Age you think you'll be a millionaire?

[Henry]

How old do you think you'll be when you reach your first million dollars (net worth)? If you're already a millionaire, what age?

[Dave Kaminski]

I hope to reach the 1m net worth by 25. I'm opening a franchise this year and currently working on a couple investment property deals. I figure it should be halfway there by 22.

In lieu of AK's post below mine, I only plan to build my net worth for financial freedom so I may spend more time helping others as often and as efficiently as possible. I also owe my parents more than money can buy, as well as my mentors and close friends. I hope to spread knowledge and good cheer for a long time, and hope to have plenty of time to do it.

[A.K.Light]

I'd say some time in my 30s. However, I'm not really sure if I want to be a millionaire yet.

I'm sure I can live quit a great life without being a millionaire, so I'm just shooting for that first. If I need millions of dollars to do whatever I'll be doing in the future, then I'll probably already be in my 30s since it's not a specific goal of mine.

[kthdsn]

Why is everyone so interested in accumulating such a ridiculous amount of money? Since money transferred rather than created, there is a limited amount to go around. Making that much money means you are taking that much money away from others. Why not just earn what you need and leave it at that?

[Colin]

I've pretty much given up on ever having such definite goals. I'd be happy as a clam to be rolling in that sort of money, but I've come to realize that such fixed monetary goals with fixed time deadlines can be extremely counter-productive.

Think of it this way: if you follow the advice of a lot of goal-setting gurus, you end up writing your goals down on Post-It notes and sticking them on your bathroom mirror, the fridge and on your computer monitor. They're there to constantly remind you of what your goal is. At first this can even be motivating, but as the days drag on, being constantly reminded of your goal is only a reminder of what you don't currently have. Every day you're reminded of a lack of something in your life; the void between where you are now and where you want to be. It can create a spiral of negative thinking that can cause you to reject your goals outright, thinking that you're never going to be able to achieve them.

It's far healtier to create an objective based reality for yourself, rather than a goal orientated one. What do I mean by that?

Have objectives that you can work on here and now, that you can reflect back on each and every day. These objectives should be actions and principles that would have ultimately led to your goal anyway (if you would have stated explicit goals, which you shouldn't!).

Let's look at this with an example from my own life. Most of my own personal development is focused on my daily trading and investing; I'm constantly looking to make myself a better trader.

I once had goals such as: I want to be a full-time trader, such that I'm financially indepedent by my 35th birthday (which was about 2 years away at the time). The enormity of the task and the stark deadline I had given myself soon led me to question my ability to ever accomplish such a huge undertaking.

Once I realised the futility and counter-productiveness of such goals, I scraped using them. In its place I developed an objective that I could work on day-to-day, something that I could measure myself against in the here and now.

My current objective is to trade profitably and consistently, following my trading plan. My objective has to allow for flexibility, as you don’t always end up exactly where you had planned. Focusing on a goal prevents you from being open and flexible to alternate opportunities that come along.

An objective allows you to positively reinforce your actions each and every day. Before you know it, who knows what great things you'll have accomplished.

[Colin]

Originally Posted by kthdsn

Why is everyone so interested in accumulating such a ridiculous amount of money? Since money transferred rather than created, there is a limited amount to go around.

Ah, money can be such a nebulus thing.

You are incorrect in stating that money can never be created. Your central bank (the Bank Of England), and most other central banks (such as the European Cenral Bank and the Federal Reserve Bank in the US), can quite happily create money right out of thin air each and every day. Such is the wonder of living in a world of fiat currencies and fractional reserve banking systems.

It is a fascinating subject, and you might find a book such as 'The Creature from Jekyll Island' by G. Edward Griffin enlightening.

Alternatively, watch Aaron Russo's latest movie: 'America: Freedom to Fascism', where he takes an indepth look at the Fed and what a fiat currency such as the dollar has gotten us. You can watch the full movie free on Google video here (link is approved and sanctioned by Aaron Russo and appears on their offical website).

[annie]

Originally Posted by kthdsn

Why is everyone so interested in accumulating such a ridiculous amount of money? Since money transferred rather than created, there is a limited amount to go around. Making that much money means you are taking that much money away from others. Why not just earn what you need and leave it at that?

