In our 50s, have never been able to create wealth

[Anonymous]

Anonymous wrote:It isn't too late.

I read books to learn what to do. Basically, I invested into Vanguard's S&P fund. If my company at the time had a 401K with a match, I put money into that and had it taken directly from my paycheck.

We also controlled spending. Bought a house in a neighborhood many would be too snobby to live in but the house is paid off now. We drove old cars and never had a car loan. My cars never impressed anyone and neither did my house.

The Millionaire Next Door is a good book to read.

I also recommend Mr. Money Mustache: https://www.mrmoneymustache.com/tag/investing/

Also, read about Wade Pfau's 4% rule. This rule states you can live forever off of 4% of your investments. If you have one million saved, according to his theory, you could live off of $40K without touching the principal. This rule may not be quite right if you are in your thirties (for any younger people reading this).

Hope it all goes well!

Don’t need more than 20 minutes of watching an intro video on building wealth to know what to do.

[Anonymous]

Anonymous wrote:I can tell you year by year how much I made, how much I spent, why I wasn't able to build wealth at that time, and what some of the opportunities were that passed me by.
For example, condos were $70k in Adams Morgan in 1998. In 2001 we moved to Rosslyn. Imagine being able to buy a condo there instead of rent. My sister and I would have paid it off in 7 years.
I was an international student from 1996-2007 without a permit to buy a home in US or invest. Bank of America even took my credit card back because of my visa.
I made minimum wage, which is not good for wealth building (total of $350k in 28 years according to my SS)and paid for international rates for my school. It took me 17 years to finish. I have BA in finance after changing major many times. What a waste of time and money.
2003-2006 I bought a condo in the old country for ca $50k (mortgaged at 16%). The same money in QQQ or other funds, would be a million $ today.
In 2007 I bought a land abroad for $100k and got a mortgage. Sold it in 2023 for $150k.The down-payment and mortgage/insurance payments put into an ETF at the time I sent my mortgage payments, would be over a million today.
I was already using Amazon to shop in 2007. The same payments into amazon stock and maybe MSFT/apple, would be way more than a million.
In 2008 I bought a condo in DC. Paid it for 11 years. The same mortgage/HOA payments in qqq/later voo would be about a million today. 15 year mortgage made the place very expensive. All the extra payments were where I lost money the most.
2014 my partner bought a condo. Same thing. We could have rented and anything extra we paid, would have been a lot more than it was when they sold it.
$20 a day into market since I moved here in 1996, would be over a million now. I had the money. I wasn't a spender and worked 10-12 hour shifts. I just didn't know anything about stock market, nor was there a free app like we have now. We didn't even have banks back at home when I left.
In 2020 I invested the equity of the condo I sold in 2019 into markets. The stocks I bought did 10X.
I went on to sell the land in early 2023 and put that money into markets also.
Five years in the markets, I learned to make much higher return that the 10%.
Years and years in real estate, taught me nothing, but to stay away.
My last two years return in two accounts (can't touch the taxed ones too much) was 100% year over year. I did the second 100% in 6 months. All this includes many mistakes.
As for my kids, one is starting their Roth at 18 this year. I will try to get him the same higher return as for myself since contributions to Roth are limited. The younger kid got inheritance coming and is set at 18 when we can start to invest that money. It sits at 4% now for years to come. Sad to say. My time is more valuable than going to court and paying the bond, the lawyers, and still having to keep the money safe in 4-10%.
I'm not a spender. My money is growing faster than I can use it. Once I got enough money that banks/landlords noticed, there was this upward spiral that happened.
My car loan is 0%. Seems hard to many people. I drive only 3k miles a year, because I don't really work for money anymore. I make enough to max the Roth.
Most people will buy 1-2 more cars while I'm fine with this one. Those next 2 cars they buy is the million they won't have.
My credit card cash back is 4%. I took $50k out and doubled it.
My landlord wanted to raise my rent. I moved to another condo and got to keep the same rent. Current landlord dumped the real estate company they hired to deal with tenants as I'm capable of taking care of the place myself.
I will save them money and hopefully myself rent increase. I used to own in the building. I know the maintenance men and the problems that may arise.
My older kid got 30 credits transferred for college from DCPS. I did nothing for that, but I do appreciate it. Now he can work more and we can really start the Roth for him.
I will get rid of my health insurance, because I can insure myself and go to EU is I must. I'm never sick and without much work, I can take even better care of myself and the kids.
I also don't have tax expense as I really don't work for living anymore. I get back more than I pay as HH.
When I tell friends about getting in the markets because they would learn a lot, or that I think I know how doubling is done, they have no idea what I'm talking about. They have zero interest in it. One friend even said that she goes blank when she hears numbers.
When I tell them about upward spiral, they look at me like I'm crazy.
I'm sure there were even better opportunities I missed, but after years of messing with real estate, I got into markets and it wasn't too late.
Doubling my money is way better than getting into market early. Early is for learning, while doubling is to catch up.
We did waste lots of money over the years on buying crap just like many people. Being more mindful of that, would have also given us a good start. I'm not even old enough to be able to make the catch up contribution to Roth.
My latest books are about saving on taxes. I already get more back than I pay. Should still be a good read though.
My kids will not sign up for 401k. The match is useless to us. That's lost money right there going into year two.
One other thing happened. I can command much higher pay at work now. More like $50 an hour plus all the food and drinks I can consume. Used to be no food, no drinks, long walk to work (18 blocks), not even paid the $2.77 an hour required by law as wage theft was normal. I can absolutely see and appreciate the difference. I'm just sad I was ever made to work without breaks and for below minimum at times. This was also a big reason why I wanted to be free of work. I just didn't know how I was going to achieve it. I didn't know money and personal finance can do it without a high salary. I counted my money several times day as a kid.
Perhaps if paid off finally.

