A New Landlord. I was sick of having neighbors above and below me. I wanted a yard, a deck, reprieve from the HOA meetings, and to be king of my own castle. The bad thing about my house was that it was on a busy street next to the busiest street in the entire city. After I moved into my single family house, I turned my condo into a rental, but finally sold it in for 30X annual gross rent because I no longer had time to be a landlord after my boy was born.
I was too busy building a business at work, managing a rental, remodeling a new home, and figuring out how to keep things going. Note On k Investments: I put away the max K pre-tax contribution since my first full year of employment. The fund actually did well given they had a net short position, so my overall k was able to take the hits.
I strongly believe most people reading this article can accumulate a million dollars if they have the motivation, a good amount of planning, the right amount of guidance, and some luck. But here are my suggestions for those who want to accumulate wealth quickly. Give yourself optionality please. There are thousands of straight-A, top 25 university graduates every single year. Getting a job on Wall Street was like winning the lottery for a kid coming out of a non-target public school.
I went through seven rounds and 55 interviews over a course of six months before getting the offer. Your job income is the 1 main source of wealth for most people. Stop making excuses why you need to buy a nice car and nice clothes. The base you build in your 20s will provide tremendous returns for later on in life.
If you stay consistent over the years, you will get there. Working hard takes NO skill. I promise you that if you wake up by 5am every morning, work one to two hours before the rest of your peers and work another one hour after your peers have left, you will get ahead! I generated millions of dollars in revenue, built a solid network of internal supporters, and was a workhorse by coming in by am everyday for my first two years and leaving at pm-8pm on average.
Sometimes I even left work at 10pm. Did I sacrifice some of my social life? Of course I did. But, I also partied hard many weekends goodness knows! If you are reading this post, chances are you have clean water to drink, shelter, internet and a legal system that protects your rights. There are millions of people in the world who are starving every single day. There are those who live in fear of dictators confiscating everything they own. What is your excuse?
Spend 30 minutes every day by yourself in meditation coming up with a better business model for your company or for own business. Spend four hours every weekend in the office studying up on new things that will help improve your standings with your clients. You can even start a blog and work an extra 30 hours a week online before you have a family and generate some healthy revenue if you wish.
Was I lucky? Hell yes! But, I did my research and was I willing to put my balls on the line to try and make some money. As a poker player I know this feeling all too well. Lock it up. Protect yourself from yourself! Continuously diversify your income streams and build passive income. Sure, you can get your face ripped off if you bite off more than you can chew. But trust me when I tell you that thanks to inflation, your debt payments will seem insignificant five years afterward. Five years later, you will be happy every month when you get to charge a rent that is much higher than the interest portion of your mortgage.
Property is my favorite asset class for young people to build wealth. I sometimes feel guilty raising the rent, but remind myself, I was the one who took the risk, put down the downpayment, and nobody forces anybody to rent my place. I want to invest in the next San Francisco Bay Area over the next 20 years, and lower cost of area cities like Memphis, Austin, and Salt Lake City look attractive to me. Stay humble despite amassing a fortune. Make people believe you are younger and poorer than you really are. I drive a 13 year old car and wear t-shirts, jeans, and a baseball cap most of the time.
The only people who want attention are those who are insecure, not not really rich. You can make big bucks through a day job or by starting your own online business. Better yet, you can do both. While I was working in finance, I launched Financial Samurai as a personal journey and worked on it before I went to work and after I came home. After almost 10 years of writing, Financial Samurai provides a nice supplemental income stream to my passive income investments. People think that all it takes is good work to get recognized, paid, and promoted. This is absolutely false!
You must sell yourself internally as much as you sell yourself externally. Once you have someone with significant power on your side, your entire career gets that much easier. Your greatest money making asset is you. Education is worth more than any material thing you can buy. My studies in college and grad school taught me how to market, negotiate, communicate, analyze investments, and influence.
Thankfully, you can now learn most everything for free thanks to the internet. However, I promise you that knowledge and education is worth more than everything else. How much you keep is even more important than how much you make. There are people who make millions of dollars and end up broke years later because they had no idea where their money went. Perhaps they made some ill-timed investments.
Or maybe they simply just spend too much. Everybody should leverage the free financial tools online to track their cash flow, analyze their investment portfolios, and calculate their financial needs in retirement. One cannot downplay the importance of luck in building wealth. I have been fortunate to have two loving parents, an incredible spouse, and a brain that works most of the time.
Despite having a deficiency in higher level math, uninspiring SAT scores, and a run in with the law as a teenager, I made up for my weaknesses with plain old work ethic and relationship building. It also helps to be an undying optimist as well. It should be viewed as natural for anybody who wants to live a better life, take care of his or her family and parents, and have the opportunity to give back to the community. As soon as we align our realities with our beliefs, we become congruent and happier with ourselves and our outlook.
Good luck on your journey to your first million! Your title is a bit misleading for the majority of the population. Reading your backstory kudos, btw even you admit that a large portion of your wealth was based on luck dotcom investment, early VP with no degree in a boom economy, move to sanfran before downsizing, etc. A good portion of these articles involving advice seem a bit unrealistic. Hard work, persistence, with a bit of financial acumen is the ticket. Maybe you are afraid of getting audited like everyone else with money. You remind me of my older sister, getting off on being out and about out there, socializing and socially deilberately hurting others to survive.
I never got along with people like you, never understood you people, never felt comfortable around you people. And you will probably never understand rock stars, real artists and people who followed their passion. You chose money for the sake of money, which is something I will never be a part of. I guess somewhat hurting others a little every day in a daily way is the type of thing you are actually good at. I just could never get how people like you thrive in those environments, obviously by shifting the blame to others on a regular basis, when people like me only did it out of necessity and real survival here and there and would never get off on it or try to intentionally live like that every day or actually enjoy it in any way.
