Millionaire - RICH or Middle Class?

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Millionaire - RICH or Middle Class?

Shiloh LundahlPro Member
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes

I have had a interesting discovery recently. At the end of last year, I was finishing updating my financials and I realized that my networth had reached over 1 million dollars. That had been one of my financial goals over the last couple of years but last week I had a sad, disappointing realization. 

I posted a question on the forums asking if there was a shortcut to wealth. Many people on the forums said yes and a few suggested I read the book The Millionaire Fastlane by MJ DeMarco. I started listening to that book on Audible and it basically stated that 1 million dollars today is not worth what it used to be and that you would really need 5 million today to live a millionaire lifestyle that I saw when I was a kid.

Unfortunately, I think there is a lot of truth to this perspective. 

As my networth has gone up, I have relaxed a lot on my spending habits. I signed my kids up for music lessons, sports, and other activities without considering the cost because in my mind, I am a millionaire and millionaires are wealthy and that is what wealthy people do. When I would eat out I would think more along the lines of what do I feel like eating rather than comparing the prices of each meal and then asking myself, “how much do I want to spend on lunch.” Each month when my wife and I would do the budget, we were over spending by $500 - $1000 and I would need to pay myself more by transferring more money into our personal account from my business accounts. I was getting confused and frustrated at this. If I was a millionaire then why was I still feeling strapped financially?

DeMarco explaines in his book that the millionaires are not really wealthy but are considered the middle class or the upper middle class. And that if you spend like you are wealthy, you will ultimately become poor. So now I am back to budgeting more strictly and living more frugally - darn it! I thought that I had arrived just to find out I am only one-fifth the way there.

Have any of you come to the realization that what you thought was wealthy today isn’t really as wealthy as you thought? 

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Erik W.
Real Estate Investor · Springfield, MO · Member since 2017 · 1k+ posts · 2k+ votes
7y

For decades, I've heard people saying, "$1 million isn't a lot these days."  I wonder how many of those are broke people living paycheck to paycheck, spouting off statements like this make them feel better about their (lack of) drive and accomplishment?

Let's state the obvious: Inflation is a booger!  It's a "silent thief" that drives down our purchasing power every year.   "A loaf of bread was 10 cents and gasoline was 15 cents a gallon when I was a kid..."  Yes, yes...I get it.

But...a personal computer in the 1980s used to cost $2000 and couldn't do more than run DOS games. Today, the $50 Trak Phone from Wal-Mart can run circles around that ancient PC!

Most people's quality of life has also vastly improved.  Think about basic things such as central HVAC and indoor plumbing.  The wealthiest emperor 200 years ago couldn't make it 70 degrees inside on a 100 degree day.  You and I can with the touch of a switch or the turn of a dial (or just tell Alexa to set the NEST t-stat for us!)  You and I can travel coast to coast in 2-3 days in a car, or fly in 5 hours.  Could Dale Carnegie?   Nope.  How many multi-millionaires died on the Titanic?  Today, you and I would just hop over the Atlantic via Delta coach class and get there with far less risk (though admittedly with less comfort)...easy peasy!

Value and wealth are always relative to the time and place in which one lives.  Does that make sense?  We can't just say, "$1 million aint what it used to be".  That's a given.  But a wise person asks, "What IS $1 million today?"  I live in a medium size Midwest town.  $1 million will purchase 2-3x the assets you can buy for the same million in some high cost of living locations.  So is $1 million "a lot" in my town but barely "middle class" in San Francisco bay?

Over 98% of the world has less than $100,000 net worth.  I made that stat up, so don't bother Googling it, but I'd says it's fair since we know over half of American's can't handle a $400 emergency.  That is a real stat you can Google.  So if a person who has $1 million USD net worth today isn't wealthy, I don't know who is.  Is that person hyper-consumptive rich?  No, probably not....but is hyper-consumptive rich a true picture of what it means to be "wealthy?"  I don't think so.

