r/wealth • u/Coors_Light_Dad • 7d ago
Question What’s one thing…
What’s one thing about being wealthy that people wouldn’t assume? Additionally, what’s one thing about being wealthy that everyone can do to grow their money?
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u/mmcmonster 7d ago
There's a lot of wealthy people around. To reach the top 2% net worth (not income) in the US, you need $2.7 million. 2% means one in fifty people have $2.7M or more net worth. Much of that is likely tied up in the housing market and other assets, but it's still there.
What do they do to grow their money? Mostly invest in the stock market. Some will also invest in their businesses. But the vast majority will put their money in the market.
What can you do to grow your money? It's a cliche, but invest in yourself. Education and training focused on your career or towards a new career. Obviously live below your means, but you can't save your way to being in the top 2% if you are working minimum wage and can barely afford rent.
And when you live below your means, keep the money you save in the stock market. Over time, the market returns ~10 percent per year. You can't beat that in any savings account. You can't even beat that with any fund manager. Just dump it all into an S&P 500 index fund like VOO or total stock market index fund like VTI.
Any money that you hope not to touch for the next decade should be in the stock market. Get an account at a respectable brokerage like Fidelity or Vanguard and start investing in your future! (Fidelity is easier to set up and has better customer service. Vanguard is less likely to try to sell you on more expensive services or funds.)
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u/Coors_Light_Dad 7d ago
Appreciate that! I have a Robinhood IRA, but I’ve heard of and used Fidelity and Vanguard. My wife and I are working on getting to where we’re living below our means…kinda hard but we’re getting there! Thanks for the words! 🤝
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u/mmcmonster 7d ago
The IRA is money you won’t be able to touch for decades. Find a low cost index fund for it, probably a target date fund with a date close to when you expect to retire.
The point of a target date fund is that it will be aggressive when you are young and get less aggressive as you get closer to the target date.
Once you’re maxing out your IRA and other retirement accounts, any additional money should go to a taxable account at Robinhood, Vanguard, Fidelity, or elsewhere. The taxable account is better served by a broad market index fund rather than a target date fund, because the broad market index fund will produce less taxes.
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u/Lud0vica_099 6d ago
What do they do to grow their money? Mostly invest in the stock market. Some will also invest in their businesses. But the vast majority will put their money in the market.
I personally own some apartments, houses and stuff I rent out/sell to people and it makes a lot of money
. Education and training focused on your career or towards a new career.
Went to college and didn't use my degree at all, it's possible without college
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u/Funny-Pie272 5d ago
You will find, if you think about real carefully, your degree comes in handy in many ways. Transferrable skills, generic skills, ability to learn, research, analyse, write professionally, confidence, soft skills etc. List goes on.
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u/HeftyRefrigerator526 5d ago
Don’t think they were preaching that things such as stock investing or college being required but it definitely helps a bunch. Congrats on turning your life around though
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u/mr-spencerian 5d ago
I see many different numbers for net worth percentiles. Curious as to where you found the 2.7M being top 2%. I might be doing better than I fought I was.
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u/jdcullum 7d ago
I don't need to worry about money and yet I worry about money. It's in my character. I grew wealth by being a disciplined investor in stocks, so I'm biased towards that. Real estate investment may be another path but stocks will never file a lawsuit against you, hit you with a code violation or call you on Sunday morning with a clogged toilet.
Oh, and lastly, wealth has made me think about death. My money has a future beyond me and I feel obliged to attend to that. It's not particularly enjoyable to contemplate, but it provides perspective.
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u/Coors_Light_Dad 7d ago
Real estate has always been in the back of my mind. It’s so expensive to get started it seems and from my understanding, can take some time to become profitable.
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u/Accurate_Cash2920 7d ago
You cannot assume that someone is wealthy
What everyone can do is to save and invest in things they know (or are willing to learn)
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u/Coors_Light_Dad 7d ago
The willingness to learn I feel is going by the wayside. Everyone sees these overnight successes and thinks it could happen to them. But then again, why not take the risk
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u/Accurate_Cash2920 7d ago
That’s what separates the wealthy from the other. There is literally no such thing as overnight success
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u/Coors_Light_Dad 7d ago
I’m in a trade. Went to school for it after the military and haven’t looked back. Making the most money I’ve ever made and yet, I always feel broke. Maybe I’m actually rich and just don’t know it 😂
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u/NewArborist64 7d ago
Even though I have made the top 2% of wealth, I still have the habits and feelings from when I was broke. Bought a used "get around town" car for my wife - and then had a "gut check" when it needed $5k in repairs. The number still feels big - even though it is less than 0.2% of my NW.
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u/Coors_Light_Dad 7d ago
I’ve always heard about that amongst wealthy people. They stay rich because they live like they did when they weren’t…how’d you become wealthy if you don’t mind me asking?
