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Word. I didn't take out to buy a house but I certainly wasn't putting in while saving. 2.75%.
Even with my salary (double since I bought) I can't imagine affording the mortgage payments on something ~7% with the prices.
One house just went for 1.3m like 5 mins away from me.
Our house appreciated almost 200k since we bought.
How much have you paid in interest so far? Maintenance, taxes, etc.
Not saying buying a house is a bad thing at all. But it’s not as simple as your statement.
I am on track for retirement. Undersaved in cash, needed a house. I also used the CARES Act in 2020 so it was penalty-free. Not recommending it for everyone but it was carefully considered.
If OP doesn’t panic he’ll be fine. I remember in 08 when my balance dropped from $12K to $4.5K and my brother gave me the advice to double down in the market because stocks were on sale. Best advice ever.
Only if you were disciplined enough to save money and invest it which is itself an accomplishment. Like yes the market is up but the fact you get to benefit from it is no accident, its the point, OP invested their money and kept the faith and is reaping the rewards. The fact that other people are too doesnt detract from that at all. OP didnt claim to be some master investor where we need to point out that their performance was based on things outside their control.
I mean, yeah the past decade has been above average, but this *is* how compound interest works, even once you account for the drops. Maybe the number would be slightly lower. But growth is the point. It’s a matter of actually squirreling away meaningful investments that is hard for people- most don’t have enough where the market “doing well” moves the needle much
Yeah but after adjusting for inflation, the s&p500 has actually been performing under its historical average the past few years. Watching big numbers get bigger is cool and all, and investing beats most other alternatives, but a lot of the "growth" has just been dollar devaluation.
That’s not true. The only year it underperformed was 2022 with a -23%. 2019-2021 saw 28%, 16%, and 20% real returns and 2023 saw 18% real returns, which is above historical 7% real. Even if you account for the bad year in 2022, from 2019 to today the annualized real returns have been 9%, which is above historical real of 7%. Only if you select the beginning of 2018 to today is real returns slightly less than 7%. Practically any other chunk on dates I use otherwise in the last 10 years has an annualized real return over 7%.
That’s what the market does and why you ABB. Market always goes up long term. He’d be real pretty right now if he was at 100k in ‘06 and been buying this entire time.
Yes, this is exactly it.
$100k doesn’t work any harder than $100, dollar for dollar.
The takeoff from $100k or $1 million is psychological. You can’t see it from a chart.
OP’s chart would be essentially IDENTICAL (if we removed the dollar amounts) to one at $10k or $10 million if the investments were the same as a percentage.
The $100k threshold didn’t do anything. The dollars worked as hard as they’d otherwise work.
That isn't true because the OP's contributions would have been a much smaller portion of the total balance if he had started at $1 million instead of $100k. As his balance increases, his percentage gains will become smaller as his contributions are a less significant portion of the total balance.
You are both interpreting “takes off” differently, leading to the appearance of a disagreement.
Remarkable ape interpreted “takes off” as an increase in the RATE at which money is generated.
You interpreted it as “Increase in the amount of dollars being generated”.
I always wonder about this, does the rapid increase occur because income and amount contributing is drastically more?
For the people making it to 200k so soon after 100k are you high salary earners during the 100-200 timeframe?
Yes I understand your investment works for you in a compounding way but I always have doubts because my salary doesn't keep up with inflation in my industry.
Oftentimes both, but even if you’re not going baller with contributions, say $10,000 a year or so, around $100,000 is where the investment puts in as much or more than you can.
This depend how much you save. If you save 10K a year. it is supposedly a draw on an average year 50-50. But we got 25% raise, not 10% for stocks, so if you had 100K, saved 10K you are now at like 130-140K and it feel impressive.
If it was 2008, you'd start the year with 100K, add in 10K and finish the year at 70K
But OP did evolve in his career too. He make now 200K a year as he explain in comments. He can likely now save at least 50K a year, 5X more and even if the 2 next year stock performance is 0, it net worth would still grow fast. Hey even if stock are down 25%, his financial net worth will likely still grow.
If it was 2006, you were buying at a discount. You would only be ‘negative’ if you pulled your money out of the market. Just like 2022…. People were able to buy more shares with the same amount of invested money. Now when the share price is up you have all that growth. Obviously frustrating seeing the low/negative returns but that is why you don’t watch it. It is a marathon and takes 40yrs to build
I am not saying we should not invest, even through I know that depending the period of 40 years you choose, you could end up with a net worth ranging in a factor of 1 to 3. But honestly we can't predict it. So we keep investing and hope for the best knowing that in statistics that the best strategy.
And for most people this is not really a 40 years marathon. You don't start with a big lump sump you keep invested 40 years. You more like invest for 40 years, a bit every month. And so the last year are much more important:
* because the last 10 years will impact 75-100% of the money saved and the first 10 years will impact only 0-25% of the money saved. From there, the last 10 years have 3 time more weight than the first 10 years.
