Want to learn how to become a millionaire by 30? Here’s my story on how I reached a million dollar net worth in my late-20s. It involved a lot of luck, a lot of effort, and a lot of risk. But I believe all Financial Samurai readers will eventually become millionaires.
Now that I’m in my mid-40s, in retrospect, I should have taken even more risk. Taking more calculated risk is a key theme if you want to become a millionaire at a relatively young age. Move to where you have the most career opportunity. The second key theme to become a millionaire by age 30 is to own appreciating assets that work hard for you.
Thanks to inflation, it takes at least $3 million to live the lifestyle of a real millionaire today. If you own assets like real estate, stocks, and businesses, inflation will start working for you. Don’t make life harder than it already is!
How To Become A Millionaire By Age 30: Financial Upbringing
Growing up in a middle class household made me strong. My parents always drove beaters and frowned upon ordering anything other than water when we went out to eat.
I knew my parents were not rich because their incomes were in the public domain as foreign service officers. As a result, I made a conscious choice in high school not to attend one of the two private colleges that had accepted me. Instead, I went to William & Mary, which cost $2,890 – $3,200 a year in tuition from 1995-1999. I needed to save money.
We were by no means poor. We just pulled up to parties in a paint-less 1976 Nissan Datsun alongside Audis, Mercedes, and BMWs for the four years we lived in Kuala Lumpur, Malaysia between 1986-1990. It was very mortifying as a kid.
I knew nothing of expensive shoes because I had none. My wealthier friend gave me his old Air Jordans 4s that were two sizes too large. I couldn’t even afford a camera or a Nintendo game system. We led comfortable lives, but didn’t have more than we needed.
I was always curious about my wealthier friends. Many of their parents were business owners. So one day I told my father I too wanted to be a businessman.
By the time I was 13 I was hooked on every single episode of “The Lifestyles Of The Rich & Famous,” narrated by Robin Leech. A million dollar house and a $40,000 sports car. What a life! I thought to myself in the 8th grade. Might as well give it a go. That’s when I started really hitting the books.
Millionaire By 30 Money Mindset
If you want to become a millionaire by 30, you must adopt a strong money mindset. Know that there is money everywhere for the taking. You’ve got to believe you deserve to be rich.
Further, becoming a millionaire by 30 is becoming more common rather than the exception thanks to inflation. After all, $3 million is the new $1 million today.
There are so many standard ways to become a millionaire. If you don’t become a millionaire by 30, you will eventually get there with enough time.
If you work for 40 years and save and invest just 20% of your after-tax paycheck a year, there is no doubt in my mind you will amass at least one million dollars. Compounding is a powerful force.
Maxing out your 401K for 30+ years will also most likely lead to over $1 million dollars as well. Historical stock and bond market returns plus company match are on your side.
We’ve got financial planners, personal finance blogs, television, books and even free financial tools to help you build and track your wealth. So many resources make building wealth much easier now than in the past. Let’s look at three reasons why becoming a millionaire by 30 is easier than ever before.
Three Reasons Why The First Million Could Be The Easiest
1) Tremendous energy.
When we first graduate from high school or college, we have a tremendous amount of energy to show what we can do after all our education. We’re hungry, motivated, and need to prove to others and to ourselves our worth. 60-90 hour work-weeks are no problem!
Unfortunately, so many of us piss away our youth. We buy new cars without following my 1/10th rule for car buying. Some of us get into expensive credit card debt. And a lot of us don’t to our elders and think the world owes us something. Forget it folks.
Nobody owes us anything. But we owe it to ourselves and to our parents who sacrificed all that time and money raising us to give life everything we’ve got.
2) Less dependents.
Most of us won’t have children by the time we graduate from college. As a result, we can focus 100% of our efforts on generating wealth by developing our careers or our businesses.
Compare ourselves to middle aged adults with two children, a mortgage, and aging parents to take care of. We are like finicky Ferraris on a starting line ready to blow away our older model competitors.
I’m now a dad to two young children. As a result, I’ve got to wake up by 5 am every morning to write before my children get up. Otherwise, nothing would get done on Financial Samurai. By the time 1 pm roles around, I’m exhausted playing with my kids. Take advantage of your youth!
3) Nothing to lose.
When we graduate with nothing, we have nothing to lose. Compare that with people with property, stocks, and other investments during economic downturns, and they have everything to lose.
With very little assets, we should be taking more risks. Now is the time to start a company, invest in that growth stock, take a new job opportunity, or move half way across the world on a hunch that good things might happen. If we don’t take risks while we are young, we certainly aren’t going to take them when we are old.
How To Become A Millionaire By 30
I had no idea I became a millionaire at age 28 until two years later when I did my first detailed net worth spreadsheet in 2007. It’s easier to achieve something when we don’t even realize what we’re doing.
I was too busy saving, investing, working, and trying not to blow my money on things that I didn’t need. I was one of those “Super Motivated Boyfriends” (SMBs) who were impossible to lock down.
Like most people believe, 30 is a big milestone. Ever since college I told myself I was either going to make it, know that I was going to make it, or be an absolute failure by 30.
The fear of being a failure at 30 with no job, no woman, no savings, no investments, and no world experiences made me so motivated to not mess things up. I felt I needed to become a millionaire by 30 in big cities like New York and San Francisco.
A painful two years of working 70+ hour weeks right out of college with difficult bosses also got me into overdrive to figure out a way not to work forever!
There was no fanfare when I discovered the seven figure milestone had been achieved. Just the realization that time passes more quickly as we age. I had to make the most of my opportunities since nothing lasts forever.
Keep Aggressively Saving And Investing
Years later, I’ve continued to grow my net worth with a variety of passive and alternative active incomes. My family is a great motivator to keep on going. The last thing my wife and I want to do is go back to work while our children are still young.
If you’ve been reading my posts from how to save for retirement and how to properly invest for your future, there’s no magic behind wealth accumulation.
Amassing wealth is about savings, discipline, perseverance, luck, an X Factor, and the belief that you too deserve to be wealthy. Eventually you will have more than enough so that you’ll either retire or keep on playing for fun.
After leaving the work force for good at the age of 34 in 2012, I decided to keep on playing by building Financial Samurai into the best possible personal finance blog I could. When people tell me I’m lucky, I agree! As a result, I’ve tried to re-create my luck by writing 3-4X a week every year since 2009.
After 11+ years of writing on Financial Samurai, I believe one important secret to wealth and success is grit. If you can demonstrate unwavering commitment with one thing for at least 10 years, I strongly believe you will succeed. Too many people quit way too soon or right before the going gets good. Stay committed!
If I started this site in my early 20s, I would have become a millionaire by 30. If you are young, please take advantage of your youth.
The Road To One Million Dollars
To the best of my memory here’s how I was able to amass a million dollars by age 28. Today, my net worth is much larger thanks to the amazing bull market.
Age 22. Year 1999. Place Your Neck On The Chopping Block.
When I graduated from The College of William & Mary, the total amount of cash I had was roughly $4,000. I had saved some money from summer jobs temping and flipping burgers at McDonald’s for $4 an hour. I had just started a dream job in New York City at Goldman Sachs. It was go time!
My base salary was $40,000, which at the time didn’t feel too great. I lived in a studio with my buddy from high school for two years because we couldn’t afford something nicer.
See: Achieving Financial Independence On A Modest Income
As a result, I invested $3,000 in a dotcom stock called Vertical Integration Systems (VCSY). It turned into $200,000 within several months. Yes it was incredibly lucky, but it also took some analysis and guts. I just wish I had more money to invest!
The stock pulled back by around 25%, at which time I sold everything for around $155,000 and stayed out of the bubbliscious stock market for the next year and a half due to a job change in 2001. VCSY ended up being worthless a couple years later. $155,000 equals about $120,000 in after tax proceeds. The trade is detailed in the post, Don’t Stop Fortune Hunting.
Net worth: ~$160,000.
Age 24. Year 2001. Taking An Employment Chance.
After two years in NYC, I was recruited to join another firm in San Francisco. I only knew a couple people in San Francisco, but felt the promotion to Associate without having to go to business school and 100%+ guaranteed raise to an $80,000 base salary + bonus was attractive enough to take a chance.
I was coming from a top firm and had established some solid client relationships over the past two years. The economy was still dicey due to the dotcom implosion and there was a big chance I would not make Associate after my third year at GS.
It turns out my firm in NYC did indeed let go of many colleagues, and only about 25% of the people I knew from my entering class were still there two years after I left. It was a little scary moving all the way cross country, but it wasn’t like I was moving to the middle of nowhere. This was San Francisco, one of the most beautiful cities in the world. Besides,
San Francisco is six hours closer to Hawaii, one of my favorite places on Earth, so I figured what the hell. I saved 100% of each bonus, maxed out my 401(k), and saved a little more for my after-tax brokerage account.
Net worth: ~$260,000.
Age 25. Year 2002. Continued To Live Like A Student.
The first two years in NYC, I lived in a studio with another guy. We put up one of those Chinese Paper Walls to add more privacy. I didn’t care. I was living in New York City, the most alive city in America. I’d rather spend money going out and partying rather than on an extra bedroom.