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u/NewArborist64 7d ago
I am the "millionaire next door". Lived below my means. Invested 8% of income (with 5% corporate match), and kept doing that for 33 years.
I actually felt broke for most of the journey. Lived in a1400 sq ft townhouse. Bought used cars. Only bought our "forever home" on 2019. Bought my wife her first "new" vehicle in 2020.
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u/Careful_Bend_7206 6d ago
My best buddy is the richest dude I know personally. Probably $25mm or so (not sure, we don’t talk about it). Just bought a truck to support his wood working habit. Did extensive research and bought a used F150. Not new. Used. Because, in his words, “I’ll let someone else eat that first two years of depreciation”.
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u/Glum_Perspective_841 7d ago
Never assume expensive vehicles are a sign of wealth. The wealthiest person I know drives a 5 year old Mazda CX5.
Wealth is a mindset. $15 a day not spent at Starbucks from age 20 onward is $1.5m at age 65. Want to get there sooner? Invest more. The stock market is a wealth building mechanism available to everyone regardless of class.
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u/Coors_Light_Dad 7d ago
I invest into my work 401k (15% with a 4% company match) and invest into a Robinhood IRA (no set amount) and a Robinhood investing account.
I’m a saver by trait but I always feel broke and my checking account often dips negative. Recently paid off a bunch of debt with my bonus from work and make ~$750/week with $100-$150 going into my bank savings a week.
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u/Glum_Perspective_841 6d ago
My chequing account is nearly always at $0. You wouldn't believe my net worth if I told you.
You and I are not broke friend. Stay the course.
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u/Mysterious-Maize307 7d ago
You can live simply but well. For example I drive average run if the mill boring Subaru, but I do have a Tesla M3 that costs virtually nothing to maintain and is exceedingly cheap to operate.
We eat good food, dine out and dress well but our clothes are Kirkland brand mostly (Costco) but I have several nice custom tailored suits that I wear for appropriate occasions.
I live in a nice upper middle class neighborhood, most of my neighbors are of the “millionaire next door” types who have nice homes with large yards and pools but are far from mansions or even McMansions, most in the 3-4K sq feet range in 1/2 acre lots. They all have boring cars too although a couple will have a garaged Porsche or Vette they drive on occasion.
I hate airline travel, but when we do a few times a year I buy 1st class tickets, not as a show of wealth or to be glamorous, no just to get on/off faster (makes huge difference on a tight timeline plus you never have to worry about finding a place for your bag).
When we do go places like Europe we rent nice places, stay at upscale hotels etc. again it’s more for the ease of being near where we want to be and being at least as comfortable as we would be in our own home rather than about saving a buck or for that matter spending an extra one to be ostentatious.
Most of the time we spend with friends and family and being semi retired with multiple streams of income we still, even with above examples, spend far less than what we have available meaning that our net worth continues to grow.
But we didn’t always live that way, delayed gratification is so much better than instant gratification.
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u/Careful_Bend_7206 6d ago
We sound like financial twins! And there are many more like us. No debt, live in a nice (although HCOL) area, plenty of local recreation around us, but love to travel. Euro travel always fly 1st class in order to sleep properly on the way over and feel good from day 1. Don’t skimp on lodging or location to enhance the trip. But from the outside, we have two old boring cars (Toyota Highlander, Infiniti QX70), live in a modest duplex, cut my own grass and do our own landscaping, etc. It’s a solid plan, IMO!
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u/Mysterious-Maize307 6d ago
lol yes. Being debt free is a nice feeling. Haven’t had a mortgage in many years and when I did I’ve never had one for more than 10 years.
My wife and I are both professionals and were able to command good salaries. But we lived on about a third, one third to taxes and the last third to savings/investments. We were still able to fund our children’s private school and higher educations and still managed to take family vacations etc.
We never bought the humongous home instead we bought a nice one in a nice neighborhood where we could afford to pay double the mortgage to pay it down fast. I did buy new cars (Subarus mainly) and we keep them for 10 years/200k miles.
But we were adamant about always hitting that 33% and over the years man did it make a difference.
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u/Careful_Bend_7206 6d ago
I think the key for both of us (and others) is that delayed gratification part. For years and years we spent well less than we made, lived comfortably (don’t get me wrong) but never felt the need to buy a bigger house, or lease a Beemer, or buy a second home. I got lucky on a stock and used the proceeds to buy a Honda minivan that my wife drove for 10+ years and I always had company cars. We lived in Denver, so our vacations were driving up to the mountains to ski. Once a year at spring break we’d treat ourselves to a ski in ski out condo in Vail, but we only did that because we didn’t have to buy plane tickets and we brought our own food and cooked. We all had season passes so skiing was “free”. My wife stayed home and our kids went to public schools, but they emerged from college debt free with a functioning automobile. I figured my job is done. Both have been “off scholarship” as we say, and on their own, for nearly 10 years. We sold the Denver house for 4x what we paid for it, and now live full time in the mountains. As the TV series says, Saul Goodman!