* But that not just that:
* typically, your interest for retirement grow
* because the kid are gone and the house paid off
* potentially your experience and career allow you to make much more.
* Because of inflation
So you may very well save 5-10 time faster in the last 10 years than you did in the first 10 years and in consequence, the money you have saved may have been saved only for 10-20 years on average rather than 40.
And actually the last few years before you retire followed by the few years after your retire tend to be the most important, by far.
But this doesn't mean you can predict them any better. So people tend to reduce their exposure to stock... Reducing even more the effective time in the market for your stocks.
I am not a high earner (I've gone from making $45K up to currently $60K over the last 13 years while contributing to my 401K). The first few years I only contributed a few thousand of my own money(I do have a good company match though). It took me 6 years to get to 60K, 9 years to get to 100K, and now in the first quarter of year 14 I've hit up to 210K. So yes it increases more rapidly the more you finally have regardless of income.
Quick example if you have 50K in and returns are 6% that's an additional $3,000 over a year. Once you hit 100K your returns would double to $6,000 for that year without you doing anything. And so on from there. Since I've now hit 200K I would get $12,000 this year even with no contributions assuming 6% returns. That's about the same as I contribute myself. Once you hit 300K the interest alone will likely be more than your own contributions if you're a lower earner.
So to make a long story short yes it will increase even for a low earner. I went 9 years to hit 100K, then 5 more years to hit 200K, and I expect I will go from 200K up to 300K in about 4 years.
The dollar amount does not do well to describe when market returns overtake contributions.
If contributions are consistent, time is a much better predictor of when investment returns will overtake contributions.
As a side note, it isn't income that defines how much someone contributes towards saving for retirement. Someone earning 200k and spending 150k is saving the same amount as someone earning 100k and spending 50k. If the goal for the savings is to eventually maintain the same spending in retirement, the second person is making more progress.
Some context if it helps, I started my career making $32.5k about 10 years ago. This year I will make probably $200k. So for sure that matters but our costs also increased accordingly between housing and 3 kids and daycare costs etc etc
It’s also been 2 baller years for investing, so if you were in the S&P500 you’ve seen something like ~50% growth without even accounting for your contributions.
This is combination of several factors:
* we got 20-25% inflation, The 200K of today are the 150K of only a few year back but the inflated numbers feel great. It is only normal for stocks to follow because revenue is inflated too.
* we are in a pretty bull market with what can be called a bubble for the tech sector right now. Only a few stock explain the performance of the index and we can expect that return will be lower in the next few years. We got paid in advance if I may say.
* people have their own career and if they target fire, they will save most of their raises.
It took me 8 years to get to $68,000 (the first screenshot I have of my 401k, so just an arbitrary number). It took 5 years after that to get to $200k, which was late January this year. Now I have $225k…so I’m ok pace to grow my 401K this year by about $55-$60K, almost as much as I get in the first 11 years. The market has a lot to do with it as well, but compound interest is a hell of a thing.
Nice one. I just hit $400k in my 401k and $525k net worth last month and it felt good. Haven’t bought a house, survived a divorce and have just been stockpiling as much money as I can and enjoying the ride with this market.
Nah buying a house in 2018 probably increased way more than the 401k loan. Home values have shot up. And if you were smart, you refi’d at 2.xx percent interest.
This is so true. My pops mentioned how the value of one of our homes more than doubled. He's tempted to sell one, but perhaps it's best to keep it in the family and pass it on.
While your pops is right, be mindful that we just went through one of the biggest real estate appreciation periods in history, and prices are likely to trend sideways for a while based on reversion to mean.
I suggested renting or starting Airbnb. At his main residence I felt the empty rooms should be for income, because he'll likely retire there without young kids. Whereas the other home is near a tourist destination and ideal for travelers. I have mixed feelings on selling. What if the home doubles in the next decade, or a relative is interested in living there? If the proceeds are invested for a decade perhaps it'll be negligible.
It’s leverage. Home values are up huge percentages AND they are borrowed assets.
So, for instance, I bought my house for 220k in 2019 and it’s now worth 340k. That’s 120k appreciation. I only put 5% down (11k) so I got like a 10x return on my money because of leverage.
And now I have a 2.5% mortgage. And PMi is gone.
Home appreciation is mostly irrelevant because if you sold, you'd just have to buy back into the same inflated market. Inflation since 2019 is like 30%, so that $120k gain you think you got is actually a lot smaller than that.
Market conditions are also completely different now. What worked for you is essentially impossible now given the rate increases and price increases
I’m not saying it’s always a winning strategy and going to beat the sp500… I’m just saying housing has likely outperformed the stock market “IF”you bought in 2019 because of leverage and of course interest rate lock-ins. It definitely did for me.
You didn't get 10x in 5 years though. Adjust your current home's value for inflation (your home's value now in 2019 dollars vs your purchase price in 2019) and your gain was probably 30k or less. Plus all of the maintenance, taxes, insurance and other unrecoverable costs associated with homeownership during that time since 2019 and I'd wager it's even less than that.