But its people like you who pushed me and pushed me and emotionally beat me down all those years until I had to be the biggest, most evil one of you people out of sheer survival, following the rules perfectly yet thinking horrible things about others in my mind, all while following societal normals as best as possible. The way to achieve things in life, right? You would think people can just get along and be happy, but apparently your kind will never change, and I will never be like someone like you.
The thing is I am your same age, and you sound just like some popular kid who made fun of me in high school or forced me into silence in high school and was well aware of my suffering but only tried to make it worse as you realized it was helping empowering you in nature. You are the type of person who in my opinion will not go to the other side after this frivolous life, rather you will probably be reincarnated, unless by some miracle you learn to be more kind to others in your old age. Anyway, just really aggravated me reading your post so I figured I would tell you what I really think about your kind insteda of trying to pretend like any of you are interesting to me in any way, other than you trying to make me feel socially uncomfortable.
You are the same type of person who would be a roommate or live in a more crowded space with others as roommates and get off on making them feel awkward and uncomfortable while you saved money for yourself, like a little touch of evil every single day as you learned to be steady in a daily regular early morning waking way. The sad thing is that your kind pushes and pushes and pushes genuinely kind human beings like me, until we have no other choice but to join your club, and if we are good enough at following the rules or lucked out by meeting the right mentors or people in our families, then people like me can be even way more evil than you… Its like your kind pushes evil on the kind people like me to corrupt our morals and prove that your conscience is okay and that those with less money and who are more kind than you who you are afraid are going to heaven or the other side instead of you, so you push them to their lowest point and try to bring them up again by having them embrace evil to prove that they are no better than you morally.
I could be wrong about all of this, you just sound like the type of person I would never ever want to be too close to, just totally right field of everything I enjoy , believe in and that makes me feel okay, comfortable and happy. Haha why are you haters even on here. I enjoyed the post. I have a long way to go, but this stuff works. No reason for Silicon Valley to have a monopoly on capital or innovation, especially with costs so high. Hi FS, how do you book the net worth for your properties?
Is it mark to the market value minus outstanding mortgage? This year I am maxing it out and will continue to do so. This is one sure way to build wealth. Great post, thank you. Plus, you are paying down your mortgage in the process. I like Fundrise. The difference to me of 1 million or 3 is nothing. There is no bank balance that could ever match a happy existence living life to the full.
I did everything and I loved it. Saving everything so you can enjoy yourself at 70 is absolutely ridiculous and in my opinion the worst possible advice someone could give or listen to. You can not do all nighters, several in a row, raving, climbing mountains, travel to dangerous places, super remote places, super exotic places, and do the same sort of things when you are Money as a singular yard stick and measure is the most soul destroying and sad perspective in my book.
What a waste of a life. Totally agree! Can those people that want to tax him give him back experiences that he declined? Can they give him back his youth? When do you think the optimal time to invest into real estate is? ASAP, out of highschool, out of college, during a housing correction, or later? Needed to comment about the ordering anything other than water line. Up until now, when other people are paying for my meal, I still feel uncomfortable ordering anything other than water. My parents drilled that pretty hard into my brain!
Financial Samurai — quick question on the math above. When you calculate net worth do you consider total assets less mortgage? Or simply total assets? So being in my late 40s, and with the same career for 24 years, it is a little disheartening reading how quickly FS attained 1 million in net worth. The younger a person recognizes the importance of budgeting, investing the excess income above needs, and having a game plan cannot be overstated. By disheartening, I mean realizing how many working years were squandered without a plan for financial freedom that stunted my wealth building.
The good news: FS demonstrates action that can be taken at any age to improve financial health, as well as passing the knowledge to your kids so they jump start the process early. Our goal is imparting our current knowledge and habits to our kids as they grow and mature. We are building our financial independence with very deliberate steps: healthy net worth, small mortgage left to pay off, pension eligibility currently for the wife and I, well funded s and climbing.
No other debt than the mortgage. We are trying to track all the information but occasionally get lost in the chaos of life. I have read multiple times about personal capital. Inputted our data manually but did not feel comfortable linking any accounts through the site. How safe is the site? Does anyone have personal experience with the site that can explain the security?
Thank you. Great read and i hope that I can have similar luck im think of investing in ripple. I just read a review of RealtyShres NomadCapitalist. Seems like they bungle up every property he purchased. How has your experience been? Thanks and Happy New Year!! My thought process is, that I would just invest in a fund that is run by a committee, who controls what deals get on the platform, to choose the investments for me. After a couple years of learning their process, then I can pick specific deals. I really enjoy your blog. You cracked me up a bit with this post, though.
Well, I was an FSO for 13 years, then bailed at 42 to become a full-time investor. Dude, pretty quickly FSOs are making six figures and then have zero expenses while living overseas. Plus, FSOs earn pensions in 20 years, including health care for the rest of their lives from age 50 onward. If you do the math, if they retire at 50, each pension would be valued in the mid-seven figures relative to the amount of money you would need on-hand to purchase a comparable annuity. Anyways, no utilities, no rent, no cell phone charges even, making six figures, earning a pension that pays forever from 50 onward yes, I did abandon that one!
We lived in a modest town home, and drove an eight-year-old Toyota Camry. Went to public HS and college too in Virginia. The D. I find this a good read. I was not taught nor did I think about time management and personal finances. Now that I am older I see the very importance of starting young. For this I thank you. I know that money comes with work and gambling for it is the worst thing you could do. This article and many other on this site have been a non-stop read for the past few days. If anyone is willing to give me 3 pieces of advice for my future I will take them with full consideration.
Here you go! Hi, guys I just ran across this forum in a 20 year old nursing major. I have little student loan debt as of right now and I was wondering what I could do now to set myself ahead in the financial game. You are absolutely right about what to do when one graduates from college and gets that first big job — preferably without huge student loans. It would also put the person in the 73rd percentile of net worth among those 65 and older even if they never saved another dime.
