Building Wealth

[Pretium]

For those on this board with a personal net worth > $1 million

 

What was your path to wealth (salary, bonuses, investments, etc.) and what are your general recommendations for those of us just starting our careers?

 

Thanks, and Happy Holidays Everyone!

[ScottHall]

Removed because it's not really in the spirit of the thread.

[oddballstocks]

Depends on what you want and when you want it right?

 

If you work a white collar job and earn $75k a year without ever receiving a raise, save 15% of your salary and it grows at 8% you'll have $2.9m in 40 years.  You'd probably have a very long and happy retirement with that setup.

 

That's the path to wealth for most Americans, work a job, save 15% invest.  Many(most?) on this board are on the fast track.  Being a millionaire in 20/30/40 years isn't quick enough.  So you see people shooting for the moon with their investments or starting funds.

 

If you want to have a million quickly you're going to need to start a business.  Either that or get extremely lucky with an investment you put your entire portfolio into, essentially a gamble.  Otherwise you'll have to start a business, grow it, nurture it and hopefully reap a return from it.  The business will either be worth enough on its own to provide the million, or it will be able to throw off extra cash to invest that will get you there quicker.

 

[innerscorecard]

Removed because it's not really in the spirit of the thread.

 

You know very well that's the best way to make people curious what you said.

[innerscorecard]

Depends on what you want and when you want it right?

 

If you work a white collar job and earn $75k a year without ever receiving a raise, save 15% of your salary and it grows at 8% you'll have $2.9m in 40 years.  You'd probably have a very long and happy retirement with that setup.

 

That's the path to wealth for most Americans, work a job, save 15% invest.  Many(most?) on this board are on the fast track.  Being a millionaire in 20/30/40 years isn't quick enough.  So you see people shooting for the moon with their investments or starting funds.

 

If you want to have a million quickly you're going to need to start a business.  Either that or get extremely lucky with an investment you put your entire portfolio into, essentially a gamble.  Otherwise you'll have to start a business, grow it, nurture it and hopefully reap a return from it.  The business will either be worth enough on its own to provide the million, or it will be able to throw off extra cash to invest that will get you there quicker.

 

The Eric path and the Gio path!

[KCLarkin]

I sold a business but the most reliable way is to learn how to save. If you control your spending habits, you can quickly build wealth and require less wealth. Once you get into the higher tax brackets, a dollar saved is worth two dollars earned.

 

The other path to wealth is to become an executive at a publicly traded company or get stock options at a tech company.

[rpadebet]

Marry someone already rich. Quickest way for sure.

[KCLarkin]

Or inherit it.

[oddballstocks]

I sold a business but the most reliable way is to learn how to save. If you control your spending habits, you can quickly build wealth and require less wealth. Once you get into the higher tax brackets, a dollar saved is worth two dollars earned.

 

The other path to wealth is to become an executive at a publicly traded company or get stock options at a tech company.

 

This is really the heart of the issue, learn to save, make it automatic and learn to live on less.

 

Anyone who doesn't know how to save runs out of money quickly, look at pro athletes, entertainers etc.  They have giant salaries coming in and huge expenses going out. 

 

Head over to Bogleheads.org, that place is filled with average people who learned to save and are all wealthy as a result.  Most just have normal jobs, engineers, doctors, managers, etc.  Some inspiring stories there as well, people who never made more than $50k who have close to a million saved and retire early.  If you learn to live on less you can quit earlier.

[frommi]

This is really the heart of the issue, learn to save, make it automatic and learn to live on less.

 

Anyone who doesn't know how to save runs out of money quickly, look at pro athletes, entertainers etc.  They have giant salaries coming in and huge expenses going out. 

 

Head over to Bogleheads.org, that place is filled with average people who learned to save and are all wealthy as a result.  Most just have normal jobs, engineers, doctors, managers, etc.  Some inspiring stories there as well, people who never made more than $50k who have close to a million saved and retire early.  If you learn to live on less you can quit earlier.

 

Thats probably the most reliable way to get rich. The moment you realize that spending doesn`t make you happier is the key to get wealthy. Save 50-80% of your income and you get rich fast, especially when combined with above average investing. I see money as my time, so i want to spend my time/money as efficient as possible.

 

For me the key was finding http://www.mrmoneymustache.com/ and www.earlyretirementextreme.com 4 years ago. After that i got rid of my big car, switched into a smaller apartment and slashed every unnecessary expense. I am near the finishing line already and can work for fun.

