Millionaire in the making profile

[stielle]

Check out this small article from CNN...

http://millionaires.blogs.cnnmoney.cnn.com/2008/03/05/ryan-and-hope-wells/

The interesting thing isn't the article, but the responses. So many wrong answers, so much slow lane thinking.

Also, wasn't quite sure where to put this, this seemed to be the safest place.

 

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[eTyler19]

Re: Millionaire inthe making profile

I don't understand people who have this kind of thinking....
They want to retire at 50! with ONLY 2 Million...... :smxE:

What is it that holds people back from striving for something greater, for something they REALLY want....

 

[andviv]

Re: Millionaire inthe making profile

I don't understand people who have this kind of thinking....
They want to retire at 50! with ONLY 2 Million...... :smxE:

I don't see it as something that wrong.
Investing their $2MM at a 5% return will net them $100K a year which is not bad at all living in the area where they live.

Now, having to wait another 25 years to get there is slow, we all agree, but I don't see anything wrong with the goal they have.

 

[kurtyordy]

Re: Millionaire inthe making profile

I don't see it as something that wrong.
Investing their $2MM at a 5% return will net them $100K a year which is not bad at all living in the area where they live.

Now, having to wait another 25 years to get there is slow, we all agree, but I don't see anything wrong with the goal they have.

I agree, if I could make 100k/year and spend all my time with my family I would be happy.

 

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[eTyler19]

Re: Millionaire inthe making profile

I would be happy also, but not at 50. When I am 50 my parents wont be here anymore.... I agree with the having 2 mill and getting the passive income off of it.... but not at that age. They are going to have medical expenses and everything.

 

[andviv]

Re: Millionaire inthe making profile

Correct. Also, keep in mind these guys probably don't know anything better, so they are the prime target for our message here in this forum. Their thinking and plan are slow. There are better, faster, probably safer ways to make it, they just don't know it. Who is going to tell them?

 

[MJ DeMarco]

By the time they are 50, $2mm will be about $300K in today's money.

 

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[PEERless]

>Scoff!<

I wanna be profiled as a millionaire in the making. I'm a year younger, making as much as both (combined), and own more property with less in expenses! Sign me up to retire with $300K! LOL!

 

[fanocks2003]

There is absolutly easier ways to make $2MM in a fraction of that time. Many people talk about working hard and saving their way to high numbers in the bank account. The main problem is, if they lose everything or just a part of that money, they are toast pretty quickly. They are toast because the time they used to accumulate a certain amount is not coming back. That spells trouble all over. Especially if they are old people.

As I mentioned in a previous post, creating fortune/wealth is not rocket science in itself. Being worth $2MM is just a number on the balance sheet and doesn't mean money in the bank at all times. What matters is getting cashflow from that fortune/wealth.

People focus very much on networth, but networth comes and goes like the seasons of the year. One year you have a networth of $1MM. The next year $10MM. Year 3 your networth has shrunk to -$1MM. Networth is just a play with numbers as I see it.

People should focus on how much passive income they can get with what they currently have in their possession. What kind of yield can I get from this car, this house, these savings etc. Income VS networth. Big difference.

 

[HenkHolland]

Re: Millionaire inthe making profile

I would be happy also, but not at 50. When I am 50 my parents wont be here anymore.... I agree with the having 2 mill and getting the passive income off of it.... but not at that age. They are going to have medical expenses and everything.

You make me feel old at the age of 56.
By the way, eTyler even at this age you can be lucky to still have (one of) your parents around. My father died of a heart disease when I was 23, but my mother is still healthy, both mentally and physically, at the age of 92.

Luckiliy I am still very healthy (that is not something that I can taker credit, it's luck and I am grateful for it every single day) and full of energy. Presently, I'm starting up a new B-type business that has an enormous potential. So, the chance of reaching the € 25 M net worth mark before I'm 60 isn't imaginary. Anyway, I feel like I'm still 35 and won't give up my fastlane goals.

 

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[ChrisS417]

Some of the comments at the bottom of that story are great.

"They need to stop what they are doing and invest in something really important: Education. At least one of them should get an MBA to get top dollars." MBA = financial freedom?

Wouldn't that mean more debt?

Many are suggesting J O B educations and not $$$ educations...

 

[HenkHolland]

In my opnion, it is difficult to generalize. Of course, the years you spend in college cannot be used (fully) in achieving your fastlane goals.

