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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.
Get married to a like-minded. Two checks are better than one.
Get married to a like-minded. Two checks are better than one.
That is true but only IF you get married and STAY married.
I am gay, so it gets a little dicier with gay men. We're not generally good at maintaining long term relationships. My bf earns more but is more of a spender (but not crazily so). But he doesn't like talking about money, so there's no way we're moving in together until that discussion is thoroughly vetted. Plus, he has 3 cats & I'm allergic to them (I could probably handle one) and he doesn't want to give any of them up. It gets harder to marry/move in with someone when you're in your 40s or older....you get set in your ways. I know it's true for both of us.
One would think that out-of-the-closet gay men would have plenty of money to save...but I find that's generally not the case....They tend to spend everything they have and more, just like the rest of the population and perhaps worse. I think sometimes having kids can force some people into a more responsible, planner's mindset...but without kids in the picture, it's even easier to maintain that "live for today" kind of thinking.
We bought our first distressed property in our early 30's and got a steal of a deal. We paid off the mortgage in 6 years. We bought our second distressed property and paid cash for it a couple of years later. We bought our third distressed property and paid cash for that about two years later. Those tenants have been with us for nearly ten years and have just about paid for the property. The first rental has more then paid for itself after 20 years. The positive cash flow after all expenses is 16600 a year. That money goes straight into a savings account. There is a nice nest egg in John's deferred comp that we have been investing roughly 1800 a month into for many years and will pay us 2k a month from age 60 to age 80. He also gets a decent civil service pension. We both have decent jobs and continue to live well below our means. We are going to be looking at some beach front with on site management soon. There is a ridiculous amount of money in the savings accounts that needs to be invested. The early years of building wealth was difficult. There would be months with only one day off a month if a property needed to be rehabbed. I remember both of us working midnights, grabbing a nap and heading out to the first rental property on our days off. We did 90% of the work ourselves. If the housing market would come back to where it was before it crashed and burned we would be at the goal we had for a really great retirement. If it doesn't then another 3 or 4 years should put us there. Building wealth isn't hard as long as you have the determination and common sense needed to meet your goals. I think to be rich you need a net worth of at least 5 million. Anything less than that feels like upper middle class to me.
Smart move to investing in rental properties. I wonder why you didn't continue to invest the income in more properties instead of putting it in a savings account earning low interest. Looks like you are in chicago and it seems there are amazing deals there right now.
Actually working a job is more risky in a lot of ways. There are risks in business...but I've heard of countless entrepreneurs that had several failures and then were able to bounce back and are now rich.
can't get rich by being cheap, and saving pennies, if you want to be super rich, start a business, and take risks.
This is true. But some of us are not cut out for starting a business; or we simply don't want to. However, most people can get to "financially comfortable" status by saving and investing at least 10% of their income in a mix of stocks and bonds over their working lifetime.
If you invest $250 per month (10% of a lowish 30K per year income) in a plain vanilla mutual fund like Vanguard Balanced Index you'll have $363,802 after 30 years and $841,218 after 40 years (based on the returns of the past 20 years of 7.85% for the most expensive "Investor" share class).
Those dollar amounts aren't rich, but they are more than most people have by retirement age. So I think they count as "comfortable". If you add in a modest $800 per month SS check and a conservative 3% drawdown on 800k, that's $33,600 per year in income...a reasonable income for most retirees, especially if their homes are paid for.
Inflation takes a bite, and a good rule of thumb is to expect 3% a year. But if you can capture the 7.85% return, and are able to survive on the recommended 4% drawdown, you should be ok, particularly with social security and a paid for home. Still, it's a little too close for comfort for me.
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