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The Math That Explains Why Net Worth Goes Crazy After the First $100k


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 2 weeks ago '05        #26
pnoi89 
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 Loknows said
So this is for stock market investments. Give me an example. Big Corp stocks like apple Amazon etc. You will invest $10k a year in that?
I invest mostly in index funds. Index funds are compilations of stocks set by criteria. Though I do own some individual stocks, from Apple, Amazon, etc., more than 75% of my holdings are indexed.

For example, more than half of my holdings is with VOO (Vanguard S&P500) and FXAIX (Fidelity 500 Index Fund). The S&P 500 is an index fund composed of the 500 largest companies in the US, so yes, this includes Amazon, Apple and other big corp stocks.

Indexing is safer than individual stocks and mutual funds, but riskier than bonds and trust meaning decent earnings, removes human errors, has much lower costs too (compared to actively managed funds), etc. while stock-picking is high risk. I do like to gamble a little; hence, why I do hold some individual stocks.
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 2 weeks ago '17        #27
Pythagoras 
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 fallinginpie said
Thanks for the gems bro
Sorry if I come off as arrogant. The average American doesn't know much of anything about the stock mkt to be fair. But yea we gotta get on our sh*t. This is wealth creation.
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 2 weeks ago '16        #28
hakim1 
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Kill a relative and claim inheritance, put it in stocks or just slide it in slowly.

 92baby said
He means 50k I’m dirty money
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 2 weeks ago '12        #29
moth818  topics gone triple plat - Number 1 spot x1
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 krazyl3gz206 said
Vanguard S&P 500 ETF (VOO)

Easy money. If your investments ain't making more than this you might as well dump it in here.






becareful with etf expense ratio

VOO has a low expense ratio


but i rather just buy the individual stocks than buy an etf

 2 weeks ago '17        #30
fallinginpie 
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 Pythagoras said
Sorry if I come off as arrogant. The average American doesn't know much of anything about the stock mkt to be fair. But yea we gotta get on our sh*t. This is wealth creation.
My issue is bills and cost of living in nyc. Trying to get a good savings in order to get in the game but sh*t keep poppin up
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 2 weeks ago '17        #31
Pythagoras 
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 pnoi89 said
The S&P 500 is an index fund composed of the 500 largest companies in the US
This isn't 100% true. Some companies (like MLPs) don't qualify for the index die various reasons. In the case of MLPs it's because they aren't corporations even though they're public. There are also other requirements like public float (amount of the company owned by outside investors vs. management or other insiders) that keep certain companies from qualifying for the S&P.
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 2 weeks ago '17        #32
Pythagoras 
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 fallinginpie said
My issue is bills and cost of living in nyc. Trying to get a good savings in order to get in the game but sh*t keep poppin up
You should move.
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 2 weeks ago '05        #33
pnoi89 
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 Brewklyner said
Ye that 7% is iffy. What if I have 50k saved up and I take the whole 50 put it in a compound interest . The govt gonna ask me where i got that 50k from?
Long term investing, meaning over the course of your adult years, you can gamble that investing and riding with the market, through its ups and downs, aka the S&P 500. Previous performance doesn't determine future results, but with nearly a century of data on records, the average AFTER accounting for inflation, fees and dividends reinvested to be at least 7% returns, on average:




Source:
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 2 weeks ago '05        #34
pnoi89 
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 Pythagoras said
This isn't 100% true. Some companies (like MLPs) don't qualify for the index die various reasons. In the case of MLPs it's because they aren't corporations even though they're public. There are also other requirements like public float (amount of the company owned by outside investors vs. management or other insiders) that keep certain companies from qualifying for the S&P.
I'll rephrase, 500 large-cap companies meeting certain criteria.
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 2 weeks ago '17        #35
Lazy 
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 92baby said
n*gga no it’s not


If you spend there is no chance on returns

If you save and invest there is a chance you can become Rich or at least we’ll off


I can’t believe you typed that
If you are a person with an on average low life expectancy or live in a third world country, long term returns aren't viable

The decision between using now vs using and possibly losing later is foremost if you live in a system that doesn't support saving/investing


Last edited by Lazy; 02-04-2020 at 06:25 PM..

 2 weeks ago '05        #36
pnoi89 
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 Pythagoras said
 Brewklyner said
Ye that 7% is iffy. What if I have 50k saved up and I take the whole 50 put it in a compound interest . The govt gonna ask me where i got that 50k from?
I don't understand this question....
I think his worry is that if he decides to invest his untraceable $50k cash earnings he made 'under the table,' will the IRS come after him on unpaid taxes, maybe?

For certain tax-shield investment accounts like the Roth IRA, you need to be documenting within a range of income to qualify for that, but a taxable account, there shouldn't be an issue with new money, especially with something as low as $50k. There are much bigger problems for the IRS to worry about, than trying to badger you about where you got that monies from.
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 2 weeks ago '16        #37
GoCop 
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This is by putting 10K a year in a savings account??

I started stacking up on REITs and Mutual funds... if Im able to put 10 K into these things a year ill make much more than what these charts say
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 2 weeks ago '14        #38
reelife 
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 Eastcoast said
The problem is that the cost of living is starting to outpace earnings, which mean if you’re poor you don’t get to save much.
True but it all depends on how youre spending.
Someone that makes even 30k a year can invest at least 5k a year..eventually they will get there. The problem is we focus on spending our money on things we dont need to impress people that dont matter.
Expensive clothes, cars, fast food, dates, parties..gotta be frugal and consistent and not care what people around you think.

