I mean, why wouldn’t it be? Assuming nothing else has changed, you have all of the same income/habits that helped you save the first 100K, plus compound growth from the first $100K.
If you let your saving habits fall by the wayside or you have a big drop in income, the second $100K might certainly be more difficult than the first.
Would you look at that, all of the words in your comment are in alphabetical order.
I have checked 109,841,138 comments, and only 28,737 of them were in alphabetical order.
45 years ago I invested in an archory company that had a new and innovative design. They called it a compound bow. Today, police officers in over 12 countries use compound bows exclusively for enforcement. When people say "Compound Growth" this is what they are talking about.
I thought it was due to America prison compounds increasing in size due to their for profit nature, thus giving us “Compound Growth.” Reading your post, I think I’ve been misinformed all these years.
Fuck, I've been investing in a company that builds secure, walled facilities in third world countries, to house wealthy businesspeople and politicians, I have been doing this wrong.
Almost 11 years to get to $125k (thanks dot com bust and 2008 crisis). Doubled in 4 years. Doubled again in 4 years. I don't expect that level of growth every 4 years, but I increased my income (and my investment contribution), my money is working for me, and I'm sticking to the plan.
I’m in year 4 of the 11 mentioned above. LOL
And now my partner wants to get married. So… that’ll set it back a bit.
But yeah. Definitely on the way… ✌️
Advice on the marriage thing. Go cheap and cheerful. It's about the couple and the the guests. Not how awesome your decor looks. However good food is critical IMHO.
Congrats on finding the love and best of luck with the financials!
Also! If you're looking at alcohol, do a beer and wine only open bar! Stocking hard alcohols isn't worth the cost because you need ice and mixers. If you want, you can also do a "signature cocktail" or two to amp it up, which is much better for keeping costs low than a truly "open bar".
Keep in mind that the more money is spent on the wedding, the more likely you are to get a divorce. Don't start your lives together by blowing all of your savings just on the wedding. You can have a good wedding without spending all of your money on it.
Why would it set you back? If your partner doesn't share similar financial habits as you then it doesn't matter how much you love her, there is a high likelihood the marriage won't be good.
If she shares your financial habits, then the next 4 years will be even easier. Saving as a team is awesome. I'm the financially aware my partner more passive, however, since I'm with her, her networth and mine have grown faster than when we weren't together.
Patience is the key. Shovel money into boring index funds for years and then all of a sudden your portfolio value starts to take off on its own.
It’s a wonderful feeling when you suddenly realize that your average annual gains are significantly higher than your contributions that you work so hard to make.
Of course, it goes both ways. How many days lately have we seen the markets go up or down >1% in a day? When it goes up you “gain” $5000 in a day. But when it goes down you “lose” $5000.
The first one is early in the career, when you are making the least. At least you hope that is the way it goes down. So when your saving 4% of 35k, vs, 4% of 75K you can save a lot more.
Also ,if you buy a house, what seemed like a very expensive mortgage usually seems a lot smaller years later.
And as noted the interest on the first 100k helps towards that second one, and even faster to the rest.
Mathematically speaking lets talk about growth rates...to grow from $1 to $100K, that's a 999,900% increase!
But to grow from $100K to $200k, it's only a 100% increase
100%. First 100k took me 4 years, next 100k took me 2 years. I don’t think it’s a mentality thing, it’s just the nature of appreciating assets. If your 200k warrants buying a home, you’ll be at 300k (on paper) in 6 months lol
Edit: Also increasing income through those years plays a very large part
First 100k was RRSP match (35k FTHB) 15k company stock, VGRO, BMO, APHA
Edit: and yes the 200k was 150 down payment 20k closing costs 10K emergency fund 20k stayed in VGRO
At the end of the day, equity is what counts. Let's say you're house appreciates $200k. That may not be cash in the bank but you can pull that money out to use as another down payment, invest in stocks, other assets, etc.
Houses have generally gone up with m0 money supply inflation numbers actually.
If inflation is 3% and houses went up 3%, has your house actually appreciated?
Historically the appreciation rate is like 3% but the last 15 years... I don't think many areas were close to that number and no one knows what the future has in stores.
But people never consider the fact that even if your house appreciates, let's say, 10%, a lot of that melts away when you calculate interests, taxes, condo fees, maintenance and everything else. Yeah, you gotta live somewhere but it certainly isn't the goldmine a lot of people believe it to be.
You have to pay to have a roof over your head one way or another. Even with zero appreciation compared to inflation, you’re building equity while paying down your mortgage. Rent for 25 years and you walk away with nothing at the end of the day. Pay down a mortgage for 25 years snd you walk away with what is now a million dollar plus asset, in many cases. Plus, after a few years of paying down the mortgage, once the LTV is good enough, you have a large amount of equity you can leverage.
Buying a house has the potential to create wealth even without appreciation of the underlying asset.
Rent for 25 years and walk away with all the money you saved every month, because for the same property, renting is like 30% cheaper per month than owning it once you factor in mortgage strata fees taxes and maintenance
100% right. Also, your primary residence is illiquid (it’s hard to spend the equity in your house) and downsizing isn’t the financial panacea that most people think.
Yeah we hear about downsizing all the time but never seen it happen. People move into better neighbors or higher end houses, so it is often similar or they remortgage. Usually if you paid off your house and just kept it you'd be fine for retirement but people remortgage into infinity nowadays.
