At what point did your investments start growing faster than you could save money?

The shift happens around the 80k to 120k range for a lot of people, but it sneaks up on you. One year you're grinding out contributions, the next a random green day does more than your whole paycheck. The stress doesn't go away though, it just changes from "will I ever have enough" to "please don't give back three months of my life in a week"

"please don't give back three months of my life in a week"

We've all been there lol. One tweet can undo a whole month of gains.

Lost almost $6k this past month because of said “tweets”…

This has been a rollercoaster month for tech. What I will say is divestment in other sectors is quite good to avoid that. Software and hardware e.g. chips are often going opposite directions. Energy moves opposite the entire market now also with how stuff is. If you can strike a good balance portfolio will pretty constantly tick up. I don't fully understand the bond market but I also feel that if inflation or currency devaluation is going to happen, assets like owning stocks are the safest haven to be in medium term. But stocks with big debt may not be

Yep, I envy tech gains even from recently this year BUT my S&P/SCHD heavy portfolio is near my ATH and wasn’t gutted due to over concentration… maybe just cope but slow and steady seems to work (not 4x in a single year, but it’s impossible to always pick those/for such an environment to be a regular thing). Not sure if any of this makes sense as I’m pre coffee

going from "will i ever have enough?" to "please don't erase 3 months of my life" is a crazy plot twist 😭

At the same time, sometimes I hope for a nice dip just so I can buy more at a lower price

it's funny how investing changes your brain. everyone else sees red and panics, meanwhile you're sitting there waiting for the discount 😂

DCA life

Its interesting to rework your brain to see green as sell and red as buy.

it's funny how you basically have to train your brain to do the opposite of what your emotions are telling you 😂

And this is one of the hardest parts of trading and investing

exactly 😂 everyone says “buy the dip” until their own portfolio is down 20% and suddenly that discount doesn’t look so attractive anymore 😭

New to investing but fascinated by this and all psychology around economics, personal finance and investing. Makes me wonder if the bear hate on WSB is a psyop haha. We are primed to cheer for our team to succeed, not fail.

Sell? There is no sell. Only buy

Yep. Not selling a thing until I'm retiring.

That's actually a terrible strategy for individual stocks. Warren buffet talks about this. Most people sell their winners and double down on losers when you should be doing the opposite. Sell the losers and buy the winners

Shouldn't hold to close to that quote with out understanding Buffet as a value investor as well.

There is truth to that. I'm not buying NKE or UA just because they're down in the dumps, and I'm not buying LULU because they have strong headwinds.

23 here, and the Buffett point really only applies to individual stocks, since index buyers just treat red days as cheaper shares instead of doubling down on a loser

While true, it's important to understand some things here. The people who can afford to still buy see it as a discount. Generally, when there is a longer, significant dip, that's correlates with businesses not doing well which correlates with people getting laid off. You should feel bad or anything, if you can afford to keep buying, definitely do so. But for you neighbor whose wife or husband got laid off, they may have to choose between contributing to retirement and buying while the market is down vs paying their mortgage. Again, it is what it is and you do what's best for you. Jr don't take it for granted and understand that that great opportunity for you almost always comes with that other piece.

2009 and 2019 were lessons in holding dry powder. If you just had 20% bonds and rebalanced into those markets you'd have done extremely well. As markets tank bond prices rise. Doesn't always work that way but those two events did.

Sure, that's not really the point of my comment though. Trying to make sure a young person understands the bigger picture and that the thing that makes them giddy isn't simply about "not panicking and buying the discount".

The healthier thing for most people is to use a simple method like the Bogleheads 3 fund strategy or a target date fund and check the balance once a quarter or whatever. Most people cannot time the market over a significant amount of time, and obsessing about your daily balance leads to the temptation to do so or panic sell. Let the money you won't spend for another 40 years do its own thing in a smart policy (for example, do rebalance if you use the 3 fund strategy) but spend your time being a young person.

i can definitely see the appeal of keeping it simple. there’s something nice about having a strategy you can stick with without constantly trying to predict the next big winner.

Studies show that very few people beat a simple index based strategy over time, even professionals with research teams. There are exceptions of course but the big winners brag about it a lot more than the big losers, so there's an unrealistic picture painted.

I think it helps if you are very familiar with an industry.. otherwise just pick an ETF. I picked up AMD when they won the console business and the moment Jim Keller came back was the deciding moment. While everyone shouted bankruptcy I was certain consoles were a life line. 10+ years later I am still holding. For the rest ETF, I simply don't have time nor the knowledge of sectors outside tech. That being said I never predicted the AI boom, but I still re-evaluate my position regularly to decide whether to continue holding or selling.

Clearly you haven't been to r/wallstreetbets

For me it's taken the stress out of the workplace. I don't feel the pressure to earn that I used to. I still work. I still do my best. But it's not as important to me anymore. And oddly enough, it's made me a better employee. I'm easier to get along with and I'm more productive. Because I'm not stressed about it anymore. Inflation has been kind of fucking everything up though. I can't imagine what it must be like for someone renting and living paycheck to paycheck.

I totally feel this. It’s a bit like that movie Office Space where dude is hypnotized to just not care, and the bosses are all like “He’s a real go-getter!” I mean…I still care, but in a different way. Before, if I was going to take on a special project or whatever I cared so much about “not failing” that a 10% chance was too much. Now? I see the 90% success rate and not only see the 90% probability of success, but a much lower consequence of that 10% failure. So, I take the chance, reap the reward most of the time, shrug off the inevitable mistake and everyone looks at me like “wow!” Success builds success and I am a much, much better employee.

