I made > $1M more than once. For me it's always been building projects/startups and eventually exiting. I repeated the cycle and got lucky enough a few times.
Interestingly, I always managed to get some kind of liquidity event for each of my projects. This is important IMO. ALWAYS try to get paid. Don't just "shut it down".
Each liquidity event added at least a digit to the price. For example, I sold my first business when I was a teenager for 4 figures. Then sold a side project for 5 figures, then sold a business for 6, and then 7 figures.
I always became more ambitious with my goals and I find that the learnings of each venture helped me move up the ladder to the next one.
So don't get discouraged if you make just $500 or $5000 with your current project. Just use it as a stepping stone to the next one and try to figure out what you could have done differently for a 10x or 100x outcome.
For example, for my 6 figure exit business, one of my biggest mistakes was that I focused on a market that was way too small with little room for growth (product was entirely in French, and it wasn't as easy as translating it to grow the market size). I made sure to never make this mistake again. I made other ones instead :)
Hey I'm a little earlier in my journey than you are, having sold 1 company in the 6 figure range, I would like my next one to be 7 or 8, maybe we could chat? My contact is in my profile
I would be really interested in hearing your story and pearls of wisdom. Have you been interviewed or would you do an interview for a site such as indieshackers.com?
I used to work on a yachts. I've worked for billionaires and people worth hundreds of millions. The pattern seems to be they hire people who know what they are doing. They provide those people with resources to accomplish what they were hired to do. And, they stay out of the way.
When I tell people I was a yacht chef, people often ask if the owners or guests tell me what they want to eat all day. In fact, people never tell me what they want to eat. If it is a charter I will speak with the guests to make sure I satisfy dietary concerns and know about certain preferences like whole milk vs. 2% milk. The people I work for make decisions concerning large amounts of money all day. The last thing in the world they want to think about is what is for dinner. That is why they hired me to make those decisions. Of course, I'm always right because guests and crew on my yacht eat the same thing so the owners and guests always eat what I want to eat for breakfast, lunch, and dinner.
The pattern I see is that truly wealthy people, not New Yorkers spending more than they really have, don't micromanage.
It depends on how you define "millionaire." Do you mean >$1M net worth? >$1M liquid assets? >$1M annual salary? Because those are three very different things.
The first is not hard to attain. If you buy a house and pay off the mortgage and do a little saving on the side you will probably end up being a millionaire by that standard. But a million net worth isn't what it used to be. A millionaire by that definition is solidly middle-class, but nowhere near being rich.
The second is a little harder to attain, but still doable by plain-old-fashioned hard work and frugality. Save $2.5k/mo for 30 years and you'll get there. Invest that money in index funds and you'll get there faster.
The third is really hard, and it's a whole 'nuther world. Having $1M in income is the equivalent (given today's interests rates) of having a net worth of many tens of millions of dollars. To get there requires a combination of hard work, sacrifice, risk-taking, back-slapping, log-rolling and a big pile of luck.
Yes, just barely but in actual assets. Meaning, if you take a complete accounting of my net worth, subtract out debts and ignore options etc and count retirement accounts and stocks and so on. I make out to just above that number by a little bit.
Not terribly impressive if you make over $100k/yr for 15-20 years, live below your means, pay off all your debts and own where you live. But I guess I've managed not to squander too much of it either. I'd have a bit more if I traveled for pleasure less I guess. But I look at that as an investment in myself while I'm young enough to enjoy it.
I pay off debts as fast as possible as well. I own my house and cars free and clear for example and have zero student debt. So nobody is getting money from me "for free". I paid them off as rapidly as I could so I could have lots of liquid cash to spend or invest as I wish. Some people would rather spend smaller to service their debts and invest the difference -- that's probably fine as well.
Housing is most people's biggest expense and it's really nice not to be burning most of my take home income in a furnace on rent or interest.
I've been a larger millionaire twice in paper options, but the companies didn't work out and the options became worthless. Oh well. I've learned the lesson to never accept lesser pay in exchange for options or RSUs no matter the promise of an upside.
I just bought a car with a 6 year, 0.9%APR loan. I literally make more in an FDIC insured bank account.
If you have a mortgage on your primary residence on the US, the interest is tax deductible. This can make your effective rate extremely low, and it's not hard to find an investment with better returns.
