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Old 01-12-2017, 03:19 PM
 
6,625 posts, read 3,752,330 times
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Quote:
Originally Posted by foundapeanut View Post
I know a guy who NEVER made more than $50,000 per year and is worth around 20 million. All from real estate investments (bare land, west coast) bought in the 60's and 70's and being sold the last few years. He give 15% to charity for every sale he makes.

His investment guy told us.
That's great. Probably frugal. But $50,000 is above average, not low, income, for a single man. The average FAMILY grosses about $53k a year these days. If he was single and making $50k, he was doing pretty well. He had expendable income. Consider that it may have taken only $25k for pay his bills, or $30k. Or even $35k. Maybe got paid O.T.

Still, it's remarkable what he did. I guarantee you he had some help....dad was experienced in r.e., a friend in the biz...something.

I read recently about a janitor who passed away. Only then was it discovered he had a few million dollars in his accounts. What do janitors get paid???!!!! Maybe he inherited a couple of houses, rented them out, or sold them and invested in mutual funds. Who knows.
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Old 01-12-2017, 03:20 PM
 
Location: SoCal
13,236 posts, read 6,340,776 times
Reputation: 9854
Quote:
Originally Posted by freemkt View Post
Lifetime low earners (remember this thread title) rarely purchase an investment property, let alone nine of them.
He is a real estate person. Started out probably with zero in some years. Not rich by any means. On average he is probably average $40k-$50k.
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Old 01-12-2017, 03:43 PM
 
592 posts, read 296,980 times
Reputation: 881
It ain't rocket science and the book The Millionaire Next Door explains it quite nicely.


I am 55, never made more than $50k/year but have a $1 mil net worth (and my house is paid for).


HOW?


I do the things my dad taught us at a young age:


1. LIVE BELOW YOUR MEANS
2. Never finance a depreciating asset (cars, boats etc..)
3. Save 10% of your income NO MATTER WHAT every year.
4. Never forget #1


What I see at work are lower-paid folks w/ new SUV's, buying lunch every day (not brown bagging), Starbucks every day, latest fancy I-Phone etc.....


And of course the lower-income folks seem to have the most kids- go figure.
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Old 01-12-2017, 03:52 PM
 
6,625 posts, read 3,752,330 times
Reputation: 13703
Quote:
Originally Posted by carnivalday View Post
It has been proven over and over that if you start saving money early, in your twenties, saving as little as $100 a month, in the stock market, you will have plenty of money for retirement. The problem is, people have to do it. People dont think about it until they are 55 and all of a sudden, retirement is staring them in the face.

I have never made over $50k a year. Most years much less than that. I never failed to put $100 a month in the stock market. I didnt get smart until I was in my mid 30's, so I lost a lot of time, but still in a couple of years when I retire, Ill be just fine.

People want to blame everyone else except themselves for having no retirement. Unfortunately you can't turn back the clock. I wish it was a requirement that everyone at 21 years of age had to save $100 a month in a good mutual fund. Retirement wouldnt be near so bleak for those whining now.
Most people can't save $100/month in their early twenties. I didn't have $100/mo in expendable income until I was about 30....and I was fairly frugal.

But let's take a look at that $100/month, saved for 35 years (age 30 to 65). Invested in the stock market, a mutual fund:

If you invest $100/month for 35 years, and get 10% pre-retirement interest (a risky %, but let's go with that), compounded monthly, you'll have about $383,000 by age 65. Not nearly enough to retire, unless you are getting your Social Security supplement. With SS and your savings and Medicare, and assuming your house is paid off, you can have a gross income of about $45,000 to age 95. (I assumed a conservative 4% post-retirement interest on savings.)

One should be able to save more than $100/mo in later years, but will likely miss some of the savings in the earlier years (medical bills, kids, catastrophes, life). You can delay retirement, IF you have that choice. That is really up to employers.

But to save $100/month in the young years is impossible for millions. Or if they do, they will never own a home, which is a very important asset to have in one's senior years.

This is why Social Security and Medicare were created. Even with the savings, that senior that worked and saved for decades would have to live in poverty or close to it, depending on any number of variables, including cont'd interest being earned on savings, health problems, house & car repairs, living longer than expected, recessions (or lack of them), if it weren't for Social Security and Medicare.
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Old 01-12-2017, 04:10 PM
 
2,443 posts, read 2,073,079 times
Reputation: 5690
Quote:
Originally Posted by StealthRabbit View Post
Have you ever tried to move a farm?

Have you BUILT a farm from bare land?

