The numbers check out almost exactly with my own experience and other guys I've worked with. Mid 30s you've either got a business that's kicking off numbers that almost scare you a bit or you're on the long term 401K ladder.
One warning to the folks who are going to be in the Top 1%: you will not feel like you're "loaded." You will notice friends that have 1/10th your net worth spending more than you and wonder what on earth they are thinking. (And then realized why they have 1/10th your net worth.)
One upside to folks who are not going to be in the Top 1%: best investment you can make is in your family. Good spouse and kids going into old age beats staying at the Four Seasons in Hawaii vs. the Hilton in Florida.
For anyone feeling discouraged maybe this will give you a bump in the right direction… started at $0 net worth age 30… now 37… $600k liquid, 1 six figure w-2 plus four side businesses (close to 2x w-2 combined but now will likely never leave (anytime soon) with health care benefits of w-2… $800k house free and clear not including stock investments and 401k… still have a long way to go but momentum on my side… you *will* have major (1-2 minimum) life setbacks along the way that will destroy momentum, dont let it deter you from starting and know its part of the “life tax”. Keep going. its never too late but you need to start now. GL.
For anyone discouraged, at 29 I was broke and finally ended my 15 battle with drug/alcohol addiction.
My wife paid for her engagement ring bc I couldn’t afford what she wanted.
By 39 I exited a professional service biz I built over 10 years. Nothing profound. Just started a biz in the same industry where I was working. The exit + high BTC allocation has put me in the 1% in my early 40s.
I would say the most important thing for me was the obsession to get rich. I am thinking about it non stop. I can’t help it. I live like I’m homeless btw tho.
i'm 30, w-2 in tech (software eng), and a side biz that is now 1.5x w-2 salary (hoping to be at 2x by end of the year). not quite 1% for bracket but close. been wanting to share these two comments for a while:
1) i have always read BTB quotes about sharing insight with friends and family. i thought, "surely my friends and family will be happy for me". well, i recently gave some blurred insights into a few trusted confidants - and instantly regretted it on my side. i could see the thoughts rambling through their head. they gave me a "cool dude!" response, but could tell that wasn't what they were really thinking. my suggestion - don't share and follow BTB advice lol.
2) i haven't seen BTB covers this directly (maybe talked around it)...but the more i've been making with the side biz, the more "gung-ho" attitude i've had at w-2. basically, i am now at a point where i just tell it like it is (instead of doing the political tango and caring what others think). i've had to be real careful because this attitude has actually improved my perceived performance at w-2 (promotions included lol). so reminder, stick to the plan of remaining in that upper bucket, but stick to your lane and don't get involved in too much. my suggestion (and saying this to myself as well) --- do enough to satisfy the work, stick to your lane and don't ruffle the feathers.
aside, i'm spinning up side-biz number 2 this year and hoping to get the flywheel going a little faster to exit the w-2 (but the health insurance and benefits are nice for now w/ growing family).
Also: What's this BTB? I don't see any mention of credit card points. You mean spending bandwidth on picking a card so I can go sit in a crowded centurion lounge vs. a crowded sky club is not the key to wealth? Don't you know I'm a diamond platinum ambassador elite titanium member?
Wasn't even thinking about that / knocking on you. Was just making fun of the people focused on credit card points vs. things that actually make money.
One thing- selective leverage makes sense for those in the 10% bracket. Taking one years worth of savings (60k) and putting it into TQQQ/etc for a potential 100X in a decade allowing a bracket jump is a no brainer. The worst that happens is they simply work an extra year.
To phrase it another way, would you work one extra year for the chance at 6 million, answer is obvious
Accurate summary. Around the late 30s/early 40s, you or your spouse and/or your parents have had at least one major health scare, ongoing issue or passing. If you’ve got a decent chunk of a net worth, you question why trade limited time with them for a few more digits on a screen that don’t move the needle on lifestyle.
I am precisely in the 1% for the 35 to 39 range… I have done it exclusively by grinding in the W2 world…I make around $600Kish and that income is extremely predictable/safe and there is a reasonable likelihood that will continue to go up. I have just really been trying to save the first decade plus out of school and have just put everything into risk assets and have been the beneficiary of compounding interest and have got my net worth up to 4.7Mish…of which less than 1m of
Is in retirement accounts.
However, I’m going through a major lifestyle change, which is creating some stress.
