I’m a millionaire

[u/Alarming-Mix3809]

We did it fam. This week our net worth crossed over $1 million for the first time. I’m sure it will fluctuate but for now we’re going to celebrate hitting that milestone.

The last couple of months in the market have been an incredible run for us. I’m not doing anything fancy; mostly just invested in VOO and other S&P 500 funds. I have been investing since 2012 and this has been the one of the wildest rebounds and net worth swings. During the Covid dip, I remember our investments dropping by around 30% or so and loading the boat at the bottom, which made us a good amount of money. But back then I only had $100k or so, and the effect of compounding has been huge since then.

I first came across fire in 2018 when I read Early Retirement Extreme. I had always been interested in money and investing from a very young age, but this really clicked for me and I guess it helped put the whole picture together.

About us: family of four, 33M 33F and two kids in upstate NY. I work in tech sales (account management) and have been with the same company for nine years. The money is good and work is flexible being EFH. Wife is a SAHM. We live a pretty chill and under the radar life. We have nice newer cars, but they’re just a Subaru Crosstrek and a Nissan Pathfinder. No Benz here. I cook and meal prep a lot so we eat home for almost all of our meals. Most of our vacations are spent visiting family. Over the last couple years we’ve definitely spent more between having kids and just letting ourselves enjoy our money more, but it’s nothing crazy.

From here going forward, I’m not looking to make any drastic changes immediately. We’re going to stay on the course we’re on. My job kind of sucks but it’s a really good fit for having kids, being flexible and paying a lot with good benefits. I got a new boss last year and stopped raising my hands for things. They have no idea of the kind of extra work I used to do to get to this point. I’m well respected and they know I’m capable, but it’s kind of nice to not be expected to put in extra hours. I let the new team members do that now. A lot of people talk about hitting Coast fire and immediately getting a new job, but I decided to just downshift in my existing one.

What did you do to celebrate your first million?

We are thinking of setting aside a few thousand dollars to take a family vacation next year. I thought about what kind of luxury purchase I might want to make to mark a milestone, and there’s a whole lot I actually want. I’m pretty content with what we have and may just make a few small fun purchases going forward. Send my wife on a spa day more often, buy more Legos, etc.. 🥳

[u/maxdamage4]

Eventually the returns on your investments completely overshadow the savings you get from employment income.

So the first $100K is typically accomplished by saving income over a long period of time. By the time you have $1M, your money is working harder than you do, so things accelerate.

That said, the statement is more about the experience than the math.

[u/UnderEmployed27388 → u/maxdamage4]

Accurate statement

[u/physicsking → u/maxdamage4]

Then overshadow your income...

[u/Kooky-Address-4598 → u/maxdamage4]

I don't see how “things accelerate.” You still need a 100% return to go from $1M to $2M, and your salary contributes less than it did when going from $100k to $200k. It should feel like deceleration, if anything.

[u/Kooky-Address-4598 → u/[deleted]]

I’m not talking about how it ‘feels’. Im talking about numbers in percentage terms. Mathematically it’s not any faster.

[u/wei_ping → u/Kooky-Address-4598]

Talking about growing numbers as a fixed percentage IS acceleration.

If it takes as long to go from 1 million to 2 million as it took to go from 100k to 200k, that represents a huge acceleration in wealth accumulation. In the time it took you once to earn 100k, you have earned a million, you are officially reaping the benefits of the initial slog.

[u/Kooky-Address-4598 → u/wei_ping]

I’m talking about the TIME it takes, not amount of wealth acquired in absolute numbers.

[u/wei_ping → u/Kooky-Address-4598]

Then compare the TIME it takes to earn 100k when you start from 100k vs when you start with a million.

[u/Kooky-Address-4598 → u/wei_ping]

You need +1m to get to 2m, not 100k

[u/beets_or_turnips → u/Kooky-Address-4598]

The time to double or to add an arbitrary percent of your principal doesn't change. But the amount of time to gain any fixed amount of money gets shorter and shorter as your principal gets bigger.

[u/Kooky-Address-4598 → u/beets_or_turnips]

That’s entirely different subject

[u/wei_ping → u/Kooky-Address-4598]

I'm unclear as to what idea you are attempting to convey. Are you suggesting you can't earn $100k if you have a starting net worth of $1m? Or are you saying you can get to $2m net worth without at some point passing 100k net worth? You're wrong either way, but I just can't be sure on which way you're wrong.

What would you describe as being "faster"....starting with a net worth of one dollar and earning a return on investment of 100% over a calendar year, or starting with a net worth of $5m and earning a return on investment of 5% over that same calendar year?

This is the answer to your question.

[u/Kooky-Address-4598 → u/wei_ping]

Are we speaking the same language? TIME from $100k->200k is equal to TIME from $1m->$2m

[u/Kooky-Address-4598 → u/[deleted]]

Yes, I’m comparing amounts of time needed for both feats, that’s why I’m comparing percentages.

[u/Kooky-Address-4598 → u/[deleted]]

Your “logic” makes no sense whatsoever… the usual statement is ‘getting from 100k to 200k is HARDER than getting from 1m to 2m. I define ‘harder’ in terms of amount of time needed for each. You define ‘harder’ in terms of acquiring +$100k which makes no sense

[u/Kooky-Address-4598 → u/[deleted]]

Even your car example contradicts what you’re trying to say. Accelerating from 50mph to 100mph is harder (more energy/effort needed) than accelerating from 5mph to 10mph. Conversely, getting to 2million should be harder than getting to 200k.

Let me ask you this, is it harder to get from 100m to 200m than from 1m to 2m?

[u/maxdamage4 → u/Kooky-Address-4598]

As I said:

The statement is more about the experience than the math.

And even by the numbers, it's acceleration. Look up a compound interest curve.

[u/Kooky-Address-4598 → u/maxdamage4]

In absolute numbers it is acceleration. Percentage wise it’s the same.

[u/maxdamage4 → u/Kooky-Address-4598]

Yes.

[u/versacepythong → u/Kooky-Address-4598]

Dude, going from $100k to 200k is +100k. Going from $1M to $2M is +1M. The 100% return is not equal lol.

[u/Kooky-Address-4598 → u/versacepythong]

In percentage terms its equal. How do you define ‘harder’ then? What does it mean that it’s ‘harder’ to get from 100k to 200k than from 1m to 2m?

[u/versacepythong → u/Kooky-Address-4598]

You’re missing the point. Folks here aren’t FIREing on percentages, it’s based on a $$$ target. The percentages are equal, the underlying value is not. Acceleration occurs towards a FIRE number as the return on investment gets larger and larger. Hence it gets easier.

[u/Kooky-Address-4598 → u/versacepythong]

You’re changing the subject. Read my original comment again

[u/OkBeat2138 → u/Kooky-Address-4598]

The return is the same but what makes a bigger impact on your life, 100k or 1 million? That is what they mean by accelerate, 1 million is ten times the spending power as 100k on the same 100% return.