Money alone will not cover it, but it helps. (not so much when you are too old to rebuild)

Tax laws at the moment make it really EZ to clear $500k tax free every 24 months, IF you are good at picking properties in the path of development. Sometimes development STOPS (2008), I FINALLY got a prime piece sold in 2016, that was slated for sale in 2009. I don't have the longevity remaining to wait too many of those deals out.

Ironically we were in Portugal (seeking healthcare) and that created an interesting challenge to close the deal, but ... after several tries / attorneys / trips to embassy...we figured out how to make it happen.
I am talking about farmers that have land on outskirts of town and the town grows and they sell their land by choice not eminent domain.
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Old 01-12-2017, 04:31 PM
 
12,825 posts, read 20,148,018 times
Reputation: 10910
Quote:
Originally Posted by LHS79 View Post
It ain't rocket science and the book The Millionaire Next Door explains it quite nicely.


I am 55, never made more than $50k/year but have a $1 mil net worth (and my house is paid for).


HOW?


I do the things my dad taught us at a young age:


1. LIVE BELOW YOUR MEANS
2. Never finance a depreciating asset (cars, boats etc..)
3. Save 10% of your income NO MATTER WHAT every year.
4. Never forget #1


What I see at work are lower-paid folks w/ new SUV's, buying lunch every day (not brown bagging), Starbucks every day, latest fancy I-Phone etc.....


And of course the lower-income folks seem to have the most kids- go figure.
This is actually good advice, I approve this message.
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Old 01-12-2017, 04:39 PM
 
49 posts, read 36,240 times
Reputation: 112
We did not start serious saving until we were in our mid 40s due to various life "surprises." Nor did we ever make more than a modest income. The key for us was buying the worst house in a decent neighborhood that we could afford at the time. As luck would have it, its value increased four fold in ten years so we were able to sell and then buy with cash. We were also very frugal towards the end of our working years and lived on one income and saved the other. I drove an old Volvo for years while I saved up to buy a nicer car with cash. I worked for the state knowing that I would receive health insurance and pension if I "did my time." Vacations didn't happen unless we had saved for it prior. We will be OK in retirement but I think it was really part luck and part planning.
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Old 01-12-2017, 05:05 PM
 
249 posts, read 197,246 times
Reputation: 492
Quote:
Originally Posted by Perryinva View Post
In a capitalist society no one is rewarded with a comfortable retirement because they worked hard and long.
Really, I've observed the opposite.
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Old 01-12-2017, 05:18 PM
 
249 posts, read 197,246 times
Reputation: 492
Quote:
Originally Posted by BayAreaHillbilly View Post

I'm not saying don't use leverage.

But let's imagine a realistic scenario that would apply to a blue collar worker.

How much of a down payment can they assemble, especially if it is for an income property beyond their own domicile. I don't know too many such people who have a lot left over after paying their own domicile's mortgage plus other ongoing bills and whatever can be set aside for emergency fund, non-retirement investments, etc. Also, one would not be wise to put all of their retirement savings into income property, way too much asset concentration from a risk management perspective.

Realistically, to get into the income property game, a person of limited means needs to go big on the leverage. It's gambling. Some win, some lose.
A low income person can start by buying a SFR, then graduate up to a duplex, fourplex.

I live in Southern California, I've seen lots of money made in RE. Leverage is great for rentals, in my area there is not shortage of tenants, rents keep increasing. I understand some areas are higher risk, the problem in my area is the high entry fee. I do know people with low income (for So Cal) do enter the market.

If one thinks its not possible, it won't be possible. I see too many people suffering from their own negativity.
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Old 01-12-2017, 05:26 PM
 
2,166 posts, read 836,674 times
Reputation: 2973
Quote:
Originally Posted by otterhere View Post
My salary finally hit $40k just this year (almost ready to retire), and my net worth is half a million. Yes, I'm thrifty.
First, kudos on saving that much money on a fairly modest income. However, unless you're retiring at an advanced age (75+) or plan on being destitute, $500K isn't going to last very long. Using very simple math, it will last less than 15 years even if you manage to continue your frugal spending habits.

I started saving way too late and I'm on track to have around $900K in my 401K when I retire at age 67. Even with 2 pensions (one is very small, around $550 per month) and maximum SS benefits (I will have earned more than the SS wage cap for 20+ years prior to retirement), a paid-off house and reduced spending, I will run of of 401K money in my early 90s. Retiring with only $500K seems pretty scary - unless you also have a very generous pension plan.
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