Yeah i get this too.

And it's different when you've lost the stress and pressure because of your own merit. It's not coming from a paycheck. It's coming from your own brain power.

I'm not kidding when I say when I have a bad day, I look at my investments and relax a little.

The feeling of going from extra money cushion, or house down payment or what have tou, to potential seed for generational wealth or very early retirement, and the increasing feelings of euphoria or panic that go with that can be wild. A $25k swing in one day feels utterly unreal. Amazing when up, horrible when down. At some point you gotta end up just looking at the percentage instead of the actual number to maintain sanity, and really make sure you're not throwing money at something dumb or just chasing those green number based highs.

Yeah that and on the down days you can’t tell yourself I lost 20k today. You have to retrain the mind to think it’s “down” whatever %. Just like up 20k isn’t “made”. It’s not final unless you sell for profit or loss. I like to think of it as I’m in the market for another 20 years. I don’t care about the big up days or down days cause it’s always gonna be a slow roller coaster with some steep climbs and dips here and there. I had BROS a while back and an earnings call had me up 30k in an hour. I worked many years where I never made it to 30K in income and one silly earnings call surpassed a whole year of work in my 20s. And yes I sold. Crazy.

The whole appeal to investing (in my mind) is there's no need to monitor closely enough to have emotions about swings. The whole thing could swing up or down a month's paycheck in a day, but it's not like I'm cashing out the whole thing tomorrow. The stress of "please don't decrease 3 months pay overnight \[but there's still over a year's salary in there\]" is not the same as "I might have to work forever"

When I hold large positions in single stocks I think like this. When I own ETFs, I forget to check the market for days at a time.

I log into my account often because I use my Roth for some trading. I don’t usually worry about not having enough, but I do stress about, “Man this isn’t growing!” And then I check the account value the year before and think fuck I’m doing good.

I honestly don't mind dips in the market at all. I actually love seeing it go down because that means my next contribution will be in at a lower price. And the market always goes back up. I suppose I'll start hating dips when I get into my 50s and I'm less than a decade from retirement

At 52, the daily fluctuations of the maker can exceed what I made in a year in my first job out of college.

Last 3 years been getting unrealized gains of about 170kish avg per year. 1m to 2m net worth growth. Gross salary 120 to 140k/year. Savings of about 80k a year

making more in unrealized gains than your actual salary is wild. at that point does it change how you approach your job, or do you just keep doing everything the same?

Personally my plan is to keep it the same until I hit my FI number with a 3% withdrawal rate (I realize this is investing and not FIRE but I feel like there's relevancy here) and then allow for some life inflation. That being said, once I hit the point where savings compounding started getting close to how much I could put away I started feeling less bad about a COLA increase for my expenses. But if you already live a comfortable life then why not continue operating as usual?

How do you save that much? If that’s your gross, then your net post-taxes is probably \~$78-$95k. Factor in deductions, housing, food, transportation, miscellaneous, etc…

Right, those numbers don’t make sense unless you’re living with your parents and they buy everything.

I make about 140k in cali. So Let's see. $24500 401k maxed out (including that as saving). That probably leaves on average 6.5k a month after taxes and other deduction or 78k a year. But yeah live with rents and probably spends 25k a year.

correct, living at home, housing expenses only about 5k a year

How are you saving 80k on 140k? What country are you in? In the UK, £140k salary is £72k take home (after pension and student loans)

US. of the 140, about effective 25% tax (federal, state and local). instead of pension, put into retirement via 401ks, MBDR and IRAs to defer or avoid income taxes and capital gains. 56k of the 80k is my contributions to retirement accounts (about 29k of that is income tax deferrable @ 22% so i save about 6k in federal taxes), 12k is employer 401k contribution. remainder 12k from net pay goes to brokerage taxable account. also i have no student loans and live at home , my annual housing expenses are 5k.

I'm 48 and worth around $3M, so I'm in this boat. Watching my portfolio is zero stress for me. Either it goes up, or I'm buying at a discount. It definitely makes me less excited about saving - how much do I really care about putting an extra $10K in, when it barely even moves the needle?

the part about an extra $10k barely moving the needle is honestly fascinating to me at 23. i feel like reaching that level completely changes how you look at money

I'm no where near that situation, but I don't think it would if I were. Investing for retirement with an outlook of decades means you need to be patient and level headed with money. Also if you've been investing that long you've also had years where 30 to 50% of your gains have been erased. But, you know in the long run it will usually pay off.

that's a fair perspective. i guess having a long-term goal makes it easier to look past the day-to-day swings instead of stressing over every move

FWIW when I was 23 I made $33k with a BS in marketing and the idea of saving $1k sounded insurmountable. Now, late 30s, we save \~55% of our net income which means $200-225k saved each year with a cash safety net of $175k. It does change how I look at money but I’ll never forget where we started.

going from feeling like saving $1k was impossible at 23 to saving over $200k a year is incredible. i'm 23 right now, so this is genuinely inspiring to read. what would you say made the biggest difference? growing your income, controlling your spending, or a combination of both?

Growing income, absolutely.

175k safety net lol. Insane

You don’t worry about because, given time, it will always go up. I have enough in my account that I typically see swings in the 5 figures quite a bit. It doesn’t bother me one bit.

seeing five-figure swings and not even flinching is wild to me at 23 😂 i’m curious though, did you just get used to the ups and downs over time, or was there a certain portfolio size where you stopped worrying about every move?

I just never really worried about it to be honest. Market will always go up over time if you are invested properly. Once you get enough in there and have over 6 figures, a small 5 figure swing down doesn’t even register.

