Anonymous wrote:Anonymous wrote:Anonymous wrote:On DCUM, every time someone asks this question, multiple people say: "family money" because then they don't have to think about what they themselves could have done differently. I really don't think receiving large gifts or inheritances from family is as prevalent as you think. Minor downpayments are the most common form of help, but usually don't run into paying for the entire house.
Practically no one ever says: "stock market". Yet for us, that's been the sole driver of our wealth, and I suspect it contributes to the wealth of a lot of my neighbors in Bethesda, along with people who manage or sell successful businesses. We bought high tech stocks when they were cheap because we believed in the product and decades later can sell some stocks to meet our needs.
Naive.. It is inheritance. You do not live in that bubble so you don’t know. A lot of large inheritance is disbursed in installments over life and remainder upon death.
I remember in my 20s learning some parents were so rich they were gifting $60k/year to their kids to avoid inheritance tax when they die. Started when they were 18.
I was earning $50k as a salary that year.
Anonymous wrote:Anonymous wrote:Anonymous wrote:On DCUM, every time someone asks this question, multiple people say: "family money" because then they don't have to think about what they themselves could have done differently. I really don't think receiving large gifts or inheritances from family is as prevalent as you think. Minor downpayments are the most common form of help, but usually don't run into paying for the entire house.
Practically no one ever says: "stock market". Yet for us, that's been the sole driver of our wealth, and I suspect it contributes to the wealth of a lot of my neighbors in Bethesda, along with people who manage or sell successful businesses. We bought high tech stocks when they were cheap because we believed in the product and decades later can sell some stocks to meet our needs.
But how did you have so much excess wealth 20 years ago to invest substantial sums on individual stocks?
We followed the “prudent advice”:
Paid down student loans (guaranteed return as they say) but not too fast as they were tax deductible
Invested in diversified index funds through maxed out 401ks
Kept adding to some long term CDs for building up a down payment on a house (which took a LONG time since houses appreciated faster than the $50k/year we were saving).
Then we had kids, and whose there went $28k/year/kid for daycare
Then we bought a house and suddenly we are dropping $20k for waterproofing a basement…
Dabbling in the stock market is fun, but a) in 2023 you can say tech was great, but you have survivor bias (and honestly most high flying tech are not profitable enough to justify their valuation, like Uber or Tesla, or have already past their prime like Facebook).
In general they recommend against investing large sums in individual stocks unless you don’t care to lose it. And if you don’t care to lose $20Ks of dollars, you are already WAY richer than us and likely OP.
You followed the “prudent advice”. This is exactly your problem. This is OP’s problem.
This is the reason she is left behind. She doesn’t play to win. She plays not to lose.
“Prudent advice” will not get you rich overnight. It will make you comfortable when you get old.
OP’s friends that are getting richer are probably playing more aggressively and taking more risks.
“Prudent advice” is what most people choose to follow. Go to college and get a 9-5 corporate job instead of the
more riskier path of entrepreneurship. Same with investing.
I bet some of OP’s friends took more risks with their investments and got rewarded.
Anonymous wrote:
In general they recommend against investing large sums in individual stocks unless you don’t care to lose it. And if you don’t care to lose $20Ks of dollars, you are already WAY richer than us and likely OP.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Anonymous wrote:Yes, OP, this has been true for me. It can feel defeating at times, especially knowing this is likely to get worse as we get older. We try to just focus on ourselves, our financial goals, making smart choices for us. Staying of social media helps a lot. We've also started thinking about moving to a lower COL area in a few years when that will be a reasonable option due to jobs. I think where we are now, we're kind of on the bottom end of the range for our peer group in the DMV. We're still very fortunate and I don't want to lose sight of that, but it's hard when the people around you have a lot more. I think moving somewhere that our HHI and financial situation is more "average" would be beneficial for us on a lot of levels.
That's what's giving me anxiety. It's really, really hard to shake this feeling. You feel hopeless and overcome with dread.
What is there to feel hopeless about? Do you own a home and have a job? Retirement savings? That is all you need.
Sounds like advice to keep proles docile.
Anonymous wrote:My best friend just moved into a new build mansion and it forced me to confront the fact that actually, practically all of our friends have moved into homes at least two to maybe even ten times the value of our home. High status zip codes. Many of them have vacation homes. Outside of my husband's college friend selling his company for tens of millions, I really don't know where everyone's money is coming from. It is demoralizing. The real gut punch is one friend who lived near us. I thought they were making what we make, but then they moved into a $2.5 million dollar home, and held onto their old house, which is worth about what our house is worth, to rent it out. None of them are flashy or obnoxious, but it still feels like we're being left in the dust. I honestly think we've become the poor friends, so there's an embarrassment there as well. I can't stop thinking about where we went wrong and we're too old to pivot.
Anonymous wrote:Anonymous wrote:Anonymous wrote:Yes, OP, this has been true for me. It can feel defeating at times, especially knowing this is likely to get worse as we get older. We try to just focus on ourselves, our financial goals, making smart choices for us. Staying of social media helps a lot. We've also started thinking about moving to a lower COL area in a few years when that will be a reasonable option due to jobs. I think where we are now, we're kind of on the bottom end of the range for our peer group in the DMV. We're still very fortunate and I don't want to lose sight of that, but it's hard when the people around you have a lot more. I think moving somewhere that our HHI and financial situation is more "average" would be beneficial for us on a lot of levels.
That's what's giving me anxiety. It's really, really hard to shake this feeling. You feel hopeless and overcome with dread.
What is there to feel hopeless about? Do you own a home and have a job? Retirement savings? That is all you need.
Anonymous wrote:Anonymous wrote:On DCUM, every time someone asks this question, multiple people say: "family money" because then they don't have to think about what they themselves could have done differently. I really don't think receiving large gifts or inheritances from family is as prevalent as you think. Minor downpayments are the most common form of help, but usually don't run into paying for the entire house.
Practically no one ever says: "stock market". Yet for us, that's been the sole driver of our wealth, and I suspect it contributes to the wealth of a lot of my neighbors in Bethesda, along with people who manage or sell successful businesses. We bought high tech stocks when they were cheap because we believed in the product and decades later can sell some stocks to meet our needs.
But how did you have so much excess wealth 20 years ago to invest substantial sums on individual stocks?
We followed the “prudent advice”:
Paid down student loans (guaranteed return as they say) but not too fast as they were tax deductible
Invested in diversified index funds through maxed out 401ks
Kept adding to some long term CDs for building up a down payment on a house (which took a LONG time since houses appreciated faster than the $50k/year we were saving).
Then we had kids, and whose there went $28k/year/kid for daycare
Then we bought a house and suddenly we are dropping $20k for waterproofing a basement…
Dabbling in the stock market is fun, but a) in 2023 you can say tech was great, but you have survivor bias (and honestly most high flying tech are not profitable enough to justify their valuation, like Uber or Tesla, or have already past their prime like Facebook).
In general they recommend against investing large sums in individual stocks unless you don’t care to lose it. And if you don’t care to lose $20Ks of dollars, you are already WAY richer than us and likely OP.