Million dollar mansions - who are these people? (Atlanta, Decatur: middle-class, sales)
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ah okay. i thought you were trying to figure out who's in the mansions and why there are so many of them.
it takes some skills and a lot of planning.
first of all you need to start a roth IRA in your teens and start dumping money into it monthly for retirement.
secondly, you need to get an education. college graduates have a better chance of making it anywhere, but you need to know what you want to do. holding a diploma isn't going to do you any good if you're not willing to get out there in the world and start shaking things up.
always think bigger. hard work by itself isn't going to get you where you want to be. if you start working for a company, restaurant, etc., you've got to do more than what your boss tells you to do— find something you enjoy doing and always be getting better at it. come up with new ideas (think about them first) and present them to your boss.
take risks, but smartly. see opportunities where they lie: invest in things you think are going to get bigger and better and get involved in those things so you're insured that they do.
always make sure you negotiate a deal while you have the upper hand— meaning make sure you get what you want in writing before you give them what they want.
live cheaply, learn how to skimp and save. don't buy charmin toilet paper, buy kroger value. save up for the big expenses you know you're going to have later (car trouble, a/c goes out, etc.)
there are a lot of techniques. it's capitalism, you've got to take advantage of it.
bryantm - this is perfect. You articulated it so well. I almost want to print this off and save to share with my kids when they are older!
I guess the question is how much of house do you need to be happy. For me, a 5 bed / 4 bath 3500 sq ft house is more than enough space to raise 3 kids until they leave for college, and there is absolutely no reason for a man to be more greedy than that.
I see these gigantic multil-million dollar estates / mansions in Buckhead, Sandy Springs, Sugarloaf CC, River Club on 3-5 acre lots and I don't get that warm fuzzy feeling thinking to myself... If only I can dream of living in a mansion like that one day. However, when I see at a nice 3500 sq/ft coastal SFR in Newport Coast or Newport Beach, CA......Damn, i do get that warm fuzzy feeling.
For me.. the only lifestyle upgrade that I can see myself leaving S. Forsyth/John Creek area is for Newport Beach. Otherwise... I will be a happy Panda living in my current home for 30 years.
Don't forget that your house is much cheaper in Forsyth County than it would be in-town. My best friend just purchased a home in Brookhaven for just over a million. It's a 4 bedroom 3.5 3000 sq ft home on a pretty small lot. As a real estate broker, you know what location can do to a price. What would the value of your house be if it were located in Brookhaven or Buckhead?
If you are moving from an area (such as NYC/CT/SF/LA), where a million dollar house is a tear-down, you might decide to buy a home here for the same amount you sold your house for just because you can.
Or if you're a Minneapolis advertising guy (like my ex), you can also afford it.
In terms of wealth, I think the vast majority of people who have a high net worth come from at least an upper middle income home. It's much easier to achieve success and wealth coming from a background like that. Most upper middle class homes value education and saving. Also, while in college and a young adult, most children that come from those homes have a great deal of financial help. It's much easier to accumulate wealth when you are older if you do not have student loans, car loans, high credit card debt, etc. Then later in life, you will most likely receive at least some inheritance, furthering your financial wealth.
Pick something you're passionate about, get better everyday, be better than your competition, be a leader, ask yourself why things get done, not how they get done, live within your means. This applies to small business owners and people working for corporations. Also, don't get jealous of others. You never know if those "wealthy" friends of yours inherited money or have debt up to their eyeballs, just worry about controlling what you can control.
Also, rich people understand how compounding interest works. They make money on interest, they don't pay it. Look at Mitt Romney, he hardly has any income from a regular paycheck, his interest pays him.
You mentioned how people can become a networth of $2M by the age of 40. Just as a general rule of thumb, try your best that the value of your home does not exceed 25% of your entire networth. For someone with a networth of $1.4M, he would be living in a home that is valued right around $400,000. The lower the percentage the better it is as you will save more.
Viningsgt hit it right on for owning a small business. If you are passionate about the business, you will work harder at it even during difficult times.
See yourself as having three vocations: A Small business owner, A real estate investor, and A hedge fund manager. In each of these three categories you have to find your niche that you are good at.
To reach $2M networth by age 40 is definitely a challenging goal to set for yourself. Living in Atlanta will definitely give you the edge in reaching that goal compared to living in LA or OC in your late 20s and early 30s working a salary job.
I know two persons who live in million dollars mansion. One is a doctor. other one is a computer engineer and works as a director. both are immigrants and came to US from india as students 15-20 years ago.
Just so everyone knows....I'm not trying to reach $2 million in net worth by the time I'm 40. I'm already very close to 40 and that's not going to happen. I'm just wondering how people who have done it did it.
Most of my friends are in pretty decent jobs and we all make decent incomes. Understand, though, that hitting $2 million by 40 is a lofty goal. It's more than doing well. For example, suppose you get a great job that starts at 20 that starts at $60k, by the time you hit 40, maybe you are at $140k or something. Whatever the math, let's just say that for 20 years, you averaged $100k per year. That's doing well by most standards. However, even if you managed to save half of your pretax income over that 20 years, which we all know that nobody does, you would still only have $1 million. With interest rates where they are, even the power of compounding isn't going to get you much above that. You'd have to take some very serious investment risk and get extremely lucky to double the money in that amount of time.
So to have that kind of money requires something extra, something more than having a really nice salary and investing acumen.
I'm trying to figure out what that extra something is. Granted, it's going to be something different for everyone, but enough people have done it so that there must be some kind of common denominator. These people probably all have drive, passion, luck, and patience....but for most people, working hard, living conservatively, and investing wisely simply isn't going to be enough.
What I'm trying to figure out is what's that edge? What gets some people there, but not most people?
Lots of real estate appreciation involved there, so not necessarily repeatable in the current economy. Still, he did a lot of smart things. (And dumped his real estate prior to the bubble burst.)
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