Tag Archives: income

Money is an Easier Goal than Happiness

Since 2007, I’ve been writing, on an off, for HerEveryCentCounts. I was reading another 20-something-year-old’s blog and was massively jealous of her networth that was around $250k. I thought about my massive savings account totaling $7k and how my part-time job and internship were not even making it possible to break even every month. I learned a lot about personal finance and got myself a Roth IRA account. I started investing. I pushed myself to increase my income year-over-year. I got to the point, a few years ago, where I made a goal for myself to hit $50k in networth growth, year over year.

What’s crazy is that, after a lifetime of never focusing on one thing long enough to achieve my goals, and even with my life consistently crumbling around me due to my bipolar depression, I managed to hit my fiscal goals time and again. Nothing else made me quite as happy as seeing my networth increase every month in my OCD spreadsheets. I didn’t really know what I was doing when it came to investing, but I kept on putting money into the stock market, especially when it went down, and I saw my networth grow.

At the end of last year when, on paper, I reached $300k in networth, it felt like the biggest accomplishment in my life. I’ve never run a marathon or won a competition. I’ve never really done anything impressive. Hitting $300k at age 30, which was the goal I had set out for myself when I was 22 – at the time when it seemed completely impossible – was achieved. All of the ups and downs over the years seemed to be, at that moment, worth it. $300k wasn’t enough to retire on, but it wasn’t chump change. Suddenly my also unreasonable goal of $500k in networth before having children seemed possible, if I could just hang in there for a bit longer.

My boyfriend does not share in my money-obsessed ways. He saves a bit here and there, but he hasn’t invested any of his money outside of a Roth I convinced him to open when he turned 31. Meanwhile I’m throwing most of my earnings into the stock market, which is maybe dumb, but so far it’s worked out. As of Feb 15, my networth is ahead of monthly target towards my annual goal of $400k (this is the first year I’m trying to achieve $100k networth growth vs $50k.) As of Feb 15, I have $319k in networth. The stock market has performed quite well for the past few weeks, so this upward trend probably won’t last, and there will be pullbacks, but I’m excited to see that 1.5 months into the year I’m already trending towards my goal.

All I know is that I have to work hard for the next two to three years until I have my first child. There is no way in hell I can do the job I have now with children. I may have to change careers at that point, or at the least, accept a lower-paying job in order to be the mother I want to be. I’m strongly considering leaving my state and moving somewhere where I can purchase a nice house with a backyard for $500k, not $1.5M. My boyfriend is open to moving as well. It would be tough because it takes me a while to meet people, and at the least we have a few friends in the area, but I know if we stay in our region I will have to maintain my level of work and simultaneously raise a family. It’s just not going to happen. I see my friends who are parents who are either not working or working from home part time, and I can’t imagine how I would be able to keep my current job, or something like it, and also take care of a young kid.

While saving money, investing, and seeing my networth grow is exhilarating, at the end of the day, it’s my own little semi-secret. My parents still see me as this ongoing series of failures, jumping from job to job every few years. My boyfriend doesn’t care about my savings, which is good, but I don’t get any sort of extrinsic reward from his acknowledgement of my success. I guess that’s why I keep this blog to begin with, because it feels good to impress someone somewhere with my little fiscal victories, month over month, year over year. When you’re an adult no one really gives a shit about the amount of money you saved every month. I guess that’s why people buy fancy cars and big houses – because then it’s easy to show off your success. I don’t need to show it off, I want to be renowned for being the millionaire next door – one day – for being a woman who, despite suffering from crippling mental illness, has saved enough to be able to take breaks from work when depression hits, or when she wants to spend time with her future children instead of spending 10 hours per day working.

Then, I also realize it’s really dumb to want any sort of recognition for saving. Everyone does it. And my own saving has been made possible due to my parents paying for my college diploma, and my graduating without any loans. I’m too scared to dip into my networth to go to grad school, even if it means finding a career that I would be more naturally suited for, so I just hold my breath and hope I can last long enough to see another paycheck come through. I am well aware that my income, strong as it is right now, is likely short-lived. All I can do is push hard and save as much as possible each month — climbing as quickly as possible to my $500k goal.

I know $500k is an arbitrary number. It’s a lot of money but it really isn’t a heck of a lot of money. What $500k means to me is the ability to take a $60k a year job that is meaningful in a state where costs of living are lower, let the $500k grow and use the $60k to cover basic day-to-day costs, along with the income my boyfriend makes. $500k growing at 5% rate over 30 years is $2.1M. So if I can not touch my principal or the interest income until I’m 65, I’d have $2.5M in retirement. That’s how much I think I need for a comfortable retirement. And if it happens to grow at 8% YoY by 65 I’d have $6.3M in retirement.

