author Topic: Get to 1 Million in Net worth  (Read 126359 times)

VirginiaBob

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Re: Get to 1 Million in Net worth
« Reply #50 on: October 07, 2014, 01:17:47 PM »
Let's try this again.  I think the idea is that if you are at a Negative NW it may seem harder or almost impossible to get to Zero, basically because you have debt eating away at what you make.  Compared to having 250k earning you money helping to propel you to the 1mm number.  Again not necessarily that it is harder to get to zero, but it may seem to be when you are underwater and barely getting by.  I was never really at a Negative NW so I don't really know what that's like, I can only assume.  And you know what they say about making assumptions.

I also think as you garner more money it is easier to earn more not necessarily on the mental front but you have more tools to work for you earning you more money hence the reason the rich just keep getting richer, and they follow good sound principles.  Although some steal and cheat along the way.

I live in a poor neighborhood and I don't think anyone in my neighborhood has the opinion that they can get to 1MM, or that it's my goal.

Yes, that was exactly my point when I posted that originally - it was more my personal journey and I had no intent of assuming it was anyone else's journey.  When I got out of college, I had $30K in student loans, and $16K in credit card debt back in 2001 - to top it off some personal debts I owed to family.  It took me 2 years with $30K-$40K salaries to get mostly out of that, but man I lived really poorly. I walked past prostitutues and drug dealers to get to my apartment.  The apartment above me had a prostitute living there and based on what I heard through the ceiling every night, it was like a revolving door - one "client" after another.  But anyways, my employer offered me an overseas temporary assignment (the Afhanistan warzone) for 6 months in 2003, I came back with enough saved for a measly 5% down payment on a starter home (which I'm still in), increased my 401K contributions and started a Roth IRA the following year.  Everything has been pretty easy relatively speaking since those earlier years.
« Last Edit: October 07, 2014, 01:20:25 PM by VirginiaBob »

Carrie

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Re: Get to 1 Million in Net worth
« Reply #51 on: October 07, 2014, 01:23:44 PM »
My goal is 1m also. I'd like $250k in home equity and the remainder in liquid investments.   So far we're at  $160k in home equity and roughly $400k in retirement,  cash, college funds.  Paid off home plus another $350-$400k in investments should get us there, aiming for 7 years.

minimustache1985

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Re: Get to 1 Million in Net worth
« Reply #52 on: October 07, 2014, 03:25:40 PM »
Let's try this again.  I think the idea is that if you are at a Negative NW it may seem harder or almost impossible to get to Zero, basically because you have debt eating away at what you make.  Compared to having 250k earning you money helping to propel you to the 1mm number.  Again not necessarily that it is harder to get to zero, but it may seem to be when you are underwater and barely getting by.  I was never really at a Negative NW so I don't really know what that's like, I can only assume.  And you know what they say about making assumptions.

I also think as you garner more money it is easier to earn more not necessarily on the mental front but you have more tools to work for you earning you more money hence the reason the rich just keep getting richer, and they follow good sound principles.  Although some steal and cheat along the way.

I live in a poor neighborhood and I don't think anyone in my neighborhood has the opinion that they can get to 1MM, or that it's my goal.

Yes, that was exactly my point when I posted that originally - it was more my personal journey and I had no intent of assuming it was anyone else's journey.  When I got out of college, I had $30K in student loans, and $16K in credit card debt back in 2001 - to top it off some personal debts I owed to family.  It took me 2 years with $30K-$40K salaries to get mostly out of that, but man I lived really poorly. I walked past prostitutues and drug dealers to get to my apartment.  The apartment above me had a prostitute living there and based on what I heard through the ceiling every night, it was like a revolving door - one "client" after another.  But anyways, my employer offered me an overseas temporary assignment (the Afhanistan warzone) for 6 months in 2003, I came back with enough saved for a measly 5% down payment on a starter home (which I'm still in), increased my 401K contributions and started a Roth IRA the following year.  Everything has been pretty easy relatively speaking since those earlier years.
This is how I took it too, more of a "getting started is the hardest part" type.  Plus if you're negative interest is working against you instead of for you, so overcoming that inertia could feel more challenging.  I was only negative for a few months, but I found going from 0 to 100 took a lot longer than going from 100 to 250- my little green employees were working for me, maxing the 401k was autopilot instead of a conscious decision to do more than needed for the match, etc.

