How did you make your first million? (stocks, pay, balance)

[petch751]

Originally Posted by mrshumbug

Great subject. I wish I was able to contribute.

But you can learn and change how you view money and use money getting you closer to becoming a millionaire.

[petch751]

Originally Posted by FelixTheCat

I have noticed one thing about people who make a lot of money. Their motivation in business is profit. They don't care what business they start, except for that it needs to make money.

Business owners can be motivated by making money all the want but if they fail to serve their customers well the business will fail.

[bencronin04]

My parents always try and convince me to not worry about money and how much I will make....unfortunately the environment I grew up in goes completely against all of those ideals. I intend to have my my first million in liquid assets by 40 years old at the latest. I'm currently in my late twenties and and looks like the sky is the limit where I currently am. A group of other fairly successful young engineers, IT enthusiast, entrepreneurs and I are working on developing a business plan currently.

To note the reason my parents tell me not to worry about money is due to the fact of being an only child and them being very successful in their adult lives. They always say that when their times comes I will need to not worry about anything monetarily, but honestly, if I haven't made it by that time on my own......what is a large inheritance going to do but probably further hurt me?

[jm1982]

Yes, I totally agree with this too..especially since people are living longer. I don't really see the point. Probably made more sense when people weren't living as long to give their children an inheritance ...if someone dies at 80 and they had their kid at 25 they would be 55 years old....any money would be helpful...but most likely they would of already made it on their own by then..

People say $1million isnt much...but it's 10x better than 10k and a million X better than $1..

Also when you have $1million you can take advantage of deals that those with less money can't ..and there is the possibility to make money quicker.

[mysticaltyger]

Originally Posted by Philosophizer

Share your success story here. I'm struggling to find my way right now and its really starting to eat away at me. I'm nowhere near where I wanted to be at the age of 24. Don't even have a "real" job and feel like other than a having a fun time, earning my bachelor's degree was a complete waste of time and money (admittedly I poorly chose a highly competitive and low paying field).

I'm 42 and I'm only up to just over 250K at this point...but I made the same mistake as you did....I chose a highly competitive, low paying field. I didn't get my first "real" job until I was 26. At that time, I was 14K in debt and I had an old car that I knew I would need to replace.

I live in the high cost SF Bay Area. I have never made more than 52K per year.

How did I get to 250K?

--I rented a room from age 26 to 35 so I could save money. (This is fairly normal here, although most people aren't doing it in their mid 30s)
--I have never had cable.
--I just have a basic cell phone.
--No ipod
--I drive a 16 year old economy car that I bought used (with cash). It still runs fine.
--I work a block away from my job, which keeps transportation costs low. Admittedly, this is tough to do and not possible for most...but you can live as close to work as possible.
--I live in a studio apt., not a 1BR.
--I stock up on stuff on sale at the grocery store.
--I started saving in my 401K ASAP, and kept increasing it with every opportunity....There have been times when I only increased it by $1 per paycheck.

Things I could have done better:

--I should have just picked a good "balanced" fund that buys a mix of stocks and bonds in my 401k and stuck with it. (My plan did have such a fund). Instead, I switched funds too much. Now, my investing is automated. Every quarter, the computer automatically moves me into 25% bonds and 75% in 4 different stock funds.
--I should NEVER have bought financial stocks in 2008. I lost 11K investing in individual stocks. I do not have the temperament for it. Most people don't.

Also, my life has not been completely spartan. I have:

--Traveled to South America 4x (my own money)
--Been to Europe once (paid for mostly by my bf).
--Gone back and forth to see my family on the opposite coast, usually once a year, as well as done local trips to see friends. Sometimes these trips were only done if/when I could use frequent flyer miles or got some other good kind of travel deal.

It helps that I have a public sector job, so I haven't been laid off...but we took stiff pay cuts about a year and a half ago. It's a good thing I was living below my means. So far, I have been able to maintain my retirement savings, but my regular cash savings, even with cutting back on lifestyle expenses, has been a little tough.

I have always tried to save as if I would never get a pension...and that is probably a good thing. We now pay 13% of our salaries into our pension plan, and that is slated to go up even more come January 2014. It goes up by more than a percentage point every year.

[Listener2307]

Originally Posted by mysticaltyger

......MysticalTygers's post......

America needs more like people you. You will do well.

One of the problems you may run into - a long time from now - is learning to let go of the money you have saved. I know, because it happened to me. It happened to a relative, too, but she has never learned to stop living like a pauper. Frugal means using everything that you have; not saving everything you have.

I am fortunate in that my wife reminds me to spend a little more sometimes, to get the nicer things. We are no longer in danger of running out of money, and sometimes I need to be reminded......

[mysticaltyger]

Originally Posted by jm1982

401ks and IRAs are good to have and put money towards...but when was the last time that you heard someone got rich investing one.

It happens all the time.

Did you not see the thread about Obama wanting to limit people's retirement accounts to $3 million? Obviously, there are people with account balances that large, or he would not be going after them.

I know someone who had 1M in his 401K by age 58 when he retired. He was an engineer. Always saved a good portion of his above average income. He had other savings and investments outside his 401K as well. He never invested in real estate (except for the house he lived in, which was paid off before he retired).

8 years later, he hasn't needed to touch his 401K because he has a pension from his job and now also collects Social Security. Despite the crappy stock market, his 401K is now worth about 1.7 M.

[mysticaltyger]

Originally Posted by dv1033

Nah. "Hard work" is generally for suckers

Here we go with the all-or-nothing mindset.

Hard work is necessary but not enough all by itself. If you are working hard as a farm laborer, forget it. You have to work hard and smart. That probably means going to school to get an education in something marketable (could be a trade school), moving to an area with higher paying jobs instead of just staying in a small town with limited opportunity, etc. Working smart also means saving and investing your money and taking prudent risks with it (i.e. not having it all in savings accounts, but also not putting it all in a few high risk stocks).

Peple who've made $1m on their own have generally worked hard and smart.

[stoutboy]

And it helps to start early. In your 20's. I did put some money into IRAs and mutual funds during that decade; my mistake was I was inconsistent. I didn't get serious until my early 30's. In the meantime, i rode out both of the big booms and busts, and since I didn't lose my nerve unlike so many others, I am in a good position now to where I have a legitimate shot at millionairedom. I will also have a good pension and health care, but my goal is to have 1 mil+ in retirement savings on top of that.

[mysticaltyger]

Originally Posted by Listener2307

America needs more like people you. You will do well.

One of the problems you may run into - a long time from now - is learning to let go of the money you have saved. I know, because it happened to me. It happened to a relative, too, but she has never learned to stop living like a pauper. Frugal means using everything that you have; not saving everything you have.

I am fortunate in that my wife reminds me to spend a little more sometimes, to get the nicer things. We are no longer in danger of running out of money, and sometimes I need to be reminded......

Yes, I am aware of that problem. At 35, I realized I was unhappy renting a room and I upgraded my living situation. If I could do it over again, I would have upgraded sooner.

I am actually more balanced in my spending/saving than I used to be. I realize that I am not like most people because I enjoy saving more than spending...but I have learned to give myself permission to have fun for today and to not always live for the future only.

I am on track to retire at 55 or 56 and should have a better lifestyle in retirement than I do now, assuming our economy doesn't totally go down the toilet (a distinct possiblity most people would rather ignore) and that my pension actually pays out.