40k in the red to 285k in the green in 5 years

[tispe]

http://www.getrichslowly.org/blog/2008/03/11/how-my-net-worth-went-from-40000-to-285000-in-five-years/



We minimized our housing costs. We used my $10,000 in savings as a down payment and purchased an income property where we could live in one unit and rent out the other. The rental income from the other unit helped pay for most of our mortgage expense.
We paid ourselves first. Upon graduation, we set up our bank accounts to transfer at least 10% of our take-home pay to a separate high interest rate savings account (http://www.getrichslowly.org/blog/2007/03/21/which-online-high-yield-savings-account-is-best/). As this account grew, it was separated into an emergency fund, lump-sum debt payments, and retirement lump-sum contributions. Any money left over in our regular account after paying bills (and discretionary spending) was used to either invest or pay down debt.
We lived well below our means. We followed The Wealthy Barber (http://www.amazon.com/exec/obidos/ASIN/0761513116/ref=nosim/foldedspaceor-20/) philosophy of separating our wants and needs. This simply means that before you purchase something, you ask yourself a question: “Is this item a want or a need?”. We try to limit our purchases to “needs”. Following this rule saves us around 15-20% of our take-home pay.
Any additional money was saved. As our combined salaries increased over the years, we’ve kept our lifestyle the same (http://www.getrichslowly.org/blog/2006/12/27/how-to-protect-yourself-from-lifestyle-inflation/), which has resulted in greater savings. In addition, tax returns or any other “free” money is re-invested or saved. Lately, we’ve been saving up to 30% of our take-home pay.
We aggressively paid down debt. We used our savings to pay down our student- and car-loan debt, while at the same time investing money in our retirement accounts. We paid off our student loan debt in late 2005, and completed the car payments in early 2007.
We invested our savings for the long term. Along with maximizing our retirement contributions, we kept our eyes open for investment opportunities. In 2005, we came by a great deal on a single-family home, and picked it up at a steep discount relative to other homes in the area. We still earn rental income on this home.

[ryph]

yea thats called treading water professionally. instead of planning and pinching every penny to grind their way out of debt, they could have just made 300k and called it a day.

"nine to five is how you survive, im aint trying to survive, im trying to live it to the limit and love it a lot"

[ytcracker]

agreed i made a lot of money but i spend it too

[ytcracker]

living for the now get money stay true

[BladeX]

its really hard to break spending habits... i went from spending 2k / month on eating out to like 200-300 in food... and stocking the ~1800 in savings

shit is really growing

[PeePee McRapist]

Eh I made about 250k in 3 years with aim spam while at FSU. I spent about 95% of that because I was a young, undiscipline fool. You live and learn though because getting back to a normal lifestyle, which I wasn't accustomed to, taught me a lot about money management.

[mhu]

Eh I made about 250k in 3 years with aim spam while at FSU. I spent about 95% of that because I was a young, undiscipline fool. You live and learn though because getting back to a normal lifestyle, which I wasn't accustomed to, taught me a lot about money management.

jesus fucking christ, do you have anything to show for that?

like a house, or even a car or two?

If you do, then it wasn't all lost.

I can't imagine a situation in which $250k just vanished into thin air

at least a cool computer or something....

[linx]

I've learned my lesson, whatever I made from spamming I used to spend it

[Krazy]

I've learned my lesson, whatever I made from spamming I used to spend it


toughest lesson i've ever learned

[PeePee McRapist]

jesus fucking christ, do you have anything to show for that?

like a house, or even a car or two?

If you do, then it wasn't all lost.

I can't imagine a situation in which $250k just vanished into thin air

at least a cool computer or something....

About 20,000 left. I bought a car in cash but the car is gone now since eclipses are shit to fix and I'm studying abroad next semester. I spent it all on 6 vacations, hibachi 5 days a week, lawyer fees for some shit I got into, etc. So basically no, I have nothing to show for it. It was one of the biggest mistakes of my life.

[hairetsu]

I like to spend money....

[mhu]

i agree with the more money thing

i just did my budget here and found out that if i pay for just the basic bills every month (rent, utils, car payment, insurance payment, gas, phone, few small things) and spend no more than $5 a day on food, then I am in the hole by $100 already.

and god help me if i have to buy something like a lightbulb, or anything more *gasp*

all aboard the sinking ship. http://digitalgangster.com/4um/image.php?u=1927&dateline=1204861761

[betticus]

i agree with the more money thing

i just did my budget here and found out that if i pay for just the basic bills every month (rent, utils, car payment, insurance payment, gas, phone, few small things) and spend no more than $5 a day on food, then I am in the hole by $100 already.

and god help me if i have to buy something like a lightbulb, or anything more *gasp*

all aboard the sinking ship. http://digitalgangster.com/4um/image.php?u=1927&dateline=1204861761


Sinking ship in my case would be called the IRS. Paid those fuckers off twice and now they just turned around and stole my tax return with no real explanation. Some shit about previous debt owed but since that was all paid off I can only assume theft.