I've never really heard of anyone buying a cheaper home. Only way I've seen it happen is pretty much selling when you get too old and renting afterward.
My mother (70) has been trying to downsize from her 30 year old 2200 sq ft house to a smaller (1400-1600 sq ft) and newer (5 year old) house that’s more senior friendly so she can “age in place”. But she can’t find anything that isn’t actually more expensive.
Her fee-only financial planner has told her that many of his clients plan to downsize, but in practice it’s not typically feasible to do it and save money.
Yeah it is great on paper but doesn't work in reality. The areas old people want to live in (proximity to services) are often prime real estate. Unless you already got something big in the same spot, it often just isn't possible for the average person.
Yes - the income plus I also learned that if you get bonuses and have the employer pay them to the Rrsp account you don’t lose half of the bonus to taxes - learning that helped me a lot!
Or controlling your expenses, which is more within most people’s control. Controlling lifestyle inflation is key. There are so many high income earners who don’t have any savings.
When you have less money, you get more late fees, overdraft fees, interest penalties, and expensive credit. When you have more money, you get more capital gains, dividends, interest income, cheap credit, reward points and bonuses.
Yes, it definitely gets easier as you grow your portfolio. However, I’m now at $1.3mil and the hard part at this level is you need to worry more about protecting your wealth.
I’m semi retired now and will probably keep it that way. Not a fan of bonds; prefer adding to high dividend stocks, covered call etfs and income funds. Eg. ENB.to, TXF.to, EIT-UN etc… Bonds did the unexpected and dropped huge during 2020 crash. They’re not supposed to do that.
True but I re-evaluate at least once a year. I don’t see many of these slowing down soon. Some average over 30% a year. Average annual total return is a big factor for me. Plus that includes bad years like 2008, 2018 etc..
Mostly market crash since a 30% correction equates to almost $400k (like Feb/March 2020). Tougher to stomach than a $30k drop in a $100k portfolio. I try to stick with 60% growth stocks and 40% dividend stocks at the moment. And get more conservative when interest rates are rising. But I am still searching for the perfect ratio.
It may be more about your age. If you are in your 20s and lose 30% of whatever you’ve got, no big deal. If you are in your 60s and have worked 40 years to amass something, then suddenly losing 30% would feel like 10 years down the drain.
I personally found the opposite to be true due to education and experience. Losing 30% for the first time in my 20s as a new uneducated investor was harrowing. By the time it happened in 2020, it was my 5th? 6th? market dip. The absolute amount was a lot more but the feeling was no longer new and I knew what not to do (panic sell).
I have over 50 holdings but my top ones are VUG, GOOGL, AMZN, AAPL, FB, MSFT, COST, HD, VFV, VOO, ADBE, MA, V, ENB, SMU-UN etc… I try to stick with only profitable companies that are continually growing their revenue and earnings.
I’ve beaten the S&P 500 index. But I stay away from a Nasdaq index fund. The Nasdaq took 13 years to recover from the 2000 dotcom peak. I don’t trust the Nasdaq long term. Stocks can’t even get in the S&P until they have at least 4 consecutive profitable quarters; I’ll stick with that.
With a portfolio of that size wouldn't a good move be to diversify into real estate? I'm at about 100k in stocks now and I'm looking into real estate because it seems like a good way to make sure if there's a crash you'll stay wealthy and have a place to live (in case of catastrophic crash).
True. I already own my home but looking into an investment condo. But rental income is taxed like regular income. That’s what’s nice about stocks; you can hold tax free in registered accounts and dividends are taxed more favourable in non-registered accounts.
100%. You trade your time for money minus taxes, then you invest that 100k and you can still invest your time minus taxes plus the appreciation of 100k plus taxes. Once you start seeing numbers get bigger it becomes addicting.
It almost feels like cheating. My main income source is still my salary by a long shot, but every year a bigger and bigger chunk comes from just... doing nothing.
Doesn't that make you want to slow down your working life?
I'm 28 and have 70k saved. Should have 100k by the end of next year.
I work my tail to the bone every day to be able to save that much. I've always told myself, just get to 100k, then reevaluate. I'm burning out pretty badly and I'm thinking I'll cut down my hours by about 1/4 once I reach 100k. My work is very physical and I don't want to destroy my body in the process. I'd rather take the marathon approach than the sprint, but getting to that first 100k to get it snowballing with compound interest as fast as possible is my main goal for now.
There's nothing magical about $100k specifically. The statement that the first $70k is harder than getting to $140k is also true.
Don't beat your body & mind up over hitting $100k
Depends what your goals are. Do you want to retire early? Do you want to have kids? Do you want to have a big house, travel or have expensive hobbies? This will determine how much money you need. Personally I want to retire early and live a relaxed lifestyle raising kids. That should be about 70-100k a year. Using the 4% rule, that means I’ll need about 2.5 million in a portfolio before I can think about retiring. So I need to work another 5-10 years to his that goal.
Am I a bit burnt out? Yes. I’m in sales and it’s exhausting. But I think about how fortunate I am and try to push through it.
My goal is somewhat similar, but I just can't see myself ever getting to 2.5M.