[premfan]

Depends on what you want and when you want it right?

 

If you work a white collar job and earn $75k a year without ever receiving a raise, save 15% of your salary and it grows at 8% you'll have $2.9m in 40 years.  You'd probably have a very long and happy retirement with that setup.

 

That's the path to wealth for most Americans, work a job, save 15% invest.  Many(most?) on this board are on the fast track.  Being a millionaire in 20/30/40 years isn't quick enough.  So you see people shooting for the moon with their investments or starting funds.

 

If you want to have a million quickly you're going to need to start a business.  Either that or get extremely lucky with an investment you put your entire portfolio into, essentially a gamble.  Otherwise you'll have to start a business, grow it, nurture it and hopefully reap a return from it.  The business will either be worth enough on its own to provide the million, or it will be able to throw off extra cash to invest that will get you there quicker.

 

Information spot on.

[Gamecock-YT]

I sold a business but the most reliable way is to learn how to save. If you control your spending habits, you can quickly build wealth and require less wealth. Once you get into the higher tax brackets, a dollar saved is worth two dollars earned.

 

The other path to wealth is to become an executive at a publicly traded company or get stock options at a tech company.

 

This is really the heart of the issue, learn to save, make it automatic and learn to live on less.

 

Anyone who doesn't know how to save runs out of money quickly, look at pro athletes, entertainers etc.  They have giant salaries coming in and huge expenses going out. 

 

Head over to Bogleheads.org, that place is filled with average people who learned to save and are all wealthy as a result.  Most just have normal jobs, engineers, doctors, managers, etc.  Some inspiring stories there as well, people who never made more than $50k who have close to a million saved and retire early.  If you learn to live on less you can quit earlier.

 

Mr. Money Mustache is also a good site.

[rpadebet]

"The Millionaire Next Door" - good book to read

 

http://www.amazon.com/Millionaire-Next-Thomas-Stanley-Ph-D-ebook/dp/B00CLT31D6/ref=sr_1_1?ie=UTF8&qid=1419350079&sr=8-1&keywords=millionaire+next+door

[DanielGMask]

It's actually not that hard. There are several paths to wealth, several! You need to start by defining what wealth means to you, no kidding, it's not the same for everybody. I consider myself wealthy, but a few of my business partners will say I'm not under their standards.

 

I'm currently writing a book (it should have been finished by now) on the subject and I've found a few habits and principles that improve your chances of becoming wealthy in your lifetime, all of them copied from other thinkers, meaning, there's nothing new in my book! These are the Principles and Habits I consider necessary:

 

PRINCIPLES

Define a Clear Purpose

Don't Get Too Comfortable

Live According to Your Possibilities

Invest Your Savings Wisely

Never Sell Anything You Wouldn't Buy

Do Business Only with People you Enjoy

Don’t Invest in Anything You Don’t Understand

Don’t Invest In Anything in Which You Can’t Make a Long Term Assessment

Be Happy. Enjoy the Ride

 

HABITS

Save

Become a Learning Machine

Don't Lose Money

Obsess Yourself with being Useful

Be Rational

Have Self-Control

Be Selfish

Focus

Have Faith in Yourself

 

Good luck!

[bizaro86]

The saving and investing is obviously key, but the rate of return you get really matters as well. I've done much better with real estate than with stock market investing, for reasons I don't totally understand. I started doing both in 2008/2009, which was excellent timing. I won't be able to keep up my real estate returns (which have been exceptional) for a few reasons mainly a lack of good deals and a reduction in leverage (which is a choice related to me now having something material to lose). If you buy anything that is materially undervalued with leveraged upside, you will do well over time.

 

On reflection, I suspect the improvement to my real estate returns has actually come from the switching costs. I've made many errors of impatience in the stock market, as I tend to sell much too soon. The five figure cost of selling a rental property tends to keep me from selling willy-nilly.

[tombgrt]

This is really the heart of the issue, learn to save, make it automatic and learn to live on less.

 

Anyone who doesn't know how to save runs out of money quickly, look at pro athletes, entertainers etc.  They have giant salaries coming in and huge expenses going out. 

 

Head over to Bogleheads.org, that place is filled with average people who learned to save and are all wealthy as a result.  Most just have normal jobs, engineers, doctors, managers, etc.  Some inspiring stories there as well, people who never made more than $50k who have close to a million saved and retire early.  If you learn to live on less you can quit earlier.