When I moved to San Francisco, I spent even less on housing since NYC is about 30% more expensive. I found a two bedroom, one bathroom apartment at the edge of downtown for only $850 a person. I finally had my own room, yeah baby!
When you now make double what you were making a year ago, yet pay 25% less in rent, saving becomes very easy. I increased my after tax, after 401K maximum contribution savings rate from 50% to 65%.
Here’s a post I wrote later called, Home Expense Guideline For Financial Independence. It highlights how I lived in NYC and SF to maximize disposable income. The post also gives recommendations on how much money you should spend on rent/buying in your journey as well.
Net worth: ~$400,000.
Age 26. Year 2003. Conservative Investments Before & During The Recession.
60% of every paycheck and 100% of every year end bonus after 401(k) contributions went into long-term CDs that yielded 5-6% at the time. The reason why I invested in CDs was due to a job change and not having time to manage my portfolio in 2001, 2002, and 2003.
Furthermore, I was scared of another market implosion that would not only take down my investments, but also my bonus, and potentially my job.
My 401(k) was already 100% exposed to the stock market already. Today, my net worth is highlight diversified across real estate crowdfunding, real estate, bonds, stocks, private equity, and business equity.
A day after my 26th birthday, I decided that it was time to grow up and buy my own place. I was renting a $1,600/month one bedroom apartment in San Francisco and wanted a nicer apartment.
At the same time, I didn’t want to spend more than $2,000 a month on rent because the return on rent is always zero. I became very disillusioned with having a large chunk of money in the bank and started wondering what is the point of working more since I had more than I could ever have imagined.
At age 26, I was already thinking of “retiring” in Hawaii. Given my waning motivation to work as hard anymore, I decided to buy a two bedroom, two bathroom condo in a nice area of SF and live it up a little!
The combination of 5-6% compounded returns in savings over four years, a growing 401(k), growing after tax investment account, and another year of saving a larger bonus really helped.
Net worth: ~$550,000.
Age 26-27. Year 2004. Renewed Motivation To Work.
After putting down a 25% downpayment (~$140,000) for a $580,500 condo, my motivation to work skyrocketed because of a drained cash account. I prayed the housing market wouldn’t implode like the stock market did years earlier.
A year before my condo purchase I did a silly thing and bought a $78,000 Mercedes G Wagon (G500). The truck was sweet and I thought it was a great deal since it was selling for $150,000+ the year before since this small dealership in Sante Fe, New Mexico curiously owned the US import rights.
I drove the truck for a year and had to sell it for a $20,000 loss because it wouldn’t fit in my condo garage due to the height! What an idiot, but I felt buying the condo was the responsible thing to do. I traded way down to a seven year hold Honda Civic worth $8,000 instead. I was growing up but still had the thirst for nice cars.
Having A Mortgage Was A Big Motivator
The $435,000 mortgage put a fire under my ass to work harder and be the best performer I could be. At the age of 27 I was promoted to “Vice President,” a title that is normally bestowed on business school graduates three to four years out of school at the age of 32-33.
From there, my income took another large jump up to $120,000 + a larger potential bonus. I became one of the youngest VP promotes in my office.
Debt provided an unexpected side benefit for my career. From 2003 to 2005 my condo also appreciated to around $815,000, a 40% jump. Unfortunately, this increase was unsustainable as we all know. In fact, one of the biggest downsides to paying off your mortgage is the loss of motivation.
I felt this way in 2015 once this condo’s mortgage was paid off. However, once my son was born in 2017, the motivation to make money increased again.
Net worth: ~$800,000.
Age 28. Year 2005. A New Landlord And Millionaire By 30
At 28, I decided to finally buy a single family house in San Francisco for $1,520,000. Believe it or not, $720/sqft for a house on the north end of San Francisco was pretty good because many homes were selling for $900/sqft at the time.
I was sick of having neighbors above and below me. I wanted a yard, a deck, reprieve from the HOA meetings, and to be king of my own castle. The bad thing about my house was that it was on a busy street next to the busiest street in the entire city.
After I moved into my single family house, I turned my condo into a rental, but finally sold it in 2017 for 30X annual gross rent because I no longer had time to be a landlord after my boy was born.
My rental property equity was around ~$350,000 plus around $750,000 worth of CDs and stock investments for a total net worth of around $1.1 million. I knew I was doing OK, but I had no idea I was worth over $1 million at the time. I was too busy building a business at work, managing a rental, remodeling a new home, and figuring out how to keep things going.
Note On 401k Investments: I put away the max 401K pre-tax contribution since my first full year of employment. At the time, the maximum contribution amount was $10,000 a year. The maximum amount is now $19,500 a year for 2021 and will likely go up by $500 every 2-3 years.
If I take six years times the average $15,000 = $90,000. The average company match was around $15,000 a year since we had match + profit sharing, so add on another $80,000 = $170,000 in my 401K by the age of 28. But actually, I had over $200,000 given it did return more than 5% on average for six years.
One of my 401K options was a hedge fund, where I put a 60% of my allocation during the downturn between 2000-2002. The fund actually did well given they had a net short position, so my overall 401(k) was able to take the hits. In fact, if you max out your 401(k) consistently, you will likely become a 401(k) millionaire after 20 years of contributions.
More Thoughts On How To Become A Millionaire By 30
I strongly believe most people reading this article can accumulate a million dollars if they have the motivation, a good amount of planning, the right amount of guidance, and some luck.
I’m sure some of you will have your own doubts, while others will scoff at how little $1 million is. But here are my suggestions for those who want to become a millionaire by 30 or at a relatively young age.
1) Don’t mess around in high school and college or else you will have a hard time landing a good job that pays well.
Give yourself optionality please. There are thousands of straight-A, top 25 university graduates every single year. I was one of the thousands, and it’s hard to compete if you are not one of them because employers can’t respond or meet with everyone.
Many firms such as Goldman, Mckinsey, Bain etc have GPA cutoffs of 3.5 out of 4.0, with some at 3.7. If you don’t have connections then you just aren’t going to make the cut when there are thousands of applicants for only 60 spots. You can rage against the machine and believe grades don’t matter, but you are going to be wrong like donkey kong and most likely regret your immaturity.
Getting a job on Wall Street was like winning the lottery for a kid coming out of a non-target public school. I went through seven rounds and 55 interviews over a course of six months before getting the offer. I would not have been able to even get an interview if I didn’t get good grades or show initiative.
Your job income is the #1 main source of wealth for most people. Might as well focus on the highest paying industries that you think you’ll enjoy if money is what you want to make. It’s important to note that no way is a large income a guarantee for lasting wealth as many millionaire bankruptcies have proven.
2) Save until it hurts each month.
If the amount of money you’re saving each month does’t hurt, you’re not saving enough. Remember this Financial Samurai saying forever.
When you’re a college student, you’re poor. Hence, even if you graduate and only make $30,000 a year, I’m willing to bet that’s more than you’ve ever made in your life! Try to continue living like a student for years after you’ve found your first full-time job and save!
Stop making excuses why you need to buy a nice car and nice clothes. You’re a 22 year old recent college graduate for crying out loud. Build your foundation in your 20s and stop thinking you have a decade to explore, because you don’t. 10 years maxing out your 401(k) will likely result in a $200,000 portfolio in your early 30s.
The base you build in your 20s will provide tremendous returns for later on in life. If you stay consistent over the years, you will get there. Aim to save at least 20% of your after tax income every year, no matter what.
3) Work hard and know your place.
If you want to be a millionaire by age 30, you must work hard. Working hard takes NO skill. If you’re not coming in first and leaving last, you aren’t putting in your time.
I promise you that if you wake up by 5am every morning, work one to two hours before the rest of your peers and work another one hour after your peers have left, you will get ahead! Avoid career limiting moves that will severely curtail your future.
The reason why I was promoted to Vice President at 27, when the average VP promote is 33 is because I put in my dues. I generated millions of dollars in revenue, built a solid network of internal supporters, and was a workhorse by coming in by 5:30am everyday for my first two years and leaving at 7:30pm-8pm on average.
Sometimes I even left work at 10pm. Did I sacrifice some of my social life? Of course I did. But, I also partied hard many weekends goodness knows! Working hard doesn’t mean you can’t play hard and travel. You’re young remember? You’re energy is limitless!
4) Stop making excuses.
You can spend time crying why the world isn’t fair, or you can do something about your life. If you are reading this post, chances are you have clean water to drink, shelter, internet and a legal system that protects your rights.
There are millions of people in the world who are starving every single day. An equal amount who live in fear of dictators confiscating everything they own. Some immigrate to America for a better life, don’t even speak the language and crush it. What is your excuse? Abolish welfare mentality.
Spend 30 minutes every day by yourself in meditation coming up with a better business model for your company or for own business. Spend four hours every weekend in the office studying up on new things that will help improve your standings with your clients.
You can even start a blog and work an extra 30 hours a week online before you have a family and generate some healthy revenue if you wish. Let’s take advantage of the freedom our respective countries provide.
5) Consider both aggressive and conservative investment strategies.
When I was 22, I only had about $4,000 to my name. Regardless, I invested 80% of my money and it turned into a 50 bagger. Was I lucky? Hell yes! But, I did my research and was I willing to put my balls on the line to try and make some money.