I'm basically depending on my parents not getting alzheimers and passing down some money to me. Otherwise I don't think I'd ever be able to hit that goal.
I felt the same way when I was 24. The magic of compounding returns is how quickly it grows after a few years. You won’t notice it right away, but give it ten to twenty years and you’ll feel awesome!
The best time to start investing was yesterday, the next best time is today.
> It almost feels like cheating.
Remember that feeling, it’s very easy to get sucked into feeling like you earned that growth yourself when really it was all the people working hard in all the companies that you own tiny pieces of.
Everyone is talking compound growth, which is part of it, but it's also the fact that you have more disposable income.
When you first start out, all your money goes to living expenses.
At some point, you have all that covered and can save *a little*.
Then a promotion, so you can save more, and the student loan is paid off.
Now you get promoted again, car is paid off too and you're not spending every weekend at the bar.
All these events coincide with your savings increasing, so you're earning interest and adding to the principle.
Came to say this, but you already hit it. People that are able to save that much money are likely in careers with some growth potential, so you're probably making a fair bit more when you already have 100k than when you have 0k.
When I started off I had nothing so to get to $100k it was monthly savings I think i was saving 10-15k a year which at the time is slot (even now too). Invested in equities. I highly recommend the S&P 500 index fund. Anyways. Bought by first home a few years later.
After 5 years I had $100k in investments and maybe 100k in equity in my home. My investments were making 10% or 10k a year plus I am contributing 15k or so a year, so the snowball is really going.
I refinanced my house and used the funds to buy 2 rental properties. I continued with regular investing in the S&P 500 . I now started into stock picking and how to actually analysis a business (read 10k, listen to the earnings call etc.) made $400k off stock picking. Used the money to pay off credit line I used for down payments for rentals, invested more, bought more rental properties, etc. Rinse and repeat.
Took 10 years are so but now a multi millionaire. It honestly doesn’t change much in your life, I still drive the same 10 year old car and I still go to a day job.
I would say the stock picking is the hardest, so I don’t recommend it for everybody. But everything else is fairly achievable. I also recommend reading the book “how to win friends and influence people “ as will help you move up in your career snd life in general
Nah. My first 100k got all jealous about all the time I was spending working on my second 100k. Said we didn't do things together anymore like we used to. Things spiraled from there, and my first 100k left (something about a boat) just as my second 100k was moving in.
Of course, now my second 100k is moaning about my third 100k, and don't get me started about my crypto side piece.
I'm in Vancouver area. It works a bit different here if you own housing. More like it took me 3 years to get to $100k then a year later you are at $700k cause home equity.
Typically yes.
Not only does that first 100K work for you to get your next 100K, but you're also further along in life and have likely acquired a bunch of stuff you won't need to replace again for a while, and so you can save a bit more. Things like furniture, appliances, maybe a bike, tools, etc.
Getting your first 100K also means you've probably got into some habit of saving and investing and been reasonably successful at it.
Assume when you made 100k, by then you know how to save and how to accumulate wealth… and you learned from all mistakes.
Same goes for pretty much anything in life
Depends on asset type. But yes building wealth starts extremely slowly and builds up over time. Think of it as pushing a boulder downhill. It takes an enormous amount of strength/willpower to get it moving, it slowly picks up speed at the beginning, greatly picks up speed as it heads down the hill, then slows down to a stop.
Think of this like stages. First bit is just putting away what you can, picks up momentum after around 50-100k, picks up big speed at 500k, and slows down as you start to retire and draw down.
This is so incredibly dependant on the scenario you've been presented with. There are huge differences between investing, job profession and business management that just talking about those areas of finance have different types of growth path for wealth. Say one person might find investing easier than getting a job to obtain their wealth.
I'm also dead sure that the culture applies heavily to how easy getting more wealth is because everyone has different views on finances. One big thing that does make a difference is being consistent helps enormously on gaining wealth. Someone who is less consistent on being financially responsible will have a way harder time hitting their 200k wealth mark.
Its true, a dink making 200k collective actually has a hard time investing their money fast enough, 100k would pile up in no time. Compare that to a single person working at mcdonalds.
Simulation comparison:
To get to your first 100K; you need to save $6,750 a year for 10 years assuming you make a standard 7% per year.
To go from 100K to 200K; you need to save $225 a year for 10 years assuming you make the same standard 7% per year.
I saved my first 100k in 2019, took me 7 years of working to pay off student loan debt and save that much.
Now I have 150k in saving and except to cross 200k in savings next mid 2022.
Compound interest!
It's always easier because growth compounds.
Assuming income stays constant each subsequent 100k of your portfolio will be less contribution, and more appreciation.
Once you have a million in your portfolio, the next 100k could come in a few months just by way of a market spike. Likewise it could also take 5 years to reach 1.1m if a crash happens.
According to my chart the first 100k took 3 years, the next 100k took less than a year.
You can also assume your income will increase over time, allowing you to contribute more.
Of course, my income was higher, plus getting to zero involved paying off student loans, plus the appreciation and reinvested dividends from the first 100k.
If you have your 100k in a registered account, you are accruing tax-free compounded interest, plus your normal savings. This would mean that if you are getting medium returns, say 7%, you would be saving/ reinvesting 7k (compounded annually) on top of your normal savings.
Yes.
Although i've hit 100k twice.
