But there are things worth funding. I joke that I spend a lot of my money on land, I just don't own it directly. The Wilderness Society has for some years now had a 10x matching fund the last couple days of the year. Throw in The Nature Conservancy, Rainforest Action Network, Defenders of Wildlife, National Wildlife Federation, Vital Ground, National Park Foundation, American Forests, American Rivers... once the wilderness is gone it cannot easily be recovered. It is an investment in our collective future. If I have to work longer than I might have otherwise, at least I can feel good about my contribution. At least I have a job that affords me that choice (my thanks to Home Depot for the job and for matching $3000 of my contributions, per year). M thanks to Azul for his hard work putting together these videos to help us make sure our retirement is funded.
The miracle of compound interest. I'm 54 and have been saving every penny I can since I was 22. I'm now just north of $2M (and completely own two rental homes). My only debt is about $100K on my primary residence, which I'm reluctant to pay off early because the mortgage rate is 3.125%. It can be done, just sacrifice early and save all that you can.
Congratulations. Worst mistake I made was to trade stocks when I was younger and not stay long term with mutual funds. Thankfully, my earning potential is going up and I think I’ll still be able to meet my retirement goal by 60.
Actually the saving for retirement is all about the expenses one would incur for health costs in addition to the living costs.... in the meantime try to “live a little”! As tomorrow is not guaranteed my friend! I say that to myself too!
Na.. i mean i get your point. And yes inflation will make even a million sound small someday. But right now still 100k really does impact how quickly you can grow your portfolio. 100k is still a lot of money. If you had invested in VOOG as example. 100k would have grown to 137k this year (which is unusual) and thats not even counting the 10 or 20k or whatever you were adding in. You could have ended this year at 160+k. Yes obviously the more you have the more events like this will benefit you. Im not saying you shouldn't target 250k. Im just saying hitting 100k is still a substantial milestone. If you invested only 100k in an s&p 500. And stopped. Did nothing. In 30 years you would have 1.6mil. 100k is still a wealth builder.
All depends on the lifestyle you want to live and how much you want to pass on. I want both to be high. So I’m really happy having invested $48,000 this year, and some of that was in Q4 so it didn’t grow as much, so I’m not taking my foot off the pedal any time soon.
Don’t ignore that future returns are based off past results. Just because the market has gone up the last 50 years does not mean it will go up the next 50 years. We can be sideways for a very very long time
That spreadsheet has an error. It assumes you invest $20k each year in a lump sum at the end of the year. In reality you're likely to invest 20k in smaller amounts during the year. So each new 20k added will return an average of 3.5% in the first year. That shaves about 3 years off the time to get to $1m. Also if you're going to discount the 1m due to inflation then you should also factor in that your savings will likely rise as well. If you can invest 20k pa in year 1 then by year 7 you may be able to invest to 40k pa. And by year 14 it may be 80k pa.
I'm taking Munger's side on this one. The first $100,000 for me was a total B. It felt like it took an eternity. I reached that point in my early 30's. Then all of a sudden at 40 I hit the million dollar mark. I couldn't believe how fast it happened.
Well, when you’re only earning $16,000 in 1988 and you could only afford to contribute 3% to the 401k, that was only $480 all year, it takes a lot longer than 8 years to save that first $100,000. It took me closer to 20 years. It took at least a decade of pay raises and continually increasing my contribution to be at a 10% contribution rate. Took a lot less time to save the second 100k due to higher salary and higher contribution rate.
I think this is the biggest factor. The first 100k is a grind because we're doing it when we are relatively poor, but instilling those habits as we earn more is vital to a good investment routine. The reason your net worth explodes at $100k is because you're been disciplined enough to get there with little income and now that you have a real fire you can throw real wood into the fire (along with your portfolio being worth enough to have substantial annual gains). The year after I hit 100k I was able to max out my IRA / 401k, that alone increased my net worth by 30% the next calendar year.
@@danielchoi6958bingo!! I now max out the 401k with catch up contributions. Finished year 3 of doing that. I’m 60 and there is a new “extra” super catch up contribution for those aged 60 to 63. We just figured out how to adjust our budget so I can max that out too this year. It’s a stretch, so we will see how it goes. It’s nice we can catch up during peak earning years after struggling for the first decade or two. Hopefully we will have enough in 2 years for me to feel comfortable enough to join my husband in retirement. He’s already retired, as he’s 8 years older than me!
Sorry, but you are incorrect. The 7% you used in your calculations are net/real returns of the stock market, which already takes the 3% inflation into account. 10% would be the typical gross/unadjusted for inflation returns of the stock market. Therefore the 1,000,000 you calculated is actually the present value (today's dollars) of your future networth.
Even if mathematically they don't explore, people I know who have 100K+ net worth are on the grind and will get their first mill much faster than those who dont.
Came here to comment this exactly. Growth in a diversified portfolio has averaged between 9 and 10 percent over the last 50 years, as I recall. Inflation averages 2-3% per year. If you subtract out inflation from growth you get a 6-7% inflation adjusted growth per year. So that 1 million dollars the influencers are talking about is inflation adjusted.
I wasn't putting away $10K/year, and I don't know what my average rate of return was, but it took me 21 years to save $300K. Then I put everything into a growth fund and that's when it really exploded for me. After that it was only 4 more years to hit the first $1M, and then another 4 years to hit $2M. I'm on track to hit $3M only two years after hitting $2M. Finding a good growth fund made all the difference. After I did that I went from a 6.5% return in the year I hit $300K to a 30% return after dumping everything into a growth fund. I've now had several years where my investments have made more than I did at my job (and one year, 2022, where I lost 33%, but that's more than been made back since, and the trick there was to keep investing, buying at a discount, rather than panicking and exiting the market). I figure another two years and I'll be at the "FU money" level of financial independence and can retire with high confidence of not outliving my money.
Right a higher rate of return makes it so much easier. This advise is for the people that know nothing about investing and have a very conservative investment strategy. I mostly buy individual stocks and having a 1000% 2000% 4000% return can easily negate some bad investments which I have made 😂. Based on the rule of 72 at 7% will take 10 years to double your money. I know beating s&p is next to impossible but increasing risk tolerance is necessary to meet finacial goals for most.
@@BrianK-zz4fk Actually, beating the S&P500 isn't hard. Plenty of ETFs do it. Schwab's growth fund SCHG (and you don't need to have a Schwab account to own it) had a 2024 total return of 40.54% vs 26.31% for the S&P500 index. Other ETFs beat the S&P500 as well, including QQQ (and QQQM), FTEC, and even the ETFs that track the S&P500 Index such as SPY and VOO also finished the year 1 or 2% higher. It's not magic, just takes some time looking into what's available and then having the courage to pull the trigger and remain invested even when the market swings down, because dollar-cost-averaging is your friend.
@@BrianK-zz4fk This is weird. I think I've had two reply comments deleted. At first I thought I didn't save my first reply and so tried to recreate it. And it seemed to work, because I refreshed the page and it was there, but now a few minutes later it's gone. In both I mentioned specific ETFs, so I'm wondering if that violates some rule that Azul has?
My net worth was $250k sometime in 2008. Then it crashed to $65k later that year. I stayed put mostly in my investments. Today I have around $3M. So when I saw those hundreds of videos about net worth exploding after $100k - it depends. It depends on whether there’s a market correction along the way or a recession.
@DAMON409. if I had sold those stocks along the way, I would be worth around $1 million instead of $3 million. I had a substantial stake in Apple and I believed in the company long-term. I am not an expert at market timing. The strategy of holding on to most of my investments worked for me; I’m not saying it would work in the future or it would work in someone else’s situation.