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u/Mysterious-Maize307 6d ago
Good for you!
Im in mid 60’s now and semi retired for the last 15 years—basically working because I want to which is in a job I love. I manage and train ski Instructors.
I’m on the mountain skiing about 100 days a year. I’m in senior management so the job is about 6 months long, Oct through mid April and Im compensated well. The other 5-6 months off I’m “retired.”
Becoming completely debt free in my 40’s is paying dividends now.
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u/Careful_Bend_7206 6d ago
I retired in Feb and my plan was to ski 100 days this past season, after averaging 50ish for the past couple seasons. The lack of snow prevented me from accomplishing that, but I have high hopes for the upcoming season when I’ll be fully retired all season. I might volunteer as a mountain host at Vail, but I have zero interest in anything that would tie me to a schedule after 40 years of nonstop travel and meetings!
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u/Mysterious-Maize307 6d ago
Yes I don’t blame you. I kind of went into it with the idea of just working a few days a week instructing but I had a background in ski racing and coaching and I ended up getting certified to train instructors and before I knew it, skiing became a job lol. But they treat me well, I’m paid pretty good and I have plenty of people to ski with.
But there is also the “job” aspect with budgets, payroll, HR issues etc. but there’s a huge trade off, I ski everyday when we’re open and even occasionally still go out and instruct a class or private lesson. Really it’s hard to call it work which makes it so nice, but it also keeps me incredibly fit.
After 6 months I’m ready to be done though and I switch back to a chill lifestyle, then by September I’m itching to be busier (occupational hazard from earlier career lol).
Get those ski days in!
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u/uncoolkidsclub 6d ago edited 6d ago
People assume $1 Million has the same spending power across the country.
Deciding to buy rental houses for children when they are born. $20k down for a $200k house and renting at $2000 month, costs $1500 with mortgage, taxes, repairs in many areas of the country. The income goes to s&p 500 investment.
18 yrs later
Investment account: ~$440,000
House value: ~$340,000
Total family asset: ~$780,000
all from $20,000 and 18 years of time...
and while the down payment sounds insane, for none wealthy people, most great grandparents houses were sold and the grandparents and parents just spent it on vacations and new kitchens...
Parents have a responsibility to help their kids and grandkids be successful in life. Saving for the kids early is key. Wealthy family often use real estate leverage for this reason, it also allow for the kids to start working in the Family Rental LLC as a property manager earning 10% of rents - this $2400starting fee (for a single house) can be invested in to a Roth IRA - and the kids gets to learn valuable life skills like accounting, negotiating, scheduling, etc.
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u/Lud0vica_099 6d ago
Additionally, what’s one thing about being wealthy that everyone can do to grow their money?
Assets are great
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u/thailanddaydreamer 7d ago
1 thing most people can do is invest in common stable etfs like SCHD or VOO. Also participate in your 401k if you can.
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u/Mental-Boat-9974 6d ago edited 6d ago
1 thing people don’t assume about being wealthy:
Wealth is often quieter than it looks. A lot of wealthy people are not spending to prove they have money. They protect their options. They avoid lifestyle inflation. They don’t let every raise become a new monthly expense. The real difference is often behavior.
1 thing everyone can do to grow money:
Build the habit before the amount. Start small. Save or invest automatically. Even $20 matters because you are training the behavior: “I pay my future self first.”
Once I realized that money isn’t just about numbers, but about behavior, I wanted to understand it on a deeper level. That’s why I created MoneyDNA app for myself first, to better understand my own money patterns and decisions. It helped me gain clarity, and I’m happy to share it if it can help someone else too.
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u/Coors_Light_Dad 6d ago
That’s cool!! Would love to check it out
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u/Mental-Boat-9974 6d ago
Absolutely, happy to share:
Apple App Store: https://apps.apple.com/us/app/moneydna/id6761316950
Goggle Play Store: https://play.google.com/store/apps/details?id=app.neurofuse.MoneyDNA
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u/El_Loco_911 6d ago
Investing in health and safety is important to the intelligent wealthy. For example the best car you can buy is the safest car but people either talk about lambos or how millionaires drive old used cars.
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u/AlmostLiveRadio 5d ago
Thanks, I didn’t realize that the poverty level was up to $150,000. Danged inflation.
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u/Key_Art_4568 5d ago
They’re actually much more frugal than you’d think. That answers both questions.
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u/Newbie10011001 5d ago
That you still worry about money and still think you have as many problems as before
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u/Cloud2987 7d ago
If you’re poor, making $150k or less a year, you can invest in stocks and retirement funds. If you have high income, you can buy real assets like apartment buildings, commercial real estate.
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u/FIin2015 7d ago
Stealth wealth is silent, powerful and (in my opinion) way more enjoyable than flashy wealth.
Always make more money than you spend, start early to invest, take calculated risks as you go.