So that’s why $500k is the magical number to hit before I can start doing things I actually want to do in my life… like being a mother, working part time building my own business, or writing for a local newspaper, or attempting to write my first science fiction novel. I still need to earn an income that covers my annual expenses, but I believe $500k is my version of financial freedom. I would still have to work, because I couldn’t tap into that money until retirement, but I’d be pretty much set as long as my average rate of annual return was at least 5%.

The exciting part of this picture is that the $500k by 32 IS possible, if I can succeed at my job and maintain my current salary for at least two years. I may come out of that with a head of grey hair and a heart attack or two, but I’ll be able to be the mother I want to be.

Feb 1 Networth Progress:

Screenshot 2015-02-14 19.54.19

Holy Cow: 1 in 5 Millennials Living with Parents

Today The New York Times posted a piece “The Boomerang Kids Won’t Leave.” Apparently one in five people in their 20s and early 30s lives at home today. And 60 percent of young adults receive financial support from their parents. Despite the challenges I’ve faced in my career, I know I’m extremely fortunate to have been able to… boomer… without the rang.

Nearly 45 percent of 25-year-olds, for instance, have outstanding loans, with an average debt above $20,000. Student loan debt is frightening. I’m a privileged spoiled brat. My parents paid for all of my overpriced, mid-tier private school BFA and a ridiculous amount of expensive art supplies along with the typical library of never-look-at-again textbooks. While I picked up a very part-time job in college at my school (because I didn’t like feeling that spoiled) the reality was the little money I made barely covered, well, not much at all.  Continue reading Holy Cow: 1 in 5 Millennials Living with Parents

Women = Breadwinners. Man = Breadmakers.

It looks like I’m not the only woman in the world gearing up for a life of winning some bread. Four in 10 American households with children under age 18 now include a mother who is either the sole or primary earner for her family, according to a Pew Research Center analysis of Census and polling data released Wednesday. This share, the highest on record, has quadrupled since 1960.

The public is still divided about whether it is a good thing for mothers to work. About half of Americans say that children are better off if their mother is at home and doesn’t have a job. Just 8 percent say the same about a father. Even so, most Americans acknowledge that the increasing number of working women makes it easier for families “to earn enough to live comfortably.”

The median household income for married women who earn more than their husbands — more often white, slightly older and college educated — is $80,000. When the wife is the primary breadwinner, the total family income is generally higher. That’s probably because if men work they’re doing it for the money, whereas there are woman working just because it fulfills their blessed hearts, if they happen to be married to someone wealthy. Continue reading Women = Breadwinners. Man = Breadmakers.

Oh the Progress You’ve Made…

Sometimes I forget just how far aheads I am (in terms of savings) than most of the American population, let alone most people my age (28.) I obsessively check my networth and investment growth, and have this month watched my “investing for fun Sharebuilder account” hit $100k. Sure it’s down a few thousand now under that mark, but I’m confident it will inch over the line again. My total Networth is now $200k, a goal that seemed completely impossible just 5 years ago on my then $50k a year salary.

A few months after I started investing in this “fun” account the stock market crashed and it was hard to keep watching my investment account go down. At the time, even though I had about $15k in the account, it was painful to watch it slip to $10k or less. I knew that was the right time to invest as much as possible, so I started to try to pour as much as possible from each paycheck into my investment accounts.

Interestingly enough, my more “safe” investments — such as my Vanguard index funds — have not performed well at all over the last 7 years. Meanwhile my fun account — which is unfortunately taxable but the only place to put my investment dollars when either I have no 401k option or I’ve maxed out my 401k and Roth — had performed quite well. It’s had its ups and downs, but I realized overall since starting the account it has made about $25k — on less than $75k investment. Knock on wood as things can always change, but the performance has definitely been much stronger than my safe accounts that have barely moved at all.