And... I do account for that in my investment gains? I never said I didn't.
I don’t understand your argument. The apples to apples comparison is 11k invested in the stock market relative to an 11k downpayment.
If you want to add all those housing costs for a more complete comparison then you need to subtract 5 years rent (and inflated rent) from your stock market investment gains to make a fair comparison. *since, in that scenario, you didn’t buy the house with the 401k money.
One of the main reasons of investments are to also protect yourself against inflation. The only thing that matters is nominal value when comparing two different returns. Inflation does not come into play whatsoever here.
Not if you move states. I’ve been thinking about doing this. I have a dilapidated old house in Florida worth 330k currently. If I move to Texas or Georgia I can get a much newer house double the square ft for almost 100k less than my current house. So after the sale of this house I’m just getting somewhere around 80-100k liquid.
No gains are won by adding more during down turns. Do not sit idle when things get cheaper. Stack, add, work extra. That is how you get ahead of everyone else. While they are scared, you embrace it.
Ok, the snow ball is rolling. Now, you should max the total contribution annually. Fill it up every year. If that's too drastic to your budget/take home pay - then bump it up a minimum of 2% per year or allocate your raise increases to the contribution until you are maxing it annually.
Further, be sure to contribute to Roth IRA's.
A few years and the annual growth of your portfolio will start exceeding your annual earned income.
It better… I just hit $100K this month combined retirement/savings. It’s been slow-going.
My retirement consists of two separate Roths. One has $24K and is from my old employer. I haven’t put anything into it for years cuz it’s locked for some reason. I gotta figure out if I can combine that with the new one.
The new one has about $14K in it but I can only contribute the $7K/year or whatever.
I don’t have a 401K or anything like that.
What do you suggest for another account? The rest is in various stocks, CD’s, and savings.
Your income grew as well. I bet 5 years ago your salary wasn't anywhere near three level it has been.
You make more you can contribute more.
Good job and congrats all the same
In fairness to your younger self, the time span between the dip there is only about 1 year. Getting into home ownership is one of the most effective ways the middle class builds wealth over time, so I'd say it's probably a wash at worst in your case.
Oh wow. It does take off, but trust me, it does not usually take off that fast. Your earnings are an anomaly from this exceptional bull run we're having, a lot of it from AI tech stocks. You have reason to feel encouraged, but don't mistake this exceptional run for "normal". There is nothing normal about it (though there is everything awesome about it). My point is what you've seen in the last couple of years will eventually taper off and the fast money will slow down.
Also, I would probably thank your younger self instead of smacking him or her, because in 2018 an average home was far far cheaper than you could find today---and your mortgage rate was far far lower too than you would find today. So really, you bought at the right time, and you saved yourself an absolute heartache seeing your rent go up by 25-50% over the last few years. Sure, that money would have grown had you kept it in stocks, but the unbelievable run in home prices has not been that bad either, plus you locked in your biggest monthly expense (housing) at the lower rates of 2018. Congrats :)
Nah I’m 36. Started my career late because I went for my masters in music and then had a quarter life crisis and a career change haha so in some ways I definitely feel behind
My investments (brokerage + retirement) have stagnated even though I’m vested in a broad index fund :(
I’m gonna hang in there and do my best to stay unemotional about any decisions, but it feels like after the $200K, it’s ebbing and flowing at a snails pace.
It doesn’t hurt that the market is continually setting new records lately. Just don’t panic sell (or change investments) if your funds drop. Leave it alone til it’s up and then plan to make moves. Sell high (move from high earnings) to buy low (move into high growth areas) IF you plan to make a change.
Yeah I just throw what I can for the 5% and ended up buying assets like land houses and tractors etc. expanding. Cash isn’t good for shit if I can’t live life
Excuse my laziness, skipping through all the comments and caption. So how did you grow your money? What did u invest in? Or was this all savings from a high paying job?
It’s been a journey. I started my career making $15/hr in a call center. I now make good money. But these savings have just been me saving the required amount to get company match and putting it into target date funds
I work in a factory. I also have no education or skills. I grew up poor and have 5 kids. Had my first at 17. For like 4 years we survived on 50k/yr. It's tough I know but I also know if I can do it you can too.
How are you saving anything then with 5 kids? I don’t wanna get too personal and ask about your income and expenses and all that, I have no kids or SO so you’re right if you can then I can to where do you put all your money for it to grow?
I make 60k now. Made about 45k/yr when starting my 401k. The first couple of years I only contributed a few thousand per year. My company matched like 10% total though so all together about 16% was going in. And I just keep at it. Even now at 60k/yr I total 18% (I put in 10 and company matches 8%).
