Why Are We Barely Breaking Even as Mid-30s Millionaires?
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- Опубликовано: 27 июл 2024
- What is a millionaire? By definition, someone who has a million dollars or more in net worth. But what do you think of when we say “millionaire”? Are you picturing sports cars, expensive vacations, big houses? The reality is that most millionaires are people just like you and me, living in regular homes, still attending their jobs, and trying their hardest to budget. Being a millionaire doesn’t mean you’ve “made it,” but it does mean you’re on the fast track to building wealth.
Gracie is a millionaire, but she doesn’t feel like it. When she discovered financial freedom, she set an impressive goal to hit millionaire status by the time she and her husband hit their mid-30s. They worked hard, were diligent savers, and ended up hitting that goal right on time, but it came with a lot less flexibility than they had hoped. While Gracie was able to quit her job, her husband wasn’t able to, and even as he brings in a great salary, the family still is close to breaking even every month on their budget.
But Gracie isn’t doing anything wrong. She’s got a tame budget, regularly reviews her spending, and knows that something has to change if she wants to reach the life of financial freedom she had been promised. So what should she do, change her assets, completely revamp her budget, or move to a lower cost of living area to increase her monthly cash flow? Scott and Mindy give Gracie some good advice that will most likely apply to you, even if you’re not a millionaire yet.
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Episode 324
00:00 Intro
02:42 Income and Expenses
04:31 Assets and Liabilities
05:24 Millionaire by Age 35
12:20 Financial Goals
16:11 Treading Water as a Millionaire
18:38 Pivoting to Part-Time Work
22:15 Moves to Boost Financial Flexibility
27:13 Reallocating the Assets
36:15 Budgeting Red Flags
52:17 Getting Gracie Back on the Millionaire Track
#biggerpockets #biggerpocketsmoney #ep324
They will never retire. 700 misc. 943 don’t ask. 100k salary is good. Not for fam of 5 in high cost of living as far as retiring early I mean. Not sure where that is.
Overall all is well for them of course but not anywhere near retirement. A family of 5!
Yeah they're not close to FIRE. She needs to get back to work
Depending on your setup, $1 million can be enough or almost nothing.
So good, it shows that asset allocation is so important. If you silo all of your cash into retirement accounts and into your primary home, it's very illiquid.
Thats why i only place the match into my retirmement acc and the rest on brk acc and high saving yield. Gotta have liquid for surprises and able to afford changes before 59.
She seems to be considering her 401k match and principal pay down as income (its not income but net worth growth).
I think this is skewing her budget numbers and she doesn’t realize it.
1 mil is not enough for "retirement" at 35 with kids, especially when part of the million is house equity. And she needs to work at least part time from home if she wants to spend more.
I'm watching this a year after it first posted, and inflation's slowed, but not nearly enough still for rates to start coming down. Three kids, mid 30's, 100k salary and mortgage still? Pfft, you're just treading water, near $1M net worth means squat. If you're 65 and own your own home, live somewhere cheap, then $1M might look like enough...but even then, it's not exactly rolling in dough...
1. Always get the 401k match;
2. It's probably not a good time to start investing in real estate now to get a positive cash flow;
3. With the inflation, $900 a month grocery bill is reasonable. Sometimes people push too hard on themselves.
Even $1,000,000 at safe 5% earnings is only 50K. That can be rapidly eaten up by mortgage and poor budgeting.
5% is not even safe for 35, more like 3%
@@divertiti We are mid 50's and think 2.5% is more likely. What kills me is the mantra that past returns are not an indicator of future returns, but the study saying 4% is a safe withdrawal rate is based on past returns. Well, past returns happened cause the boomer generation grew up and consumed, plus there was global growth. Uhm, the next 50 years promises boomers will age and consume less, while global growth slows ... Therefore 2.5%, maybe 2.25%
Move to the state where you can get the most help with childcare from family. Family of five means wife can't go back to work and help with much needed income increase. Growing family of five also means keeping costs low gets harder as they get older and consume more in food, clothing, recreational activities, education, etc... There's no getting around the need for an income increase, and that means she has to go back to work.
Had a full ride scholarship and quit school. then went back. That is so sad. Also, the whole saying your have a $1M net worth only works if you are willing to sell the house when expenses need to be paid.
They are doing great overall but are now sloppy with their budget and overspending and she needs to be real with herself and get back on track.
More like get back to work
@@holdencawffle626 Yup, too eager to live the millionaire lifestyle, doesn't grasp most with twice or even three times her net worth are BOTH still going to work and keeping expenses low...
Millionaire Next Door. Just working folks who know how to save more, spend less for DECADES
What about keeping the house as a rental?
Be near family for the kids and grandparents. Family. TN better weather.
$935k is not millionaire. :)
close enough. It's pretty good for a 35 year old . They only make 100k to save that much is impressive.
I'm so far behind if that's where I need to be 😅 @@beatricerights
Welcome to 2024, where $1M net worth means you're a quarter of the way there. Seriously. Suze Orman says you need $5M to retire, I think you could get by with $3M, split the difference for $4M... Cash flow of $100k won't cut it for a family of five, especially with it still paying the mortgage and building the retirement funds. Try doubling that income if you want to have some fun.
I think she is buying way too much of a variety of foods and over preparing so there is a lot of food being thrown away. Try not to buy such a variety and prepare smaller meals for a few months. In our home we have a low tolerance for food being thrown away. We make smaller purchases and prepare smaller meals with fewer leftovers so the food is fresher.
Yeah, they’re fine.
Lol holy fuck I thought she was SERIOUS about being 35!!! I was like FUCKKKKK NOOOO she's not lol
Mindy is 35?
No shes 48
I thought 60
@@pb25193 LOL 😂. I doubt 60, but don't believe 35 either. Somewhere in between. Your age is your age, better to worry about what you're doing with your time than how much has elapsed already...
Mindy is 35? I thought 60...
Yikes, this lady rambles. This was painful listing to this lady think out loud about her finances. A CPA? Weird.
Nope.
Of course they have to keep working. They have 3 kids lol. Just maintaining 3 kids is 250k each.
Spend less than you make please. Problem solved.
$16k in crypto as a millionaire makes Mindy cringe? 🥴 They could burn $16k and it wouldn’t change their lives. So silly to impart this strong opinion on everyone as a whole
It's cringey when compared to their cash flows
No real millionaire would ever be comfortable burning $16k. That’s what separates the long term millionaires from the ones who lose it all.
Every dollar invested needs to be assessed on its own merit. I guess Mindy simply questions the merit of investing in crypto.
A lot of people like crypto. A lot of people don’t.
Why is Mindy so scared of crypto??? If you invest in everything else and ignore crypto you are truly missing out 😂
If you’ve hit your retirement numbers then why is your husband still working? Something must not have been done right 🥲
some people still wanna work even if they have a set amount of money. think of it as a safety net
@@DUES_EX ah good point!
@@DUES_EX One million is not enough to retire on at 35. I'm 50 have close to 3x (half of which is home equity). I'm still working a job I don't love because I get a pension at 55.
@@beatricerights I agree, but I’m poor. Only $3000 bank. I live so frugal I could retire. You may have higher material needs or a family , which is why you need more. I’m 27 single.
They’re including their house in the $1M, which isn’t paid off. They currently have no assets that cash flow except for $200k in mutual funds, which isn’t much. They need at least $1M in stocks to live off $40k per year, which again isn’t much for 2 adults and 3 children. They still have a long way to go before they’re fully retired. If they stop spending 10k/year on weed they’ll get there faster lol.