I recently met up with two of my friends from different aspects of my life — one who I grew up with back east, who moved across the country to go to culinary school and has been moving her way up in the world as the manager of a hotel. The other, also my age, I met in a summer program in high school. She too picked up and moved across the country and is now working as a video editor. All of us are middle class — the hotel manager, I’ll call her Sally, owns a 2br condo in the suburbs, which her parents helped her purchase despite the fact that they were struggling with money. I don’t know her exact income but I’d guess it’s around $60k. My friend the video editor has been at the same job for 6 years now, and hasn’t received much of a raise in those 6 years. Her income I estimate to be about $50k. She likes her field but is unhappy with the company and some colleagues, but is comfortable without change. She hasn’t saved for retirement yet and is living in a 1br apartment for about $1200 a month (which isn’t bad for the city she’s in, but having roommates could help her save more.) Meanwhile, my boyfriend just quit his PT $20/hr job and has $0 in retirement savings. He turned 30 last March and is finally getting his act together and looking for a FT position with benefits and such.

I’m sitting here today staring at the net worth in my PersonalFinance.com account, with the number $200,947.58 staring back at me. This isn’t a fake number or guesstimate of my networth today. This isn’t filled with some questionably accurate estimate of a car or home value. This is $200,947.58 of straight-up cash and stock investments. This isn’t meant to brag — for one, I could have been much wiser with my money to date and saved even more, and two, I know I’ve been fortunate in my upbringing to be able to get where I am today, with no student loans and $5k from my parents plus $10k from a lawsuit when I was a kid to buy my first car and get started in the world.

Still, my friends noted above had similar situations. My friend the hotel manager may have student loans, but her parents bought her a 2br condo. My friend the video editor had her college education paid for and is likely going to inherit a large sum down the road. My boyfriend’s college education was paid for by his mother, and he lives at home paying $0 in rent in a part of the country where jobs that pay well are relatively plentiful. So, in short, I feel ok comparing myself to these three people I know in understanding my level of success versus the rest of the world who may be less fortunate.

In June, the average American family saw their net worth drop 40% in that three-year time period from $126,400 to $77,300. Going on 29 and single, I’m already well above that. It’s sad to think that most families do not have more than $77k in networth! I’m still shocked that I’ve been able to save and earn this much on my investments in less than a decade of work. I’m a bit terrified of how little i’ll be able to save once i have a family and kids — I’m pretty sure the whole financial advice that marriage is good for your finances is actually going to be the opposite for me.

Looking ahead, I’m focused on continuing to save $50k per year. My goal has always been to hit $250k by the time I turn 30. As long as the stock market cooperates next year that may be achievable. Given I’m at $200,947 right now with 3.5 months left in the year (and a big iphone release coming out which will only help Apple stock ride up in the short term), I could theoretically hit this goal much sooner than thought. The car purchase will definitely get in the way — it’s kind of funny, but one thing my DUI proved is that large expenses don’t have to get in the way of your goals. I’m still pissed at myself for all the chaos that one stupid day caused to my life, but the reality is the DUI was my largest-ever “expense” and I’ve lived to tell about it. I estimate the DUI will cost me $10,000 all things said and done, whereas previously my most expensive purchase was my car for $7500. Sure, without the DUI I’d actually be able to purchase a car right now and be well over my networth goals, but in a way it’s shown me that you can spend money in life and still save quite a bit.

My goal has always been to have $500k in the bank before having children. The plan right now is to get married at 31 (in 2 years) and start my family in 3 (wedding in 2014, start family in in 2015.) That gives me 3 years to save $300,000, so that goal is highly unlikely. This year my stock performed well but in reality I’ve saved about $25k and the other $25k was earnings on my investments. That may not happen in future years and it very may well go in the other direction. Eeks. But even if I can save $50k per year, that’s still just $350k by the time I want to start a family… no where near the $500k goal. I could wait another 3 years to start a family and put marriage off as well, if I can continue as planned saving $50k per year I should reach $500k by 34. But I’m worried 34 is too late to start having children given my PCOS and how hard it will be for me to have kids in the first place. Sigh. I get very freaked out about how fast life is going and all the choices that need to be made. But I really don’t want to have children until i hit that $500k networth mark. Of course my company stock options can significantly impact this. If my company is able to have a successful exit, my networth could skyrocket past that goal. That’s always in the back of my mind, but I don’t like to consider that in my planning as it also very well may not happen. It’s crazy to think that there’s a better-than-winning-the-lottery chance that it may, but until the day that happens I’ll stick to my plan of saving $50k per year, and try to up that quite a bit so I can get to $500k earlier than 34!

June Networth Update: $174.5k (-0.78%)

It’s been a rough networth month for many of us, as the stock market, which was doing so well earlier this year, has decided to take a turn in the other direction. In May, my portfolio took a hit, as I managed to spend a bit of money on a few weddings (gifts, dress, shoes, etc.) I’m honestly surprised I ended the month just .78% down.