It's been awhile since I've checked this thread, H and I finally quasi-combined finances (separate bank accounts but joint Mint account) between then and now and I was underestimating some things, so we're now about 45% there without real estate.  I won't share a firm FIRE goal (in part b/c H is a spendypants and I'm hoping the now astronomical number will come down over time) but 1MM is a nice round target to aim for at this point.

Caella

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Re: Get to 1 Million in Net worth
« Reply #53 on: October 08, 2014, 08:00:00 AM »
1MM is my first number, too. Will not be enough to FIRE, but is a nice, round and achievable goal. Should take me somewhere about 7 years to get there.

I'm 28 now, my main objective is to become a SWAMI at 40ish, and decide what to do then. Probably keep working to fund vacations and restaurants (my money weakness).

Workinghard

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Re: Get to 1 Million in Net worth
« Reply #54 on: October 08, 2014, 11:18:04 AM »
Probably keep working to fund vacations and restaurants (my money weakness).

That's what I want my dh to do, but I think he'd rather retire in 18 months. :P

Siobhan

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Re: Get to 1 Million in Net worth
« Reply #55 on: October 08, 2014, 01:05:25 PM »
1MM is our first goal too. 32 and 35, net worth 664, 210 real estate equity, rest investments, hopefully 2-3 years to get there after that it's 1M in just investments

Caella

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Re: Get to 1 Million in Net worth
« Reply #56 on: October 10, 2014, 10:49:07 AM »
Probably keep working to fund vacations and restaurants (my money weakness).

That's what I want my dh to do, but I think he'd rather retire in 18 months. :P

Yeah, I'm almost in the reversed situation ahahahah
I would rather avoid some luxuries by now, until we get to the 1M mark, and then start to loosen things with that secured nest egg.

But my husband don't quite buys the saving for saving idea. He values "wants" very much, and sees no problem buying something in impulse if it doesn't wreck a long term plan. As long as we keep the established 40% savings rate, he will impulse buy anything. I will celebrate and try to invest if we end the month below the expected spending, he will celebrate and get some takeout from a good place!

Roots&Wings

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Re: Get to 1 Million in Net worth
« Reply #57 on: October 15, 2014, 05:18:15 PM »
Update: just got a small unexpected raise at work which will let me save another $500/mo (total of $4,400/mo), and might let me reach the $1M mark a few years sooner!   Depending on the calculator and assumptions, perhaps another 6-10 yrs out :)

ChickenMonster7

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Re: Get to 1 Million in Net worth
« Reply #58 on: October 16, 2014, 12:03:03 AM »
New to the Forums here! 1MM is also my goal. Im in my senior year of college and at a NW of positive 35. Its a small start, but hopefully I can keep it up. I also agree with others on the topic that I think its much harder to get to 0 NW than 1MM NW. Its like swimming against the current versus with it.

powersuitrecall

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Re: Get to 1 Million in Net worth
« Reply #59 on: October 20, 2014, 01:51:22 PM »
I'm in!  This is my second post ... might as well commit to a challenge (although I must admit I've been thinking about this one for a while).

Investments:    320K
Pension:           250K
House I live in: 400K
Mortgage:          80K
==============
total:                890K

Our plan is to pay off the mortgage and continue investing like we've been doing ... in 3 years we should be there!
« Last Edit: February 20, 2015, 07:50:11 AM by powersuitrecall »

MWM1220

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Re: Get to 1 Million in Net worth
« Reply #60 on: October 28, 2014, 06:16:23 AM »
I'm up for the challenge - but I think I'm standing about a mile BEHIND the starting line. Right now, husband and I are still tearing through our debt. We're both 25 (that's the good news) and have already paid down about 15k in debt since we got married in March, but have 8k left on a student loan of his plus 18k on a car (which, yes, we now know was dumb and this might be sold in a few months once we're not upside down). On top of that, the plan is to stockpile cash from January (date of intended student loan murder) to May (date of Husband's car lease being up... our 2nd stupid mistake) so that we can purchase his car outright with cash.  We are a LONG way from a million, but considering we have no kids and no house (although that should happen in about 18 months or so once the debts are gone) and a great income, I think we can get some inertia going and I love the camaraderie of this challenge.

