Tips to build wealth

[Chicago Desi]

Ok, I will be the first one to ask a simple question.

This is a very honest question. I am amazed at the amounts of wealth members on this forum manage to amass.

My simple question is how do you manage that? How does one save SO MUCH while having a family and a decent standard of living in the US? What are the secrets to your success? I would appreciate any responses because I have talked to a few people and it has intrigued them too.

If we can compile ideas to go about doing that, it will be great for everyone. I am sure there are as many ways as there are people, so lets hear everyone's ideas. Thanks.

[SixthSense]

CD,

Is that a honest question or silly question - plz clarify :) As you know there are no silly questions only people asking silly questions or giving silly answers ;)

Now as far as "Incomprehensible wealth by some NRIs could amass" could be
1) They have double earning engine ( both hubby / wife working with 1 salary next savings cld be 80K per year and hence 10 year cld be $750K-$1Mil savings )

2) Some may have got "stock options profit in 2000 boom - lucky they

3) Some may have very high salary due field like in SAP in last 10 years and hence ...

4) Well this is anonymous internet forum. So not what you say could be true ( Need I say more ) :D

possible explaination by a poor NRI like moi :(

[swadesh]

Or may have gotten as part of Wedding Gift, like one of my collegue from a rich Soutn Indian community expects 4 caror (approx 1 Million) as part of his wedding gift in near future.

Usually we don't expect that to be case but :mad: in some cases Indian dowry system can contribute to one's wealth.

-swadesh

[DosaiLvr]

My simple question is how do you manage that? How does one save SO MUCH while having a family and a decent standard of living in the US? What are the secrets to your success? I would appreciate any responses because I have talked to a few people and it has intrigued them too.

If we can compile ideas to go about doing that, it will be great for everyone. I am sure there are as many ways as there are people, so lets hear everyone's ideas. Thanks.[/quote]

How do they do it?

I believe that

a) People don't become wealthy by scrimping and saving from a mediocre salary - be it single or double.

b) It is tough to break the middle/uppermiddle class barrier. It is only possible by being in the higher management cadre of a company or by owning the company itself... some self-employed can aspire to become wealthy too, but not all (self-employed) can...

c) Folks who made riches due to dotcom/options etc. are a minority and is not the norm. However, something like the "dotcom" heydays happens all the time - maybe not on the same scale, may not in the same place.

One should try to identify and position themselves in the right place at the right time.

Though I haven't accomplished the above, what gives me hope is that many have done it before and someone is doing it somewhere, even as I'm posting this...

[FreeSpirit]

For me time tested simple strategies are the keys to accumulating wealth (not insane wealth)
1. Pay yourself first.
2. Contribute max to 401K, IRA and Roth (if eligible)
3. Save atleast 10% after tax income for long term needs
4. Save atleast 5% after tax income for short term needs
5. Most important - when buying a house in US don't buy the biggest house you can afford, buy a house enough for your family needs. For example if it's just husband and wife, townhome or condo should be enough. This is one area where people stretch themseleves. Problem with real estate is there's no immediate return from the house plus it has ongoing committed expenses like insurance, property taxes other than mortgage.
4. Create AAP and stick to it.
5. Diversify across all sectors and countries.

[FreeSpirit]

For me this is the most important one for people trying to accumulate wealth via emplyment route (salaried job)
1. Expand your skill sets every year
2. Get an above average raise every year. that means you have to be at top 5% percentile in your company to get that raise. I'm assuming that average raise is atleast equal to inflation.
3. If you don't get promoted or atleast in line for promotion in a company, then quit the company. It ain't worth your time and effort slogging over in such a company. Even if company is great atleast look what's available in the market and consider new opportunities.

In US only way one can get a higher salray is either getting promoted or jumping companies. So use this tool to the maximum extent.
Warning: Just don't overdo it.

[tejasvee]

Or may have gotten as part of Wedding Gift, like one of my collegue from a rich Soutn Indian community expects 4 caror (approx 1 Million) as part of his wedding gift in near future.

-swadesh[/quote]

Is that something you made up? $1 million in dowry in 2007???

:confused:

[swadesh]

Is that something you made up? $1 million in dowry in 2007???

:confused:

Nope It is a stated statement of the collegue :emwink: during casual conversation. The way he said everyone (all other collegues) got impression that he is quite serious and it not something unusual to him/his community.

-swadesh

[nand]

from my observation. very few make it to upper rungs of management or business. A sure shot secret sauce is double income software engineers. steady and nothing spectacular 80-100K per head, yet lving on essentially a single income and banking the rest. Over the years that adds up esp in a place like say texas. Every year of 2 incomes coming in is equal to a retirement coming 3 years sooner.

Of course there are the doctors, dink doctors and other animals I have seen as well. But the double income, honda accord driving software engineer animal is the most commonly observed species with a decent bank balance.

[dpph]

I am living and working in US since '96 with single income,2 kids...but after 11 years i don't have wealth of 200K leave alone million $s...If you have more than $250K after 10 years with single income, you are GENIUS atleast from my perspective...