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

[www.fool.com]
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.

I love books. I adore everything about them. I love the feel of the pages on my fingertips. They are light enough to carry, yet so heavy with worlds and ideas. I love the sound of the pages flicking against my fingers. Print against fingerprints. Books make people quiet, yet they are so loud.- Nnedi Okorafor
_____
I’ve noticed that everyone who is for abortion has already been born. - Ronald Reagan
_____
@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.
[www.fool.com]
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.
Speaking of 10-baggers, I found this company interesting and took a flyer on it with a tiny $1,500 investment last week: [www.youtube.com] (starting at 34:30 mark)

THIS IS NOT INVESTING ADVICE! smiling smiley Just a passing along of information I found interesting and fun for the thread theme.

Company: Purecycle Technologies
Ticker Symbol: PCT
@ wrote:

"There is no recycling of plastic. I saw this as a huge problem and I found this company. It's called Purecycle Technologies. It was actually a SPAC that is just in the process of closing today and the ticker is ROCH. It's about a $2.7B market cap. And you're like: "Wow, that's pretty big for a SPAC." But, they have the only patented technology to recycle a plastic called polypropylene. And polypropylene is used in everything. And all of the players, Coca-Cola, everyone who makes shampoo, Procter & Gamble, you name it - go on and on and on - carmakers. They all use this product and they want to be able to use recycled product. But, up until now they couldn't. You'd have to make it all virgin. There's a 170 billion pounds a year of this as waste. And it just goes right into the ground.

So, Purecycle is the only player that can manufacture it and turn it into virgin polypropylene, which can be re-used in food grade items, like a bottle for water and things like that. And, they have two plants right now - one under construction and one built in Ohio. And there plans are to build 50 more plants. And the beauty of this is that they charge about $0.91 cents a pound right now and they have a 50% EBITDA margin. So, this is going to be extremely profitable - a monopoly. And, over the next 5 years, you're going to see them build 30-50 plants on their way to God knows how many plants in every single landfill to re-manufacture this polypropylene. And over time - a very short time - once this become available, which is now, states are going to start writing legislation mandating this be recycled. . .

Nobody covers it yet and I'm absolutely certain that they will. And when you model this out over 3 years and look at look at 4 years, you're looking at a billion dollars of EBITDA going to $5 billion of EBITDA."
yada yada...

Hedge fund manager Michael Taylor goes on to give a valuation of about $13-14 billion market-cap based on industry peer company valuations trading on 14x 2024 EBITDA. . .I.e., the company valuation could easily quadruple in the next year or so and long-term, one could make 10-20x one's initial investment from today's valuation. There are technical reasons, aside from sell-side analysts finally researching and recognizing the company (which no one covers right now), Taylor lays out for why the stock could explode. In June, the stock will be introduced into the benchmarks and this will grab ESG (Environmental, Social, and Corporate Governance) fund attention.

Summary:
-Purecycle has a monopoly (via 20-year patent) on a new industry.
-No one knows about the company right now, but they should by June.
-Stock could triple or quadruple by year-end if re-rated to reflect analyst understanding, be on par with peer industry company valuations, and get the attention of ESG (the "hippie, liberal, save-the-world" investing trend) funds.
-Over 3 years, the stock could be a legitimate 10+-bagger. Taylor says he finds these opportunities only about twice a decade, where he cannot understand why you wouldn't make 20x your money.

Not a recommendation, nor advice. But, just one of those things I came across (as an occasional Hedgeye viewer). Will I become a millionaire with my puny $1,500 investment (as a rule, I keep amts. very, very small when I'm taking flyers)? No . . .But, it could be a nice return. tongue sticking out smiley

eta: The company's SPAC form in ticker $ROCH does not exist anymore, as Taylor explained, but instead, Purecycle Tech's recycling arm is a normal publicly traded company now with ticker PCT (in case there was confusion).