Roth IRA: $6800
401k: $3951
Cash: $6000
Debt: -$26,493
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$-$9742

Ouch. That hurts. No time like the present, right?

usmarine1975

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Re: Get to 1 Million in Net worth
« Reply #61 on: October 28, 2014, 06:32:26 AM »
Welcome to the Challenge and correct no time like the present and what better way to enforce it by writing it somewhere, even if it's among complete strangers.

powersuitrecall

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Re: Get to 1 Million in Net worth
« Reply #62 on: October 28, 2014, 07:53:14 AM »
MWM1220,

-10K is hardly a mile behind.  Once you have a goal and a realistic plan to get there, it's just focus and execution. When I was 25 I had no direction at all.  I slid sideways for years.  You are here NOW and that's what matters.

Cheddar Stacker

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Re: Get to 1 Million in Net worth
« Reply #63 on: October 28, 2014, 08:08:08 AM »
MWM1220,

-10K is hardly a mile behind.  Once you have a goal and a realistic plan to get there, it's just focus and execution. When I was 25 I had no direction at all.  I slid sideways for years.  You are here NOW and that's what matters.

Impressive turnaround gashford!

total:                890K

MWM1220

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Re: Get to 1 Million in Net worth
« Reply #64 on: October 28, 2014, 08:38:01 AM »
MWM1220,

-10K is hardly a mile behind.  Once you have a goal and a realistic plan to get there, it's just focus and execution. When I was 25 I had no direction at all.  I slid sideways for years.  You are here NOW and that's what matters.

Impressive turnaround gashford!

total:                890K

Agreed! Inspirational!

Tetsuya Hondo

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Re: Get to 1 Million in Net worth
« Reply #65 on: October 28, 2014, 01:28:21 PM »
Marine - I know exactly what you mean about getting to zero. Arebelspy, you are completely overthinking his post. I mean that with no disrespect because I enjoy your posts, but you sound a little Vulcun-ish.

But getting to zero was a complete bitch. Coming out of grad school, I had a mountain in school loans and credit card debt. It seemed impossible, if not hopeless. But, after years of grinding it out, I found that once the debt was gone, the savings have quickly snowballed.

I'm in for this challenge and plan to be there in five years.

arebelspy

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Re: Get to 1 Million in Net worth
« Reply #66 on: October 28, 2014, 01:40:57 PM »
Marine - I know exactly what you mean about getting to zero. Arebelspy, you are completely overthinking his post. I mean that with no disrespect because I enjoy your posts, but you sound a little Vulcun-ish.

But getting to zero was a complete bitch. Coming out of grad school, I had a mountain in school loans and credit card debt. It seemed impossible, if not hopeless. But, after years of grinding it out, I found that once the debt was gone, the savings have quickly snowballed.

I'm in for this challenge and plan to be there in five years.

That's fine, we can have different opinions.

I just think getting to 1MM is way harder than getting to 0, and I think the fact that way more people get to 0 than get to 1MM is proof.

If you said 0 vs 100k, maybe.  But most people focusing on debt can be done in a few short years.  Those same people, then focusing on 1MM, take way longer.

/shrug
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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usmarine1975

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Re: Get to 1 Million in Net worth
« Reply #67 on: October 28, 2014, 01:58:44 PM »
I don't think we have differing opinion's on this subject.  I think we are just looking at it from a different perspective.  I never stated that I thought getting to 1 million was easy.  Simply that getting to 0 may seem to be impossible if you are in the negative.  Again I can only assume as I have never really had a negative net worth.  Sadly I am not further along then I currently am.  Let's just say a couple new vehicles, couple missions trips, many tools, and 6 years in the Marine Corps.  Among all the other things that can consume our money.


Marine - I know exactly what you mean about getting to zero. Arebelspy, you are completely overthinking his post. I mean that with no disrespect because I enjoy your posts, but you sound a little Vulcun-ish.

But getting to zero was a complete bitch. Coming out of grad school, I had a mountain in school loans and credit card debt. It seemed impossible, if not hopeless. But, after years of grinding it out, I found that once the debt was gone, the savings have quickly snowballed.

I'm in for this challenge and plan to be there in five years.

That's fine, we can have different opinions.

I just think getting to 1MM is way harder than getting to 0, and I think the fact that way more people get to 0 than get to 1MM is proof.

If you said 0 vs 100k, maybe.  But most people focusing on debt can be done in a few short years.  Those same people, then focusing on 1MM, take way longer.