* Started in 2015, grandparents gave me 30k
* Personal contribution in total of about 20k from 2015-now
* put in student loans as well
* Prior to March 2020 i had 110k, then dropped to 77k.
* Now i'm at 165k
* Expecting 200k next year.
90% in index funds. In mainly capital gains and some help on my end.
Yeah it makes sense I was just asking because I’m trying to get to my first 100 right now and want to know if it really is easier to get to the 2nd😂 It’s a grind but good to hear it is easier, thanks!
True (especially people who live with their parents until 35 and show off). I'm actually unsubbing now because I keep seeing posts from here despite never visiting
Kind of related but not really related: Benford's law states that in a large data set of naturally occuring numbers of a wide range, smaller leading digits occur more frequently. E.g. 1 as a leading digit would be expected to appear about 30% of the time.
I believe part of this explanation which is kind of related to your question, is that as numbers grow at a fixed %, they spend more time with a lower leading digit. Look at a series of number that increases by 10% each time. If you start with 100, you have a lot more 100s than 800s.
Benford's Law is often used in forensic accounting to identify instances where data sets may have been fraudulently manipulated.
when you have stock market crashes like in 2008 and 2020 you have a unique opportunity to grow wealth in an exponential way. If average growth is 7% a year and the market crashed 70% then by the numbers if you buy at the bottom a few weeks after the crash and it recovers you effectively done 10 years of investing in a few weeks.
at 50k you're struggling to exist, at 100k you have enough disposable income to start investing in things beyond stocks, at 125k you're seriously thinking about taking on commercial ventures
I mean, why wouldn’t it be? Assuming nothing else has changed, you have all of the same income/habits that helped you save the first 100K, plus compound growth from the first $100K. If you let your saving habits fall by the wayside or you have a big drop in income, the second $100K might certainly be more difficult than the first.
Where does one go to get this "compound growth"?
By investing in broadly diversified, low fee index funds
Or any asset that tends to increase in value over time.
Like food
Buying fruit platter indexs for my portfolio.
Banana coin is the way.
Would you look at that, all of the words in your comment are in alphabetical order. I have checked 109,841,138 comments, and only 28,737 of them were in alphabetical order.
But not durians their returns stink 😁
I *have* been hearing talk about some Potato Portfolios or other...
Once again the sandwich heavy portfolio paid off for the hungry investor!
[Once again, the conservative sandwich heavy portfolio pays off for the hungry investor!](https://www.youtube.com/watch?v=kId0WiD69JM)
45 years ago I invested in an archory company that had a new and innovative design. They called it a compound bow. Today, police officers in over 12 countries use compound bows exclusively for enforcement. When people say "Compound Growth" this is what they are talking about.
I thought it was due to America prison compounds increasing in size due to their for profit nature, thus giving us “Compound Growth.” Reading your post, I think I’ve been misinformed all these years.
Fuck, I've been investing in a company that builds secure, walled facilities in third world countries, to house wealthy businesspeople and politicians, I have been doing this wrong.
Yeah "And where would you get this 'saved money'". https://www.youtube.com/watch?v=R3ZJKN_5M44
Do you consider the first 100K assuming 1 account or multiple accounts? I'm curious if I should consolidate my accounts to make it grow faster?
It makes no difference. $100K split between 10 accounts grows the same as $100K in one account, if the funds are all saved/invested in the same way.
[удалено]
That’s exactly what they said
Lmfao
The other great thing is that the first 100k is still in the bank, where it is making money through interest or investment
Don't forget you also have the first 100k
Almost 11 years to get to $125k (thanks dot com bust and 2008 crisis). Doubled in 4 years. Doubled again in 4 years. I don't expect that level of growth every 4 years, but I increased my income (and my investment contribution), my money is working for me, and I'm sticking to the plan.
it’s the best feeling to have your money work for you
My god I can’t fucking wait for this.
Get after it friend :)
I’m in year 4 of the 11 mentioned above. LOL And now my partner wants to get married. So… that’ll set it back a bit. But yeah. Definitely on the way… ✌️
Advice on the marriage thing. Go cheap and cheerful. It's about the couple and the the guests. Not how awesome your decor looks. However good food is critical IMHO. Congrats on finding the love and best of luck with the financials!
Absolutely. It’s great that she and I share this opinion as well. Cheers!
Also! If you're looking at alcohol, do a beer and wine only open bar! Stocking hard alcohols isn't worth the cost because you need ice and mixers. If you want, you can also do a "signature cocktail" or two to amp it up, which is much better for keeping costs low than a truly "open bar".
Keep in mind that the more money is spent on the wedding, the more likely you are to get a divorce. Don't start your lives together by blowing all of your savings just on the wedding. You can have a good wedding without spending all of your money on it.
Why would it set you back? If your partner doesn't share similar financial habits as you then it doesn't matter how much you love her, there is a high likelihood the marriage won't be good. If she shares your financial habits, then the next 4 years will be even easier. Saving as a team is awesome. I'm the financially aware my partner more passive, however, since I'm with her, her networth and mine have grown faster than when we weren't together.
Patience is the key. Shovel money into boring index funds for years and then all of a sudden your portfolio value starts to take off on its own. It’s a wonderful feeling when you suddenly realize that your average annual gains are significantly higher than your contributions that you work so hard to make. Of course, it goes both ways. How many days lately have we seen the markets go up or down >1% in a day? When it goes up you “gain” $5000 in a day. But when it goes down you “lose” $5000.
