Its good to be rich

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Mai72

Diamond Member
Sep 12, 2012
9,684
728
126
It's not simple, but it's not as difficult as many people make it to be. Chris Hogan/Dave Ramsey put out a book called everyday millionaires, and what they found were the people who reached millionaire status weren't doctors, dentist and lawyers. The top 3 were:

1) Engineers
2) Accountants
3) Teachers

Yes, educators. How? Well the educators they interviewed had their homes paid off. So, a $400k home. Plus their 403b is worth about $600k. They have a net worth of $1m. It's a very slow process, and it takes decades. The problem with most Americans is when they think of the rich, visions of flashy cars, and million dollar mansions come to mind. That is not true. A good book on this is the Millionaire Next Door. What the author found is people you'd never think were rich because of their appearance/life style were worth millions.

The ohter point I'd like to make is to start as early as possible. I love this quote on compounding by Albert Einstein: “He who understands it, earns it; he who doesn't, pays it." He also described compounding as the 8th wonder of the world. They don't teach you these things in school, and most parents are not conditioned to think in this mode as well. It's why most Americans are broke today. Financial education eludes most people. Finally, much of it comes down to how badly do you want it. If you want to reach millionaire status quickly it's not going to be an easy process. You'll have to give up your hobbies, take on a side business, and work hard. You might get lucky, but it will probably take years before you see any financial benefit from your work.

 
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snoopy7548

Diamond Member
Jan 1, 2005
5,050
2,034
136
It's not simple, but it's not as difficult as many people make it to be. Chris Hogan/Dave Ramsey put out a book called everyday millionaires, and what they found were the people who reached millionaire status weren't doctors, dentist and lawyers. The top 3 were:

1) Engineers
2) Accountants
3) Teachers

Yes, educators. How? Well the educators they interviewed had their homes paid off. So, a $400k home. Plus their 403b is worth about $600k. They have a net worth of $1m. It's a very slow process, and it takes decades. The problem with most Americans is when they think of the rich, visions of flashy cars, and million dollar mansions come to mind. That is not true. A good book on this is the Millionaire Next Door. What the author found is people you'd never think were rich because of their appearance/life style were worth millions.

The ohter point I'd like to make is to start as early as possible. I love this quote on compounding by Albert Einstein: “He who understands it, earns it; he who doesn't, pays it." He also described compounding as the 8th wonder of the world. They don't teach you these things in school, and most parents are not conditioned to think in this mode as well. It's why most Americans are broke today. Financial education eludes most people. Finally, much of it comes down to how badly do you want it. If you want to reach millionaire status quickly it's not going to be an easy process. You'll have to give up your hobbies, take on a side business, and work hard. You might get lucky, but it will probably take years before you see any financial benefit from your work.

My dad always told me growing up, "Live below your means and you will always be wealthy." I have, and I am. I bought a brand-new house at age 26, on my own, on an engineer's salary of ~$66k at the time - I had saved up over $60k in less than four years.

I don't want to turn this into a brag post, but I am shooting for an early retirement, or at least $1M in my 401k + IRA by the time I'm 45. Although I'm now over the $100k/year mark, I still save over 50% of what I make. I have no desire to keep up with the Joneses or go on fancy vacations and, though I do have relatively expensive hobbies, I make sure that I'm meeting my savings goals before spending any money on wants.

I'm not the type of person that takes risks, and I believe in "slow and steady." Compounding interest is extremely powerful. I remember when I first started working, I immediately joined the company's 401k plan (this was near the end of 2008). There were so many young engineers around me who just didn't get it - they refused to put any money into their 401k because they didn't think it would make a difference. You can guess where that money ended up going...
 
Nov 8, 2012
15,375
2,538
126
My dad always told me growing up, "Live below your means and you will always be wealthy." I have, and I am. I bought a brand-new house at age 26, on my own, on an engineer's salary of ~$66k at the time - I had saved up over $60k in less than four years.

I don't want to turn this into a brag post, but I am shooting for an early retirement, or at least $1M in my 401k + IRA by the time I'm 45. Although I'm now over the $100k/year mark, I still save over 50% of what I make. I have no desire to keep up with the Joneses or go on fancy vacations and, though I do have relatively expensive hobbies, I make sure that I'm meeting my savings goals before spending any money on wants.