/shrug

Workinghard

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Re: Get to 1 Million in Net worth
« Reply #68 on: October 28, 2014, 02:51:26 PM »
I probably should mind my own business, but I don't think there's any way of defining which is more difficult since it's subjective. The bottom line is it can be done regardless of age or even income.

We started out with a negative networth 23 years ago. We lived on one income around 50k for 10 years and cash flowed a bachelor's degree for our son. Having said that, we have not reached 1m yet but will next year, in spite of just coasting. We didn't start keeping a budget , or get intense ,until almost 2 years ago.

larmando

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Re: Get to 1 Million in Net worth
« Reply #69 on: October 28, 2014, 03:26:03 PM »
New to the Forums here! 1MM is also my goal. Im in my senior year of college and at a NW of positive 35. Its a small start, but hopefully I can keep it up. I also agree with others on the topic that I think its much harder to get to 0 NW than 1MM NW. Its like swimming against the current versus with it.
Well it always depends where you start, and which interest rate you pay. Definitely harder to get from -1M to 0 (if such a thing is even possible), and depending on the interest you can calculate witch number is the 1M equivalent in negative.
« Last Edit: October 28, 2014, 03:30:14 PM by larmando »

2Birds1Stone

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Re: Get to 1 Million in Net worth
« Reply #70 on: October 28, 2014, 08:41:13 PM »
In on this, as long as this thread is around for another 12-13 years (most likely time I will be able to reach goal)

Sitting at 103k right now after a less than smooth couple of months in the markets/commodities.

rubybeth

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Re: Get to 1 Million in Net worth
« Reply #71 on: October 29, 2014, 09:23:39 AM »
I'd love to get to the $1MM net worth mark, not likely to happen until we are just about to retire, in around 12-15 years. Right now, we own no property and have no debt, and net worth is around $120k. We make considerably less than the OP, around $90k annually.

powersuitrecall

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Re: Get to 1 Million in Net worth
« Reply #72 on: October 29, 2014, 11:09:17 AM »
Impressive turnaround gashford!

Agreed! Inspirational!

Thanks folks.  It really looks better on paper than it really is.  Most of that NW is tied up in tax sheltered accounts or pensions that we won't be able to touch for some time, as well as real estate.  If we had to liquidate any or all of these things, it would be a real hit.

The real challenge for folks who want to be FI (all of us here) is that we need this wealth in a place that will generate income for the rest of our lives.  I'm still trying to figure out what that will look like for us.  I think we are a ways off, but perhaps closer to it than I thought before discovering this site :)

MWM1220

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Re: Get to 1 Million in Net worth
« Reply #73 on: October 29, 2014, 12:03:10 PM »
In on this, as long as this thread is around for another 12-13 years (most likely time I will be able to reach goal)

Sitting at 103k right now after a less than smooth couple of months in the markets/commodities.

You and me both! I think I'm at least that far away. Let's hope this forum is still going ;)

Cheddar Stacker

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Re: Get to 1 Million in Net worth
« Reply #74 on: October 29, 2014, 12:17:43 PM »
Impressive turnaround gashford!

Agreed! Inspirational!

Thanks folks.  It really looks better on paper than it really is.  Most of that NW is tied up in tax sheltered accounts or pensions that we won't be able to touch for some time, as well as real estate.  If we had to liquidate any or all of these things, it would be a real hit.

The real challenge for folks who want to be FI (all of us here) is that we need this wealth in a place that will generate income for the rest of our lives.  I'm still trying to figure out what that will look like for us.  I think we are a ways off, but perhaps closer to it than I thought before discovering this site :)

Gashford, you are aware of the roth pipeline method right?

VirginiaBob

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Re: Get to 1 Million in Net worth
« Reply #75 on: October 29, 2014, 12:21:00 PM »
Impressive turnaround gashford!

Agreed! Inspirational!

Thanks folks.  It really looks better on paper than it really is.  Most of that NW is tied up in tax sheltered accounts or pensions that we won't be able to touch for some time, as well as real estate.  If we had to liquidate any or all of these things, it would be a real hit.

