Best way to get rich?

[Bankai]

Assuming the goal is to amass 1m, what's the best way to do this?*

1) playing office politics in the main job hoping for a promotion, while also working a second job (20h a week) in the evenings/weekends?

2) only working one job while spending 20h a week creating an online business?

3) only working one job while spending 20h a week learning and trading shares?

Here is an example starting position:

• 35yo, married no kids
• 32k income, 7k expenses, 20k savings a year
• Starting NW 75k

1) Being good rat and climbing while also working a part-time second job.
In the current job, next level (rise to 40-45k) is possible within 3 years. Yet another step up (55-60k) would probably require good 5 years of overperformance. Alternatively, contracting with 50-60k income requires 2-3y experience. In between levelling up, pay rise would likely be 2-3% pa. No option for overtime. Could also work a second job part-time, likely for lower hourly rate, possibly adding another say 8k after tax a year in savings at the cost of working 20h a week in evenings/weekends.

With these assumptions 17 years of 60h work a week is required to reach 1m assuming 4% pa investment growth. This also requires playing office politics and overperforming in the main job and is most soul-destroying of the three.

2) Side business. Instead of working part-time and playing office politics, 20h a week would be redirected to create an online side business. Considering no experience in creating online business, assume 3 years before any profit is made. Profit then rises to 5k pa by year 6 and then by another 5k every year. Takes 18 years to reach 1m. This is big if, but it's not impossible and potentially might net significantly more. Or nothing at all after thousands of hours spent.

3) Trading shares. The same 20h a week is spent learning and trading shares with a goal to outperform the market. Assuming marker grows by 4% pa and actively trading can produce 15% pa returns. Lowest upside than business but should get there within a reasonable time (12y at 15% or 8 at 25%)... unless prolonged recession etc. Outperforming in a bull market is not that difficult, however this will not last forever.

Here's the projection:

https://imgur.com/0pcj4Um

None of these options guarantees ever getting to 1m. Being a rat might have the highest probability of making it to 1m, however is also likely to take many years of soul destruction. Business has the highest upside but also a high risk of never making any money. Trading shares seems easy in a bull market; with several years of good returns, it allows to reach the goal relatively quickly.

* best would be some combination of quickest/safest/easiest/least soul destroying etc.

I know it's just a bunch of assumptions and (semi) random numbers and treating it more like a discussion topic and not a real-life advice.

[Jean]

The goal is to not need the million anymore.

[Bankai]

Not for the purpose of this exercise.

[Riggerjack]

Very few people get rich by working for someone else, or being their own boss.

You have a job to trade your time for security and money. Your boss has you, because he has the system all set up, to keep generating money, and plugging you into that system pays for you, and then some.

So, being your own boss, until you have been good at it long enough to be someone else's boss, is the traditional route.

However, this is the 21st century, and fortunes are made regularly, by finding a way to dismantle exist businesses, by using network power to reduce the overhead. This is very much over hunted online business hunting reserve.

As I can see it, the rich mining that is left is in interdisciplinary applications. Looking at bicycles from a public utility standpoint, or something similar. And that is where the "big picture" guys are doing well. They don't need to know bicycles or utilities contract negotiations to make it work, they just need to connect supply with demand, at a lower cost than anyone else knows how to.

But even a plumber can do well just lining up work for other plumbers.

So I would suggest that you start with what you already know. How does your boss turn your time into money? And how can you do that without him? And how many of your co-workers would you like to keep busy, given the opportunity? Because that is how people get rich, from what little I have seen.

[BRUTE]

with 92.5% of the way to go, and if the goal is really 1M, brute would recommend switching jobs to something vastly more profitable.

[George the original one]

with 92.5% of the way to go, and if the goal is really 1M, brute would recommend switching jobs to something vastly more profitable.

That's what I was thinking... job hopping plus investment vehicle of your choice.

Building your own business and selling is a good plan if you have a greater tolerance for risk-taking. Successful $1M business ideas are few, though, unless you have a head for leveraging human capital or selling (See Riggerjack's post).

Getting to $1M quickly requires risk-taking. Getting there slowly is less risky and highly probable provided you can grind out the money. It is unlikely if you leave your income at $32k/yr unless you can get expenses very low.

[sky]

Behind every great fortune is a great crime.

[slowtraveler]

You're not even earning the median US household income in this example.

You don't need business to hit 1 or 10MM. For 100, you probably do.

If you earn the median US household income of 75k after taxes and spend 15k per year. You get 60k/year in savings assuming a little over a Jacob of spending a person. It'll take 17 years of saving assuming a 0% ror.

[thrifty++]

Gosh I dont know. It seems to hard to estimate over a long time. I think you need to just carry on and plan as you go.

Ie as things evolve you might find you have a HUGE job salary so that then becomes the main option. But if the salary is as low as the numbers suggest it doesnt look like a good option. I would go for a side business with unlimited topside and not spend too much time overly focusing on work at that sort of salary. There are also WAY more tax benefits through a side business which is a substantial expense reduction compared to employees. Employees bear the brunt of tax.

