I used to think the easiest way to guaranteed riches is going to dental school. There is zero pressure in being a dentists. Nobody (I hope) ever dies from pulling teeth. For minimal effort you are guaranteed 300K a year. Best of all nobody can fire you. Set for life.
Recently I found another job that’s even easier than dentist: pharmacist. You don’t even need grad school. Go to some random school like University of the Pacific in Stockton of all places and you can make 150K to 200K. It may not seem like a lot compared to some tech hot shot, but a) you’ll never become obsolete, b) they can’t outsource your job to India and so c) nobody will fire you. You just work that 9-5 for 10 or 15 years, come to this forum to learn real estate investment and boom, you can retire before you hit 40. Simple as pie.
Really? You can retire in the Bay Area with less than $1M? Ok…
Well, my parents certainly did so. They retired with less than $50k! But only because I’m supporting them. I’ve supported them for more than 15 years… It really does pay to have a good son
Now with 900K cash as down payment that person can lever up 4x to 3.6M worth of property.
All these didn’t factor in appreciation, and that person’s rising earning power over time. She would have bought some early on, in year 2 or 3 say. Over that 18 years at 5% growth rate these earlier properties will double in value.
So let’s say you have 5M worth of property and 3M equity. Why can’t you retire?
Well, personally, I wouldn’t be satisfied with $3M, nor do I think $3M is enough for retirement. But each person is different. $3M might be plenty for others…
Not true. Pharmacists are being gradually replaced by robots as we speak. Some of my friends are pharmacists and they all regretted entering the profession.
Also, I think @manch painted too rosy of a picture. I don’t think there are many pharmacists out there who have been able to retire by 40 with a $3M net worth. I doubt there’s even one of them (unless they got a fat inheritance)…
Manch is right on the pharmacist income. There may not be many people like tech engineers. They get paid more than Tech Engineers, few of my colleague’s spouses are pharmacist in bay area, hectic work schedules, but earning $150/hr. They are front end public facing people, lot of work, tension, and stressful job. Not easily replaceable by Robots ! Medical field, lot of restrictions apply, they need to go through lot procedures.
Yes it’s a very stressful job. The pharmacies are starting to cut hours though (but I am not sure how they will be able to deploy robots in the near term). One of my friends’ coworker recently bought a house in SF and he already regretted his purchase due to the fear of not being able to keep up with mortgage payments after his hours got slashed.
I think this is the overtime hourly rate. My friends tell me pharmacists’ hourly pay is standardized and they make about $150K/year. A little bit more if you are a pharmacy manager.
So let’s give them benefit of the doubt and say the pharmacist makes $200k per year. That’s $120k after tax. After 15 years they end up with $1.8M. Let’s say they live way below their means and only spend $50k per year. That’s $750k of expense after 15 years. That will leave them with $1M saved up after 15 years. Let’s say they dumped all that into investments (stock market/real estate) from day 1. Honestly I think the best they could have done is maybe doubled the net worth in that 15 year period so that would take them to a $2M nest egg.
So no, they’re not going to retire by 40 with a $3M net worth/$5M assets…
Come on, Guys and Gals, you all have not mentioned the obvious: it is not how much you make, it is how much you keep. Remember that, one??? So what you make 300k, but if you have absolutely nothing in terms of investments (specifically real estate) Uncle Sam will eat up a huge chunk of that.
I am sure the pharmacists have their own lobbyists in all branches of governments to resist the robots. It’s a made-up job anyway. In Hong Kong we got medicine right at the doctor’s office. Why would you need to go to another place, pay another person for the subscription the doctor already gave you? Makes no sense.
1M levered up 4x is 4M. And at 5% growth rate it will take 14 years to double value: rule of 72. Now the pharmacist won’t have 4M worth of property at Year 0. But something she bought at Year 3 or 4 would be close to being doubled at the end of the 15 years.
I will leave the detailed spreadsheet work as an exercise. I will just wave my hands and say the 4M portfolio would grow to 6M and equity is 1M down payment + (6 - 4)M growth = 3M.
I never made more than $50k W2 salary…Expecting an employer to make you rich is a losing proposition. …Gates and Jobs didn’t graduate from college…They
realized that following the standards and rules like going to college and getting a W2 job were the road to comfort and mediocrity but not to riches
Yes, $150/hr may be overtime hours. What my friends (few of them) told me that his wife earns more than him ! Some of them telling it is around 180k to 220k depends on experience, getting over time and getting 401k etc. Definitely not less than 150k/year, but hard to get and hard stressful work.
The best way to accumulate wealth as a W2 employee is to buy your own house and sell everytime you can get the $250k or $500k tax free money…This is the quickest way to wealth…I have done it a few times…If you do it every two years, you can get rich quickly…I made $5m by 45…never made the salary that techies make.
Never more than $120k even as independent structural engineer…
Scaling it up by 11%. But 500K downpayment is easier to remember.