For me personally, getting a Master's degree in engineering opened the possibility to get an expat job with a multinational. What you learn from working in other countries and getting to know other cultures and languages may not make you rich in the financial sense but does enrich your mind. This is invaluable.
I have to say that I was lucky that my parents were able and willing to pay for my university education. So, I did not build up any debt while studying.

 

[Venturer]

Hé Henk, are you sure your last post was meant for this thread? If so, it does not make much sense since it does not relate to a millionaire in the making profile.

 

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[rlucas]

I love the picture that they put up of the couple. The husbands facial expression says it all. "This is not what I signed up for..." I feel like the article is trying to make the couple sound better than they really are. And about the mustang...what is that all about. Next thing they buy will be the 22 inch spinna rims and a window tint.

It's like...you say you want to get out of debt and pay off your student loans but you drop a third of your years salary on a gas guzzling (Not to mention gas prices) pos Ford. Oops I forgot...he's a car salesman, gotta roll off the lot in style.

Prioritize people! It doesn't make financial sense for these people to purchase or own a mustang. The purchase was strictly made by the husband to look like a 'badass' who has important places to be (and clearly doesn't).

People who don't buy hybrid technology cars are just insanely out of touch with reality. America is plagued with the misconception that the only hybrid vehicle is the Prius. Well it's not and trying to save energy and gas does not make you a metro sexual. WAKE UP OIL IS AT 115 PEOPLE. By about June I speculate gas prices will be around 4.00 a gal.

You can kiss that 2 million by age 50 bs good bye if this country doesn't find a way to alleviate the oil crisis.

The demand for oil is only going to increase with China becoming the largest economy in the world and also the largest consumer of oil. If oil prices continue grow at the current rate (likely more) over the next 20 years we will see the worlds most powerful of economies collapse before our very eyes.

100 $/Gal (2015 estimate) - I kid I kid...but for real though support alternative energies. (Specifically solar and wind)

 

[andviv]

Like I said before, this is very mainstreet thinking. I certainly hope that websites like this help a lot to increase financial knowledge so more people can see how the industry sells you the wrong product (wrong for you, but great for them).

 

[Russ H]

the years you spend in college cannot be used (fully) in achieving your fastlane goals.

For me personally, getting a Master's degree in engineering opened the possibility to get an expat job with a multinational. What you learn from working in other countries and getting to know other cultures and languages may not make you rich in the financial sense but does enrich your mind. This is invaluable.

I have to say that I was lucky that my parents were able and willing to pay for my university education. So, I did not build up any debt while studying.

Hé Henk, are you sure your last post was meant for this thread? If so, it does not make much sense since it does not relate to a millionaire in the making profile.

Seems to make sense to me, Venturer.

Henk is responding to a post, just prior, that questions the value of an MBA. Henk points out that getting a Masters in Engineering gave him many options, which he lists. He then goes on to point out that his parents paid for University, so he didn't incur the debt (this debt is also referred to in an earlier post).

I think we're all in agreement that advanced degrees and taking 25 years to get $2M are not fastlane. But there are other things here being discussed-- like the value of things other than money.

Sorry if I put words in your mouth, Henk. Lemme know if I misunderstood.

-Russ H.

 

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[Diane Kennedy]

And because I'm feeling contrary today, I can't let this one go.

**Rant alert**

I hear this again and again... I'm going to become a multi-bazzillionaire and not ever worry about "slow lane" things like compound interest or budgets or creating assets. I'm going to buy fast cars, travel the world first class and generally have the life of the rich and fabulous. And it's all because I'm going to discover that one big thing that will make it all happen.

There seems to be an element of that in the disdain about saving $2 million. It seems so worthless (or at least that's my interpretation from some comments on this and other threads) that you might as well not even do it. IMHO, that thinking is dangerous.

It reminds me of the thinking during the inflationary times in the 1980's....might as well spend the money as fast you can because it will be worth less tomorrow anyway. And, that was when we got into this habit of using credit cards and NEVER delaying gratification and never saving, etc etc

I'm sure I'll get shot down in this post. I did the last time I brought up the concept of "shudder" compound interest. It's just so much easier to live in the fantasy world where someone shows up at your door with a big check, instead of realizing that there is real education and real change you have to do.

I remember that MJ posted somewhere that it IS possible to "get rich quick" but you can't "get rich lazy." I couldn't agree more. You've got to know the fundamentals.