In conclusion: Daddy Warbucks (movie Annie, set in the year 1933) stated, "I made my first million by the time I was 23 (around 1910)....that was a lot of money back then!"

Just for some perspective on how people view their personal wealth, always have, and probably always will.  ;-)

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  • Account Closed
    Investor · Milwaukee, WI · Member since 2013 · 1k+ posts · 1k+ votes
    7y

    Hmm...wealthy people don't speak what's on their mind (from the survey)...well that leaves me out - lol. I never seem to shut up and worse, seem to think others care what I have to say - lol.

    I recently (finally) sat down and figured it all out the end. Took a minute to do that. The crazy thing was, once I got it figured, everything became real philosophical fast, and turned into one of those "duh" moments.

    What is retirement? What is wealth? What do these look like on day-to-day terms? I realized if I had an endless supply of money, I might be bored out of my mind. Heck, it might even be a liability. That having some sort of goal to do something productive is an element of being happy and fulfilled. What am I trying do accomplish here? Am I trying to start a family dynasty or something? And so it all came down to what the wise elders have always said, the most valuable thing we can buy is time. Time to slow down and go at our own pace. Time to enjoy relationships. Time to well...smell the roses.

    I can say this about a million dollars today. I need about half of that in cash and I could buy the time I have convinced myself is available for sale. But will I be here tomorrow to spend it?

    Only thing to do is enjoy the ride. Luke Perry - 52 and done. My best friend, 45 and done. If legacy is the game, well, there are only so many ways to get that and it's not very often the number in a persons bank account creates it.

    I dunno...

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Joe Splitrock:
    Originally posted by @Anthony Wick:

    @Steve Vaughan

    Sorry bro, you’re simply wrong. $1 mil is way way above middle class. If you make $100k a year you are top 10% earned in this country. Not to confuse $1 mil with being “rich” and certainly not ultra rich. But to say $1 mil is middle class is simply incorrect.

    There is a difference between income and net worth, but arguably higher income individuals will have higher net worth. Simply because net worth includes home equity, cars, retirement savings, etc. 

    You referred to $60K as middle class, which is actually the US median household income. Median income means half the households make more and half make less. 

    Middle class is a range in the middle and is generally taken as between 66% and 200% of median income. Roughly 50% of households fall into the middle class. So based on $60K, it would be a range of $45K up to $120K are middle class.

    In other words middle class is a range that includes what half the households make, whereas median income is the point at which half make more and half make less.

    The top 10% of household incomes in the US are closer to $170K and top 5% is around $210K. 

    Joe, we come back to how far will the median stretch in a given location in the US.. in CA and OR and maybe WA minimum wage is now 15 and hour.. thats starter salary.. so that is 28k a year and a couple is at 56k right at the median .. but at 60k on the west coast your not living a middle class lifestyle at least in my mind. middle class in our area ( enough to afford your own home ) is more in the 100k range.. and since most have dual incomes this is only 50k each.. Not sure what minimum wage is were your at.. Then you look at where rents start in our area.. its about 1200 these days.. unless you want a Flea trap. and a SFR would be pretty much 1700 to 2500 a month.. This is why a lot of renters now are focusing in our area to buy. If they have good enough credit can put 10 to 15k together they can get an FHA loan in the mid 400s and be all in for about 2500 to 3k a month.. with a 41% DTI you can see how the median of 60k a year just does not cut it for home ownership but 75 to 100k does.. And when you go to SF or LA or Seattle its even that much more.

    But when you can buy a nice SFR at the median price point in the mid west and I will use Indy since i have a lot of business there its 120k for a home.. so the median 60k a year can buy a median home.. which gets you out of the Morris invest hood neighborhoods and in my mind your living middle class. So just depends on where your at.

    I could never go back to where i raised my kids in Palo Alto my old house I paid 180k for in 1982 is now over 2 million.. i mean i could swing it but no way would i pay that to live in a 900 sq ft home.. unless i worked at google with my wife and combined we are making 500k a year and we get to eat on campus 90% of our meals and lattes are free LOL. its amazing i digress but I did a presentation there and got the full tour.. its AMAZING the work environment in the Bay Area compared to virtually anywhere else.  

