Are there any millionaires.... (pay, rent, credit, dollars)
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That is very impressive considering you live in the Bay Area. My favorite spot and hopefully will go back and retire there. I grew up in South San Jose.
From my point of view the most important lessons that allowed me to succeed in this way were:
-- Ignore both the doomsayers and the wild optimists. The economy's going to do what it's going to do. Focus on your own situation.
-- Think about the long run. It took almost twenty years for me to build my savings. I try to put something in every single month. One month's savings may not seem like a lot, but it all adds up over many years. This is another reason to ignore news about the economy. Who knows what it's going to be like ten, twenty years from now? But I do know that if I put more away this month, I'll have more down the road.
Net worth is the best estimate. Home values have always been stable with a few exceptions. A swing of 20-50k in home value would have minimal impact.
Someone who rents and has a million in the bank if no more of a millionaire than one who has 500k in the bank and owns a 500k home.
Maybe, but maybe not. Someone renting a simple apartment vs a house has lower utilities costs, and property taxes and repairs included in their rent payments.
Maybe, but maybe not. Someone renting a simple apartment vs a house has lower utilities costs, and property taxes and repairs included in their rent payments.
Renting an apartment is not comparable to renting a house. Of course it's less as it's cheaper to rent or purchase.
I know a miser who "made" millionaire. He reuses pieces of aluminum, and will eat something even past its "prime." He has the same furniture and items that he's had since, oh, decades ago. That's how he's lived his entire life.
Oh, here we go again with the extreme examples . It's entirely possible for most people to become wealthy (or at least financially comfortable) without eating rotten food and reusing tin foil (although I don't see anything wrong with reusing tin foil if it's clean).
You forgot number 5: Budget properly so as to save an adequate amount monthly, and wisely invest it.
I might add an investment in a pretty plain vanilla mutual fund that invests in a mix of stocks and bonds can add up over a lifetime.
$200 a month into a fund like Vanguard Wellington (at the rate of return of 6.98%...which is the rate of return over the last 15 years, below average compared to historical standards) would yield:
Excellent link...and I just had to post this excerpt:
"...our ideas about the relationship between money and happiness are misguided. In research we conducted with a national sample of Americans, people thought that their life satisfaction would double if they made $55,000 instead of $25,000: more than twice as much money, twice as much happiness. But our data showed that people who earned $55,000 were just 9 percent more satisfied than those making $25,000. Nine percent beats zero percent, but it’s still kind of a letdown when you were expecting a 100 percent return."
No one gets rich on that, unless any of the 1-4 are in place.
Those who get rich honestly (and really, a great deal of what is related to Wall Street cannot be considered honest, good, decent, etc.) can be counted on the fingers of one hand.
Depends on how you define "rich". If you're talking Hollywood Celebrity level rich, then possibly.
If you're talking about being able to live a basic middle class lifestyle (notice I said basic) without needing to work, then that, while not common, is attainable for most. It's just that most people are like you and complain rather than taking any kind of constructive action. To attain this level of financial independence requires a decent (but not necessarily above average) income, and a planner's mindset. That means, no kids out of wedlock (maybe no kids at all), no messy and expensive divorces, saving 10% or more for the long term once you get your first decent paying job, etc.
It seems engineers are particularly good at saving money. The personal finance blogs are dominated by engineers. The rest of the population doesn't seem to care about planning their lives, but they like to complain a lot about the rich and the fact they are broke.
From my point of view the most important lessons that allowed me to succeed in this way were:
-- Ignore both the doomsayers and the wild optimists. The economy's going to do what it's going to do. Focus on your own situation.
-- Think about the long run. It took almost twenty years for me to build my savings. I try to put something in every single month. One month's savings may not seem like a lot, but it all adds up over many years. This is another reason to ignore news about the economy. Who knows what it's going to be like ten, twenty years from now? But I do know that if I put more away this month, I'll have more down the road.
Putting in $17K in 401K and $5K in Roth IRA for the year is automatic for me. What do you think?
I might add an investment in a pretty plain vanilla mutual fund that invests in a mix of stocks and bonds can add up over a lifetime.
$200 a month into a fund like Vanguard Wellington (at the rate of return of 6.98%...which is the rate of return over the last 15 years, below average compared to historical standards) would yield:
Putting in $17K in 401K and $5K in Roth IRA for the year is automatic for me. What do you think?
I think you're on the right track. My 401k and Roth IRA make up a large chunk of my net worth and I got it there my maxing out my 401k to the $49K cap and my Traditional IRA/Roth IRA (I switch back and forth depending on circumstances) to the $5k cap. The more you can put away, the better.
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. It's entirely possible for most people to become wealthy (or at least financially comfortable) without eating rotten food and reusing tin foil (although I don't see anything wrong with reusing tin foil if it's clean).
