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MurrayS's thread of reaching the 1,000,000 prompted several of you to say you reached the 50k mark.

I'm a renter, 30yrs old and recently reached the 50k mark. This breaks down roughly as follows:

20k RRSP
10k stocks
20k efund+checking account

no debt

How do the rest of you in the 50k club compare?

Roland
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My 401K is at 49,500.

I do have several stocks that add another 10K on to that. So, I made it at age 36.


fredinseoul
working to keep the faith
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I hit it at 28 years. A couple of weeks shy of my 32 birthday, I now have 300K.

Cheers,
Nuclear Redneck
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FWIW, it appears I hit 50k in investments at age 29 or so (not yet married). I'm now 40 & married.

-murray
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I hit 50k at 28. Bought a car shortly after (and don't consider it in my net worth calculations), so now a year and a half later I'm at 56k.

-Agg97
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Near as I can tell, I was at $50K at 28. I didn't get serious about finances until I was 30. So it's just in the past nine years that DW and I have worked on building wealth. I became pretty obsessed with it for a few years until the crash I read every book I could find (most of them were terrible) and was obsessed with the Wall Street Journal and CNBC. However during the crash, I got most of my true financial education (and paid a lot in "tuition"). Now in the past three years it's starting to come together. We're now well over the 1M mark and looking for 2.

That's a very fast ramp up. So all those who are just starting should take heart. It can be done.

nmckay
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Greetings, nmckay, were any of the books you read worth a recommendation? Congratulations, by the way, on your fast-track!

xraymd
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I reached the 50k mark just last month, at the age of 27. I rent because my monthly rent of $450 (for half of a 2-BR apt) is less than the property taxes I would pay on any owned residence. Here's the breakdown:

7,000 - current 401(k) (just started with this employer in October)
13,000 - Roth IRA (maxed every year 2002-2005)
8,000 - Rollover IRA, sum of 401(k) and SEP IRA from 2 previous employers
8,000 - Bond fund in taxable account; this is my e-fund
16,000 - Stock index fund in taxable account

It's interesting to see how much the amount can change in a single day. As a very rough estimator, with 50,000 invested in stocks, I can think that I own 5 "shares" of the Dow Jones average. In other words, whenever the Dow moves, I gain or lose five times that amount in dollars. I made nearly $600 on Friday by doing nothing. That's a great feeling.

- Erik
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I'll check my bookshelf and get back to you with a list. My all time favorite is still "How to Make Money in Stocks" by William O'Neil.

nmckay
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My husband and I just reached a little over 50K at age 35.
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My DW and I hit 50k in investable assets sometime before we really started keeping close track and making RE a goal. Our first record is for 62k on 11/2002 (age 26) but I'm guessing we hit 50k sometime in late 2001. We currently stand at 174k and are both going to turn 30 early next year. I was hoping we would get to 200k by our 30th birthday's but it doesn't look like that is gonna happen unless the market heads up and only up.

I'm sure it could have been done faster and more intelligently, but our method has been through regular index investing and mindful LBOM. Our savings rate has decreased significantly recently as we just bought a house and I am going through a career change.

It definitely can be done.

-Ben
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We started at zero net worth at 25 and hit 50K at age 27, and now sit at 390K at age 31.

Our latest goal is 1000k at age 36, which seems almost impossible unless the market continues to work in our favor.

--
whyohwhyoh



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>> We started at zero net worth at 25 and hit 50K at age 27, and now sit at 390K at age 31. <<

Maybe we should exclude people who live in bubblicious real estate markets. :-)

#29 (former San Jose resident)
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Maybe we should exclude people who live in bubblicious real estate markets. :-)

Just imagine if you would have stayed in the bay area...

By the way when calculating house into networth I take house value * 0.93 - what we owe. Figure 6% commission, and 1% for other costs in selling.

625K*0.93-385000=$196K

This is what we would walk away with when we move.

--
whyohwhyoh

---Please... no bubble popping ... just give me 6% growth each year till I FIRE.

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>> Just imagine if you would have stayed in the bay area... <<

Oh, I know exactly all too well.

The house we paid $239K for in 1997 and sold for $440K in 2003 is probably in the $625-650K range now.

