DeepSummary
The episode discusses various financial milestones that signify meaningful accomplishments in the wealth-building journey. The first milestone is reaching $100,000 in invested assets, which indicates mastery of the behavior of building wealth through disciplined saving and investing. The second milestone is when the portfolio's growth exceeds the contributions, meaning the investments are earning more than the saver is contributing.
The third milestone is becoming a millionaire in terms of net worth, although the hosts caution that this milestone can be misleading if a significant portion of the net worth is tied up in home equity rather than liquid investments. The fourth milestone is having $1 million in liquid invested assets, which allows the portfolio to generate substantial growth through compounding.
The fifth milestone is when the portfolio's growth in a given year exceeds the saver's annual income, indicating that the investments are working harder than the saver. The final milestone is achieving financial independence, where the portfolio can sustain the desired lifestyle without relying on earned income.
Key Episodes Takeaways
- Building wealth requires disciplined saving and investing over an extended period.
- Reaching key milestones, such as accumulating $100,000 in invested assets and achieving a $1 million liquid portfolio, signifies substantial progress in the wealth-building journey.
- Home equity can be a misleading component of net worth, as it does not provide liquid assets for retirement income.
- As the portfolio grows larger, the compounding effect accelerates wealth accumulation.
- Achieving financial independence, where the portfolio can sustain the desired lifestyle without earned income, is the ultimate milestone.
- Professional financial planning becomes increasingly important as wealth and complexity increase.
- Saving and investing aggressively early on can significantly accelerate the wealth-building process.
- Consistent monitoring and adjustment of the financial plan is necessary to account for market fluctuations and changing circumstances.
Top Episodes Quotes
- “Success will create complexity.“ by Brian Preston
- “Wealth building is slow, but it's something that picks up speed.“ by Bo Hanson
- “The first hundred thousand doesn't happen on accident. Nobody kind of just stumbles into that.“ by Bo Hanson
- “You get to a million, and you make a 10% rate of return on a million dollars, you've made $100,000. That may be more than you earn in a year.“ by Bo Hanson
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Episode Information
Money Guy Show
Brian Preston and Bo Hanson
5/10/24
Over the years, we’ve given you a lot of different “milestone” markers to help keep you on track. Since a lot of us mutants are over-achievers, hitting those goals can be not just rewarding, but crucial to keep us going on our financial journey. There is no one right plan. In fact, there are a few of these that you may hit out of order in your journey. However, these are all important steps in the wealth-building journey that signify meaningful accomplishments, and are points where your relationship with money will likely change.
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