As long as you're still adding to the stash instead of withdrawing from it, market crashes don't hurt you. Most of the time, they're buying opportunities that will help you in the long run. There are exceptions, such as being overweighted in an investment that totally fails, such as Enron or Global Crossing. Those will happen from time to time. But if you're diversified, then their effect will be more than compensated for by the rest of your portfolio which will spring back within a few years.
My mother gave me two pieces of advice when I graduated from college. First, save $10k for F-YOU money. Don't touch it unless there's an emergency. Second, max your 401k - immediately. Don't tell me you can't save 10%.
Maxing out isn’t 10% unless your salary is $230,000, which for few people it is. This is because “maxing out” means contributing $23,000. The IRS adjusts this number annually. That’s hard for a new graduate fresh out of college unless you’re a chemical engineer or something similar. Starting at a contribution rate that will earn your full company match is much better advice for someone starting their first job. At my company, that’s 6%. A person can increase that contribution each year at annual raise time so, eventually they can “max out.”
For most people, $200-400 is an average workday in terms of pay. That also happens to be the monthly amount of interest in a HISA with $100k. The light bulb usually goes off when you see your money "earning" the same (or slightly more) as you do in a normal work day.
One thing that does make your million dollars feel like more in retirement is being 100% debt free. Life in the cash lane is much more rewarding and ownership is much more valuable than owing. 😉
Thanks for all your vids. Mortgage free this year before I hit 49. Taking a holiday with family and lots of mini vacations. Plan to save one of our wages (married) going forward for next 5 years (around 75k after tax) then transition to part time work at 54, and full retirement at 60. Fingers crossed for smooth sailing
You are well on your way!!! I had about $6K at your age and then switched 100% to the S&P 500. Now 34 years later and I’m at $3.7 million and that’s with pulling $52K a year for the last four years.
You and your Bride are well on your way. Keep up good habits and you’ll do well! I’m well over 60 now and at your age My wife and I were starting our retirement investing outside my IRA but life happens and I broke my leg and need the money from my investment to live on. We started a few years later and stayed steady to this day and are talking to our Advisor about possibly drawing money from those investments.
I make almost 150k a year and even though my 401k is only about 520k, I swear it grows at the same rate I make my salary. I ended 2023 @ 418k and now I'm at 521k. I was at about 535k before the dip. It's not quite matching my salary but I love my money making more money for me.
I been investing for 5 and I can say it has for me, from 60k to 130k in 4 months, although my risk tolerance is highly aggressive, I'm stupidly passionate about finance and understand more than most people though, leveraging, knowledge on specific companies, risk tolerance , minimizing taxes, ect, I consider it an unhealthy obsession
I've just begun learning about value investing, and I've found that many good stocks are undervalued despite their intrinsic value. If you had $200,000 to create a strong investment portfolio, which stocks would you choose for better returns?
I think a good investment portfolio should have three basic things: ETFs for diversification, dividend stocks for cash flow, and leading tech stocks. With your budget, it's a good idea to talk to a fiduciary financial advisor for expert advice.
I agree with you. As an early investor in NVDA, AVGO, ANSS, and LRCX, my financial advisor's advice was incredibly helpful. Over the past 7 years, she has helped me find stocks that did 10x multiple times. With her help, I've grown my portfolio to over a million dollars.
I'm cautious about giving specific recommendations since this is an online forum and everyone situation is unique, but I've worked with Laurel Ann Watkins for years and highly recommend her. Look her up to see if she meets your criteria.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
I will be forever thankful to you, you changed my life I will continue to speak on your behalf for the world to hear that you saved me from huge financial debt with just a little trade, thank you Jihan Wu you're such a life saver
Jihan Wu Services has really set the standard for others to follow, we love him here in Canada 🇨🇦 as he has been really helpful and changed lots of life's
I'm favoured, 90K every week! I can now give back to the locals in my communities and also support God's work and the church. God bless America,, thank you Mr Jihan Wu😊🎉
The median home price in 1994 was about $130k and today its around $420k. So charlie said to save 77% of the median home price. Converting that to today's median price, thats $324k. This is a 3.85% inflation rate. At that inflation rate, you need to have a $3.2M goal 31 years from now for it to feel like $1M today.
The real rate of currency depreciation (so called inflation) is actually ap. 50% every 17 years. Very few people are going to succeed in volatile markets combined with banking cartel wealth confiscation. A little over a generation ago, one income (and it didn’t even have to be a very big one) was enough in most areas of the US to own a modest house and raise a family. Most women did not even need to work. Now everyone is a debt peon and a payroll slave as all real wealth is being transferred to the insiders at the top. Keep in mind that this theft does not even account for massive increases in productivity that instead of accruing to the producers was instead stolen by the fiat financial cartel. Azul’s example is very optimistic. It often takes years to recover from a market contraction and this has previously been under market conditions that were probably much more favorable than what we are likely to incur in the future. Remember if you have a million and lose 50% in a down market, you have to recoup a 100% to just get back to where you were.
Most debt issues are personal choices. Lifestyle creep. Decades ago we didn't buy mini super computers annually. Decades ago we didn't buy expensive suvs ever 3-5 years. You bought one family car and kept it for 20 years to hand over to your kids. Decades ago you couldn't even buy bk or Wendy's on a credit card. Decades ago if you owned a 3000sqft house you were insanely rich. You had a mansion. Nowadays i hear people talk about there small 3000sqft cozy home. Heck around where i live they practically stopped building homes smaller than 2000sqft. Im not saying our lives shouldn't get better. But those things come at a cost. Act your wage.
Wow, way to look on the bright side... In my experience, there is still all the room in the world to be successful or make excuses (some are very legitimate) as to why you are being screwed by the man. The truth is, It's all up to how you respond to what life throws at you.
@mp5778 no , the goal is NOT to work as long as you can .. The goal is to save and invest as much as you can to not have to work longer.... It is the only reason i'm doing this... lol
Everyone’s situation is different. I just turned 67, healthy, make good money working which is not too stressful, started collecting SS at my FRA, and have 2 houses paid off and 2.5M in retirement acct. I could retire now. If I work for 3.5 more years, and retired at 70.5, my retirement account would grow another 1M+ and I would earn 1M to live on and save. Now my retirement account will be over 3.5M and 3 less years that I will need to depend on it for support. That extra is an additional 6k/m in retirement. For working 3 more years. In these last 3.5 years of working I will make 350k working and 350k+ in retirement account. That’s 700k/yr for 3.5 years. Not working is not worth losing that 700k/yr to me. That gain is just too great for me to not continue working. I will have more than enough in retirement and not spend my retirement acct down to zero and be able to leave my only son generational wealth forever. It’s not all about me and wanting to stop working. It is about maximizing my wealth and generational wealth.
My first 300k was pretty easy. Ran a company and remodeled old houses nights and weekends. 80 to 100 hours a week adds up pretty fast. Once I started getting houses paid for the trip to 700k wasn't to bad. 700 to a million took forever, it seemed. Every time I got close something went to hell. LOL Once I got there I quit. Been retired for years. Worth more than when I retired so I guess I'm doing OK. My biggest challenge was learning to spend money instead of constantly saving and investing it. Bought an 80k pickup a few months ago, so I'm getting better at it. LOL
Now are we talking about just money put away into a traditional savings or mutual fund or are we also talking about all money put away that includes your IRA, savings/mutual fund and/or trade account?
I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.
I took charge of my portfolio but faced losses in 2022. Realizing the need for a change, I sought advice from a fiduciary advisor. Through restructuring and diversification with dividend stocks, ETFs, Mutual funds, and REITs, my $1.2M portfolio surged, yielding an annualized gain of 28%.
11 months of investing. $67k saved, debts cleared, and a portfolio just shy of a quarter million. Taking my finances seriously this year was worth it in retrospect.
