Becoming A Millionaire Is A Letdown

25 Replies

I read this article this evening and figured folks on BP may enjoy it.  He does a good job of highlighting the key elements to becoming a millionaire for most "ordinary millionaires" that don't get a lot of media hype.  Here is a link to the story:

Becoming a Millionaire Is a Letdown

Enjoy!

Awesome article!

I quickly scanned BP and read this post title and immediately thought it was going to be some condescending article about how easy it is to get rich. It wasn't. It was a good read. Thanks. I learned something and will hope to make my first million someday. Thanks @Bryan Hancock

@Bryan Hancock

  thanks read through that...that's a Dave Ramsey approach.. and one I can say I never even close to entertained.. I wanted to have some great experiences while I was young not live like a miser.. so I think there Is balance.. never know when your ticket gets punched don't want to have that happen and you never did anything never went anywhere and just focused on putting money in your mattress ... LOL

Great stuff-
Simple, but good to chew on:)

Just downloaded the spreadsheet can already see the benefit thanks for the link.

I have individual clients who are UHNW  ( ultra high net worth investors - 25 million or more ).

If others think people that have money do not worry about it then they do not understand the process. It's kind of like until you get there you really do not understand how different it is.

That kind of money you start getting into dynasties, estate planning, family offices, multiple trusts, tax advantages to claiming residence in certain states and just visiting others etc.

The people that do not have money worry about getting it. The people that work hard to get that money worry about the government taxing them to death and taking it all. So a complex process has to be put in place with layers and layers to minimize taxes, management loads, legacy planning.

Your worry just moves to something else.

I invest as well but I enjoy myself within reasons. I do not believe you should be a miser for 25 years either. My principle is to try to increase my income higher each year and plow that into investing.

If you make 100k a year income there is only so much you can do to get the ball rolling. If you start making 300k,400k,600k a year you can really start doing some major snowballing if you buy right.  

     

Nice article, it is good that he had the sense to start investing when he was younger. The majority of my net worth can't be shown on a spreadsheet as it is tied up in the real estate that I own. Only a fraction of my money is in the stock market. Still, at 35 years old as well, I am way behind that guy. 

Agreed on not being a miser.

The key principles to me are:

1.  ALWAYS spend significantly less than you earn and dedicate yourself to saving.  This gives you fuel to invest

2.  Focus hard on increasing your income.  The article has a lot of material on cutting expenses.  Cutting expenses gives you more fuel than increasing income because you don't have to pay taxes on the cut expenses.  There is only so much you can cut though to enjoy a nice lifestyle

Balance is certainly key here.  Nobody wants to be the richest person in the graveyard.  

Sure glad I didn't have to reach 'millionaire' lol status by slaving away at my highly-taxed J.O.B. squirreling away 20% into my 401(k), hoping my asset allocation is perfect and praying the stock market continues to rise! Wait. Then all future contributions are buying less shares. Ok - I only want the market to rise when I need the money, in 30 years. Wait- then I'll be nervous for that whole time. Sure hope Greece doesn't sink the euor. Sure hope oil prices stabilize and congress gross a brain. Sure hope the middle east tensions calm. Confessions of a used-to-be wall street paper securities investor. I love real estate. Tenants and toilets may be a pain, but buying below FMV with access to awesome leverage terms and having control is where it's at! "Wealth is measured in time. How long can you last without a 'paycheck'?"

Great article!

There are two ways to increase your net worth.

1) Reduce your expenses and save

2) Increase your income by more than your expenses

In the long term, I believe it's better to focus on increasing income over reducing expenses. There is a cap on how much you can cut back your expenses, but there is no ceiling to how much you can increase your income.

Early on in my investing career my primary focus was to cut back on expenses, but as my income and net worth has grown, I focus on increasing my income and adding more sources of income.

@Bryan Hancock thanks for sharing the article. Any suggestions on how to sneak this into a teenagers "must want to read?" 

No idea @Richard D.

It would be good to see more posts like this though.  Some posts around balance in one's life would be good to see too.

I wonder how may 35 year-old folks are millionaires.  It would be interesting to see how big that data set is and how big it is by age in general.  

Talk about a high-quality problem to have.  Of course where i live (and expect in CA too) I can throw a dart and hit a millionaire so its not really a huge goal at this point. $5 - $10MM is the new millionare. 

@Joel Owens
You realize that there are less than 70,000 households in the U.S. with a networth of  $25 million dollars or more. Some of the best financial advisors I know in North Atlanta do not have clients at this caliber. If you have individual clients at this level, more power to you. 

@Bryan Hancock Nice article! After graduating from college, I thought success meant reaching that magical seven digit number as quickly as I can. 