The real challenge for folks who want to be FI (all of us here) is that we need this wealth in a place that will generate income for the rest of our lives.  I'm still trying to figure out what that will look like for us.  I think we are a ways off, but perhaps closer to it than I thought before discovering this site :)

Gashford, you are aware of the roth pipeline method right?

and the SEPP, which I learned about here.

powersuitrecall

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Re: Get to 1 Million in Net worth
« Reply #76 on: October 31, 2014, 09:14:52 AM »
Gashford, you are aware of the roth pipeline method right?

and the SEPP, which I learned about here.

I'm in Canada, so it's a bit different here. 

We have Registered Retirement Savings Plan (RRSP) accounts which you can contribute to in PRE-TAX dollars, growth is sheltered, and withdrawals are fully taxable as income.

We also have Tax Free Savings Accounts (TFSA), which you can contribute to in POST-TAX dollars, growth is sheltered, and withdrawals are completely tax free.

I think the equivalent maneuver is (when retired / not receiving income) to withdraw a small amount of RRSPs to stay in a low tax bracket (or even under the taxable amount altogether), then place it into your TFSA, meanwhile living the good life drawing from your already plump TFSA balance for living expenses.

Does that sound about right?  Any Canadians want to chime in?
« Last Edit: October 31, 2014, 09:18:21 AM by gashford »

Hummer

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Re: Get to 1 Million in Net worth
« Reply #77 on: November 05, 2014, 04:28:07 PM »
Yup, I'm Canadian and that's how I see it. I also have a defined contribution pension plan that my employer matches but unfortunately that money is locked in until 65 so I am not depending on it for early FI. The good thing about our personal RRSP's is they can have money moved out of them at any time as long as you pay the income tax(unless you are below the minimum tax bracket, then it's 0) unlike the american version called the 401k, it appears they have to keep the money in there until 65. I could be wrong about this, correct me if I am but it looks like Canadian using RRSP's might have a slight advantage in flexibility over American's for that reason.

Only 27 now. My wife is 20.
I'm joining this challenge.

Pension: 22k
RRSP: 15k
TFSA: 1k
Cash: 10k
House: ~280k dang, housing in america is cheap from all the posts I've seen

Debt: none
Mortgage: ~275k they shouldn't have let me buy my house, stupid CMHC and insured mortgages and I was house horny, minimum 5% down... my parents didn't encourage me, but they definately didn't discourage me.

NW: 53k

Current income: 68k gross (this is probably, 49k net, income tax, EI, CPP, Canada seems to have a lot of taxes, plus 5% removed for company pension match)
Wife's income: ~40k gross (this is probably 27k net)
Annual expenses: ~45k (16k) is the mortgage, we can improve this.
Income from basement suite: ~7k annually

Annual savings: approx 38k annually(net income minus expenses), this is what we intend to invest in monthly instalments to grow our stash.

We plan on maxing our TFSA's right now first and RRSP's second. I am going through an interview process right now to hopefully move up to a job worth 90k. That would help. We could probably throw another 20k each year at the stash. I believe in the first few years we are going to use up the extra contribution room in our RRSP's and TFSA's(Right now I have approx 25k contribution room in my TFSA). After that we will have to use taxable accounts because we will be maxing out our RRSP and TFSA every year. :(

Is thread still going to be active in 13 years? lol, At 9% compounded, I'm planning on 13 years...

Cheers

BBub

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Re: Get to 1 Million in Net worth
« Reply #78 on: November 19, 2014, 09:04:33 AM »
In.  My goal is to surpass $1M liquid in the yr 2020.  FI goal is slightly higher at 1.25, but $1m will definitely be a fun milestone to hit along the way.  Currently at $143k.

clarkfan1979

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Re: Get to 1 Million in Net worth
« Reply #79 on: November 26, 2014, 03:43:19 AM »
I am 35 and wife is 31. Went from 162K to 262K in the last 12 months. Based on our current trend, I would say 6-7 years. However, my wife is most likely going to switch from full-time to part-time in 5 months. As a result, I think 10 years is  more realistic. However, I wouldn't be surprised if it was less than 10 years. Jan 1st 2025!

EDSMedS

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Re: Get to 1 Million in Net worth
« Reply #80 on: November 26, 2014, 05:34:18 AM »
Fellow devil dog here. $1,000,000 is an irrelevant number.  MMM espouses the 4% rule b/c it forces contemplation on income AND expense. MMM preaches that the ratio of income to expense should be 25 to 1 for a safe, investment-supported FIRE.  He also praises other forms of income besides investments - real estate, pleasure work, construction - to make investment earnings irrelevant.