My wife and I happened to watch a game show a while back, and seeing the winner's reaction to them winning really put things into perspective. Imagine if you won $100. I mean, that's great! You might buy yourself a videogame or a dinner out or something, but it's not life changing money and you're probably not going to be jumping around screaming like you just won the lottery. That's about how $10K feels to me. I mean, I'd certainly be happy to receive an extra $10K - hooray, great! - but all that would happen is that I would put it in the bank and then absolutely nothing about my life would change in even the slightest way. So when we watched this couple win $10K and then jump up and down screaming like it was the most unbelievable thing that had ever happened... it was embarrassing to realize just how fucking privileged we've become, where it was genuinely surprising that somebody could be that excited over such a modest win. I realize that demonstrates how out of touch I am, and I realize it's gross, and I am not proud of it. I'm not defending it. I'm just saying that your perspective shifts and eventually it's hard to remember what it was like before you could reliably afford to pay your bills.

man, that game show example really puts things into perspective. $10k being life-changing for one person and barely noticeable for another is honestly wild. i’m 23, and hearing this makes me realize there’s more to success than just watching your net worth grow. i hope if i ever reach that level, i don’t forget how much that kind of money means to other people. seriously respect you for being so open about it.

Why is every single one of your comments AI

Noticed the same thing

If you reach that level, consider donating one of it to your favorite charities. :-)

honestly that’s a really good point. making money is one thing, but being in a position to actually change someone’s life with it would be pretty incredible.

True story for people living paycheck to paycheck, a little extra money is a windfall. The whole game show thing, though, they are told backstage to act like fools and like they have won millions. It’s what gets the crowd and ratings up. They can’t just sit there and give a thumbs up. If they did, I guarantee they would go back and shoot the scene again and make them pretend they’re excited.

And what have you done since that while back to get back in touch?

Remember that every $10k that drops in, grows at the same rate. So, in ten years, it will matter more than it did today.

An easy way to do the math is that your money should double roughly ever 7 years. So if you have 3 million and choose to add an extra $10k today, then in 7 years you'd have $6,020,000 instead of $6,000,000

If that makes you feel better I'm seriously considering taking my own life over loosing around 25k aka 90% of my savings. It's bcs this money was not won over investing or anything , it was over 6 years of hard work savings gone. So yeah it's insane.

Please don’t. Money will never compare to the most valuable thing in the world which is consciousness. Money comes and goes, but life is only one shot. You never know when the next windfall may happen. Too many people care about you to end it before you can make your resiliant comeback and teach others about how to persevere through adversity.

I won't atm but I'm just waiting for another terrible thing to happen . Knowing my luck I'll get either some terrible disease because health is the only thing I have or I'll have my family die or something ( my brother is suicidal and have terrible luck all his life , so is my mom ) it's like this family is cursed and WE ARE GOOD people. While bad people are millionaires and have women and everyone , I'm out here single and 0 luck plus loosing everything expect my health so far.

I hear you. At the moment it seems like everything is falling apart. But take a step back for a second. Your problems are absolutely real, but luckily you mentioned you have good health. Think about all of the other people that have cancer or auto-immune conditions. They have their own struggles too. Point is that very few people have everything. Some exist, but even they aren’t always happy. You’re not alone. You’re going to be just fine if you give yourself some grace.

I hear you brother , i guess I'll always live with a permanent ,, what if " thoughts tho. What if I didn't loose everything , what if I kept my portfolio , I could have been a millionaire technically . Now? Not a chance. Also this negative thoughts affect my life my face and my social interactions , people can just sense I'm always dark and in my head. I'm thinking of trying anti depressants or weed , will see.

Yes and no. I'm worth $2.5M and I'm still as frugal as ever. I don't think anything will change my day to day spending habits. What has changed, though, is the willingness to splurge once in a while for special occasions. Those moments are priceless.

being worth $2.5M and still living just as frugally is honestly interesting. i guess the biggest luxury at that point isn’t buying more stuff, it’s knowing you don’t have to worry about money the same way anymore.

Yes, the most valuable thing I've bought is peace of mind that I don't have to worry about money. That is far more meaningful than driving around in an Lambo.

honestly, that might be the best definition of wealth i’ve heard today. not having to constantly stress about money is worth more than any luxury purchase.

it does. But for us, it's been fairly healthy. Less stingy or frugal in areas that makes sense, more generous, picking up the tab with friends and family, not overthinking a trip or a gift. When 10k is easy come easy go, a $200 dinner tab or donation to a charity or a short notice flight for family is an inconsequential rounding error. might as well exchange some of that 10k earned through work for experiences, health, connection, or material item that will last years. To your question, it's not answerable generally because it depends so much on your income and what you are capable of saving. If you make 40k a year and can only save $500 a year, having like $8000 invested might outpace your ability to brute force save. If you make 500K and save half of your income, that crossover point is probably between $2-3 million invested. mathematically, most people will start to experience this around 100K, but the compounding feels very slow in real time at that stage, nothing about your life changes going from 110K to 120K net worth. the very straight answer is that it gets much more interesting around $1-2M where most years will be a six figure swing passively. For most people that will be more than their salary if they kept 100% of it, during a decade bull run it will produce over $1 million completely hands-off. totally different ball game.

that’s actually the balance i’d want to reach. having enough money to stop stressing over every purchase without completely losing the habits that helped you get there.

i think for most people that feeling will really settle somewhere around 10x your annual expenses the buffer and passive growth at that point is so significant that it actually becomes hard to make a financial mess unless you take a huge dumb gamble or inflate lifestyle prematurely

This is how I feel. I got a very big pay increase about five years ago, to the point where i went from negative net worth to immediately being able to save around US$10k per month. The early days were great watching my portfolio rocket up but now it’s a bit disappointing seeing the percentage increase more and more slowly as a result of my deposits (albeit I recognize this is objectively a good thing)

Same dude. Up 74k today? Great. Down 50k next week? No problem. YoY up 498k? Sounds good.