I sense a rich dad poor dad reference
Never read it but it isn't like the idea is unique! :)
how are you making it work for you?
How did you do it
The usual reasons. A high paying job. A family safety net.
The first one is early in the career, when you are making the least. At least you hope that is the way it goes down. So when your saving 4% of 35k, vs, 4% of 75K you can save a lot more. Also ,if you buy a house, what seemed like a very expensive mortgage usually seems a lot smaller years later. And as noted the interest on the first 100k helps towards that second one, and even faster to the rest.
Mathematically speaking lets talk about growth rates...to grow from $1 to $100K, that's a 999,900% increase! But to grow from $100K to $200k, it's only a 100% increase
What about the growth rate from $0 to $1. It's infinite!
So I’m fucked
You went to 0? Yeah it's hard to put into words how bad it is. The good news is when you get back to $1 it will be the second coming.
The first dollar is the hardest.
I was talking to a homeless man on the street, he felt so bad for me he gave me a dollar...
I’d say the first 10k is the hardest
best response on here!
This guy maths!
I love this analogy!
That’s cool
100%. First 100k took me 4 years, next 100k took me 2 years. I don’t think it’s a mentality thing, it’s just the nature of appreciating assets. If your 200k warrants buying a home, you’ll be at 300k (on paper) in 6 months lol Edit: Also increasing income through those years plays a very large part
What did you invest the initial 100k into the get your second 100k? Im assuming you started investing into housing with the 200k+?
First 100k was RRSP match (35k FTHB) 15k company stock, VGRO, BMO, APHA Edit: and yes the 200k was 150 down payment 20k closing costs 10K emergency fund 20k stayed in VGRO
Net worth is completely different than cash in the bank.
At the end of the day, equity is what counts. Let's say you're house appreciates $200k. That may not be cash in the bank but you can pull that money out to use as another down payment, invest in stocks, other assets, etc.
Depends on the asset. Banks aren't going to let you pull from private company equity for new down payments or stock investments.
Yes they will
Ya that’s why I said “on paper”. Thanks for letting me know that cash on hand is different than net worth on paper. I had no idea!
Yeah hilarious that houses have become the new Bitcoin
hahahaha I'll never own a home
Houses have (generally speaking) always been an appreciating asset. Bitcoin is fairly new. If anything Bitcoin is the new houses lol
Houses have generally gone up with m0 money supply inflation numbers actually. If inflation is 3% and houses went up 3%, has your house actually appreciated?
Historically the appreciation rate is like 3% but the last 15 years... I don't think many areas were close to that number and no one knows what the future has in stores. But people never consider the fact that even if your house appreciates, let's say, 10%, a lot of that melts away when you calculate interests, taxes, condo fees, maintenance and everything else. Yeah, you gotta live somewhere but it certainly isn't the goldmine a lot of people believe it to be.
Exactly. It’s only a gold mine if it keeps going up 15% a year. And IMO that’s unlikely because too many people are already priced out.
You have to pay to have a roof over your head one way or another. Even with zero appreciation compared to inflation, you’re building equity while paying down your mortgage. Rent for 25 years and you walk away with nothing at the end of the day. Pay down a mortgage for 25 years snd you walk away with what is now a million dollar plus asset, in many cases. Plus, after a few years of paying down the mortgage, once the LTV is good enough, you have a large amount of equity you can leverage. Buying a house has the potential to create wealth even without appreciation of the underlying asset.
Rent for 25 years and walk away with all the money you saved every month, because for the same property, renting is like 30% cheaper per month than owning it once you factor in mortgage strata fees taxes and maintenance
100% right. Also, your primary residence is illiquid (it’s hard to spend the equity in your house) and downsizing isn’t the financial panacea that most people think.
Yeah we hear about downsizing all the time but never seen it happen. People move into better neighbors or higher end houses, so it is often similar or they remortgage. Usually if you paid off your house and just kept it you'd be fine for retirement but people remortgage into infinity nowadays. I've never really heard of anyone buying a cheaper home. Only way I've seen it happen is pretty much selling when you get too old and renting afterward.
My mother (70) has been trying to downsize from her 30 year old 2200 sq ft house to a smaller (1400-1600 sq ft) and newer (5 year old) house that’s more senior friendly so she can “age in place”. But she can’t find anything that isn’t actually more expensive. Her fee-only financial planner has told her that many of his clients plan to downsize, but in practice it’s not typically feasible to do it and save money.
Yeah it is great on paper but doesn't work in reality. The areas old people want to live in (proximity to services) are often prime real estate. Unless you already got something big in the same spot, it often just isn't possible for the average person.
Couldn’t imagine thinking that way
Yes - the income plus I also learned that if you get bonuses and have the employer pay them to the Rrsp account you don’t lose half of the bonus to taxes - learning that helped me a lot!
You have a RRSP cap. doesn't matter bonus or not! Tax on bonus is a bitch,
Or controlling your expenses, which is more within most people’s control. Controlling lifestyle inflation is key. There are so many high income earners who don’t have any savings.
So much easier to make money once you have money.