Big plans start with small steps. Don't shoot down the people who are willing to take action. It might not be the optimum step, but it's a step and we all start somewhere. just THINKING about the financial future and taking steps in that direction, whatever they might be, is more than most Americans do.

**Rant over**

 

[andviv]

Don't shoot down the people who are willing to take action. It might not be the optimum step, but it's a step and we all start somewhere. just THINKING about the financial future and taking steps in that direction, whatever they might be, is more than most Americans do.

I've found the same situation too often. Criticizing people is too easy, but these guys at least are thinking about something they'd like to get and are working on getting there. As I mentioned before, they don't know anything better so they are working with what they got.
Diane, great post, I couldn't Rep++ in this thread as I just did in another one.

 

[Runum]

From what I experienced, we all have a desire and hope for the magic carpet to get us on the fastlane. Most of us are laying plans to get there. I agree about compounding. However, I also see compounding of everything, money, interest, resources, time, etc.

Also, as has been noted before, if you are an E and you are told of many of these success stories and strategies, you will not believe that you can do it too. It's too much info too soon. It takes different levels of learning which takes focus and time. Most people won't commit. Perhaps in a couple of years this couple will be ready to take the next step or maybe they will continue on with their current plan. At least they have a plan.:cheers:

 

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[MJ DeMarco]

And because I'm feeling contrary today, I can't let this one go.

**Rant alert**

I hear this again and again... I'm going to become a multi-bazzillionaire and not ever worry about "slow lane" things like compound interest or budgets or creating assets. I'm going to buy fast cars, travel the world first class and generally have the life of the rich and fabulous. And it's all because I'm going to discover that one big thing that will make it all happen.

There seems to be an element of that in the disdain about saving $2 million. It seems so worthless (or at least that's my interpretation from some comments on this and other threads) that you might as well not even do it. IMHO, that thinking is dangerous.

It reminds me of the thinking during the inflationary times in the 1980's....might as well spend the money as fast you can because it will be worth less tomorrow anyway. And, that was when we got into this habit of using credit cards and NEVER delaying gratification and never saving, etc etc

I'm sure I'll get shot down in this post. I did the last time I brought up the concept of "shudder" compound interest. It's just so much easier to live in the fantasy world where someone shows up at your door with a big check, instead of realizing that there is real education and real change you have to do.

I remember that MJ posted somewhere that it IS possible to "get rich quick" but you can't "get rich lazy." I couldn't agree more. You've got to know the fundamentals.

Big plans start with small steps. Don't shoot down the people who are willing to take action. It might not be the optimum step, but it's a step and we all start somewhere. just THINKING about the financial future and taking steps in that direction, whatever they might be, is more than most Americans do.

**Rant over**

OK, Ill bite.

First I agree with everything you said, but I think the contention is with their plan, not their action.

Second, $2,000,000 in 25 years is $465K in today's money (6% discount rate).

While this couple is leap years ahead of the "average American" and deserve kudo's for it, I think the issue is that their plan is "the Slowlane". No where in the article does it mention any type of Fastlane-type escape plan: "We will start real estate investing" or "Ryan has plans to start a used car business".

Nope, its save, save, frugal frugal, increase income from job, blah blah -- a classic example of dying the slowlane with no escape; must have read a few Suze Orman or David Bach books. Slowlanes should lead to a fastlane. But not here, at least, the article didn't mention it.

This is my bone of contention with the article. The couple should be lauded for their discipline -- far beyond their peers. However I have to wonder, will they start to "live life" at age 50 when they reach their mythical $2m figure? Life will not give them that guarantee, and that, is the bet the house usually wins.

 

[stielle]

While the mustang does seem to be a sore spot for many of the responders, I personally think that if that is their biggest vice, they aren't doing too bad. I love cars. especially big v8 overpowered sports cars that guzzle gas. If it fits in my percentages, then why not? Besides, given the way they are being taught to deal with their money, the mustang isn't going to make or break them.

I agree with MJ in that there is much slowlane action being done with them. Perhaps they just dont know about fastlane. Maybe they are stuck in the Ramsey/Orman camps. I can't stand when one of my peers tries to get me to read Suze Orman, Dave Ramsey, etc... I want to chuck the book back at them. Now, I am nowhere NEAR where the couple in the article is, but I'd wager that if I hold to my thinking, hang with you guys, and hold steady with the fastlane mindset, I'll shoot past them in just a couple of short years and have more fun in the process.

I was surprised to see no mention of the guy looking to start his own used car business. Since he already has the licensing to deal, its at least a very simple matter to sell on his own from his home, or at least it is here.