WOW...of all places to see a quote like this, I would expect this the last place on earth to read....there is a limited amount of money to go around.

There really isn't. Maybe "paper-wise"...but no, they'd create more if the economy could sustain it.

First of all, a million dollars in net worth isn't really that much. Not if you're thinking about a nice home and decent investments. My husband doesn't want to retire until we have 3 mil in investments...so the $750,000 house doesn't count!

Here's why I think it's a great desire to acquire a million dollars....because you can get out of the rat-race. You can live off the passive income...and devote your life to your cause. At approximately $100,000 return on your $1 million investment, that should give you just enough to support a family and contribute both financially and time-wise to your "causes".

It's a great goal.....

Acquiring more than a million or two.....too worldly for me....then you have begin "worrying" about your money and it takes up a lot of time and creates stress in how to take care of all your stuff....but that's just me. (and I don't know from experience...just have friends in that boat!)

annie

[mattinglot]

Originally Posted by kthdsn

Why is everyone so interested in accumulating such a ridiculous amount of money? Since money transferred rather than created, there is a limited amount to go around. Making that much money means you are taking that much money away from others. Why not just earn what you need and leave it at that?

That's not entirely true. You have a good point in that simply taking money from one person and transfering it to another simply makes one poor and another rich. A game of poker with your friends is an example. Economics actually recognizes this when computing GDP. If that's how you get rich then there is an ethical question there, particularly if you accumulate more wealth than you require.

However money CAN actually be created as well! It is all the time in fact. When you create a product or perform labor of value to people then you are creating or contributing something new, and thus there is a net gain there. Money is just a very convienent form of holding value so that the value you create may be exchanged easily for other forms of value created by others (so that we aren't still trying to barter 5 oxen for six baskets of fish). If this is the path someone chooses to fortune then they are creating gain rather enriching themselves through another's loss. I won't get into exactly how the money supply works (first year macro econ does this) but suffice it to say that a country cannot arbitrarily print money to create more wealth (see what happened in Germany after WWI). There is real value behind, which can be created through positive contributions.

All this being said, my friend and I decided back in high school that 28 is a good age for your first million. Time will tell if this manifests

[Henry]

Originally Posted by mattinglot

That's not entirely true. You have a good point in that simply taking money from one person and transfering it to another simply makes one poor and another rich. A game of poker with your friends is an example. Economics actually recognizes this when computing GDP. If that's how you get rich then there is an ethical question there, particularly if you accumulate more wealth than you require.

However money CAN actually be created as well! It is all the time in fact. When you create a product or perform labor of value to people then you are creating or contributing something new, and thus there is a net gain there. Money is just a very convienent form of holding value so that the value you create may be exchanged easily for other forms of value created by others (so that we aren't still trying to barter 5 oxen for six baskets of fish). If this is the path someone chooses to fortune then they are creating gain rather enriching themselves through another's loss. I won't get into exactly how the money supply works (first year macro econ does this) but suffice it to say that a country cannot arbitrarily print money to create more wealth (see what happened in Germany after WWI). There is real value behind, which can be created through positive contributions.

All this being said, my friend and I decided back in high school that 28 is a good age for your first million. Time will tell if this manifests

Good info. How old are you now Matt? Millionaire status at 28 would be phenomenal.

[helgi]

Paul Graham wrote about this distinction between money and wealth in How to Make Wealth.
I had always thought of money as a finite entity, and of economics as a zero sum game, but that article turned that whole illusion on its head for me.

Although my head doesn't want to let it through yet -- the zero sum illusion is hard to shake

[Jill]

No million here, nor any desire for it. (Although a million isn't very much these days.) I'm happy with the amount I currently have. I can pretty much do whatever I want, and I'm not even close to having a million. Living frugally is its own reward!

[Henry]

Originally Posted by Jill

No million here, nor any desire for it. (Although a million isn't very much these days.) I'm happy with the amount I currently have. I can pretty much do whatever I want, and I'm not even close to having a million. Living frugally is its own reward!

Amen sister. Frugality is the way to go.