 

Thats probably the most reliable way to get rich. The moment you realize that spending doesn`t make you happier is the key to get wealthy. Save 50-80% of your income and you get rich fast, especially when combined with above average investing. I see money as my time, so i want to spend my time/money as efficient as possible.

 

For me the key was finding http://www.mrmoneymustache.com/ and www.earlyretirementextreme.com 4 years ago. After that i got rid of my big car, switched into a smaller apartment and slashed every unnecessary expense. I am near the finishing line already and can work for fun.

 

What fun is living if you have to cut every unnecessary expense?

 

Wasn't it Buffett (Watsa?) that said he wouldn't bet the farm on something if there was even a 1 in 100(00...) chance he lost it all?  Why wouldn't the same be true for life? Once you're 20, you have a yearly chance of 0,1% of dying or 1 in 1000 and that number grows rapidly as you grow older. Do you really want to risk not having any fun with your money before you die?

 

It's all fine if you're like Buffett who gets all his happiness out of investing, doing business and getting richer but almost no one is like that. Sure, you don't "need" anything past the basics, but buying those things experiences actually shapes your life in a big way. There aren't a lot of trips, restaurant visists, drinks with friends, day at [insert anything fun to do that costs money], ... that I would return for more money.  I'm sure a lot of extremely frugal people realize this as they get older after which they start to spend more. I saw it happening for the last 15-20 years with a family member and it has been great to see!  :)

 

[mjohn707]

What was your path to wealth (salary, bonuses, investments, etc.)

 

I was curious about this and looking for an excuse to avoid doing any work today ;)

 

sources

savings from salary 32%

savings from bonuses 31%

returns private investment 30%

gifts 2%

returns stocks 5%

 

balance sheet

private investment 72%

life insurance, cash value 2%

stocks 14%

ira 9%

cash 3%

 

 

 

 

[oddballstocks]

This is really the heart of the issue, learn to save, make it automatic and learn to live on less.

 

Anyone who doesn't know how to save runs out of money quickly, look at pro athletes, entertainers etc.  They have giant salaries coming in and huge expenses going out. 

 

Head over to Bogleheads.org, that place is filled with average people who learned to save and are all wealthy as a result.  Most just have normal jobs, engineers, doctors, managers, etc.  Some inspiring stories there as well, people who never made more than $50k who have close to a million saved and retire early.  If you learn to live on less you can quit earlier.

 

Thats probably the most reliable way to get rich. The moment you realize that spending doesn`t make you happier is the key to get wealthy. Save 50-80% of your income and you get rich fast, especially when combined with above average investing. I see money as my time, so i want to spend my time/money as efficient as possible.

 

For me the key was finding http://www.mrmoneymustache.com/ and www.earlyretirementextreme.com 4 years ago. After that i got rid of my big car, switched into a smaller apartment and slashed every unnecessary expense. I am near the finishing line already and can work for fun.

 

What fun is living if you have to cut every unnecessary expense?

 

Wasn't it Buffett (Watsa?) that said he wouldn't bet the farm on something if there was even a 1 in 100(00...) chance he lost it all?  Why wouldn't the same be true for life? Once you're 20, you have a yearly chance of 0,1% of dying or 1 in 1000 and that number grows rapidly as you grow older. Do you really want to risk not having any fun with your money before you die?

 

It's all fine if you're like Buffett who gets all his happiness out of investing, doing business and getting richer but almost no one is like that. Sure, you don't "need" anything past the basics, but buying those things experiences actually shapes your life in a big way. There aren't a lot of trips, restaurant visists, drinks with friends, day at [insert anything fun to do that costs money], ... that I would return for more money.  I'm sure a lot of extremely frugal people realize this as they get older after which they start to spend more. I saw it happening for the last 15-20 years with a family member and it has been great to see!  :)

 

Had a family friend who saved 60% of their pay, they are in the medical field and make a lot.  Very frugal, almost to a fault.  Their wife came down with Alzheimers and isn't doing well.  He suddenly realized that having a lot and never enjoying it isn't everything.  Went out and purchased a Porsche with cash, drives it daily.  The dealer didn't believe he was serious in his 20 yr old raggedy clothes. Said he wanted the car now and wanted to pay cash, they closed the deal and that was that.  So yes, sometimes it makes sense to live in the present, we never know when our time is up.

[AzCactus]

This is really the heart of the issue, learn to save, make it automatic and learn to live on less.