I'm not the type of person that takes risks, and I believe in "slow and steady." Compounding interest is extremely powerful. I remember when I first started working, I immediately joined the company's 401k plan (this was near the end of 2008). There were so many young engineers around me who just didn't get it - they refused to put any money into their 401k because they didn't think it would make a difference. You can guess where that money ended up going...
Always amazes me when I meet people who are good at math and functions (engineers, you would think) that can't save/invest effectively to save their life.

I've seen plenty of people that work in fucking ACCOUNTING that don't understand the simplicities of investing in your 401k...

I mean aside from the whole interest argument, there is also the tax advantage argument as well.
 

EliteRetard

Diamond Member
Mar 6, 2006
6,255
884
136
.4% a day might not seem like much but thats over 100% gain for the year. Not many traders beat the indexes much less see that kind of a profit.
Yeah after the last crash in 08 or whatever I made like a 10x return on my stocks in just a few years, then it's basically flat lined.
I really should have invested during this crash, but I couldn't be bothered to make another 10x return.
 

EliteRetard

Diamond Member
Mar 6, 2006
6,255
884
136
Damn... those mirrors are kind of tacky, but that house still looks a hell of a lot nicer than mine does.
It's basically a dressed up flip house. They even used a fish-eye lens to make things look way bigger.
All the details are extremely cheap and low end, in most other states this would be a $100k low end cookie cutter home.
 

Tweak155

Lifer
Sep 23, 2003
11,288
196
106
He started at TDAmeritrade with their Thinkorswim software.
Seems like a good starting point if you want try your hand at it.
You do need $25k minimum for day trading, and you can't trade for anybody else.
The next step may be Lightspeed software, it's a paid subscription software.

It all sounds super easy when you boil it down "buy low sell high!" and "you only need half a percent!". From what I understand so far, you find companies with the trade volume needed then look at the stock data to determine it's direction. If it has a good chance of decent growth in the time span you need, then you buy. You may need to do a few trades to get the volume you need for the day, meaning you may need to look at more than one company/stock. Using the minimum $25k example and 2x margin, you could buy 750 shares of a $100 stock, and all you would need is a 43 cent gain in order to make a $300+ profit (after fees and/or margin interest, before tax).

I have not actually done any of this day trading myself, I'm just posting about what I've observed.
I do know he customized the software settings and setup emergency high/low sell orders etc. (he still manually controls most trades).
The margin you qualify for varies depending on investment, and I think day trades are more than overnight (which I think maxes at 4).

I do want to clarify, he is not averaging $300 a day on a $25k investment. It is more, but also not in the $100k+ range.
It's one reason he is not a professional trader (yet), and also why he is using only a 2x margin right now.
I am saying that with $25k and a 2x margin with a 0.4% profit you can make $300 a day.

Seems easy watching someone else do this, but I don't know how easy/hard it actually is.
There is an option to do fake "paper" trading, a no risk way to try it...I have not done this either (yet).
Currently it would take me a very long time to save up $25k, so I'll keep watching before I risk that kind of money.
I think this is popular right now. I also started day trading, although haven't opened a margin account yet while I'm still learning.

That said, you only need $25k to day trade if you plan on using margin. A full cash account has no such restrictions. I also started with TD Ameritrade. I'm up since I started, but doing very low volume until I get better at it.
 

ponyo

Lifer
Feb 14, 2002
17,269
1,352
126
My dad always told me growing up, "Live below your means and you will always be wealthy." I have, and I am. I bought a brand-new house at age 26, on my own, on an engineer's salary of ~$66k at the time - I had saved up over $60k in less than four years.

I don't want to turn this into a brag post, but I am shooting for an early retirement, or at least $1M in my 401k + IRA by the time I'm 45. Although I'm now over the $100k/year mark, I still save over 50% of what I make. I have no desire to keep up with the Joneses or go on fancy vacations and, though I do have relatively expensive hobbies, I make sure that I'm meeting my savings goals before spending any money on wants.

I'm not the type of person that takes risks, and I believe in "slow and steady." Compounding interest is extremely powerful. I remember when I first started working, I immediately joined the company's 401k plan (this was near the end of 2008). There were so many young engineers around me who just didn't get it - they refused to put any money into their 401k because they didn't think it would make a difference. You can guess where that money ended up going...
The best-laid plans of mice and men often go awry.
 

ponyo

Lifer
Feb 14, 2002
17,269
1,352
126
I think this is popular right now. I also started day trading, although haven't opened a margin account yet while I'm still learning.