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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Account Closed:

    Hmm...wealthy people don't speak what's on their mind (from the survey)...well that leaves me out - lol. I never seem to shut up and worse, seem to think others care what I have to say - lol.

    I recently (finally) sat down and figured it all out the end. Took a minute to do that. The crazy thing was, once I got it figured, everything became real philosophical fast, and turned into one of those "duh" moments.

    What is retirement? What is wealth? What do these look like on day-to-day terms? I realized if I had an endless supply of money, I might be bored out of my mind. Heck, it might even be a liability. That having some sort of goal to do something productive is an element of being happy and fulfilled. What am I trying do accomplish here? Am I trying to start a family dynasty or something? And so it all came down to what the wise elders have always said, the most valuable thing we can buy is time. Time to slow down and go at our own pace. Time to enjoy relationships. Time to well...smell the roses.

    I can say this about a million dollars today. I need about half of that in cash and I could buy the time I have convinced myself is available for sale. But will I be here tomorrow to spend it?

    Only thing to do is enjoy the ride. Luke Perry - 52 and done. My best friend, 45 and done. If legacy is the game, well, there are only so many ways to get that and it's not very often the number in a persons bank account creates it.

    I dunno...

     this is why my Dads real estate attorney told my dad in the 60s you have to stop and smell the roses.. you cant take it with you. he went and bought a time share in Maui in 68  one of the very first and we spent 2 weeks at thanksgiving there for 20 some years.. It FORCED him to use it since he owned it.  LOL  other wise he would not really take much of vacation maybe drive cross country to visit family.

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  • Account Closed
    Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes
    7y

    FYI -- When leaving your legacy to pay it forward, people might want to consider using a donor-advised fund. I've read where setting up a private foundation is best done when you have at least $50 million to contribute because the compliance cost with the IRS is so high. Those of lesser means might find a DAF as a better alternative because you need only several thousand dollars to get started.

    If you want to fund the development of a vaccine for a rare disease, you'll likely need a private foundation. But a DAF is adequate for most people to give back to worthy 501(c)(3) charities. I use my DAF to donate money anonymously to worthy causes all over the country and the DAF takes care of the paperwork with the IRS. I choose the anonymous option so the charity doesn't have to spend the resources to thank me for my donation. Instead, every penny I donate goes to supporting the charity's mission. 

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  • Shiloh LundahlPro Member
    OP
    Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votes
    7y

    I guess it would be helpful to put down my definition of wealthy to have a frame of reference. I would define wealth the same way @JD Martin explained it, “ideally your income would exceed your expenses by a good amount such that your overall net worth continues to grow without a job.” 

    Basically, I could meet my goals, enjoy the lifestyle explained earlie in the thread, and fulfill my life’s purposes without worrying if I am overspending.

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  • Randy E.
    Rental Property Investor · Durham, NC · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Bill F.:
    Originally posted by @Peter Tverdov:

    I

    What net worth level allows you to live a middle, upper middle, or upper class life style? 

    That is where we are all talking past each other, because what exactly is a "middle class life style"? Definitions matter. Does it shift with location and age? I would think so.

     Bill, I think that's the biggest obstacle to this discussion.  Some responses indicate a "middle class" lifestyle that, to me, sounds like an upper class lifestyle.  When I hear about spending six figures a year to send a child to college, or taking frequent international vacations, or having multiple houses, or earning $400K a year, I think "upper class lifestyle."  There is nothing at all wrong about an upper class lifestyle.  I'm just saying that's what comes to mind.

