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Thread: How a 27 year old became a millionaire

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    Default How a 27 year old became a millionaire


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    Default Re: How a 27 year old became a millionaire

    This dude is a friend of a friend: back in the navy, I heard he was the chapest dude ever. No wonder he's a millionaire now.

    However, he's hardly the only sailor who had done this. I had a landlord (and eventually good friend thorugh my husband) who, after doing his time, invested in real estate and also saw his first million quite recently (he also read "Think and Grow Rich"). These dudes stash all their sea pay, their hazarzous pay and bonuses and live in the ship and/or barracks, eat at the mess deck/galley, and rely solely on MWR for leisure.
    Last edited by Jay12; 11-08-2014 at 12:16 PM.





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    Default Re: How a 27 year old became a millionaire

    It's actually pretty easy to become a millionaire these days. Well, maybe not "easy". You just need to save and invest like crazy. I can get there in 16 years if I invest around 3k per month, which isn't unreasonable. Many people manage to do it fast by being super thrifty and living well below their means, and saving like 75% of their income.

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    Default Re: How a 27 year old became a millionaire

    ^^^ that's indeed true for relatively high earning dancers, camgirls and escorts as well. As you point out ...

    - step one is to be able to save as much money as possible. Indeed this requires living 'well within your means', avoiding frivolous / luxury expenditures etc. As you allude, it should not be extremely difficult for a serious dancer, camgirl or escort to set aside $2-3,000 per month.

    - step two is to invest that money in a manner that will produce additional 'passive' earnings. This can take the form of interest earnings, dividend earnings, capital gains, etc. Generally speaking, after-tax returns of 5% are typically possible versus minimal loss risk.

    Based on 10 years worth of $2,000 per month 'contributions' and a 5% rate of return, that girl would have accumulated $312,000 ... which will then provide ~$16,000 worth of passive income in every future year.

    Based on 16 years worth of $3,000 per month 'contributions' and a 5% rate of return, that girl would have accumulated $883,000 ... which will then provide ~$44,000 worth of passive income in every future year.

    Arguably, the larger problem is likely to be that 'a million dollars ain't what it used to be' ... meaning that the dollar denominated price levels of everything from food to energy to cars to insurance are likely to rise at a rate that is equal to or greater than the 5% 'safe' rate of return.

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    Default Re: How a 27 year old became a millionaire

    ^^ Yeah, it's a really exciting prospect!! I love reading financial independence blogs. I'm not sure how the issue of inflation is tackled, though, as you mentioned. I guess that's where frugality comes in handy. If you have your home & cars paid off, don't waste electricity, make your groceries last (or grow your own vegetables, etc.), and just generally keep your spending down, then that $44k should be more than enough to live on, regardless of inflation (I'm guessing?)

    It's a goal I'd really like to work towards, but I'm way waaaayyyy far off from it now (negative net worth and my work habits are shit).

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    Default Re: How a 27 year old became a millionaire

    ^^^ obviously nobody can reliably predict the economic future. But indeed you hit on some major points ...

    - paying back borrowed money with interest charges is the worst 'investment' one can make ( assuming that the borrowed money will be used for 'consumption' versus a productive 'capital investment'. Thus being a diligent saver, and paying cash for a car and/or home, provides an effective rate of return that is higher than any other type of low risk investment.

    - 'sweat equity' ... be it in the form of growing your own vegetables or ( partially ) constructing your own home ... is a very 'productive' investment. This is arguably due to the fact that your 'sweat' is tax exempt !!!

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    Default Re: How a 27 year old became a millionaire

    Quote Originally Posted by Melonie View Post

    Arguably, the larger problem is likely to be that 'a million dollars ain't what it used to be' ... meaning that the dollar denominated price levels of everything from food to energy to cars to insurance are likely to rise at a rate that is equal to or greater than the 5% 'safe' rate of return.
    No they're not. Over the past 30 years, the annual inflation rate has exceeded 5% once. There's no reason to think that's going to change. The 30 year rate for a treasury bill is approximately 3 percent, so the market is expecting inflation below 3 percent over the next 30 years.

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    Default Re: How a 27 year old became a millionaire

    ^^^ that's technically true if you use official gov't CPI statistics, and don't single out rising costs of food, energy, rent / property taxes, insurance etc. which comprise a major part of household budgets for people earning $41,000 per year !!! But, indeed, computers, luxury cars, big screen TV's, middle class housing etc. have not risen in price in recent years.

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    Default Re: How a 27 year old became a millionaire

    Late to the thread, but wanted to add, I know someone who got rich this way. This is the one of the easiest ways to build wealth when young (have an employer that pays a lot of living costs and get good at saving money.)

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    Default Re: How a 27 year old became a millionaire

    though I never had an employer covering my living costs, I rented out the mainfloor of the small old farmhouse that I purchased in 2008. I lived in the basement and the mainfloor covered the mortgage and property taxes. I split the utilities 60/40 with the mainfloor tenants and this covered 75% of my living expenses. I invested all of my income in stocks and danced from 2008 to 2014. My goal was to achieve $2million saved, but that did not happen. I made $650,000 in those 6 years and my stock portfolio is currently worth $642k. This involved much learning and many up and downs. My new house is a modest $385k house and I have about $290k mortgaged on it, not the one I lived in the basement anymore. Adjusting to post adult career income was difficult at first. My first job paid $60k (marketing & sales), then second was a step up in role, but less $ ($47k) (membership and events coordinator), now I am in an Executive Director (C-level) role and even though I only make $55k, I have control over my future earnings because I am responsible for the revenue my business generates. One that I came into a failing business to turn it around. I'll get the raise and the accolades of accomplishments! The salary is something I know that I can double and it would be easy to justify to the board of directors... Nonetheless, I'm still hoping to also be a millionaire by age 27.

    By the way - my dancing career has done so much more to prepare myself for the executive position that I am in now than I could have gained from any business program! Finance is pretty easy to learn when you have accountants and software to make it simple. Dancing has given me confidence to run meetings, sell, negotiate, and to 'read people'. It has made me an effective leader!
    Oh Canada, we stand on cars and freeze...

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    Default Re: How a 27 year old became a millionaire

    Didn't zerohedge post something about this story being BS?
    "There are different kinds of darkness. There is darkness that frightens, the darkness that soothes, the darkness that is restful. There is the darkness of lovers, and the darkness of assassins. It becomes what the bearer wishes it to be, needs it to be. It is not wholly bad or good."
    - The Court of Mist and Fury

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    Default Re: How a 27 year old became a millionaire

    I don't know if it was Zerohedge, but I read subsequent articles disclosing that 75-80% of this 27-year old millionaire's wealth was inherited from his deceased parents.

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    Default Re: How a 27 year old became a millionaire

    Quote Originally Posted by Danny Ocean View Post
    I don't know if it was Zerohedge, but I read subsequent articles disclosing that 75-80% of this 27-year old millionaire's wealth was inherited from his deceased parents.
    Inheriting well is always an effective shortcut to riches. When one does inherit well, then wealth management becomes a much more important factor. Those who make money by building companies, have fewer wealth management problems because "growth" takes care of most of that.

    Z

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    Default Re: How a 27 year old became a millionaire

    Quote Originally Posted by Athenathefabulous View Post
    we are all perverts in the SC in my opinion. Hes a pervert, you're a pervert, I'm a pervert.

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