DW and I are shooting for 15 to 1 ratio of investment/liquid savings to expenses, WELL under $1M.  At that point, with our known expense level, we could both work our current style of job for 8 hours a week, take 9 months of vacation, both take an 80% paycut, or one of us works part-time, etc., and still our investments will grow closer to the 4% rule.  Our time is more valuable than a faster rate of accumulation of money we don't need to survive/thrive anyway.

Assuming consistent expenses and an annual average return >6%, DW and I will have >$1M before 2024.  But that is >30x our expenses.  Why would we need it?

usmarine1975

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Re: Get to 1 Million in Net worth
« Reply #81 on: November 26, 2014, 07:05:08 AM »
Semper Fi

Great to see a brother on the forum.  I don't know if I would say 1m is irrelevant.  For me it's not necessary.  With my Rentals I will have more then enough income to live on without any other income.  But rentals also carry risk, furnace needing replaced, tenants destroy the place, fire, etc...  Having some investments or money to pull from outside of that income is going to be crucial for my own financial safety.  My properties make up most of my NW hence the 1 million number for me.  And it's a number many never hit.

If you hit the number you are going for I can only figure that in time you will eventually pass over the 1 million mark even without trying.  Being Frugal and having money set aside you tend to make money even when you don't need too.  It's a good problem to have.

arebelspy

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Re: Get to 1 Million in Net worth
« Reply #82 on: November 26, 2014, 07:58:13 AM »
But that is >30x our expenses.  Why would we need it?

Many shoot for a 3% WR, which is 33x assets.  It all depends on what you're comfortable with, and your plans for after FI (if you're going to earn money, or not).
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

usmarine1975

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Re: Get to 1 Million in Net worth
« Reply #83 on: November 26, 2014, 08:17:31 AM »
But that is >30x our expenses.  Why would we need it?

Many shoot for a 3% WR, which is 33x assets.  It all depends on what you're comfortable with, and your plans for after FI (if you're going to earn money, or not).

In the financial Advising world anything less then a 4% withdrawal rate is considered insufficient.

arebelspy

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Re: Get to 1 Million in Net worth
« Reply #84 on: November 26, 2014, 08:25:22 AM »
But that is >30x our expenses.  Why would we need it?

Many shoot for a 3% WR, which is 33x assets.  It all depends on what you're comfortable with, and your plans for after FI (if you're going to earn money, or not).

In the financial Advising world anything less then a 4% withdrawal rate is considered insufficient.

Huh?  Did you mean more than?

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HawkeyeNFO

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Re: Get to 1 Million in Net worth
« Reply #85 on: November 26, 2014, 08:29:44 AM »
I think the idea is that if you are at a Negative NW it may seem harder or almost impossible to get to Zero, basically because you have debt eating away at what you make.  Compared to having 250k earning you money helping to propel you to the 1mm number.

And this is where people make mistakes with their debt and the associated math.  As pointed out by other people on this very thread, paying off your debt before investing your extra money could be a foolish endeavor.  For example, paying off a debt at 3.25% would be silly if I can make 7% by investing the money.  Debt itself is not a bad thing, but it is on you to do your math homework.

usmarine1975

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Re: Get to 1 Million in Net worth
« Reply #86 on: November 26, 2014, 08:31:10 AM »
No I meant Less than.  Meaning below 4% is not sufficient.  Anything above 4% would be in the acceptable range of draw down or withdrawal.  4% would be the minimum that most Advisors would even consider as an acceptable withdrawal rate.

Looks like I used the wrong Then/than again.  Ugh gotta work on that.

HawkeyeNFO

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Re: Get to 1 Million in Net worth
« Reply #87 on: November 26, 2014, 08:32:05 AM »
In the financial Advising world anything less then a 4% withdrawal rate is considered insufficient.

As a rule of thumb, 4% or less is desired.  For some situations though, that rule doesn't apply.

usmarine1975

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Re: Get to 1 Million in Net worth
« Reply #88 on: November 26, 2014, 08:36:43 AM »
The discussion regarding it feeling easier or harder is not a discussion about the math or the reality.  It is a discussion about how it feels.  We are using Debt and I feel we are using it in a good and safe manner.  Each needs to make their own choice regarding debt.