The cruel irony is that one of the major reasons we left was to get out before the bubble popped. I've never been a good market-timer, obviously.

#29
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The house we paid $239K for in 1997 and sold for $440K in 2003 is probably in the $625-650K range now.

The cruel irony is that one of the major reasons we left was to get out before the bubble popped. I've never been a good market-timer, obviously.


Good enough...
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Please explain to me how that's possible?? I'm assuming that neither of your are 6 figure execs, but i could be wrong :D


ramseesforever

We started at zero net worth at 25 and hit 50K at age 27, and now sit at 390K at age 31.

Our latest goal is 1000k at age 36, which seems almost impossible unless the market continues to work in our favor.

--
whyohwhyoh
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>> Please explain to me how that's possible?? I'm assuming that neither of your are 6 figure execs, but i could be wrong :D <<

>> >> We started at zero net worth at 25 and hit 50K at age 27, and now sit at 390K at age 31. << <<

They own California real estate, and it's included in their net worth calculations.

#29
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Ok, now the picture is clearer. I was under the assumption it was straight cash.


ramseesforever
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I made an interesting observation today when working on my 8 year plan to retirement.

We didn't start saving for retirement until we were 35. We bought a house at age 34.

It's taken us 14 years to pay the house off and save $250k. If we roll the principal and interest into our current retirement savings, and increment our savings by $3k per year, we will hit the million mark in 7.5 years. This is assuming a 5% annual return on our investments.

I can see why that first million is the hardest to make. Once that next egg becomes sizable, the magic of compounding interest really kicks in.

Hang in there everyone,

-helen
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I was under the assumption it was straight cash.

It will be straight cash sooner than later.

My wife is constantly wanting to leave the bay area each year. I am trying to hold off until our net worth reaches 1 million.

Sponge the wealth and move on...

--
whyohwhyoh
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50K at 31

10 years later I'm at 648K, if you include absolutely everything into the calculation; pensions, house, etc.
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Fun thread!

I haven't hit 50K yet, but based on current projections I expect to hit it sometime next year. I'll be 31.

Currently, my net worth is about 37K.

d
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I don't have any old income statements but If I include the home we lived in, I probably hit 50k somewhere around 28 or 29. If I figure in just investments, it would be around the age of 30.

Now that I'm 43, I'm a little miffed that I'm not closer to a million than I should be. A few bad investment decisions, a 4 year period when I worked at a company with a sucko 401k (so I paid down house debt on an 8% mortgage instead) and then overly weighted in tech stocks in 2000 & 2001 is why I'm not where I think I should be. However, I expect to hit a mil before I turn 50.

decath
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>> Now that I'm 43, I'm a little miffed that I'm not closer to a million than I should be. A few bad investment decisions, a 4 year period when I worked at a company with a sucko 401k (so I paid down house debt on an 8% mortgage instead) and then overly weighted in tech stocks in 2000 & 2001 is why I'm not where I think I should be. <<

We were weighed down a bit by the fact that we had very little to save in the mid-90s when I had a much more modest salary and I was putting my wife through school. If I saved during those 2-3 years, in a percentage equal to the percentages I put away before then, we'd have an extra $100K or so put aside.

Then again, if I waited two more years to sell our house in California...this stuff can drive you mad if you let it. We're a little more than "on track" with where I want to be, so I try not to sweat the smaller stuff.

#29
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<<10 years later I'm at 648K, if you include absolutely everything into the calculation; pensions, house, etc. >>


I didn't consider pensions or annuity payments in my net worth calculations.

I hope this doesn't sound like a naive question, but is there a rule of thumb formula for calculating present lump sum value of a monthly income?

For example, we currently receive $800/mo in the form of Veterans Affairs benefits. We will receive this until death.

Additionally, I am eligible for early retirement at age 55 or regular retirement at age 65, with pension benefits.

Hypothetically speaking, if my ER benefit is $2K/mo and my RR (if I wait to 65) would be worth $4K - how do I back those out of those numbers into lump sum figures?