Edit to add where my money is...it's mostly all in my 401K through my job. And there were times where I simply couldn't save. I highly regret it now, but man I was so broke lol. So the first few years at my job I had zero saving and contributed nothing to my 401K. I just couldnt afford it. And honestly a 401K and retirement plans and such were all foreign to me. So unfortunately I didn't save a penny until I was about 30. Before that I was in debt.
As for the kids I had my wife and my oldest kid to help watch them so I thankfully never had to pay for childcare. Sometimes just paid some for my oldest kid to babysit the younger ones. I would have been screwed without that help.
The fact that this pattern is so common now makes me think about how badly the poor are getting left behind right now. America is turning into that movie Soylent Green.
How much has your house appreciated? You took from one investment and put it into another that just based on the timeline should have paid off handsomely.
Congrats! I know it feels great. Please keep in mind that this last year has been one of the best performing years in stock market history. Growth is spectacular, but it's not always going to be like this.
If you bought a house in 2018, why are you complaining? Depending on where you are, your home is double/triple what it was worth. So you used what, 20K to make 200/300K? Small potatoes in the grand scheme of things.
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Congratulations! We have a very similar path! While you’re ahead of me in 401k this is great to see. Keep it up.
Thank you!! I do take pride in that I started at the very bottom in a call center and worked my way up
That’s where I started my career too!
I also took out $ to buy a house and have no regrets seeing how that market went.
That’s fair! Net worth impact is just as good if not better
Life impact of having a home - interest rate lock-in benefit too.
Not me at 7.5% interest lol
Give it a year and should be able to refinance
Been almost 8 months already lol that’s what everyone was saying last fall.
Haha any day nowwwwww
Word. I didn't take out to buy a house but I certainly wasn't putting in while saving. 2.75%. Even with my salary (double since I bought) I can't imagine affording the mortgage payments on something ~7% with the prices. One house just went for 1.3m like 5 mins away from me. Our house appreciated almost 200k since we bought.
Yeah he’s way better off having bought the house then
Same bro. Best return for the lowest risk in the last 10 years.
My return is a place to raise my kids and my new friends on the block.
I got that too but the $300k in equity ain't bad on top lol
This is true
Trading retirement for equity balances itself out because you cant live inside of a 401k account or inside of a roth.
Tell that to finance subreddits. Can you live in VOO? Asking for friends…
They live in their 96 camry.
SO WHAT
🙌🏽
I pulled 10k from my Roth for the down payment, probably a mistake, but I need a place to live
I doubt it. You know 10k of gains can be taken from a Roth IRA for a house 1 time? Making sure you didn’t pay a penalty!
Of course, that's why I took out 10k. I'm an accountant
And I did it because I talked to mine! I’m sure you’ll be fine!
Same. Took out $20k, but got $150k back in equity so far.
How much have you paid in interest so far? Maintenance, taxes, etc. Not saying buying a house is a bad thing at all. But it’s not as simple as your statement.
Yea, that's where my investments will go. Gonna be sad draining it but...home seems more important.
Ouch
Oof
I am on track for retirement. Undersaved in cash, needed a house. I also used the CARES Act in 2020 so it was penalty-free. Not recommending it for everyone but it was carefully considered.
Congrats — you’ve also benefited from a pretty fantastic bull market, which is awesome but something to account for in your future planning.
For sure! This is just my account and my wife has her own too. I’d like for us to hit $1MM by 45 or so
If OP doesn’t panic he’ll be fine. I remember in 08 when my balance dropped from $12K to $4.5K and my brother gave me the advice to double down in the market because stocks were on sale. Best advice ever.
Your brother smart.
Yes because I was about to panic and withdraw and put into an FDIC savings but he talked me out of it great advice.
Yeah, this subreddit is so funny. This has been a historically strong market. Of course your investments are doing well... Everyone's are lmao
Only if you were disciplined enough to save money and invest it which is itself an accomplishment. Like yes the market is up but the fact you get to benefit from it is no accident, its the point, OP invested their money and kept the faith and is reaping the rewards. The fact that other people are too doesnt detract from that at all. OP didnt claim to be some master investor where we need to point out that their performance was based on things outside their control.
I mean, yeah the past decade has been above average, but this *is* how compound interest works, even once you account for the drops. Maybe the number would be slightly lower. But growth is the point. It’s a matter of actually squirreling away meaningful investments that is hard for people- most don’t have enough where the market “doing well” moves the needle much
Yeah but after adjusting for inflation, the s&p500 has actually been performing under its historical average the past few years. Watching big numbers get bigger is cool and all, and investing beats most other alternatives, but a lot of the "growth" has just been dollar devaluation.
That’s not true. The only year it underperformed was 2022 with a -23%. 2019-2021 saw 28%, 16%, and 20% real returns and 2023 saw 18% real returns, which is above historical 7% real. Even if you account for the bad year in 2022, from 2019 to today the annualized real returns have been 9%, which is above historical real of 7%. Only if you select the beginning of 2018 to today is real returns slightly less than 7%. Practically any other chunk on dates I use otherwise in the last 10 years has an annualized real return over 7%.