That said, you only need $25k to day trade if you plan on using margin. A full cash account has no such restrictions. I also started with TD Ameritrade. I'm up since I started, but doing very low volume until I get better at it.
Daytrading is for suckers.
 

ponyo

Lifer
Feb 14, 2002
17,269
1,352
126
I think you forgot /sarcasm/ mode.

If anyone said that seriously it would make them sound like an ignorant fool.
Of course I'm serious. Experienced traders/investors know day trading is fool's game. Every novice trader thinks they can make money day trading. And 99% of them end up losing their ass and give up. It's extremely hard and next to impossible to win day trading.
 
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boomerang

Lifer
Jun 19, 2000
18,894
638
126
In life you can make things happen, you can watch things happen or you can wonder what happened. Most people have the ability to do great things but choose not to. That's OK until they start whining and bitching that they got the short end of the stick.
 
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Muse

Lifer
Jul 11, 2001
25,335
1,305
126


So like, how many of you are smart enough to make real money from investing? And would you teach me for free?
The thing about the stock market is that it's not intuitively obvious how to do well in it. It tends to screw you up, your perceptions of what will work become disjointed, not solidified into working strategies. It AIN'T easy. Even the folks who charge you fail. They say the majority of money managers fail to achieve the results of the general market, at least the S&P500.
 

Muse

Lifer
Jul 11, 2001
25,335
1,305
126
My friend is day trading now, averaging $300 a day an hour or two before his full time job.

He makes it look easy, I might try it myself at some point. Though you do need $25k to start.
A day trader I met online said he'd never met a single day trader who hadn't gone broke at least twice.
 

Red Squirrel

No Lifer
May 24, 2003
55,610
7,425
126
www.uovalor.com
My dad always told me growing up, "Live below your means and you will always be wealthy." I have, and I am. I bought a brand-new house at age 26, on my own, on an engineer's salary of ~$66k at the time - I had saved up over $60k in less than four years.

I don't want to turn this into a brag post, but I am shooting for an early retirement, or at least $1M in my 401k + IRA by the time I'm 45. Although I'm now over the $100k/year mark, I still save over 50% of what I make. I have no desire to keep up with the Joneses or go on fancy vacations and, though I do have relatively expensive hobbies, I make sure that I'm meeting my savings goals before spending any money on wants.

I'm not the type of person that takes risks, and I believe in "slow and steady." Compounding interest is extremely powerful. I remember when I first started working, I immediately joined the company's 401k plan (this was near the end of 2008). There were so many young engineers around me who just didn't get it - they refused to put any money into their 401k because they didn't think it would make a difference. You can guess where that money ended up going...
I bought mine at 23 as I saved up throughout college for the downpayment and other expenses by working a summer job. The house is the easy part though, it gets paid off eventually. The hard part is all the reoccurring bills like hydro, insurance, gas, property taxes etc.... that go up each year. I have a couple 100 bucks left at end of month and that number is smaller each year. About 90% of the money I make is straight to bills, and I actually make good money, not 6 figures good, but 80kish which is not that far off. I've been trying to reduce costs by downgrading things like my cell plan to the lowest possible tier or eating one meal per day but there's only so much one can do. I don't know what 401k or IRA even is, but not like I would have any money left to put in there anyway. I have $100/pay that goes into my TFSA and then like $50 that goes into RRSPs and that's the extent of my savings. Not going to go far. I also have an ESP through work and have around 30k in there, but that's "fun" money... you still need to live.

My goal is to save more once the house is paid off though, should be paid off in about 5 years. I want to buy a property in the bush with the ESP money and some of the extra money I'll have once the house is paid off would maybe go towards that too. Eventually it will be a retirement home. Way cheaper to live out there and I would have way more land and room for less money. Essentially my retirement goal is to just reduce my costs of living by living off grid so whatever money I have I can actually keep more of and make it go further.
 

KillerCharlie

Diamond Member
Aug 21, 2005
3,643
48
91
I'm not surprised to see engineers, being one myself. They make good money, but more importantly they're cheap bastards - it's all about efficiency.
 