Thanks, MG
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I'm not sure about the $50K mark (probably sometime when I was 30 or so; I didn't pay much attention in those days), but at the moment we just crossed $400K for cash net worth, and about $750K if real-estate is included. (We don't like to include real-estate since it only becomes "real" if we move - and we don't count physical assets at all.)

We're hoping to FIRE in about eight years with about 1.5M excluding RE. I'm 41, DW's 35.

One thing that helps hugely is DW now has a self-employed 401K, where we can park relatively large amounts of tax-deferred money even in years that she doesn't make much money. You can put your first $14K of biz income after SE tax into the 401K, and after that, what amounts to essentially 1/4 of your business income up to about $40K.

--Foobarista
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MG asked:

is there a rule of thumb formula for calculating present lump sum value of a monthly income?

Look up the Excel function PV which stands for Present Value. It returns the present value of a series of future payments.

Remember that the rate it needs is a monthly rate in your case and the fv parameter is zero.
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is there a rule of thumb formula for calculating present lump sum value of a monthly income?

Not really a "rule of thumb", but there is a formula. It is one of the basic "time value of money" concepts. A quick google search comes up with this. It's a link to a chart. The percentages at the top are the "discount rate", meaning how much less value is money worth next year than it is today.

http://www.studyfinance.com/lessons/timevalue/lesson10.mv

Quick answer: Using a 4% discount rate, and 10-periods, the factor is 8.1109. So, $2,000/mo * 12 months = $24,000/year (annuity). $24,000 * 8.1109 = $194,661.60.

That's the present value of your 10-years of ER benefit payments.

Now, let's assume you're going to live to 90 years old. Here's how the numbers look:

PV of Early Retirement ($2k/mo) for 35 years: $24,000 * 18.6646 (35 periods, 4%) = $447,950.40

PV of Regular Retirement ($4k/mo) for 35 years: $48,000 * 15.6221 (25 periods, 4%) = $749,860.80 in 2015 dollars. To back that down to 2005 dollars, again using a discount of 4%, the factor is 1.4802 (http://www.studyfinance.com/lessons/timevalue/lesson04.mv). $749,860.80 / 1.4802 = $506,594.24

You can choose different variables, such as your life expectancy and a different discount/interest rate.

-Agg97
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Hypothetically speaking, if my ER benefit is $2K/mo and my RR (if I wait to 65) would be worth $4K - how do I back those out of those numbers into lump sum figures?


I just use the 4% SWR as an indicator of what I would need to have invested to get the same amount of income. So the $2K/month = $24K/year, divide that by 0.04 and you would need $600,000 invested to get the same income, if you use a SWR of 4%. If you wait until 65 its worth $1.2M

I used what my actual pensions are worth now. i.e., if I quite working right now, and can still draw the pension at 55 or 65, what is it worth?

Volucris
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Hey all. haven't posted in a year or so. Good to be back wasting time.

50k (stocks) at age 21. Age 25 now have net worth of 350k, house about 300k of it. 32k cash and 18k in stocks (depending on NFLD price). Got bills out the wazzo since the wife has 48k in student loans and a baby on the way.......and yes she is worth it. I think priorty is to pay down the loans to make month to month life a little easier.

laters
BP aka nukenick
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How do the rest of you in the 50k club compare?

Hi, I'm new to this board, but not to TMF. Anyhow, I hit 50k this year at age 24/25. I've been hovering just under 50k since Christmas, but by now I've got roughly:

35k 401k
17k ING
3k checking/saving

-ffoltz4
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These are approximate since I switched from MS money to Quicken in 2001, and they include home equity:

Finished school: Age 30; Net worth -$45K (student loans!!!)

Hit $50K: Age 34

Current: $190K; Age 38

Adenovir
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It's been a while, and I didn't track things too closely back in my pre-Fool days, but I'd say our FIRE fund was at 50k when we were about 37-38, about 10 years ago (IRA/401k) We started in our lates 20's with 2 kids, one income, and just getting started like many others... We are now at about 280k in 401k/ira and taxable investments, and about 450k in investment/rental real estate equity at age 49. Our FIRE window might be opening in about 2 years m/l. Work hard and keep your eye on the prize... that and a little luck will get you there.
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