Yea, similar age & nw range here. In a normal year, the portfolio gains more than my salary. And I also know that on the flip side, a bad year can mean I work for free. Overall, I'm still frugal in terms of expense, but definitely less stressful. 

Wait until you reach the point where you "lose" $20k in one day. (And then gain $25k the next day)

Haha time in the market is king

Presently here. Its more like gain 10k 4 out of 5 days and then lose 30k the other. Maybe that's just semiconductors lol

I’m nowhere near these numbers but I laughed hard when you mentioned the semiconductors, they’re wild!

They've been really good to me long term even if they make me pull my hair out in the short term

I’m happy to know, I’ve loved them since day one but probably because I took this group’s advise to “not look at the numbers too much”, so I never know what they’re up to, but when I do check them out, they are making me smile.

I see this everyday with my semi heavy portfolio. Watching the ups and downs and not freaking out (much) is also proof that my belief that I have a higher risk tolerance is fairly accurate.

proof that my belief that I have a higher risk tolerance is fairly accurate

Eh... semis are way up. If they dropped 80% and stayed down for 2 years and everyone declared them dead, would you still feel fine?

Considering I'm up way more than 80% on them, probably. Not to say a huge drop wouldn't suck, but semis are a relatively small portion of my entire portfolio.

I’m there and it no longer phases me.

Exactly, it's all temporary and with continual contributions I welcome downturns.

But does it faze you?

Nope

I don’t look at my portfolio on red days, just stick to my schedule. Then track the total monthly or yearly.

It’s not a phase, mom!

Mentally you just have to figure that your portfolio is worth 70% of what it actually is. That way when the market shits the bed it’s not that big a deal. Plus if it’s qualified money, it really is worth 60%-70% of marked value bc of taxes.

Nah because 2 things: 1, I don't invest on emotion. The amount of news today is like drinking from a fire hose. You can't make decisions on emotion because 24 hrs later it's completely different. And 2, I invest probably 30-60k/yr between 401k's, roth, brokerage, 529s. So having continual investments go in, I actually welcome deep dowmturns because I'm getting more shares per dollar. If it's going up, then that's great too. Ill be getting less shares per dollar but it's going up which is the goal. So either way I view it as a win win.

ironically i don’t penny pinch so much now seeing how i can lose and gain so much from doing nothing

Lmao, lost 38k in a day on a cruise and had internet….and the drink package….#Jacuzzis.

Wait until you start a company and pay nearly 200k in taxes each month

I just remind myself that those were previous gains and it will eventually recover. I'm still way ahead compared to what I put in.

Once I had $400K in my portfolio I made $200K over the past 2 years

making $200k in two years is crazy, especially when you started with $400k. i’m curious though, did seeing that kind of growth change how much you cared about saving from your paycheck? or did you just keep doing what got you there?

i'm going to be honest, im almost certain you are a bot

Certain I'm a bot is crazy, especially when starting from nothing 😂. At what point did you notice the perspective shift and how did it affect your day-to-day life?

Mathematically you can calculate this with some degree of certainty. It’s called the cross over point. Given the sp returned 14% YTD, it well past what I can max with my 401k, HSA, and Roth combined. I think for me it was crazy to see my portfolio go from 200k to over double in nearly no time. It’s gotten to the point where when I’ve lost 10k in a day, I hardly even react in my retirement accounts.

i didn't even know there was an actual name for that point 😂 the math is interesting, but i'm also curious how it feels mentally when your investments start making bigger moves than your paycheck

Honestly insignificant, maybe even demotivating. You wonder what’s the point of it all when you’re slaving away for tomorrow. You question a lot around you after the novelty of making money wears off. I’ve been asking myself deeper questions in life that don’t revolve around money. For example, I was asking myself to define wealth and poverty in my life without the use of money. For me is the number of people around you that you genuinely enjoy being around. I also asked myself what dreams do I have now? Turns out the guy who I was in college died sometime between then and now. My curiosity of the world has died while chasing money. For context 37M, about 1.2 mil NW. With about 500k in retirement, 200k cash/brokerage, and rest in home equity.

honestly, this might be one of the most interesting responses i’ve gotten. i’m 23 and so focused on building something successful that sometimes it’s easy to forget what the money is actually supposed to be for. the part about defining wealth without money really stuck with me. i guess reaching your financial goals and actually feeling fulfilled are two completely different things. appreciate you sharing this perspective.

At 23, there’s nothing wrong with what you’re feeling. I think right around your age, I was signing myself up for grad school and digging myself into 225k of debt. This motivation is normal to have. Just don’t let it consume and define you along your path. I’ve seen it at my work place where a guy FIRE’d off his investing. It sounds cool, because it is. 5 mil at 52 years old. Guy pinched all the pennies he could. Rumor has it, he’s squeezed blood out of a stone once to invest a little more. But in that path, his body is broken, battered, and his reputation is known as a cheap skate that hardly would donate to the company party other than ice he gets from his freezer at home.

the story about the guy with $5M who still can’t enjoy life really puts things into perspective. i have some pretty big ambitions at 23, but the last thing i want is to spend years building wealth just to realize i sacrificed everything that made life worth living. i want to be successful, but i also want to actually enjoy what i’m working so hard for. seriously appreciate you taking the time to share this.