 

Anyone who doesn't know how to save runs out of money quickly, look at pro athletes, entertainers etc.  They have giant salaries coming in and huge expenses going out. 

 

Head over to Bogleheads.org, that place is filled with average people who learned to save and are all wealthy as a result.  Most just have normal jobs, engineers, doctors, managers, etc.  Some inspiring stories there as well, people who never made more than $50k who have close to a million saved and retire early.  If you learn to live on less you can quit earlier.

 

Thats probably the most reliable way to get rich. The moment you realize that spending doesn`t make you happier is the key to get wealthy. Save 50-80% of your income and you get rich fast, especially when combined with above average investing. I see money as my time, so i want to spend my time/money as efficient as possible.

 

For me the key was finding http://www.mrmoneymustache.com/ and www.earlyretirementextreme.com 4 years ago. After that i got rid of my big car, switched into a smaller apartment and slashed every unnecessary expense. I am near the finishing line already and can work for fun.

 

What fun is living if you have to cut every unnecessary expense?

 

Wasn't it Buffett (Watsa?) that said he wouldn't bet the farm on something if there was even a 1 in 100(00...) chance he lost it all?  Why wouldn't the same be true for life? Once you're 20, you have a yearly chance of 0,1% of dying or 1 in 1000 and that number grows rapidly as you grow older. Do you really want to risk not having any fun with your money before you die?

 

It's all fine if you're like Buffett who gets all his happiness out of investing, doing business and getting richer but almost no one is like that. Sure, you don't "need" anything past the basics, but buying those things experiences actually shapes your life in a big way. There aren't a lot of trips, restaurant visists, drinks with friends, day at [insert anything fun to do that costs money], ... that I would return for more money.  I'm sure a lot of extremely frugal people realize this as they get older after which they start to spend more. I saw it happening for the last 15-20 years with a family member and it has been great to see!  :)

 

Had a family friend who saved 60% of their pay, they are in the medical field and make a lot.  Very frugal, almost to a fault.  Their wife came down with Alzheimers and isn't doing well.  He suddenly realized that having a lot and never enjoying it isn't everything.  Went out and purchased a Porsche with cash, drives it daily.  The dealer didn't believe he was serious in his 20 yr old raggedy clothes. Said he wanted the car now and wanted to pay cash, they closed the deal and that was that.  So yes, sometimes it makes sense to live in the present, we never know when our time is up.

 

Oddball---It really depends on the age of the person you are talking about.  For someone in their 20's and 30's the opportunity cost of funds is significantly higher than someone in their 60's.  I am guessing the family friend you reference has a lot more money and a lot less investing time than someone in their 20's.  That being said giving yourself a treat--short vacation, mini shopping spree when you increase your net worth X% can be a good way of reinforcing positive behavior.

 

 

[oddballstocks]

This is really the heart of the issue, learn to save, make it automatic and learn to live on less.

 

Anyone who doesn't know how to save runs out of money quickly, look at pro athletes, entertainers etc.  They have giant salaries coming in and huge expenses going out. 

 

Head over to Bogleheads.org, that place is filled with average people who learned to save and are all wealthy as a result.  Most just have normal jobs, engineers, doctors, managers, etc.  Some inspiring stories there as well, people who never made more than $50k who have close to a million saved and retire early.  If you learn to live on less you can quit earlier.

 

Thats probably the most reliable way to get rich. The moment you realize that spending doesn`t make you happier is the key to get wealthy. Save 50-80% of your income and you get rich fast, especially when combined with above average investing. I see money as my time, so i want to spend my time/money as efficient as possible.

 

For me the key was finding http://www.mrmoneymustache.com/ and www.earlyretirementextreme.com 4 years ago. After that i got rid of my big car, switched into a smaller apartment and slashed every unnecessary expense. I am near the finishing line already and can work for fun.

 

What fun is living if you have to cut every unnecessary expense?

 

Wasn't it Buffett (Watsa?) that said he wouldn't bet the farm on something if there was even a 1 in 100(00...) chance he lost it all?  Why wouldn't the same be true for life? Once you're 20, you have a yearly chance of 0,1% of dying or 1 in 1000 and that number grows rapidly as you grow older. Do you really want to risk not having any fun with your money before you die?