Not all loans are bad; some are subsidized. It often makes sense to keep those ones.
Isn't this effectively the wrong strategy though? For a portion of my loans I would earn more investing and paying the minimum amount than I would paying them off sooner.
Achieved twice, by two separate means. Raised by single mom, no family member ever attended college. Public exam result delivered full private school scholarship. Graduated Oxford and Harvard. At 35, (1) married wealthy family’s only daughter and (2) founded VC-backed startup that paid out some years later. After growing up poor, have no interest in big spending or additional risk. Live simply in a warm state, happily retired. Most valued assets: wife and kids. An exceptionally fortunate life.
I'm naturally very frugal - prefer to have housemates, don't own/want a car, rarely eat out, have cheap hobbies. I was lucky enough to land a good software dev job at a big tech company right after college - high-five-figure salary plus a good chunk of stock. Saved/invested everything I didn't spend, for a savings rate well above 80%. Investments were mostly Vanguard index funds, nothing special.
High income plus low spending adds up fast. I "retired" (to work on my own unprofitable projects instead) around age 30 with about $700k invested. It's grown steadily since I stopped working, and very recently hit $1m.
If you're interested in this sort of approach, The Millionaire Next Door, the Mr. Money Mustache blog, and /r/financialindependence are good reads.
Yup. I guess I'm a millionaire on paper, in reality my bank account is negative several hundred dollars and all my credit cards are maxed out. Yay start-ups!
(I think that's relevant since HNW definitions exclude the value of their primary residence. [1])
[1]High-net-worth individual (HNWI) is a term used by some segments of the financial services industry to designate persons whose investible assets (such as stocks and bonds) exceed a given amount. Typically, these individuals are defined as holding financial assets (excluding their primary residence) with a value greater than US$1 million.[1][2][3]) https://en.wikipedia.org/wiki/High-net-worth_individual
To protect myself I created a new account. The answer is cryptocurrencies, bitcoin early and then ethereum. Also high salaries from startups even though all of their stock became worthless. I only work because I like to. Once kids are born probably will go into academia.
It basically all comes down to front-loading income and back-loading expenses. On the first point, a bit of early job-hopping was hugely beneficial.
(1) Better raises that I would have gotten by staying in one place.
(2) Developed lots of skills; exposed myself to lots of industries / bodies of knowledge / ways of thinking and doing.
(3) Allowed me to discover which computing specialty best suited me (amazing how many work in an area they neither enjoy nor are good at just because they don't know any better).
Once things had stabilized a bit, when continuing to job-hop would have become a negative, I got deeper into one particular area and scratched my way up to expert-hood. Turns out to have been a good strategy, though I can't take much credit for having realized it at the time. To a certain extent I just fell into a good pattern by accident.
The "back-loading expenses" part was more deliberate. My wife and I have always been a bit frugal, driving older/cheaper cars and not traveling or eating out constantly. Didn't live in the most expensive part of the country. Didn't buy a house until I was 31. Didn't have a kid until I was 39. By that time, interest was working for me on investments instead of against me on credit. That's the one point you should take away from this: make interest work for you, not against you. Deliberately took a mortgage with no penalty for paying it off early, then did so about half way through the original term, have been 100% debt free ever since. Now the paychecks just roll in and a good chunk goes immediately into earning interest.
Even as a highly productive worker, this combination probably means I've made more money as a (fairly passive) investor than as a worker. Sadly, becoming a rentier or attaching yourself to them is the only way to get ahead in this economy.
By millionaire, do we mean liquid assets or net worth? And do we only count individuals, or does household wealth qualify? Because if we take the latter in both cases, a couple with decent white collar jobs, conservative spending, and maximized tax advantaged investments should make the cut inside a decade. It's boring but not difficult.
Save $1500 per month, invest in index funds, such as QQQ. If you are lucky and your investments grow 15% every year then in 15 years you will be a millionaire. More realistically, if you assume 9% growth then in 20 years you will be a millionaire. Use this compound interest calculator to run your own simulations: https://www.investor.gov/additional-resources/free-financial...
Net worth is low millions. Have a well paying job, but made most of our wealth investing in real estate while in the military.
