How To Become a Millionaire On Minimum Wage or Low-Income

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This was an interesting piece. Of course, there are a lot of routes one can take, but this one focuses on investing.

Edited 1 time(s). Last edit at 03/13/2021 10:26PM by shoptastic.

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Ridiculous.
Didn't you read that 40% of Americans don't have $1000 in case of an emergency?

You want an 18 year old making minimum wage to save $47 a month?
You want to work until age 70?

Here's a thought:
Go to college. Learn a trade. Max out any 401K plans (even Target and Wal-Mart have them).
Don't buy stuff you can't afford.
Don't put things you can't afford on credit cards if you can't pay them in full monthly.
@SoCalMama wrote:

Ridiculous.
Didn't you read that 40% of Americans don't have $1000 in case of an emergency?

You want an 18 year old making minimum wage to save $47 a month?
Interestingly, that figure is better post-pandemic. Bankrate's annual survey has shown worse savings percentages historically. But, the U.S. savings rate is now 20% (and the 40%-$1,000 figure is down from 69%) - probably much to the chagrin of policymakers, as COVID stimulus/benefits are being saved rather than spent into the economy.

I thought the main value in the article was the investing chart, which I cannot post as an image, due to its coding. Author didn't try to model a realistic budget for how one might generate those savings. Housing and healthcare are usually the two biggest issues for budgeting and a National Low Income Housing Coalition study showed that full-time min. wage workers could not afford housing for a 2-bedroom rental in any U.S. county, nor a 1-bedroom rental in 95% of U.S. counties. [www.cnbc.com]

In practice, most probably cohabitate (family/friends/roomies) to greatly reduce expenses and have other jobs. I was going to post/mention a "minimum wage to millionaire" experiment by George Gammon (don't have time to find all the details today) - actually quite a few have tried this and have written about it (blogs/books), I believe - but, in short, he used his min. wage salary to fund other "hustles" that would produce higher savings/income. George lived in the cheapest, crummiest apartment/rental he could find for $300/month ("in the ghetto," as he put it) and bought and flipped cars with his spare time/min. wage McDonald's salary. After six months, he had $20,000 in savings.

There are probably innumerable ways one can generate higher income using a min. wage job as a "base" of support. Various forms of sales arbitrage seem like the most common. It's not my thing, so I wouldn't do these myself. Just thought the article's min. wage investing chart was interesting.

Edited 2 time(s). Last edit at 03/08/2021 03:37PM by shoptastic.
Just search for the FIRE movement and you'll find people like me who were able to be responsible adults and enter the double comma club. It just takes ambition and time. Most people can do it. People with bad habits or poor learning skills will not.
@maverick1 wrote:

Just search for the FIRE movement and you'll find people like me who were able to be responsible adults and enter the double comma club. It just takes ambition and time. Most people can do it. People with bad habits or poor learning skills will not.

I have seen the FIRE movement things, and they are interesting. I wonder if it has changed at all during the pandemic?

My co-worker found some guy (millennial) on tik toc today that was claiming that if you put $1200 a year into an IRA for 40 years, you'd have $1,000,000 when you retired. Thing is ... you can't count on 12% return, which is what this idiot claimed. So, yes, at 12%, you could have $1,000,000. At a more realistic 7%, I think it was $250,000. People will believe all kinds of crap on the internet without checking it out.
Others who might not include people who despite prudence, diligence, and best plans are beset by one financial calamity after another, especially through no fault of their own.

Enjoy your commas.

@maverick1 wrote:

Just search for the FIRE movement and you'll find people like me who were able to be responsible adults and enter the double comma club. It just takes ambition and time. Most people can do it. People with bad habits or poor learning skills will not.

Things are not to be judged good or bad merely because the public think so. - Tacitus
_____
I’ve noticed that everyone who is for abortion has already been born. - Ronald Reagan
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@SoCalMama wrote:

I have seen the FIRE movement things, and they are interesting. I wonder if it has changed at all during the pandemic?

My co-worker found some guy (millennial) on tik toc today that was claiming that if you put $1200 a year into an IRA for 40 years, you'd have $1,000,000 when you retired. Thing is ... you can't count on 12% return, which is what this idiot claimed. So, yes, at 12%, you could have $1,000,000. At a more realistic 7%, I think it was $250,000. People will believe all kinds of crap on the internet without checking it out.

12% is a reach... more closer to 10%, but this also is a rate that INCLUDES reinvesting dividends too and before taxes.

In the end, the famous Trinity Study was relooked at and guidelines suggest a 5% or an even crazier 6% Safe Withdrawal Rate (SWR) is realistic (SWR = allowable pretax dollars after accounting for inflation, fees and reinvested dividends without hindering your asset’s value), but time will be against you as your portfolio needs as much time as possible to mature to fight against risk (volatility), otherwise, the traditional 4% SWR has still worked wonders.

I’m part of the FIRE movement and would like the option to retire (or even partially retire aka “Barista FIRE”) before 40, hence why I max out my 401k, IRA, contribute $1k per week in a taxable account and max out my ESPP for my employer, constantly driving to increase my real estate portfolio, etc.

P.S. TikTok financial influencers are a joke, mainly cause most of them likely didn’t start investing until the March 2020 crash, so to them, they’ve NEVER weathered through a nice, bloody bear run.

Shopping the Greater Denver Area, Colorado Springs and in-between in Colorado. 31 year old male and willing to travel!


Edited 1 time(s). Last edit at 03/18/2021 02:59PM by Tarantado.
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Ronald Read, a janitor, who invested his savings regularly, amassed $8 million over the course of his life.

I'm more impressed with his discipline than I am with his stocks. smiling smiley I've met plenty of people who've made a good bit of money from their 10-baggers (often a few hundred thousand on that one stock) in a relatively short amount of time, but they weren't always the most disciplined investors/savers. To constantly contribute to your retirement accounts (or regular investing accounts when those limits are exceeded) over many, many decades and to not panic sell at the worst moments takes good discipline.
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