Its all a mentality, its the lack of knowing that k*lls us, the younger you start the better...this are things we gotta teach the kids as their back up plan. You can work any job and become good...it just takes a strong mind, knowledge, will and consistency.


Last edited by reelife; 02-04-2020 at 06:32 PM..
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 2 weeks ago '15        #39
GGG goat 
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95% of people can't save up 100k

if you have it, screenshot your account and post it
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 2 weeks ago '17        #40
92baby 
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 Lazy said
If you are a person with an on average low life expectancy or live in a third world country, long term returns aren't viable

The decision between using now vs using and possibly losing later is foremost if you live in a system that doesn't support saving/investing
Not true at all you can get a fitness certification for 500 bucks and damn near any gym will hire you then you can find clients and build your wealth up that way


You’d rather invest in yourself then random stocks anyway

 2 weeks ago '05        #41
pnoi89 
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 GoCop said
This is by putting 10K a year in a savings account??

I started stacking up on REITs and Mutual funds... if Im able to put 10 K into these things a year ill make much more than what these charts say
Most high yield savings accounts only yielding close to 2% APY.....

Also, Mutual Funds are littered with front loading fees and annual fees as well. In short, passively managed funds (ETF's, index funds) >>>> actively managed funds (Mutual Funds). The only time that makes sense is with you 401k, where your investing options are limited, but your employer's matching some of your contributions.

Also, unless your REIT's are invested within a tax-shielding account (retirement account like a Roth IRA), you'll be subjected to normal income taxes on your capital gains and dividends, as opposed to the much more tax-efficient capital gains tax.


Last edited by pnoi89; 02-04-2020 at 06:33 PM..

 2 weeks ago '04        #42
xbossxplayax 
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being able to get bigger pay checks was comparatively easier than continuing to live within means and not spending that extra earnings on bs that i never needed when i was small time
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 2 weeks ago '17        #43
2007 
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 Loknows said
Where do you obtain the 7% interest rate?
Good question.

Stocks are unpredicable. Be careful and make sure youre well invested in this scheme before u deposit money in to e trade.

 2 weeks ago '05        #44
pnoi89 
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 2007 said
Good question.

Stocks are unpredicable. Be careful and make sure youre well invested in this scheme before u deposit money in to e trade.
That's why you don't stock pick and pick a diversified index fund, dump money in it consistently and do it for the long term....

When it comes to investing, bonds are safer, but yields are sh*t and the only thing you're gaining is keeping up with inflation. You can hold onto your $1M too liquid, but you're taking an L due to inflation over time.

 pnoi89 said
Long term investing, meaning over the course of your adult years, you can gamble that investing and riding with the market, through its ups and downs, aka the S&P 500. Previous performance doesn't determine future results, but with nearly a century of data on records, the average AFTER accounting for inflation, fees and dividends reinvested to be at least 7% returns, on average:




Source:


Last edited by pnoi89; 02-04-2020 at 06:38 PM..
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 2 weeks ago '16        #45
GoCop 
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 Loknows said
So this is for stock market investments. Give me an example. Big Corp stocks like apple Amazon etc. You will invest $10k a year in that?
right now theres a trust called New York Mortgage Trust (NYMT) which is at about $6.30 - $6.35 a share

For every share u have you get .20 cents quarterly as dividends
with $5,000 in NYMT you are making close to 700 - 800 dollars a year...

believe me when I tell you Ive made a few people good amounts of money in the last 2 years straight off free gems I be giving out
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 2 weeks ago '16        #46
GoCop 
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 pnoi89 said
Most high yield savings accounts only yielding close to 2% APY.....

Also, Mutual Funds are littered with front loading fees and annual fees as well. In short, passively managed funds (ETF's, index funds) >>>> actively managed funds (Mutual Funds). The only time that makes sense is with you 401k, where your investing options are limited, but your employer's matching some of your contributions.

Also, unless your REIT's are invested within a tax-shielding account (retirement account like a Roth IRA), you'll be subjected to normal income taxes on your capital gains and dividends, as opposed to the much more tax-efficient capital gains tax.
thanks for this info bro, I needed that still learning along the way
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 2 weeks ago '17        #47
92baby 
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Great thread real good thread
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 2 weeks ago '04        #48
nwking  topics gone triple plat - Number 1 spot x2
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It's hard to save 100k depending on your job the city you live in, how many kids you have if at all and if you have a spouse. All that before student loans or mortgage or both. Let's not forget health insurance. Respect to anyone who got it done because that sh*t is not easy.
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 2 weeks ago '18        #49
set117  topics gone triple plat - Number 1 spot x2
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 AllWins said
Look at this rich privileged thread. All rich people are evil we need to tax them at 90% or higher.

We need a government that gives free sh*t to everyone. We need free government healthcare for everyone in the world. I need my student debt paid.

Bernie or bust. If you don’t agree you’re in shambles.
Your sarcasm lacks tact.
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 2 weeks ago '17        #50
92baby 
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 Lazy said
If you are a person with an on average low life expectancy or live in a third world country, long term returns aren't viable

The decision between using now vs using and possibly losing later is foremost if you live in a system that doesn't support saving/investing
People that live in a third world country shouldn’t even be thinking about investing they should be thinking about moving

Idk why you keep typing what you’re typing
+2   



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