TL;DR had extra capital to invest during the recession. Had most properties appreciate 2-3x since then + rental income. We bought most of them cash, but if we could do it over again would probably borrow more for a higher return. But we were new to it and afraid of debt.
As for how I got there, a lot of it (and this is a largely unpopular view in some parts) was rather pre-determined. Born into an upper-class family, went to a private high school that sent nearly 50% to Ivy League schools, and graduated from a top school in '04. I studied computer science, but had little intention to pursue it and went to Wall Street.
Stayed on Wall Street until '09 and was worth slightly under a million when I left. I went from an investment bank to a hedge fund that in the crisis period did well enough, relatively, to still pay good bonuses. I had not invested any of my net worth, partly due to working 80-100 hours a week, and put a great deal in the market at the end of '09, which has obviously done well.
In '09 I was miserable, or rather more miserable than normal, and a friend from college convinced me to come to SV to what is now one of the largest companies in the world (it was reasonably large then too). Did well, working half the hours and ending up making more per year than at the hedge fund, and recently "retired".
Given your question, and your username likely denoting you're 25 or 26 years old, here's the truth: I've been miserable for most of my working life. My happiest days always revolved around my last day at each job. I didn't enjoy finance, but was good at it, and the same is true for the time I spent in SV. I've always been jealous of those that, for whatever reason, wholly engross themselves in a given field and are content with that. Following your passion may well be bad advice, but do not assume that a passion naturally develops out of one's work. Most of the time that "passion" that some, especially in finance, develop is simply a coping mechanism to justify the long hours and unnecessary stress of the job. I saw the same thing in SV, especially among the PMs that became increasingly detached from day-to-day development with seniority.
A million dollars in the bank will not make you happy and doing something you desperately do not enjoy for a million dollars, even if it can come in only 5-10 years, will not evaporate the bitterness you have towards yourself for wasting away years of your life in pursuit of that. Money, above a certain amount, loses it's context beyond being a measuring stick used against your colleagues and friends. I could have stopped working years ago. I wish I did. What you define to be a "certain amount" is an entirely personal decision predicated on a lifestyle that makes you contented.
I sometimes get asked for advice, often from people who are in their early 20s, now that I'm retired. My "advice" is that I wish I had found something that I would enjoy doing well into later life, whether I needed to do so financially or not. Spending your youth focusing on an upward trajectory of wealth, despite disliking your work, is a waste of a life; especially for those who come from privileged backgrounds like my own. However, spending your youth bouncing around a number of different jobs until you find something you actually like (even if it's not a passion, per se) is not a waste. I always end my little advice diatribe by noting that when older-folks say "money doesn't make you happy" it's largely pointless. I didn't believe them years ago, I wouldn't expect others to. It's one of those lessons that is only truly understood when wealth is accumulated; one of those lessons that is only truly understood when it's often too late.
Follow up: are you satisfied with where you're at? I thought about prepending that question with "if so," but it may also be nice to hear from those who aren't millionaires that feel content with their life.
[+] [-] cmer|8 years ago|reply
Interestingly, I always managed to get some kind of liquidity event for each of my projects. This is important IMO. ALWAYS try to get paid. Don't just "shut it down".
Each liquidity event added at least a digit to the price. For example, I sold my first business when I was a teenager for 4 figures. Then sold a side project for 5 figures, then sold a business for 6, and then 7 figures.
I always became more ambitious with my goals and I find that the learnings of each venture helped me move up the ladder to the next one.
So don't get discouraged if you make just $500 or $5000 with your current project. Just use it as a stepping stone to the next one and try to figure out what you could have done differently for a 10x or 100x outcome.
For example, for my 6 figure exit business, one of my biggest mistakes was that I focused on a market that was way too small with little room for growth (product was entirely in French, and it wasn't as easy as translating it to grow the market size). I made sure to never make this mistake again. I made other ones instead :)
[+] [-] malux85|8 years ago|reply
[+] [-] pricees|8 years ago|reply
[+] [-] zappo2938|8 years ago|reply
When I tell people I was a yacht chef, people often ask if the owners or guests tell me what they want to eat all day. In fact, people never tell me what they want to eat. If it is a charter I will speak with the guests to make sure I satisfy dietary concerns and know about certain preferences like whole milk vs. 2% milk. The people I work for make decisions concerning large amounts of money all day. The last thing in the world they want to think about is what is for dinner. That is why they hired me to make those decisions. Of course, I'm always right because guests and crew on my yacht eat the same thing so the owners and guests always eat what I want to eat for breakfast, lunch, and dinner.