Why is every single one of your comments AI

Also why he tell ChatGPT to type in all lowercase? OP is pretending to be 23 not 16.

The basic math is when your portfolio is equal to annual income times annual savings rate divided by annual portfolio return. So if your income is $75k, and you’re investing 15% of it per year, during a 20% return year growth will exceed savings if portfolio is over $56k. You’ll need 2-3 times more before growth is larger nearly every year.

that's actually a really good way to look at it. so the magic number isn't necessarily $100k or $500k, it depends on how much you're saving and what your investments are returning. makes a lot more sense now

Yes. It gets really fun when returns are bigger than your entire income. Of course if a big positive return year is more than your income, you also get to experience down years occasionally when you lose more than your income.

Probably after that 100k mark but mine happened dramatically because of tech concentration. This is not investment advice and is risky, but January 2025 I was at 250k and now my portfolio sits at 635k. Probably 50-60k of that was contributions but now it's at the point where those gains make up more than what I'm regularly putting in by a long shot.

going from $250k to $635k is insane 😂 but i respect you pointing out the risk with being heavily invested in tech. did you ever feel tempted to take some profits or have you just been letting everything ride?

Nope letting it all ride. I'm 34 and around 450-500 of that is in 401k and roths so I've got 25 years before I can even touch that money so there's no reason for me to not be aggressive especially with regular contributions. The 150-170k that's in brokerage are about 100k of highly appreciated NVDA and the rest is a diversified equity model so some of that money is at least more spread out.

okay that makes a lot more sense now. having 25 years before you need the retirement money definitely changes things. but having $100k in NVDA alone would still have me checking my portfolio every 5 minutes 😂 what would actually make you decide it’s time to take some profits?

Eh I do to an extent but it doesn't really bother me. I honestly don't know what would actually make me take profits mainly because I'm on the verge of a pretty sizable earnings increase with my job so all of my bi weekly 401k contributions and investments are already going into less tech and more index so it's slowly rebalancing itself in a way. I'll probably hold onto a good bit of the nvda for a while still.

Are you donating a part of your income? To charities / churches or anything?

Occasionally but not regularly at this point of life. I plan to be more philanthropic in my later years especially RMD age.

That's good. I hate fucks like Nancy pelosi who hasn't donated a dime in their life's and keep sucking on the schemes to make more and more millions. I can't afford anything , I'm a addict who ruined his life and I was on the right path funny but something snapped I sold my investments and lost everything and more. Now I view life way different , I was a narcissist and 1 point and viewed homeless or poor people as beneath me , funny how everything can change.

Would you not be confident now that 600k by 20 years time will be enough to retire and just spend what you earn? Yes it's less tax efficient per say but a massive pension will be taxed too eventually.

Oh yeah im perfectly confident itll be enough. But my earnings are starting to have a good jump because of my job position and my future contributions have been funneled into more index funds or equity models that aren't quite as tech heavy so I'm "rebalancing" it as I go so to speak.

Once i hit 1 million the annual gain i have from stocks has surpassed my annual income from my full time job. But I do have to spend a lot of time to study and follow companies.

having your investments make more than your full-time job is honestly the dream 😂 but i find it interesting that you still spend so much time researching companies. do you mostly pick individual stocks or have a mix of index funds too?

picking stocks is a suckers game. \*source sucker

I started out with simple etfs like spy or voo...then because of my job i saw first hand how AI can exponentially improve efficiency of companies, I decide to study and buy only individual stocks of AI related companies ...nothing fancy or obscure, just 10 or so big names everyone knows about, and my account gained 40%, 55%, 50% last three years, and this year will likely be another 40%...it's been a crazy ride and i am grateful to be born at the right time ...what can be easier and obvious when companies like TSM are cheaper than Walmart. Good luck to you

seeing what AI can actually do firsthand at work must give you a completely different perspective. did that experience change which companies you invested in, or just make you more confident about AI long term?

No I don't have any insider knowledge of AI companies, I am just a full believer of the power of AI, people say the usage of AI has been exaggerated, I think the opposite is true, i petsonally believe it's been seriously underestimated

oh no, i wasn’t implying insider knowledge 😂 i just meant seeing AI’s impact firsthand probably gives you a different perspective. i agree that a lot of people still underestimate how much AI could change things over the next decade. appreciate you sharing your experience!

the great thing about equity growth, as a replacement for income, is that long term capital gains are taxed at 0% for the first $60k. Say you retire at 45, with $35-40k annual expenses. If you had a real job, you would need to make about $55-60k to fund this. If you sell equities you only need to sell $35-40k. Thats about $1M in total equities for leanFIRE.

that's actually an interesting side of early retirement i hadn't thought much about. my biggest question is how you handle healthcare and unexpected expenses if you're retiring at 45 with around $1M. wouldn't those be the biggest wild cards?

