Secrets of rich people

[Anonymous]

Anonymous wrote:The secret to how people got rich on DCUM is largely: they went to law school, they got a job at a big firm, they never left.

It's not that they're so much better at managing their money than you. It's that they make a sh*t ton of money because of the industry they are in. It's not a function of logic or fairness.

this is a good point. so many lawyers here

[Anonymous]

Anonymous wrote:The secret to how people got rich on DCUM is largely: they went to law school, they got a job at a big firm, they never left.

It's not that they're so much better at managing their money than you. It's that they make a sh*t ton of money because of the industry they are in. It's not a function of logic or fairness.

It most definitely is a function of logic and fairness. No one goes to biglaw for anything other than $.

[Anonymous]

The float in home prices in the DC area over the last 20 years has made us millionaires in equity alone. We could buy a very nice house in a lower COL area outright and have many hundreds of thousands leftover. We did it by a lot of hard work ourselves (painting, plumbing, installing, fixing, etc), choosing the right properties, and a huge swath of luck.

We we were in our 20s, we started buying mutual funds and using this new thing called a 401k. I cut back to freelance when kids were babies, but I'm back FT now and maxing that 401k again.

OP - Vanguard is a good first step into investing. Read their website and choose a fund that fits your preferences. Don't be afraid to go with the most aggressive allocation, especially if you have time on your side!

[Anonymous]

Anonymous wrote:I've been reading The Millionaire Next Door. It's dated, but the principles and information still applies to modern times. You can Google the book if you want a synopsis of the main points.

This x1000. Go read the posts about people spending $20 or more a day on lunches and do the opposite. I still shop at thrift stores, use online coupon codes, and go to lower prices grocery stores and eat out maybe 1 time a month. We are wealthy but you would never, ever guess it.

[Anonymous]

OP,
This is the wrong place to ask about the secrets of rich people.
The wealth of rich people on DCUM simply comes from their hard working high paying jobs. Most of them are lawyers.
They are essentially rich slave workers.
Their secrets is simple: go to a top law school and build some connections to land a big law job.
This secret isn't going to help you isn't it.

What you want to do is find rich entrepreneurs or rich people that got rich by other means other than the 9-5 job.
Those rich people will give the most valuable secrets.

[Anonymous]

Anonymous wrote:If you have two incomes, pretend you only have one and invest the other. Do this forever, and you'll be rich.

This is what we've done. We weren't handed anything. It's not a secret. We don't appear rich, although we are.

That only works if you could live on one of the two incomes. In a high cost of living area like DC, many people cannot. In fact, I would venture a guess that most people cannot.

[Anonymous]

Anonymous wrote:

Anonymous wrote:The secret to how people got rich on DCUM is largely: they went to law school, they got a job at a big firm, they never left.

It's not that they're so much better at managing their money than you. It's that they make a sh*t ton of money because of the industry they are in. It's not a function of logic or fairness.

this is a good point. so many lawyers here

+1

They be smarter than you. And they want wives that match them. Not you.

[Anonymous]

I hear ol' Dave Ramsey say that if people stopped forking over $500/month in perpetual car payments and invested it instead, they'd retire millionaires. He's on the right track.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The secret to how people got rich on DCUM is largely: they went to law school, they got a job at a big firm, they never left.

It's not that they're so much better at managing their money than you. It's that they make a sh*t ton of money because of the industry they are in. It's not a function of logic or fairness.

this is a good point. so many lawyers here

+1

They be smarter than you. And they want wives that match them. Not you.

A large majority of these lawyers never practice big law and carry a large debt.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:The secret to how people got rich on DCUM is largely: they went to law school, they got a job at a big firm, they never left.

It's not that they're so much better at managing their money than you. It's that they make a sh*t ton of money because of the industry they are in. It's not a function of logic or fairness.

this is a good point. so many lawyers here

+1

They be smarter than you. And they want wives that match them. Not you.

I went to a top 5 MBA program and make over $350k in cash, $500k counting equity. My work is far more interesting than what most lawyers do. but okay.

[Anonymous]

I think it’s living below your means and saving as much as you can. One small example is we would never buy snacks or drinks at the movie theater, looking for free parking for a few minutes before paying, going on walks instead of soul cycle.

[Anonymous]

Not hard at all. Buy a few places, rent them out and watch equity grow. I'd be on a rental nr 4 or 5 if I hadn't been illegal for 15 years. I have some catching up to do, but I alwyays wondered why Americans didn't buy a place or 2 and rent it out since rents are very high in DC. Many were my coworkers and somehow they were unable to save up the down payment and have a good credit it took to get a pace in Adams Morgan for example. I saved over $10k in 1998 making only ca $24k a year. I coudln't however buy the $74k 1-bedrooms on Columbia Road. An American could've but many never bothered. I figured their parents will leave them their houses. Many drank too much, smoke too much and were too cool to settle down.
For the richer crowd I suggest to wait to buy the million dollar shit-schack in upper NW. It's not going up, it's already up and it will take all you HHI of $300-$350k for the next 30 years to live in it. Stay in smaller homes or apartments a little bit longer. Kids ages 1-7 don't really complain about how much space they have at home, you do.
Got to keep the housing price low and work hard 22-40.

[Anonymous]

There aren't really any earth shattering secrets. It typically boils down a combination of the following:

- Controlled spending
- Constant investing
- Good lifestyle habbits - not lazy, no excessive smoking, drinking, etc.

[Anonymous]

Build/Own a business.

[Anonymous]

It is very difficult to build wealth as a wage earner. You need to have passive income from your own business, rental properties, or other investments to build wealth (more quickly and efficiently). W-2 earners pay a lot in taxes as a % of their income.

That said, regardless of your source of income, always live below your means, don't dip into principal, and pay yourself first, as other PPs have mentioned.