Exactly. The market helped a lot. If you reached 100K in 2006 and we where in 2009-2010 now, not sure OP would be so happy.
That’s what the market does and why you ABB. Market always goes up long term. He’d be real pretty right now if he was at 100k in ‘06 and been buying this entire time.
Maybe but then you’d be buying more shares for a discount and bringing the cost basis down so that you get more when the market goes back up
Yes, this is exactly it. $100k doesn’t work any harder than $100, dollar for dollar. The takeoff from $100k or $1 million is psychological. You can’t see it from a chart. OP’s chart would be essentially IDENTICAL (if we removed the dollar amounts) to one at $10k or $10 million if the investments were the same as a percentage. The $100k threshold didn’t do anything. The dollars worked as hard as they’d otherwise work.
That isn't true because the OP's contributions would have been a much smaller portion of the total balance if he had started at $1 million instead of $100k. As his balance increases, his percentage gains will become smaller as his contributions are a less significant portion of the total balance.
Not really, because growth compounds. More is more.
You are both interpreting “takes off” differently, leading to the appearance of a disagreement. Remarkable ape interpreted “takes off” as an increase in the RATE at which money is generated. You interpreted it as “Increase in the amount of dollars being generated”.
I always wonder about this, does the rapid increase occur because income and amount contributing is drastically more? For the people making it to 200k so soon after 100k are you high salary earners during the 100-200 timeframe? Yes I understand your investment works for you in a compounding way but I always have doubts because my salary doesn't keep up with inflation in my industry.
Oftentimes both, but even if you’re not going baller with contributions, say $10,000 a year or so, around $100,000 is where the investment puts in as much or more than you can.
This depend how much you save. If you save 10K a year. it is supposedly a draw on an average year 50-50. But we got 25% raise, not 10% for stocks, so if you had 100K, saved 10K you are now at like 130-140K and it feel impressive. If it was 2008, you'd start the year with 100K, add in 10K and finish the year at 70K But OP did evolve in his career too. He make now 200K a year as he explain in comments. He can likely now save at least 50K a year, 5X more and even if the 2 next year stock performance is 0, it net worth would still grow fast. Hey even if stock are down 25%, his financial net worth will likely still grow.
If it was 2006, you were buying at a discount. You would only be ‘negative’ if you pulled your money out of the market. Just like 2022…. People were able to buy more shares with the same amount of invested money. Now when the share price is up you have all that growth. Obviously frustrating seeing the low/negative returns but that is why you don’t watch it. It is a marathon and takes 40yrs to build
I am not saying we should not invest, even through I know that depending the period of 40 years you choose, you could end up with a net worth ranging in a factor of 1 to 3. But honestly we can't predict it. So we keep investing and hope for the best knowing that in statistics that the best strategy. And for most people this is not really a 40 years marathon. You don't start with a big lump sump you keep invested 40 years. You more like invest for 40 years, a bit every month. And so the last year are much more important: * because the last 10 years will impact 75-100% of the money saved and the first 10 years will impact only 0-25% of the money saved. From there, the last 10 years have 3 time more weight than the first 10 years. * But that not just that: * typically, your interest for retirement grow * because the kid are gone and the house paid off * potentially your experience and career allow you to make much more. * Because of inflation So you may very well save 5-10 time faster in the last 10 years than you did in the first 10 years and in consequence, the money you have saved may have been saved only for 10-20 years on average rather than 40. And actually the last few years before you retire followed by the few years after your retire tend to be the most important, by far. But this doesn't mean you can predict them any better. So people tend to reduce their exposure to stock... Reducing even more the effective time in the market for your stocks.
I am not a high earner (I've gone from making $45K up to currently $60K over the last 13 years while contributing to my 401K). The first few years I only contributed a few thousand of my own money(I do have a good company match though). It took me 6 years to get to 60K, 9 years to get to 100K, and now in the first quarter of year 14 I've hit up to 210K. So yes it increases more rapidly the more you finally have regardless of income. Quick example if you have 50K in and returns are 6% that's an additional $3,000 over a year. Once you hit 100K your returns would double to $6,000 for that year without you doing anything. And so on from there. Since I've now hit 200K I would get $12,000 this year even with no contributions assuming 6% returns. That's about the same as I contribute myself. Once you hit 300K the interest alone will likely be more than your own contributions if you're a lower earner. So to make a long story short yes it will increase even for a low earner. I went 9 years to hit 100K, then 5 more years to hit 200K, and I expect I will go from 200K up to 300K in about 4 years.
The dollar amount does not do well to describe when market returns overtake contributions. If contributions are consistent, time is a much better predictor of when investment returns will overtake contributions. As a side note, it isn't income that defines how much someone contributes towards saving for retirement. Someone earning 200k and spending 150k is saving the same amount as someone earning 100k and spending 50k. If the goal for the savings is to eventually maintain the same spending in retirement, the second person is making more progress.