Assets: $181.628 (.43%)
Cash: $11,870 (124.56%)
Stocks: $113,634 (-2.33%)
Retirement: $52,735 (-3.56%)
Future Kids College Fund: $3389 (-1.77%)
Debts: -$7,087

Networth: $174,541 (-$1367, -0.78%)

In order to hit my goal of $200k this year, I need my account to increase $3637 in June, or 2.08% of my current networth.

$3637 Gain Goal in June? Here’s how…
$1125: 401k auto investment
$1500: savings
$942: growth on investment (.5%)

Of course, if my stocks don’t play nice, this could be an unfortunate month. But, the good news is, I am eligible for a bonus again this July (and again in September) which could help offset some of the losses from wonky markets.

2012 Self Operating Plan to save $50k for $200k Networth

This is a big year in my networth saving. I hope to have $200k in all of my accounts by Dec 31, 2012. This will have me on track to $250k by 30; and $500k by 35. Somewhere between 30 and 35 I plan to get married and start having kids, so that will change the story a bit, but I don’t want to get married and even think about having children until I have $250k across my various savings and investing accounts.

Since graduating college in 2005, I’ve increased my networth from $10k to $145k. On average over the last six years, I’ve saved (or earned interest on my savings) an average of $22.5k per year (my income for the past 6 years has been $15k, $25k, $35k, $55k, $65k, $85k, and now $90k.) My goal these days is to save $50k per year, but that remains a difficult feat on my $90k salary. Lately I have been eligible for a bonus of up to $20k, and I hope to hit my objectives in order to achieve a $110k per year salary including a bonus.

In order to reach my $200k goal in 2012, I will have to be very strict with my spending. I’m not sure that amount of saving is even possible (unless the stock market rebounds) but my plan of income vs spending below will need to be followed spotlessly if I am going to achieve my goal in 2012. Continue reading 2012 Self Operating Plan to save $50k for $200k Networth

Without a Raise, How my Salary Increased from $20k to $90k in 5 years.

Some people get annual raises of 3% to keep up with inflation, or more if they’re lucky, and less if it’s in the middle of a recession in a company that can’t afford to offer raises.

I’ve never gotten a raise. Since graduating from college in 2005, I started out making $18 an hour at a non-profit and am now making $90k a year. This was not through raises. In fact, my income trajectory is due to learning to pick myself back up when I lost my job, re-brand myself as something more valuable, and attack the job market with as much belief as disbelief in myself, which allowed me to take a lot of risks as I wandered my career path to where I am today.

Had I remained at my first job for longer than 6 months, I might have received annual raises and be making somewhere north of $25 per hour today. I’d have five years of Admin Assistant at a non-profit on my resume, which, if I were to leave to another position, would move me into yet another admin role, or a very low-level assistant position in another department.

Instead, I got laid off. Well, in that case I was fired. I was in the depths of one of my worst depressions that year (yea, got to love being bipolar) and my boss didn’t exactly understand why depression made it hard for me to drag myself out of bed and get to work on time. So that job ended, and within a week I managed to land my first full-time position as an editorial assistant at an international magazine making $35,000 a year. At the time, I was extremely excited to be making more than $20k.

I stayed in that position for a year and it went well enough, though the career path was not quite right and when the opportunity to jump ship came I jumped. This was the only time I was actively recruited, and thus my salary went up from $35k to $50k. This was a huge jump. Again, had I stayed at my employer where I was working as an editorial assistant, I’d be lucky if I were making $50k today. Instead, I left. And I stayed at my next position for three months, at which time I discovered I was (and still am) a terrible reporter (too socially anxious to be a good reporter and ADHD to pay attention to all the facts) so I left that role, again depressed, thinking I had thrown away all chances I had of a career, and moped around for a few months.

But then another opportunity came up. I found a part time job writing copy for a local startup at a rate of something like $35/hour. My contract there expired monthly, and I managed to re-negotiate a higher hourly rate each time. It got to the point when both my boss and I were tired of negotiating, and he offered me a full time job. I pushed the salary up a bit in our final negotiation to $65k, which I was offered. At the time I felt like I was rich.

Two years later, I’m laid off again. This time because the product I was working on was being shut down. I go for a month without a job and again fall into a deep depression — oh woe is me — oh woe — oh what am I going to do?