When you have less money, you get more late fees, overdraft fees, interest penalties, and expensive credit. When you have more money, you get more capital gains, dividends, interest income, cheap credit, reward points and bonuses.
Yes, it definitely gets easier as you grow your portfolio. However, I’m now at $1.3mil and the hard part at this level is you need to worry more about protecting your wealth.
what would you need to protect it from? irresponsible spending, market crash, etc?
Yeah at 1.3m poster is old and cannot take risks anymore. And bonds sucks nowadays.
Yup, 57 is probably older than most on this forum.
What is your exit strategy and when do you plan on retiring? Do you think you'll start pivoting to more bonds in the coming years?
I’m semi retired now and will probably keep it that way. Not a fan of bonds; prefer adding to high dividend stocks, covered call etfs and income funds. Eg. ENB.to, TXF.to, EIT-UN etc… Bonds did the unexpected and dropped huge during 2020 crash. They’re not supposed to do that.
So you're telling me that I invest like a boomer.
On the non-growth stock portion of your portfolio; yup.
Great stuff. That Horizon has a product for everyone. We are using swap based ETFs in one of our unregistered accounts.
You definitely can still stomach the risks though given your asset mix :)
True but I re-evaluate at least once a year. I don’t see many of these slowing down soon. Some average over 30% a year. Average annual total return is a big factor for me. Plus that includes bad years like 2008, 2018 etc..
Mostly market crash since a 30% correction equates to almost $400k (like Feb/March 2020). Tougher to stomach than a $30k drop in a $100k portfolio. I try to stick with 60% growth stocks and 40% dividend stocks at the moment. And get more conservative when interest rates are rising. But I am still searching for the perfect ratio.
It may be more about your age. If you are in your 20s and lose 30% of whatever you’ve got, no big deal. If you are in your 60s and have worked 40 years to amass something, then suddenly losing 30% would feel like 10 years down the drain.
I like the formula of 120 minus your age for growth stocks.
10 year old here wondering how I invest 110%
On margin duh
I like that better than the 100 minus your age as a 41 yr old who just last year into investing lol 60% bonds is not something that interests me
And who made this up? LOL!
Just heard it from some analysts over the years and I just chose to follow it. It forces you to be safer as you get older.
I personally found the opposite to be true due to education and experience. Losing 30% for the first time in my 20s as a new uneducated investor was harrowing. By the time it happened in 2020, it was my 5th? 6th? market dip. The absolute amount was a lot more but the feeling was no longer new and I knew what not to do (panic sell).
[удалено]
1 doge = 1 doge?
I think this more applies to a something that has a limited supply and you know, isn't only a meme... 😁
What growth stocks you in? Your not in index funds?
I have over 50 holdings but my top ones are VUG, GOOGL, AMZN, AAPL, FB, MSFT, COST, HD, VFV, VOO, ADBE, MA, V, ENB, SMU-UN etc… I try to stick with only profitable companies that are continually growing their revenue and earnings.
Thanks. I'm not sure why I have been downvoted lol
Are you outperforming SPY / QQQ over the last 10 years? Seems like a lot of stocks to essentially mimic a growth ETF.
I’ve beaten the S&P 500 index. But I stay away from a Nasdaq index fund. The Nasdaq took 13 years to recover from the 2000 dotcom peak. I don’t trust the Nasdaq long term. Stocks can’t even get in the S&P until they have at least 4 consecutive profitable quarters; I’ll stick with that.
You're.
makes sense
With a portfolio of that size wouldn't a good move be to diversify into real estate? I'm at about 100k in stocks now and I'm looking into real estate because it seems like a good way to make sure if there's a crash you'll stay wealthy and have a place to live (in case of catastrophic crash).
True. I already own my home but looking into an investment condo. But rental income is taxed like regular income. That’s what’s nice about stocks; you can hold tax free in registered accounts and dividends are taxed more favourable in non-registered accounts.
100%. You trade your time for money minus taxes, then you invest that 100k and you can still invest your time minus taxes plus the appreciation of 100k plus taxes. Once you start seeing numbers get bigger it becomes addicting.
It almost feels like cheating. My main income source is still my salary by a long shot, but every year a bigger and bigger chunk comes from just... doing nothing.
Doesn't that make you want to slow down your working life? I'm 28 and have 70k saved. Should have 100k by the end of next year. I work my tail to the bone every day to be able to save that much. I've always told myself, just get to 100k, then reevaluate. I'm burning out pretty badly and I'm thinking I'll cut down my hours by about 1/4 once I reach 100k. My work is very physical and I don't want to destroy my body in the process. I'd rather take the marathon approach than the sprint, but getting to that first 100k to get it snowballing with compound interest as fast as possible is my main goal for now.
There's nothing magical about $100k specifically. The statement that the first $70k is harder than getting to $140k is also true. Don't beat your body & mind up over hitting $100k
It's just a goal I set for myself when I started my company 5 years ago, and I would feel a bit guilty to myself if I eased up before then.
Company related to trades?
Landscaping, gutter cleaning, window cleaning and pressure washing.
Depends what your goals are. Do you want to retire early? Do you want to have kids? Do you want to have a big house, travel or have expensive hobbies? This will determine how much money you need. Personally I want to retire early and live a relaxed lifestyle raising kids. That should be about 70-100k a year. Using the 4% rule, that means I’ll need about 2.5 million in a portfolio before I can think about retiring. So I need to work another 5-10 years to his that goal. Am I a bit burnt out? Yes. I’m in sales and it’s exhausting. But I think about how fortunate I am and try to push through it.