Edited 2 time(s). Last edit at 04/26/2021 01:55AM by shoptastic.
@shoptastic; yes, I always had fiscal discipline and saved at least 25% from each paycheck for decades. I grew up with very little but was taught to have a good work ethic. I refrain from needless purchases. But I do a lot of DIY. So I'm willing to spend money on specific tools to repair my vehicles, for example. I never take my vehicles to others for repairs. I know how to do plumbing, electrical, most HVAC and woodworking tasks. My wife and I cut each others hair. I cut our lawn, she tends to the garden. We cook most of our own food. We also like to travel (pre-COVID) and go camping. You'll find the first million was the hardest. The subsequent millions are easier to accumulate via reinvestment/compounding/dividends/cap gains. Like Warren Buffett says, “If you don't find a way to make money while you sleep, you will work until you die.”
@maverick1 wrote:

@shoptastic; yes, I always had fiscal discipline and saved at least 25% from each paycheck for decades. I grew up with very little but was taught to have a good work ethic. I refrain from needless purchases.
That is a good foundation. It can be hard to keep investing, though, when markets have crashed and the economy stinks, etc. My parents amazingly had discipline to keep doing this over many decades. They "lost" hundreds of thousands during the dot com bust (only temporarily, as they never sold the lows), but actually kept buying and buying and saving through it all (kept buying in 2001 as if nothing had happened). Through good times and bad, they just kept saving and investing. 2008 did scare the heck out of them, though. That was the first time they invested less than normal (even though it was one of the best times to put money to work). They had seen markets crash and rebound before, but something about 2008 made them a bit less optimistic. Plus, they were older and probably more wanting to protect wealth vs. gain more.
@ wrote:

You'll find the first million was the hardest. The subsequent millions are easier to accumulate via reinvestment/compounding/dividends/cap gains. Like Warren Buffett says, “If you don't find a way to make money while you sleep, you will work until you die.”
Yup. Not that I have $1 million personally, but I've seen the charts. It's crazy how compounding works and how much more money you're making in those later years. That's why Albert Einstein said compounding is the most powerful force in the universe. smiling smiley
@shoptastic; I've only tracked our net worth in detail since just before we FIRE'd. It would take deeper analysis to find our data from past recessions. So I'll anonymously share our loss of ~$463K for the month of March 2020 (pandemic begins). Since then, it increased by ~1,775K. We didn't make any real changes to our investments during that time. If you were to look at the S&P500 index it should actually show an even better recovery because it's all US stocks. I don't like it when the market takes a deep dive, but since I've seen it happen a number of times in our lives, I deal with the risk and consider it manageable / tolerable. I know we are extremely fortunate to live in a wonderful country, America, even if there are some who prefer to riot to get what they want. I started by taking every 50 cent allowance as a kid, rode my bicycle to the bank and had the teller deposit into my passbook account. To save money, my wife and I moved into a single wide trailer for a year or two and built up more savings before moving into our first house. We completed our Bachelor of Science degrees at night to save more money with assistance from our employers. We only purchased one car with a loan. Every car since has been purchased by writing a check at the dealerships. No debt. Nothing happened fast. But yes, the compound effect does accelerate the process. It's unfortunate that our education system today prefers Critical Race Theory teachings over Personal Finance. I feel sad for the children today. The concepts are kindergarten like simple; treat one another fairly, save more than you spend. Meanwhile, I'll continue on with a planned morning shop and get a reimbursed breakfast sandwich with a small paid fee and reward points while pursuing one of my hobbies, pick up some fruit and vegetables on the way home and maybe check the stock market at the end of the day.

Edited 3 time(s). Last edit at 04/29/2021 10:26AM by maverick1.
@Maverick, WOW! Your tenacity and frugalness has sure paid off. I am curious, are you saving for a specific purpose in mind? Why do you feel sad for the kindergarten concepts today? I believe in all the ones that you have cited above. But...with regard to finances, many can't save more many than they spend while are able to. I do agree that one should never spend more money than they earn i.e. they cannot afford.
@Madetoshop; A specific purpose? Ha! After growing up with little, compared to my peers, I didn't want to be dependent on anyone for anything. So I just kept saving and investing. In my twenties, while I was working in a consulting engineers office, at lunch time I would run calculations on a desk calculator and determine "the" number required to have invested to cover my expenses and dream. I had a goal to have $1 million by 30. I never made it. I didn't know enough about investing. I didn't push myself hard enough. I could have, knowing what I know now. I should have hustled by starting a business too. I never did. I never had cable TV (I obviously have internet). I was one of the last of my peers to have a smart phone. We have an antique stove from the 60's. Our first microwave oven is now over 35 years old, works like new. I build my own desktop computers. I'm typing on a computer that is now 10 years old, but I just replaced all the hard drives. Works great! We have six vehicles, the oldest dating back to 1985. It should run if I replace all the fluids and clean out the fuel lines. It sits in a garage collecting dust. I bought another vehicle in 2009 during the "bankruptcy" period. It was a bargain. It only has about 3K miles and sits in a garage under a cover. The newest vehicle sits under a cover outside. Etc., etc. I never thought I was different from my peers. That is, until I got older and starting comparing notes with HS friends. That's another story...
Everybody's life tells a story. And except for the extreme upper and lower cases, as someone told me years ago, there will always be someone (blank) than you. "Blank" being; richer, smarter, prettier, taller, thinner, etc. Speaking of extreme, it reminds me of the guy Jacob Fisker of Early Retirement Extreme (ERE). He could live on $7K per YEAR! Here's just one reference to him: [www.getrichslowly.org]
[www.lynalden.com]
@ wrote:

Anne Scheiber worked for the IRS back in the 1920s, 1930s, and 1940s.

Although she had a law degree and by all accounts was a solid worker, she was never promoted, and it is argued that the fact she was a woman and Jewish in that era was the key reason. Women having the right to vote was still a new thing back then, after all.

Eventually she retired at the age of 51, and received a small pension and social security from then on.

But that’s where the story begins.

Over the next 50 years, she lived frugally in her New York apartment, read the financial statements of various companies, and invested in a number of blue chip dividend-paying companies.

When she died at 101, she left $22 million to Yeshiva University’s Stern College for Women and Albert Einstein School of Medicine, for the purpose of providing scholarships to young women.

She invested in things she knew about- companies that owned theaters and pharmaceuticals, and Coca Cola.
Anne Scheiber is another inspiration.
[www.washingtonpost.com]
Back up a bit..... why does or should anyone want to become a millionaire?

I love books. I adore everything about them. I love the feel of the pages on my fingertips. They are light enough to carry, yet so heavy with worlds and ideas. I love the sound of the pages flicking against my fingers. Print against fingerprints. Books make people quiet, yet they are so loud.- Nnedi Okorafor
_____
I’ve noticed that everyone who is for abortion has already been born. - Ronald Reagan
_____
On paper we are in good shape, but most of our so-called net worth is in the value of our home, land and water rights. We are what some people call land rich and cash poor. If I had to choose one over the other, I'd keep our land. When push comes to shove, fertile land is a lot more useful than a fistful of money.
@Candy Kane; big hat, no cattle...(The “Big Hat, No Cattle” concept is the idea that many millionaires do not have the outside appearance that they are millionaires.) got it! So how many acres?

Edited 1 time(s). Last edit at 04/30/2021 08:02PM by maverick1.
@Shop-et-al: well, not having a financial goal is fine, but going by your name you must have "other" goals? What motivates you? What makes you happy? Please share... winking smiley
Never mind. I just watched 'The Beach House' and felt better and better about what I intensely dislike about how some people approach MONEY! and how others approach life, which necessarily includes some of it. All is well now.

I love books. I adore everything about them. I love the feel of the pages on my fingertips. They are light enough to carry, yet so heavy with worlds and ideas. I love the sound of the pages flicking against my fingers. Print against fingerprints. Books make people quiet, yet they are so loud.- Nnedi Okorafor
_____
I’ve noticed that everyone who is for abortion has already been born. - Ronald Reagan
_____
@Shop-et-al; it's all cool...I view money only as a "tool." Humans used to barter directly. I'll trade you a hen and bushel of corn for that pile of lumber you have. Now it's a fiat currency as the intermediary. Not really any different than the physical big cabinet of wrenches, sockets, pliers, and screwdrivers I have in the garage. Tools are used to get the job done. Example: I have a seal leak on our truck. I could pay a shop ~$600 to take it apart and replace the seal. Or, I could buy the seal on Amazon for less than $20 and spend about 3-4 hrs to replace it myself. You might go to the shop. I'm planning on replacing it myself. I'm just waiting for Amazon to ship the seal puller tool.

Edited 1 time(s). Last edit at 05/01/2021 10:46AM by maverick1.
Years ago, in my Engineering Ethics class I remember the professor asking the class something along the lines of, what do you want out of your career / life? I recall most students responded with some form of well paying career / lifestyle / money. A few students responded with "health" or "happiness." I believe the normal behavioral response would likely be the something you don't have. I sincerely hope everyone here on this forum has found some form of sustainable happiness...
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