I am building a home for my family…seems like an irresponsible amount…I am going to be spending about $3.6M and the house should be worth closer to $4.4mish day one. While my net worth (on paper) will go up … My expenses are going vertical…
Even after putting $1 million down, my housing nut will still be around $250K annually and with my other non-housing expenses, I will basically be at wash with my after tax-income…
I am taking 1 out of my 4.7m to put down… it seems completely irresponsible to basically spend this much on a home, where my after taxes cash flow will essentially offset my expenses, and I will not save a penny for the foreseeable future…
However, I can always flip the house down the road, if it becomes too much to handle, refinance if/when rates come in, I am bullish on my income and and enjoy my job…
I’m just essentially living in the moment even though I am spending an absurd amount on the home relative to my income… it is a big psychological change after being so frugal the last 15 years
It seems absurd to be living paycheck to paycheck in my late 30’s… hoping it will all be worth it.
Insane? Terrible idea? I know I had once put a comment out in the past and you seemed to be comfortable with me putting 1 million of the 4.7 M down… I just won’t be prioritizing saving at this point, and feel like I have earned the right to do so given the savings I have put together… I am also very bullish on my income moving forward. if I can’t take it anymore and want to relax more, I can always flip the house as I think I will have a material amount equity on day one
Agreed, it will take up a bigger portion of my net worth… I have been renting my entire life. I just feel like if I’m not going to hit the exit, I might as well live. This is my one indulgence, fucking expensive one at that! I’m not really into cars/watches, etc..
Would you guys be open to using the treasury money to fund talented <=25 y/o as sort of a VC but into jungle kids type beat, know you're not fans of VC but thats the analogy
The classic business adage book Parkinson' Law warns businesses against building "the perfect HQ."
"During a period of exciting discovery or progress there is no time to plan the perfect headquarters. The time for that comes later, when all the important work has been done. Perfection, we know, is finality; and finality is death."
Always good to have real world benchmarks. Just worth pointing out that the numbers are VERY different if you're not US-based. Scaping high costs of living, if you can guarantee a first-world income, goes a long way.
Yeah usually the geo arbitrage bros are in their 20s, by the time you're mid-30s or so you don't want to be out there for a multitude of reasons. Only makes sense when you hit that age band though.
The numbers check out almost exactly with my own experience and other guys I've worked with. Mid 30s you've either got a business that's kicking off numbers that almost scare you a bit or you're on the long term 401K ladder.
One warning to the folks who are going to be in the Top 1%: you will not feel like you're "loaded." You will notice friends that have 1/10th your net worth spending more than you and wonder what on earth they are thinking. (And then realized why they have 1/10th your net worth.)
One upside to folks who are not going to be in the Top 1%: best investment you can make is in your family. Good spouse and kids going into old age beats staying at the Four Seasons in Hawaii vs. the Hilton in Florida.
That third paragraph is gold. Like any portfolio, family life will have peaks and valleys. Try to stay focused on the long game.
For anyone feeling discouraged maybe this will give you a bump in the right direction… started at $0 net worth age 30… now 37… $600k liquid, 1 six figure w-2 plus four side businesses (close to 2x w-2 combined but now will likely never leave (anytime soon) with health care benefits of w-2… $800k house free and clear not including stock investments and 401k… still have a long way to go but momentum on my side… you *will* have major (1-2 minimum) life setbacks along the way that will destroy momentum, dont let it deter you from starting and know its part of the “life tax”. Keep going. its never too late but you need to start now. GL.
Four side businesses well done!
This is what I’m fucking talking about. Build baby build. 4 businesses- King is coming for me! LFG!!!!
For anyone discouraged, at 29 I was broke and finally ended my 15 battle with drug/alcohol addiction.
My wife paid for her engagement ring bc I couldn’t afford what she wanted.
By 39 I exited a professional service biz I built over 10 years. Nothing profound. Just started a biz in the same industry where I was working. The exit + high BTC allocation has put me in the 1% in my early 40s.
I would say the most important thing for me was the obsession to get rich. I am thinking about it non stop. I can’t help it. I live like I’m homeless btw tho.
i'm 30, w-2 in tech (software eng), and a side biz that is now 1.5x w-2 salary (hoping to be at 2x by end of the year). not quite 1% for bracket but close. been wanting to share these two comments for a while:
1) i have always read BTB quotes about sharing insight with friends and family. i thought, "surely my friends and family will be happy for me". well, i recently gave some blurred insights into a few trusted confidants - and instantly regretted it on my side. i could see the thoughts rambling through their head. they gave me a "cool dude!" response, but could tell that wasn't what they were really thinking. my suggestion - don't share and follow BTB advice lol.