I think it is very important to take more risks when you are young which is why I’m biased towards growth stocks over dividend stocks. With the proceeds from my VCSY China internet trade, I transferred my wins into long-term CDs and then ultimately into property.
When you are ahead, it’s very hard to walk away. As a poker player I know this feeling all too well. But it’s tantamount to invest a portion of your winnings in a safe haven. Lock it up. Protect yourself from yourself!
I didn’t take on the reckless mentality of betting the farm with my windfall since I was now playing with the “house’s money.” This was my money now damnit, and I wasn’t about to piss it away on some B2B stocks. Continuously diversify your income streams and build passive income.
Today, I like the combination of growth stocks and less volatile real estate investments.
6) Property is one of your best friends over the long term.
If you put 20% down on a property and it goes up 3% a year, that’s a 15% return on your cash thanks to leverage. Sure, you can get your face ripped off if you bite off more than you can chew. But trust me when I tell you that thanks to inflation, your debt payments will seem insignificant five years afterward.
Five years later, you will be happy every month when you get to charge a rent that is much higher than the interest portion of your mortgage. Property is my favorite asset class for young people to build wealth.
I sometimes feel guilty raising the rent, but remind myself, I was the one who took the risk, put down the downpayment, and nobody forces anybody to rent my place. Real estate is my favorite investment asset class to build wealth. The condo I bought on my 26th birthday for $580,000 was fully paid off in 2015 at the age of 38. A neighboring unit with the same layout sold in 2017 for $1.36 million.
I’m now investing in real estate crowdfunding to take advantage of lower valuation properties with higher cap rates in the heartland of America. I want to invest in the next San Francisco Bay Area over the next 20 years, and lower cost of area cities like Memphis, Austin, and Salt Lake City look attractive to me.
My two favorite real estate marketplaces are Fundrise for their eREITs and CrowdStreet for their individual commercial real estate investments in 18-hour cities. There is opportunity to be had due to the coronavirus pandemic in 2020. Both platforms are free to sign up and explore.
After explosive stock market gains during a pandemic, money is likely going to flow into real estate. Mortgage rates are at all-time lows, corporate earnings are rebounding, and all of us are spending more time at home. As a result, the intrinsic value of real estate is going way up.
The value of rental income has gone way up as well. The reason being is that it takes a lot more capital to produce the same amount of risk-adjusted income. Real estate and technology sectors tend to do best in a rising interest rate environment.
7) Pretend you are poorer than you are and show few signs of wealth.
Stay humble despite amassing a fortune. Don’t show off or waste money on things you don’t need. Make people believe you are younger and poorer than you really are. I drive a 13 year old car and wear t-shirts, jeans, and a baseball cap most of the time. Once you’ve accumulated your war chest, practice Stealth Wealth.
I would say at least 80% of the millionaires I know are very low key. You can’t tell they have a lot of money except for when you get to their house. The only people who want attention are those who are insecure, not not really rich.
8) There are more ways than one to rub a furry koala.
You can make big bucks through a day job or by starting your own online business. Better yet, you can do both. While I was working in finance, I launched Financial Samurai. I worked on it before I went to work and after I came home.
Since starting this site in 2009, Financial Samurai now generates enough revenue to provide comfortably for a family of four in San Francisco. In fact, FS started generated enough for us to live well starting at around 2013. You just never know until you start something new.
To become a millionaire by 30, you must work on your X-Factor. Your X-Factor is what will bring you more wealth, happiness and joy. But the key is to work on your X factor long before you need it!
9) Office politics counts.
In order to get ahead, you’ve got to play the game by building as many company allies as possible. I don’t know many people who like to sell themselves internally to their colleagues and bosses. People think that all it takes is good work to get recognized, paid, and promoted. This is absolutely false!
You must sell yourself internally as much as you sell yourself externally. I believe you need to sell yourself 50% internally and 50% externally. Don’t think just because you’re bringing in business that you will automatically get paid and promoted. You must build a support network of powerful people at your firm. Once you have someone with significant power on your side, your entire career gets that much easier.
10) Regularly invest in yourself.
Your greatest money making asset is you. Don’t cheap out on education or consulting. Education is worth more than any material thing you can buy. My studies in college and grad school taught me how to market, negotiate, communicate, analyze investments, and influence.
Thankfully, you can now learn most everything for free thanks to the internet. It’s hard to recognize value when you can’t touch it. However, I promise you that knowledge and education is worth more than everything else.
11) Diligently keep track of your progress.
How much you keep is even more important than how much you make. There are people who make millions of dollars and end up broke years later. The simple reason is because they had no idea where their money went. Perhaps they made some ill-timed investments.
Maybe their risk exposure didn’t align well with their risk tolerance. Or maybe they simply just spend too much. Everybody should leverage Personal Capital, the best free financial tool online. With Personal Capital, you can track your cash flow, analyze their investment portfolios, and calculate their financial needs in retirement.
12) Regularly turn funny money into real assets.
We will regularly go through boom bust cycles. The key is to consistently turn that funny money you made in the stock market into something real. Do not stay all-in all the time when you have a nice windfall.
So many people have ended up losing all their money in the 2000 crash. Then came the 2008-2009 crash. Most recently was the March 2020 crash. Boost your wealth by using your windfall gains to buy a more stable asset like real estate or fine art. If you do, your chances of becoming a millionaire by 30 will increase.
With stocks at all-time highs again, I’m taking about 10% of my winnings and spending it on a better life.
13) Consistently recognize your luck
To become millionaire by 30 requires a ton of luck. If you start believing all great wealth is mostly due to hard work and skill, you decrease your chances of becoming a millionaire. The reason is because you may start taking your opportunities for granted. You also start getting arrogant.
Not everybody has equal opportunity. For example, people’s chances of becoming a millionaire are different by race. Stay humble and hungry.
14) Invest for the long run
Your first million really isn’t the easiest now that I’m much older. Once you accumulate several million dollars, you will find it much easier to make another million dollars in net worth.
Therefore, your key is to grow your capital to a sizable amount and make continued risk-appropriate investments. For example, if you have five million dollars in invested capital in the S&P 500, and it goes up 20%, you’ve just made one million dollars without doing much work.
15) Keep on reading and learning about money
Millionaires are voracious readers. We’re always learning in order to continuously grow our finances in a risk-appropriate manner. There is always opportunity!
If you want to dramatically improve your chances of being a millionaire, purchase a hard copy of my new book, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. The book is jam packed with unique strategies to help you build your fortune while living your best life.
Buy This, Not That is a #1 new release and best seller on Amazon. By the time you finish BTNT you will gain at least 100X more value than its cost. After spending 30 years working in finance, writing about finance, and studying finance, I’m certain you will love Buy This, Not That
Align Your Beliefs With Reality
One cannot downplay the importance of luck in becoming a millionaire by 30. I have been fortunate to have two loving parents, an incredible spouse, and a brain that works most of the time.
If you’re born in America, please take full advantage of all your opportunities. Despite having a deficiency in higher level math, uninspiring SAT scores, and a run in with the law as a teenager, I made up for my weaknesses with plain old work ethic and relationship building. It also helps to be an undying optimist as well.
You can’t complain about not having wealth if you decide not to pursue wealth. That’s a mental misalignment. The desire for wealth shouldn’t be viewed as evil. It should be viewed as natural for anybody who wants to live a better life. Who doesn’t want to b a millionaire to take care of his or her family and parents? Further, by being a millionaire, it’s easier to give back to the community.
As soon as we align our realities with our beliefs, we become congruent and happier with ourselves and our outlook.
Good luck on your journey to your first million! Becoming a millionaire by 30 is a great accomplishment. Once you get there, that’s when the real fun begins.
Become A Millionaire Through Real Estate
Real estate is my favorite way for the average person to become a millionaire. Using other people people’s money (a mortgage), you can buy a real estate that tends to appreciate in value over time. Meanwhile, inflation whittles down the cost of debt. This one-two combination helps create a significant amount of wealth over time. Let inflation be your friend, not your enemy!
Roughly 40% of my net worth is in real estate. Further, real estate accounts for roughly half of my estimated $300,000 a year in annual investment income. One irony of real estate is that because it is less risky than stocks, investors can actually end up making much more from real estate.
I think the best strategy is to ow your primary residence to at least get neutral real estate. Then diversify by buying rental properties in your city, public REITs, and commercial real estate.
Take a look at my two favorite real estate crowdfunding platforms:
Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eREIT. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For the average investor, investing in a diversified eREIT is the way to go.
CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have a lot more capital, you can build your own commercial real estate portfolio.
Both platforms are fee to sign up and explore. I’ve personally invested $810,000 in 18 real estate crowdfunding projects since the end of 2016. My goal is to diversify, take advantage of real estate arbitrage, and earn income 100% passively as a busy father of two young children.
I’m bullish on real estate as we come out of the pandemic. The combination of higher rents and capital appreciation is a powerful wealth-building combination!
Keep Track Of Your Finances
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Congrats! Your story sounds amazing and for sure this is a good example for many, but to be honest it is extremely difficult to replicate your story. Everyone has a different situation.
