I am intrigued by such a success story. is this generally reproducible? SO i ran a few compounding interest scenarios. assuming “7 figures” means 1’000’000 and “8 figures” accordingly 10M.
the “7-figures” after (25-10=) 15 years i think is quite realistic for typical frugal people with decent income to achieve. assuming yearly interest of 7%, monthly savings of 3400 already get you there
Hence your story involves either serious inheritance, enterpreneurial success or other forms of extreme financial luck that I’d doubt are generally reproducible. But i think you mentioned luck somewhere in this context.
anyway thanks for sharing!
I think getting to 7 figures after a couple of decades is easily achievable with normal investing and a 5k per month savings. With the recent stock market, it could have even been done in a single decade.
8 figures is doable with a high salary, but you need more time and some stock market luck. Though I think most normal people would quit before the 10M on this trajectory.
For true high 8 figure or 9 figure wealth building, you really need a better model as salary+investing doesn’t really scale well to this level in a reasonable time.
if you’re aiming for 8/9 figure wealth, then building a business makes more sense.
Increase income more than spending, save and invest and be patient etc. is, for many.
OP wrote in their other thread of 800k income (2 people) some 5 years ago. That’s where the air gets much thinner, salary-wise. That’s not a top 10% income, anymore.
Add maybe some increase to that income along the way, a move to a low tax place and buying into pillar 2 and you’ll have much higher savings then 10k a month…
That’s how the numbers add up, but I guess the shared insights are more of a general nature, not specific to 10m milestone. What’s 10m to them might be only 500k or 5m to others.
Also, if you start with a decent pot, then this itself will do some of the work for you e.g.
Future Retirement Pot Calculation
Monthly Savings: $0
Starting Balance: $2,000,000
Annual Rate of Return: 9.0%
Investment Period: 18 years
Results
Monthly Compounding
Future Value of Pot: $10,045,275
Investment Gain: $8,045,275
So one strategy could be to work in your 20s to build up a big pot. If you save 5k each month until you are 30, you will have just under 1 million. Then even if you save nothing else, by age 50, you’d have 4.5 million.
Thank you @nugget for that very insightful analysis!
I agree with the commenters that said that to get to 1 mil in 15 years some things have to work out seriously well beyond just getting a uni diploma.
This “strategy” sounds great in theory, though what is the “strategy” that will allow a 20yo to save 5k/month?
At 20y they would either be 2 years out of high school, so without a degree, or just out of an apprenticeship.
Maybe the 5k is averaged out…
Idk. I’m pretty sure there are a lot of people with a university degree that aren’t able to save 5k a month even 10 years after finishing university.
Your person would need to earn at least 7k net after taxes to be able to save 5 k, and that’s being extremely frugal (counting 500 healthcare, 900 shelter, 300 food, which leaves 300 for the rest including transportation). That would be, how much? About 120k brutto? Depends on the Gemeinde/Commune of course.
Which education would you propose to get to (guarantee) that sort of salary straight after uni/apprenticeship?
Note: I’m not saying it’s not possible, I’m doubting / wondering if it’s a viable strategy/plan.
I’d say that in order to save 5k per month out of university, you have to:
have a really good degree (my limited imagination only sees software engineers/data scientists and people in the financial field. Doctors have to go through their internships, so do lawyers, I would say other engineers start with a salary that doesn’t allow for it (civil engineers, environmental engineers and geologists don’t). There are probably other professions I haven’t thought of but my point is many don’t have that high of an opportunity).
give up on building a family until you reach at least 32-35 (10 years of savings).
potentially live with your parents for an extended period of time (years to a decade), which limits your job opportunities as it roots you in one place.
potentially give up on life building experiences like travels or not immediately paying for itself training that could also bring benefits on the longer run.
The reward is awesome but the costs are also real and the opportunity isn’t really there for most. 3.5k per month seems more doable to me, though still leaves out a good many people. 2k may be a realistic yet demanding target. I think either I’m completely out of touch regarding actual Swiss salaries or people on this board have too high a view of what most starting salaries are and how they evolve through the course of a career not specifically focused on maximizing financial incentives.
Don’t want to be pedantic and further digress, but isn’t it more like while studying? Which is why the proffesional degrees have an average income, PHD’s a lower one and university and FH pretty low, basically student jobs or internships.
Median starting salary is probably still some 80k-ish, with the typical variations between field of study, industry, company size, location etc.?
120k (+/- 10) after some years seems realistic and also where jobs in many industries reach some kind of plateau (expert, management and bonus-heavy roles aside).
You’re totally right!
The light blue is actually 6 months before getting the degree, it sais so in the notes I didn’t crop off in the French version.
Thanks! I will correct my post.
Of course there are. There are even more people who don’t have $1M after 10 years of working.
Do you really think the average person doing the average thing is going to get $1M in 10 years? To get extraordinary results, you should normally expect to do extraordinary things.
Zuckerberg had double digit billions in net worth by age 30. He didn’t even have a degree.
I used to read this kind of thread and envy the googles/bankers etc.. now I envy everyone with goals and stuff. I’m preparing for FIRE but apparently I don’t know how (see for example this post on Saturday evening. The 14th of February but that’s another story).
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