    When I hear "middle class" lifestyle, I think of a summer vacation to the beach, a winter vacation to visit faraway family (or maybe Disneyworld,) buying a modest new car (not a Tesla or MB) every five or six years, owning (or paying for) your own home and being able to keep it up, eating out with the family a few times a month, being able to afford music/dance lessons and sports for the kids, going to the movies without having to save for it, college options for the kids being limited to those options that cost (whether through the actual cost or cost after scholarships and grants) less than $15K/year, those sorts of things.

    I guess we could shoehorn these wide-ranging descriptions into "lower middle class" and "upper middle class", but some of the responses here indicate to me that the gap in our assumptions is much larger than that.

    Anyhoo, this is a fun discussion to follow.

    3Reply
  • Randy E.
    Rental Property Investor · Durham, NC · Member since 2014 · 1k+ posts · 1k+ votes
    7y
    Originally posted by @Account Closed:

    @Randy E. I was being hypothetical. Of course I don’t spend 100% of my income. It’s just that having a solid income allows me to spend more freely than having a high net worth. And there are reasons to hold on to Bay Area property long term. Just ask @Jay Hinrichs!

     Agreed!

    0Reply
  • Krishnan T.
    Real Estate Professional · Tampa, FL · Member since 2017 · 104 posts · 47 votes
    7y

    63% Americans do not have enough savings to cover a $500 emergency and there is hunger and poverty in the country, with a million you are RICH .

    1Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    7y
    Originally posted by @Jay Hinrichs:
    Originally posted by @Joe Splitrock:
    Originally posted by @Anthony Wick:

    @Steve Vaughan

    Sorry bro, you’re simply wrong. $1 mil is way way above middle class. If you make $100k a year you are top 10% earned in this country. Not to confuse $1 mil with being “rich” and certainly not ultra rich. But to say $1 mil is middle class is simply incorrect.

    There is a difference between income and net worth, but arguably higher income individuals will have higher net worth. Simply because net worth includes home equity, cars, retirement savings, etc. 

    You referred to $60K as middle class, which is actually the US median household income. Median income means half the households make more and half make less. 

    Middle class is a range in the middle and is generally taken as between 66% and 200% of median income. Roughly 50% of households fall into the middle class. So based on $60K, it would be a range of $45K up to $120K are middle class.

    In other words middle class is a range that includes what half the households make, whereas median income is the point at which half make more and half make less.

    The top 10% of household incomes in the US are closer to $170K and top 5% is around $210K. 

    Joe, we come back to how far will the median stretch in a given location in the US.. in CA and OR and maybe WA minimum wage is now 15 and hour.. thats starter salary.. so that is 28k a year and a couple is at 56k right at the median .. but at 60k on the west coast your not living a middle class lifestyle at least in my mind. middle class in our area ( enough to afford your own home ) is more in the 100k range.. and since most have dual incomes this is only 50k each.. Not sure what minimum wage is were your at.. Then you look at where rents start in our area.. its about 1200 these days.. unless you want a Flea trap. and a SFR would be pretty much 1700 to 2500 a month.. This is why a lot of renters now are focusing in our area to buy. If they have good enough credit can put 10 to 15k together they can get an FHA loan in the mid 400s and be all in for about 2500 to 3k a month.. with a 41% DTI you can see how the median of 60k a year just does not cut it for home ownership but 75 to 100k does.. And when you go to SF or LA or Seattle its even that much more.

    But when you can buy a nice SFR at the median price point in the mid west and I will use Indy since i have a lot of business there its 120k for a home.. so the median 60k a year can buy a median home.. which gets you out of the Morris invest hood neighborhoods and in my mind your living middle class. So just depends on where your at.

    I could never go back to where i raised my kids in Palo Alto my old house I paid 180k for in 1982 is now over 2 million.. i mean i could swing it but no way would i pay that to live in a 900 sq ft home.. unless i worked at google with my wife and combined we are making 500k a year and we get to eat on campus 90% of our meals and lattes are free LOL. its amazing i digress but I did a presentation there and got the full tour.. its AMAZING the work environment in the Bay Area compared to virtually anywhere else.  