When I was younger I had similar idea to start saving&investing as soon and as much as possible. There were periods when I saved over 50% of my salary.
Things changed after I started a family. Our small rented apartment wasn’t enough for 4 people, a car as well etc. So the initial plan to save 50% of salary has become impossible.
After some time I decided to change my approach to become financially independent and I think this might help everyone who is overwhelmed by the success stories of others.
Right now I am a big believer in the Coast FIRE idea. Before I started a family I was able to save $230k in ETFs, after kids showed up me and my wife were able to save $1.5k on average. It is not a lot but thanks to that the seed amount of 230k is significant, annual portfolio growth was higher than our contributions of 18k per year.
Our goal is to reach $1,3M and retire early at the age of 44. According to our calculation $6k will last for nearly 50 years https://calcopolis.com/saving/rentier/a_130000000-i_600-w_600000-inc_0-t_1500
I know this is not as fast a route to success as your story, but still we will be able to retire over 20 years before schedule.
Damn, I’m 2 years too late reading this article.
I think while luck play *a* role in wealth, it certainly doesn’t play 100% of the role. I think the luckiest thing for most of us are the basic: we’re in a nice, first-world country where opportunities are abound.
I read a book recently “Great By Choice” by Jim Collins where he studied luck across companies and it turns out better companies don’t on average have better luck than their much worse competitors.
Most companies, and people, are hit with bad luck and good luck. What separates the people that have great results over time is a financially conservative mindset, consistency, and resiliency.
So sure, there’s some a lot of luck with a 50-bagger, but at $200K, that’s only a +/- a few years of savings. The greatest achievement of hitting a million I feel is the consistency and the emotional discipline over time to get there.
Hi, talking about land of oportunity, does anybody know what would be the equivalent amount you would need in Mexico to be in the same situation as having 1million USD living in the US? My guess is someone living in Mexico having 1Million dollars is much richer that someone having a million living in the US (asuming they live in a relatively nice city).
I think the core knowledge here is:
WITH A LOT OF LUCK
It is not true that at your 20s your energy is infinite. Millions of people have medical issues before that age. Others are graduating with scary student’s loans, other has family members with health issues, or siblings to support, others are jobless. Also let’s see the dates in this article: from 1999 to 2000s, before the housing bubble burst and the Great Recession.
In 1999 I could buy a decent flat with my actual savings, now I have nowhere to go (despite having those savings and no debt, and no kids to support). Sadly, I was born too late, in 1999 I was right out of high school, so housing bubble hit right when I was starting my career (the worst time to start a career, salaries were low and have no recovered).
Also it is not true that 3 millions is 1 million now, it is the other way around because of inflation, and this is happening worldwide. Just look for the increased prices of plastics, that increases the price of everything (from food to medicines).
And your investments can make you lose money. This happens, bussiness go wrong, investments go wrong too.
Simply, I’m unlucky as hell.
I totally agree that extraordinary wealth is mostly due to luck. Click the link of you want to read more.
As a result, it is up to the lucky ones to give back and help other people get lucky too. This has been one of my missions since I started Financial Samurai in 2009. To share as much knowledge as possible to help others build more wealth and achieve financial freedom sooner, rather than later.
Best of luck to you! For more nuanced personal finance content, join 100,000+ others and sign up for the free Financial Samurai newsletter.
Hi, it is me again, after a year. Yeah, I read some of your articles about saving, the article about Stealth Wealth is really useful.
I found a place to live.
You forgot the biggest lesson I have learned this year:
ASK FOR HELP
I talked to some people about my problems, I asked for a raise at my job at the worst of 2021… I got it. Just after that I said out loud my income still was too low, a friend heard me, offered me a place to buy at a decent price given the actual housing market (now I have a mortage for the next 10 years, but I can control it).
And once you’re wealthy, tell nobody. Keep a low profile.
The lesson here is that if you are poor, say it. if you are short of money, say it. Ask for a raise or look for a better paying job. Ask your friends for help. Not everything is about luck, it is about building communities of people mutually helping each other. I’m slowly learning this, I was raised by truly selfish people. We humans need each other. I asked for help and I got it. I want to do the same when I will be able to do it.
To all the people reading this: work hard and help others. Not only with money, I’m still poor so I share the compost I make at home.
Congrats! Yes, if we can focus on helping others first, the good karma tends to come around.
I am an attorney who doesn’t make more than 55k a year. Yes, we’re out there. No, if you google it, most attorneys do NOT make 100k or more a year. Also, a number of attorneys aren’t actually practicing attorneys. Yet, my net worth is over 600k. How did I do that? I sold one of the 4 life insurance policies I control and after begrudgingly paying my sister her half, I got 250k. Still even without that nice cash infusion, my net worth (not including a home since I don’t own one) would be 350k with that paltry salary I mentioned above.
How? 1) I chose to move in with my mom and step dad for almost 4 years after law school. 2) According to Fidelity, I have averaged a 25 percent return in my “investing account” and 50 percent in my Roth IRA. I only opened up my ROTH 401k two years ago since my cheap company finally started to match it two years ago (but suspended the match for last year). Even with my very paltry salary, my ROTH 401k is worth 90k. I contribute 50 percent of my pay to my 401k. I’ll be hitting the 19,500 maximum in the not distant future.
It really boils down to what one wants: If one desires to have kids and be married, then that’ll obviously cost you more money than if you’re single. Do you want to retire early, travel and live in style? Ditto. As for me, I am not interested in having a family of my own or living the life of the rich and famous now or in retirement. I’m a minimalist with basic needs. If things work out well, I’ll be retired (I mean fully retired, not writing on the side for income, doing any sort of side hustle, working part time, etc) by 43 (I am 37 now) and do what I want.
I know roughly 30 or so attorneys, and not a single one is less that $100k. I did know one that started around $75k but after a couple years is now in the $300k range. Most that I know started in the mid six figures though on day one. What type of work are you doing as an attorney for $55k? Did you not have law school loans to payback? I’m assuming since you are calling yourself an attorney you passed the bar and don’t just have a law degree.
I think that retiring at 43 on a $55k salary is amazing, and hopefully you get to spend your free time doing all that you want. Seems like a tall order to me though unless you never get health issues, and live somewhere very remote. eitherway, best of luck to you. In the end it’s really all about making a plan and executing that plan. There are truly no “right” ways to live your life.
My net worth will be $600,000 by age 60 BUT i only averaged $10,750 (GROSS) a year for 35 years!! Read down WAY below!!
My accomplishment is BETTER than yours!!!
LESSON: Get a GOOD financial planner early and invest PRIMARILY EQUITIES (especially AMERICAN)!!!!!!!!!!!!!!!!!!!!!!!!!
This needs to be a movie! What a fantastic story.
Another key: Don’t get married young and divorced in your thirties. Especially to someone who earns 25% of less of what you earn. If you contribute the majority, you lose the majority in the divorce and the other party gets a huge bonus in the end while you are stuck paying for a life style they could never afford if it was only on them to earn the funds for it.
Good luck convincing 95% of the sheep out there to follow this sane and sober advice.
obligation should be the mark of your life. work to be the best in the world at what you do and the rest will follow. obligate yourself, in as many ways as you can so that people look to you. and they will help. -jav
I have to disagree. I think it’s ok to get married (and divorced) in your 30s, but I think it would be better if everyone thought about the ‘what ifs’ and prepared for them prior–especially when things are all still rosy and you never think the relationship will end.
Anyone can get a prenup and you don’t have to have any wealth to have one.
I was close to getting married in my very early 20s, didn’t have a penny to my name, but knew I was going to make it one day. I asked for a prenup (and he agreed).
Marriage didn’t happen, but we were together for nearly a decade. By the time the relationship ended I had made it, I was a millionaire.
My partner at the time of our break up? Worth less than when I met him in our 20s. The difference in our personal drive & passion obviously wasn’t a good match–but hey, who thinks about that in your 20s?
I was fortunate enough to have the foresight to think about the ‘what ifs’ though.
I also started investing in real estate. By the time the relationship ended I had two houses (now I own 5) but I owned everything (I never had my partner put his name on anything nor helped with any of the finances). So it all worked out fine when we split.
A prenup would have done the same thing should the state have demanded I split it all.
I absolutely shared everything with my partner at the time and provided him an incredible life he couldn’t afford, I just didn’t put his name on anything I earned.
My fear of not being able to take care of myself is what kept me keeping everything in my name, something I talk about on my new blog.
But Sam is right that it takes a TON of luck and anyone who says otherwise is lying to you. Definitely have to work hard and longer than everyone else, absolutely– but luck is huge too.
I am not aware of the stock that Sam invested in with his 3k, that was a bit before my time. I started out of grad school around the recession and had only 2k that I saved from my first paying ‘real’ job–a whopping 16k a year.
All I did was Google back then about everything and anything I can learn to get a better life. Because I was struggling. bad.
So when I had my 2k saved up, what did I invest in? Google.
Dumb luck? You bet.
But I wouldn’t have had that 2k if I didn’t bust my butt, live near the poverty line and save like a madwoman lol.
You can turn any situation around–even the divorce. Use one of your income streams to pay for the ex and gain others to pay for the life you want.
Best of luck to you!