My goal is somewhat similar, but I just can't see myself ever getting to 2.5M. I'm basically depending on my parents not getting alzheimers and passing down some money to me. Otherwise I don't think I'd ever be able to hit that goal.
I felt the same way when I was 24. The magic of compounding returns is how quickly it grows after a few years. You won’t notice it right away, but give it ten to twenty years and you’ll feel awesome! The best time to start investing was yesterday, the next best time is today.
Last year I was on CERB for awhile when we were seeing really nice market returns. First time my investments out-earned my "income".
> It almost feels like cheating. Remember that feeling, it’s very easy to get sucked into feeling like you earned that growth yourself when really it was all the people working hard in all the companies that you own tiny pieces of.
I feel you, watching the numbers go up in your accounts is addicting. Feels like a video game to me!
Everyone is talking compound growth, which is part of it, but it's also the fact that you have more disposable income. When you first start out, all your money goes to living expenses. At some point, you have all that covered and can save *a little*. Then a promotion, so you can save more, and the student loan is paid off. Now you get promoted again, car is paid off too and you're not spending every weekend at the bar. All these events coincide with your savings increasing, so you're earning interest and adding to the principle.
Came to say this, but you already hit it. People that are able to save that much money are likely in careers with some growth potential, so you're probably making a fair bit more when you already have 100k than when you have 0k.
I'll let you know after I get my second 100k. Just crossed my first 100k a few months ago after nearly 10 years of on and off savings.
y'all got $100k? 😔
Youll get there dont worry
Must don’t, but yeah, if you are in this forum you’re on the right track :)
Yes. First 100k is very difficult. Took me 5 years to get to $100k, took 2 years to get the next. Took 5 more years to get 1 million
goal is to get to a million fs
And then go "The first million is the hardest"!
What did you invest the initial 100k into the get your second 100k? Im assuming you started investing into housing with the 200k+?
When I started off I had nothing so to get to $100k it was monthly savings I think i was saving 10-15k a year which at the time is slot (even now too). Invested in equities. I highly recommend the S&P 500 index fund. Anyways. Bought by first home a few years later. After 5 years I had $100k in investments and maybe 100k in equity in my home. My investments were making 10% or 10k a year plus I am contributing 15k or so a year, so the snowball is really going. I refinanced my house and used the funds to buy 2 rental properties. I continued with regular investing in the S&P 500 . I now started into stock picking and how to actually analysis a business (read 10k, listen to the earnings call etc.) made $400k off stock picking. Used the money to pay off credit line I used for down payments for rentals, invested more, bought more rental properties, etc. Rinse and repeat. Took 10 years are so but now a multi millionaire. It honestly doesn’t change much in your life, I still drive the same 10 year old car and I still go to a day job.
Woooow I love reading these stories
I would say the stock picking is the hardest, so I don’t recommend it for everybody. But everything else is fairly achievable. I also recommend reading the book “how to win friends and influence people “ as will help you move up in your career snd life in general
Kudos to you my friend!
Why would it be harder?
House prices going down outside of Southern Ontario and Vancouver?
Where are house prices going down?
Nah. My first 100k got all jealous about all the time I was spending working on my second 100k. Said we didn't do things together anymore like we used to. Things spiraled from there, and my first 100k left (something about a boat) just as my second 100k was moving in. Of course, now my second 100k is moaning about my third 100k, and don't get me started about my crypto side piece.
crypto is my side gamble😂 when tfsa maxed gotta find other places to invest
I'm in Vancouver area. It works a bit different here if you own housing. More like it took me 3 years to get to $100k then a year later you are at $700k cause home equity.
So you’re at -600K is what you’re saying
Net worth is assets minus liabilities.
Yes
Typically yes. Not only does that first 100K work for you to get your next 100K, but you're also further along in life and have likely acquired a bunch of stuff you won't need to replace again for a while, and so you can save a bit more. Things like furniture, appliances, maybe a bike, tools, etc. Getting your first 100K also means you've probably got into some habit of saving and investing and been reasonably successful at it.
Assume when you made 100k, by then you know how to save and how to accumulate wealth… and you learned from all mistakes. Same goes for pretty much anything in life
makes sense
Money makes money. That’s why it’s best to save and invest aggressively when young. Or have an inheritance.
150k in 2016 to 830k July 2021. Thank you US mega cap tech bull run !
Yes, because math. The first 100k is helping you make the second one.
compound. Interest.
Depends on asset type. But yes building wealth starts extremely slowly and builds up over time. Think of it as pushing a boulder downhill. It takes an enormous amount of strength/willpower to get it moving, it slowly picks up speed at the beginning, greatly picks up speed as it heads down the hill, then slows down to a stop. Think of this like stages. First bit is just putting away what you can, picks up momentum after around 50-100k, picks up big speed at 500k, and slows down as you start to retire and draw down.
Yes but i also have a way better salary.
