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First Million


bennycx
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Today is the first time I've reached my First Million dollars at the age of 30, just before my 31st birthday!  ;D

 

I am very grateful to the mega bull market in the US for the past 10 years (started investing since 2009) and all the wonderful learning opportunities on this forum!

 

Some people say the first million is the hardest to make. Do you remember when you first become a millionaire?

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Yes - when Trump was elected and Obama's administration came to an end!  ;D ;D ;D

 

Something that I keep track of that I think is a better yardstick for measuring savings is if you took your net worth * the dividend yield on SPY, and compare that to my spending level.  This provides a market-adjusted measurement of savings.  To the extent the your net worth goes up 1:1 with the market, your earnings under this measure won't change.  Your net worth is up this month with the market, but could fall back next month to the extent the market drops, and you have no control over this.  This alternative measurement I'm describing will change (1) to the extent you outperform or underperform the market, (2) to the extent you increase your savings by adding to it, and (3) to the extent the absolute level of dividends issued increases.

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Today is the first time I've reached my First Million dollars at the age of 30, just before my 31st birthday!  ;D

 

I am very grateful to the mega bull market in the US for the past 10 years (started investing since 2009) and all the wonderful learning opportunities on this forum!

 

Some people say the first million is the hardest to make. Do you remember when you first become a millionaire?

 

Congrats! That's an incredible accomplishment. Would be curious to hear more if you're comfortable sharing - this used to be a goal of mine ($1mln by 30) but I did a Masters degree and started to work 2 years later than I originally expected which has made the math a lot harder. Any idea how your net worth splits between savings vs. investment gains? Would also be curious to hear about how your journey has progressed by age/year. Any abnormal gains or inflows, or has it just been a steady grind?

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Congrats on your first brick!  You should do something meaningful to you to celebrate.

 

When I hit my first one (not counting real estate) and I realized I was officially an accredited investor, I decided to reward myself by going to an investor conference (NERD ALERT!) and meeting some of my heroes.  I looked at Sohn and a few others but because I am a value guy decided on the Ivey Ben Graham one.  Spending $500 vs $2000+ to meet the same people is a no brainer for me.

 

In my 30s I was paying off law school debt and starting to build the foundations and now I'm working on FIRE and playing to retire (hopefully) when I'm 51. 

 

 

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Congrats, that’s quite an accomplishment assuming you started from zero. 

 

I remember first passing the $1m mark because it happened rather quickly thanks to a concentrated position in a stock that went up 5x or something in less than a year.  Of course I did a round trip on that one, and it took me a while to get back to $1m again.  Hopefully you will only need to become a millionaire once, not twice like me.  :)

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I first became millionaire 20 years ago, during the dotcom, through the stock options I was granted in a hot tech company.  and then I lost all of it because I didn't exercise and the stock fell > 90%. I wished I had known Buffett then. If I had listened to the annual meeting in 1999, I would have exercised my options, sold all of them and bought BRK. Then I would have called myself a "MULTI-millionaire" :) My wife liked to say that I would be so much richer if she had met me earlier (she would ask me to sell the stocks and we would bought a house at San Jose CA)

 

on the other hand, if I hadn't lost my millions in the year 2000, I wouldn't have read so much about the stock market and finance, and then eventually learned about Mr. Buffett. I learned from Mr. Buffett not only about the stock market, I also learned how to be a much better person.

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I first became millionaire 20 years ago, during the dotcom, through the stock options I was granted in a hot tech company.  and then I lost all of it because I didn't exercise and the stock fell > 90%. I wished I had known Buffett then. If I had listened to the annual meeting in 1999, I would have exercised my options, sold all of them and bought BRK. Then I would have called myself a "MULTI-millionaire" :) My wife liked to say that I would be so much richer if she had met me earlier (she would ask me to sell the stocks and we would bought a house at San Jose CA)

 

on the other hand, if I hadn't lost my millions in the year 2000, I wouldn't have read so much about the stock market and finance, and then eventually learned about Mr. Buffett. I learned from Mr. Buffett not only about the stock market, I also learned how to be a much better person.