[placebo]

it's kind of tricky question. Imagine that someone gives you 1 milion now. What would you do with it? Most of people will be scared of losing the many, every investment will be "not easy to choose", they will simply live in fear.

What would you do if you're milionare from your age of 30 till age of 60. What will you do then? You'll be adjusted to live comfortably and money is gone. Are you going to be able to handle that?

[Dave Kaminski]

Originally Posted by placebo

it's kind of tricky question. Imagine that someone gives you 1 milion now. What would you do with it? Most of people will be scared of losing the many, every investment will be "not easy to choose", they will simply live in fear.

What would you do if you're milionare from your age of 30 till age of 60. What will you do then? You'll be adjusted to live comfortably and money is gone. Are you going to be able to handle that?

If you're a millionaire at age 30, not only should you be able to increase your worth, you should have the knowledge of money that you can start from scratch without much trouble to a decent sustainable net worth again. You certainly wouldn't be the first person to do it.

[Leonard]

Making a million is not entirely impossible. In fact, every single one of us are millionaires in our lifetime. That is, if we save every single cent of our salary for the next 40 years (average of $2.5K a month). Needless to say, that is not possible.

And annie is right, it does take a couple of millions to retire comfortably, and still being able to sustain the current lifestyle.

Most millionaires, especially self-made ones, are more careful with how they spend their money. They lead normal lives, without driving fancy cars and dining at luxurious places. They are frugal. People like these will multiply their wealth, and not lose their millions.

I believed I have digressed. Anyway, my goal is to make my first million in 2 years, before 27.

[Henry]

Originally Posted by Leonard

Making a million is not entirely impossible. In fact, every single one of us are millionaires in our lifetime. That is, if we save every single cent of our salary for the next 40 years (average of $2.5K a month). Needless to say, that is not possible.

And annie is right, it does take a couple of millions to retire comfortably, and still being able to sustain the current lifestyle.

Most millionaires, especially self-made ones, are more careful with how they spend their money. They lead normal lives, without driving fancy cars and dining at luxurious places. They are frugal. People like these will multiply their wealth, and not lose their millions.

I believed I have digressed. Anyway, my goal is to make my first million in 2 years, before 27.

A million in 2 years? Are you almost there?

[Zach]

I'm hoping as soon as possible, but my reasons for wanting to be a millionaire are probably different than most people's.

[Dbarker]

45, three years from now.

Originally Posted by Zach

I'm hoping as soon as possible, but my reasons for wanting to be a millionaire are probably different than most people's.

What would those reasons be Zach? I'm thinking along the same lines and know that is the reason I haven't made it yet. I've been wanting it for the wrong reasons, but that is changing. It isn't about me having moneyonly for myself, it's having the ability to help others by having it.

[Milo Riano]

Here's why I think it's a great desire to acquire a million dollars....because you can get out of the rat-race. You can live off the passive income...and devote your life to your cause. At approximately $100,000 return on your $1 million investment, that should give you just enough to support a family and contribute both financially and time-wise to your "causes".

What's wrong with the rat-race? As long as you enjoy the journey then I see no problem with it. As long as you get to cash out 50 million dollars by the age of 50 then that would be fine really.

[thadroe]

It's amazing to see the diversity of goals out there. Some people want a million, some want more, some don't want it at all. Some want to stay away from the rat race, some want to embrace it.

This is what is wonderful though and what keeps things in balance naturally. We all have our own goals and our own purpose...the important thing is that it fulfills what we feel our purpose is and it helps us enjoy the journey of life.

I fully intend to reach 1 million in the next 2 years...and intend to push beyond that as much as I can. However, it's not really for the sake of having money. I could be very comfortable on far less. The whole reason for that goal is to remove myself so far from concerns about money that I have maximum flexibility to live out my purpose. Also, I feel that the more I have, the more I can put it to use in positive ways to make even more of an impact on society. So ultimately, I want to have large sums of money as a tool to help others.

Thad

[Zach]

Originally Posted by Dbarker

What would those reasons be Zach? I'm thinking along the same lines and know that is the reason I haven't made it yet. I've been wanting it for the wrong reasons, but that is changing. It isn't about me having moneyonly for myself, it's having the ability to help others by having it.