Darn, I typed in a few numbers wrong. So two years of that saving would net a half-million dollars, not a million. Is it worth it to spend K on a dental school degree? I feel like the return on investment is poor. Median salary for a dental associate is around K and dentistry is becoming saturated in big cities.
What are your thoughts? I would say that you really have to ask yourself if you would like a particular profession before diving in. If you look at something like dentistry, nursing, or physician careers, none of them may be the ultimate return on investment if you look at it from purely a financial standpoint. Obviously, not everyone is suited to even be in any of those professions either. Most people in dentistry have some degree of interest in helping others and probably did not choose it solely for money. That being said, dentistry is a relatively stable profession.
What is it about dentistry that calls to you? If it is about the money, there are plenty of other six figure jobs out there that may be more intriguing. Have a look yourself. My plan is to work and build a relationship as much as i can until 28 currently working in logistic line.
At the end of 28, i should have something i can depend to in order to build my first million. Not quite under 30 years old but somewhat close. Most of it is into real estate. I also live in Los Angeles. Here is my story I have always worked and saved money my whole life. I dropped out of college and got into selling life insurance and became a life insurance agent at 22 years old. This was at and I know because of the housing crash I need to save asap to buy a house. I made 12k my first year as an insurance agent and 73k my second year, 86k my 3rd year about about 80k every year after that.
When I was 25 I has a net worth of k and I bought my first house for , with a k down payment. Every since and they are all rented out. I have about 30k in company stock and about 30k in paied of cars and 70k liquid. You just need to live well below your means and save and invest. I read through the comments and felt a bit surprised by how many people rag on you for the early stock earnings.
For most people, that would have led to building a lot of negative spending habits that would have taken many more years to correct. The fact that you were able to wisely invest and keep your earnings — VERY impressive!! Thanks for reading. The temptation to blow the wad of cash at a young age was there. But because work was so stressful, I knew I had to save it in order to have the option to do some type of less stressful work later. It was an awesome and incredible experience — did it for one year.
Net worth age USDk. At age 35 got fired from my job and was offered to go to Shanghai China to lead a business unit for well known consultancy. Age 35 Net worth about USDk. I arrived in Shanghai at the right time when it was affordable and I was paid decently. Key milestones which really accelerated by NW a married a woman and bought 2 properties in Shanghai b RMB was appreciating big time.
Bought property in Singapore not making or losing money. At age 50 now — networth is about USD4 mn. Which approx. The rest are liquid investments. Although my initial target was USD5 mn…hopefuly I can hit that before Need to add that along the way…the family had nice windfall when my uncle sold his bank and my dad shared some of the windfall. My dad gave me about USDk. In hindsight, it was about making the right career bet betting on Asia and having a horse shoe up your ass getting married and lucky time to buy properties in China and being blessed uncle selling his bank.
But the taxes in California are so damn scary!!! FS — you and I need to hook up man; enjoyed reading your post! Probably have taken some similar paths. If I had an offer from any other job, I would have gone to China in But it is hard to reject a frontline revenue generating job from what was then the toughest bank to get into maybe still is and be potentially set for life if I lasted 10 years.
The China move for you was great. Seems like your wife comes from a wealthy family? If your wife can buy TWO properties at age 20, or in her early 20s? What a crazy run Singapore went through from onward yeah? I remember Singapore being relatively affordable then. I view the tremendous energy as a huge advantage. I want to start in some new project for my life.
Thanks for very useful articles. Well said. Nicely told with great instruction. Have one for you. Im am I worked my tail off, made some great investments and have a net orb of 6 mil. I feel stuck and not sure what to do. I have my toys, a few houses, nice cars, great wife etc, so do I just live. I can retire if I want. At number was a low ball. What do you think. Figure out what things you really love to do and do them. You have enough money to do whatever you want now. I left banking in at 34 to make little money as a blogger. Find something that pays you, fulfills you, and is fun.
Great motivational post. Definitely shows that after 2 years, people are still commenting. Some are given opportunities and, as you say, waste them due to laziness or entitlement. I also think that writing posts like this is a great way of giving back in a way as others glean their own advice and solutions from your experiences. Since leaving college I have worked my ass off to impress the top in order to move up quickly. I have worked at 3 different companies over the last 8 years. I also think I shot myself in the foot a bit when I left the company I started with right out of school.
I was there for 5 years, and was in the sweet spot of advancement there. But for some reason I got a hair up my ass to leave the company an oil company to go work somewhere fun and younger in action sports. At the Action Sports company I got noticed very quickly by the C-suite, but happen to join the company at a challenging time. I had not done my homework before I accepted the offer to go and work for them. They had been in a multi year restructuring…and things were not improving.
So, even though I got in with the right people, we had so much turnover that those people were never around long enough to help put my career trajectory on the exponential curve I was working so hard for. When I finally left that company before an impending BK filing, I made sure to join a smaller company that had huge growth and robust profitability.
This time I played my cards right. The CEO is now my biggest fan and has helped turbo charge my career. Good luck on the third time! Office politics is huge. I am 17 year old university student living on campus away from home I turn 18 November 30th and my goal is to have over a million by I am planning on putting as much money as I can into my portfolio. I need to start working however first year university is tough, getting into the swing of things though!
Everyday for at least an hour I do research on starting businesses, investments, the ways of the wealthy, and different ways of making money. Which is teaching me success through relationships and networks of people. That sounds all fine and dandy but here is my dilemma. I chose this program for my love travel and being active I was raised by a single mother since the age of 4 and she has given me the gift of travel at a very young age.
She worked very hard and she is a very successful sales agent and one of my biggest inspirations However as you can see I also have a strong passion for becoming very successful and making money. Do you think I should change my path in education to something more business related? What types of business do you think an 18 year old could start.
Success comes to the ones that are not afraid to fail. I want to fail earlier rather than later. I am probably going to start a snow shoveling business in the winter as it snows a lot up here and hire some university students for work. However I am interested in the online business world. I mean its , a lot of money is online these days. Just like you one of my biggest motivators is not being a failure in life. I have short term and long term goals written down in my phone that I look at every night before bed. This site that you put together is very motivating and I will definitely be exploring it more in the future.