I was aggressive in my 401k investments. Since the 80s I have had my 401k drop by 50% twice. Then more years to return to where I was before. It is not a steady slope. You can be aggressive when young if you have the risk tolerance. Adjust your portfolio to match your need for the funds. If you will need the money soon moderate the risk or only take the higher risk will a small percentage of your funds.
I did a market analysis and withdrawal strategy program that used real data from the stock market. 1970s-1990 were god awful. Omg. I had no idea it was that bad. I think it was 1972 tanked. And it didn't recover for 14 years. The program just showed if you retired in 1973.... it would have been aweful. Just awful.
Your should adjust the $10k per inflation rate at a minium. Also, most people earn more in future years so, the $ 10k will be likely a lot higher in years 15-30...
One thing not mentioned, people make more money as they get older and usually save as a percentage, not a flat dollar. Market returns are putting away more actual dollars as we earn more is how money really grows!
You have to be willing to completely risk all of your money, assuming your first $100K is all that's needed. Unfortunately, if you aren't comfortable investing everything, then you better save at least double that first $100K.
The reason they say that your net worth explodes after 100k is because at 100k, your gains start exceeding your contributions for the first time. At some point, your continuing contributions become utterly irrelevant. I stopped contributing around the 450k mark. At that stage, a single up or down day moves the needle more than a whole year's worth of contributions.
I'd submit that most retires don't spend more each year with inflation or not. I'd like to see someone produce a report showing them doing so. Most have fixed expenses of groceries and utility bills, paid off home and paid of cars. Also most retires collect social security as a healthy portion of their retirment which is adjusted for inflation every year. They usually know how much they bring in a month and spend less than that. Don't let this scare you into thinking you don't have enough. Save more than you spend in pre retirement don't spend more then you make in retirement and you'll live a fun and happy retirement.
I recently sold half my tech stock holdings due to all-time highs, leaving me with $400k. Should I invest in ETFs now or wait for a market correction considering potential inflation?
Sounds interesting. I was planning to invest some few £ in some coins, stack them up and leave them for a few years, but seeing this changed my mindset. Thank you very much
I think it was Charlie Munger who coined the phrase that the first $100k is the hardest. It's probably true from a psychological point of view, but assuming that you have a consistent investment strategy, every dollar is just as valuable as every other dollar.
Right or wrong, my experience has been that when it's a big sell off you'll know right away and it's not too late to get out. The risk is that it's going to do a quick turn around not letting you back in. I think this is typically a low probability as most other people evidently also believe or it wouldn't be a big sell off. Don't be afraid to lose some more when you jump back in.
I just did a quick tally and find that we put away about 96K annually across IRA's, 401k's, & savings. But that is only since 2023. It was less before then. It is difficult (because I have never liked numbers & math) to get a hold on what is really going on anymore. The interest and dividend growth make it a moving target. I just know that each year we are up more than the last and have more than we actually put in. I do keep a bi-weekly spreadsheet with data going back to 9/2022 but would have to do a deep dive and would need to smoke ganja for the task to hold my interest and I don't do that anymore. We are on track to retire in 2027, maybe 2028 depending on how hard we want to "drive the nail in." We have more than 250K saved, quite a bit more. And we are retiring in a South American country (thank the Lord!). I will say that after that first 100K things took another 3 years to begin really moving. It will be an interesting next couple of years.
Same here., I strongly agree that the Bitcoin ETFs approval will be greatly life opportunity for us, with my current portfolio of $102,500 from my investments with my personal financial advisor Steve Miley I totally agree with you😊
YES!!! That's exactly his name (Steve Miley) so many people have recommended highly about him and am just starting with him from Brisbane Australia...🇦🇺
He's my family's personal Broker and also a personal Broker to many family's in the United states, he is licensed and a FINRA AGENT in the United States.
So what I'm hearing is that if I save the equivalent of a low wage person and invest it every year, I'll still never be wealthy enough to live on my own terms. So basically adjust my expectations of life and enjoy what I can?
I'd say also having it in a tax deferred account, as well as an employer match can help a lot. Say you could save 15% post tax of 70k, thats $10k per year. Add in an employer match of 4% that's $2,800. And the tax deferral will increase the amount you're saving by about 30%. So $10k post tax is more like $12,800 pre tax. Thats $15,620 per year. Say two of you are doing that, and increasing your wages just 2% annually on average. Thats $31,000 saved per year, increasing by $600 per year on average. That's $2,630 per month contributions, and hopefully you'll get 8% or 9% returns. Then it really starts cooking after like 8 years you're at $350k. Thats the way to do it if you can!
It took lions 6 years to go from -120k to +100k, 25 years ago but it meant never owning a house or marrying. Lions try to look at their stonks as a basis & capital gains. Any level above basis is better than cash which is always going to yield negative.
Depends on your expertise as an investor, if you buy SPY your bet is safe while your risk tolerance is lower, take more risks and see more gains, im up 120% from august thanks to Tesla and some others been buying these up since early 2020s
I have just over 1 million saved across all my retirement, brokerage and savings accounts. It doesn't leave me feeling in a great place now that I did it. 1 mill at 55 isn't enough kids, save more sooner and don't stop.
It's all about how much you need to spend? As a 4 year retiree, I can assure you that working is very expensive. I probably saved too much. I should have bought a lake house. RMDs and IRMAA are going to eat my lunch.
If you have 1M in investable assets, you’re doing better than about 95% of households in this country. About 48% are retiring with less than $10k! It’s perspective. Make sure you retire with no debt and keep your expenses in check. You will be just fine. Job well done, BTW.
I wish I had known this information when I was younger, I feel like I'm running out of time, I'm 56 years old, and my 401K has a balance of $115,00.00, my IRA Roth $20K,
Ignore the jerks. ❤ You're doing better than the vast majority of people and you absolutely still have time to build a nice nest egg. Plus, WHERE you live makes a huge difference. I follow a number of TH-cam channels that focus on retirement with $500k or less (mostly people who even retired early) and they offer a lot of real world info. This chart is awesome and inspiring but it's still very abstract. It's more about making a realistic plan tailed to you than shooting for a big number.
I need to thank you Azul for making this video. I’ve always felt there was something wrong with the 100,000. bench mark. I didn’t see any movement like everyone says. However when I got into the 250,000. bench mark, I saw it growing all on its own!! Now last year is probably a stock market fluke. An this future may not have similar returns. Growth is for sure a mover at a 1/4 million not 100,k. Thank you for confirming my thoughts! Happy New Year!
I would say market volatility and crashes are needed for net worth to jump. Otherwise, that growth will be mostly the effort of the individual investor. Any opportunity to average down, with good valued assets, is the best advantage.
It all just depends on your subjective interpretation of "explode." The growth curve looks the same at every dollar amount. If you show the growth curve without labeling the y axis of the graph, it looks the same from $1 - $100 as it does from $1 - $1,000,000,000. So exploding is entirely subjective. Has it exploded when your investments are making $10k/yr? $100k/yr? More than you make working? It's up to you to decide.
O’Nases said the first $5000 was the hardest to make back in the 1920 s. Munger said $100.000 30 years ago. But in reality the first 10 million$ is the hardest to make. After that it becomes a lot easier.
Your calculation is overly flawed because the savings rate of $10k a year for 30 years is unrealistically low. People save more than that and their savings rate increase over time. I don't see the point of your video other than discouraging savers, all while putting down other youtubers and glorifying yourself.