Looking back on my savings strategies, one thing I regret is not taking advantage of the after-tax investment vehicles (e.g., Roth IRA, Roth 401(k) earlier in my career. I saved primarily with pre-tax accounts and I think that was a mistake. In fact, to rectify it, I’ve been slowly converting my pre-tax accounts to my Roth IRA over the last couple of years, making sure not to ‘increase’ my income too much so that I’m subject to the next tax bracket.
The key to saving is to start with what you can afford when you are early in your career, then ratchet it up as you get pay raises and promotions so you don’t really feel it in your paycheck. That’s worked for me and we are saving around 30% now. I have two defined benefit pensions as well that will pay me ~ $100k when I hit 62 and retire, so my savings rate doesn’t need to be at the level of FIRE followers.
Just my two cents ;-)
I am 36 and I have a bit of an opposite take on this. My parents (especially my dad) pretty much forced me to put money in Roth instead of traditional when I first started working at 22. The result is that I saved a lot less money in my 20s than I could have because I couldn’t afford to max out my Roth 401k until my late 20s.
Sure, yea, that money will be available tax-free in 24 years, but not putting away 15-25% more in my early 20s really crippled my portfolio once you consider compounding interest. I could have always converted those traditional 401ks to Roth later when I rolled them over to my IRA. Instead I lost 7 years of non-maxed-out contributions AND 7 years of a lower effective tax rate that I can never get back.
Each $1,000 I didn’t save in my 20s turns into $20k+ I won’t have in my 60s. So I basically screwed myself out of hundreds of thousands of dollars because I bought into my parents’ tax fears.
Maybe in 24 years tax rates will be 50% I’ll be grateful for my Roth accounts, but the government could always raise penalty-free withdrawal ages. The tax rates could also be lower. We just have no idea. It’s impossible to predict the future.
Sam has it right: Max out your traditional 401k/IRA and then decide what you want to do after that. Nothing else matters until you can max out your pre-tax accounts and that should be everyone’s goal.
Evie D,
You make a great counterargument. The one thing I worry about is that the government will be forced to raise taxes significantly in the future to pay for all the debt they are taking on – but you are right, there is no way to know for sure what will happen.
Since I’m covered by a traditional state pension plan, I don’t get a match on the pre-tax 401(k), so that is a little less enticing for me and one of the reasons I went with the Roth 401(k). Considering the savings rate in this country is so paltry, the decision to save is the most important thing – where to put it is another story ;-)
In-state tuition and fees for 2020-21 at William & Mary is $23,628. Out of state tuition is $63,370.
Run through an inflation calculator, your $2,890 tuition in 1995 was $4,805.85 in today’s dollars.
Did you get some sort of scholarship?
I didn’t. I wasn’t smart enough to get a scholarship for tuition. I was just thankful for getting in! It was either William & Mary or UVA as the top schools for in-state students.
You check out the historical W&M tuition here.
Tuition is out of control for most universities.
Financial Samurai – I’m curious your thoughts on my savings/retirement planning as it is a bit unusual:
I am a 35 and my wife is 30. We plan to have 2 kids (one is young now). Our savings that we have earmarked solely for retirement are $2 million. We also have fully funded 529 plans (~$200k now) and $500k of equity in our house that is worth ~$850k. I plan to payoff the house in the next 2 years with cash flow from work. Also, we live in a low cost of living area. My salary is ~$500k and my wife makes ~$115k. The salaries are nice, but I’m getting tired of the office politics and rat race.
If I were to take a less stressful position in a couple of years after the house is paid off, what are your thoughts on us living solely on whatever I make (assume I could get a $150k job that is far less stressful) and saving my wife’s salary (~$80k after taxes). With an $80k annual contribution and a modest 3% real rate of return for the next 15 years, we should be over $5 million of real retirement savings by the time I’m 53 (at which point I will play golf and travel).
Do you see any flaws with this approach? It is front end loaded, but I’m looking to take advantage of compounding and early saving.
I’d love your thoughts. Thanks!
If you’re burned out, it’s worth taking things down a notch. With income taxes going up, I personally plan to re-retire over the next 12-24 months.
I think the ideal household income to live a comfortable life is about $300,000 a year with two kids.
Grinding away when you have enough is to worth it.
Related: Don’t Make $400,000 A Year: Look At How People Suffer
Who did you sleep with to make that much money at 34?
I need that knowledge too.
I’m 30 this year and am still in residency for medicine getting paid like $60k a year. Been questioning my life choices a bit lately haha
Me too. Have been up and down recently with work situation. I am almost 40. My net worth is over 1.4 million, but I don’t feel rich at all living in the Bay Area. I invest in stocks and real estate. I live below my means, and save as much as possible. My hope is to be financial independent and leave my dreadful job in one day, and start living the life I want and help others in need.
Easy answer: Move the heck out of the Bay Area!
I get not feeling wealthy with 1.4 million. When most people finally reach 1 million they don’t even realize it let alone “feel” wealthy like they thought they would.
What number will make you feel wealthy? Have you thought about that?
Statistics say the average response from millionaires to “feel” wealthy is around 7-10 million.
I think it really comes down to how you live your life. You can have less than 1 million dollars and live on less so that you never have to work a day in your life.
Or you can make a million dollars a year and not be a millionaire because you are constantly throwing your money away on stuff and it will never feel like enough and you’ll never be able to retire.
The stuff never makes you happy, that’s why you keep having to buy more, right? If the purchase made us happy, completely fulfilled us– then we would have no need to buy more. It’s short fleeting because it’s not real happiness.
Again, maybe take a look at what makes you ‘feel’ wealthy and what you would have to do to accomplish that.
It might not be to make more money at all, it may be to change your lifestyle habits–including who you are around and what you find meaningful in life.
Life is short, and the time we have left to enjoy it is running out every. single. day.
Why wait for tomorrow? Tomorrow might not come, then what was it all for?
Hope this helps.
I don’t know why everybody should think about being worth 1 million by age 30.
I was worth $100,000 by age 30 and believe that that is quite an accomplishment!
My lifetime gross income from age 25 to age 65 (all jobs, self-employed income, employment insurance and pension) will be $420,000 ($10,500 a year).
I AM ECSTATIC ABOUT BECOMING A MILLIONAIRE BY AGE 65!!!
I worked my ass off all my life. I was always the first one in and last one out, sometimes working til midnight.
I was let go under discriminatory circumstances. They refused to give me the formal training credentials that I would have needed to continue working and be hireable anywhere in that sphere, so now I have nothing.
You’re full of shit. You got lucky, and you made wise choices, but it’s NEVER been about hard work. Now I’m almost 30 and got little to my name, and I’ve tried to read your book but it is just I’m sorry SO WRONG about the reality in the workplace as it has been for me. Maybe it’s because I’m not a white male? Hard to say, but everyone around me workplace included could not believe how I’ve been treated. I was so catastrophically demoralized as a consequence of the blatant unfairness I faced – and it doesn’t help that self-congratulatory successful types like to say it’s about hard work. I was number one in my STEM class and consistently praised by my employers with the exception of this one that happened to be most critical.
I have nothing but I will never work so hard again. I can’t make money but I’m not going to give them my time too. Just wanted to say your blog is just incredibly demoralizing to people who actually have the battle scars to prove that it doesn’t work that way for everyone, and that in itself is the x factor.
You make excuses or you make changes. Sounds like you are bitter and have adopted the victim mentality. It’s easy to fall into that way of thinking as you can rid yourself of responsibility. You’re young. Use that bitterness as motivation to improve your life.
If you believe you will never work so hard again then you won’t. If you want to set yourself up for failure, that is your choice an no one else’s.
Agreed
Even very successful people will have bad experiences with certain jobs/employers. Don’t let this bog you down too much, you’ll bounce back and you’re still quite young.
Just saw this. Thank you for the kind words. I definitely wrote that when the trauma was still fresh.
One of the bigger issues with that whole experience enough, just for the record, was that even though I objectively could prove that I was the sole person excluded from trainings and networking sessions despite doing the same type that others did (technically more hours, no negative reviews), all the lawyers I’ve contacted told me that even though laws were broken, it’s not worth their time to pursue. The financial reward wouldn’t be worth much. So it was just extremely rattling to hear that in effect I didn’t have protections despite my record keeping.
I’ve recently stabilized and begun working towards the job I’d like. Thank you, I really appreciate your nice words again.
Let that ‘trauma’ be the fuel to save (as much of your income as possible) like your life depends on it so that you can walk away whenever you want.
Sometimes those bad experiences are the fuel we need to ignite a passion inside of us that will take us beyond what we ever thought we could achieve.
You’ve got it in you (we all do)—dig deep, find it, and never let it go.
Wishing you luck!
Just found your blog and I love all your unique insights on finance. We are on track to have our home paid off by the age of 35 and have zero debt. We have been aggressively saving money and living well below our means so I would say we are on the right track. Great article!
Good stuff and congrats! You won’t regret paying down a mortgage. It feels so good.