If you could respond to this comment it would be much appreciated! I am 22 since a month now and in six months I will finish my tourism and eventmanagement studies. I am planing on taking a year of to see the globe, but I am still ready to make some money now. I would be so thankful for a respond.
I really want to make a move now. You can read my posts in the Investments category as a great way to start! I found it very interesting reading your blog posts and arguably just as interesting to read just some of the comments here. As the screen name suggests I am a student studying business Enterprise Development BA Hons in England, I am 23 and in my second year out of 3, it is interesting for me to compare your experiences with my own as I am now just beginning on my journey and will be creating my own story as you have described.
I only hope that one day I will be recalling my tale with such fondness. However the opportunities today feel much more bleak than of the times when you and many of your commenters started out after graduating. Just came across this blog and thought this is a great read. Just wanted to add a little comic that relates to the previous comments and discussions in this thread. Most of the population can relate more to the person on the right. The lucky few born into privilege is on the left. Although its true we make our own destiny.
I am now 20 and on my second year in college in kenya. JUST as u said it takes a lot of sacrifice to arrive at a million, am sure i will embrace all that u did…i trade shares at the stock and offer financial services such as soft loans at higher interest rates with the bucks i have made so far.
The post was an eye opener a real evidence that it will work out. Just stumbled upon the site and was intrigued. I was shocked and intrigued by the No BS facts on savings. Ive done all those things since graduating and not sure what to do next. I always thought I was doing well but this site reminds me that I could be doing better. I have my k via my employer maxed out. I started working at Age Late graduate but graduated with no 10k debt which i payed off pretty quickly afterwards.
Ive also maxed for the last 6 years. I was two years late on making contributions once i started working. I bought my first home in Its a two family owner occupied unit. I refied into a 15 year loan 3 years ago. I anticipate a rebound there and riding it for now. I basically said F it with that chunk of cash.
I could probably save more but dont track it. My checking account moves up each month. Based on that what would you recommend my next moves be? Other ideas were opening fast food healthy eats place next to my local gym. I think it would do well. Must be people at least foot traffic at gym each day. Besides that i just continue to save and max out my retirement accounts with conservative smart investment choices.
What else should I be doing? What can I do better? Ill be moving either locally or somewhere else into a single family home within the next year. This sounds astoundingly far fetched. Obviously there was risk involved but getting back x40 what you put in is just mind blowing. I never underestimate the person sitting next to me. First, what degree or connections did you have to get into a Goldman Sachs job at age 22? Second assuming you actually had 4, after college and investing 3, and turning it to K AFTER taxes in a few months? Third, you saved an additional 40K your first year at a job in NYC as a 22 year old?
Fourth, apparently a job that was double the money was offered two years in? What were the annual salaries and in ? On your salary in one year you saved an additional , after taxes in San Fran? Just use hate to motivate you to do something more for yourself. I just shared my story. There are plenty of others. I went to public school and my parents worked in the State Department. I was totally lucky with my stock pick of VCSY.
It was crazy in That was a conscience choice. Can you share your story so I can better understand where you are coming from? However, my ownership percentage in the company has increased — and I strongly feel it will be very profitable next year.
What I will do when I make my first ,,,? Probably invest portions into gold, dividend stock, and start a business. I want to learn more about it but is there any other way that I could make my 1st million before my 30s? When I was 17, I was thinking of trying ForEx but the risk was too large and the profit was too little. I know it varies case by case but there has to be a general idea. How did you stay focused? Your story is very inspiring. Thanks for sharing. I just graduated from high school and went right into college. I am pursuing a BSc in Information Technology. What are the best careers I can pursue with this degree.
I have a dew in mind already but I want to hear your thoughts. Check out this post on six figure careers. The ability to be selfish with my money and life choices without dependents or anything else to consider helps A LOT. Thanks for this article! It is motivating to know about your success. That was probably my biggest mistake in my 20s. Working 70 hours per week makes it hard to pick up side projects.
You need something passive. Stock market is obviously the easiest, but one alternative I am working on is being a silent partner in a franchise. I reached out to owners who were looking to sell and asked if they would be willing to stay on managing with me as a financial partner. Best of luck. Congratulation on your success. Your article is motivating. I would disagree with one point you made about someone with no woman or a man as a sign of failure. People get in and out of relationships, so a lot of whether someone is single or not is just timing.
Better story that is probably more reproducible. My neighbor was born with a 20 million trust fund. How to get to age 0 1 day with 20 million, be born to rich parents. Discovered your site about 4 days ago and have been reading every day since— definitely enjoy the material. I have been fortunate in my life to have had my college paid for without any student loans, and help from my father for a down payment for my first home.
I have 2 outside investments, in private partnerships. Not everybody will become a millionaire by 30, but it is certainly possible and I am nobody special. I had parents who worked middle class jobs for the government, went to a public school, worked hard and got lucky by getting on the 6am bus to DC for a recruiting fair that was empty bc nobody else wanted to wake up that early.
You have won the lottery with your dad helping out for a downpayment. Hi Mr. Your are still young, and there is plenty of time left to build wealth, it all depends on you. Live below your means. Best advice, take as much advantage of government programs as possible in order to allow for additional savings. Depending on your state as a single male you should still be able to get some extra assistance for food.
I took advantage of this while working part time in college. While doing this continue to work at increasing your income. There is a LOT of drug users and alcoholics in the trades, still good folks, but there is a lacking of motivation to work toward something bigger. There is also currently an under supply of people with skills in the trades. But if it is a full time MBA then you are in debt of about k for 2 yrs and on top you are forgoing your income. Say if you make k a year then that leads to a total of k opportunity cost. How would that be worth it though? Is it still worth it to get it from a top 10 MBA school?
