The Mcdonalds Millionaire Challenge

[Singuy]

And what if your parents don't have health insurance? Or if you don't have parents? All of your assumptions are that everything always works out for this person. Roommates never move out, cause damage, you never get sick, your car never breaks down (even though you make no assumptions for saving for a new car so this person has this same old beater for 30+ years). Sorry man but that's not the real world. As Forest Gump once said, "sh*t happens". It might work out on paper, but that's not real life.

Not to mention your original "solution" to the challenge was based on government assistance, when your original point was railing against government safety nets.

LoL, the minute I throw an idea out about a strategy using parents, someone needs to post "what happens if you have no parents?"..Seriously? Since when is having parents an unique circumstance? Yes, there are the select few who doesn't have parents, there are the select few who gets sick every hour, and there are a select few who ends up with a broken down car every other day. I wonder how come you didn't mention that barely ANYONE makes min wage? I mean who works at a job for 40 years without a promotion?

So yes, if you are one of the select unfortunate souls who have a rain cloud over your head because luck is never in your favor, my challenge is not for you.

Also who to say making 1mil is the goal? I'll be equally impressed if any min wage worker ends up with 500k in the bank before they retire! I think most people are defensive about what I posted because a lot of you guys make 2x-3x of min wage and yet still ends up with no savings, an anemic retirement account, and a massive amount of debts. This is why a lot of you guys write what I said off as fairy tale.

[herdjohnson]

Also who to say making 1mil is the goal?

Did you not name this thread the "Mcdonalds Millionaire Challenge"?

[Joan.of.the.Arch]

Errgh, I letting myself get back into this.

Even with that 20% down payment in hand, do you really think a minimum wage earner is going to find a home loan for the remaining amount? Would you recommend that in applying for the mortgage our challenger should tell the lender that they intend to rent out rooms in the house, or would you recommend that our challenger hide that plan from the lender?

I guess they form a small business to collect all that rent over the years, too? And pay whatever taxes are due on that.

EDIT: I do keep forgetting that you originally meant to be writing about two people earning minimum wage at McDonald's.

[herdjohnson]

Errgh, I letting myself get back into this.

Even with that 20% down payment in hand, do you really think a minimum wage earner is going to find a home loan for the remaining amount? Would you recommend that in applying for the mortgage our challenger should tell the lender that they intend to rent out rooms in the house, or would you recommend that our challenger hide that plan from the lender?

Yeah I give up. The person winning this challenge would have to be the luckiest man alive. An easier solution would just be to say he takes 2 dollars from his paycheck, buys a ticket, wins the lottery, boom - millionaire. If he's so lucky that he can make a $1500 beater civic last 30 years with no repairs, never get sick, never have to pay for childcare, never have roommates move out, furniture never breaks, beds never need replaced.... well, he should be playing the lottery.

[Fishindude77]

I think most people are defensive about what I posted because a lot of you guys make 2x-3x of min wage and yet still ends up with no savings, an anemic retirement account, and a massive amount of debts. This is why a lot of you guys write what I said off as fairy tale.

Exactly !

The person winning this challenge would have to be the luckiest man alive. An easier solution would just be to say he takes 2 dollars from his paycheck, buys a ticket, wins the lottery, boom - millionaire.

Sadly, the average American thinks this way. They think they have better odds of winning a lottery than they do of saving for retirement.

[rigz]

I just saw this and it was scary how so much of it matched my budget. As a single guy, my food is $100 from Aldi's (and good food too), utilities avg $100/mo., gas is about $50/mo. (and I drive 20 miles one way to work), I have the $100 /year tracfone, $38 internet, car insurance is about $75 / mo., clothes for me are less than you listed (I do yard sales, etc... too). You haven't been watching me, have you?

Only problem I have with your numbers is there is no way to pay so little for a place to live here (unless you live in a trailer, and I know there are some people that do that in this area, or share an apartment), as well as the child care. You're right, the splitting of shifts could work for child care, but most minimum wage locations want employees "on demand" which will mess up that idea. And you really need to include expenses such as car repairs, doctor co-pays, etc...

An interesting thought exercise nonetheless, it shows what can be done (and I see some immigrants locally doing most of what you propose), but too many people are on the consumer hamster wheel, and would never consider this. Become a millionaire on minimum wage? I doubt it with just saving money in a bank. If they invest in the stock market shrewdly, then maybe. Of course if they could do that, why are they working minimum wage jobs?

I may be misreading this, but did you say you spend $100 per month on food?

[disneysteve]

Inflation generally is cancelled out by raises

I sure wish this were true, but it simply isn't. Wages have been stagnant for years, and not just for minimum wage earners.

And if 2.5% rate of return isn't a possibility, then pretty must nothing is a possibility. This cannot be more conservative when it comes to a rate of return number. Dave Ramsey says 12% and most people on this forum will spit out numbers like 8%, I'm just picking a CD rate of 2.5% which exists today.

Please provide a link to the 2.5% CD rates. I just checked bankrate.com. The highest 5-year CD is at 2.25% with a $25,000 minimum. The rates are lower after that: 2.12, 2.10, etc. And that's tying up your money for 5 years. How realistic is that for folks living on minimum wage?

[disneysteve]

Two or three families could live together and share a house and expenses.

This is illegal in many cities across the country. Before doing this, make sure you aren't in violation of the local housing code. Also make sure it is permitted by your lease.

[herdjohnson]

[B][I]
The person winning this challenge would have to be the luckiest man alive. An easier solution would just be to say he takes 2 dollars from his paycheck, buys a ticket, wins the lottery, boom - millionaire.

