If you are ‘upper class’ how did you make your fortune?

amother

↑ Poppy ↓

Sun, Nov 24 2024, 8:32 am

amother Brown wrote:

Nobody is saying it's nothing, but to retire and live off of? You'd have to live very frugally.

Exactly. The reason I'm posting this is because I'm in this position right now. DH plans on retiring shortly due to health reasons (we're in our mid fifties). We have a net worth of over 1.5 mil plus as a former government worker, DH expects to get a pension (so instead of capital generating income). I don't see us living comfortably at all, let alone in the upper class. So I'm looking at real numbers... unfortunately we never planned but even without planning, a frum family that owns their own home in a frum area and has invested in an IRA can easily be worth over 2 million by their fifties. Its not as much as you think it is when you're twenty and broke.

amother

↑ Khaki ↓

Sun, Nov 24 2024, 8:34 am

amother Poppy wrote:

Do you have separate investments for weddings etc? If not I can see why you feel this way.
Also does net worth include your home? If yes that’s different than 2 million in investments generating interest. A pension likely isn’t as high as interest on millions in investments, and it’s taxed at a regular rate.

Saying this not to cause you to feel bad but to explain to others that planning yields better results. so thay younger people should not feel discouraged but should do their best to plan to save and invest when they’re young.

amother

↑ Poppy ↓

Sun, Nov 24 2024, 8:38 am

amother Khaki wrote:

Yes. Basic weddings, but not 100k per kid plus support... our lifestyle is very expensive. We can live very very middle class, the title of this thread is upper class.

Doesnt the definition of net worth include your home? For anybody.

amother

↑ Khaki ↓

Sun, Nov 24 2024, 8:42 am

amother Poppy wrote:

Net worth does include your home but retirement investments of 2 mil does not include your home, it’s referring to 2 mil in investments generating interest - not your home which goes up in value but doesn’t generate interest and is not a liquid asset.

2 million in retirement investments (which special tax benefits) is enough for retirement if living carefully and responsibly (not poorly!).

amother

↑ Poppy ↓

Sun, Nov 24 2024, 8:45 am

amother Khaki wrote:

Thank you for clarifying. So an investment of 2 million would generate approximately 100k yearly income, correct? Lower taxes (not nothing if there us other income as well).

How do you save up 2 million by fifty using Dave Ramseys method? What type of income and do you pay tuitions? No mortgage?

amother

↑ Khaki ↓

Sun, Nov 24 2024, 8:49 am

amother Poppy wrote:

Yes, this is what I am saying.

I don’t do Dave Ramsey. But we prioritize investing max out our IRAs and deferred comp etc.

We live beneath our means and save and invest as much as we can, with goals for weddings, bar mitzvahs and retirement.

If I can offer support to kids I will but if I can’t I won’t. (I married dh who wasn’t learning bec my parents couldn’t support and I couldn’t see working 9-4 and then running a household… I got a part time job and dh works.)

amother

Vermilion ↓

Sun, Nov 24 2024, 8:55 am

So I don’t know if you want a response from me bec we aren’t upper class. We actual live like low middle class but have nice savings and building nice passive income.

Started with 30k we refinanced from our home.

Bought cheap real estate house with some of it. Fixed it up. Refinanced. Bought another. Kept doing that.
That brings in a nice small income. Return on investment is very nice but not tons bec the home weren’t expensive to begin with. But it isn’t passive bec you need to be involved (can hire company but that will cut income significantly). The depreciation also helped on taxes.

Refinance a few homes. Invested that money with someone else in real estate (typically minimum is 100-150k). Keep doing that. Makes about 7-9% if go with reliable established companies. Full amount of Money returns in 2-5 years - depending on firm. (But you keep your portion. Of building so keep getting returns). Then reinvest that that money.

I wouldn’t put money all in one basket. Like we also have some stocks, mutual funds, 401k, IRA. Like we have savings we maintain for all our kids from the time they are born. But the buildings and homes have done the most for us.

I know ppl who have made a lot of money going the house investment route. We haven’t done that many and have other jobs. But it is a nice investment and income.

As the poster above said living below your means is a good trick. Like we have well over a million between everything but no one would ever know or be able to tell. I think that is why we could do it. And my kids are happier living with less and I think it will make their life easier to not being used to big houses and expensive life.

(I don’t count my home)

amother

↑ Khaki ↓

Sun, Nov 24 2024, 8:57 am

amother Vermilion wrote:

So I don’t know if you want a response from me bec we aren’t upper class. We actual live like low middle class but have nice savings and building nice passive income.

Started with 30k we refinanced from our home.

Bought cheap real estate house with some of it. Fixed it up. Refinanced. Bought another. Kept doing that.
That brings in a nice small income. Return on investment is very nice but not tons bec the home weren’t expensive to begin with. But it isn’t passive bec you need to be involved (can hire company but that will cut income significantly). The depreciation also helped on taxes.

Refinance a few homes. Invested that money with someone else in real estate (typically minimum is 100-150k). Keep doing that. Makes about 7-9% if go with reliable established companies. Full amount of Money returns in 2-5 years - depending on firm. (But you keep your portion. Of building so keep getting returns). Then reinvest that that money.