KillerCharlie

Diamond Member
Aug 21, 2005
3,643
48
91
That's not a house, it's a rotten old RV that got stuck there in 1982.

I'll keep living in the crawlspaces and such, more room and much nicer.
You guys are picking the most extreme examples. I live 15 minutes from Snohomish (closer to Seattle), and these are more typical:
 

Red Squirrel

No Lifer
May 24, 2003
55,610
7,425
126
www.uovalor.com
I'm not surprised to see engineers, being one myself. They make good money, but more importantly they're cheap bastards - it's all about efficiency.
And they can make stuff. "I'm not paying that much for THAT!" Spends an hour in the shop and makes it. I'm not an engineer but I have that mentality myself, if it's something I can build myself I'll do it to save money. I use build loosely here too, sometimes it's just piecing the right components together. High capacity UPSes are very expensive, so I just bought an inverter-charger and big batteries and boom, got a high capacity UPS that would cost 10's of thousands if I bought a "real" one.
 
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Tweak155

Lifer
Sep 23, 2003
11,288
196
106
Daytrading is for suckers.
Lots of people are successful at day trading. Just because it's a low percentage, doesn't mean it isn't a lot of people. Sorry you were never any good at it. And if you never tried, then you speak from 0 experience which way more people are successful at.
 

ponyo

Lifer
Feb 14, 2002
17,269
1,352
126
Lots of people are successful at day trading. Just because it's a low percentage, doesn't mean it isn't a lot of people. Sorry you were never any good at it. And if you never tried, then you speak from 0 experience which way more people are successful at.
Lots of people are not successful at day trading. Success rate is like 1% or less. Yes, I'm not a good day trader. I found out very early on it's not for me. I will occasionally day trade a position if great opportunity presents itself but that's not my bread and butter. Day trading is fucking hard. Like really hard. You're not going to beat the computers. They will eat you alive.

It's because I've experience I'm telling you it's foolish. Do anything other than day trade. Some people are good swing trader. Some are good at options. Some are good investor. But I've never met any good day trader. They really don't exist. There are lot of good traders but very very very few good day trader. It takes special skills different from regular trading. I'm telling you this for free as someone who made millions and also lost millions in the stock market. And yes, I trade. But I don't day trade.
 

Tweak155

Lifer
Sep 23, 2003
11,288
196
106
Lots of people are not successful at day trading. Success rate is like 1% or less. Yes, I'm not a good day trader. I found out very early on it's not for me. I will occasionally day trade a position if great opportunity presents itself but that's not my bread and butter. Day trading is fucking hard. Like really hard. You're not going to beat the computers. They will eat you alive.

It's because I've experience I'm telling you it's foolish. Do anything other than day trade. Some people are good swing trader. Some are good at options. Some are good investor. But I've never met any good day trader. They really don't exist. There are lot of good traders but very very very few good day trader. It takes special skills different from regular trading. I'm telling you this for free as someone who made millions and also lost millions in the stock market. And yes, I trade. But I don't day trade.
I guess 2 things - I hardly know people that invest regularly in real life (I can think of 3), and of those 3 - one retired years ago from day trading and he's only my age (mid 30's). He now only does a handful of trades per year to balance risk, fit his current plan and lives off the income his current sizes provide. The other 2 guys also day trade, but primarily swing trade overall.

Second thing would be is that I'm doing it for the learning, not for the money. I'll see whether I like it or not, but I know I want to do more investing so trying day trading has already taught me way more than I knew before. I also know there is way more that I don't know and I am prepared to give it years (at least right now I am ;) ).

I'm not using any money I cannot lose 100% and view it as paying for an education. I'm fine with discovering my limits, my ultimate goal is to learn something I can make money from, even if it's an alternate form of investing to day trading. If I end up good at it, then great - if not, I'm still certain I will learn things that I'll benefit from for the rest of my life.
 
Last edited:

skull

Platinum Member
Jun 5, 2000
2,101
274
126
That's not a house, it's a rotten old RV that got stuck there in 1982.

I'll keep living in the crawlspaces and such, more room and much nicer.
You said you couldn't even get a burnt out budget home for 600k yet you can get a trailer for 50k I'm sure theres lots inbetween if you actually look genius.
 
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