I have to admit I wasn’t as impressed with the latest “Millionaire in the Making” series on CNNMoney. I do think I need to cut these folks some slack because they are doing better than a lot of people. I think that changing careers in their 40’s and not coming to the realization that saving/investing was so critical when they were young probably plays in to their 401k balances. ($170K at age 49/52).
Now, for the positives:
- Their 401k ($170K) is larger than the median balance in our country
- They have a significant amount of real estate holdings. (two homes, one more in progress)
- They are maxing out their 401K contributions and putting an additional $12k per year in taxable accounts. (Smart!!)
So, I guess I’m just in a bad mood or something. These people are doing better than many other people their age. I think that if they had been able to apply their current practices earlier in life, they’d be in REALLY good shape now.
Here is the article:
http://money.cnn.com/2006/06/19/pf/millionaire_claudio/index.htm
Great points. So I’m not crazy. I agree, they seem to be pretty heavy on the toys and light on the savings.
Wow, I am so not impressed with these folks. They’ve got $170,000 in savings, are above 50 years old, and claim to be frugal.
Yet they have, on a $130K salary:
3 houses (which sound like they are not cashflow positive)
A 30 foot boat
A 28 foot boat
A fishing boat
jet skis
A motorhome
A touring motorcycle
A Cadillac
A Dodge Ram pickup
A Jeep Grand Cherokee
A Ford SUV
Then they claim to have turned their friends onto savings. A 2-person household with 6 vehicles, 5 boats, and 3 houses on $130K per year does not strike me as saving much. And they want $2 million in 15 years? I doubt they’ll get halfway there.
I do think they bought way too much unnecessary stuff, but it seems like just about everything was paid for in cash. The people I’m most not impressed with are the ones who boast about their vast real estate holdings, but all of their stake in the real estate is just from gains because all the properties are 95 or 100% mortgages. At least these people aren’t paying for all these things every month, and they can always sell them.