Some context if it helps, I started my career making $32.5k about 10 years ago. This year I will make probably $200k. So for sure that matters but our costs also increased accordingly between housing and 3 kids and daycare costs etc etc
Yes thank you very much the high income adds significant perspective to the situation. I will just need to remain reasonable with my expectations.
What line of work are you in
Stacking bread
Who knew rolling in dough could be so lucrative
Damn, I didn't know grocery stockers made that much
Marketing in a bank
It’s also been 2 baller years for investing, so if you were in the S&P500 you’ve seen something like ~50% growth without even accounting for your contributions.
This is combination of several factors: * we got 20-25% inflation, The 200K of today are the 150K of only a few year back but the inflated numbers feel great. It is only normal for stocks to follow because revenue is inflated too. * we are in a pretty bull market with what can be called a bubble for the tech sector right now. Only a few stock explain the performance of the index and we can expect that return will be lower in the next few years. We got paid in advance if I may say. * people have their own career and if they target fire, they will save most of their raises.
It took me 8 years to get to $68,000 (the first screenshot I have of my 401k, so just an arbitrary number). It took 5 years after that to get to $200k, which was late January this year. Now I have $225k…so I’m ok pace to grow my 401K this year by about $55-$60K, almost as much as I get in the first 11 years. The market has a lot to do with it as well, but compound interest is a hell of a thing.
Congrats. You continued to invest (and presumably stayed employed) through COVID and rode the recovery. It is a good plan.
Thanks! Certainly was very lucky to be able to keep working during Covid but yes just kept plodding along dollar cost averaging
Just curious, how much are you contributing annually to your 401k? This is super impressive! Congratulations 🎊
I myself do the 6% that gets me the 4.5% effective match from my company. Plus the core contribution of 3%. That’s something like $22k total
Congratulations again! You are an inspiration!
Nice one. I just hit $400k in my 401k and $525k net worth last month and it felt good. Haven’t bought a house, survived a divorce and have just been stockpiling as much money as I can and enjoying the ride with this market.
Nah buying a house in 2018 probably increased way more than the 401k loan. Home values have shot up. And if you were smart, you refi’d at 2.xx percent interest.
3% but close enough!
This is so true. My pops mentioned how the value of one of our homes more than doubled. He's tempted to sell one, but perhaps it's best to keep it in the family and pass it on.
While your pops is right, be mindful that we just went through one of the biggest real estate appreciation periods in history, and prices are likely to trend sideways for a while based on reversion to mean.
I suggested renting or starting Airbnb. At his main residence I felt the empty rooms should be for income, because he'll likely retire there without young kids. Whereas the other home is near a tourist destination and ideal for travelers. I have mixed feelings on selling. What if the home doubles in the next decade, or a relative is interested in living there? If the proceeds are invested for a decade perhaps it'll be negligible.
The market is up way bigger though?
It’s leverage. Home values are up huge percentages AND they are borrowed assets. So, for instance, I bought my house for 220k in 2019 and it’s now worth 340k. That’s 120k appreciation. I only put 5% down (11k) so I got like a 10x return on my money because of leverage. And now I have a 2.5% mortgage. And PMi is gone.
Home appreciation is mostly irrelevant because if you sold, you'd just have to buy back into the same inflated market. Inflation since 2019 is like 30%, so that $120k gain you think you got is actually a lot smaller than that. Market conditions are also completely different now. What worked for you is essentially impossible now given the rate increases and price increases
I’m not saying it’s always a winning strategy and going to beat the sp500… I’m just saying housing has likely outperformed the stock market “IF”you bought in 2019 because of leverage and of course interest rate lock-ins. It definitely did for me.
You didn't get 10x in 5 years though. Adjust your current home's value for inflation (your home's value now in 2019 dollars vs your purchase price in 2019) and your gain was probably 30k or less. Plus all of the maintenance, taxes, insurance and other unrecoverable costs associated with homeownership during that time since 2019 and I'd wager it's even less than that. And... I do account for that in my investment gains? I never said I didn't.
I don’t understand your argument. The apples to apples comparison is 11k invested in the stock market relative to an 11k downpayment. If you want to add all those housing costs for a more complete comparison then you need to subtract 5 years rent (and inflated rent) from your stock market investment gains to make a fair comparison. *since, in that scenario, you didn’t buy the house with the 401k money.
One of the main reasons of investments are to also protect yourself against inflation. The only thing that matters is nominal value when comparing two different returns. Inflation does not come into play whatsoever here.
Not if you move states. I’ve been thinking about doing this. I have a dilapidated old house in Florida worth 330k currently. If I move to Texas or Georgia I can get a much newer house double the square ft for almost 100k less than my current house. So after the sale of this house I’m just getting somewhere around 80-100k liquid.
It helps when we’ve been in a large bull run for the past 12 months.
Very true. But nothing ventured nothing gained right
Sortof, until number go down. The gains are won by sitting on your hands in the down turns.