Off topic a little: I read an article that showed how UNgreen a Prius really is. It put a Prius vs a Hummer H3. The Hummer doesn't put out as much pollution over its lifetime as the pollution caused by manufacturing a single Prius battery alone. Overall, the H3 was twice the value, costing less to drive over the vehicle's lifespan despite its horrendous gas mileage.

 

[mtnman]

However I have to wonder, will they start to "live life" at age 50 when they reach their mythical $2m figure? Life will not give them that guarantee, and that, is the bet the house usually wins.

Those two sentences really made me think. I've read them about ten times and it can really make you reanalyze things from a different perspective.

What it means to me is this. No matter what my plans were, if I'm not living as though I have six months to live, I'm making excuses. Oh I'll do it tomorrow, next year, I don't feel like it, saving is safer than losing it all, that's too much work, I can't, just get a job, what if.., etc. are all excuses. My new biggest pet peave is I don't have time.

Those excuses become habits, and habits become life history. When we get to the end, there aren't any more excuses. At this point we will have recognized the journey behind us and realized that each excuses represents a "could have been." I can imagine the "could have beens" could haunt far longer than a failed attempt.

It would seem the easy way (the most chosen path) is the worst path. What a boring journey, as I'm beginning to realize. This further increases my love to work. And, that work is a priveledge.

This makes me realize that life should be lived on a constant "bucket list." There's no reason not to.

This also resonates with a story I read a while back (can't remember the article or man) about an athlete who stated, "you want to end life like you slid through home base and gave it your all, even if you struck out. Dive, if you half to."

The point of his story is that life is supposed to be turbulent. You're supposed to slide home dirtied and bruised, broken bones, trials and triumphs, and energy completely spent. Anything less would be a waste of life.

 

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[Diane Kennedy]

Agreed MJ.

The danger, though, in posting in a forum that is open like this is IMHO it gives people a justification for not saving, not learning about "slow lane" topics and feeling superior about the path they have that is going nowhere. (No coincidence that today I also posted the "what the h*** are you waiting for? post at the Tax category. Okay, I didn't say it that way, but that's what I meant)

My bottomline is that the $2 mill at 50 y.o. is a lot better than nothing. And that's the danger I see. There are people who read these threads who don't understand that.

I remember meeting a 25 y.o. or so who was buying real estate on credit cards. He was a HUGE RK fan and was going to make sure he wasn't a "loser", RD's spin on the "slow lane" label. And, no huge surprise, he ended up bankrupt with nothing and ruined credit.

Yet, he'll tell you he's so much better off then someone who is working, saving and starting a small business to get his feet wet.

Everyone's got their own path, that's all I'm saying. And MJ, YOU have definitely earned the right to say "That's not for me" but the risk is that you have a following. And they all want to have what you have, but they don't understand that there were a lot of steps to get there.

By the way, we got a call this morning from parents of one of my son's friends. They had just gotten evicted from their apartment. As in, TODAY, the sheriff put their stuff on the street. She just married a 60 y.o. fast talker who was going to "start a business" that was going to make millions and completely disdained any talk of living within their means, saving, being frugal. In fact, for the image, he sold her paid-for car and leased a fancy one. Of course, she's the only working, a year later he still haven't made a dime (but she's put her entire savings into this business) and now he's gone and she's on the street with her 16 y.o. son. Oh, and by the way, can we rent them a new apartment this afternoon because her hubby won't come back unless it's a nice place?

He would love this thread. He'd point to it and say "See!! I'm not going to be 50 with only $2 million!" The irony that he is 60 y.o. with no car, no apartment, no net worth, nothing... would be lost on him. That's because he's not going to be a LOSER (SLOW LANER, whatever)

 

[MJ DeMarco]

The slowlane is a precursor to a fastlane. If anyone here believes that I am advocating a lifestyle of lavish spending, living outside of their means, immediate gratification over delayed gratification, they have the wrong message. The slowlane (and its strategies) is just as important in a Fastlane plan as the Fastlane plan itself.

A slowlane is better than no lane. The vast majority don't even get on a road (slow or fast) ... they are stuck. Others *think* they can jump into a fastlane (like the great examples you cited) without the discipline required to drive it often learned in a slowlane (hence they get stuck into NO LANE).

