The wealthy, how'd they get there?

[GeezerSteve]

Wealth and financial security are not the same thing. I have run into many people who had great positive net worth who were one down market cycle away from losing it all. When you engage in leverage plays (e.g., rental properties pledged as security, relying on rent revenue to cover your debt service).

For most people, the fastest and surest way to fill a leaky bucket is to plug the holes. Live within your means. Spend less than you make. Save.

Yeah, most wealthy people come from wealthy families or at least wealthy places. But not always. I did not inherit a dime and paid for all my tuition and other educational expenses by working through college and law school. OTOH, although my parents could not afford to send me to college, they (one a high school dropout) valued education, supported our local schools and instilled a work ethic in their kids.

And Honey and I decided to not have children.

Just a point about the "business owner" side of things. With some exceptions - such as being a contractor in the trades, or being a freelance web developer or similar - starting a business usually requires not-insignificant capital.

You omitted professional service provider with a portable book of business. Today's technology makes it pretty cheap for a big firm escapee with clients to start a bare bones law firm or accounting firm. It worked for me.

[GeezerSteve]

what exactly is wealth?

Valid question. OP is obviously talking about material wealth. (See OP's reference to "financial security"). Material wealth and non-material wealth are related. One key to saving money is finding value in things that are free or cheap, e.g., observing nature, hanging with friends, hippy stick skiing, etc.

Okay then, back to the TGR snark

[Buster Highmen]

Also read this:
https://www.washingtonpost.com/opini...=.7d16b67db91b

[adrenalated]

You omitted professional service provider with a portable book of business. Today's technology makes it pretty cheap for a big firm escapee with clients to start a bare bones law firm or accounting firm. It worked for me.

Absolutely, it was not meant to be an all-inclusive list.

[Danno]

I am not sure what the intent of the inquiry is. I have no doubt that the vast majority of the financially secure got that way through hard work. What does that prove, what does that say, what's the purpose and use of reaching that conclusion?

[iceman]

He's trying to convince Leavenworth Skier to quit fucking around with houses and go work at his job, basically.

[Buster Highmen]

I don't know any of those people.

Now you're just being modest.

[Benny Profane]

what exactly is wealth?

This goes back that whole net worth argument in another thread. It's simple. The value of your assets minus your debt. Now, some can defy that with bullshit, like Trump, but, eventually, you get caught with your pants down.

And don't give me that wealth is happiness bullshit. Money buys good skiing, to start.

[mcsquared]

My dad could be considered "wealthy". Not billionaire wealthy but was able to retire at precisely 57.5 (20 years ago), and is able to bring in the neighborhood of $250k a year of passive income ever since, 2 houses (Mountain and City). He didn't come from money. Raised by a single mom in Brighton, CO. But he will be the first to tell you that his success is just a mixture of good luck and simply showing up every morning. He met my mom while working at a lumber yard. They got married and she got a job in a mountain town. So they just happened to move to a nascent ski resort in the early 60's. He starts as a construction worker in the summer and bartender in the winter. Couple real estate deals later and he is able to start his own business in a town that was growing like gangbusters. Another dozen real estate deals and 25 years of business later he is able to cash out and travel and fart around in his garage as much as he wants.

[Foggy_Goggles]

He's trying to convince Leavenworth Skier to quit fucking around with houses and go work at his job, basically.

Not exactly. I am just genuinely interested in seeing what ya'll see and perceive. I don't actually think there is a neat and correct answer. As I read the replies, it makes me realize that that I have actually experienced is people using the money and experience they garner at a a paycheck job to pursue other opportunities.

I just know absolutely zero financially secure people who didn't get there without a tremendous amount of hard work. I just don't see that as being respected by younger generations. But that's just me. Old and hardworking. Carry on.

[Viva]

Find something that's mildly entertaining that pays the bills and you're good to go.

TGR don't pay no bills.

[fatnslow]

I heard at a real estate seminar that we're all just 2-3 house flips away from being millionaires, right? They said they'd explain further at the next seminar for another $5000.

Send me $1000 and I'll send you a PDF with killer graphics on how to do it in 18 months without using any of your own money and only spend 5 hours a week.

[Danno]

I just know absolutely zero financially secure people who didn't get there without a tremendous amount of hard work. I just don't see that as being respected by younger generations. But that's just me. Old and hardworking. Carry on.

First, I would suspect that you would not have reason to encounter the many wealthy people that got there without tremendous hard work.

Second, I don't think it is an issue of young people not respecting the hard work, that sounds a bit grumpy old man-ish. What I think many young people believe, that many geezers don't see, is that the wealthy person may have accumulated their wealth through hard work, but that person is often blind to the many advantages they had that helped them along the way. In other words, there is often a myopic belief that they got where they are through hard work only, with the corollary belief that those who haven;t achieved the same wealth must not be working as hard, or aren't as smart, or whatever. And that's a dangerous misconception, IMO.

[TAFKALVS]

Send me $1000 and I'll send you a PDF with killer graphics on how to do it in 18 months without using any of your own money and only spend 5 hours a week.

Robert Kiyosaki, is that you?

[Foggy_Goggles]

First, I would suspect that you would not have reason to encounter the many wealthy people that got there without tremendous hard work.