    Even in the coastal states the median household income isn't much higher - it is still less than 75k / household. So that means HALF the households make less than that. 

    Obviously people with these lower salaries are not living in Palo Alto. They live further away and commute or live in worse neighborhoods. Or many just rent. 

    0Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Joe Splitrock:
    Originally posted by @Jay Hinrichs:
    Originally posted by @Joe Splitrock:
    Originally posted by @Anthony Wick:

    @Steve Vaughan

    Sorry bro, you’re simply wrong. $1 mil is way way above middle class. If you make $100k a year you are top 10% earned in this country. Not to confuse $1 mil with being “rich” and certainly not ultra rich. But to say $1 mil is middle class is simply incorrect.

    There is a difference between income and net worth, but arguably higher income individuals will have higher net worth. Simply because net worth includes home equity, cars, retirement savings, etc. 

    You referred to $60K as middle class, which is actually the US median household income. Median income means half the households make more and half make less. 

    Middle class is a range in the middle and is generally taken as between 66% and 200% of median income. Roughly 50% of households fall into the middle class. So based on $60K, it would be a range of $45K up to $120K are middle class.

    In other words middle class is a range that includes what half the households make, whereas median income is the point at which half make more and half make less.

    The top 10% of household incomes in the US are closer to $170K and top 5% is around $210K. 

    Joe, we come back to how far will the median stretch in a given location in the US.. in CA and OR and maybe WA minimum wage is now 15 and hour.. thats starter salary.. so that is 28k a year and a couple is at 56k right at the median .. but at 60k on the west coast your not living a middle class lifestyle at least in my mind. middle class in our area ( enough to afford your own home ) is more in the 100k range.. and since most have dual incomes this is only 50k each.. Not sure what minimum wage is were your at.. Then you look at where rents start in our area.. its about 1200 these days.. unless you want a Flea trap. and a SFR would be pretty much 1700 to 2500 a month.. This is why a lot of renters now are focusing in our area to buy. If they have good enough credit can put 10 to 15k together they can get an FHA loan in the mid 400s and be all in for about 2500 to 3k a month.. with a 41% DTI you can see how the median of 60k a year just does not cut it for home ownership but 75 to 100k does.. And when you go to SF or LA or Seattle its even that much more.

    But when you can buy a nice SFR at the median price point in the mid west and I will use Indy since i have a lot of business there its 120k for a home.. so the median 60k a year can buy a median home.. which gets you out of the Morris invest hood neighborhoods and in my mind your living middle class. So just depends on where your at.

    I could never go back to where i raised my kids in Palo Alto my old house I paid 180k for in 1982 is now over 2 million.. i mean i could swing it but no way would i pay that to live in a 900 sq ft home.. unless i worked at google with my wife and combined we are making 500k a year and we get to eat on campus 90% of our meals and lattes are free LOL. its amazing i digress but I did a presentation there and got the full tour.. its AMAZING the work environment in the Bay Area compared to virtually anywhere else.  

    Even in the coastal states the median household income isn't much higher - it is still less than 75k / household. So that means HALF the households make less than that. 

    Obviously people with these lower salaries are not living in Palo Alto. They live further away and commute or live in worse neighborhoods. Or many just rent. 

    I think also they pack generations into one unit as well.  quite common in some cultures .  I mean why do two people need 5k sq ft home ? 

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  • Account Closed
    Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes
    7y

    I've heard news reports out of Orlando of Disney World workers living in their cars. There was a news report out of Pensacola of a popular waitress living in one of the makeshift homeless camps (the TV station disguised her voice to protect her identity).