 

It's all fine if you're like Buffett who gets all his happiness out of investing, doing business and getting richer but almost no one is like that. Sure, you don't "need" anything past the basics, but buying those things experiences actually shapes your life in a big way. There aren't a lot of trips, restaurant visists, drinks with friends, day at [insert anything fun to do that costs money], ... that I would return for more money.  I'm sure a lot of extremely frugal people realize this as they get older after which they start to spend more. I saw it happening for the last 15-20 years with a family member and it has been great to see!  :)

 

Had a family friend who saved 60% of their pay, they are in the medical field and make a lot.  Very frugal, almost to a fault.  Their wife came down with Alzheimers and isn't doing well.  He suddenly realized that having a lot and never enjoying it isn't everything.  Went out and purchased a Porsche with cash, drives it daily.  The dealer didn't believe he was serious in his 20 yr old raggedy clothes. Said he wanted the car now and wanted to pay cash, they closed the deal and that was that.  So yes, sometimes it makes sense to live in the present, we never know when our time is up.

 

Oddball---It really depends on the age of the person you are talking about.  For someone in their 20's and 30's the opportunity cost of funds is significantly higher than someone in their 60's.  I am guessing the family friend you reference has a lot more money and a lot less investing time than someone in their 20's.  That being said giving yourself a treat--short vacation, mini shopping spree when you increase your net worth X% can be a good way of reinforcing positive behavior.

 

They'd been saving like this since they were in their 20s, they're in their 60s now.  Multi-millionaire who never enjoyed a cent.  Now they're trying to squeeze life into what remains.  Is there an opportunity cost, sure, but I know if you asked him he would say he'd rather have spent it earlier and enjoyed it while his wife was ok.  You never know what will happen.  Everyone in their 20s here thinks they're invincible and will live forever, everyone older knows that's not true. 

[AzCactus]

This is really the heart of the issue, learn to save, make it automatic and learn to live on less.

 

Anyone who doesn't know how to save runs out of money quickly, look at pro athletes, entertainers etc.  They have giant salaries coming in and huge expenses going out. 

 

Head over to Bogleheads.org, that place is filled with average people who learned to save and are all wealthy as a result.  Most just have normal jobs, engineers, doctors, managers, etc.  Some inspiring stories there as well, people who never made more than $50k who have close to a million saved and retire early.  If you learn to live on less you can quit earlier.

 

Thats probably the most reliable way to get rich. The moment you realize that spending doesn`t make you happier is the key to get wealthy. Save 50-80% of your income and you get rich fast, especially when combined with above average investing. I see money as my time, so i want to spend my time/money as efficient as possible.

 

For me the key was finding http://www.mrmoneymustache.com/ and www.earlyretirementextreme.com 4 years ago. After that i got rid of my big car, switched into a smaller apartment and slashed every unnecessary expense. I am near the finishing line already and can work for fun.

 

What fun is living if you have to cut every unnecessary expense?

 

Wasn't it Buffett (Watsa?) that said he wouldn't bet the farm on something if there was even a 1 in 100(00...) chance he lost it all?  Why wouldn't the same be true for life? Once you're 20, you have a yearly chance of 0,1% of dying or 1 in 1000 and that number grows rapidly as you grow older. Do you really want to risk not having any fun with your money before you die?

 

It's all fine if you're like Buffett who gets all his happiness out of investing, doing business and getting richer but almost no one is like that. Sure, you don't "need" anything past the basics, but buying those things experiences actually shapes your life in a big way. There aren't a lot of trips, restaurant visists, drinks with friends, day at [insert anything fun to do that costs money], ... that I would return for more money.  I'm sure a lot of extremely frugal people realize this as they get older after which they start to spend more. I saw it happening for the last 15-20 years with a family member and it has been great to see!  :)

 

Had a family friend who saved 60% of their pay, they are in the medical field and make a lot.  Very frugal, almost to a fault.  Their wife came down with Alzheimers and isn't doing well.  He suddenly realized that having a lot and never enjoying it isn't everything.  Went out and purchased a Porsche with cash, drives it daily.  The dealer didn't believe he was serious in his 20 yr old raggedy clothes. Said he wanted the car now and wanted to pay cash, they closed the deal and that was that.  So yes, sometimes it makes sense to live in the present, we never know when our time is up.

 

Oddball---It really depends on the age of the person you are talking about.  For someone in their 20's and 30's the opportunity cost of funds is significantly higher than someone in their 60's.  I am guessing the family friend you reference has a lot more money and a lot less investing time than someone in their 20's.  That being said giving yourself a treat--short vacation, mini shopping spree when you increase your net worth X% can be a good way of reinforcing positive behavior.

