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

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[quote=Anonymous][quote=Anonymous][quote=Anonymous]My husband, who was a war refugee as a child, lived poorly all through his 20s and early 30s because he invested in the stock market instead of moving out of a poor neighborhood, buying better food, or a car, or nice clothes, or buy stuff.

Now, thanks to him, we have more than 10M. At no point did he invest large sums, because he never had large sums: his salary at the time did not exceed 30K a year, if that. Now our HHI is 120-150K a year. We have two children, born in a one-bedroom apartment. When they were little, we would only buy food on sale. We bought our first basic compact car to drive DC1 home from the hospital. We still have that car 20 years later. We do splurge on certain things that are important to us, like education, but that's after decades of belt-tightening, living with extreme frugality and realizing we can simply sell stock to pay for private university.

I have posted multiple times over the years on DCUM, trying to explain to people that investing in the stock market or in real estate is possible at most income levels, even very low ones, but that it takes thought and very real sacrifice. Frankly, most Americans are not prepared to make those sacrifices. You cannot live a middle class lifestyle if you seriously want to invest and your salary is low. You cannot invest in real estate in expensive areas. You need to pick a neighborhood you hope will gentrify, and renovate it yourself, like my friend did. It's less work, if you're really poor, to buy stocks like my husband did. All these methods usually only bear fruit over multiple decades, which is why it's very important to start young.

The point is that you should not expect your salary to make you rich.

OP, you can still give it a try if you want. You have several decades left. [/quote]

To get to 10M on normal income he was speculating not investing. [/quote]

Say you make $120k per year and invest a consistent $70k yearly for 30 years. At a 9% nominal rate of return, you end up with $9,541,528.  If your income goes up along the way, you can increase contributions for a while, but when you get married and start a family, maybe you revert back to the $70k annual investment amount and spend the difference on your kids. Someone with a decent income can get very rich over 30 years if they are disciplined and start early.  [/quote]

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