Charlie's idea was to simply save that amount and put that $100 000 in S&P index fund. Not in savings account !! The index icreas from 630 to 6 000 in 50 years ,1000 to 6000 in past 30 years , 3700 to 6000 in 10 years
With 100k and proper planning in options a $500-1000 per week is realistic. But to save 20k a year am already touching 40 and no more hopes of early retirement
No, he was referring to stock appreciation, not interest as in bonds. Munger was as Azul stated speaking about the value of a dollar in 1994. Obviously as Azul stated the value must be adjusted to today’s real value, as Munger would have done if he were speaking today. Interest really had no bearing on the discussion.
I am at the beginning of my "investment journey", planning to put $85,000 into dividend stocks so that I will be making up to 30% per year in dividend returns. Any advice?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
I started working with Caroline Suzan Olson back in 2024, and my financial goals have never been clearer. It's like having a strategic partner for my money with a solid track record.
Caroline Suzan Olson is a renowned figure in her line of work. I recommend researching her credentials further. Just search her name in your browser. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Caroline Suzan Olson is a renowned figure in her line of work. I recommend researching her credentials further. Just search her name in your browser. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
I reached $138k today. Thank you for all the knowledge and insights you've shared with me over the past few months. I began this journey in October 2024. Financial education is essential for over 70% of the population, as only a few are truly literate in this area. Thanks so much Charlotte Grace Miller.
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United states
I'm celebrating a $30k stock portfolio today. started this journey with 6k. I have invested on time and also with the right terms now I have time for my family and the life ahead of me
I just withdrew my profits a week ago, To be honest it was an amazing feeling when the profits hits my wallet I wish I could reinvest but, too much bills
Currently, at 46 I have ZERO dollars saved and I'm $40k in debt... Still owe 160k on my house. So yep.. I'm right on track .. straight to hell that is.
Find a way to spend less than you earn and you will get there. Look at everything. Next, can you do some consulting on the side? I was about where you are at 46 and am retired at 59.
In a world full of “financial gurus” winding people up to expect a windfall for minimal effort or pushing scams I appreciate the realistic view on investing. It’s not a get rich quick situation it’s a life long endeavor for most of us.
Hi Azul, I have been binging on your videos. I love your vibe, your energy is full of so much light. Do you recommend any good financial advisors? I am in Michigan however I don't think that matters so much anymore with online, wooo hooo. Thank you for the all the amazing videos. I believe this is your life's work and that you were brought here to guide people.
Oh my, yep we can easily see how 100k stated in 1994 would have the purchasing power of 250k today, so we would need 250 now. Something we can already to today……retire from optimism…..things indeed stacked against us…good luck guys do your best
I'm 26, $245K in net worth, $127K in stocks, rest is in my house that i paid extra on. Still feel like I'm way behind 😔 if i was at $200K I'd feel better.
Hundred k threshold is too low. Reason is that you can contribute $5k a month and get to it in a year and a half through contributions only. You won't double your portfolio every 18 months with investment returns once you get to say $500k
@@HughJass-313 Care to show your work? 10% average market returns minus 3% average inflation is 7%. The 7% net return already has the inflation adjustment of purchasing power built into it. Further adjusting it again for inflation is 10% market returns minus 3% inflation minus 3% inflation again and is wrong.
i came to the US with zero $. the first chance i got a job, i started saving. i save whether i make $50k or $250k annual salary. i do NOT remember when i saved $100k but I remember when i saved $1m. that day, i went to chase to deposit a check and after i got my deposit slip, i looked at the balance and it says $1m (and some change). i started jumping up and down and the bank security guy asked me to keep quiet and leave. fast forward to now, my $1m is about $5.6m (was at $5.8m about 3 weeks ago). the only thing i do to keep the $ growing is to keep it in the market (up or down). i also keep saving every month - it is a discipline i practice religiously. i will work until the day i die (and still take 3 or 4 vacations a year). i will probably give the money i save to some organization that helps kids get education as i am not sure i will be able to spend all of it.
You are in the minority. Of everyone I have ever know or met through the years especially one income households, they are lucky to make enough to cover the bills. They can but not easy.
If possible - 1. autoinvest into any work 401K/IRA that gives a match 2. max out a Roth 3. invest in a brokerage 4. buy a house & work to pay it off. Even if you can't do it all, doing those consistently over time will make you financially independent.
This is in many ways a wake up call, and is a nugget in all the many u tube videos out there. Humans are notoriously bad with percentages! Thinking fast and slow is a book well worth reading. Thank you. If only I was 20 with a 55 year old wisdom head.😊
Yeah, I think Azul double corrected for inflation is some of his examples of what 1 million feels like. That 1 million at 7% return already was adjusted for the "feel" due to inflation.
Every dollar bill is a worker. You can give it to someone else or put it to work for yourself
But there are things worth funding. I joke that I spend a lot of my money on land, I just don't own it directly. The Wilderness Society has for some years now had a 10x matching fund the last couple days of the year. Throw in The Nature Conservancy, Rainforest Action Network, Defenders of Wildlife, National Wildlife Federation, Vital Ground, National Park Foundation, American Forests, American Rivers... once the wilderness is gone it cannot easily be recovered. It is an investment in our collective future. If I have to work longer than I might have otherwise, at least I can feel good about my contribution. At least I have a job that affords me that choice (my thanks to Home Depot for the job and for matching $3000 of my contributions, per year). M thanks to Azul for his hard work putting together these videos to help us make sure our retirement is funded.
Well said Ron. 🙏 Azul
Yep! I call them “adding another soldier to my army”
Unfortunately, the USA produces a lot of this "workers". So, every year this workers become cheaper and cheaper
I love my employees! Their kids called "Change" adds up too.
The miracle of compound interest. I'm 54 and have been saving every penny I can since I was 22. I'm now just north of $2M (and completely own two rental homes). My only debt is about $100K on my primary residence, which I'm reluctant to pay off early because the mortgage rate is 3.125%.
It can be done, just sacrifice early and save all that you can.
Congratulations. Worst mistake I made was to trade stocks when I was younger and not stay long term with mutual funds. Thankfully, my earning potential is going up and I think I’ll still be able to meet my retirement goal by 60.
@@BKNew2022 My worst mistake: Not getting into B-H 20 years ago. In general, mutual funds have been nothing but a scam in my experience.
Stay out of convenient stores
Buy something nice.
Actually the saving for retirement is all about the expenses one would incur for health costs in addition to the living costs.... in the meantime try to “live a little”! As tomorrow is not guaranteed my friend! I say that to myself too!
Currently at $241K, gotta keep pushing.
👏👏👏🫡
Don’t look at it, keep going.
Keep at it
How manY years are u investing
Bro same exact number as you!!! Crazy ..How old are you?
Na.. i mean i get your point. And yes inflation will make even a million sound small someday. But right now still 100k really does impact how quickly you can grow your portfolio. 100k is still a lot of money. If you had invested in VOOG as example. 100k would have grown to 137k this year (which is unusual) and thats not even counting the 10 or 20k or whatever you were adding in. You could have ended this year at 160+k. Yes obviously the more you have the more events like this will benefit you. Im not saying you shouldn't target 250k. Im just saying hitting 100k is still a substantial milestone.
If you invested only 100k in an s&p 500. And stopped. Did nothing. In 30 years you would have 1.6mil. 100k is still a wealth builder.
Yeah this video is ridiculous.
I can speak to that. I started with around 33k this year and ended it with 46k. If i had 330k it would be 460k.. that is pretty substantial
He’s using 7% in his calculations which is the inflation adjusted return of the S&p500. So yes 1mil in 30 years will “feel” like 1mil today
All depends on the lifestyle you want to live and how much you want to pass on. I want both to be high.
So I’m really happy having invested $48,000 this year, and some of that was in Q4 so it didn’t grow as much, so I’m not taking my foot off the pedal any time soon.