To further your example, I know I guy who jumped right into a Fastlane and proceeded to lose it ALL because he lacked "slowlane" intelligence. He earned $40K/mo ... he spent $50k/mo. He bought lavishly because he felt his income entitled him to it. Had he had "slowlane" discipline, he'd be in a different position today.

I won't be crucifying *the slowlane* in my book -- I explain it and use it as the springboard into a Fastlane.

Basically, if people here can't drive 35 mph/kmh successfully, trying to drive 200mph/kmh will have grave consequences involving hitting a wall... much like the examples in your own experience.

 

[Redshft]

The slowlane is a precursor to a fastlane. If anyone here believes that I am advocating a lifestyle of lavish spending, living outside of their means, immediate gratification over delayed gratification, they have the wrong message. The slowlane (and its strategies) is just as important in a Fastlane plan as the Fastlane plan itself.

A slowlane is better than no lane. The vast majority don't even get on a road (slow or fast) ... they are stuck. Others *think* they can jump into a fastlane (like the great examples you cited) without the discipline required to drive it often learned in a slowlane (hence they get stuck into NO LANE).

To further your example, I know I guy who jumped right into a Fastlane and proceeded to lose it ALL because he lacked "slowlane" intelligence. He earned $40K/mo ... he spent $50k/mo. He bought lavishly because he felt his income entitled him to it. Had he had "slowlane" discipline, he'd be in a different position today.

I won't be crucifying *the slowlane* in my book -- I explain it and use it as the springboard into a Fastlane.

Basically, if people here can't drive 35 mph/kmh successfully, trying to drive 200mph/kmh will have grave consequences involving hitting a wall... much like the examples in your own experience.

rep++ That is a GREAT explanation. Something that some of my friends can't seem to identify is the differences b/w slowlane and no lane, or I like to call dead end roads.

 

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[Russ H]

I love this discussion.

Having read many of Diane's books, I know that she often starts with basic concepts (like interest, then compound interest) before going on to more advanced thoughts.

(if you were doing that w/the compound interest posts, Diane, I hope that you consider building on them).

I love the metaphor of learning how to crawl before you walk (and then run).

Or in fastlane terms, you need to learn how to drive first, starting slow, before you can go fast.

Learning how to drive, and how to drive in the slowlane, is *part* of the process of getting to the fastlane.

Trying to jump into the fastlane without enough experience-- or trying to drive fast with slowlane reflexes/skills-- can result in disaster:

[ame]http://www.youtube.com/watch?v=pRvHV7pUmAc[/ame]

-Russ H.

 

[Diane Kennedy]

I like the "no lane" metaphor. Sitting in "no lane" making fun of the slow lane doesn't make a bit of sense.

 

[stielle]

I think many of the responders to the articles are 'armchair investors' or giving advice that they themselves don't take.

I understand slowlane before fastlane and if it seems I don't or think the slowlane can be skipped, that is not the case. It seems, though, there are many many who are either unaware of the fastlane or simply choose to learn its ways because they are doing 'fine' or 'good' already.

I read somewhere that the enemy of 'Great' isn't 'bad', but 'good'. If someone is doing 'bad', they want to improve. If they are doing 'good', they mostly won't try any harder. I think that is the case with some of the profiles I read.

 

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[fanocks2003]

The main problem with people wanting badly becoming rich is: they spend like if they where rich already (perception makes reality and other crazy stuff). That equals debt up to their eyeballs. I have tried it, I went great deal into debt. Do yourself a favour, sober up if you have that mentality.

The second main problem, as I see it, is that people believe they need to spend big money to start a company. They get a big fancy office, a big fancy car, a big fancy everything it seems. Before they have made a dime or even proved their business concept.

They seem to lack the understanding of the main reason why someone starts a business: spending less money and making more than they spend. I mean, this is not rocket science, but it seems like people believe it is.

Formula for success (in very simplified terms. Goes for entrepreneurs and workers alike): 1 dollar (earned) - <1 dollar (spend) = Surplus money.

Invest surplus money at X% interest. Done, your wealthy and rich. And you have money to buy yourself some time. This is really the only thing a guy in business needs to know. Hire the expertise for the detailed stuff that goes into running a business or learn the difficult stuff yourself and do it, whatever choice you see fit the best.

 

[kimberland]

I think it is funny
that no one picked up that the guy is in sales,
sure making baby sales right now,
but still learning the profession.

Of all the careers out there,
I think sales has the biggest potential for income
and you don't need a traditional education for it.

Plus if you know how to sell,
building a business
or landing financing for real estate
is much, much easier.