[BRUTE]

You're not even earning the median US household income in this example.

brute just realized Bankai lives in England. are the numbers in pound sterling? median incomes, viable savings rates etc. might be different there.

still, 30 might not be too late to switch careers. getting from 75k to 1M sounds like a lot of sharpening the axe.

[jacob]

If you want to increase income, it's better to concentrate the forces. E.g. instead of a full time job plus a 20h sparetime job, it's likely better to add those 20h to the main job insofar there's a way to outwork the others. Otherwise, this is more of a diversification. Ditto starting a business. You'll get farther if you put 100% of your time behind it. Don't even think about learning how to trade by spending 20h per week.

(1) is the most robust way. You just have to work somewhat longer for the 1M than for FIRE.

(2) is the fastest way if you remove that whole "online" thing and pick something true and tried.
viewtopic.php?t=8722

(3) No! The success rate for professionals is 10% and it takes 1-2 years of 24/7 focus to try before you start breaking even (and that's if you're in the 10%). This is a high risk move. 90% lose their "tuition money" ... (by paying it to the older 10%).

[Smashter]

Considering no experience in creating online business, assume 3 years before any profit is made. Profit then rises to 5k pa by year 6 and then by another 5k every year. Takes 18 years to reach 1m.

I would read this post by Fish before assuming anything regarding starting an online business. They can be rough. And that's from a guy who has more skill, patience, smarts, fortitude and overall gumption than the average person.

My plan in this scenario would be to level up at the rat race. It's much less soul-crushing once you increase your autonomy.

[thegreatvoid]

my parents would like me to take over their business one day and I´m like " No way Jose " .
They work 24 h, 365 days a year and due to the progressiv taxes of my country they don´t really make that much.
Much of the equity is tied up in the business . all these bureaucratic hurdles.... not how i envision my life.
not even if it means I´ll be a millionaire on paper

[arcyallen]

Bankai, I'm only a few years older than you and am solidly FI. I can tell you it's not worth the destination if you're not enjoying the journey (seriously).

I'm a big fan of finding work that you really enjoy, and enjoy doing WELL. Focus on doing that enjoyable job (self employed or not) better than the majority and usually opportunities start to "magically" present themselves.

For awhile I was making near $100k/yr (which was double the average for my position) working as a retail store manager that I loved, because I -wanted- to do well despite it being "only retail". I couldn't have done that doing a job I didn't enjoy, and quite frankly why do something you don't enjoy for a big chunk of your life when THERE ARE THINGS OUT THERE YOU WILL LOVE DOING! Maybe it's plumbing, maybe it's running your own business, maybe it's becoming a financial advisor or gardener. But if you provide a great service better than most and enjoy doing it, the potential for money AND happiness is very high!

And, oh yeah, being a full time investor as an occupation is going to have an extremely high failure rate. Run from that one.

[SustainableHappiness]

I’ll echo, if you’re only making 60k a year with 5 years experience and your primary goal is to make money, you are doing it wrong.

If that’s your cap, choose a new field. If you like what your doing, 60k is a good pay to journey to FI if you have low expenses.

If you can play the game well, realize the levers to make people assume you are performing better than average (*actual performance may vary), 5 yrs of exp in industries I’ve explored starting from the bottom rung as jobs like, teller (banking), territory rep (FMCG sales), Analyst 1 (marketing agencies/research firms/finance departments) in large companies, by pointedly and aggressively pursuing specific positions you can achieve 2-3 promotions depending on some luck.

If you work for a small company where there is no upward mobility, stop, unless you like it... that’s different.

This clearly applies to the white collar jobs (oh an it’s canadian) and is anecdotal, but friends in the trades who are hard workers experienced similar increases in income, because in 5 yrs you should have your red seal (certification) in whatever you are doing and be a journeyman X.

Anyways, I’d go with option 1 and do it with higher numbers, especially if you are single and fully mobile.

[BRUTE]

option 1b): focus on single career, but a more lucrative one

ps: brute has heard that trades are shit in Europe vs. North America, but has no first hand knowledge.

[Sclass]

Does your wife work?

[suomalainen]

+1 to arcyallen. Best advice I got (from a crazy drunk finn who sold bus washing equipment) was "it doesn't matter what you do. what matters is that you're the BEST at what you do. and you can't be the best at something you don't enjoy."

[chenda]

If you're serious I would suggest you work in a property related field, with a view to becoming a small developer. Property is such a diverse field where you can find a role depending on you're skills. If I wanted too, this is how I would make serious money, because I know the industry from numerous sides; estate agents, lettings, sales, auctions, planning regs. The last one is very important - if you know the planning system well enough you can't help but identify opportunities. Small scale stuff which the big boys aren't interested in and the Bob -the - builder types haven't got the planning knowledge to identify or maximise.

You're probably too old to break into the trades, (although historic craft just might be a possible option if you have the aptitude for it)

I don't do this, because I have enough and don't want the stress and hassle.

[BRUTE]

it doesn't matter what you do. what matters is that you're the BEST at what you do.

uh, brute would almost give the exact opposite as advice. the best barista vs. the average investment banker?

it's much easier to be a small fish in a big pond than a big fish in a small pond.