The pattern I see is that truly wealthy people, not New Yorkers spending more than they really have, don't micromanage.
[+] [-] noonespecial|8 years ago|reply
"What do you want for dinner tonight?" Not to have to decide.
[+] [-] lisper|8 years ago|reply
The first is not hard to attain. If you buy a house and pay off the mortgage and do a little saving on the side you will probably end up being a millionaire by that standard. But a million net worth isn't what it used to be. A millionaire by that definition is solidly middle-class, but nowhere near being rich.
The second is a little harder to attain, but still doable by plain-old-fashioned hard work and frugality. Save $2.5k/mo for 30 years and you'll get there. Invest that money in index funds and you'll get there faster.
The third is really hard, and it's a whole 'nuther world. Having $1M in income is the equivalent (given today's interests rates) of having a net worth of many tens of millions of dollars. To get there requires a combination of hard work, sacrifice, risk-taking, back-slapping, log-rolling and a big pile of luck.
[+] [-] bane|8 years ago|reply
Not terribly impressive if you make over $100k/yr for 15-20 years, live below your means, pay off all your debts and own where you live. But I guess I've managed not to squander too much of it either. I'd have a bit more if I traveled for pleasure less I guess. But I look at that as an investment in myself while I'm young enough to enjoy it.
I pay off debts as fast as possible as well. I own my house and cars free and clear for example and have zero student debt. So nobody is getting money from me "for free". I paid them off as rapidly as I could so I could have lots of liquid cash to spend or invest as I wish. Some people would rather spend smaller to service their debts and invest the difference -- that's probably fine as well.
Housing is most people's biggest expense and it's really nice not to be burning most of my take home income in a furnace on rent or interest.
I've been a larger millionaire twice in paper options, but the companies didn't work out and the options became worthless. Oh well. I've learned the lesson to never accept lesser pay in exchange for options or RSUs no matter the promise of an upside.
[+] [-] yojo|8 years ago|reply
If you have a mortgage on your primary residence on the US, the interest is tax deductible. This can make your effective rate extremely low, and it's not hard to find an investment with better returns.
Not all loans are bad; some are subsidized. It often makes sense to keep those ones.
[+] [-] soared|8 years ago|reply
[+] [-] vipsanius|8 years ago|reply
[+] [-] nzealand|8 years ago|reply
[+] [-] mud_dauber|8 years ago|reply
[+] [-] quickthrower2|8 years ago|reply
[+] [-] ridiculousgame|8 years ago|reply
High income plus low spending adds up fast. I "retired" (to work on my own unprofitable projects instead) around age 30 with about $700k invested. It's grown steadily since I stopped working, and very recently hit $1m.
If you're interested in this sort of approach, The Millionaire Next Door, the Mr. Money Mustache blog, and /r/financialindependence are good reads.
[+] [-] cperciva|8 years ago|reply
[+] [-] guyfawkes303|8 years ago|reply
[+] [-] hkmurakami|8 years ago|reply
(I think that's relevant since HNW definitions exclude the value of their primary residence. [1])
[1]High-net-worth individual (HNWI) is a term used by some segments of the financial services industry to designate persons whose investible assets (such as stocks and bonds) exceed a given amount. Typically, these individuals are defined as holding financial assets (excluding their primary residence) with a value greater than US$1 million.[1][2][3]) https://en.wikipedia.org/wiki/High-net-worth_individual
[+] [-] milionaire10101|8 years ago|reply
[+] [-] notacoward|8 years ago|reply
(1) Better raises that I would have gotten by staying in one place.
(2) Developed lots of skills; exposed myself to lots of industries / bodies of knowledge / ways of thinking and doing.
(3) Allowed me to discover which computing specialty best suited me (amazing how many work in an area they neither enjoy nor are good at just because they don't know any better).
Once things had stabilized a bit, when continuing to job-hop would have become a negative, I got deeper into one particular area and scratched my way up to expert-hood. Turns out to have been a good strategy, though I can't take much credit for having realized it at the time. To a certain extent I just fell into a good pattern by accident.