Don’t ignore that future returns are based off past results. Just because the market has gone up the last 50 years does not mean it will go up the next 50 years. We can be sideways for a very very long time
That spreadsheet has an error. It assumes you invest $20k each year in a lump sum at the end of the year. In reality you're likely to invest 20k in smaller amounts during the year. So each new 20k added will return an average of 3.5% in the first year. That shaves about 3 years off the time to get to $1m. Also if you're going to discount the 1m due to inflation then you should also factor in that your savings will likely rise as well. If you can invest 20k pa in year 1 then by year 7 you may be able to invest to 40k pa. And by year 14 it may be 80k pa.
I'm taking Munger's side on this one. The first $100,000 for me was a total B. It felt like it took an eternity. I reached that point in my early 30's. Then all of a sudden at 40 I hit the million dollar mark. I couldn't believe how fast it happened.
Well, when you’re only earning $16,000 in 1988 and you could only afford to contribute 3% to the 401k, that was only $480 all year, it takes a lot longer than 8 years to save that first $100,000. It took me closer to 20 years. It took at least a decade of pay raises and continually increasing my contribution to be at a 10% contribution rate. Took a lot less time to save the second 100k due to higher salary and higher contribution rate.
I think this is the biggest factor. The first 100k is a grind because we're doing it when we are relatively poor, but instilling those habits as we earn more is vital to a good investment routine. The reason your net worth explodes at $100k is because you're been disciplined enough to get there with little income and now that you have a real fire you can throw real wood into the fire (along with your portfolio being worth enough to have substantial annual gains). The year after I hit 100k I was able to max out my IRA / 401k, that alone increased my net worth by 30% the next calendar year.
@@danielchoi6958bingo!! I now max out the 401k with catch up contributions. Finished year 3 of doing that. I’m 60 and there is a new “extra” super catch up contribution for those aged 60 to 63. We just figured out how to adjust our budget so I can max that out too this year. It’s a stretch, so we will see how it goes. It’s nice we can catch up during peak earning years after struggling for the first decade or two. Hopefully we will have enough in 2 years for me to feel comfortable enough to join my husband in retirement. He’s already retired, as he’s 8 years older than me!
It also took me 20 years to save £100k, then a further 7 years to get to £200k
Sorry, but you are incorrect. The 7% you used in your calculations are net/real returns of the stock market, which already takes the 3% inflation into account. 10% would be the typical gross/unadjusted for inflation returns of the stock market. Therefore the 1,000,000 you calculated is actually the present value (today's dollars) of your future networth.
Great point. This is often misunderstood. The S&P has a return of over 11% historically. So, he would hit 1M in 24 years and 2M in 30 years.
Even if mathematically they don't explore, people I know who have 100K+ net worth are on the grind and will get their first mill much faster than those who dont.
You're counting inflation twice! Typically it's 10% annual returns for the s&p500. People tend to deduct 3% to account for inflation.
Came here to comment this exactly. Growth in a diversified portfolio has averaged between 9 and 10 percent over the last 50 years, as I recall. Inflation averages 2-3% per year. If you subtract out inflation from growth you get a 6-7% inflation adjusted growth per year. So that 1 million dollars the influencers are talking about is inflation adjusted.
I wasn't putting away $10K/year, and I don't know what my average rate of return was, but it took me 21 years to save $300K. Then I put everything into a growth fund and that's when it really exploded for me. After that it was only 4 more years to hit the first $1M, and then another 4 years to hit $2M. I'm on track to hit $3M only two years after hitting $2M. Finding a good growth fund made all the difference. After I did that I went from a 6.5% return in the year I hit $300K to a 30% return after dumping everything into a growth fund. I've now had several years where my investments have made more than I did at my job (and one year, 2022, where I lost 33%, but that's more than been made back since, and the trick there was to keep investing, buying at a discount, rather than panicking and exiting the market). I figure another two years and I'll be at the "FU money" level of financial independence and can retire with high confidence of not outliving my money.
Right a higher rate of return makes it so much easier. This advise is for the people that know nothing about investing and have a very conservative investment strategy. I mostly buy individual stocks and having a 1000% 2000% 4000% return can easily negate some bad investments which I have made 😂. Based on the rule of 72 at 7% will take 10 years to double your money. I know beating s&p is next to impossible but increasing risk tolerance is necessary to meet finacial goals for most.
@@BrianK-zz4fk Actually, beating the S&P500 isn't hard. Plenty of ETFs do it. Schwab's growth fund SCHG (and you don't need to have a Schwab account to own it) had a 2024 total return of 40.54% vs 26.31% for the S&P500 index. Other ETFs beat the S&P500 as well, including QQQ (and QQQM), FTEC, and even the ETFs that track the S&P500 Index such as SPY and VOO also finished the year 1 or 2% higher. It's not magic, just takes some time looking into what's available and then having the courage to pull the trigger and remain invested even when the market swings down, because dollar-cost-averaging is your friend.
@@BrianK-zz4fk This is weird. I think I've had two reply comments deleted. At first I thought I didn't save my first reply and so tried to recreate it. And it seemed to work, because I refreshed the page and it was there, but now a few minutes later it's gone. In both I mentioned specific ETFs, so I'm wondering if that violates some rule that Azul has?
My net worth was $250k sometime in 2008. Then it crashed to $65k later that year. I stayed put mostly in my investments. Today I have around $3M.
So when I saw those hundreds of videos about net worth exploding after $100k - it depends. It depends on whether there’s a market correction along the way or a recession.
Why didn't you sell along the way?
@DAMON409. if I had sold those stocks along the way, I would be worth around $1 million instead of $3 million. I had a substantial stake in Apple and I believed in the company long-term. I am not an expert at market timing. The strategy of holding on to most of my investments worked for me; I’m not saying it would work in the future or it would work in someone else’s situation.
@@DAMON409 If you sell you realize the loss. If you stay out it is only a paper loss.
As long as you're still adding to the stash instead of withdrawing from it, market crashes don't hurt you. Most of the time, they're buying opportunities that will help you in the long run.
There are exceptions, such as being overweighted in an investment that totally fails, such as Enron or Global Crossing. Those will happen from time to time. But if you're diversified, then their effect will be more than compensated for by the rest of your portfolio which will spring back within a few years.
@@DAMON409 I responded earlier but my answer disappeared. I didn’t sell along the way because I’m not a good market timer. I invest long-term.
My mother gave me two pieces of advice when I graduated from college. First, save $10k for F-YOU money. Don't touch it unless there's an emergency. Second, max your 401k - immediately. Don't tell me you can't save 10%.
You should PROFUSELY thank your Mother
I’ve been saving 25% into my IRA and I plan on jumping that up even more coming down the last few years before I start getting close to retirement.
Mother was a wise woman
Maxing out isn’t 10% unless your salary is $230,000, which for few people it is. This is because “maxing out” means contributing $23,000. The IRS adjusts this number annually. That’s hard for a new graduate fresh out of college unless you’re a chemical engineer or something similar. Starting at a contribution rate that will earn your full company match is much better advice for someone starting their first job. At my company, that’s 6%. A person can increase that contribution each year at annual raise time so, eventually they can “max out.”
10K is not f-you money in the US. most people couldn't pay 1 year of rent with 10K or even cover a major house repair with that little
I'm at 325k.....
The march to a Half Mill continues on 😂😂
Congrats! You’re about to hit 33%!
That’s a milestone too!
I’m pretty close to 33% as well!
DON’T ease off the gas at 100K. That’s too early by far.
Charlie Munger said that in the 1990s, in today's money it would be the first $250,000
For most people, $200-400 is an average workday in terms of pay. That also happens to be the monthly amount of interest in a HISA with $100k. The light bulb usually goes off when you see your money "earning" the same (or slightly more) as you do in a normal work day.
Average for who???
