Whats been the #1 driver of your wealth?

[james.hendrickson]

Forums Community,

Wanted to put this out there for discussion => What's been the number 1 driver of your wealth?

By this I mean specifically what habits or practices are you doing that have built your net worth the most.

[Fishindude77]

A few things:
a. Starting young; getting into business, buying good real estate, and beginning retirement investing all while relatively young, and then holding the course.
b. Staying married and making good decisions to stay out of trouble. (Divorces, DUI's, addictions and foreclosures wreck a lot of people)
c. Work ethic; enduring the daily grind, long hours, tough conditions, etc.

[james.hendrickson]

A few things:
a. Starting young; getting into business, buying good real estate, and beginning retirement investing all while relatively young, and then holding the course.
b. Staying married and making good decisions to stay out of trouble. (Divorces, DUI's, addictions and foreclosures wreck a lot of people)
c. Work ethic; enduring the daily grind, long hours, tough conditions, etc.

Item b is especially the case. Nothing like a good divorce to nuke your wealth.

[ua_guy]

Like many Americans, our relative wealth has come from a mix of work, savings, and investments. Not just real-estate market conditions but the repayment of a mortgage loan on an asset that has a history of increasing in value over time, and playing the long game of investment contributions.

To Fishindude's point, we've managed to stay out of trouble and have sidestepped major financial losses because of it. Part privilege, part luck, part intentional decision, and a lot of work. My spouse and I have stuck together and have tried to put our best feet forward...doing things even though they were incredibly difficult, or not what we had necessarily hoped for. In the end, the effort has been to our benefit.

[Singuy]

Six step process

1. Earn high income out of school by picking good majors
2. Pay off student loans ASAP
3. pay off mortgage ASAP
4. continue to live off 20-30% of household income
5. learn how to invest
6. use that knowledge to invest in higher risk/reward portfolios due to the ability to tolerate higher risk established from steps 1-4

Single biggest contributor is #5 and 6 but they couldn't happen without steps 1-4.

[LivingAlmostLarge]

staying married and marrying right person. Divorce nukes wealth. Also even if you stay married but are financially in different times it doesn't work.

[jenn_jenn]

I love this thread. So what ya’ll are saying is don’t get divorced.

What we do have is the result of hard work and making decisions that allowed us to take advantage of opportunities that came along. And honestly, a little bit of luck on my part this year (but that luck wouldn’t have been possible without years of hard work leading up to it).

[bjl584]

Probably consistency.
Regularly investing month after month, year after year, no matter what.

[kork13]

Give me enough time, my list would be lengthy.

• Learned to make frugal choices from my parents.
• Paid attention & focused on my schoolwork... Leading to a full-ride scholarship to a great college.
• Started saving & investing young -- started maxing my Roth IRA as a college junior.
• Had a decent paying professional job straight out of college.
• Consistently lived on only 50-60% of my gross income since day 1 out of college.
• Consistently saved/invested the rest of that income out of each & every paycheck.
• Maintained a budget/spending plan based upon tracking my expenses.
• Interacted regularly with like-minded people (all of you, for example) who were concerned with smart money management.
• Learned to (eventually) avoid debt like the plague.
• Purchased quality real estate with an eye toward rental prospects and/or resale value.
• Married someone who generally shared my mindset toward money management

Good enough for now... As I said, many factors involved. Though perhaps to summarize: intentionality, consistency, and self-control.

[Scallywag]

Item b is especially the case. Nothing like a good divorce to nuke your wealth.

Sometimes, though, a divorce can actually set you on the path to wealth by helping you move away from a spendthrift, unambitious spouse who lacks the motivation or the capacity to build wealth or who believes that they can spend as long as you earn a good living.

One of my older relatives got divorced at 45. They were eyeballs deep in debt, lost their home to foreclosure and had filed for bankruptcy TWICE! She refused to work even though she had education and work skills, and the kids had long since grown. After the second bankruptcy, something snapped within him, apparently, because he filed for divorce and never looked back.

Post-divorce, in addition to his day job, he began a side business, briefly living with friends as he rebuilt his life and built up the business.

When he retired 25 years later, he had built a large successful business that he loved and enjoyed running and which took his net worth to the stratosphere. He never truly "retired" but continued in a supervisory capacity well into his mid-80s and left fat inheritances at his passing. Quite a turn-around eh?

Ironically, had he stayed married, he'd have highly likely died broke. So the divorce actually helped him build wealth, as opposed to staying married and staying dead broke.

[rennigade]

Probably the #1 factor is my mindset. I always wanted to live below my means. Never wanted to impress people with flashy things and material objects.

Saving a lot, investing, picking the right partner, etc etc is fine, but without committing mentally to living that lifestyle, im not sure if anything else matters.

[Jluke]

Steady employment combine with frugal lifestyle and savings rate.

Apple stock

[disneysteve]

Living below our means.

That's it. If I had to sum it all up in 4 words, there you have it.

[myrdale]

Being intentional in my financial decisions (conversely not making knee jerk purchases or decisions).

If there is something that I want, very seldom do I just run out and buy it. I'll mull things over for at least a week or two and then if I still want it, I will buy it. The larger the purchase, the longer I will give it.

Once the decision has been made, being consistent in following through on those decisions. Maybe it's making the IRA a priority. Previously it was hammering away to be debt free.

Continuing to educate myself, even if it means occasionally listening to bad advice which I disagree with. Watch what other people do. Emulate what works and discard what doesn't.

[MonkeyMama]

For us, starting young. Buying real estate instead of paying twice as much to rent (during 20s/30s/40s). Investing for retirement starting the day we graduated college. Never living up to the second income. Along with all that, we never borrowed for anything but a mortgage. (Which has always freed up more of our income to invest).

Marrying another saver also helped, as brought up often in this thread. I don't think either of us had the personality to marry a spender, though our siblings both did marry spenders and struggle more financially. I don't even remember even dating someone who wasn't on the same financial page, in contrast.

We both chose practical degrees at good/affordable colleges. I expect this also puts us way ahead of most Americans. As more people share, I can see the layers of many good financial decisions. Though interestingly, most of those early financial decisions (affordable college, no debt, putting everything into housing) were decisions born of launching in a very high cost city. Would we have saved 50%-75% of our income if we weren't saving up for Bay Area real estate? Probably not. Would we have been so debt adverse? Probably not. Would we have been so fixated on colleges that cost pennies? Probably not. (& for me, a lot of it was my parents not helping me with college, because of their massive mortgage. So it seems all of our early life/financial choices really come down to starting out in an extreme high cost region. Our practical/saver personalities were never interested in high-interest debt, which obviously wouldn't have helped us any).