Quote:
Originally Posted by LongNote
Do you know any self-made millionaires? And if so, what are the most consistent traits that you see among them? We're talking about people who were able to go from being a member of the middle class community, to becoming a millionaire. Do you find that there's any general commonalities among people who were able to achieve millionaire status?
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I know of 4.
#1. Single gay male engineer. Typical engineer. Earned a good salary. Had a solid, middle class lifestyle, but nothing fancy. Not having kids obviously helped. Saved 15% or more of his income in 401K and other vehicles (savings bonds, etc.). Paid off house early. Retired at 58 with corporate pension with about $1M net worth (not including value of house). Is now probably worth at least $2M 12 years later. Hasn't even needed to dip into the 401k the last time I talked to him. Still drives a 30 year old economy car.
#2. Single, late 50s gay finance guy in California. Got MBA. Worked as a chief financial officer in several different companies. Most recently a biotech company. Borderline workaholic. Rented a 2BR condo until he was nearly 50 because he spent more time working & travelling than he did at home. Bought a townhouse near the peak of the real estate bubble in 2007, but it didn't really hurt him that much because he could afford it. This being the SF Bay Area, I'm sure its value has more than recovered....but he bought it as a place to live, not as an "investment". Still had hand me down dishes in his 40s (partly because he ate out a lot). Told me his liquid net worth was over $1M back in the late 1990s. I'm sure its more now. Same deal as #1--nice lifestyle, but nothing too flashy. He did break down and buy a used Jaguar that he paid cash for. Is in late 50s and still working to the best of my knowledge (we haven't talked in a while).
#3. Married hetero couple of 2 (now adult) kids. Now in their early 70s. Lived in the same house for many decades. Husband has an MBA. Started as accountant & went back to school at night to get MBA...was also in military reserves 2 weekends per month for 22 years and gets pension from that. Wife was stay at home mom for quite a few years but did do secretarial and administrative work when kids were older. Wife quit working in her early 50s. Husband retired at 60. Many folks wondered why these people didn't buy new cars every few years and why they lived in a more ordinary, blue-collarish, suburban neighborhood. They didn't want to buy up to the limit of what the bank would lend them. They paid off their house in 13 years. Bought cars new, but always paid cash. Ordinary cars, nothing flashy. Drove 'em for 8-10 years until they weren't worth fixing.
#4. Single gay male, 62. Works in IT. Makes good, but not great, money in IT, but is always doing side gigs building stereos for well off folks, as well as fixing cars, etc. Does like to spend money on concert tickets, entertainment, eating out etc....but always socks away a decent amount, too. #4 is probably the most reckless of the group. Got in a lot of car and bike accidents. Doesn't do well in office politics. But seems to just be able to power through a lot of difficult situations through sheer will. He has F'd up a lot in his personal life, and sometimes his work life (gotten fired from more than one job), but did not dwell on his failures. He just moves on quickly. Hit millionaire status (not including house) last year. Wants to work until age 70 or until his portfolio hits $2M. Could retire now and be ok if forced, but he is interested in living a somewhat more spendy lifestyle and is ok with working in order to have it. Enjoys cycling. He feels like he's the poor one in the group. Apparently lots of guys who are into cycling are very well off. Also, having $1M in the SF Bay Area is more common than other areas, so it's not considered a lot of money by many in the upper middle class crowd here.
#1, #2, & #4 all live in the SF Bay Area. #3 live in a relatively moderately priced metro area on the East Coast (i.e. not NYC, Boston, or DC).
Common characteristics:
--Earned above average, but not necessarily extravagent, incomes. #1 & #4 never hit 6 figures. #4 is over 50K but far from 100K at his day job (although the side gigs have helped him a lot).
--Have "ordinary nice", but not flashy, cars & houses.
--Prioritize saving. I'd guess the engineer probably had the highest overall savings rate. This is very typical of engineers, so no surprise there.
--Didn't move or change cars very much...Generally all were pretty stable financially, emotionally, etc. Like I said, #4 is the least stable, emotionally speaking, but a killer work ethic and a decent savings ethic have compensated for it.
--No divorces or kids out of wedlock. None of the gay men were particularly good at relationships, but they also avoided major relationship drama...(i.e. did not play "sugar daddy" in their relationships, didn't let other guys rip them off or suck them dry financially, etc.). They also didn't live in denial about being gay, as many men their age did...so they didn't do the (hetero) Marriage--Kids--Come out of the closet--Divorce thing like many others of the age 55+ gay male crowd did, Kids are expensive. Divorce, even more so.
I will also say that while money is a good thing, it's not a magic happy pill. 2 of the 3 gay men have dealt with depression and other mental health issues (depression rates are off the charts for gay men, unfortunately, and are high for single men, more generally). One of them copes more successfully than the other. Just my opinion, but I think his belief in God (even though he's not churchgoing religious) and regular exercise help. The one who doesn't successfully cope with his depression is an atheist who doesn't exercise regularly (and won't go to therapy, either).
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