I think you mean $1 million. $1 million x 5% = $50,000 = $200 x 5 days x 50 weeks.
One thing that does make your million dollars feel like more in retirement is being 100% debt free. Life in the cash lane is much more rewarding and ownership is much more valuable than owing. 😉
Thanks for all your vids. Mortgage free this year before I hit 49. Taking a holiday with family and lots of mini vacations. Plan to save one of our wages (married) going forward for next 5 years (around 75k after tax) then transition to part time work at 54, and full retirement at 60. Fingers crossed for smooth sailing
Best of luck towards your retirement!!
Never chase the number. Chase the point where you can feel financially unburdened.
$135k in retirement at 32 between me and the wife. Made early mistakes and started late but glad I got passionate about finances before 35.
You are well on your way!!! I had about $6K at your age and then switched 100% to the S&P 500. Now 34 years later and I’m at $3.7 million and that’s with pulling $52K a year for the last four years.
Stick to it! When you retire, AT 50-55, you will find the freedom tastes wonderful!
@ love it! Definitely heavy in the S&P/index funds. Very encouraging as well.
You and your Bride are well on your way. Keep up good habits and you’ll do well! I’m well over 60 now and at your age My wife and I were starting our retirement investing outside my IRA but life happens and I broke my leg and need the money from my investment to live on. We started a few years later and stayed steady to this day and are talking to our Advisor about possibly drawing money from those investments.
I make almost 150k a year and even though my 401k is only about 520k, I swear it grows at the same rate I make my salary. I ended 2023 @ 418k and now I'm at 521k. I was at about 535k before the dip. It's not quite matching my salary but I love my money making more money for me.
I've been investing almost 25 years, and at no point has my wealth ever exploded.
I been investing for 5 and I can say it has for me, from 60k to 130k in 4 months, although my risk tolerance is highly aggressive, I'm stupidly passionate about finance and understand more than most people though, leveraging, knowledge on specific companies, risk tolerance , minimizing taxes, ect, I consider it an unhealthy obsession
I've just begun learning about value investing, and I've found that many good stocks are undervalued despite their intrinsic value. If you had $200,000 to create a strong investment portfolio, which stocks would you choose for better returns?
I think a good investment portfolio should have three basic things: ETFs for diversification, dividend stocks for cash flow, and leading tech stocks. With your budget, it's a good idea to talk to a fiduciary financial advisor for expert advice.
I agree with you. As an early investor in NVDA, AVGO, ANSS, and LRCX, my financial advisor's advice was incredibly helpful. Over the past 7 years, she has helped me find stocks that did 10x multiple times. With her help, I've grown my portfolio to over a million dollars.
I'm glad I found this conversation. I have cash to invest but am worried about picking the wrong stocks. Can you refer me to your financial advisor?
I'm cautious about giving specific recommendations since this is an online forum and everyone situation is unique, but I've worked with Laurel Ann Watkins for years and highly recommend her. Look her up to see if she meets your criteria.
Thanks for sharing. I curiously searched for her full name and her website popped up immediately. I looked through her credentials and did my due diligence before contacting her.
Hit 240k today Appreciate you for all the knowledge and nuggets you had thrown my way over the last months. Started with 24k in September 2024
I would really love to know how much work you did put in to get to this stage
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The median home price in 1994 was about $130k and today its around $420k. So charlie said to save 77% of the median home price. Converting that to today's median price, thats $324k. This is a 3.85% inflation rate. At that inflation rate, you need to have a $3.2M goal 31 years from now for it to feel like $1M today.
As long as people didn’t sell during Covid, they are more than fine now. It’s a long game. Just keep maxing out the 401(k) and keep it in equities.
The real rate of currency depreciation (so called inflation) is actually ap. 50% every 17 years. Very few people are going to succeed in volatile markets combined with banking cartel wealth confiscation. A little over a generation ago, one income (and it didn’t even have to be a very big one) was enough in most areas of the US to own a modest house and raise a family. Most women did not even need to work. Now everyone is a debt peon and a payroll slave as all real wealth is being transferred to the insiders at the top. Keep in mind that this theft does not even account for massive increases in productivity that instead of accruing to the producers was instead stolen by the fiat financial cartel. Azul’s example is very optimistic. It often takes years to recover from a market contraction and this has previously been under market conditions that were probably much more favorable than what we are likely to incur in the future. Remember if you have a million and lose 50% in a down market, you have to recoup a 100% to just get back to where you were.
Most debt issues are personal choices. Lifestyle creep. Decades ago we didn't buy mini super computers annually. Decades ago we didn't buy expensive suvs ever 3-5 years. You bought one family car and kept it for 20 years to hand over to your kids. Decades ago you couldn't even buy bk or Wendy's on a credit card. Decades ago if you owned a 3000sqft house you were insanely rich. You had a mansion. Nowadays i hear people talk about there small 3000sqft cozy home. Heck around where i live they practically stopped building homes smaller than 2000sqft.
Im not saying our lives shouldn't get better. But those things come at a cost. Act your wage.
Wow, way to look on the bright side...
In my experience, there is still all the room in the world to be successful or make excuses (some are very legitimate) as to why you are being screwed by the man.
The truth is, It's all up to how you respond to what life throws at you.
I would say it is somewhere around 2x to 3x your yearly salary when you will start feeling it.
Start saving early.
Save as much as you can.
Work as long as you can/healthy.
@mp5778 no , the goal is NOT to work as long as you can .. The goal is to save and invest as much as you can to not have to work longer.... It is the only reason i'm doing this... lol
Everyone’s situation is different. I just turned 67, healthy, make good money working which is not too stressful, started collecting SS at my FRA, and have 2 houses paid off and 2.5M in retirement acct.
I could retire now.
If I work for 3.5 more years, and retired at 70.5, my retirement account would grow another 1M+ and I would earn 1M to live on and save. Now my retirement account will be over 3.5M and 3 less years that I will need to depend on it for support. That extra is an additional 6k/m in retirement. For working 3 more years.
In these last 3.5 years of working I will make 350k working and 350k+ in retirement account. That’s 700k/yr for 3.5 years. Not working is not worth losing that 700k/yr to me. That gain is just too great for me to not continue working.
I will have more than enough in retirement and not spend my retirement acct down to zero and be able to leave my only son generational wealth forever. It’s not all about me and wanting to stop working. It is about maximizing my wealth and generational wealth.
My first 300k was pretty easy. Ran a company and remodeled old houses nights and weekends. 80 to 100 hours a week adds up pretty fast. Once I started getting houses paid for the trip to 700k wasn't to bad. 700 to a million took forever, it seemed. Every time I got close something went to hell. LOL Once I got there I quit. Been retired for years. Worth more than when I retired so I guess I'm doing OK. My biggest challenge was learning to spend money instead of constantly saving and investing it.
Bought an 80k pickup a few months ago, so I'm getting better at it. LOL
Now are we talking about just money put away into a traditional savings or mutual fund or are we also talking about all money put away that includes your IRA, savings/mutual fund and/or trade account?
It seems like he's talking about invested money, likely in a retirement account (IRA, Roth IRA, 401k). A savings account won't pay 7% right now.
I feel investors should be focusing on under-the-radar stocks, and considering the current rollercoaster nature of the stock market, Because 35% of my $270k portfolio comprises of plummeting stocks which were once revered and i don't know where to go here out of devastation.
i'd advise you redistribute assets in your port;folio with the help of a pro so you don't get burnt in the market
I took charge of my portfolio but faced losses in 2022. Realizing the need for a change, I sought advice from a fiduciary advisor. Through restructuring and diversification with dividend stocks, ETFs, Mutual funds, and REITs, my $1.2M portfolio surged, yielding an annualized gain of 28%.
mind if i ask you to recommend this particular coach you using their service? seems you've figured it all out.