I wouldn’t put money all in one basket. Like we also have some stocks, mutual funds, 401k, IRA. But the buildings and homes have done the most for us.

I know ppl who have made a lot of money going the house investment route. We haven’t done that many and have other jobs. But it is a nice investment and income.

I didn’t love the investing with others in RE thus far bec once they refinanced, our yearly returns went down significantly and it was almost not worth it, other than the tax benefits.

amother

↑ Poppy ↓

Sun, Nov 24 2024, 9:00 am

amother Vermilion wrote:

So I don’t know if you want a response from me bec we aren’t upper class. We actual live like low middle class but have nice savings and building nice passive income.

Started with 30k we refinanced from our home.

Bought cheap real estate house with some of it. Fixed it up. Refinanced. Bought another. Kept doing that.
That brings in a nice small income. Return on investment is very nice but not tons bec the home weren’t expensive to begin with. But it isn’t passive bec you need to be involved (can hire company but that will cut income significantly). The depreciation also helped on taxes.

Refinance a few homes. Invested that money with someone else in real estate (typically minimum is 100-150k). Keep doing that. Makes about 7-9% if go with reliable established companies. Full amount of Money returns in 2-5 years - depending on firm. (But you keep your portion. Of building so keep getting returns). Then reinvest that that money.

I wouldn’t put money all in one basket. Like we also have some stocks, mutual funds, 401k, IRA. Like we have savings we maintain for all our kids from the time they are born. But the buildings and homes have done the most for us.

I know ppl who have made a lot of money going the house investment route. We haven’t done that many and have other jobs. But it is a nice investment and income.

As the poster above said living below your means is a good truck. Like we have well over a million between everything but no one would ever know or be able to tell. I think that is why we could do it. And my kids are happier living with less and I think it will make their life easier to not being used to big houses and expensive life.

Beautiful. This is so smart! This is exactly what I would do if I were starting all over again.

amother

↑ Vermilion ↓

Sun, Nov 24 2024, 9:04 am

amother Khaki wrote:

I didn’t love the investing with others in RE thus far bec once they refinanced, our yearly returns went down significantly and it was almost not worth it, other than the tax benefits.

It’s true. With a house we make 15-20. With a building 7-9%.
By us it depends how much you give. If we give under 150k we had a penalty when they refinanced. I haven’t found the numbers to go down so much after a refinance even in this economy.

Besides now I have the lump sum to put in another building. And I’m making let’s say 8% now off the same original 150k. So it’s really 16% from 2 buildings on the same money.

And the headache with a house is so different. With a building we sit back and collect the money. With the houses they sometimes don’t pay. Can trash the house. The heat goes out. The roof leaks. Etc.

wrkngmomof2

Sun, Nov 24 2024, 9:06 am

Emuna and bitachon. I will say that again and again. Obviously we need to be responsible and do our hishtadlus but Hashem is the one that gives.
I went from working and barely making ends meet to building a multi million dollar company.
Unfortunately, due to a change in the industry I lost a significant amount of business and set to lose more. Couple this with a HUGE tax bill (long story) and it is a bit overwhelming.
However, I know that nothing is up to me. Hashem will take care of me as He always did. I did invest in RE but it is not the right time to sell yet.

amother

↑ Khaki ↓

Sun, Nov 24 2024, 9:14 am

amother Vermilion wrote:

We were getting 2% quarterly and after refi it went down to 1%. we invested the refi money into another deal and are getting 2% on that but I think wed have done better in mutual funds, with 8-10% a year compounding, so the amount goes up yearly

im glad we diversified but also glad RE was the much smaller of our investments vs the bulk.

amother

Babyblue ↓

Sun, Nov 24 2024, 10:44 am

Not upper class reg middle class in a high tuition/high property tax neighborhood ..

I’d say inherited money gives that step upwards. Ex: down payment, help with extras, college etc. gifts especially the amount of wedding money of 100k plus depending on your guests..

We had to start from scratch - saved for everything which gives a good work ethic, but we’re not nearly as able to invest from the beginning of our wedding money, we’re trying to get advice on what to invest but our savings is negligible compared to someone who inherited money.

BH we have what we need, our needs are not wants and we’re giving over good work ethic and living within our means to our children.
We have friends in investing so we ask advice and they help us out …

amother

↑ Stone ↓

Sun, Nov 24 2024, 11:09 am

amother Phlox wrote:

So what DOES put you in the right mindset?

How to think like a millionaire. Millionaire mindset and habits. Think like a billionaire, become a billionaire (because a millionaire isn't that much these days LOL). In short, it's still about living any feelings and saving aggressively. But you need to take intelligent risks and maximize your investments. Of course the short version won't make anyone rich. Believing in the abundance mindset. It's hard to become rich with a scarcity mindset.

In addition to the box that really teach you how the market works. I find the ones written for teens to be easier to understand and still accurate. The Wall Street journal's guide to investing for teens. The motley fool's guide to investing for teens.

I can say over and over what's important in selecting an index fund, but you need to understand why in order to become rich. And if you understand why, it's a no-brainer.