 

I had a similar story, but I did exercise my options as soon as I could so that I wouldn't be too overweight in my own company.  The problem was that after exercising the options I invested half of the proceeds into other tech stocks.  You can guess what happened.  Luckily I was still fairly young in 2000 (about 4 years out of college so I didn't have 7 figures in investments to lose) and I was married already and had my wife to convince me to spend half of what I did have on a house, so I didn't lose 7 figures like others did in the crash, just very low 6 figures.  It still hurt though and it lead me to reading about investing in general, Buffett, value investing, etc... 

 

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This is a goal I've had for some time as well. I'm still pretty far away, but a couple mid-teens years plus my normal savings rate would have me within spitting distance.

 

Honestly, the best "investment" I've ever made was purchasing two vacant residential lots in an area near an upcoming public transit system in a growing Southern city.

 

The leverage from increasing house prices without having to take on debt myself has been pretty crazy. My personal view is land offers many of the benefits of homeownership or even owning a rental property without many of the negatives. In reality, the physical structure of a home is a depreciating asset, while the land underneath is what actually appreciates. So on a $100,000 home, when home prices increase 3%, the physical structure did not really increase in value (depreciation offset by replacement cost inflation approximately net out). The land, which may be roughly 20% of the total value, actually increased in value by 15%.

 

Anyways, my market investments have been only so-so because I've held a very large amount of cash. I think I'm still working on the psychological scars from a prior employer who insisted on holding 40% in cash for at least the last 6 years.

 

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Unless you're a real estate developer referencing the PFS you provided to the bank, big Congrats!  If you're a real estate developer, congrats on the $300K.  ;D

 

LOL. That's hilarious, and has more than a kernel of truth to it. Although how do you compute a net worth when you have significant illiquid assets. A material portion of my net worth is in real estate and my own business. You could value those things at cost/book, but at least in my case that would be absurdly conservative. The real estate at least has comparables...

 

Computing a net worth statement isn't something I bother doing except for getting new mortgages, so I've never really thought about it.

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I never knew exactly when I hit mine, but I think it was likely about exactly the same as you, slightly before my 31st birthday.  To piggyback a little, a recently hit a milestone of finally owning an A share of Berkshire. 

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A dude on the phone with his father, a grumpy old retired econ professor:

 

Dude:  “Hey dad, guess what, I just became a millionaire.”

Dad:  “No you didn’t.”

Dude:  “How do you mean?”

Dad:  “You just converted your human capital into financial capital.  In other words, you just sold your life for money.  You were always a millionaire, you just didn’t know it.”

Dude:  “Ok, but no dad, I didn’t just save my salary, I made a killing in the stock market!”

Dad:  “That just means you used the wrong discount rate.”

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A dude on the phone with his father, a grumpy old retired econ professor:

 

Dude:  “Hey dad, guess what, I just became a millionaire.”

Dad:  “No you didn’t.”

Dude:  “How do you mean?”

Dad:  “You just converted your human capital into financial capital.  In other words, you just sold your life for money.  You were always a millionaire, you just didn’t know it.”

Dude:  “Ok, but no dad, I didn’t just save my salary, I made a killing in the stock market!”

Dad:  “That just means you used the wrong discount rate.”

 

Hahaha

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A dude on the phone with his father, a grumpy old retired econ professor:

 

Dude:  “Hey dad, guess what, I just became a millionaire.”

Dad:  “No you didn’t.”

Dude:  “How do you mean?”

Dad:  “You just converted your human capital into financial capital.  In other words, you just sold your life for money.  You were always a millionaire, you just didn’t know it.”

Dude:  “Ok, but no dad, I didn’t just save my salary, I made a killing in the stock market!”

Dad:  “That just means you used the wrong discount rate.”

 

;D

 

Dad, I really really just became a millionaire...

 

...

 

I started with 10 million and invested in Canadian O&Gs, some promising biotechs, even more promising techs, couple airlines, IBM, and triple index tracker.

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I hit the mark about two years ago before I bought the houses...but I'd guess it isn't the same as it was growing up in the 80s/90s. Now, you can get a useful degree and go consult for 5 years, save your cash and you're 90% of the ways there. Which is a good thing!

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I hit the mark about two years ago before I bought the houses...but I'd guess it isn't the same as it was growing up in the 80s/90s. Now, you can get a useful degree and go consult for 5 years, save your cash and you're 90% of the ways there. Which is a good thing!

 

I think it was easier to build wealth in the 80s/90s. Lower debt levels for the average young person and better market returns. The S&P 500 averaged like 18% or so from 1981-1999.

 

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