How much money do you earn? And how do you spend it?

Hackson said:
Sure but he's only earned that for the last what, 3 years give or take? It takes 7 years to earn R23M at R270K/m.
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That's assuming you pay 0% tax too.

Which is why I can't see it.
You'd need to be at that same pay bracket for a hell of a long time and very early on in your career.

Mid 40's - let's assume 45.

45 - 18 = 27 --> then you'd need to be at that pay level from the start --> maintain it (and hope for good investment growth).

I just can't seem to see the sums working?

Feels a little like this? :ROFL: Congrats OP I'm just jealous!

67jjoy.jpg
 
shadow_man said:
That's assuming you pay 0% tax too.

Which is why I can't see it.
You'd need to be at that same pay bracket for a hell of a long time and very early on in your career.
Mid 40's - let's assume 45.

45 - 18 = 27 --> then you'd need to be at that pay level from the start --> maintain it (and hope for good investment growth).

I just can't seem to see the sums working?

Feels a little like this? :ROFL: Congrats OP I'm just jealous!
Click to expand...

Lots of peeps here 28-30+ earning 100k a month apparently looking at the thread.

When I saw his post I figured Crypto helped quite a bit.
 
Pho3nix said:
Lots of peeps here 28-30+ earning 100k a month apparently looking at the thread.

When I saw his post I figured Crypto helped quite a bit.
Click to expand...
It has to be some heavily linked investments. Folks were hardly earning 100k pm 18 years ago etc.
 
shadow_man said:
That's assuming you pay 0% tax too.

Which is why I can't see it.
You'd need to be at that same pay bracket for a hell of a long time and very early on in your career.

Mid 40's - let's assume 45.

45 - 18 = 27 --> then you'd need to be at that pay level from the start --> maintain it (and hope for good investment growth).
Click to expand...

Here's a thought experiment to help show the importance of compounding and the benefits of capital growth.

Assume a reasonable equity return 12% annual growth rate on investments (CPI+5%). Blend of JSE and offshore indices over past decade would have achieved that, no crypto.
In a 6 year period, an R11.5m balance would have grown to R23m on capital growth alone. No contributions over those 6 years.
Tax rate, since no sales? 0.

Over a 20 year period, the starting balance would've needed to be R2.4m growing at that 12% rate, without any contributions. Obviously I didn't start with R2.4m, but I did lots of contributions. Compounding however made a huge difference and monthly swings can now dwarf any savings. A minor 1.5% swing up or down in a month is more than I can earn...

My point: in the beginning it was from saving hard, keeping expenses low, growing my salary, banking all bonuses, a very slow slog. Minor impact if your investment goes up 10%-20% if it's on R500k, your savings make the bigger impact. The growth is mostly linear with what you can save after tax.

Once it got to a decent net worth (>R5m) the compounding took over (and importantly at close to 0% tax since no sales), and exceeds the amounts I can save, since 12% on R20m+ is now R2.4m increase and very hard to earn after tax. Now the growth is exponential and no longer linear.
 
Pho3nix said:
Lots of peeps here 28-30+ earning 100k a month apparently looking at the thread.

When I saw his post I figured Crypto helped quite a bit.
Click to expand...

So if you started investing 15k a month and increased by 10% annually and earned 10% on it annually you get to R24,127,878.

Assuming he had more than 20 years and he made some extra investments on the side and made some money on a property here and there and was diligent with saving bonuses it's not really unrealistic at all.

Starting early and sticking to it with discipline pays off great dividends (lol) when you are older for very little effort other than sticking to it.

Especially once you pay your house off and your car and then don’t buy new ones but still put that money away it becomes very easy given time.
 
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SauRoNZA said:
So if you started investing 15k a month and increased by 10% annually and earned 10% on it annually you get to R24,127,878.

Assuming he had more than 20 years and he made some extra investments on the side and made some money on a property here and there and was diligent with saving bonuses it's not really unrealistic at all.

Starting early and sticking to it with discipline pays off great dividends (lol) when you are older for very little effort other than sticking to it.

Especially once you pay your house off and your car and then don’t buy new ones but still put that money away it becomes very easy given time.
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I guess R180k per year doesn't sound a lot, but since that's 20years ago and at 10% increase per year it would be close to saving R100k pm after 20 years in 2023...
 
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