I'm starting to think I'll have to expatriate and become an illegal alien to get this shit settled. At least then I can start collecting social security benefits and free medical coverage.

[rmk]

yea thats called treading water professionally. instead of planning and pinching every penny to grind their way out of debt, they could have just made 300k and called it a day.

"nine to five is how you survive, im aint trying to survive, im trying to live it to the limit and love it a lot"

i support this post 400%

[Moose]

Bett, what did they get you for? Those fuckers sent me a bill for $91k a cpl years ago...

[BladeX]

who sent you a bill for 91k?

[Moose]

who sent you a bill for 91k?

eye are ess

[BladeX]

ouch beats my settlement w/ m$

[Moose]

I settled it down to 26k, but it was still a bunch of bullshit. I was stalling as long as I could. Problem was that I had the money in the bank, and they had already frozen one account. I should have kept the letter the bank sent me when they froze the account.

[rmk]

i just looked at this thread title again...

so they gained $325k in net worth in 5 years, which is 60 months, which means NW + $5,416/mo. the blog states they STARTED with $85,000 in combined annual income. they also mentioned buying real estate at great deals..

net worth is such a gay metric because if they bought a house for 80k that they think is worth 150k blam there's $70k in net worth. keep in mind they have house + i think 2 rental properties so every payment made in the past 5 years went towards raising that miracle net worth.

i wonder if they've factored realtor commissions, taxes, and decreasing market value into that $285k figure?

bleh idk why i'm playerhating on this so bad but like imo 285k net worth is nothing worth celebrating. net worth is so easy to manipulate. I'm sure I could get my various businesses valued at some decent amounts so does that make me a millionaire?

no, i'm not a millionaire until i can look at liquid assets that i could trade for $1,000,000 almost instantly.

[ryph]

liquid assets that i could trade for $1,000,000 almost instantly.

[smarty]

if we're talking banks, bankfox has better savings accounts (http://www.bankfox.com/savings)than most places. oh and i lied about hating to shill.

[stang]

liquid assets that i could trade for $1,000,000 almost instantly.

[ryph]

wow bumpage

[betticus]

Bett, what did they get you for? Those fuckers sent me a bill for $91k a cpl years ago...

The extra 10% on an early 401k disbursement but they waited four years so they also tacked on interest and penalties.... it seems odd to me that the IRS gets to set their own interest rates and fines with no oversight. Loan sharks have been taken down who charged less.

So I filed amended returns but I moved to New Mexico halfway through the year that I took that disbursement and when the fed gov sent out their amended return notices to all of the states New Mexico decided that I owe them taxes on that same disbursement even though I lived in Colorado when it was taken and didn't move till five months later. So now it's the state that is trying to rape me in the asshole.

[stang]

betticus enjoys that

[betticus]

betticus enjoys that

Only from you baby!!!!

Thanks to my shitty recordkeeping I can't find the tax form I got when I took that disbursement so I may be fucked.

[2fast]

I too have learned but lession about spending $$ but i will never be a frugal jew and waste away my healthy years of my life for numbers that dont even mean shit in the end.

[Napolean]

I too have learned but lession about spending $$ but i will never be a frugal jew and waste away my healthy years of my life for numbers that dont even mean shit in the end.

lifes too short to live furgal until 60.

actually, I live life under the assumption that in 2012 its all over.. I dont really really think it will be, but its definately motivation to do more than just work, work, work, and patiently wait for a 401k to mature. (not that I have a 401k, havent even gotten a good start on investing yet!)

edit: I also believe that retirement kills, keeping busy keeps you alive

[mhu]

I was just thinking about this thread the other day too

[vettefever17]

Personally, I like to watch how I save in certain areas. But on the other hand, never rely on just a 401k or something for retirement. Because when you get there, it might not be there. That is what I have picked up from this recession.

Also, net worth is only as good as the practices you are using in the accounting. Mark to market is king.

With all that said, I keep up with everything I spend on investment. I even calculate how much my interest I paid on my car loan. If you dont keep tabs on that stuff you will get caught with your pants down. There's such a thing as get money, but not to get it take over blindness. If you want to ultimately ball, always watch what goes on.