The "back-loading expenses" part was more deliberate. My wife and I have always been a bit frugal, driving older/cheaper cars and not traveling or eating out constantly. Didn't live in the most expensive part of the country. Didn't buy a house until I was 31. Didn't have a kid until I was 39. By that time, interest was working for me on investments instead of against me on credit. That's the one point you should take away from this: make interest work for you, not against you. Deliberately took a mortgage with no penalty for paying it off early, then did so about half way through the original term, have been 100% debt free ever since. Now the paychecks just roll in and a good chunk goes immediately into earning interest.
Even as a highly productive worker, this combination probably means I've made more money as a (fairly passive) investor than as a worker. Sadly, becoming a rentier or attaching yourself to them is the only way to get ahead in this economy.
[+] [-] sopooneo|8 years ago|reply
[+] [-] petilon|8 years ago|reply
[+] [-] aoeusnth1|8 years ago|reply
[+] [-] first_amendment|8 years ago|reply
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] gmays|8 years ago|reply
TL;DR had extra capital to invest during the recession. Had most properties appreciate 2-3x since then + rental income. We bought most of them cash, but if we could do it over again would probably borrow more for a higher return. But we were new to it and afraid of debt.
[+] [-] rj1942|8 years ago|reply
As for how I got there, a lot of it (and this is a largely unpopular view in some parts) was rather pre-determined. Born into an upper-class family, went to a private high school that sent nearly 50% to Ivy League schools, and graduated from a top school in '04. I studied computer science, but had little intention to pursue it and went to Wall Street.
Stayed on Wall Street until '09 and was worth slightly under a million when I left. I went from an investment bank to a hedge fund that in the crisis period did well enough, relatively, to still pay good bonuses. I had not invested any of my net worth, partly due to working 80-100 hours a week, and put a great deal in the market at the end of '09, which has obviously done well.
In '09 I was miserable, or rather more miserable than normal, and a friend from college convinced me to come to SV to what is now one of the largest companies in the world (it was reasonably large then too). Did well, working half the hours and ending up making more per year than at the hedge fund, and recently "retired".
Given your question, and your username likely denoting you're 25 or 26 years old, here's the truth: I've been miserable for most of my working life. My happiest days always revolved around my last day at each job. I didn't enjoy finance, but was good at it, and the same is true for the time I spent in SV. I've always been jealous of those that, for whatever reason, wholly engross themselves in a given field and are content with that. Following your passion may well be bad advice, but do not assume that a passion naturally develops out of one's work. Most of the time that "passion" that some, especially in finance, develop is simply a coping mechanism to justify the long hours and unnecessary stress of the job. I saw the same thing in SV, especially among the PMs that became increasingly detached from day-to-day development with seniority.
A million dollars in the bank will not make you happy and doing something you desperately do not enjoy for a million dollars, even if it can come in only 5-10 years, will not evaporate the bitterness you have towards yourself for wasting away years of your life in pursuit of that. Money, above a certain amount, loses it's context beyond being a measuring stick used against your colleagues and friends. I could have stopped working years ago. I wish I did. What you define to be a "certain amount" is an entirely personal decision predicated on a lifestyle that makes you contented.
I sometimes get asked for advice, often from people who are in their early 20s, now that I'm retired. My "advice" is that I wish I had found something that I would enjoy doing well into later life, whether I needed to do so financially or not. Spending your youth focusing on an upward trajectory of wealth, despite disliking your work, is a waste of a life; especially for those who come from privileged backgrounds like my own. However, spending your youth bouncing around a number of different jobs until you find something you actually like (even if it's not a passion, per se) is not a waste. I always end my little advice diatribe by noting that when older-folks say "money doesn't make you happy" it's largely pointless. I didn't believe them years ago, I wouldn't expect others to. It's one of those lessons that is only truly understood when wealth is accumulated; one of those lessons that is only truly understood when it's often too late.
[+] [-] dolguldur|8 years ago|reply
[+] [-] consultutah|8 years ago|reply
[+] [-] lwansbrough|8 years ago|reply
[+] [-] unknown|8 years ago|reply
[deleted]
[+] [-] throwaway_goog|8 years ago|reply
5 years at Google, plus living cheaply (at least as much as possible in Silicon Valley).
[+] [-] pkd|8 years ago|reply