I'm glad things are working out for you and that you're happy with what you have learned and accumulated. I have to say that you lost me at your claims that you are doubling your money (without explaining how you are doing this I have to assume you are talking about doubling your money in the market which happens about every 7 years, which is in direct conflict with your assertion that doubling money is better than getting in the market early) and telling your kid to NOT sign up for a 401k match. Passing on the match is literally passing on doubling your money immediately.

[Anonymous]

Anonymous wrote:Stop thinking about it. You don't need to "create wealth" to be a productive and happy person. Just so you have enough to support yourself without being a burden on others -- that's enough. And please, please, do NOT go into any debt to send your kids to college. State schools all the way. The best way to "create wealth" is to avoid debt.

Very good advice here. Do NOT go into debt for college and do not let your kids take out loans.

If they are still in HS, stop the APs and do dual enrollment instead for college credit. Where I am, it's free. Then if you live near a community college, have your kids live at home and get their AA. If they are smart, they can do it in 3 semesters. If they are leaning towards a final BS in STEM, it's a good idea to check out requirements for the intro classes in the sciences.

There might be Biology 101A which is for general students, 101B which is for semi-science majors (like CS) and 101C which is for hard science and math majors. So they can take Bio 101A to get their AA, but when they start working on their CS degree, they will have to take Bio 101B. Better financially to just take Bio 101B right off the bat.

If you live near a state school, consider having them continue to live at home the last 2 years. Yeah, it's not the traditional experience, but that's a luxury now. It's not worth borrowing 20K a year just so they can live in a quad and walk to campus. Especially with the uncertainty about which majors will be worth the cost anymore, due to AI and having our economy purposely being tanked.

If you have saved money for college but haven't saved enough for retirement, stop college saving immediately. You will do your kids a much bigger favor by being able to fund your own retirement and not become a burden to them. Even if they have to work during college to pay their tuition, in the end, that is better for them.

While you are still under 65, start cutting extra spending and save as much as possible. If you have a 3% mortgage, don't pay it down.

Cut WAY back on travel, dining out, holiday gifts, graduation gifts for the next 10-15 years. Do not plan on funding expensive weddings. You just can't. Contribute 5K at most, and let them cover the rest themselves. You just can't afford to do otherwise.

I would never suggest someone in their mid 50s start their own business. There's a greater chance you will fail and lose what little savings you may have.

Try to look and act as youthful at work as possible to not be a reminder to management that you are "old" and dispensable. Try to line yourself up with roles and projects that can take you into your 60s. Keep your networking strong. Plan to work until 65 and beyond as a goal.

If you have at least 250,000K in savings, maybe even less, see a financial advisor to map out the next 10-15 years.

And please don't tell me you are one of those posters who has "only" saved 3 million and therefore have not built up any wealth. Please!

[Anonymous]

OP, please share some details so we can actually help you. How much do your earn? What are your expenses? Savings? Money in retirement? Debts?

[Anonymous]

Anonymous wrote:

Anonymous wrote:It isn't too late.

I read books to learn what to do. Basically, I invested into Vanguard's S&P fund. If my company at the time had a 401K with a match, I put money into that and had it taken directly from my paycheck.

We also controlled spending. Bought a house in a neighborhood many would be too snobby to live in but the house is paid off now. We drove old cars and never had a car loan. My cars never impressed anyone and neither did my house.