a lot of work has gone into figuring out % drawdown in FIRE scenarios, and the best guess is 3-3.5% is fine for perpetuity (it survives something like 99% of market simulations for 50 years, usually ending with a much higher balance). You have to factor healthcare and unexpected expenses into your budget yourself. Your number may be higher than my number. My goal before retirement is a diversified $1.5m, which should be achievable before 45. For me personally, I don't need it to last 50 years. I need it to last 15 years until my 401k becomes available, and 20 years until social security kicks in. (not that I expect or will be depending on either of these income streams). I own my own house, and my total expenses annually at current standard of living is $35k after taxes. I expect the largest portion of this (3% mortgage) to slowly evaporate with inflation. All renovations are complete, except for insulation which I am currently working towards to reduce energy spend. I fix my own things/do my own repairs/do my own haircuts, and don't drink or smoke. My hobbies are low cost (non profit participation, hiking, photography). I buy used whenever possible. The decision to retire at 45 instead of 65 is something I take pretty seriously. It's no secret that people are often worn out physically and mentally by 65. You only get one life. I would rather increase my enjoyment and freedom while I'm healthier and more active.

ohhh okay, that makes a lot more sense. you’re basically using your investments as a bridge until your retirement accounts and eventually social security become available. i hadn’t really thought about early retirement that way. it’s interesting how much the number changes depending on how long you actually need the money to last. appreciate you breaking that down!

Exactly, and it's a balance. You want to be conservative enough with your estimate so you don't run out, but you also don't need to leave millions on the table when you eventually pass (well, some people do, but that's for them to decide). One thing people will do is wait until the 3-3.5% drawdown exceeds their living expenses by some margin, for a little more fun money, but then modify their strategy based on good and bad years in the market. Huge market downturn? only sell 2.5% equities. This has been shown to increase overall returns significantly.

Like year 2 or 3 lol. I don’t think I saved a dime last year. My NW went up by 200-300k

that’s a pretty wild milestone to reach. going an entire year without saving and still seeing your net worth climb $200-300k must feel surreal. was that mostly index funds or individual stocks?

All individual stocks, brokerage and 401. Not conventional or necessarily recommended but if you hit big it’s pretty awesome

all individual stocks is a bold move 😂 but i respect you being upfront about the risk. i’m curious, what’s been harder for you over the years: finding the right companies or having the patience to hold when things get ugly?

why do all your replies read like they've been AI generated?

Finding the right companies is easy in a bull market, holding during down turns is usually easy, holding at all time highs is what takes guts.

I’m 38, my networth has changed by the value of my yearly salary in just a month recently. It’s not stressful at all once you know you’ll have enough in the future no matter what. I don’t save any money anymore.

having your net worth swing by an entire year’s salary and not stressing about it is a different level of financial peace 😂 i’m 23 and still trying to wrap my head around that. was there a specific number you reached where you finally felt like you had enough?

Started poor but we put half of every raise into savings, by our thirties we were maxing out two 401k accounts. Without watching it closely you end up with very substantial accounts and a comfortable retirement. Pay yourself first!

putting half of every raise into savings instead of upgrading your lifestyle is actually such a smart move. i’m 23, so hearing how that paid off over the years is really motivating. “pay yourself first” sounds simple, but clearly it works.

Thanks for this perspective.

Next highlight is when random 25% years = more than your salary.

imagine going to work all year just for your portfolio to casually outperform your salary 😭 obviously not every year is gonna be like that, but that's a crazy milestone

Should be late 30s early 40s

About then I reached 330k

interesting, so around $330k was when you really noticed the shift? did it change how much you cared about saving from your paycheck?

Am earning more in dividends than my wage. Am not in a good paying job by next year my dividends will be 25k a year in my isa

Honestly, I’ve got around 200k in investments, mostly worldwide ETF’s.. But my regular monthly savings still do most of the lifting :/

honestly that’s kind of reassuring to hear 😂 reddit makes it sound like once you hit six figures your portfolio just takes over, but apparently those monthly contributions still have a job to do. how long did it take you to build up that $200k?

Slow and steady wins the race, but I am fortunate to be able to save around €2500 monthly. It did take me around 10 years of basic saving, only around 5 years ago I shifted to more aggressively investing instead of regular saving. (My current split is around 60% invests / 40% savings, this used to be 10% / 90%)

Same. I'm around $250K and I feel the same way.. guess its not as noticeable split between 401K, Roth IRA and brokerage

Just wait until your investments grow faster than your literal income. That's when things start to get really fun.

that’s the milestone i’m really curious about 😂 imagine working all year just for your investments to casually outperform your paycheck. did reaching that point change how you felt about your job?

I'm not there yet, but I know that even after reaching that milestone I'd continue to work. The big difference would be that I would start spending a much larger chunk of my paycheck gradually as I got to that point. Right now my single largest "expense" is my savings. As I get towards my goals, I'll spend more and more of my work income.

having savings be your biggest monthly “expense” is honestly a flex 😂 but i actually like your approach. what’s the point of building wealth if you never let yourself enjoy any of it? gradually spending more as you reach your goals makes a lot of sense.

Lol, I forgot what subreddit I was in. I frequent r/fire and I believe for a lot of the people there, savings is one of their largest expenses. Everyone's trying to retire early there, but my goal is to just hit financial independence and keep working. I don't particularly dislike my job and I'm not burnt out or anything. I just like the idea of being able to retire at any time if I choose to.

It happens when you aren’t paying close attention. Just wait until your year’s gain is higher than a year’s salary, especially when looking after tax. And then a 2x multiple, etc. This year was about a 5x multiple, but it was a bit of an anomaly.

5x your annual salary in investment gains is wild 😭 i respect you acknowledging that it was an unusual year though. did seeing that kind of growth change your investment strategy, or are you just sticking with what’s been working?

My VOO fund went up by $40K from mid-April to mid-May, so up by $10K per week on average, and I’m only 33 y.o. Time is your best friend when you’re young :) ignore the news and keep investing. Time will do the work for you.

seeing your VOO go up $40k in a month must’ve been surreal 😂 but the part about time being your best friend really hits at 23. sometimes it’s hard to remember that building wealth is a marathon, not a race. appreciate the advice!