I'm not really interested in big fancy houses, expensive cars, etc...I just want the means to be able to help people out who need it. For instance, a close family member of mine badly needs a better car. If I could, I'd take care of that.

There is a man I know who has made himself very well-to-do through entrepreneurship, and he has retired from his business to travel to various parts of the world (such as India) to help people who need it most by building excellent schools, homes, and other buildings that Westerners really take for granted. Over there in that part of India, education isn't exactly popular, and most of the children grow up to participate in the "family business."

What I admire about him is he goes personally to supervise these building projects, he doesn't just give money to some random organization to "perhaps" use the money for what he gives it. I want to be able to do the same, someday.

[Henry]

To me, a million dollars would mean that I could quit my job and spend time with my family (when I have a family). I would live off of the interest. I know a million dollars isn't great by today's or future standards, but it's enough so I can exist and have time to play with my kids.

When I'm an old man, I hope I can say, "I spent as much time as possible with the people I love."

[Dave Kaminski]

Originally Posted by Henry

To me, a million dollars would mean that I could quit my job and spend time with my family (when I have a family). I would live off of the interest. I know a million dollars isn't great by today's or future standards, but it's enough so I can exist and have time to play with my kids.

When I'm an old man, I hope I can say, "I spent as much time as possible with the people I love."

Agreed. Completely. Althought i'm shooting for 10-11m or so, I'm doing it for almost the exact same reason. If I want a family, I want them to be able to have every opportunity and caring parents with at least a bit of free time. The 10-11m figure is so that I can have a few mil in each sector, so that if any investment falls through I have another are in which I can recoup.

Look at all the early riser posts xD. Lots of us here!

[kthdsn]

I find it interesting to note that those who want a million to enable them to spend time with their families don't actually have families yet.

[Henry]

Originally Posted by Dave Kaminski

Agreed. Completely. Althought i'm shooting for 10-11m or so, I'm doing it for almost the exact same reason. If I want a family, I want them to be able to have every opportunity and caring parents with at least a bit of free time. The 10-11m figure is so that I can have a few mil in each sector, so that if any investment falls through I have another are in which I can recoup.

Look at all the early riser posts xD. Lots of us here!

10-11m for the sole reason of spending time with your family? You're going to have the world's largest family. Either that or you're going to be spending time with them in a gold house. Just kidding.

Hooray early risers!

[mattinglot]

Originally Posted by Henry

Good info. How old are you now Matt? Millionaire status at 28 would be phenomenal.

I've got another 6 years to go, which simultaneously seems like forever and a very short period of time. I'm currently not rich by any stretch of the imagination, but my net worth is at least positive (an accomplishment for any student) and I am planting the seeds of high income in the future.

The frugal point is very interesting as it illustrates another funny thing about money. The term millionaire is rather insufficient. To attain a million dollars net worth in a reasonable period of time with a slightly above average income (say $70-$100K) requires great frugality. To keep that money requires slightly less frugality (standard 10% return on investment assumption applies here - hence $100 000 return per year, of which $10 000 - $30 000 must be re-invested to combat inflation, so you have about 70K extra per year you can now spend and your net worth can retain the same buying power it had last year). Hence you can be a millionaire and live a very average lifestyle - perhaps with a nicer car and an extra bedroom in the house.

Compare this to another type of millionaire - the one whose net worth is currently also a million dollars... but this time it's a CEO who makes $500 000 after tax per year. Same amount of money in the bank, but with the expectation of far more money per year than the first millionaire. This person can clearly afford a much more lavish lifestyle, even if he/she spends it 100% on consumables each year and doesn't use it to increase net worth (ie even after completely wasting $500K a year on wild parties this person retains the millionaire label). The lesson is that ultimately the amount of income you make per year (be it employment income, investment income, or jewel heist income) will play a big role in determining your possible lifestyle. When we think of millionaire we tend to think of the second type, but in reality simply knowing that someone is a millionaire doesn't tell us a whole about the kind of lifestyle they can afford to live. Income is very important.