Second, I don't think it is an issue of young people not respecting the hard work, that sounds a bit grumpy old man-ish. What I think many young people believe, that many geezers don't see, is that the wealthy person may have accumulated their wealth through hard work, but that person is often blind to the many advantages they had that helped them along the way. In other words, there is often a myopic belief that they got where they are through hard work only, with the corollary belief that those who haven;t achieved the same wealth must not be working as hard, or aren't as smart, or whatever. And that's a dangerous misconception, IMO.

I more or less agree with that. In some ways, opportunity is not available to all like how it used to be. In other ways, opportunity has never been greater. Danno, don't forget that I grew up in suburban CT. I've seen people be given Mercedes' for their 16th birthday. Thought I was done with that part of the world forever until I just had to go the a 70th birthday party at the Doral in Ryebrook. Barf.

[XXX-er]

This goes back that whole net worth argument in another thread. It's simple. The value of your assets minus your debt. Now, some can defy that with bullshit, like Trump, but, eventually, you get caught with your pants down.

And don't give me that wealth is happiness bullshit. Money buys good skiing, to start.

well some people think wealthy is having lots of stuff so how much stuff?

I came from zero money, did zero planning, zero education, barely made it out of h-school which all explains the poor spelling and sentence structure but I did show up for work

haven't had a real job in 13 yars, lotsa skis and skiing tho, too many skis actualy so instead of buying more skis, I am just gona go cat skiing

but not heli skiing cuz that would be excessive

[GeezerSteve]

I just know absolutely zero financially secure people who didn't get there without a tremendous amount of hard work.

You live in a bubble. At least 1/3, possibly 1/2, of wealthy people (say >$5 million net worth) I have encountered inherited significant wealth or lucked into it by being in the right place at the right time during the tech boom. I'd put the "got it through hard work" at around 1/4, probably less. The balance were people who worked as hard as the next guy and got some very good breaks or had 95%-tile talents or skills. In my practice I have run into a pretty fair representation of the spectrum of wealthy people. Of course, this begs the definition of "wealthy." IME, the higher the bracketing, say net worth >$10 million) the higher the percentage of inherited and dumb luck wealth.

[Norseman]

Live within your means. Spend less than you make. Save.

This is my current mantra.

Plus, "put your money to work because it can work harder than you can."

Lots of paths to take. The simple one seems to be... live small, invest in low-expense ratio index funds, and use the tax code to your advantage.

I don't know shit. Maybe it's enough. Ears open here.

[hatchgreenchile]

Wealthiest person I have spent some time with got there through HOF QB play.
It helps to be 6'3, 225lb with a rocket arm.

[GeezerSteve]

The simple one seems to be... live small, invest in low-expense ratio index funds, and use the tax code to your advantage.

Good long term strategy, although note that the Code offers fewer breaks to the middle class and professional class than it used to

[XXX-er]

I sold out at the local housing peak to go chase women/drink/ smoke dope/ski/paddle

So then I forget to reinvest the money

So 2008 I end up sitting completely in cash when everything goes in the dumpster, buy back in low, didnt have to get a job

So I look like a fucking genius but i'm pretty sure this is the dumb luck of which steve speaks

it can be that arbitrary

[dunfree]

First, I would suspect that you would not have reason to encounter the many wealthy people that got there without tremendous hard work.

In the current environment it is in the interests of some wealthy to over-represent how hard they worked (see i-bankers bragging about 80-hour weeks, coders about "all-nighters", etc), how smart they are, and how much money they have. at a high level: https://www.forbes.com/sites/danalex.../#18c9e0647515 (and that article renders any study of wealth based on the Forbes list inherently suspect to me)

not that they didn't work hard - most of them did. just that a "hard work" narrative is very much required for business, whether or not it's accurate

[PNWbrit]

In the current environment it is in the interests of some wealthy to over-represent how hard they worked (see i-bankers bragging about 80-hour weeks, coders about "all-nighters"

not that they didn't work hard - most of them did. just that a "hard work" narrative is very much required for business, whether or not it's accurate

Goes back to the earlier point of whether that is hard work. Or just lots of. And that promoting and paying lots for those that will do that encourages others to do it within the organisation's culture.

Because employing lots of people who strive to impress you by working lots and by making you money makes you very wealthy.

Far, far wealthier than just "hard" work does.

And the wealthy, that is really wealthy, don't often retire early.

[Norseman]

Good long term strategy, although note that the Code offers fewer breaks to the middle class and professional class than it used to

Sure. I guess I meant use tax-advantaged investment options, keep taxable income low to stay in low tax brackets, use a Roth IRA conversion ladder... shit like that.

But I'm just getting ahold of these concepts and have a lot to learn. Fkna I wish I learned it in highschool.

[GeezerSteve]

Yeah, good point. Put away max in retirement accounts, pay taxes later at a lower marginal rate.

The millionaire next door is a real thing. Most financially secure people live well below their means.

The flip side is also true: Trying to look wealthy is a loser's game. I've seen way too many people go broke trying to appear wealthy.

Also, purge your brain of get rich quick schemes and dreams. For every guy who invented a widget and made big bucks there are 100,000 dreamers with little, zero or negative wealth.