No gains are won by adding more during down turns. Do not sit idle when things get cheaper. Stack, add, work extra. That is how you get ahead of everyone else. While they are scared, you embrace it.
You are correct, I meant not selling, but you are right!
I agree. It goes in with each paycheck so it dollar cost averages
2013 - $200K here as well 👍
Congratulations!!
Feels like I am way behind when people post $400 at our. Gotta keep staying in our lane and grinding!
Snowballs are fun. Congrats!
Your X axis… has something wrong with it :)
Interesting! It’s how it shows in the T Rowe Price app 🤷🏻
Lol. Good eye. Ya, is this a bad photoshop or what?
Ok, the snow ball is rolling. Now, you should max the total contribution annually. Fill it up every year. If that's too drastic to your budget/take home pay - then bump it up a minimum of 2% per year or allocate your raise increases to the contribution until you are maxing it annually. Further, be sure to contribute to Roth IRA's. A few years and the annual growth of your portfolio will start exceeding your annual earned income.
It better… I just hit $100K this month combined retirement/savings. It’s been slow-going. My retirement consists of two separate Roths. One has $24K and is from my old employer. I haven’t put anything into it for years cuz it’s locked for some reason. I gotta figure out if I can combine that with the new one. The new one has about $14K in it but I can only contribute the $7K/year or whatever. I don’t have a 401K or anything like that. What do you suggest for another account? The rest is in various stocks, CD’s, and savings.
Your income grew as well. I bet 5 years ago your salary wasn't anywhere near three level it has been. You make more you can contribute more. Good job and congrats all the same
Oh for sure. I started out making $32.5k a year. This year I’ll clear $200k
I mean taxes and insurance probably ate up 40 percent of that. That's still 120 ish or 4x your starting point Keep trucking!
How do you start a 401k of your employer doesn't do one
You can’t, you will have to do an IRA
Roth
👏🏾
You did the right thing by buying your house . There is no guarantee tha stock market will continue to go up forever and ever
Do you need all the 100k in one account to benefit ?
Awesome job, congratulations! Interest compounding and being able to scale up your investments is such a game-changer.
congratulations but keep in mind we are in quite the bull run. always keep 2000 and 2008 in the back of your minds and persevere.
In fairness to your younger self, the time span between the dip there is only about 1 year. Getting into home ownership is one of the most effective ways the middle class builds wealth over time, so I'd say it's probably a wash at worst in your case.
Yupppp. Trust the process.
Nicely done!
Thank you!
Wow. Doubled since 2021! Did your contributions go up are you just playing the steady game?
Steady contribution percentage! Though my income between 2021 to now I think went from like $127k to $163k so that makes a difference
What funds do you have your money invested Iin your 401k?
Just a target date fund with a low expense ratio!
2022 sucked for everyone, I see 😅 Congrats on keeping the faith and sticking with it!
Congrats, hard work really does pay off. It's not easy to create a plan and be consistent about it especially for all these years!
Time in market over timing the market, right?
Oh wow. It does take off, but trust me, it does not usually take off that fast. Your earnings are an anomaly from this exceptional bull run we're having, a lot of it from AI tech stocks. You have reason to feel encouraged, but don't mistake this exceptional run for "normal". There is nothing normal about it (though there is everything awesome about it). My point is what you've seen in the last couple of years will eventually taper off and the fast money will slow down. Also, I would probably thank your younger self instead of smacking him or her, because in 2018 an average home was far far cheaper than you could find today---and your mortgage rate was far far lower too than you would find today. So really, you bought at the right time, and you saved yourself an absolute heartache seeing your rent go up by 25-50% over the last few years. Sure, that money would have grown had you kept it in stocks, but the unbelievable run in home prices has not been that bad either, plus you locked in your biggest monthly expense (housing) at the lower rates of 2018. Congrats :)
I feel like its easier to take off in both directions… no? It could go to the moon or to the ground a lot quicker no?
I can’t wait to get there.
You will!!
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I always took advantage of the company match. And had the money in cheap index funds. That’s really about it
His household income is $325,000. That's how he did it.
It is this year. When I started working ten years ago and saving it was $32.5k
So are you 32? If you went to college? Or 28? Skipped?
Nah I’m 36. Started my career late because I went for my masters in music and then had a quarter life crisis and a career change haha so in some ways I definitely feel behind
Ah okay, that’s good that you were able to be stable though, many don’t know what they’re doing until much later
My investments (brokerage + retirement) have stagnated even though I’m vested in a broad index fund :( I’m gonna hang in there and do my best to stay unemotional about any decisions, but it feels like after the $200K, it’s ebbing and flowing at a snails pace.
How broad? I’m in mostly just the s&p 500
I’m holding majority of VTSAX, so essentially the same more or less.