As i got older, I realize success is not about the money. To me, Success is finding purpose in what you do. Success is an expression of passion, the realization of a sustainable business. Success is about contributing to the lives of others. And ultimately, I believe that success is generating enough income to fund your lifestyle, whether it be a teacher, engineer, financial advisor or a real estate agent, and never, ever being pigeon holed into missing precious moments in this short life.  
 
That is worth a lot more to me than a million bucks. 


Originally posted by @Joel Owens:

I have individual clients who are UHNW  ( ultra high net worth investors - 25 million or more ).

If others think people that have money do not worry about it then they do not understand the process. It's kind of like until you get there you really do not understand how different it is.

That kind of money you start getting into dynasties, estate planning, family offices, multiple trusts, tax advantages to claiming residence in certain states and just visiting others etc.

The people that do not have money worry about getting it. The people that work hard to get that money worry about the government taxing them to death and taking it all. So a complex process has to be put in place with layers and layers to minimize taxes, management loads, legacy planning.

Your worry just moves to something else.

I invest as well but I enjoy myself within reasons. I do not believe you should be a miser for 25 years either. My principle is to try to increase my income higher each year and plow that into investing.

If you make 100k a year income there is only so much you can do to get the ball rolling. If you start making 300k,400k,600k a year you can really start doing some major snowballing if you buy right.  

     

Great article! Good stuff.

i will turn 30 this year and believe I am on track to hit a $1 million net worth by 35. My net worth has grown much faster than my plan showed years ago as I take advantage of opportunities along the way. However, the amount I need to feel comfortable to retire and go into real estate full time does continue to creep up as time goes on. The bigger investments I take on, the more capital it requires. When I started I thought I was rocking to put 10% of my income into my 401k and save $600 a month and pay cash for a $5,000 capital improvement. Now I put put 13% a year between my 401k and ROTH 401k and have been making a minimum of $40,000 a year in cash capital improvements for several years. My personal spending has risen dramatically as I now family, with a at home with, a 4 year old and another baby on the way. I could cut my expenses but working the schedule I do and the sacrifices my family already makes, i'm ok with a lit much in our blown money budget. 

It is an interesting journey and things always change but it is one hell of a ride and I wouldn't have it any other way. Life would sure be boring for me to lose my drive.

Good article. 

I should note that as a non-yet millionaire I don't consider millionaires to be "rich" though they are certainly wealthy. I don't think you're really "rich" in monetary terms until you hit 25 million. Why 25 million? Because that's roughly 1 million dollars at the dawn of the 20th century adjusted to today's far weaker dollars--if my quick math is correct. They just don't make them dollars like they used to.

"70,000 households in the U.S. with a networth of $25 million dollars or more."

Thanks for that stat James. That is actually a bunch of households. More than I thought actually.

I do have individual clients at that level. I would welcome more of course IF we were a good fit for each other........ : )

The clients at that level want complete service. They are typically not do it yourself to save a nickel.

@Joel Owens

 I know what you mean. I have dealt with a lot of UHNW offices over the years and you would not believe some of the things they have just for their clients. 

great article.  i think as an investor i get caught up in the numbers and this articles helps to re-align the priority of WHY to invest.  security in my financial and family life.  

@Charles Worth

 I live in CA and agree that it is very easy to find millionaires, but most of the population of the US seem to have their wealth tied up in expenses. They may be worth a million or more dead, but do not have access to liquid money. I think this is a good article and that you make a good point of setting your bar higher. The anti-climatic point title of this article combined with what you're saying can suggest a simple re-raising of the bar. When listening to Wendy Patton, she would stress the importance of celebrating each win, typically in reference to closing a deal with a handsome payout. I think reaching a net worth of seven figures is something to celebrate for a moment. Then aim for the next million, or 5 million, or eight figure net worth. 

  This article also reminded me a little of a Warren Buffet mentality. Live with the minimum and invest rather than live extravagant. Also the age set goals of hitting a million (however inflation has taken its course and 1 million for Buffet is many more millions today; maybe @Jeff G. can help us with the math).

  On a personal note, I have been investing my whole life, but not financially. I have been investing in my education, and will always continue to do so. I wish that I had more of a financial mindset throughout, but do not regret it. It has made me hungry for wealth and financial freedom. I have yet to have a six figure amount in my bank account and will celebrate the day it happens. Then I will move on and aim for the seven figures. In the meantime, I will also strive for a strong cash flow. 

    Good article for information, motivation, and though provocation.

@Joel Owens

How would you recommend making that much per year? I would assume being a very successful business owner is the only way.

Travis people make money all kinds of ways. Bootstrapping a business that you eventually sell off can generate a lot of return.

Equity growth from investments such as stock, real estate, etc. can accelerate the process. 

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