I think the idea is that if you are at a Negative NW it may seem harder or almost impossible to get to Zero, basically because you have debt eating away at what you make.  Compared to having 250k earning you money helping to propel you to the 1mm number.

And this is where people make mistakes with their debt and the associated math.  As pointed out by other people on this very thread, paying off your debt before investing your extra money could be a foolish endeavor.  For example, paying off a debt at 3.25% would be silly if I can make 7% by investing the money.  Debt itself is not a bad thing, but it is on you to do your math homework.

arebelspy

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Re: Get to 1 Million in Net worth
« Reply #89 on: November 26, 2014, 09:46:48 AM »
No I meant Less than.  Meaning below 4% is not sufficient.  Anything above 4% would be in the acceptable range of draw down or withdrawal.  4% would be the minimum that most Advisors would even consider as an acceptable withdrawal rate.

Looks like I used the wrong Then/than again.  Ugh gotta work on that.

Wait, what?

It's the other way around.  4% or less is acceptable, and 4% is the safe MAX withdrawal rate, not minimum.  If above 4% was an acceptable range, then why not 5%, or 50%?
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usmarine1975

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Re: Get to 1 Million in Net worth
« Reply #90 on: November 26, 2014, 09:51:58 AM »
An advisors goal is to get you to save more. If you use a 5 or 6% withdrawal rate you would need more money.  We are looking at it from two different angles.  An advisor won't use a 3% withdrawal rate or they are encouraged not too.  When I first started the norm was 6% it has since dropped to 4%.

Not what I would advise. Just what the norm is in the industry.

arebelspy

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Re: Get to 1 Million in Net worth
« Reply #91 on: November 26, 2014, 09:58:36 AM »
An advisors goal is to get you to save more. If you use a 5 or 6% withdrawal rate you would need more money.  We are looking at it from two different angles.  An advisor won't use a 3% withdrawal rate or they are encouraged not too.  When I first started the norm was 6% it has since dropped to 4%.

Not what I would advise. Just what the norm is in the industry.

Again, you have it backwards.

If you use a 5 or 6% WR, you'd need less money saved.  If you use 4% or 3% you'd need to save more (to be able to withdraw a lower percentage to meet your expenses).
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
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usmarine1975

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Re: Get to 1 Million in Net worth
« Reply #92 on: November 26, 2014, 10:00:39 AM »
Your just considering income, not longevity, market return, etc....  Yes a higher withdrawal rate will take less money to get you the income you want but it may not give you the longevity.  Income is not the only factor.
« Last Edit: November 26, 2014, 10:07:56 AM by usmarine1975 »

arebelspy

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Re: Get to 1 Million in Net worth
« Reply #93 on: November 26, 2014, 10:16:41 AM »
We are two former teachers who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and are now settled with three kids.
If you want to know more about us, or how we did that, or see lots of pictures, this Business Insider profile tells our story pretty well.
We (rarely) blog at AdventuringAlong.com. Check out our Now page to see what we're up to currently.

devan 11

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Re: Get to 1 Million in Net worth
« Reply #94 on: November 26, 2014, 11:43:03 AM »
    Virginia Bob had it right.  Fifteen years ago, our credit card debt was $48000.

  I opened wife's credit card statement by mistake, and called the credit card company, not knowing that debt was being run up.  When I saw the statement, I thought it was identity theft.  EZ credit and using 6 months of zero interest, then rolling it over to the next credit card company for zero interest was how it built up. (That financed college for my daughter and my wife).  We had some interesting discussions about finances, step parent responsibility (me), our goals and values.
  The day we reached zero was magnificent.  It took sacrifice, hard work, and long work hours to get to that point.  Then, finally we made it.  It was tempting to kick back and coast at that point, but we kept going saving aggressively and investing, all while living a modest lifestyle.  The day we reached 1 M was another milestone.  Now, number 2 M is getting closer.  (It does get much easier, the farther you go).
   A recession knocking down stock prices, and our continuing, doubling down on investments combined to results that amaze me still.  Sooner or later, there will be another recession.  How tough you are to stay on a steady investing course will help you along, as it did for us.  This isn't just a "Yeah, us" comment.  The real reason is to say that financial frugality works.  Hang in there if you are starting out. It can be done.

FIPurpose

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Re: Get to 1 Million in Net worth
« Reply #95 on: November 26, 2014, 12:12:00 PM »
I'd like to follow along, though who knows if this forum will still be around when I hope to achieve this goal.