The Millionaire Next Door is a good book to read.

I also recommend Mr. Money Mustache: https://www.mrmoneymustache.com/tag/investing/

Also, read about Wade Pfau's 4% rule. This rule states you can live forever off of 4% of your investments. If you have one million saved, according to his theory, you could live off of $40K without touching the principal. This rule may not be quite right if you are in your thirties (for any younger people reading this).

Hope it all goes well!

I will add that we made it a priority to save. At one point, we saved around 48% of our income. You can imagine...we did not have a fancy life at all. I remember the HR guy at work asking if I had made an error with how much I was saving into my 401K. That was funny. Meanwhile, he was probably paying $13 for one martini at office happy hours.

When you save more, you are proving to yourself you can live on less. When you can live on less, you don't as much later.

Also, exercise and do strength training because assisted living is extremely expensive. You want to put that off as long as possible.

You can get very far in just ten years.

There’s always been a cap on 401k contributions, so how would an HR person be astonished by this? I guess if you’re making $25-30k. But then obvs you wouldn’t be buying $13 martinis.

[Anonymous]

Crypto

[Anonymous]

Every situation is different and takes different strategies. Without knowing your current situation other than you think you missed the train, all these responses are pointless

[Anonymous]

It's never too late to become wealthier, but you will have to break your financial habits of a lifetime. Those evidently are spending too much, and saving/investing too little. Income levels matter in that the more you bring in the more you can potentially invest, but even modest incomes can create wealth over time if spending is restrained relative to whatever income you have.

So, spend much less than you bring in, prudently invest the difference (as opposed to gambling and speculating with it, e.g., buying single "hot" stocks, crypto, and the like) in widely diversified, low-cost ETFs like those offered by Vanguard, don't reflexively exit the market during downturns, and let compounding do the work for you. That requires time, so the longer you wait to reform your financial life the less you'll be able to accumulate for a secure and comfortable retirement.

[Anonymous]

Anonymous wrote:Idk. Same. We rent and there’s nothing left to invest each month. Every time savings is built up something breaks, sometimes it’s one of our bodies. We haven’t been able to break the cycle.

This is the definition of being middle class and/or working poor.

[Anonymous]

Anonymous wrote:I've been a public service on my life, spouse has been in general low-paying jobs. We have never been able to save much and now kids will be going to college. I feel like we missed the boat on financial advice and what we should do to build wealth. Is there anything that can be done at this point?

Believe it or not you are still ahead of most Americans. The massive gap in wealth/income/retirement savings among Americans is staggering. We live in parallel universe.

[Anonymous]

Anonymous wrote:Start your own business. Risky but can be more rewarding than being a wage slave.

I hear this advice a lot and frankly one of the most stupid advice people keep throwing around. The problem with this advice is that people then start hinting for things to do, things to sale instead of naturally finding a product/service they are good at.

[Anonymous]

Anonymous wrote:Idk. Same. We rent and there’s nothing left to invest each month. Every time savings is built up something breaks, sometimes it’s one of our bodies. We haven’t been able to break the cycle.

I’m the low earner and I feel terrible about not contributing more $$. Retroactively I see where the mistakes were made. 10-99 instead of fully starting my own business.

Unfortunately this is due to low earnings. You simply don't make enough money.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Stop thinking about it. You don't need to "create wealth" to be a productive and happy person. Just so you have enough to support yourself without being a burden on others -- that's enough. And please, please, do NOT go into any debt to send your kids to college. State schools all the way. The best way to "create wealth" is to avoid debt.

Very good advice here. Do NOT go into debt for college and do not let your kids take out loans.

If they are still in HS, stop the APs and do dual enrollment instead for college credit. Where I am, it's free. Then if you live near a community college, have your kids live at home and get their AA. If they are smart, they can do it in 3 semesters. If they are leaning towards a final BS in STEM, it's a good idea to check out requirements for the intro classes in the sciences.

There might be Biology 101A which is for general students, 101B which is for semi-science majors (like CS) and 101C which is for hard science and math majors. So they can take Bio 101A to get their AA, but when they start working on their CS degree, they will have to take Bio 101B. Better financially to just take Bio 101B right off the bat.

If you live near a state school, consider having them continue to live at home the last 2 years. Yeah, it's not the traditional experience, but that's a luxury now. It's not worth borrowing 20K a year just so they can live in a quad and walk to campus. Especially with the uncertainty about which majors will be worth the cost anymore, due to AI and having our economy purposely being tanked.

If you have saved money for college but haven't saved enough for retirement, stop college saving immediately. You will do your kids a much bigger favor by being able to fund your own retirement and not become a burden to them. Even if they have to work during college to pay their tuition, in the end, that is better for them.

