What does that 'millionaire moment' feel like?

[disneysteve]

It seems that being single for some and not for others would help in getting to 1M quicker. There doesnt appear to be a one size fits all for this scenario.

It really depends on the income of the 2nd person.

My wife hasn't worked for much of our marriage. When she did work, she only earned about 20% of what I earn. So her contribution was certainly helpful but my income still did the heavy lifting.

[97guns]

i didnt know it happened until one day i looked at the values of my properties and busted out the calculator. some and probably most wont believe me but i dont care, i perfectly timed the housing crash and cashed in large, turning around 250K in 2009 into over 1.2 mil today with help from a recent 250K inheritance but i was already there before i got that.

the dropping of the banks 5% interest rates in 2009 made me dump it into real estate for better yield on my money, i was really happy bringing in $1000 a month with my money in cd's, the large gains in equity is nothing but icing on the cake

[rennigade]

i didnt know it happened until one day i looked at the values of my properties and busted out the calculator. some and probably most wont believe me but i dont care

Why wouldnt anyone believe you? If you own a couple homes and they're valued at $200k each...it doesnt take long to reach $1M.

You just own yours in objects made out of wood and bricks that people live in...some have their money sitting in a digital world made up of binary code. You can feel and touch your investments...others can view theirs on a computer screen and with a click of a few buttons money magically appears in their checking/savings accounts. Different strokes for different folks.

[disneysteve]

Why wouldnt anyone believe you? If you own a couple homes and they're valued at $200k each...it doesnt take long to reach $1M.

Also, investing in real estate, when it goes right, leverages your money tremendously.

Let's say you buy a $200,000 property with a 20% down payment.
The value of the home goes up just 3% to $206,000.
The return on your $40,000 down payment investment is actually 15% (6K gain on 40K investment).

Obviously, it isn't quite that simple due to taxes, insurance, maintenance, etc., and it's an illiquid investment but you get the idea.

[Fishindude77]

And don't forget that while you have that property is is costing you money in upkeep and taxes, and when you sell it there will be realtor fees and taxes on the gain. These all cut into your investment gain.

Despite any negatives, I'm a huge fan of real estate investment.
My favorite is farm ground. Steady income, relatively low taxes, no structures to maintain, and can be sold and turned into cash pretty rapidly.

[DecisiveParadox]

Sigh...I had to stop reading when saw a 4% return as being generous. Are you just pulling a number out of thin air? You could have at least checked on the historical rate of the S&P...which is around 7% adjusted for inflation.

Sure, I'm more than happy to tell you where I got 4% from.
Last month when I banked all my invoices I officially reached over 250K of liquid net worth which means I now qualify for my banks private banking package.
When sitting down with my "personal wealth adviser", I was run through some investing options, during this I asked why all of the balance portfolio options had a return of 4%.
That's the rate, pre-tax & inflation adjusted, annual average the bank has been delivering over the last 6 years.

So to answer your question, No I didn't pick it out of thin air, but I relied on professionals with enormous resources and knowledge that exceed my own.

Like I said its different strokes for different folks YMMV. 97Guns has done well in real estate.
Some people have invested and contributed to where compounding has secured the bulk of their income towards the millionaire moment.
I think everyone who has made or getting close to the millionaire moment would agree that its not easy, its takes a lot of discipline, time and sacrifice.
If your costs are higher from having a family like you and I this increases the time as opposed to someone single with minimal cost drains.
I think the key here is to accept that other people have different strategies for getting to that moment.
I want to enjoy my life in my youth, which means tucking money away and waiting for interest to snowball is not the first plan I would choose.
Instead I am focused on maximising my income to rapidly build a capital pool while factors are in my favour.

My criticism is people who sit back and claim its easy. I don't think it is. I think its very hard. If it was easy why do less than 2%('02 D&T) of the population ever achieve it? something that's socially desired yet statistically elusive for the majority cannot be championed by those who have achieved it as easy. There is a factual disconnect with that.

Instead of linking articles about disagreements in figures, why don't we humble our opinions on other peoples paths, offer help and enlightenment where its welcome (in a welcoming way)and learn from those who do it differently.

DecisiveParadox

[disneysteve]

I now qualify for my banks private banking package.
When sitting down with my "personal wealth adviser", I was run through some investing options, during this I asked why all of the balance portfolio options had a return of 4%.
That's the rate, pre-tax & inflation adjusted, annual average the bank has been delivering over the last 6 years.

