There is a lot of talk about big numbers, but little talk about people who actually are "wealthy". I know over a dozen folks over the 100 mil mark and here are some observations for all you thinking about "getting rich". Financial independence can be thought of freedom from money issues. So someone who is a billionaire is NOT financially independent by any stretch. Think about how much time it takes just dealing with all the people. They all want a piece of it. E.g. Paul Allen's sister. You want to deal with that? Look at all the decision you have to make! It consumes your life. One person said: You need 40 million after taxes. 20 mil for you and 20 for your wife if she leaves. Would you rather have 5 million and 20 years of your life to do whatever, or 20 million (+15 mil) and be 20 years older? (all after tax). If you make 350K a year and pay taxes, and save 100K a year, how long until you reach 5 million. Probably a decade or two. One way to get wealthy is not spend so much. Every 100 you spend post tax is more pretax that you have to earn. If you don't earn the money, chances are you can't manage it, and will lose it. It is easy to make money and be an A-hole. It takes skill to do it without being one. If you have 10 million earning 5% after tax, that is 500K a year. So you have a nice house the first year, a nice second home the second year, a boat, car and fancy vacations the next year, then what? You can't really spend it all reasonably without getting on the slippery slope of "give me the best, or I want more". At what point is enough, really enough? Your life clock is ticking. Finally, IMO, it is best to set your goals to something reasonable, after tax. Manage the risk, lower your overhead, don't escalate your overhead, and you can live a darn good life! And all those folks I mentioned, are still hustling and doing what they love. That is the key. Work hard, and Work smart and Enjoy it. YMMV, Cheers. PS: all those folks mentioned are pretty normal folks. Brilliant in their field (top 5%), humble, generous, and kind. Not one jerk among them, all class acts.
Note the symbolism of the scene ; every young guy out there, dirty & ignorant, in the rock bottom, meeting a ,,great vision" for the very first time : timestamped That is the very first step, towards becoming that.
In my opinion (and that's all it is), financial independence has been achieved once your PASSIVE income is equal to or greater than 2X your annual spend.
Once you have financial freedom, you think about other things. Having a purpose in life becomes really important. And financial freedom is not having a billion dollars, it's having a multiple source of incomes that keep going without you and you can pass on to the next generation.
That's what makes you financially independent. You make your own decisions. You don't have someone else (i.e., your employer, your parents) making them for you. You're hustling, but you're doing what you love, so the money issues don't necessarily have to be a burden. When it comes to the third bullet, I'd rather have 20 million dollars and 20 years of my life to do whatever.
so glad you made this post, I was running the risk of approaching 40mil but now I know to dial it back
If I had $50 million, that would be it for me. Not going to stop trading but, there would be less pressure to trade to earn monies. I could set aside, $1,000,000 for my trading account. The rest, I would spend on my family and to fund a couple of charitable projects I have in mind. Oh, I would need a decent house for myself. No fancy cars for me. Would probably, go on a few trips to visit some countries on a leisure trip.
The standard definition of Financial independence is that you don’t have to work to support a particular lifestyle for the rest of your life.
The premise is preposterous. The advise from the 1% is unhealthy and useless to people who actually need to earn their money. When your money makes money you cease to belong to the class that, should they stop working, live on the street. It's like listening to retards on CNBC telling you to cut out drinking your favorite beer to become a millionaire. Those people, the 1%, are entirely out of touch with reality. You may know some smarts ones, but they haven't known what actual hard work looks like for at least a dozen years. Surely you will stand on your bully pulpit and tell me they have worked hard recently. I doubt this. The average earner of a "potential millionaire in the future" makes $70,000 a year (paraphrasing The Millionaire Next Door). That's the salary of a lineman and that is fuckin' TOUGH work. The people you are citing are so far beyond that they cannot comprehend what it actually takes to build your first million. This example scales. I remember making $15,000 a year working as a customer service clerk at a retail store. I can't for the life of me remember how to live that way. Nor do I care to. For the rest of us, frugality and investing carefully are the keys to making our first million. Your 1% buddies have no idea what this even means. They make more than 10x the average American in just their "careful" investments. Though, I have some idea that it might mean cutting out the lobster 4 times a week. The shortest path to riches is to know someone who is already rich. Imagine that. I'm sure your 1% buddies have a few stories they aren't telling about their 1% buddy who saved their bacon. They are statistical outliers, and are therefore worthy of intense skepticism.
This bitter rant had nothing to do with the OP. Although I do agree, a lineman is a tough job and worthy of praise. Also, people who have more than 9 figures are the 0.01%, not the 1%. Regardless, have a lifestyle and rhythm to life whether you are middle class or rich. If you're not making money like I was for a while, make sacrifices like no kids, no bad habits and no debt accumulation. It's never been easier to make it in the US if you keep it simple.