    Perhaps our expectations have been set to unreasonably high levels with popular TV shows such as Lifestyles of the Rich and Famous. Instead of "champagne wishes and caviar dreams," maybe we need to start thinking in terms of "carbonated wine wishes and fish egg dreams"  (it sounds less appetizing). 😜

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  • Krishnan T.
    Real Estate Professional · Tampa, FL · Member since 2017 · 104 posts · 47 votes
    7y

    @Jay Hinrichs  lol ...so the 2 people can drive to their big house in their big truck listening to Mr Big while eating a big Mac

    0Reply
  • Garrett Hawk
    Investor · Branson, MO · Member since 2016 · 101 posts · 146 votes
    7y
    Hello! Congrats on your milestone. I would have to agree with you when it comes to $1 million in net worth. I reached it last year and it wasn't as a great of an achievement as I thought it would be. I would say that it was the hardest to get to in terms of the length of time, (investing for 8 years), however I am on pace to double that in less than 6 months from when I first achieved it. It is the first milestone that will begin to snowball! Best of luck on your success!

    Originally posted by @Shiloh Lundahl:

    I have had a interesting discovery recently. At the end of last year, I was finishing updating my financials and I realized that my networth had reached over 1 million dollars. That had been one of my financial goals over the last couple of years but last week I had a sad, disappointing realization. 

    I posted a question on the forums asking if there was a shortcut to wealth. Many people on the forums said yes and a few suggested I read the book The Millionaire Fastlane by MJ DeMarco. I started listening to that book on Audible and it basically stated that 1 million dollars today is not worth what it used to be and that you would really need 5 million today to live a millionaire lifestyle that I saw when I was a kid.

    Unfortunately, I think there is a lot of truth to this perspective. 

    As my networth has gone up, I have relaxed a lot on my spending habits. I signed my kids up for music lessons, sports, and other activities without considering the cost because in my mind, I am a millionaire and millionaires are wealthy and that is what wealthy people do. When I would eat out I would think more along the lines of what do I feel like eating rather than comparing the prices of each meal and then asking myself, “how much do I want to spend on lunch.” Each month when my wife and I would do the budget, we were over spending by $500 - $1000 and I would need to pay myself more by transferring more money into our personal account from my business accounts. I was getting confused and frustrated at this. If I was a millionaire then why was I still feeling strapped financially?

    DeMarco explaines in his book that the millionaires are not really wealthy but are considered the middle class or the upper middle class. And that if you spend like you are wealthy, you will ultimately become poor. So now I am back to budgeting more strictly and living more frugally - darn it! I thought that I had arrived just to find out I am only one-fifth the way there.

    Have any of you come to the realization that what you thought was wealthy today isn’t really as wealthy as you thought? 

    1Reply
  • Michael Ealy
    Developer · Cincinnati, OH · Member since 2018 · 1k+ posts · 3k+ votes
    7y

    Congrats on reaching millionaire networth.

    I agree with your assessment - being a millionaire is NOT a big deal.

    It's like - "Really? That's it?"

    In life, you really don't "arrive". The pursuit of achieving your goals is never ending. You can't stand still and rest on your laurels. The pursuit is part of the enjoyment.

    2Reply
  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    7y
    Originally posted by @Krishnan T.:

    @Jay Hinrichs  lol ...so the 2 people can drive to their big house in their big truck listening to Mr Big while eating a big Mac

    well I should not talk.. I have a 4k sq ft home for 2.. but to be fair it also houses my office staff.. so I have 2 to 3 people a day working there. and of course a second home that sits vacant 6 months out of the year.. my wife wont let anyone STR it LOL..

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  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    7y
    Originally posted by @Account Closed:

    I've heard news reports out of Orlando of Disney World workers living in their cars. There was a news report out of Pensacola of a popular waitress living in one of the makeshift homeless camps (the TV station disguised her voice to protect her identity).

    Perhaps our expectations have been set to unreasonably high levels with popular TV shows such as Lifestyles of the Rich and Famous. Instead of "champagne wishes and caviar dreams," maybe we need to start thinking in terms of "carbonated wine wishes and fish egg dreams"  (it sounds less appetizing). 😜

    That TV show hasn't been on the air for almost 25 years, so you might have missed a few with that reference. With younger generations it is social media, such as Instagram that is creating the images of a perfect life, one that nobody can keep up with. There is also this idea that each generation needs to live better than their parents, but it is getting harder with every generation. 