I land two jobs in those two months — one full time contract at a large, international tech company where I’m able to negotiate a $65/hour payrate (! — I inquired how much the role paid — $30-$60/hr, told them I wanted $70 an hour, totally thinking I was going to throw away the job by asking for so much, and they came back with $65) and another hourly role at a startup on the side at $40/hr. After a two month hiatus from the work world, I had the most profitable 6 months of my life. But that too had to come to an end.

The contract role at the big tech company was not extended because the product I was working on was being shut down (story of my life) — but I was ok with that. The startup I had been working for over the length of the contract was doing well enough to hire me on full time. And while I could have pursued a full time role in the large company where I had the contract (I had a few leads that might have turned into something) instead I decided to jump to the startup, assuming I’d have a stable salary and health insurance, vs the contract setup.

Mission accomplished. I secured a role with not only a $90k salary, but also a title that (assuming I am successful in this role) sets me up for higher-paid positions to follow. I doubt I’ll get a raise in this job either, but I also assume that within the next 3 years I’ll move on to a new position, and ideally break six figures, because now that I’ve found an industry and role I’m good at, I am sculpting myself into a valuable prospective hire.

Those first few years were really rough, and I’ll undoubtedly have a ton of rough times ahead, but at the very least I am confident that the harder you fall, the more room there is to leap higher than you’ve ever leaped before.

Clashing Long Term Fiscal Values in a Young Relationship

My boyfriend and I have been together four years. I quickly fell in love with his kindness and calm nature, which contrasted with my oft-anxious and somewhat self-centered relationship with the world. Mostly, though, I found that after dating a law student for two years I felt much more comfortable in a relationship with someone who had less motivation than I did than more. With the lawyer, who had an Ivy undergrad education and a JD from a top-10 school, I could never equal his level of success (or so I thought at the time) with my average schooling and internship salary.

Thus, dating a guy who wasn’t striving to become the next Joe Jamail was a refreshing relief. With the attorney, I always felt like he looked down on my choices and with that my depression over uncertainty, my 21-year-old lack of clarity. Enter my current boyfriend with his lack of concern over professional title or climbing up the corporate ladder, and I felt safe. With him, I felt comfortable moving up my own corporate ladder. It’s not that he is stupid or anything, he too has a degree from a top school with a high honors mark on his diploma to boot. So intelligence is not the factor here, more so, it’s the fundamentals of what motivates a person.

Four years later, my boyfriend and I still have little arguments about money. He doesn’t like discussing finances – which, fair enough, is not something two people dating oft discuss prior to marriage or at the very least engagement. After being unemployed for a year and not applying to jobs, he eventually landed a low-paid, part-time internship (one that I had completed earlier) and after that found an hourly editorial job at a non-profit that paid less than I made at my first non-profit job. It was obvious he hadn’t cared to negotiate for a better starting wage, but mostly I was proud of him for finally getting out of his funk and getting a job.

The years go by… and neither of us are by any means perfect. I manage to get fired from… a few jobs… because I lack motivation when I believe my contributions would be better contributed by a robot. As I learned to force myself to do my job no matter what, I got laid off because that job was no longer needed. To my credit, every time I lost my job I managed to practically double my salary in my next position. I moved across industries and tried out a lot of different things to figure out where I would be fulfilled. I realized that I am, to some extent, motivated by money – not by having nice, flashy things, but by watching my networth increase… my maxing out my 401k… by feeling that I may one day have enough to afford a house, even in the Bay Area.

My boyfriend, on the otherhand, spent those three years working at the non-profit. He did his job very well, followed orders, increased productivity in the company by making many of the processes more efficient. He never asked for a raise. His boss gave him a very small “raise” when he decided to work less hours and go 1099 contract instead of W2 hourly. He’s still making $20/hr, while I’m billing upwards of $80/hr on some of my projects.

This isn’t to say that I would judge anyone for working a job that makes $20/hr – there are plenty of jobs I respect out there that earn this. If you’re talking about $20/hr in Kansas, that’s also a very different income than $20/hr where the average small house costs over $1M. But this is where we always get into our little tiffs about money… I argue that before I have kids, I’d like to have an average yearly dual income of at least $150k. Long-term, I see no reason why that dual income can’t be $300k. And I would feel more comfortable in life, before deciding to have children, to know that we’d make that kind of income in our lifetimes.

My boyfriend thinks I’m crazy. Maybe I am. $150k for a family income is not unreasonable, but the majority of people in America live on much less than that – and many of them have healthy, happy families. I just look at my current spending – which could be more frugal, but is by no means extravagant – and wonder how I’d ever be able to save for retirement and pay for a house and potentially pay back graduate school loans, all while also affording children (I want two or three of them within the next 10 years.)