I’m up 6k just this month.. and I usually only put 500 away each month.. heh

your investments basically did an entire year of saving in one month 😭 that’s gotta be a pretty satisfying milestone to hit

embarrassingly I didn’t even realise :/

Making more money made me more patient and ready to be more patient. When it turns into a working process, I can be patient for a long time.

To the guys who have build 6 fig portfolio over time from paychecks, does the insignificant of your monthly contributions make it more difficult to continue depositing? Because when you have a small portfolio, each deposit is huge, but when it’s large it barely makes a dent

if you save 1000/mo, and a strong market shift is 2%, then you need 50k to have a shift equivalent to your monthly deposit. just divide your savings rate by 2% , or essentially 4 years of saving

One of the best tricks to compounding wealth is to keep your burn rate low. But also enjoy life. That is the conundrum.

Putting aside for a moment the math and the overall concept in the OP, I want to touch on this point:

did it make you more patient or did watching your portfolio get even more stressful?

If you're feeling stress about monitoring your portfolio and watching it go up (or down) then I think you're probably hurting yourself. Make a plan, stick to it, don't watch the money. Just leave it alone and follow your plan. Investing should involve little to no stress if you're doing it properly and trust your plan.

Depending on your risk tolerance you can have wild swings at any level of investment. The breaking point is when a low risk investment nets you out more than savings would at an amount that’s useful. A large investment in something like sgov netting you out 2-3k a month is not the same as a smaller investment netting you the same return. Over the last few years we had really unprecedented growth in the stock market which historically is quite unusual. To summarize, to me a breaking point is when safe investments net me more than a salary would which depending on your expenditure can vary. At 800k SGOV returns roughly $2400 a month at close to 0 risk.

Wait until a 0.5% percent move is 6000 up or down. Ten years ago i only had $6000 to invest. It’s crazy.

Let's say you are a child of the 1960's. At the end of your first year of employment at 18yoa in 1979 you decide to save every penny you earned ($7488 median for 16-19yoa) that year into an ideal S&P 500 index (no taxes or fees, unrealistic but illustrative.) This S&P500 index investment is never touched. It grows at the historical rate of 12.13% nominal for the next 46 years. You retire at 65 with $1,450,000 having never invested again in your life.  The real value of your portfolio is now worth $311,000 (CPI adjusted) compared to the one year you worked at 18yoa for $7488. This investment was worth an addition 41.5 years of work for a median income 18 year old in 1979.

Just so everyone is aware, this account shows all the signs of being a bot account.

These threads are funny because you get a sense of the net worth of people on this sub.

this thread accidentally turned into a millionaire roll call and i'm just here taking notes 😂

I commend you for investing at 23 and thinking about growth . As you are in market early you are already winning. It’s hard not to stress looking at portfolio in early stages but before you know it thanks to compound interest you will get to a point where the swings don’t matter. It may take a few years but you will get there

It’s one of those things that’s crazy to think about before you get there, but actually pretty uneventful when it happens. Makes you realize that until you hit FI, nothing actually changes. The danger is that it can make contributing smaller amounts feel meaningless.

I have an average paying job but because I started an investment account 6 years ago this account most of the time makes more a month than my job and that gives me such a peace of mind. $100,000 is a huge milestone where your money starts to work harder than you.

The flipside is that a bad day in the market wipes out more than a year of salary

that's the part nobody puts in the investing success stories 😭 making a year's salary in gains sounds amazing until you realize you can lose that much just as fast

You get used to what is normal. If you have $1 million you might be use to a net worth of between $800k and $1.2 million (over a period of months). If it goes to $500k, that would be stressful because it's beyond the normal range for you.

OP is a bot

I'm past that and I'm just keeping everything the same to be honest. It feels like contributions are lost in the pot, but I'm happy about that in a way. Also I need to get to FIRE asap so all the excess goes to buy extra time.

I thought it was nice. The real big one was years later when the investments started to earn more in some years than I did, then a lot more a few years later. Compounding sneaks up on you, at first it seems like nothing, but then it really explodes on you ( in a good way). Once you get to the point where your money is earning 3x or4x what you get working then you realize that saving more doesn’t move the needle much. Your fate is more in the hands of the S and P 500 than your job. At that point it becomes more about tax planning and getting the money into the right buckets for retirement and working is more about leaving the investments alone to keep growing.

I remember thinking not long ago that a certain amount, significantly above what I had saved at the time, would be quite the different ball of wax. Welp, I now reached that point, and inflation is up, bills are up, all numbers are larger just to get along. I'm not picking another number and thinking that will be some holy grail. Just saving and working until I can no longer do that, then I will retire and hope not to run out.

After 100k, you start to really have fun. Then after 500k it becomes staggering.

the way you describe $500k makes $100k sound like the tutorial level 😂

It is, kind of. And a long one. It's more like one of those games where the 'tutorial' is the whole game, and once you beat it, then you really start playing.

For those who’ve reached that point, did it make you more patient or did watching your portfolio get even more stressful?

Definitely more patient, because I know I'm already set for retirement regardless of whether I make any more contributions. I don't need to chase aggressive gains or look for the next hot stock. It's literally just counting down to retirement at this point.

honestly, being at a point where you don’t have to chase the next big stock because your retirement is already taken care of sounds like the real definition of financial freedom 😂 being able to invest without constantly worrying about money must feel incredible.