I am 26 and applying for next year. I plan on paying it off with my own money which is a significant investment and would cut my savings thoroughly. I think a Top 10 MBA is worth it. Your income takes a large step function higher, and most likely permanently too if you stick to the traditional path. I am embarrassed for my failures, but I will continue to try hard and improve every day. Care to share your story? I can relate with Sam. I went to a flagship large public university, got the highest paying job I could out of college working for a large IT firm, and worked my butt off while I lived with my parents.
I paid my parents rent which covered half their mortgage , food and utilities were included. After 4 years of waiting, the real estate market crashed and I purchased my first property in a gentrifying neighborhood in the city. I lived in the basement on a futon and rented out the 3 upstairs bedrooms, it covered my mortgage and some. I renovated the house slowly over 3 years and finally moved out when I purchased a 4 unit apt building in the adjacent neighborhood which was on the cusp of gentrifying.
I am in my early 30s and I have 4 properties 8 units. The constant is that I always worked hard, both in my and now in Real Estate and that I saved a lot. While I was doing my thing I saw most my friends wasting their money away on cars and unnecessary purchases. Most of them have nothing to show for it other then a liability they consider an asset primary residence , some not even that. This is a very easy formula but it requires discipline.
I think that is what separated me from my friends. Thanks for sharing your encouraging story! A huge housing crisis may not be in the cards for those of us who are starting in the last few years, but the constants—spending way below your means, and buying assets instead of liabilities—will always produce more wealth than a consumption lifestyle. Yes, please do share your story Matt.
By looking at the numbers, FS is fairly aggressive in his savings. I wish I read these kinds of inspiring stories when I was in high school and perhaps I would be closer to being a millionaire by now. Thanks Sam for curbing my spending. If you go to college, and then law school or pursue some other degree, that goal may get pushed back. This is the second time I read this article now. Real estate is interesting, you seem to have done a great job there.
By the way, did you know that Arnold Schwarzenegger made his first million s from real estate? This was before he got famous as an actor. Great stuff! He seems like a very enterprising person. The best lesson is the same lesson your grandparents would tell you. Start saving early and live below your means. The only difference is that you should put that message on steroids. Do that for as long as possible. Compared to most of my peers, I was. Unfortunately, I know now I could have done more.
Of course, to many I am way ahead. We only need so much to be happy. Hi Sam. I have all my accounts in Personal Capital but that shows before tax with the exception of my Roth …am I wrong? Are you including all your assets in your calculation including real estate, jewelry, etc or just cash and securities? Im 43 and my net worth is a little over a million including my primary residence. I usually feel better than most but not when I read your blog! Id just take your pretax assets and multiply it by 1 — your effective tax rate to get a rough picture. Two things you significantly underestimate in your post: Structural factors that can make or break you:.
As a women of color — it would have been so much harder to rise in a company — older mentors who are white and male would never have promoted you to VP. There is plenty of evidence of this statistically — it is much harder as a minority and as a women to rise. But do you think younger people have more energy than older people? We can focus on race and age to defeat us and discredit people. But how about we focus on my thesis?
I just turned 26 couple months ago. My wife and I started a business cellphone stores 4 going to 5 years ago. Its hard to tell our net worth, was good but also the worse in comparison. We lost money to the landlord in order to break contract plus also all the money that we put in it. Fast forward to nov, sign a contract for a new store which was supposed to be open by December. We ended opening 2 days ago long store short this store we put laminated floors 3 days after it got water damage and we had to stop and re do everything again..
Anyways, we have over k in merchandise. I think we could manage to reach 1MM by age Ifthings go as planned possibly even more because we were suppose to have 6 stores by I hope by we have 15 or more stores which in that case 1MM should be a problem and the addition of rental properties and other investments that may arise. Pretty much all the money that we have now we made it in the last 2 years. Love that you are going for the American dream man! Risk, reward, hard work! Keep it up and diversify your gains to safer assets when you can.
Incredible story, really inspirational to everyone out there. If I may ask, what was the position you worked for at your firm, was it related to investing? I think the problem with most people out there is that they live the moment entirely. The key to success is to focus on your long-term goals and do at least a little everyday to get there. I worked in the Equities department sales and trading.
It was one of the major revenue generators of the firm. Do you think these numbers are accurate? I myself have been in software for 2 years since graduating. They pay about k, rise to k when you are more senior and bring home the bacon. I highly recommend people in tech look at sales engineering and technical sales. It pays much better and you stop being a commodity. Relationships you build can transfer over to other jobs too; whereas tech is often just a job — as the tech you learn is evolving your knowledge becomes outdated. Yes, those numbers are pretty in line. Inste Any occupation where you are responsible for bringing in the revenue allows you to potentially make more if you generate more.
Towards the end of my career in and , that correlation broke, so I figured, why bother.
Instead, I went out on my own! Outstanding article! Hard work and perseverance pay off in the long run. I especially like your advice to remain humble and be seen as the underdog, while also building alliances and seeking out a mentor at work. I made a lot of financial mistakes-buying a brand new Corvette in and short selling a house in California being the biggest-but consistently saved and invested and got ride of debt.
Wealth here is not just money but abundance in your life, be it money, personal relationships, work etc It's about changing your mindset in how your approach. The Seven Day Path to Wealth: A Meditation on Building Personal Wealth. -by Kent Comfort. An inspirational book about manifesting true wealth in one's life.
My personal financial education was through experience, but I wish I had had resources like this blog when I was in my teens. All our kids should learn from sites like yours. Keep up the good work! I have read this with interest as someone who took some of the steps you mentioned at With real estate we are at just under 2M and are feeling quite confident about the next few years. Will be fun to see how far we can go with it. The wife and I have done this together, and I cannot over-emphasize the importance of that.
Oh, and our car was 16 years old when we got clobbered from the rear last year. Now have a still frugal car, but can appreciate the difference with a slight move up. Get well set, then take more risks later while leaving yourself some breathing room.