2) i haven't seen BTB covers this directly (maybe talked around it)...but the more i've been making with the side biz, the more "gung-ho" attitude i've had at w-2. basically, i am now at a point where i just tell it like it is (instead of doing the political tango and caring what others think). i've had to be real careful because this attitude has actually improved my perceived performance at w-2 (promotions included lol). so reminder, stick to the plan of remaining in that upper bucket, but stick to your lane and don't get involved in too much. my suggestion (and saying this to myself as well) --- do enough to satisfy the work, stick to your lane and don't ruffle the feathers.
aside, i'm spinning up side-biz number 2 this year and hoping to get the flywheel going a little faster to exit the w-2 (but the health insurance and benefits are nice for now w/ growing family).
Yeah once you are checked out you somehow get promoted a story as old as time.
What side business(e)s did you go for? Never successfully made any money online maybe because I am overthinking (comp sci. background as well)
Also: What's this BTB? I don't see any mention of credit card points. You mean spending bandwidth on picking a card so I can go sit in a crowded centurion lounge vs. a crowded sky club is not the key to wealth? Don't you know I'm a diamond platinum ambassador elite titanium member?
The points comment was related to crypto dude...
Wasn't even thinking about that / knocking on you. Was just making fun of the people focused on credit card points vs. things that actually make money.
Ha well you'll see what it was about tomorrow
Scary accurate for those that have been through it…can’t fake knowledge like this.
One thing- selective leverage makes sense for those in the 10% bracket. Taking one years worth of savings (60k) and putting it into TQQQ/etc for a potential 100X in a decade allowing a bracket jump is a no brainer. The worst that happens is they simply work an extra year.
To phrase it another way, would you work one extra year for the chance at 6 million, answer is obvious
Accurate summary. Around the late 30s/early 40s, you or your spouse and/or your parents have had at least one major health scare, ongoing issue or passing. If you’ve got a decent chunk of a net worth, you question why trade limited time with them for a few more digits on a screen that don’t move the needle on lifestyle.
Great article. I really enjoyed it.
I am precisely in the 1% for the 35 to 39 range… I have done it exclusively by grinding in the W2 world…I make around $600Kish and that income is extremely predictable/safe and there is a reasonable likelihood that will continue to go up. I have just really been trying to save the first decade plus out of school and have just put everything into risk assets and have been the beneficiary of compounding interest and have got my net worth up to 4.7Mish…of which less than 1m of
Is in retirement accounts.
However, I’m going through a major lifestyle change, which is creating some stress.
I am building a home for my family…seems like an irresponsible amount…I am going to be spending about $3.6M and the house should be worth closer to $4.4mish day one. While my net worth (on paper) will go up … My expenses are going vertical…
Even after putting $1 million down, my housing nut will still be around $250K annually and with my other non-housing expenses, I will basically be at wash with my after tax-income…
I am taking 1 out of my 4.7m to put down… it seems completely irresponsible to basically spend this much on a home, where my after taxes cash flow will essentially offset my expenses, and I will not save a penny for the foreseeable future…
However, I can always flip the house down the road, if it becomes too much to handle, refinance if/when rates come in, I am bullish on my income and and enjoy my job…
I’m just essentially living in the moment even though I am spending an absurd amount on the home relative to my income… it is a big psychological change after being so frugal the last 15 years
It seems absurd to be living paycheck to paycheck in my late 30’s… hoping it will all be worth it.
Insane
Insane? Terrible idea? I know I had once put a comment out in the past and you seemed to be comfortable with me putting 1 million of the 4.7 M down… I just won’t be prioritizing saving at this point, and feel like I have earned the right to do so given the savings I have put together… I am also very bullish on my income moving forward. if I can’t take it anymore and want to relax more, I can always flip the house as I think I will have a material amount equity on day one
the story in general, basically you heavily value your house
Agreed, it will take up a bigger portion of my net worth… I have been renting my entire life. I just feel like if I’m not going to hit the exit, I might as well live. This is my one indulgence, fucking expensive one at that! I’m not really into cars/watches, etc..
Best of luck!
"Best of luck," he said, as he smiled and nodded.
Would you guys be open to using the treasury money to fund talented <=25 y/o as sort of a VC but into jungle kids type beat, know you're not fans of VC but thats the analogy
Would reconsider doing that, opportunity cost is huge.
The classic business adage book Parkinson' Law warns businesses against building "the perfect HQ."
"During a period of exciting discovery or progress there is no time to plan the perfect headquarters. The time for that comes later, when all the important work has been done. Perfection, we know, is finality; and finality is death."
Always good to have real world benchmarks. Just worth pointing out that the numbers are VERY different if you're not US-based. Scaping high costs of living, if you can guarantee a first-world income, goes a long way.
Yeah usually the geo arbitrage bros are in their 20s, by the time you're mid-30s or so you don't want to be out there for a multitude of reasons. Only makes sense when you hit that age band though.
true. especially for health care reasons