 

They'd been saving like this since they were in their 20s, they're in their 60s now.  Multi-millionaire who never enjoyed a cent.  Now they're trying to squeeze life into what remains.  Is there an opportunity cost, sure, but I know if you asked him he would say he'd rather have spent it earlier and enjoyed it while his wife was ok.  You never know what will happen.  Everyone in their 20s here thinks they're invincible and will live forever, everyone older knows that's not true.

 

Saying "Everyone in their 20s here thinks they're invincible and will live forever, everyone older knows that's not true. " to me appears to be a gross exaggeration.  I think that the reason that people in their 20's are on this forum is to find ways to improve their well being sooner rather than later.  In order to do that one would have to sacrifice instant gratification now in order to have more later on.  I am not saying people younger than 60 should not enjoy their money at all.  However, if someone says they should always do what they want and live in the moment that could lead to some very impulsive decisions.   

[valueorama]

As you can see from differing opinions, everything in moderation is the best path.

 

Just remember that A penny saved is a penny earned. Just be rational.

[ScottHall]

For the guy who asked, my post was similar to Nate's but not near as eloquent.

 

I think he's right, though. It really depends on what you find enjoyable, but if you think there's any chance 20 (30, 40) years from now that you're going to look back on the nights you spent reading 10-Ks instead of taking your wife out, playing with your kids, seeing friends, etc. and regret it, then you need to reassess your priorities.

 

Let's be honest. Looking up individual investments for selection can be time consuming, and there's a very good chance that you won't beat the market. And even if you do, there's an even better chance that it won't be enough to justify the opportunity cost of your time. Time is a very valuable thing - once it is spent, you can never get it back.

 

I think most people would be better off financially and emotionally just putting their investable money into index funds or giving it to a manager whose processes you think are sound. Odds are good you'll detract value, and if you add value... well what does it matter if you retire with $2 million or $20 million, really.

 

Frills aside, you'll do just fine on either amount... so is it really worth dedicating a portion of your life to the extra? For some of you, maybe. But for many of you, I wouldn't be surprised if you come to regret it. And that's if you're successful at adding value. If you look back and find that all those hours were a waste? Well, that'll be a real bitter pill to swallow.

 

That said, if you genuinely find this fun, have at it. Just don't forget that as far as we know, life is finite. You only get to spend each day once. So spend it wisely.

[Patmo]

This is really the heart of the issue, learn to save, make it automatic and learn to live on less.

 

Anyone who doesn't know how to save runs out of money quickly, look at pro athletes, entertainers etc.  They have giant salaries coming in and huge expenses going out. 

 

Head over to Bogleheads.org, that place is filled with average people who learned to save and are all wealthy as a result.  Most just have normal jobs, engineers, doctors, managers, etc.  Some inspiring stories there as well, people who never made more than $50k who have close to a million saved and retire early.  If you learn to live on less you can quit earlier.

 

Thats probably the most reliable way to get rich. The moment you realize that spending doesn`t make you happier is the key to get wealthy. Save 50-80% of your income and you get rich fast, especially when combined with above average investing. I see money as my time, so i want to spend my time/money as efficient as possible.

 

For me the key was finding http://www.mrmoneymustache.com/ and www.earlyretirementextreme.com 4 years ago. After that i got rid of my big car, switched into a smaller apartment and slashed every unnecessary expense. I am near the finishing line already and can work for fun.

 

What fun is living if you have to cut every unnecessary expense?

 

Wasn't it Buffett (Watsa?) that said he wouldn't bet the farm on something if there was even a 1 in 100(00...) chance he lost it all?  Why wouldn't the same be true for life? Once you're 20, you have a yearly chance of 0,1% of dying or 1 in 1000 and that number grows rapidly as you grow older. Do you really want to risk not having any fun with your money before you die?

 

It's all fine if you're like Buffett who gets all his happiness out of investing, doing business and getting richer but almost no one is like that. Sure, you don't "need" anything past the basics, but buying those things experiences actually shapes your life in a big way. There aren't a lot of trips, restaurant visists, drinks with friends, day at [insert anything fun to do that costs money], ... that I would return for more money.  I'm sure a lot of extremely frugal people realize this as they get older after which they start to spend more. I saw it happening for the last 15-20 years with a family member and it has been great to see!  :)

 

Where did he say he stopped living? He said he got rid of his big car and lives in a smaller apartment. He cut the two biggest expenses anyone has right in the fat. Seems quite reasonable to me.