I also plot everything on an Excel sheet and feel that this is the only informative way to understand what is happening to you, as you describe in your own shorthand what is going on… I am guessing running commentaries that make you pause and think are not possible with some of these other financial life-planning programs. I have a question. I am a young person and I am inspired by your path to becoming a millionaire. What if I liked science? Or tech? Or engineering? Is the smartest play to study finance, economics, etc instead? Good on you for researching your options early on. So yes, an MbA from a too school significantly increases your chances.
Wonderful communicators in speech and writing go much farther IMO. Do well in school to at least give yourself a chance at more opportunities! Very impressive. If you have a chance in future posts it would be great to get a sense of what your thoughts might be on what strategies are most effective for building wealth. I really think real estate is the best way for most people to build wealth over the long run. I absolutely love this article! I am 27 and is constantly talking to my wife about a break through.
Yep, did the whole college thing…. Graduated, and started working…. I do have a little PC business working out of home and it does bring in some income, just getting the business is the biggest thing. My guess is that only 1 in a do this. At age 27 my net worth is around 30k. I decided to pursue acting as a career so my income is extremely variable and limited. But reading stories like yours motivates me to work harder and find new and innovative ways to save, invest, and grow. We have one child, age 5, who will receive free college tuition if she attends a state University in our state of record.
We live in the Midwest, where cost of living is ok much better than our last duty station in CA! Curious on your thoughts as to where this puts us. Michael, Two kids, boys, one at state university for CompSci. RE at 53, FI since before that. Younger son understands value of money and will save and spend wisely. Older son, never got it. We are closer to blockbuster than anything else on this post on a hard working engineers salary and a stay at home and raise the kids stretch a dollar, low maintenance wonderful wife! Oh, yea and rental properties and other non stock market investments.
It has been great for me!! Please explain. I like the idea that you are FI when you are no longer worrying about money. Hi Sam, This is Dan from Romania again. I wish to enjoy everhthing you have and to stress a little less with your financial situation because you are doing great. Keep up the good work. Nice way of putting it! I am more towards setting a year to retire early and live within whatever means I could to reach that but this yearly income does makes the picture clearer. I love this chart! I have seen a few different descriptions of the levels of FI but this one feels the most authentic.
Personally I am targeting the Baseline FI by 50 with the hopes that I am running an empire that will allow me to catapult into Blockbuster. Great work as always! Based off of those deep ingrained habits, it is extremely difficult for that individual to suddenly change course and tell themselves they no longer need to keep growing their money.
I like how you say all levels of financial independence are good and then take it to the next level by breaking it into three buckets. That 2. I live the middle tier FI during periods when returns are good, and hunker down to budget FI when there are crises, or otherwise lower returns. It actually adds some spice in my living without endangering my FI. I think I am in that mindset because I am mostly excited about the idea of building up something new from scratch and not chasing a paycheck. So when I reach some level of FI that allows me to pursue new projects and new ideas I will be happy.
My goal is to diversify my streams of passive income between market investments, rental income, and small business income. Returns from all three should make me and my future family comfortable indefinitely. Hi Sam, interesting post as always. It would be great if you could show us the math! Blockbuster FI would be way more money then my HH would ever need. Late to the game, Sam, but I like where you, J. Understanding levels of financial independence and financial security are very much needed.
For a lot of people, just being able to spend slightly less than they earn and having a modest emergency fund is their idea of financial nirvana. It would be nice if we could somehow champion these people and show them that they are welcomed members of our community. Thanks for the post. My dad lost his hearing in one ear and my mom is having a lot of trouble with her vision. Do you feel your parents waited too long? I personally do not consider any capital gains or paper gains as part of my retirement income.
Any capital gains are one off. Hopefully, my gains from my rental house sale in will be properly deployed to earn future income. Folks can classify the way they wish. I just have a personal belief that the ideal withdrawal rate in retirement does not touch principal. My wife and I are squarely at the mid-point of Blockbuster FI.
I am 60 and she is My wife continues to work a really good sales job. I retired from corporate America in to work and consult with startups. I also have a pension that kicked in right after I turned 60 last October. Our plan is to continue on until I hit 65 when I can transition my healthcare to Medicare, our daughter will be out of college and almost finished with grad school and close to transitioning to her own healthcare plan which just leaves the need to cover my wife for another 3 years, unless she wishes to soldier on a little longer on the company plan.
My investment accounts have done well and the house has increased in market value. Renting part of the home covers housing and transportation expenses, and my small pension covers basic living expenses. I withdraw money from investments for travel but reinvest most of the gains. I too am faced with heavy income taxes once I have to withdraw from tax deferred accounts. I have run spreadsheet projections for income, net worth, and income taxes to with various withdrawal plans and estimated net returns.
Always come back to deferring tax as long as possible, spending down the taxable accounts first, while building up the tax-free account agressively. What I would do differently is learn to invest my own money at a younger age, buy a bigger better house at a younger age, and retire earlier. Sam you did it again, you can tell a world class post when it generates so many comments that it takes five minutes to scroll to the bottom of them! And if another several millions of dollars dropped out of the sky into my lap I still would buy not a thing extra. So I like your concept but I kind of think that once you feel completely free to buy anything or go anywhere or do anything you want to do then you are at your own version of Blockbuster FI.
Maybe we need a flyover state FI category? Good stuff man. And if all you need is Budget FI to be happy, then more power to you. It is hard to spend more money when you are used to spending less. Gonna write about this topic in a future post. Some of us, who can only save and be frugal, will never make it beyond the bottom of the pyramid. I am already budget FI. However being in my 40s that level leaves me feeling a bit vulnerable so I still work part time.
I want to enjoy life now while I am still young and fit enough to do the activities I enjoy. A wealthy blockbuster retirement when I am old is no use to me. A good friend died recently at 49 years old and that concentrates the mind too. Good article Sam on fine-tuning the FI tribe. Expenses play a huge part, of which, just housing alone is a big driver in FIRE comfort scale. Nice locales in Malaysia, Thailand, Ecuador, India and even Eastern Europe are all available if people are open to it.