She's "Abigail Ann Ryan" by name. please do your own research to see if she is suitable with your goals.
thank you for this pointer. it was easy to find your handler, she seems very proficient and flexible
11 months of investing. $67k saved, debts cleared, and a portfolio just shy of a quarter million. Taking my finances seriously this year was worth it in retrospect.
I was aggressive in my 401k investments. Since the 80s I have had my 401k drop by 50% twice. Then more years to return to where I was before. It is not a steady slope. You can be aggressive when young if you have the risk tolerance. Adjust your portfolio to match your need for the funds. If you will need the money soon moderate the risk or only take the higher risk will a small percentage of your funds.
I did a market analysis and withdrawal strategy program that used real data from the stock market. 1970s-1990 were god awful. Omg. I had no idea it was that bad. I think it was 1972 tanked. And it didn't recover for 14 years. The program just showed if you retired in 1973.... it would have been aweful. Just awful.
When the investment starts earning more in interest that you can feed into it.
Exactly. For me, that was around $500K. I can no longer out contribute the account.
That’s a good benchmark that I haven’t heard anyone else say. I probably won’t reach that for at least a decade!
Mine did. Depends on the investment vehicle.
Your should adjust the $10k per inflation rate at a minium. Also, most people earn more in future years so, the $ 10k will be likely a lot higher in years 15-30...
One thing not mentioned, people make more money as they get older and usually save as a percentage, not a flat dollar. Market returns are putting away more actual dollars as we earn more is how money really grows!
You have to be willing to completely risk all of your money, assuming your first $100K is all that's needed. Unfortunately, if you aren't comfortable investing everything, then you better save at least double that first $100K.
The reason they say that your net worth explodes after 100k is because at 100k, your gains start exceeding your contributions for the first time. At some point, your continuing contributions become utterly irrelevant. I stopped contributing around the 450k mark. At that stage, a single up or down day moves the needle more than a whole year's worth of contributions.
Great comment
I'd submit that most retires don't spend more each year with inflation or not. I'd like to see someone produce a report showing them doing so. Most have fixed expenses of groceries and utility bills, paid off home and paid of cars. Also most retires collect social security as a healthy portion of their retirment which is adjusted for inflation every year. They usually know how much they bring in a month and spend less than that.
Don't let this scare you into thinking you don't have enough. Save more than you spend in pre retirement don't spend more then you make in retirement and you'll live a fun and happy retirement.
So far, so good!
Great post and true.
Need to talk about power of company matching and how that can be powerful. That is the major benefit
I live overseas Azul and for me it is a lot of money and I live like a king ! Not in the USA
So, when does it explode? If ever?
Hi Azul, great to hear your perspective. It fills in the gap. Thank you.
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I think it was Charlie Munger who coined the phrase that the first $100k is the hardest. It's probably true from a psychological point of view, but assuming that you have a consistent investment strategy, every dollar is just as valuable as every other dollar.
Right or wrong, my experience has been that when it's a big sell off you'll know right away and it's not too late to get out. The risk is that it's going to do a quick turn around not letting you back in. I think this is typically a low probability as most other people evidently also believe or it wouldn't be a big sell off. Don't be afraid to lose some more when you jump back in.
yea it is not that fast. it sometimea crashes too
I just did a quick tally and find that we put away about 96K annually across IRA's, 401k's, & savings. But that is only since 2023. It was less before then. It is difficult (because I have never liked numbers & math) to get a hold on what is really going on anymore. The interest and dividend growth make it a moving target. I just know that each year we are up more than the last and have more than we actually put in. I do keep a bi-weekly spreadsheet with data going back to 9/2022 but would have to do a deep dive and would need to smoke ganja for the task to hold my interest and I don't do that anymore.
We are on track to retire in 2027, maybe 2028 depending on how hard we want to "drive the nail in." We have more than 250K saved, quite a bit more. And we are retiring in a South American country (thank the Lord!). I will say that after that first 100K things took another 3 years to begin really moving. It will be an interesting next couple of years.
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So what I'm hearing is that if I save the equivalent of a low wage person and invest it every year, I'll still never be wealthy enough to live on my own terms. So basically adjust my expectations of life and enjoy what I can?
I'd say also having it in a tax deferred account, as well as an employer match can help a lot. Say you could save 15% post tax of 70k, thats $10k per year. Add in an employer match of 4% that's $2,800. And the tax deferral will increase the amount you're saving by about 30%. So $10k post tax is more like $12,800 pre tax. Thats $15,620 per year. Say two of you are doing that, and increasing your wages just 2% annually on average. Thats $31,000 saved per year, increasing by $600 per year on average. That's $2,630 per month contributions, and hopefully you'll get 8% or 9% returns. Then it really starts cooking after like 8 years you're at $350k. Thats the way to do it if you can!
It took lions 6 years to go from -120k to +100k, 25 years ago but it meant never owning a house or marrying. Lions try to look at their stonks as a basis & capital gains. Any level above basis is better than cash which is always going to yield negative.
Depends on your expertise as an investor, if you buy SPY your bet is safe while your risk tolerance is lower, take more risks and see more gains, im up 120% from august thanks to Tesla and some others been buying these up since early 2020s
I have just over 1 million saved across all my retirement, brokerage and savings accounts. It doesn't leave me feeling in a great place now that I did it. 1 mill at 55 isn't enough kids, save more sooner and don't stop.
It's all about how much you need to spend? As a 4 year retiree, I can assure you that working is very expensive. I probably saved too much. I should have bought a lake house. RMDs and IRMAA are going to eat my lunch.
If you have 1M in investable assets, you’re doing better than about 95% of households in this country. About 48% are retiring with less than $10k! It’s perspective. Make sure you retire with no debt and keep your expenses in check. You will be just fine. Job well done, BTW.
54 here. Feel the same way!
I wish I had known this information when I was younger, I feel like I'm running out of time, I'm 56 years old, and my 401K has a balance of $115,00.00, my IRA Roth $20K,
😅😅😅, keep working
Ignore the jerks. ❤ You're doing better than the vast majority of people and you absolutely still have time to build a nice nest egg. Plus, WHERE you live makes a huge difference.
I follow a number of TH-cam channels that focus on retirement with $500k or less (mostly people who even retired early) and they offer a lot of real world info. This chart is awesome and inspiring but it's still very abstract. It's more about making a realistic plan tailed to you than shooting for a big number.
Are you Mortgage free?
If not.... you in for much struggle
@@HughJass-313 Nice of you to use a screen name that lets everyone know who you are right off the bat.
@@roguered706
🤣🤣
What does my Screenname have to do with how bad it is to still "have a mortgage at age 56"
?
I need to thank you Azul for making this video. I’ve always felt there was something wrong with the 100,000. bench mark. I didn’t see any movement like everyone says. However when I got into the 250,000. bench mark, I saw it growing all on its own!! Now last year is probably a stock market fluke. An this future may not have similar returns. Growth is for sure a mover at a 1/4 million not 100,k. Thank you for confirming my thoughts! Happy New Year!
Good info-however tell your kids to get a California state pension-much better in the long run-all careers fields
I would say market volatility and crashes are needed for net worth to jump. Otherwise, that growth will be mostly the effort of the individual investor. Any opportunity to average down, with good valued assets, is the best advantage.
It all just depends on your subjective interpretation of "explode." The growth curve looks the same at every dollar amount. If you show the growth curve without labeling the y axis of the graph, it looks the same from $1 - $100 as it does from $1 - $1,000,000,000.
So exploding is entirely subjective. Has it exploded when your investments are making $10k/yr? $100k/yr? More than you make working? It's up to you to decide.
