Just surpassed $1m net worth

[Anonymous]

Anonymous wrote:We are a little over a million too in ours 40s but we don’t make as much as many of you guys. HHI of 130k

Same here. If you are bringing in 350k/year, even a bad investor should have several million before age 50.

[Anonymous]

how do people have a HHI of 130k or less and $2 million in their early 40s?

[Anonymous]

Anonymous wrote:

Anonymous wrote:We are a little over a million too in ours 40s but we don’t make as much as many of you guys. HHI of 130k

+1. This was us early 40’s but a little lower HHI. Now late 40’s/50 and just hit 150 HHI, and after reading this post, went to add up our Net Worth excluding House and we’re 50k shy of $2 million. Kind of feels good but in the back of my mind I know it’s not real until we cash out - which we won’t anytime soon. Congrats OP! We know how you feel.

Can you explain this please? Not counting your house you have $2 million in retirement and you're just now making 150k between the two of you?

Tell us what you're counting to come up with your net worth.

[Anonymous]

Anonymous wrote:how do people have a HHI of 130k or less and $2 million in their early 40s?

they don't. they can't. not without counting home equity. we need more detail to understand this.

[Anonymous]

Well done, OP! We are 46 and 44, and are just over that, so you are ahead of us, and I think we are pretty comfortable, so way to go!

[Anonymous]

People. Net worth includes your home equity.

[Anonymous]

Anonymous wrote:Not to burst a bubble but your combined net worth just crossed $1 million. Your individual net worth is 1/2 of that. Still not bad but everything is easier in two player mode!

And way less if appreciated stocks or 401k assets as tax consequences when you sell.

You need at least 1.3 million in a 401k to have a million dollars as you have to account for taxes

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not to burst a bubble but your combined net worth just crossed $1 million. Your individual net worth is 1/2 of that. Still not bad but everything is easier in two player mode!

And way less if appreciated stocks or 401k assets as tax consequences when you sell.

You need at least 1.3 million in a 401k to have a million dollars as you have to account for taxes

Not necessarily true. I retired early and there are ways to reduce the tax consequences of retirement fund withdrawals if you do it right. I know this is true, because I'm doing it.

[Anonymous]

Anonymous wrote:Not to burst a bubble but your combined net worth just crossed $1 million. Your individual net worth is 1/2 of that. Still not bad but everything is easier in two player mode!

Assuming they divorce and move on to entirely separate housing, expenses, and finances, maybe, but otherwise no.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not to burst a bubble but your combined net worth just crossed $1 million. Your individual net worth is 1/2 of that. Still not bad but everything is easier in two player mode!

And way less if appreciated stocks or 401k assets as tax consequences when you sell.

You need at least 1.3 million in a 401k to have a million dollars as you have to account for taxes

Not necessarily true. I retired early and there are ways to reduce the tax consequences of retirement fund withdrawals if you do it right. I know this is true, because I'm doing it.

Harder to do in future. Now you don’t have to do RMD till 72. By that age will have 5 million in 401k. I would be pulling several hundred thousand a year out.

[Anonymous]

Good for you. Give some away.

[Anonymous]

Purely out of curiosity, those of you who don't count home equity, do you still count your mortgage against your net worth? Or do you just leave housing out altogether?

[Anonymous]

Anonymous wrote:how do people have a HHI of 130k or less and $2 million in their early 40s?

Not one of the PPs, but I have a similar HHI and close to $1 million net worth including home equity (~$400k) and retirement (~$700k) and savings (no debt other than mortgage ~$200k). I started contributing the max to my 401k when I was young and single. It would be even higher if I hadn't had to pay off massive school loans.

[Anonymous]

Anonymous wrote:Purely out of curiosity, those of you who don't count home equity, do you still count your mortgage against your net worth? Or do you just leave housing out altogether?

There's no question that home equity is, by definition part of your net worth. Also by definition, your home equity is the value of your home minus any debt outstanding against it, so yes, your mortgage is "counted." As for your question - if you don't include home equity, do you still "count" (subtract?) your mortgage? - that wouldn't make any sense at all. I presume if people wanted to take that approach, then yes, they should be "leaving housing out altogether," but then, that wouldn't be their net worth.

Some people like to get caught up in the semantics of this, but don't confuse your net worth with your "liquid net worth," or whether or not your investment banker is going to call you a "high net worth individual" or whether or not you have "investable assets" of a particular value or any of that. Those are different. Net worth is a finance and accounting concept, and there's really only one way to calculate it - everything you own, minus everything you owe.

[Anonymous]

Anonymous wrote:Harder to do in future. Now you don’t have to do RMD till 72. By that age will have 5 million in 401k. I would be pulling several hundred thousand a year out.

And there you have it folks, the very definition of 1st world problems.