I see FI as more of a continuum which might vary with age and circumstances. When I was in my early 20s, an FU fund of six months living expenses was the goal. I eventually got up to a few years. After I got married in my 30s, being able to buy a house outright took over — and once that was bought at 40, I focussed on ensuring I had a pension that would comfortably cover all of our costs and a bit of contingency. Along the way, the missus stopped working and in the last year or so, I found we could cover all of our costs up until early retirement. For now, I am working but am hoping to go part-time this year.
Interesting discussions. Thanks for sharing your household income goals and historical amounts generated over the years :. I find it easy just to figure out what lifestyle you want, what it costs, and then make that your monthly nut. We relocated to a low cost-of-living midwest community, with excellent schools, and a medium-sized city within a minute drive.
As always, Sam, a good piece that I enjoyed reading…. How fortunate are we to break out levels of FI as we all click away on our keyboards to respond to each other! Will an extra K a year in passive income make me happier then I will stick with it. Hopefully over time I will learn more about myself and get involved in projects that are rewarding.
I never want to retire the same way many FIRE bloggers do though. As of now I think my aim is k a year, oh how we all adapt and adjust over the years though. We also have various pensions that kick in over the next 5 — 15 years. Especially as we have come to terms that our goal in life is not to leave our kids with several million dollars. Bank of Hope Personal Installment Savings up to , Have you heard of them and would you consider this risk free? I am a small animal vet in the Washington DC area. Vet school loans and housing have taken their toll. I would like to retire at 60 I just turned 52 , and reach budget or baseline.
Choose your career well— I love what I do, but sometimes wish it paid more. Semi-retirement may also be an option. Thank you, Sam, for a great post as always. Robin, I was reading through the comments and saw your post. I am a small animal veterinarian in Eastern Washington State.
I was privileged and had support with education but still had about 70k in student loans. I will easily reach blockbuster level by I am nearly 37 now. I did it through ownership. That increases income dramatically. Additionally, it is an investment, my biggest, that you can sell when your done. Essentially, it allows you to earn income twice, once through dividends and then secondly through capital gains when you sell. I am also currently investing in real estate and downsized my primary residence. I had to transition my mentality about money and define wants vs needs but I did it.
I still see other associate vets I work with that will barely scrape enough by the time they are If you want to talk more please feel free to reach out to me. I should be there within a few years. Then baseline would be my next and final goal. With a lower cost of living the same amount of passive income can go further. This website makes me feel so poor haha. I use to see myself as rich until I came to this website. Actually I still feel rich. To me rich is someone who can quit work and can live off his investments or wealth for 10 years.
It would be great if you could tell us what your expenses are. I live in the Michigan so its pretty cheap here. Also it would be great if other people can share the expense and income and how they were able to attain their net worth year by year. This would be a great article to bring everything together. Also including taxes in your statement would be great. Good post. I would like to add another level to your pyramid. My wife and I just returned from Cabo and on the Tarmac there were close to twenty of the most beautiful private jets a person could ever hope to see.
My goal is to generate as sum passive as my expenses inflation adjusted. There is always the fear of unknown. That being said I would not some more money. My plan is to establish a foundation which provides educational scholarship. There is a reason for my frugality It would take a truly horrible job for me to quit and settle for budget FI. Budget FI without debt, that is no mortgage, no car payments, no student loans no consumer debt IS the same as baseline with these.
I look at FI as the ultimate goal. Goals are supposed to be the best situation I can strive for based on my personal wants. Whereas budget FI is allowing just enough to cover expenses. FIREcalc puts us comfortably much higher. We are not fancy people, prefer to vacation and visit family, walks, parks…. Medical is challenging, some non traditional options are health cost sharing, should this fit your life choices. High level Break down 5K Medical insurance 3K real estate tax 2k car insurance 20 year old, inexperienced driver, 3 cars, 1 high end 3k utilities 2k phones, network 6k grocery 1k prescription.
But when ya start at needing k as a base makes getting there and staying there tougher. I have no dependents, though. Well, a diabetic dog, but I only take one less trip a year to finance her! I would like to hear more about how you spend your travel budget. I do not stay in luxury hotels and I rent the cheapest cars and fly economy. I avoid cruises, resorts, casinos, islands, sports, mountain climbing, snow and ice, beaches, and look for art, architecture, archeology, history, jazz, food and wine.
About half the time I take a specialized tour and the rest of time I tour on my own, usually by car. Sometimes, I travel with a friend. All these concerns about kids costing hundreds of thousands of dollars up to and including a million is interesting but off kilter to me. Raising our 2 children in a modest sized city in the mid west did not cost us anywhere near that kind of money.
We would have owned a 3 bedroom home anyway. We would have had two used cars anyway. Food and healthcare??? Not a big deal. Lucky I guess in that they were two healthy kids. Young bodies quickly develop strong anybodies when exposed to normal bacteria in the world. I know of no one who has spent the amount of money talked about by FS to get a kid to adulthood. I mean, what the hell would you be doing doing with all that money for a kid?
They need to be responsible for their spending habits, not live off Mom and Dad. Having too cushy of a high school experience makes for a weak people. Neither wife nor I ever had really fancy high paying gigs. We raised two strong adults who are now off on their own too.
These child rearing dollars seem way off base to me. I think they are thrown out there by Financial planners to scare folks into — guess what? Going to a Financial planner. I agree with FS. Without kids we would have a 3 bedroom house, with kids we had to go with a 4 bedroom. I was fortunate enough to travel internationally with my family growing up and I want to provide that experience to my children. I believe that is valuable but it also costs thousands per year. I look forward to seeing how your thoughts on this evolve as a parent. One recurring problem I have with the FIRE community, or the more publicized stories, is they are almost always single people or couples with no kids.