And early rising is indeed part of the plan for success I get up between 5 and 6 every morning, parties excluded. It's 7:30 now and I've already showered, had breakfast, and solved a horrendously annoying JavaScript problem.

[Henry]

Here's something interesting:

Age: 20-29
Median Net Worth: $7,900
Top 25%: $36,000
Top 10%: $119,300

Age: 30-39
Median Net Worth: $44,200
Top 25%: $128,100
Top 10%: $317,800

Age: 40-49
Median Net Worth: $117,800
Top 25%: $338,100
Top 10%: $719,800

Age: 50-59
Median Net Worth: $182,300
Top 25%: $563,800
Top 10%: $1,187,600

Age: 60-69
Median Net Worth: $209,200
Top 25%: $647,200
Top 10%: $1,429,500

Source: Federal Reserve Board's 2004 Survey of Consumer Finances

Ref: Free Money Finance: Median Net Worths -- Are You Ahead or Behind?

[Leonard]

Originally Posted by Henry

A million in 2 years? Are you almost there?

Henry, I would be lying if I said I'm anywhere near. That is the reason why I gave myself 2 years. I turned 25 two months ago, and decided that while most people my age are facing the quarter-life crisis, I would like to embrace it, and achieve my first million. There are many who have done it before 25, so what's stopping me?

Since then, I have been planning what I need to do to reach my goal. Along the way, while implementing it, I realise and made certain mistakes. But hey, it's better to make the mistakes now then later on. Eventually, I decided on 3 streams of income to get me where i want.

1. My own business. As a self-employed, this gives me the advantage of being able to earn more. The sky's the limit. I'm paid according to the time I devote to my business. Afterall, income = the time spent x the value you create.

2. An internet business. The good thing about the internet is the global reach. I have a global audience of almost 900 million. How is it if I just reach 1% of them, and have them buy my product. And even if I do fail, the cost of it is relatively low compared to a brick and mortar business. And since it's an internet business, business is on 24/7.

3. Investments. Stocks and shares, unit trusts, options trading and so forth.

Lastly, it's down to cutting down my expenses and saving another 20 - 30 percent of unnecessary expenses, and reallocating this amount of money to either the business or investment.

[Leonard]

Originally Posted by mattinglot

And early rising is indeed part of the plan for success I get up between 5 and 6 every morning, parties excluded. It's 7:30 now and I've already showered, had breakfast, and solved a horrendously annoying JavaScript problem.

This, I concur wholeheartedly.

[ahimel]

Originally Posted by Leonard

1. My own business. As a self-employed, this gives me the advantage of being able to earn more. The sky's the limit. I'm paid according to the time I devote to my business. Afterall, income = the time spent x the value you create.

2. An internet business. The good thing about the internet is the global reach. I have a global audience of almost 900 million. How is it if I just reach 1% of them, and have them buy my product. And even if I do fail, the cost of it is relatively low compared to a brick and mortar business. And since it's an internet business, business is on 24/7.

3. Investments. Stocks and shares, unit trusts, options trading and so forth.

Sounds like a workable plan. We also are starting a business in January that we plan to build up to a franchise, and sell for $1,000,000 within a couple of years. At this point, I would technically be a millionaire. Even if we don't find a buyer or choose not to sell, I would own a business worth a million, and so would also technically be a millionaire.

2 years to a million is ambitious. Am I almost there? It really depends on how you define "almost there." I haven't technically started the business yet, so in that sense I'm nowhere close. But I've laid a lot of groundwork since I started thinking about being rich 6 years ago:

• I overcame the zero-sum mentality of economics
• I accepted that the best way to become rich is to provide value
• I learned enough about the stock market and financial terminology to become a licensed financial advisor
• I've worked for a small business
• I've helped start a small business
• I've met with and talked to a lot of people who own small businesses
• I've studied to learn what makes businesses successful
• I've studied to learn the differences between a small self-employment business and a large business
• I've learned about C-corps, S-Corps, LLCs, Tax requirements for businesses, and paperwork requirements for businesses
• I've learned how to write a business plan
• I've spend hours refining the best ways to launch this business

So in some sense, I really am "almost" there. The only thing I have left is the busywork to actually get it done.