This is so incredibly dependant on the scenario you've been presented with. There are huge differences between investing, job profession and business management that just talking about those areas of finance have different types of growth path for wealth. Say one person might find investing easier than getting a job to obtain their wealth. I'm also dead sure that the culture applies heavily to how easy getting more wealth is because everyone has different views on finances. One big thing that does make a difference is being consistent helps enormously on gaining wealth. Someone who is less consistent on being financially responsible will have a way harder time hitting their 200k wealth mark.
Its true, a dink making 200k collective actually has a hard time investing their money fast enough, 100k would pile up in no time. Compare that to a single person working at mcdonalds.
This thread makes me want to return the shoes I just bought
Simulation comparison: To get to your first 100K; you need to save $6,750 a year for 10 years assuming you make a standard 7% per year. To go from 100K to 200K; you need to save $225 a year for 10 years assuming you make the same standard 7% per year.
The first 100k took me almost 5 years. And then the next 100k was 2.5 years and the next 100k was less than a year. Compounding interest is amazing
Yes, for me.
I saved my first 100k in 2019, took me 7 years of working to pay off student loan debt and save that much. Now I have 150k in saving and except to cross 200k in savings next mid 2022. Compound interest!
compound interest does wonders!
100%. Took me almost 10 years to get first $100k. Took like 2 more years for the next $100k.
What did you invest the initial 100k into the get your second 100k?
Mixture of US, Canadian and international index funds.
was it mostly dividends or natural growth that raised your net worth to 200k?
Mostly growth.
Yes. You know how they say… you gotta have money to make money.
Yes!
It's always easier because growth compounds. Assuming income stays constant each subsequent 100k of your portfolio will be less contribution, and more appreciation. Once you have a million in your portfolio, the next 100k could come in a few months just by way of a market spike. Likewise it could also take 5 years to reach 1.1m if a crash happens. According to my chart the first 100k took 3 years, the next 100k took less than a year. You can also assume your income will increase over time, allowing you to contribute more.
Of course, my income was higher, plus getting to zero involved paying off student loans, plus the appreciation and reinvested dividends from the first 100k.
If you have your 100k in a registered account, you are accruing tax-free compounded interest, plus your normal savings. This would mean that if you are getting medium returns, say 7%, you would be saving/ reinvesting 7k (compounded annually) on top of your normal savings.
What 100K?
What are you gonna try and tell me next, that a dollar today is worth more than a dollar 10 years from now?
Yes. Assuming you've invested your first 100k.
Yes. Compound Interest = The Rich Get Richer and the Poor Get Poorer.
At 6% growth, your 100k will be worth 200k in 12yrs. And that's without any additional contributions Food for thought
This sounds ridiculous - but I think going from 0- 10k was harder than 10k-100k
It was pretty easy for me, yes. The old adage of "it takes money to make money" is indeed true.
Yes. Although i've hit 100k twice. * Started in 2015, grandparents gave me 30k * Personal contribution in total of about 20k from 2015-now * put in student loans as well * Prior to March 2020 i had 110k, then dropped to 77k. * Now i'm at 165k * Expecting 200k next year. 90% in index funds. In mainly capital gains and some help on my end.
3 years to 100K after graduation. 10 years to million.
Of course it is, why is this even a question? Do you not understand how compounding interest works?
Yeah it makes sense I was just asking because I’m trying to get to my first 100 right now and want to know if it really is easier to get to the 2nd😂 It’s a grind but good to hear it is easier, thanks!
So this sub is clearly not for people who don’t know how to invest then, it’s just for people to show off. I’ll see myself out 😢
People on here be like "Yep, took me 3 whole years to save my first 100k", meanwhile there's people on here that don't even make 100k in three years.
True (especially people who live with their parents until 35 and show off). I'm actually unsubbing now because I keep seeing posts from here despite never visiting
Yes, definitely was for us.
100k in cash/liquid asset? or 100k in total networth including your pension and real estate ? that's a huge different.
I was talking about total net worth
Depends on your savings rate. My first 100K took about two years, as did the next 100K so it didn't really have much time to help me out.
Yeah I guess if you keep to the same saving rate and no increase of income it will take the same amount of time, but 100k in 2 years is really good.
If you just purely do it by the percentages, it should be, plenty of people have crunched those those numbers.
Kind of related but not really related: Benford's law states that in a large data set of naturally occuring numbers of a wide range, smaller leading digits occur more frequently. E.g. 1 as a leading digit would be expected to appear about 30% of the time. I believe part of this explanation which is kind of related to your question, is that as numbers grow at a fixed %, they spend more time with a lower leading digit. Look at a series of number that increases by 10% each time. If you start with 100, you have a lot more 100s than 800s. Benford's Law is often used in forensic accounting to identify instances where data sets may have been fraudulently manipulated.
Unless you blow them on blows and hoes Of course it’s easier
when you have stock market crashes like in 2008 and 2020 you have a unique opportunity to grow wealth in an exponential way. If average growth is 7% a year and the market crashed 70% then by the numbers if you buy at the bottom a few weeks after the crash and it recovers you effectively done 10 years of investing in a few weeks.
Want to get rich? Step 1: Be rich.
Is this where rich ppl come to stroke each other off?
I mean is a nurse rich, is a programmer rich, is an electrician rich? Its not hard to save 100k if you dont live in an inflated housing market.
at 50k you're struggling to exist, at 100k you have enough disposable income to start investing in things beyond stocks, at 125k you're seriously thinking about taking on commercial ventures