While you are still under 65, start cutting extra spending and save as much as possible. If you have a 3% mortgage, don't pay it down.

Cut WAY back on travel, dining out, holiday gifts, graduation gifts for the next 10-15 years. Do not plan on funding expensive weddings. You just can't. Contribute 5K at most, and let them cover the rest themselves. You just can't afford to do otherwise.

I would never suggest someone in their mid 50s start their own business. There's a greater chance you will fail and lose what little savings you may have.

Try to look and act as youthful at work as possible to not be a reminder to management that you are "old" and dispensable. Try to line yourself up with roles and projects that can take you into your 60s. Keep your networking strong. Plan to work until 65 and beyond as a goal.

If you have at least 250,000K in savings, maybe even less, see a financial advisor to map out the next 10-15 years.

And please don't tell me you are one of those posters who has "only" saved 3 million and therefore have not built up any wealth. Please!

This is tricky advice. If I didn't take loans I would not have been able to go to Purdue for aerospace engineering. That degree from that school gave me a shot at the "American dream". I am wealthy today and I honestly I am glad I took student loans.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Stop thinking about it. You don't need to "create wealth" to be a productive and happy person. Just so you have enough to support yourself without being a burden on others -- that's enough. And please, please, do NOT go into any debt to send your kids to college. State schools all the way. The best way to "create wealth" is to avoid debt.

Very good advice here. Do NOT go into debt for college and do not let your kids take out loans.

If they are still in HS, stop the APs and do dual enrollment instead for college credit. Where I am, it's free. Then if you live near a community college, have your kids live at home and get their AA. If they are smart, they can do it in 3 semesters. If they are leaning towards a final BS in STEM, it's a good idea to check out requirements for the intro classes in the sciences.

There might be Biology 101A which is for general students, 101B which is for semi-science majors (like CS) and 101C which is for hard science and math majors. So they can take Bio 101A to get their AA, but when they start working on their CS degree, they will have to take Bio 101B. Better financially to just take Bio 101B right off the bat.

If you live near a state school, consider having them continue to live at home the last 2 years. Yeah, it's not the traditional experience, but that's a luxury now. It's not worth borrowing 20K a year just so they can live in a quad and walk to campus. Especially with the uncertainty about which majors will be worth the cost anymore, due to AI and having our economy purposely being tanked.

If you have saved money for college but haven't saved enough for retirement, stop college saving immediately. You will do your kids a much bigger favor by being able to fund your own retirement and not become a burden to them. Even if they have to work during college to pay their tuition, in the end, that is better for them.

While you are still under 65, start cutting extra spending and save as much as possible. If you have a 3% mortgage, don't pay it down.

Cut WAY back on travel, dining out, holiday gifts, graduation gifts for the next 10-15 years. Do not plan on funding expensive weddings. You just can't. Contribute 5K at most, and let them cover the rest themselves. You just can't afford to do otherwise.

I would never suggest someone in their mid 50s start their own business. There's a greater chance you will fail and lose what little savings you may have.

Try to look and act as youthful at work as possible to not be a reminder to management that you are "old" and dispensable. Try to line yourself up with roles and projects that can take you into your 60s. Keep your networking strong. Plan to work until 65 and beyond as a goal.

If you have at least 250,000K in savings, maybe even less, see a financial advisor to map out the next 10-15 years.

And please don't tell me you are one of those posters who has "only" saved 3 million and therefore have not built up any wealth. Please!

This is tricky advice. If I didn't take loans I would not have been able to go to Purdue for aerospace engineering. That degree from that school gave me a shot at the "American dream". I am wealthy today and I honestly I am glad I took student loans.

DP - That’s where I went! I only lasted 3 semesters in aero before I switched to professional flight.

Good on you for making it through.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Idk. Same. We rent and there’s nothing left to invest each month. Every time savings is built up something breaks, sometimes it’s one of our bodies. We haven’t been able to break the cycle.

I’m the low earner and I feel terrible about not contributing more $$. Retroactively I see where the mistakes were made. 10-99 instead of fully starting my own business.

Unfortunately this is due to low earnings. You simply don't make enough money.

Yes, absolutely. You can't save if you're living paycheck to paycheck. However, some high earners are in OP's situation because they lack discipline. And some low earners have plenty saved for retirement because they have discipline (think teachers who are the frugal "millionaires next door").

The past is in the past. Do the best you can with your remaining working years and prioritize retirement savings so you don't become a burden to your kids as you age. Given that you are low-income, you should qualify for financial aid and loans for college.