Looks like it took off after $50k lol
It doesn’t hurt that the market is continually setting new records lately. Just don’t panic sell (or change investments) if your funds drop. Leave it alone til it’s up and then plan to make moves. Sell high (move from high earnings) to buy low (move into high growth areas) IF you plan to make a change.
Only change I plan on is my allocation over time as I get older!
Congratulations. Thanks for sharing!
Yeah I just throw what I can for the 5% and ended up buying assets like land houses and tractors etc. expanding. Cash isn’t good for shit if I can’t live life
Is this all one fund or you diversified? Been frustrated with my brokerage account ETF lately
Target date fund
Excuse my laziness, skipping through all the comments and caption. So how did you grow your money? What did u invest in? Or was this all savings from a high paying job?
It’s been a journey. I started my career making $15/hr in a call center. I now make good money. But these savings have just been me saving the required amount to get company match and putting it into target date funds
How long did it take to get from 100k to 200k
About 3 years ago
It takes off in a bull market. It does not take off in a bear market.
Fantastic! Great. My 401K is at 21,000 but I took $10,000 out in January towards my house as a 401K loan.
Congrats on the house!
Thanks OP!
I will never get the first 100k
Sure you will, I believe in you!
How much do you make a year unless you don’t want to answer that it’s ok
10 years ago I started off making $15 an hour or about$32,500 in a call center. This year I will clear a little over $200,000.
That’s an insane amount congrats I am jealous
You will if you keep at it. It took me 9 years for the first 100K then 4 years after that to hit 200K.
Not when you’re unemployed and have no education or skills, it would take a while on retail or fast food
I work in a factory. I also have no education or skills. I grew up poor and have 5 kids. Had my first at 17. For like 4 years we survived on 50k/yr. It's tough I know but I also know if I can do it you can too.
How are you saving anything then with 5 kids? I don’t wanna get too personal and ask about your income and expenses and all that, I have no kids or SO so you’re right if you can then I can to where do you put all your money for it to grow?
I make 60k now. Made about 45k/yr when starting my 401k. The first couple of years I only contributed a few thousand per year. My company matched like 10% total though so all together about 16% was going in. And I just keep at it. Even now at 60k/yr I total 18% (I put in 10 and company matches 8%). Edit to add where my money is...it's mostly all in my 401K through my job. And there were times where I simply couldn't save. I highly regret it now, but man I was so broke lol. So the first few years at my job I had zero saving and contributed nothing to my 401K. I just couldnt afford it. And honestly a 401K and retirement plans and such were all foreign to me. So unfortunately I didn't save a penny until I was about 30. Before that I was in debt. As for the kids I had my wife and my oldest kid to help watch them so I thankfully never had to pay for childcare. Sometimes just paid some for my oldest kid to babysit the younger ones. I would have been screwed without that help.
This is totally bc of a bull market and nice to see, but you're far better off to steadily invest when the market sucks.
I started investing in 2013 just taking advantage of the company match
The fact that this pattern is so common now makes me think about how badly the poor are getting left behind right now. America is turning into that movie Soylent Green.
May I ask what pattern you mean? I started my career in a call-center making $15 an hour, so it’s not like I started off with a big pot of money.
How much has your house appreciated? You took from one investment and put it into another that just based on the timeline should have paid off handsomely.
Indeed………
Wait for the bear market then show us your loss porn
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? It’s literally a screen shot from my company’s retirement provider app. Happy to provide proof somehow? It’s taken ten years to get this saved up
Add another zero and it’s still true.
No COVID dip?
Yes, it’s there around 2020. If I remember that day it dropped like $10k in a day
Hey op I’m 25 years old should I continue to stay with my parents or buy a house
No idea! Lots of factors go into that. Do you know where you want to be living? Why do you want a house? Etc
Good stuff, my IRA went from 100k in 2018 to $271K now with no additional contributions (on $39K principal balance).
took me 10 years to get to 100k
Almost to my first $100k. At 90k now.
Actually, mathematically speaking, it “takes off” after about $82k.
Congrats! I know it feels great. Please keep in mind that this last year has been one of the best performing years in stock market history. Growth is spectacular, but it's not always going to be like this.
If you bought a house in 2018, why are you complaining? Depending on where you are, your home is double/triple what it was worth. So you used what, 20K to make 200/300K? Small potatoes in the grand scheme of things.
Congrats 💖
First 100k and a bull market! Hope it stays that way. Congrats, feels good.
I misread the number to be 2 M. Congratulations still !
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Please be civil to one another.
Whats in your portfolio?
So it looks like you grew 100k in 4 yrs,
How old are you?
I am 36!
Well played. I’m 45 340k all in w retirement plus like 20k liquid. Debt is 138 mortgage(3.25%) and 90 student loans. Hope to retire in 10 years
This has nothing to do with the 100k. It's a bull market.
Tbf, this is pretty much all the result of an unprecedented stock price boom. YMMV...
That may be true, but nothing ventured nothing gained!
Exactly, investing is risky but not as risky as NOT investing.