Millionaire By 30: How He Made It Happen

[hegemony]

http://www.mainstreet.com/slideshow/smart-...-made-it-happen

[radi8]

Doesn't make mathematical sense unless he earned a whole lot more than $40K.

 

If he started saving at 18 (assumption) and is a millionaire by 30, assuming he makes a steady 7% on his money, he'd have had to make monthly deposits of $4,488 without missing a month.

If he earns $40K/year as stated, that's only $3,333/month income....before taxes.

 

He'd have to earn at least 26% interest and not spend one dime on living expenses to make it work on that salary, after accounting for federal taxes and FICA alone.

Or have several grand/month in additional income from his side jobs (at least another $1,100 towards savings + 100% of his living expenses) which would mean although his "salary" was $40k, his actual income was substantially higher. Which is cool... but if that's the case, he's really not a millionaire at 30 on $40K.

[hegemony]

I guess we can buy the book and find out more LOL

 

then we can read his story of millionaire by 40!!!!

Edited October 4, 2009 by hegemony

[TroyP]

Doesn't make mathematical sense unless he earned a whole lot more than $40K.

 

If he started saving at 18 (assumption) and is a millionaire by 30, assuming he makes a steady 7% on his money, he'd have had to make monthly deposits of $4,488 without missing a month.

If he earns $40K/year as stated, that's only $3,333/month income....before taxes.

 

He'd have to earn at least 26% interest and not spend one dime on living expenses to make it work on that salary, after accounting for federal taxes and FICA alone.

Or have several grand/month in additional income from his side jobs (at least another $1,100 towards savings + 100% of his living expenses) which would mean although his "salary" was $40k, his actual income was substantially higher. Which is cool... but if that's the case, he's really not a millionaire at 30 on $40K.

 

Depending on what he did with rental properties and investments, its possible that despite his $40k salary he's generated enough passive income to become a millionaire. That said, the story is certainly misleading. You're not really becoming a millionaire on $40k a year if you're earning another $25k in investment income.

 

My goal personally is to have no debt, and $100k in the bank (not including retirement accounts) by 12/31/2011.

 

I've made a lot of progress on the first part (all I really have left is $15k in student loans) the latter... well that will take a lot more work, but I'll get there.

[TJ Girl]

From one of the reviews of his book on Amazon:

 

His multifamily house essentially doubled in value in the space of a couple of years, and accounted for a large chunk of the $1 mil.

[radi8]

From one of the reviews of his book on Amazon:

 

His multifamily house essentially doubled in value in the space of a couple of years, and accounted for a large chunk of the $1 mil.

 

 

I wonder how much of his million was actually accumulated by saving?

[StockTrader6080]

From one of the reviews of his book on Amazon:

 

His multifamily house essentially doubled in value in the space of a couple of years, and accounted for a large chunk of the $1 mil.

 

BINGO. That is a logical explaination.

[hurricanesfans27]

it may have doubled but it since been halved so i guess hes not a millionaire anymore.

[higher180]

I'd like to be a millionaire by age 50 I'll play it safe that way.

[radi8]

I'd like to be a millionaire by age 50 I'll play it safe that way.

 

 

I already surpassed the "million" mark, considering the last 29 years income. Problem is it wasn't all at once.

[cljohnr]

I think these type of people miss the point. He speaks of how great it is to be a millionaire, yet he:

 

Doesn't own a car

Has to put up with roommates

Intentionally keeps himself from having free time not working

Only allows himself to spend $200 per week

...

 

The guy might die with $25 million, never having enjoyed any of it. If he truly has $1 million at 30, he'll have $10 million or so at retirement age if he never saves another penny. To me, the point of becoming independently wealthy is so that I don't have to work and just do whatever I enjoy. I don't get the feeling that he loves his job.

[thesaintly]

While the article makes some valid points on compound interest and savings instead of spending, I have to disagree regarding 401k's. You shouldn't just throw money into a 401k to "hide it from yourself". You should invest when the timing is right instead of setting your personal financial health on auto-pilot. Proactive investors sleep better at night. Other than that, not a bad piece.

[Yoda147]

This guy had a positive goal, accomplished it, and is proud of it.

 

Whining about it is silly.

[radi8]

Whining about it is silly.

 

Yeah, but we're gonna anyway.

[TJ Girl]

This guy had a positive goal, accomplished it, and is proud of it.

 

Whining about it is silly.

I think it's a valid exercise to look at what someone else did, and determine what aspects you can apply to your own life, and what aspects don't apply (whether because of luck, legality, resources, different ultimate goals, etc)

[TroyP]

This guy had a positive goal, accomplished it, and is proud of it.

 

Whining about it is silly.

I think it's a valid exercise to look at what someone else did, and determine what aspects you can apply to your own life, and what aspects don't apply (whether because of luck, legality, resources, different ultimate goals, etc)

 

I agree. I know a guy who was a millionaire by his 28th birthday despite never having a salary of more than probably $50k a year. He won $3 Million on a scratch off ticket.

 

Worked for him, but somehow I doubt that's in the cards for me.

[Kevin20]

Yes this is ridiculous -- compound interest as the article says his book credits, doesn't express much power by the time you're 30, unless your parents set up some hefty savings for you as a small child. In just 10 or 12 years the interest you earn on interest isn't going to be a heck of a lot for any modest amount of saving.

 

I once bought a stock that went up 50-fold in a year and a half. If I'd had the foresight to buy a lot more and sell all at the top I'd have been a millionaire right at 30! Alas... but THAT's not compound interest, and however this dude made his supposed million, it isn't compound interest either.

[cmw45]

I think these type of people miss the point. He speaks of how great it is to be a millionaire, yet he:

 

Doesn't own a car

Has to put up with roommates

Intentionally keeps himself from having free time not working

Only allows himself to spend $200 per week

...

 

The guy might die with $25 million, never having enjoyed any of it. If he truly has $1 million at 30, he'll have $10 million or so at retirement age if he never saves another penny. To me, the point of becoming independently wealthy is so that I don't have to work and just do whatever I enjoy. I don't get the feeling that he loves his job.