Thanks for all your advice! I have been reading your notes for years and went diligently along your advice. I’m a 28 year old female and my net worth is about 300k, not near your 1 million but hoping to be there one day! My question for you is, I recently did back out of a home because I was fearful the home was too high of my take home pay (37%). Do you follow any take home pay strategies when you got these homes? My goal is to save aggressively one more year and live very below my means and put a large sum of case on the home. Would you recommend this? Thanks in advance,
Work from 5 AM to 10 PM!. Yeah but I still have a social life on weekends!
What about your own health? what is the point of amassing so much money? you don’t have endless energy in your 20s… you are still young and throwing your health out of the window to be a slave of capitalism.
Work smart, NOT hard. I am 30 and I am worth $1,000,000 already and I don’t work 10 hours days…. I work normal and take plenty of time off. I dedicated most of my 20s to education, while I worked at the same time, got a few patents and now have a very good paying job. I think carefully every decision I make, but my health comes first and I refuse to work like that to simply die with a bunch of work memories and “hard weekend parties”. What a joke.
Just found this blog and I find this so inspirational. Keep up the good work and stay active!
– Nordic Fire
Your title is a bit misleading for the majority of the population. Reading your backstory (kudos, btw) even you admit that a large portion of your wealth was based on luck (dotcom investment, early VP with no degree in a boom economy, move to sanfran before downsizing, etc.). Imagine if you’d been like the majority of the bachelor’s degree population & stuck at a 40k salary (or less) until your 40’s (or for your entire career).
I do however think the median wage college-educated individual can hit the first million by early/mid 40’s using similar techniques. My advice would be to eliminate the clickbait “by age 30” in the title & add a caveat that the advice works for most livable income ranges; faster if you have more dispensable income. If you have tens of thousands each year in dispensable income in your 20’s, by all means you can be a millionaire by 30.
ABSOLUTELY correct. A good portion of these articles involving advice seem a bit unrealistic. Saving 50% of your income,applying to best colleges/co’s in the US (virtually no one gets in), getting straight A’s, going to best MBA programs etc…It’s more of a story about a highly intelligent, gifted person that maximized his potential by working hard & smart and occasionally was lucky.
A better story would be a B student that worked 2 jobs and bettered himself/herself by attending night school and networking eventually landed a great job with benefits. Hard work, persistence, with a bit of financial acumen is the ticket.
“Stealth wealth.” Exactly. That’s why you made sure to brag about how much money you have in a huge public blog that you literally work on 20-25 hours a week. Maybe you are afraid of getting audited like everyone else with money. Did you ever stop to think that some people without a “regular job” may have unbelievable social anxiety being a part of those types of social situations? You sound as if you you are the type of person who is pissed at people who don’t have a regular job. No offense, your way of earning money doesn’t interest me at all. Like continuing going to school or some insincere ass kissing institution for the rest of one’s life where the only ones who survive are the ones who get off on socially hurting and being a dick to others in the group, ostricizing those different and trying to hurt them or push the innocent “weaker”
ones out of the team so you can deliberately hurt them for no reason while you kiss ass to be the most popular. You remind me of my older sister, getting off on being out and about out there, socializing and socially deilberately hurting others to survive. I never got along with people like you, never understood you people, never felt comfortable around you people. And you will probably never understand rock stars, real artists and people who followed their passion. You chose money for the sake of money, which is something I will never be a part of. I guess somewhat hurting others a little every day in a daily way is the type of thing you are actually good at. I don’t agree with you at all and felt really bad just having to read your post and probably wouldn’t get along with someone like you in real life and definitely wouldn’t feel very comfortable around you unless I was being a dick just like you to fit in in this inherently somewhat evil world. I just could never get how people like you thrive in those environments, obviously by shifting the blame to others on a regular basis, when people like me only did it out of necessity and real survival here and there and would never get off on it or try to intentionally live like that every day or actually enjoy it in any way. But its people like you who pushed me and pushed me and emotionally beat me down all those years until I had to be the biggest, most evil one of you people out of sheer survival, following the rules perfectly yet thinking horrible things about others in my mind, all while following societal normals as best as possible. The way to achieve things in life, right? You would think people can just get along and be happy, but apparently your kind will never change, and I will never be like someone like you. The thing is I am your same age, and you sound just like some popular kid who made fun of me in high school or forced me into silence in high school and was well aware of my suffering but only tried to make it worse as you realized it was helping empowering you in nature. You are the type of person who in my opinion will not go to the other side after this frivolous life, rather you will probably be reincarnated, unless by some miracle you learn to be more kind to others in your old age. Anyway, just really aggravated me reading your post so I figured I would tell you what I really think about your kind insteda of trying to pretend like any of you are interesting to me in any way, other than you trying to make me feel socially uncomfortable. You are the same type of person who would be a roommate or live in a more crowded space with others as roommates and get off on making them feel awkward and uncomfortable while you saved money for yourself, like a little touch of evil every single day as you learned to be steady in a daily regular early morning waking way. The sad thing is that your kind pushes and pushes and pushes genuinely kind human beings like me, until we have no other choice but to join your club, and if we are good enough at following the rules or lucked out by meeting the right mentors or people in our families, then people like me can be even way more evil than you… Its like your kind pushes evil on the kind people like me to corrupt our morals and prove that your conscience is okay and that those with less money and who are more kind than you who you are afraid are going to heaven or the other side instead of you, so you push them to their lowest point and try to bring them up again by having them embrace evil to prove that they are no better than you morally. …or maybe that’s just unfortunately the mentors or people I have had to be a part of and I am wrongfully projecting that on you. I could be wrong about all of this, you just sound like the type of person I would never ever want to be too close to, just totally right field of everything I enjoy , believe in and that makes me feel okay, comfortable and happy.
Haha why are you haters even on here. You don’t want to chase money and get wealthy the way he did? Then don’t. All the time you wasted writing that novel is the real reason you’re not building wealth. I enjoyed the post. Good to see how someone made it to that point, even if some of it was “luck”. I’m 26, net worth of 300k+ built purely off of hard work and discipline. I have a long way to go, but this stuff works.
Why am I about to reply to this? I’ve never replied to blog post IN MY LIFE. But there is something very disconcerting about your post that struck a chord with me.
There’s a good chance you won’t even see this… but here goes:
“…or maybe that’s just unfortunately the mentors or people I have had to be a part of and I am wrongfully projecting that on you” <—BINGO.
Your entire diatribe is filled with assumptions, projections, and logical fallacies.
He's not making a blog to "brag about his wealth". The blog exists to detail how he did it, and to help INSPIRE others to do the same. There is absolutely nothing wrong, evil, or immoral about discussing strategies to maximize wealth.
Discussing wealth means you have to discuss numbers. If his wealth numbers spark jealously and resentment in you, I would suggest trying to shift your mindset to being INSPIRED by his results. BE INSPIRED and LEARN from the success of others. If you aren't on the exact same path as him, that's fine, but you can still learn from his life and apply the knowledge to your own circumstances as you see fit.
"Your kind pushes genuinely kind human beings like me"… I'm sorry if someone hurt you or the world has you feeling down, but life is NOT fair. I repeat. Life is not fair. But he isn't PUSHING you AT ALL. It's a blog post, not a mandate. Don't like his advice? Don't follow it. But your vitriol and contempt shouldn't be directed towards the author. Don't assume all people that pursue wealth are "evil". They aren't. And don't make yourself out to be some sort of "genuinely kind" hero. I would bet money you aren't. In fact, your post reads rather sad and pathetic.
In addition to finding a good therapist, I'd suggest reading Rich Dad, Poor Dad by Robert Kiyosaki. It's an old standard for personal development and wealth accumulation, but it might help you shift your mindset to a better place.
Change your way of thinking, or it will be a problem that manifests itself in all areas of your life. You'll be glad you did. Or, continue to be bitter and presumptuous and see where that gets you. I suggest the former.
I hope you read this reply. Good luck to you.
'Anger is an acid that can do more harm to the vessel in which it is stored than to anything on which it is poured.' – Mark Twain
Haha, who hurt you?
I don’t care what financial samurai, who reminds me in some bad ways to dividend sensei says: 1 million by age 30 is unlikely for the majority of people. And, that’s okay.
30x annual rent is insane, where I am at 10x annual rent is probably more in line with the market (which is already high to begin with).
That is the primary reason for your obsession with RE and anti-rent. Right place, right time.
Indeed.
I’m diversifying into the heartland of America with target 10% cap rates and much lower valuations through real estate crowdfunding.
No reason for Silicon Valley to have a monopoly on capital or innovation, especially with costs so high.
Hi FS, how do you book the net worth for your properties? Is it mark to the market value minus outstanding mortgage? Thanks
Yes, the estimated equity in each property with a 10% discount for transaction costs and to try and be more conservative.
Thanks FS. You also count retirement savings/ benefit into the total net worth, right?
Wow!! very great advice, indeed!! If you’re lucky enough to have an employer that offers a 401k plan, take advantage of it. Four years ago, I started contributing to my employer’s 401k starting at 3%, every year I increase the amount. This year I am maxing it out and will continue to do so. This is one sure way to build wealth.
Great post, thank you. Can you please explain the calculation for this part: ‘If you put 20% down on a property and it goes up 3% a year, that’s a 15% return on your cash thanks to leverage.”
Sure.
$100,000 property value, $20,000 down payment.