My boyfriend, who also wants to return for graduate school (either to become a teacher or psychology researcher) will never care about income above and beyond middle class. It’s not that he’d mind if his field paid more, he just will never be the type to push for raises or chose a job because it pays better. And as much as I admire that about him – as much as I feel safer in my own career journey knowing that my partner will accept me and love me if I make $30k a year or $200k a year, I still feel like sometime down the road this difference in fiscal values will start to hurt us a lot more than it does now.

There are times when I think of what it would be like to continue my search for my life partner, and I just can’t imagine being with anyone else. I love this guy to death, and again, I couldn’t be with someone who cared that much about money. If anything, I know that I’m most comfortable bringing home the bacon because then I feel I have more right to be in charge of the household finances. My mom is clueless when it comes to money and my entire life my parents have argued about how it should be spent. As my father was the one bringing home a single income (albeit over $200k by the time he retired) he never felt she had any right to be involved in financial decisions. If I was with a guy who understood finances more than I did… and made more money… then I might end up in that situation too. So I’d rather be the one in charge, making more money, and with a guy who maybe doesn’t care that much about his salary.

It just makes me nervous about limiting my choices later in life. What if I want to take a year off to spend time with my newborn child? What if I want to work part-time to be able to go to my child’s plays during the school day or drive them to soccer practice? On the whole other hand of this, I’m terrified of knowing I’m worth “$200/hr” or whatever my going rate would be at the time, and then deciding not work that hour because I want to spend it with my family. It would almost be easier to have less money, have a stable job, and never feel like my time is stamped with a dollar value. Or, at the least, have a partner who earns as much as I do, or around the same amount, so we could contribute to a goal income for the year… and enjoy the time we have off without the calculator in my head exploding over lost income opportunities.

September Networth: $77,434

Will I or won’t I hit my goal this year of a $100k networth? It’s possible. I’m at around $77.4k right now.

I need to be extremely frugal over the next four months to hit my goal.

As far as income goes, I’m expecting:

Potential September Income

Project A: $10000 pre-tax this month
Project B: owed $1600 + potential income of $3200 (pre-tax)
Project C: owed $300 (pre-tax)
Total: $14000 pre-tax… ~$9000 after tax.
I’ll prob spend $2000 this month on rent, food, insurance, gas, health, etc.

So if I can do +$7000 this month I’ll be at $84k.
That leaves $16k that I need to make in 3 months between Oct & Dec, or $5.3k per month after tax.
It’s possible for Project #C I will start a $5k-$10k per month contract for 1 month. That would help a lot! Project B will likely pay around $3200 pre-tax for part-time, though it’s not guaranteed. Project A is likely ending this month.
I plan to donate 10% of any income above $100k that I earn and 15% of all income above $120k, if I happen to earn that much, 25% of all income over $150k. It’s not much, but I like the idea of donating a portion of income I earn over $100k.

I Will Teach — Me — to Be Rich

Earlier today on my lunch break I opened up the PDF first chapter of Ramit Sethi’s “I Will Teach You To Be Rich” and read through it quickly.

One part that stuck out was early on when he poses the question “what do you define as rich?” He argues that you first must figure out what rich means to you in order to get there.

What does “rich” mean to me?

It means…

  1. Having enough passive income to not have to work.
  2. Having enough passive income to fund my own business.
  3. Having enough passive income to fund my own business and fail. Maybe 3 times.
  4. Being able to work when I want, for who I want.
  5. Having enough money to donate large sums each year without feeling like it hurts my ability to achieve above goals.
  6. Manage to do this while also having a family with 2-3 kids and supporting an upper middle class lifestyle and occasional splurges.

A few years ago, I would have said “making over $50k a year.” Well, that was never rich in my mind, but it sure came close. I recently reviewed my social security statement for the past six years and realized that with the exception of last year, my largest yearly income to date was $25k. Last year I made about $63k. This year, I should hit $80k-$100k. And that still doesn’t feel rich. I feel less rich now than I did when I was making $25k because instead of wealth being impossible, it instead is a hard, yet achievable road of long hours, late nights, working for ‘the man’, or finding the right startup to get lucky at.

If I never have kids, never buy a house, avoid graduate school, and maintain my current level of saving ($50k per year) with a 5% rate of return on average, I’ll have over $1 million by the time I’m 40.

But is that rich? Not at all.

What does “being rich” mean to you?