    2Reply
  • Rhett Dean
    Rental Property Investor · Lehi, UT · Member since 2015 · 25 posts · 23 votes
    7y

    @Shiloh Lundahl

    Great points everyone!! My net worth is about 1.2 million. I am 42 years old and I make about 200k a year selling in the medical field. Some would say wow that’s not to bad your doing ok. But Last year I lost my job due to a restructure and suddenly that nice big salary was gone and I had expenses and a wife and 4 kids counting on me. Luckily I am a saver but that net worth didn’t make me feel any less vulnerable. Most of it was tied up in retirement funds that I wouldn’t want to liquidate and take the tax hit and pay down on my primary home. Luckily I found a better paying job and was only out of work for about a month, and with a nice severance the whole ordeal turned out to be a financial blessing. A hit to my ego being the first time I had been unemployed since the age of 9 but a big blessing. But what it did was wake me up to the need for passive income. I don’t want to feel helpless like that again. Since last year I have bought 16 properties now as rentals that I manage myself and my goal is to grow that to about 150 to help supplement my income. In the process I have found a new zest for life and it’s been a blast getting my teenage boys involved with me in the real estate. My personal goal is 15 million by retirement age around 67 or so, I am excited to make that happen over the next 25 years and enjoy journey to get there.

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  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    7y

    One of my clients is in AR.

    Some of his friends are farmers.

    Wal-mart required vendors to have an office in Bentonvillet to do business. That transformed alot of AG land farmers owned for 10,000 an acre to sell for 70,000 to 80,000 an acre when developers came calling to build office for the vendors.

    It's not the norm but some farmers can really make out if an area is trannsformed by selling. I know another land bank investor that buys lot's of land in Texas because it is AG zoning and very little taxes there. They wait to convert to commercial  when they have  a buyer on the hook that goes hard with the money.   

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  • Ashton Levarek
    Rental Property Investor · Beaverton, OR · Member since 2018 · 88 posts · 155 votes
    7y

    Great post @Shiloh Lundahl, and congratulations. 

    First world problems, am I right?

    On the other hand I would argue that 1 million, 10 million, 100 million, its all perspective right? I mean if you're spending all your time and effort trying to sustain that 1 mil of net worth, it just might not be "worth" it. Right?

    And to take a page out of Timothy Ferris's book, "The 4 Hour Work Week" being rich isn't about money, or net worth, its about free time. A man that spends some 80+ hours each week working to make that 1, 10, or 100 mil a year is not as rich as that man that hustles for 2 months to make 100k and then be off for 10 months.  Ferris argues that the new rich create businesses, or investments, that run themselves and allow them to take 1-2 "mini retirements" each year. And I think I'd have to agree. 

    But thats just me. 

    Ashton

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  • Quito Keutla
    Real Estate Agent · Renton, WA · Member since 2017 · 204 posts · 151 votes
    7y

    @Shiloh Lundahl Congrats! on developing the habits that got you to your 1M bench mark, they say making it to your first 1M is the hardest now is keeping it and growing it.  Wether you feel you made it or not it's all about our perspective.  I was born in a 3rd world country where most people make less than a $1 a day slaving away with little opportunity to advance.  Keep up the work, what ever your next bench mark maybe I'm sure you'll achieve that as well.  Happy Investing!

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  • Account Closed
    Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes
    7y
    Originally posted by @Joe Splitrock:
    Originally posted by @Account Closed:

    I've heard news reports out of Orlando of Disney World workers living in their cars. There was a news report out of Pensacola of a popular waitress living in one of the makeshift homeless camps (the TV station disguised her voice to protect her identity).