O’Nases said the first $5000 was the hardest to make back in the 1920 s. Munger said $100.000 30 years ago. But in reality the first 10 million$ is the hardest to make. After that it becomes a lot easier.
Thank you for sharing.
Did you say what calculator you were using in the video?
1:34 should have said much less.
The "fun" begins, when you got around 300k invested that's when you realistically see the compounding take effect.
Is the text "Is It False" on your thumbnail a question or a statement?
Just hit 100k 😊
Your calculation is overly flawed because the savings rate of $10k a year for 30 years is unrealistically low. People save more than that and their savings rate increase over time. I don't see the point of your video other than discouraging savers, all while putting down other youtubers and glorifying yourself.
Charlie's idea was to simply save that amount and put that $100 000 in S&P index fund.
Not in savings account !! The index icreas from 630 to 6 000 in 50 years ,1000 to 6000 in past 30 years , 3700 to 6000 in 10 years
With 100k and proper planning in options a $500-1000 per week is realistic. But to save 20k a year am already touching 40 and no more hopes of early retirement
Azul, Charlie Munger advice stands still until today. He is focusing on "INTEREST," not the value of the dollar
No, he was referring to stock appreciation, not interest as in bonds. Munger was as Azul stated speaking about the value of a dollar in 1994. Obviously as Azul stated the value must be adjusted to today’s real value, as Munger would have done if he were speaking today. Interest really had no bearing on the discussion.
The 72 rule applies no matter what the inflation rate.
I am still pushing at 62. I have energy Thank you jesus. I dont want to retire. It does not matter about the age. You give up you will quite.
I am at the beginning of my "investment journey", planning to put $85,000 into dividend stocks so that I will be making up to 30% per year in dividend returns. Any advice?
Investing without proper guidance can lead to mistakes and losses. I've learned this from my own experience.If you're new to investing or don't have much time, it's best to get advice from an expert.
I started working with Caroline Suzan Olson back in 2024, and my financial goals have never been clearer. It's like having a strategic partner for my money with a solid track record.
Glad to have stumbled on this comment. Please, who is Caroline Suzan Olson that assists you, and if you don't mind, how do I get in touch with her?
Caroline Suzan Olson is a renowned figure in her line of work. I recommend researching her credentials further. Just search her name in your browser. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
Caroline Suzan Olson is a renowned figure in her line of work. I recommend researching her credentials further. Just search her name in your browser. She has many years of experience and is a valuable resource for anyone looking to navigate the financial market.
it is about to build the habbits to multiply that 100k ... and 10 return on 100k is 10k
I reached $138k today. Thank you for all the knowledge and insights you've shared with me over the past few months. I began this journey in October
2024. Financial education is essential for over 70% of the population, as only a few are truly literate in this area.
Thanks so much Charlotte Grace Miller.
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United states
I'm celebrating a $30k stock portfolio today. started this journey with 6k. I have invested on time and also with the right terms now I have time for my family and the life ahead of me
The very first time we tried, we invested $1000 and after a week, we received $7500. That really helped us a lot to pay up our bills.
I'm new at this, please how can I reach her?
I just withdrew my profits a week ago, To be honest it was an amazing feeling when the profits hits my wallet I wish I could reinvest but, too much bills
Buy land, build a home, sell it for profit.
Rinse and repeat.
Currently, at 46 I have ZERO dollars saved and I'm $40k in debt... Still owe 160k on my house. So yep.. I'm right on track .. straight to hell that is.
Find a way to spend less than you earn and you will get there. Look at everything. Next, can you do some consulting on the side?
I was about where you are at 46 and am retired at 59.
In a world full of “financial gurus” winding people up to expect a windfall for minimal effort or pushing scams I appreciate the realistic view on investing. It’s not a get rich quick situation it’s a life long endeavor for most of us.
TITLE SHOULD BE 'YOUR SAVINGS NEVER EXPLODE UNTIL YOU OWN THE RIGHT STOCKS'----PLUGGING ALONG AT 7% PER YEAR WILL NEVER EXPLODE.
Hi Azul, I have been binging on your videos. I love your vibe, your energy is full of so much light. Do you recommend any good financial advisors? I am in Michigan however I don't think that matters so much anymore with online, wooo hooo. Thank you for the all the amazing videos. I believe this is your life's work and that you were brought here to guide people.
Oh my, yep we can easily see how 100k stated in 1994 would have the purchasing power of 250k today, so we would need 250 now. Something we can already to today……retire from optimism…..things indeed stacked against us…good luck guys do your best
I took me 40 years,made the best money in my 60s
In 2008, I said my 401K had become a 200.5K.
Excellent video ! Please keep up the great work !
Glad that you pointed out the nuances , for eg, Charlie Munger had quoted this in 1990s.
I'm 26, $245K in net worth, $127K in stocks, rest is in my house that i paid extra on. Still feel like I'm way behind 😔 if i was at $200K I'd feel better.
This means 100k in invested money. Having cash means nothing.
I am fortunate enough to have a pension, but I did pay 7.5% if my income towards it through the length of my career for it.
Charlie Munger said that when $100k was worth $1 million.
Hundred k threshold is too low. Reason is that you can contribute $5k a month and get to it in a year and a half through contributions only. You won't double your portfolio every 18 months with investment returns once you get to say $500k
7% is already supposed to take inflation into account though, so that $1mm is already in terms of today's dollars
😂😂
no
@HughJass-313 yes. Google "where does 7% return come from" - it's the inflation adjusted historical returns from stocks
@@HughJass-313 Care to show your work?
10% average market returns minus 3% average inflation is 7%. The 7% net return already has the inflation adjustment of purchasing power built into it. Further adjusting it again for inflation is 10% market returns minus 3% inflation minus 3% inflation again and is wrong.
@@ronbambrick449
I tried yesterday...but you tube kept deleting my comment
@@ronbambrick449
nope.
Y'tube algorithm keeps deleting my comment
well explained!!!
i came to the US with zero $. the first chance i got a job, i started saving. i save whether i make $50k or $250k annual salary. i do NOT remember when i saved $100k but I remember when i saved $1m. that day, i went to chase to deposit a check and after i got my deposit slip, i looked at the balance and it says $1m (and some change). i started jumping up and down and the bank security guy asked me to keep quiet and leave. fast forward to now, my $1m is about $5.6m (was at $5.8m about 3 weeks ago). the only thing i do to keep the $ growing is to keep it in the market (up or down). i also keep saving every month - it is a discipline i practice religiously. i will work until the day i die (and still take 3 or 4 vacations a year). i will probably give the money i save to some organization that helps kids get education as i am not sure i will be able to spend all of it.
You are in the minority. Of everyone I have ever know or met through the years especially one income households, they are lucky to make enough to cover the bills. They can but not easy.
Congratulations on your persistence to save over the years.
This was validation--as I've just shook my head at all those videos claiming if you make it to $100,000 a million is inevitable.
If possible - 1. autoinvest into any work 401K/IRA that gives a match 2. max out a Roth 3. invest in a brokerage 4. buy a house & work to pay it off. Even if you can't do it all, doing those consistently over time will make you financially independent.
Your net worth explodes when more allocations go to investment and fewer go to expenses, over a period of time!
This is in many ways a wake up call, and is a nugget in all the many u tube videos out there.
Humans are notoriously bad with percentages! Thinking fast and slow is a book well worth reading.
Thank you. If only I was 20 with a 55 year old wisdom head.😊
400k driving dump trucks 🚚
Thank you.
It should be pointed out that the 7% growth is net growth, i.e. after inflation.
Yeah, I think Azul double corrected for inflation is some of his examples of what 1 million feels like. That 1 million at 7% return already was adjusted for the "feel" due to inflation.