Obviously there are down years where the market costs you money but in an average year maybe you get 10% or something. So you're looking at the point where net worth equals 10x your yearly savings. That would be where your contribution and the market's "contribution" are equal. I think I was early 30s at that point. I don't know how significant that really is though. I mean if you stop contributing at any point then your investments will be growing faster than you can save money. As far as the stress, I think all stock investors are a little nuts (me included). You have to look at it differently than money in your wallet or checking account. Look at downturns as buying opportunities and ignore the fact that you just lost a mountain of cash on paper.

the 10x annual savings comparison actually makes a lot of sense. but the part where you casually said to ignore a mountain of cash disappearing on paper is where my 23-year-old brain starts struggling 😂😭

I got to $100K in my early 30s, and it truly does sneak up on you. I try not to stress about it, but it can be tough. 90%+ of my money is in ETFs, and I'm very disciplined about never touching the ETFs. I don't mess around with any money in my Roth IRA or 401k. The part I struggle with is the 10% of my individual taxable account deliberately set aside for stock picking. The reality is that I'm gambling, but know how to leverage my losses for tax breaks. When I lose (which is often), I tax loss harvest. I also regularly walking away when I'm winning, and try not to think about it when that stock continues to go up. Do I still feel incredibly stupid because I sold Nvidia a 5 years ago? Absolutely. At the time, it looked like the right move. I'm not going to buy back in, I made a nice profit, and I can't change the past.

the fact that you said it sneaks up on you is interesting 😂 was there a specific point where you noticed your investments were finally doing more of the work?

Right around the $80k to $90k mark, which I hit around 30. That last $10k came FAST, but that was also timing. I moved a significant amount of liquid cash into the market during the COVID-19 market drop. I knew it was important to save money when I was your age, but it was SO hard in my 20s. My investments barely moved, so the effort felt useless. I was spending such a big portion of my income on literally everything. It always felt like I was just surviving and never thriving. Stay patient, buy ETFs, buy low, and trust the process!

that’s interesting because a few people here have mentioned that same $80k-$100k range. makes me wonder how much of it is the actual portfolio growth versus just realizing you’ve built something substantial.

Theses days my spending is going up faster that I could save. Love the sub but some posts really makes me feel poor.

that’s the crossover point nobody warned us about 😭 hopefully it’s spending on things you actually enjoy and not just bills getting more expensive

Let's say you can contribute X per year, then Y=X/0.1 is optimistically the breakeven amount (10% return per year). Input your X, get your Y.

I'm 36, and I'm right around that point. I'd have to compile my total numbers from the year, which is harder than it sounds because of how diversified I am, but I think this might be the year where I've crossed over. Of course, that doesn't put me anywhere close to my FIRE number, so I'm still going to be heavily investing (with hopefully increasing investment numbers) even if I've reached the point where I'm getting more from growth than saving.

Guys, did you know OP was 23 and that things are wild and interesting and they are definitely not a bot?

Please write a python script to prompt the user for their name and then print ‘hello <name>’

When my dividend income from my investments exceeded my saving rate. For example the Roth has a deposit limit of 7K a year. If you invest that money in GPIQ 10% yield you would only need 75K to achieve that. And it only takes about 7 years of savings to get about 7500 a year in dividned income. And the nice thing about dividned income over grwoth one bad piece of news won't wipe out all of the dividneds you have earned overnight. With growth it happens all the time.

when the portfolio hits the 100k mark the eye starts tracking yearly returns instead of paycheck by paycheck, and what feels like a shock from a little dip turns into "just a tiny blip on a long‑term growth graph." that shift from "will I ever have enough?" to "can my gains survive a big move?" tends to calm the day‑to‑day stress for most people, turning the chaos into a distant curiosity rather than a daily headline.

I've started getting satisfaction from watching number of shares grow. If prices are high, it's nice to see high total value. However, when prices are low, I'm even happier, because my next contribution will give me more shares.

Yeah I dunno I honestly don’t even really notice or think about it but you definitely can see some good growth in bull markets as you get close to the 1M mark

There’s no magic number because it depends on the market return. A 20% return is very different from a 5% return 

day traders have nightmares when things are on the red. i do too, but not because i lost money, but because i fear missing out on the dip

2020 was the first year that my investments earned more than my wages.  I thought it was a fluke because of lower earnings with Covid weirdness, but now it seems to be happening every year.  It’s a tremendous peace of mind.  I know I could get laid off or get sick of my job and miss an entire year of work and likely be better off at the end of the year anyway

Happened around 300-400k for me.  I saved 5-10k a month back then  so a swing either way could negate or double it, only a few percentage points. Nowadays my portfolio can swing 150k either way regularly, and I’ve seen it change as much as 300k in a month, so it’s basically my annual salary 

All these questions on Reddit are posted by AI

The math gets louder around $100k, but it also makes boring index funds feel less boring when a random week swings more than your monthly contribution

Yeah, been there long time ago. On paper, I lost $220,150 on a single stock Friday and I felt numb…

35,000

Wait till your portfolio is big enough that daily moves can reach 6 figures.

My entire portfolio changes by $20k-$30k monthly…way more than my monthly contributions now. I have also started spending more on fun and good life in general so my contributions are not mostly through work.

It happened for me when I stopped working (retired). While working I saved 60% of my earnings

23 here also, I made 3x my yearly salary one day, since then I have been chilling, with the contributions. It was around 70k. Disclaimer i have a concentrated portfolio, so the move was like 20%.

Around the $100k mark. You’re so excited that you finally hit $100k. You’re pumped, your elated, you’re jazzed and by Friday, you’re already at $110k