Property goes up 3%, or $3,000. $3,000 / $20,000 = 15% return on your cash downpayment. Plus, you are paying down your mortgage in the process.
I’d check out real estate crowdfunding as well. I like Fundrise.
I spent a lot of my income, I pi$$ed it up the wall and lived my life to the full. I still worked my arse off, I still do sometimes 7 days a week in my absolute dream job that is a “paid hobby” and I still have a net worth over a million at age 40. The difference to me of 1 million or 3 is nothing. What I did in my 20-30 years, how I lived, the memories I have, what I gained in every way other than just financial is absolutely priceless and I wouldn’t swap it for anything. There is no bank balance that could ever match a happy existence living life to the full. I did everything and I loved it. Saving everything so you can enjoy yourself at 70 is absolutely ridiculous and in my opinion the worst possible advice someone could give or listen to. You can not do all nighters, several in a row, raving, climbing mountains, travel to dangerous places, super remote places, super exotic places, and do the same sort of things when you are 70. At 70 you are close to death and there’s a reasonably probability you have already died. Money as a singular yard stick and measure is the most soul destroying and sad perspective in my book. What a waste of a life.
Totally agree! There’s definitely a spectrum between spending 100% and saving 100% — and it’s up to everyone to judge what is best for themselves.
I went nuts in my 20’s and wouldn’t trade it. However, my dad saved ‘until it hurt’ as described, and built a business for himself, and generational wealth.
Tangentially, we see some people today talking about ‘taxing the rich’ like it’s some easy resource. However, they don’t see the years of scrimping that my Dad endured to get where he is today. Can those people that want to tax him give him back experiences that he declined? Can they give him back his youth? So I don’t see it as super fair to levy taxes on those that planned for their future.
That was his choice. And, I still want to tax your dad more. Sorry not sorry.
As a 16 year old I am able to save 100% of my income (may it be small), and I am in the midst of building a stock portfolio. When do you think the optimal time to invest into real estate is? ASAP, out of highschool, out of college, during a housing correction, or later?
Not now since most of the US housing market is inflated. wait for the impending crash.
Needed to comment about the ordering anything other than water line. Up until now, when other people are paying for my meal, I still feel uncomfortable ordering anything other than water. My parents drilled that pretty hard into my brain! Although, unconsciously I’m sure
Financial Samurai – quick question on the math above. When you calculate net worth do you consider total assets less mortgage? Or simply total assets? Was trying to follow along with the net worth math in / around significant home real estate purchases.
So being in my late 40s, and with the same career for 24 years, it is a little disheartening reading how quickly FS attained 1 million in net worth. The younger a person recognizes the importance of budgeting, investing the excess income above needs, and having a game plan cannot be overstated. By disheartening, I mean realizing how many working years were squandered without a plan for financial freedom that stunted my wealth building.
The good news: FS demonstrates action that can be taken at any age to improve financial health, as well as passing the knowledge to your kids so they jump start the process early.
Our goal is imparting our current knowledge and habits to our kids as they grow and mature. We are building our financial independence with very deliberate steps: healthy net worth, small mortgage left to pay off, pension eligibility currently for the wife and I, well funded 529s and climbing. No other debt than the mortgage. We are trying to track all the information but occasionally get lost in the chaos of life.
I have read multiple times about personal capital. Inputted our data manually but did not feel comfortable linking any accounts through the site. How safe is the site? Isn’t it a bad idea to have all personal account information linked through one location, making it a high value target for humans with malicious intent. Does anyone have personal experience with the site that can explain the security? Thank you
I understand your angst about the past. Take heart! You know all kinds of things now that will further your financial achievements!
I’m quite a bit beyond you in age, way behind probably everybody here in my net worth…but I can’t redo anything. I can only try to make wise decisions from here on out.
On the other hand, we are rich in family, having many children, and now an even greater number of grandchildren. We didn’t invest financially when young–we had babies and spent our money providing for them. We are rich in ways other than a 401k, and I know that if I lost everything I have (in a worldly sense) tomorrow, we would not go hungry nor be homeless, because of our support system.
Great read and i hope that I can have similar luck im think of investing in ripple. i hate i missed out on bitcoin. if anyone is looking for a great read and a teaching source i recommend this https://tinyurl.com/y9auflzx
I have personally learned alot from it and made a nice amount of money from its teachings just thought I would continue helping anyone that wants more and more knowledge
I just read a review of RealtyShres @NomadCapitalist. Seems like they bungle up every property he purchased. How has your experience been?
Thanks and Happy New Year!!
So far so good. That’s why I committed another $300,000 to the real estate equity fund.
Not sure what nomad capitalist’s picks were, just like if you invest in the stock market, there are winners and there are losers. My thought process is, that I would just invest in a fund that is run by a committee, who controls what deals get on the platform, to choose the investments for me. After a couple years of learning their process, then I can pick specific deals.
Also, for those people who are picking single-family homes as investments on a real estate crowdfunding platform that is trying to focus on the middle market, I think that’s a sub optimal move.
Hi Sam,
I really enjoy your blog. You cracked me up a bit with this post, though. You mentioned your family wasn’t rich because your parents were FSOs. Well, I was an FSO for 13 years, then bailed at 42 to become a full-time investor.
Dude, pretty quickly FSOs are making six figures and then have zero expenses while living overseas. Plus, FSOs earn pensions in 20 years, including health care for the rest of their lives from age 50 onward.
If you do the math, if they retire at 50, each pension would be valued in the mid-seven figures relative to the amount of money you would need on-hand to purchase a comparable annuity.
Anyways, no utilities, no rent, no cell phone charges even, making six figures, earning a pension that pays forever from 50 onward (yes, I did abandon that one!), and your kids get to go to private schools that can cost up to $20,000 a year, for free, for as many kids as you have.
Maybe relative to the financial world you were swimming in they weren’t wealthy, but that’s pretty rich! It’s cash flow upper-middle class (when you are abroad), but when you add in the benefits FSOs are making north of 200K per year. Cheers!
Tom
Glad I made you laugh Tom.
My father is 72 years old. Maybe pay has accelerated since you joined?
We lived in a modest town home, and drove an eight-year-old Toyota Camry. Here’s a picture of our house actually: https://www.financialsamurai.com/rich-spoiled-clueless-work-minimum-wage-job-at-least-twice/
We definitely were not poor, but I’m pretty certain that we lived a very middle-class lifestyle. Went to public HS and college too in Virginia.
And if you live in New York City, or San Francisco, the median price home is almost $1.5 million now. Even if you make an adjusted $200K, you can’t afford a home 7.5X your gross income. The D.C. area where we lived. was expensive, but not as much.
I find this a good read. Especially I find it an awesome tool for parents/caregivers to share with their middle school and beyond children. I was not taught nor did I think about time management and personal finances. I’m certain that is because my parents were not taught. Now that I am older I see the very importance of starting young. This is the first writting of yours I’ve read and most certain will not be the last. I am going to share this for I see it’s value. For this I thank you.
I’m 13, live in an upper middle-class family, have good grades in school, and wan’t to start planning out my future now. I wan’t to learn the major mistakes other people have made before I can even grasp the chance to do the same. I run an ebay account where I make ~$400 gross a month buying and reselling high tier shoes and clothing. The money usually ends up in my desk drawer, but I have been dabbling in the investment of crypto currency and I have turned around a $2200 profit so far. I know that money comes with work and gambling for it is the worst thing you could do. I wan’t to be able to live a happy and wealthy life and I know I have all the utilities but I don’t know what to do. This article and many other on this site have been a non-stop read for the past few days. I am willing to work and take risks to sustain financial growth but I don’t know where to start.
If anyone is willing to give me 3 pieces of advice for my future I will take them with full consideration.
Thanks, Daniel.
Hi Daniel,
Here you go! https://www.financialsamurai.com/financial-advice-for-a-13-year-old-cryptocurrency-trader/
Wrote a whole post to answer your question and you’ll see tons of advice from other readers.
Good luck!
Sam
Thanks!
Hi, guys I just ran across this forum in a 20 year old nursing major. I have little student loan debt as of right now and I was wondering what I could do now to set myself ahead in the financial game.
I was being harassed in Anaheim with my child for asking he neighbors kid on some type of drugs to go home-these people have invaded every job i have had- including target -it’s a doctor from allergan pharmacuetical i hadn’t worked there since 1980 when they drugged me and no one called the anyone at all-they put a cot in the bathroom after they did it-terrorists–
my loan in anaheim was from bank of america-diane alexander was not arrested after i called te anahiem police in 1986-cause of the people nextdoor used to live next to me in garden grove.
my sears a nd discover credit cards were stolen, when i tried to send in a name change and job change and income report-1997-principal mortgage- inside our store by people from the back of the store-I counted the deposit for the store and the manager gave it to lisa, she must have taken it-
In 1972 all… insurance agent set p an accident-I came ot a stop twice-fat man black hair-the police did nothing about felons allover the riverview drive-riverside –
I received 0 un employment checks everyone else from the store did- laid off when the store closed-nothing at all-worked there for years and asked to built a new store-near by-
You are absolutely right about what to do when one graduates from college and gets that first big job — preferably without huge student loans.