Sadly, the average American thinks this way. They think they have better odds of winning a lottery than they do of saving for retirement.

I'd say the odds are better to win the lottery than to buy a 1500 beater civic and drive it for 30+ years never needing so much as an oil change or new tires.

But what does this average American know about your magical indestructible vehicles and immortal never-get-sick immune systems?

[Fishindude77]

I am not suggesting that the lifestyle suggested in this thread by the originator is a lifestyle I would recommend, or that I would want to see any of my family living. However, to shoot it completely down and pick it apart is pretty ridiculous also.

There are tons of people in this country who live at that level or poorer and manage to get by. Some don't even know or feel like they are poor. If they came from a foreign country, they may feel like they are richer than ever.

Forget the car repairs, you can live without a car all together. In my rural little community there is a public transportation system that hauls people to work every day, $1 per ride anywhere in the city, $2 per ride anywhere in the county, and it's free if you can't afford that.

Regarding healthcare, you don't have to pay that either. they just go to the ER, get treatment and walk away never paying their bills, happens every day. Now you're not going to get your teeth cleaned every six months, braces for the kids and new eye glasses every year, but there are sources to get the basics for free, people are doing it.

Forget codes about several families living together, you just do it and don't ask. People do it every day, and many landlords don't much care so long as they get a rent payment.

Do I recommend this lifestyle, NO. But to shoot it all down like it is completely impossible is inaccurate.

[disneysteve]

Regarding healthcare, you don't have to pay that either. they just go to the ER, get treatment and walk away never paying their bills

Forget codes about several families living together, you just do it and don't ask.

Well I suppose it is easier to accomplish if you ignore silly things like paying your bills or obeying the law.

[hamchan]

Well I suppose it is easier to accomplish if you ignore silly things like paying your bills or obeying the law.

Not to mention if you are doing this while sitting on piles of money, expect you're gonna start getting sued (They don't hesitate even to sue people with zero money, on the off chance you'll have money some day). And they can absolutely just take your money if you have judgements against you.

[Singuy]

Not to mention if you are doing this while sitting on piles of money, expect you're gonna start getting sued (They don't hesitate even to sue people with zero money, on the off chance you'll have money some day). And they can absolutely just take your money if you have judgements against you.

About Disneysteve's comment on interest rate
Yes, it's hard to find a 2.5% CD(2.25% are possible..and no you are NEVER locked into anything for 5 years..you just pay a penalty of 6 months worth of interest if you REALLY need the money). But do remember, we rarely have CD rates this low..and this is all because of the housing crisis. YOu really don't think in the next 30 years, CD rates(as well as mortgage rates) would go up? You think we will have historically low CD/mortgage rates for the rest of time?

My initial budget is based on pretty much worst case scenario (assuming low CD rates forever, no promotions forever, really low wages forever, and no investments that will yield you anything higher than 2.5%). My worst case scenario doesn't include getting cancer, being an orphan, exploding cars, not able to find roommates, gangbanger drive bys, deportation...or any other excuses you can think up of.

A lot of people are emphasizing the need for car repairs every other day, or medical bills every other week, and that not having these expenses factored in is like winning the lottery. You guys really think the chances of having major medical problems is that high in your 20s and 30s? Then why are so many people bitching about the ACA if this is the case? And you guys never seen a used lexus or honda hitting 250k miles without major repairs? Am I the only person with a 2001 celica @ 165k miles and 0 repair bills(besides brake, tires, and oil change)? And you really think an oil change or a tire swap will keep you hitting a million dollars?!@#

How come no one talks about the fact that only 2.65% of Americans actually make min wage(everyone else makes higher)?

My challenge is actually ONLY made possible because of the ACA and other social safety nets. Without the ACA, then yes..you can get into a car accident and end up with a 250k hospital bill..but with the ACA, your max expendature is 10k(using the worst plan) so lets say you have crap luck and ends up with 5 major accidents till 55..that will leave you with 50k(or 80k with interest factored in) less than your 1mil..so now you can be a millionaire at 58 instead of 55..big deal.

I'm surprised that no one here made the comment about how this challenge is not possible due to death before hitting 55...

[disneysteve]

And you guys never seen a used lexus or honda hitting 250k miles without major repairs? Am I the only person with a 2001 celica @ 165k miles and 0 repair bills(besides brake, tires, and oil change)?

No, I've never heard of someone getting 250K on a car with no repairs. That's pretty remarkable if it has happened. I had my last car, a 1998 Camry, for 14 years and about 160K and and had plenty of repairs. I always budget $2,000/year for car repairs. I've got a 2006 Camry now and just spent $1,100 on it last week. If you've truly spent nothing on your 14 year old Celica, that's fantastic but is certainly not the norm.

[Singuy]

No, I've never heard of someone getting 250K on a car with no repairs. That's pretty remarkable if it has happened. I had my last car, a 1998 Camry, for 14 years and about 160K and and had plenty of repairs. I always budget $2,000/year for car repairs. I've got a 2006 Camry now and just spent $1,100 on it last week. If you've truly spent nothing on your 14 year old Celica, that's fantastic but is certainly not the norm.

I have never done a tune up, or even changed my transmission fluid in my celica. 165k and still going.

My wife's civic had about 2000 dollars worth of repairs from 0-175k miles
Her brother has a honda accord with 250k miles with 3000 dollars worth of total repairs
My co-worker has a lexus with 180k miles and the thing just wouldn't die so he can't justify another car.
The only people I hear with dud cars are peeps with American or German cars. If you want something that will last forever, get Japanese.

2000/year on a car for repairs is way too high.