I would turn and run as fast as you possibly can from this "wealth advisor". You don't want to have anything to do with sleaze like that. How nice that they are earning 4% for their clients at a time when the stock market has been hitting record highs day after day and those of us who do it ourselves are earning 10, 15, 18, 22% on our money. One of my mutual funds is up over 31% in the past year. Another is up almost 14%. Another is up over 11%.

Any "advisor" who is trying to sell you on a "wealth" plan that has a 4% return should be avoided like the plague.

[rennigade]

My criticism is people who sit back and claim its easy. I don't think it is. I think its very hard. If it was easy why do less than 2%('02 D&T) of the population ever achieve it? something that's socially desired yet statistically elusive for the majority cannot be championed by those who have achieved it as easy. There is a factual disconnect with that.

DecisiveParadox

You were on the right track when you said its socially desired. Its socially desired to live like a baller. Nice cars, nice houses, nice watches/clothes. Thats sexy right...thats what the media pushes, thats what people drool over. Why should anyone save/invest $10k when they can go out and buy that new motorcycle and impress everyone? There is the issue. Its not cool or sexy to save your money, invest your money, and have a large number in your bank account. No one will known how cool you are unless you're flashing it around.

How many of those people who never make it to the 1million mark ever had a budget? Think they've invested each month for the past 20 years? How often do they turn down impulse purchases? These are just a few things that can get in the way of building wealth. Yes..a lot of people simply do not make enough money to invest and reaching a higher net worth is almost impossible. But for a lot of people who you see living paycheck to paycheck...they're doing it to themselves.

Also ill echo what DS said. You need to ditch your wealth manager. If you're serious about all of your accounts making 4%...thats really low. You should head over to bogleheads and check out their 3 fund portfolio. I really hope you havent been allowing this person to manage your portfolio for very long. If so they screwed you out of a lot of gains.

[Singuy]

You were on the right track when you said its socially desired.

Nothing wrong with what the poster wrote. Being a millionaire is socially desired(true statement, and it may have nothing to do with showing off but a million may give MOST people that financial stability..so it's always socially desired), and the poster said it's extremely hard even though it's socially desired(meaning, most people ends up spending their money instead of saving it..therefore it's hard).

[DecisiveParadox]

Dont worry about my returns, so far so good.

Also ill echo what DS said. You need to ditch your wealth manager. If you're serious about all of your accounts making 4%...thats really low. You should head over to bogleheads and check out their 3 fund portfolio. I really hope you havent been allowing this person to manage your portfolio for very long. If so they screwed you out of a lot of gains.

Nobody makes what I do a month listening to a bank.
Every time I go in they try give me a sell. I wouldn't be where I am if I was easily sold and parted from my hard earned.
I think everyone agrees banking products will never give the most satisfying returns and most certainly not match market returns.
I put the money we earn back into the business which so far is paying healthy returns.

[scfr]

Here is what I thought was an interesting read on the topic of net worth of an individual vs. net worth of a couple:

http://www.financialsamurai.com/the-average-net-worth-for-the-above-average-married-couple/

[FIREseeker]

Here is what I thought was an interesting read on the topic of net worth of an individual vs. net worth of a couple:

http://www.financialsamurai.com/the-...arried-couple/

Oh - yes! Thanks for posting!!! You're awesome!

[Eagle]

This thread reminds of a book I've been reading called The Millionaire Next Door by Thomas Stanley and William Danko. Most people would be surprised by the habits of the average millionaire next door. There's less bling and more frugal living in most cases. Celebration would be either non-existent or minimal. It's a slow and steady pace that wins the race.

[JoeP]

Depends upon your definition of "millionaire."

Is it net worth? Is it $1M actual post-tax cash sitting in an account? Is it pre-tax retirement dollars in that amount prior to taxes and fees due at withdrawal?

We plan on having a small celebration once our net worth hits that target. It will be short-lived, because college expenses will quickly eat into that.

[bjl584]

Depends upon your definition of "millionaire."

Is it net worth? Is it $1M actual post-tax cash sitting in an account? Is it pre-tax retirement dollars in that amount prior to taxes and fees due at withdrawal?

We plan on having a small celebration once our net worth hits that target. It will be short-lived, because college expenses will quickly eat into that.

That's a good question that's been argued over and over on this forum.

What is the true definition of a millionaire? Is it all assets? Is it all assets excluding your home? Should you include retirement accounts that you possibly don't have access to for 20 or 30 more years?