I know you plan, as do I, to provide a good future for your children which includes education. Even your baseline FI it would be tough. Providing a good life, after school activities, travel opportunities, college, etc. No problem with that. Then you should be able to retire pretty comfortably. How old are you? With some diligent saving, reasonable investment returns and some good performance at work that might be possible by So it would be hard for me to quit a highly lucrative job just as my earnings are really ramping and exchange it for the unknown of semi-retirement.
And I agree with your previous post, there is nothing wrong with folks who decide to not have kids. I just find reading your posts to be particularly interesting because you are having children or a child at least! We have a long way to go but I like how you placed parameters around the pyramid.
There should be a projected lifestyle in mind already when one decides to retire. I like the pyramid visual of different levels of financial independence. Most are both spouse working, some day care. College funds, food for teenage boys, sports equipment, musical instruments, kiddie activity travel all add up. I like the results provided by firecalc. Recommend everyone take a look at it, very easy to use and very flexible for more complex situations pensions, annuities, investment style, social security.
I would put this closer this above Baseline at Basic income levels, all due to no debt. You can really live well for little when the debt is gone and not sacrifice. Channeling Dave Ramsey, I guess. Yea, no taxes listed…adding taxes would incorrectly skew the picture, sold a rental with lots of tax owed, our investments generate significantly more taxable income than we use and I was not aggressive enough to find ways to reduce. Will there be any in for married filing joint?
I like it! The formula-lover in me wonders about doing something like this for defining these levels based on the avg income of cities. I like that idea of planning for options. I guess there is a correlation with cost of living and best places in the world to live e. Therefore, problem solved with Blockbuster FI! What do people do all week when they are retired, especially when retiring early? I retired early and struggled with being preoccupied after 3 months. It turned into boredom and slippery slope of troublesome lifestyle.
I finally returned to my career part time after bucket list. I consider myself semi-retired and enjoy working more once I had balanced time off. It surprised me. My partner enjoys working and is seeing how far she can go. I have improved, but have not arrived. I guess this is a good problem to have, but I just wanted you to know retirement is not always paradise, and semi-retirement may help make the transition.
I moved to a remote tropical Island once FI. This idea was not spontaneous, and I had planted seeds for years working off and on as an expat in the medical field. I worked with royalty and even had the life changing experience of using a gold toilet. The toilet was not really life changing at all, and somehow sad.
I also had opportunities to work with orphanages literally in the tree tops and cultures who thought their medical issues were caused by spirits. There were amazing times, but I also suffered through cholera. The remaining time I worked for years in high stress, high salary, with little time off. It made me sick. When I took the plunge it was paradise for about 3 months, but got bored of the lazy days, warm beaches, and amazing sunsets.
Kind of like the big island once the nature wears off. I was drinking more.
I know some of you may think I am an alcoholic, but I have never been, but I did not like that I was drinking more. I also got a dangerous reputation for having money. I never showed real wealth, but I tend to give money away especially for education and this caused some jealousy. The ladies started to have more interest in me, and the local men did not always appreciate it. An analogy could be a celebrity with money and time off.
I am no celebrity. I eventually moved to a major city and enrolled in a language school, because I could not adjust to just being alive. Two years later I returned to my career in the bay area after meeting my partner from Japan who is a well-known designer in those circles. You have never heard of her. Sometimes she designs hands bags for fashion industry and secret startups. I only mentioned her because I think the goal is to find something you enjoy and get paid for it.
Why would she not want to work. Semi-retirement has been a better path for me. Thanks for sharing! Your story is fascinating! Fascinating Max. I often worry that many people are chasing this end goal at the expense of really living their current life, and what you ultimately end up with in FI may not be all that rosy, like your story. Any level of FI used to be a huge and urgent goal of mine, but its funny how finding work you enjoy doing and keeping life balanced and interesting can take away the urgency of FI. Buy a Fitbit and get walking! Not bad for a year-old, if I do say so myself.
A little over miles in My goal was miles in Reached that goal mid-November! To me, financial independence is being able to live how I want without worrying too much about money. Things always come up. A new roof, new septic system, etc. Also, I want my kids to go to whatever college they want and not be burdened with student loans. I want them to follow their dream careers, not be cajoled into a career because of the earnings potential. Thanks for the mention! Fear of a big market crash is a big factor too.
Right on! Not having to commute to work and deal with knuckleheads is huge! I know you would never go back, and neither would I for less than….. With Blockbuster money, thoughts of leaving the cold Midwest for paradise? Well I do when its cold…spent 5 weeks last year visiting Oahu, Kauai, Maui, and the Big Island, 2 weeks sailing in the Bahamas, a week driving the French Riviera, a week hiking the Tetons, and spent Christmas through new years in Costa Rica.
I read a lot of blogs and there is this one Blogger who goes on every single other blog and shouts from the top of his lungs that he is a multimillionaire. But he has no self-confidence because his wife still works. His writing oozes insecurity probably due to the lack of friends, lack of success from his site, and lack of purpose.
I have to say I also read a ton of blogs and I am darned if I know for sure who you are talking about. I could guess but that would be rather inappropriate…. I do agree with your general point that screaming form the top of your lungs that you are a millionaire or stable genius…. I guessed right, and mostly agree with your comment. However, I am guessing he has no losing stocks.
Who would after an 8 yr bull market? I think I have over 80 positions and they are all up big, no losers. Why are you being so rough on him? I recall an article about this very topic from a long time ago early s? These would be much higher today after adjusting for inflation. Perhaps that article was directed towards mid-level executives looking to escape the grind. Now that living off passive income has gone mainstream these three levels have downscaled a bit.
In silicon valley these days these three ranges inflate on the high end— maybe something like seven, eight, and nine figures blockchain FI? I used the leverage from my financial situation to present my employer with an ultimatum about working conditions i. I control my location, schedule, and work content , and they seem happy to accommodate. Only works on mobile or iPad for some reasons. You are spot on and a talented writer. Living FI lifestyle is a total mental game.