    Perhaps our expectations have been set to unreasonably high levels with popular TV shows such as Lifestyles of the Rich and Famous. Instead of "champagne wishes and caviar dreams," maybe we need to start thinking in terms of "carbonated wine wishes and fish egg dreams"  (it sounds less appetizing). 😜

    That TV show hasn't been on the air for almost 25 years, so you might have missed a few with that reference. With younger generations it is social media, such as Instagram that is creating the images of a perfect life, one that nobody can keep up with. There is also this idea that each generation needs to live better than their parents, but it is getting harder with every generation. 

    One advantage of not watching TV (other than over-the-air PBS) is I missed a lot of this stuff over the years. My knowledge of the show comes from the country and western song Lifestyles Of The Not So Rich And Famous, which makes me homesick for the Class C type of neighborhood where I grew up.

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  • Tim G.
    Rental Property Investor · San Diego, CA · Member since 2011 · 1k+ posts · 1k+ votes
    7y

    I feel like a more interesting question would be, to those with a net worth over 1 million... are you happy? 

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    7y
    Originally posted by @Joe Splitrock:
    Originally posted by @Account Closed:

    I've heard news reports out of Orlando of Disney World workers living in their cars. There was a news report out of Pensacola of a popular waitress living in one of the makeshift homeless camps (the TV station disguised her voice to protect her identity).

    Perhaps our expectations have been set to unreasonably high levels with popular TV shows such as Lifestyles of the Rich and Famous. Instead of "champagne wishes and caviar dreams," maybe we need to start thinking in terms of "carbonated wine wishes and fish egg dreams"  (it sounds less appetizing). 😜

    That TV show hasn't been on the air for almost 25 years, so you might have missed a few with that reference. With younger generations it is social media, such as Instagram that is creating the images of a perfect life, one that nobody can keep up with. There is also this idea that each generation needs to live better than their parents, but it is getting harder with every generation. 

     LOL. I was thinking the same thing. 

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  • Account Closed
    Lender · Pensacola, FL · Member since 2017 · 658 posts · 626 votes
    7y
    Originally posted by @Tim G.:

    I feel like a more interesting question would be, to those with a net worth over 1 million... are you happy? 

    The short answer is YES, I don't have to worry anymore about how I'm going to pay for my next meal. The long answer is it takes some getting used to. I've been working since age 5 (starting out doing chores on my parent's farm). Finding other things to do with my freed-up time means making decisions I've never had to make before. I'll continue to learn and apply new ideas. The tag line of UCLA Extension in the 1970s was "if you're not learning, you're not living." Fortunately, the Internet is my library now and Google is my library card catalog. 

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  • Loc Nguyen
    Member since 2019 · 2 posts · 6 votes
    7y
    Originally posted by @Peter Tverdov:

    I guess I am in the minority ITT but I think several of you are severely out of touch with reality saying someone with $1m net worth is middle class wealth. You're insane or just don't know the numbers. 

    There are about 50-60% of people in this country who do not have $1,000 to their name. The AVERAGE net worth in the US is maybe 50-100k. Again, it might not feel like you made it. But if you're a millionaire that means every 10 people you see today, you're doing better than 9 of them. That's not middle last time I checked. 

    I think it depends on how you look at it.  $1m net worth is a large number to the majority of the population, but it won't buy anyone freedom.  $1m by itself is a large number.  $1m is a lot if you're still working.  $1m is a lot if you have a nice steady monthly passive income.  $1m is not a lot if you have neither a job nor monthly passive income.  Freedom, for me, is the ultimate goal.  $1m doesn't buy me freedom.  Everything I know about economics tells me the US is going to be in a world of hurt in the not too distant future with increase in taxes to pay for entitlement, increase in borrowing to pay for deficits, increase in inflation, decrease in the value of the dollar due to competitiveness, loss of income generating workers due to robotics and AI.  If I project where the hockey puck is going, it doesn't bode well for $1m in assets.

    btw, here in the San Francisco, they now have robotic coffee shops and burger joints.  Amazon store fronts have no cashiers.  All purchases are handled by AI driven cameras and sensors.  Malls and store fronts are going empty.  The future for non-skilled workers is quite bleak.

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