The wife and I are currently around investments of $44k

We decided that our FI would be around $750k and would probably declare FIRE around 1.25M

The goal is to hit FI in 2022, hit $1M in 2024, and FIRE around 2027. So FI around 31, $1M at 33, and FIRE at 36.

This is all assuming no windfalls, raises or bonuses. So I'm hoping that it can happen a good bit earlier than that :)

MWM1220

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Re: Get to 1 Million in Net worth
« Reply #96 on: November 29, 2014, 01:34:52 PM »

Roth IRA: $6800
401k: $3951
Cash: $6000
Debt: -$26,493
===========
$-$9742

Ouch. That hurts. No time like the present, right?

Took the debt down a bit in November!
Roth IRA: $7139
401k: $4494
Cash: $6000
Debt: -$22,659
===========
-$5026

Also this doesn't include the 'value' of my car in the debt amount - so I guess if I were to factor in that hypothetically it would be positive, but seeing as this gauntlet is more for the long haul, not worth including something I guess that won't hold its value. I'm heading back to school to get my Masters in January so we are cash flowing that which will slow things down, but not too much. We should be done with all other student loans this month and will also cash flow the purchase of his car (lease ending) by May. By May we should only have one car loan that is getting whittled away and then the cost of school (about $10,000 a year on a $104k + bonuses salary) So we should still make good progress in the coming months despite the added expense of school. Woohoo! Here we go!

 

BBub

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Re: Get to 1 Million in Net worth
« Reply #97 on: November 29, 2014, 03:25:42 PM »
In.  My goal is to surpass $1M liquid in the yr 2020.  FI goal is slightly higher at 1.25, but $1m will definitely be a fun milestone to hit along the way.  Currently at $143k.

Currently $145k

Hoping for $155k by year end.

Spondulix

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Re: Get to 1 Million in Net worth
« Reply #98 on: December 02, 2014, 11:06:26 PM »
I'm in - my goal is $1M by the time I'm 40, so March 2020.

Hummer

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Re: Get to 1 Million in Net worth
« Reply #99 on: December 04, 2014, 03:57:20 PM »
Yup, I'm Canadian and that's how I see it. I also have a defined contribution pension plan that my employer matches but unfortunately that money is locked in until 65 so I am not depending on it for early FI. The good thing about our personal RRSP's is they can have money moved out of them at any time as long as you pay the income tax(unless you are below the minimum tax bracket, then it's 0) unlike the american version called the 401k, it appears they have to keep the money in there until 65. I could be wrong about this, correct me if I am but it looks like Canadian using RRSP's might have a slight advantage in flexibility over American's for that reason.

Only 27 now. My wife is 20.
I'm joining this challenge.

Pension: 22k
RRSP: 15k
TFSA: 1k
Cash: 10k
House: ~280k dang, housing in america is cheap from all the posts I've seen

Debt: none
Mortgage: ~275k they shouldn't have let me buy my house, stupid CMHC and insured mortgages and I was house horny, minimum 5% down... my parents didn't encourage me, but they definately didn't discourage me.

NW: 53k

Current income: 68k gross (this is probably, 49k net, income tax, EI, CPP, Canada seems to have a lot of taxes, plus 5% removed for company pension match)
Wife's income: ~40k gross (this is probably 27k net)
Annual expenses: ~45k (16k) is the mortgage, we can improve this.
Income from basement suite: ~7k annually

Annual savings: approx 38k annually(net income minus expenses), this is what we intend to invest in monthly instalments to grow our stash.

We plan on maxing our TFSA's right now first and RRSP's second. I am going through an interview process right now to hopefully move up to a job worth 90k. That would help. We could probably throw another 20k each year at the stash. I believe in the first few years we are going to use up the extra contribution room in our RRSP's and TFSA's(Right now I have approx 25k contribution room in my TFSA). After that we will have to use taxable accounts because we will be maxing out our RRSP and TFSA every year. :(

Is thread still going to be active in 13 years? lol, At 9% compounded, I'm planning on 13 years...

Cheers

Got the new job. I start in the new year at $90k. Unfortunately, the $22k raise translates into only a $14k raise after tax. I'm planning on adding around $10k to my RRSP this year to repay the amount I borrowed under the HBP to buy my house. I'll update my our NW number in the new year.