If a graduate continues to live very cheaply their first year at their new job, and saves just $15,000 that year, it can transform their retirement.
Historic rate of return after subtracting inflation for the US stock market is around 7%. $15,000 compounded at 7% for 42 years will yield, on average, over half a million dollars. (That’s in today’s dollars, the actual number would be higher to account for inflation.)
It would also put the person in the 73rd percentile of net worth among those 65 and older even if they never saved another dime.
Delaying gratification for a second year and repeating the process would put them at a net worth of just shy of $1,000,000.
And those are income producing assets that should safely generate an income of $40,000 a year in today’s dollars!
When I read about middle class families with less than $25,000 in retirement savings at age 65, I just cringe.
Darn, I typed in a few numbers wrong. $15,000 at 7% for 42 years will be around a quarter of a million dollars. So two years of that saving would net a half-million dollars, not a million. Safe withdrawal rate would net $20,000 a year of the half million.
It’s still a huge amount of money for a very small amount of “sacrifice”.
Is it worth it to spend 450K on a dental school degree? I feel like the return on investment is poor. Median salary for a dental associate is around 120K and dentistry is becoming saturated in big cities. What are your thoughts?
I would say that you really have to ask yourself if you would like a particular profession before diving in. If you look at something like dentistry, nursing, or physician careers, none of them may be the ultimate return on investment if you look at it from purely a financial standpoint.
Obviously, not everyone is suited to even be in any of those professions either. Most people in dentistry have some degree of interest in helping others and probably did not choose it solely for money. That being said, dentistry is a relatively stable profession. No matter how much debt you rack up, you’ll likely get out of it if you are able to hold the job for a certain period of time. How quickly you repay the loans/debt is up to how you choose to spend your earnings early in your career.
Doesn’t sound worth it to me, unless you really, REALLY love to work on people’s teeth. $450,000 earning 5% a year is a nice $22,500 a year in passive income.
What is it about dentistry that calls to you? If it is about the money, there are plenty of other six figure jobs out there that may be more intriguing. Have a look yourself.
Hi,
I think our way of thinking quite a like.
underdog, think before act, company politics etc.
But still, i just finished my study at 24, 2 years late. :D
My plan is to work and build a relationship as much as i can until 28 (currently working in logistic line).
At the end of 28, i should have something i can depend to in order to build my first million. (business).
From there, i give my self 2 years (until 30) to reach that goal.
Wow I glad I found your site I can’t wait to build my first million. I’m 32 and have a net worth of about 930k so I’m almost there. Not quite under 30 years old but somewhat close. Most of it is into real estate. I also live in Los Angeles.
Here is my story
I have always worked and saved money my whole life. First job was at 15 at a local hobby store net worth at 18 years old was about $25000
I started a successfully eBay business at 18 and put my self through college at the local state university but the eBay business failed and ended when I was 21 years old net worth was $100,000
I dropped out of college and got into selling life insurance and became a life insurance agent at 22 years old. This was at 2007 and I know because of the housing crash I need to save asap to buy a house. I made 12k my first year as an insurance agent and 73k my second year, 86k my 3rd year about about 80k every year after that. When I was 25 I has a net worth of 150k and I bought my first house for 380,000 with a 150k down payment. My mom gave my $50k so I only had to use my 100k so I still had 50k for emergencies. Bought my second house at 27 years old for $222,000 with 20% down and my 3rd house 29 at $260,000 k at 20% down and I have been aggressively paying them dos. Every since and they are all rented out
I’m now 32 and the first house is with 650k and I owe 169k second house is with 260k and I owe 95k and 3rd house is with 310k and I owe 185k. I have about 30k in company stock and about 30k in paied of cars and 70k liquid. Last year was my first year I made over 6 figures as an insurance agent at $103,000 last year and this year I’ll probably end up at about 115k
You don’t need a crazy high income to become a millionaire. You just need to live well below your means and save and invest.
Glad to see this post on your front page today!
I read through the comments and felt a bit surprised by how many people rag on you for the early stock earnings. If anything, I think your path to wealth is much more difficult because you did have an enormous pile of cash at the age of 22/23.
For most people, that would have led to building a lot of negative spending habits that would have taken many more years to correct. The fact that you were able to wisely invest and keep your earnings – VERY impressive!! :)
Thanks for putting this post together and I too wish I had read it years ago!
Thanks for reading. The temptation to blow the wad of cash at a young age was there. But because work was so stressful, I knew I had to save it in order to have the option to do some type of less stressful work later.
I’m VERY glad I converted a lot of the funny money into an SF condo right after my 26th birthday. The ~$460,000 mortgage locked me down!
My path to millions
20s: living in the Bay area making about 40k/ year (mid 1990); actuary entry level. At age 26, made a big bet that China/ Asia was the place to be and packed it all in to become a poorly paid English/ Math teacher in China (making about USD100/ month…yes USD100!) It was an awesome and incredible experience – did it for one year.
Mid 20s to Mid 30s: Worked in HK and bounced around jobs here and there (including co-founding a company), making about USD50k/ year. Net worth age 30: USD150k.
At age 35 got fired from my job and was offered to go to Shanghai China to lead a business unit for well known consultancy. Starting job was USD70k (but was paid in Chinese Currency). Age 35 Net worth about USD300k. I arrived in Shanghai at the right time (when it was affordable and I was paid decently). Key milestones which really accelerated by NW a) married a woman and bought 2 properties in Shanghai b) RMB was appreciating big time. By the time I left China in 2009 at age 42 my networh was USD1 mn.
In 40s Now living in Singapore (low taxes) and pulling in USD200k year. Bought property in Singapore (not making or losing money).
At age 50 now (2016) – networth is about USD4 mn. Which approx. 75% is from property holdings. The rest are liquid investments. Although my initial target was USD5 mn…hopefuly I can hit that before 55.
Need to add that along the way…the family had nice windfall when my uncle sold his bank and my dad shared some of the windfall. My dad gave me about USD500k.
In hindsight, it was about making the right career bet (betting on Asia) and having a horse shoe up your ass (getting married and lucky time to buy properties in China) and being blessed (uncle selling his bank).
I’m now thinking about returning to California…and winding down the career. But the taxes in California are so damn scary!!!
I have two kids 10 and 8. Wife is 35.
FS – you and I need to hook up man; enjoyed reading your post! Probably have taken some similar paths.
20s: Figuring out what you want in life
30s: You’ve figured it out and you are now building your brand name
40s: Maxing out on pay and titles
50s: Winding down the career
60s: Leaving a legacy
Sounds like you took an adventure that I WANTED to take out of college, but didn’t because I got a job I could not refuse (GS in NYC). If I had an offer from any other job, I would have gone to China in 1999. But it is hard to reject a frontline revenue generating job from what was then the toughest bank to get into (maybe still is) and be potentially set for life if I lasted 10 years.
The China move for you was great. Seems like your wife comes from a wealthy family? If your wife can buy TWO properties at age 20, or in her early 20s (?), that is pretty damn good! Not too sure how many people have Uncle’s who “sold his bank” either!
What a crazy run Singapore went through from 2000 onward yeah? I remember Singapore being relatively affordable then. We can go eat some curry crab next time I’m visiting!
I view the tremendous energy as a huge advantage. That’s why I spend all of my time right now (early twenties) working my a** off to build something for myself, while the rest of people my age are concerned with partying and other shenanigans.
Hi Sam, I’m 55 years old, I live in the Canary Island, can you give some tips to achieve the finance freedom. I Speak more languages, Spanish is my mother tongue, I speak English, French, German, Italian, Portuguese. I want to start in some new project for my life. Thanks for very useful articles.
Well said. Nicely told with great instruction. Have one for you. Im am 34. I worked my tail off, made some great investments and have a net orb of 6 mil. But I don’t know what to do. I feel stuck and not sure what to do. It’s wierd. I am the underdog, wear exactly what you do, it’s funny actually. I have my toys, a few houses, nice cars, great wife etc, so do I just live. I can retire if I want. Easy. At number was a low ball. What do you think
It’s funny how we get used to our net worth isn’t it?
Figure out what things you really love to do and do them. You have enough money to do whatever you want now. I left banking in 2012 at 34 to make little money as a blogger. But it’s been a ton of fun, and it surprisingly has turned out to be quite lucrative as well. See: How Much Can You Really Make Blogging?
Find something that pays you, fulfills you, and is fun. Then you’ll have a lot more inspiration!
Great motivational post. Definitely shows that after 2 years, people are still commenting. It’s refreshing to see what it’s going to take for someone in the medical profession who is over a decade behind to build wealth. It definitely can be done if you stick to the principles that you’ve outlined.
I’ve considered that if I had taken a tech job instead of going into medicine (I made a last minute decision to change careers) and had been knowledgeable about finance then, it’d still take me into my late 40’s/early 50’s to catch up financially as a doctor compared to the tech/finance equivalent of me. That’s the power of compound interest and time.
Keep up the good work!
Hi Sam,
I found your story really inspiring and to me, it seems like you’ve grafted to get where you are. Some are given opportunities and, as you say, waste them due to laziness or entitlement. I also think that writing posts like this is a great way of giving back in a way as others glean their own advice and solutions from your experiences.
Glad to have found your blog.