[oddballstocks]

For the guy who asked, my post was similar to Nate's but not near as eloquent.

 

I think he's right, though. It really depends on what you find enjoyable, but if you think there's any chance 20 (30, 40) years from now that you're going to look back on the nights you spent reading 10-Ks instead of taking your wife out, playing with your kids, seeing friends, etc. and regret it, then you need to reassess your priorities.

 

Let's be honest. Looking up individual investments for selection can be time consuming, and there's a very good chance that you won't beat the market. And even if you do, there's an even better chance that it won't be enough to justify the opportunity cost of your time. Time is a very valuable thing - once it is spent, you can never get it back.

 

I think most people would be better off financially and emotionally just putting their investable money into index funds or giving it to a manager whose processes you think are sound. Odds are good you'll detract value, and if you add value... well what does it matter if you retire with $2 million or $20 million, really.

 

Frills aside, you'll do just fine on either amount... so is it really worth dedicating a portion of your life to the extra? For some of you, maybe. But for many of you, I wouldn't be surprised if you come to regret it. And that's if you're successful at adding value. If you look back and find that all those hours were a waste? Well, that'll be a real bitter pill to swallow.

 

That said, if you genuinely find this fun, have at it. Just don't forget that as far as we know, life is finite. You only get to spend each day once. So spend it wisely.

 

Scott great points.  There is a cost to anything we do.  Investing can take time from family, or from a job, or whatever.  I've known people in terrible marriages that can't stand their kids, so staying at work until everyone was asleep was their escape.  To them there was zero opportunity cost to being a workaholic, they hated every other aspect of their life, work was better.  But for others that isn't always true.

 

I worked a job where we had to stay until 10-11pm every Tuesday.  To all the investing martyrs on here working 80 hours a 45 hour mandatory week sounds like a walk in the park.  But when everyone else is only doing 40 that extra five hours sucked.  Especially because most weeks we had nothing to do, so I sat captive in the office all night.  At the time I wasn't married so it wasn't terrible, I just sucked it up and went with it.  I had co-workers with families and kids and it was much more stressful for them, sitting around doing nothing because we had to.  That was part of the cost of the job, if you wanted to work at this place that's what you did.  On a side note companies that make you stay late on Tuesdays have lots of fire drill emergencies at other weird times.  I ended up working a lot of weekends and other nights as well, and eventually the cost was too much and I left.

 

Investing is the same.  For many on here those Tuesday nights have zero cost.  It's either reading 10-K's or watching TV.  I'd say the 10-K is worth it in that situation.  But it's not always clear cut like that.  Family or work obligations can happen as well.  Then there's a real cost, do you focus on investing or spend time with an ailing parent?  In the long run monetarily investing works out, but you can't get time back.

 

Dshachory made the point that those here in their 20s want to enrich their lives.  I agree, I'm here for the same reason.  But don't let the goal blind you to life.  I've met a few people who are so singularly focused on getting rich and retiring that they miss life.  Not to get philosophical or anything, but no day is guaranteed.  When you're young you'll live forever.  Kids aren't supposed to die etc.  I understand this thinking fully, I lived it.  What changed it was an incident with one of my kids when they were 6-mo old.  They were on the hinge of death and I was keeping them alive by breathing for them.  We had a scary stay in an ICU, but thankfully he's fine.  But that morning was like any other morning until suddenly it wasn't.  How many people are living ordinary lives until suddenly one morning they find out they have cancer?  It took a scary event to wake me up so to speak, but my hope is that others can realize it without going through something similar themselves.

 

I guess my rambling point is that you don't need to invest or have money to be rich.  If you're alive and healthy you're rich, enjoy that.  I have relatives who put off life until they were older only to find they weren't healthy enough to enjoy their savings.  I had a relative suddenly wake up with cancer and a few months later they were dead.  They were very young with a kid, things like this happen.  Everything is normal until it isn't.

 

So to piggy back off Scott really take a deep look and consider what your goals are in life.  Like I posted earlier you can work, save 15% in index funds and do quite well.  Is the time spent investing taking away from something else that's better?  Is having $3m vs $4m when you're 70 going to make much of a difference? 

 

Let me put it another way.  What could you buy with the extra money from your job or extra time investing that would be worth more than whatever else you'd be doing with that time?