Total Savings/Net Worth Forum

[Anonymous User]

$1.4m total net worth.

$700k cash.

Looks like people told me to invest my cash in ETFs last time I looked at this thread over a year ago but instead I stayed in cash and let inflation eat away at my net worth.

I also looked at this thread around a year ago and (after also talking with others and doing research ofc) did invest my cash in ETFs. And then the market crashed. It was a tech-heavy ETF, too. It's a terrible feeling because now I'm reading all this stuff about "NOW is the best time for younger investors to snap up value at lower prices!" and etc. and I'm like, welp, not the best timing on my part!

I think your choice to stay in cash was the better one, between our two paths!

Also, I feel like it's definitely easier to stomach big stock-market losses if you've already been in the market a while, and so have to withstand a bear. Much harder to stomach when you've JUST put in your $$ and the market proceeds to tank. Because then you keep wondering how much value you got have gotten if you'd JUST waited a few more weeks and bought at the lower prices.

That's life as a plain-vanilla ETF investor, I guess.

[Anonymous User]

$1.4m total net worth.

$700k cash.

Looks like people told me to invest my cash in ETFs last time I looked at this thread over a year ago but instead I stayed in cash and let inflation eat away at my net worth.

I also looked at this thread around a year ago and (after also talking with others and doing research ofc) did invest my cash in ETFs. And then the market crashed. It was a tech-heavy ETF, too. It's a terrible feeling because now I'm reading all this stuff about "NOW is the best time for younger investors to snap up value at lower prices!" and etc. and I'm like, welp, not the best timing on my part!

I think your choice to stay in cash was the better one, between our two paths!

Also, I feel like it's definitely easier to stomach big stock-market losses if you've already been in the market a while, and so have to withstand a bear. Much harder to stomach when you've JUST put in your $$ and the market proceeds to tank. Because then you keep wondering how much value you got have gotten if you'd JUST waited a few more weeks and bought at the lower prices.

That's life as a plain-vanilla ETF investor, I guess.

Don't worry. It will come back. You did the right thing then to put it in the stock market. Nobody can predict the future and timing the market is dumb. Don't have remorse based on 20/20 hindsight.

[JusticeJackson]

$1.4m total net worth.

$700k cash.

Looks like people told me to invest my cash in ETFs last time I looked at this thread over a year ago but instead I stayed in cash and let inflation eat away at my net worth.

I also looked at this thread around a year ago and (after also talking with others and doing research ofc) did invest my cash in ETFs. And then the market crashed. It was a tech-heavy ETF, too. It's a terrible feeling because now I'm reading all this stuff about "NOW is the best time for younger investors to snap up value at lower prices!" and etc. and I'm like, welp, not the best timing on my part!

I think your choice to stay in cash was the better one, between our two paths!

Also, I feel like it's definitely easier to stomach big stock-market losses if you've already been in the market a while, and so have to withstand a bear. Much harder to stomach when you've JUST put in your $$ and the market proceeds to tank. Because then you keep wondering how much value you got have gotten if you'd JUST waited a few more weeks and bought at the lower prices.

That's life as a plain-vanilla ETF investor, I guess.

I think in the long run you’ll be better off. I went down my path because I’m super busy at work and like to enjoy every second of down time to the fullest.

[run26.2]

Perhaps it would be worthwhile to create a new thread that asks the same question of lawyers that are, say, 10 years out. There's too much granularity at the bottom of the scale and there should be some more categories at the top. It would be useful for those considering law school to consider the two polls. Relying on the assumption that at 10 years out, many law graduates are going to be pretty close to or over the top of the scale in the current poll, I suggest the following:

0-250k
250-500k
500-1 million
1-2.5 million
2.5 - 5 million
5 - 10 million
over 10 million

Raising it here for discussion about usefulness and scale.

[Anonymous User]

Has Dooley made it in this thread yet?

[johndooley]

Has Dooley made it in this thread yet?

I posted a general overview of my assets and net worth on another thread. My net income is in the low seven figures primarily through my legal practice and investments. I own one personal residence, two cars, and a boat. My house is 4BR, was appraised at $4.3 million, and is waterfront with a dock. The pipeline of cases is reasonably solid, although not as sound as the investments (medmal does not attract repeat clients so there is always a degree of uncertainty and you need to save accordingly). The small portion of my assets in public equities are in ETFs. I do have a very large 529, I would need at least two children with private HS/private college/JD/MBA to deplete it by the time they are teenagers. I deposited a large amount initially after one particularly sizable settlement and have not put a penny more in, no regrets because I would like many children.

Concerning real estate, I do own about 35 rental units outright (a collection of duplexes and triplexes with one 10+ unit building) and about 75 other units mortgaged in Central Florida (all duplexes/triplexes with one highly levered 20+ unit building). I am looking to diversify in either Houston or Atlanta in low-end retail specifically. I think if I can get to a portfolio of 300+ residential units and half a dozen strip malls I will have a nest egg such that I can forgo my practice should it dry up. I am in my 30s and grew up solidly middle class (parental income 75-150k in today's dollars).

[wwwcol]

Has Dooley made it in this thread yet?

no regrets because I would like many children.

are you a breeder like Elon musk? Do you believe it’s your duty to populate the earth?

[johndooley]

Has Dooley made it in this thread yet?

no regrets because I would like many children.

are you a breeder like Elon musk? Do you believe it’s your duty to populate the earth?

That is an odd question. All I said was I want many children, that should be interpreted at 4+ given the average keeps sinking lower and lower. The Misses and I are planning accordingly so they can be educated. I do not think 4+ merits this questioning. If we have 4+ we will purchase a larger house, ideally with 7500 square feet and at least an acre.

[Corncob]

4th year. 130 cash - 130 student loans. 0 net worth, feels good, man.

Now 6th year. 50k cash - 0 student loans. $400k home equity $100k 401k = $550k net worth.

Will be back in a couple years for another update.

[Anonymous User]

Just surpassed $1m nw 8th year (I have kids) and have done a few dumb bets probably lost $15-20k but I think those are tax deductible so whatever. Anyone using leverage? Feels risky but I want more than 7% return

[Anonymous User]

C/o 2012, single/no kids, $1,500,000 net worth. Still in big law but the kind where you're stuck making senior associate money for a while. Obviously this could be higher, but I'm pretty happy with the balance I've struck between spending/saving.

[nealric]

Just surpassed $1m nw 8th year (I have kids) and have done a few dumb bets probably lost $15-20k but I think those are tax deductible so whatever. Anyone using leverage? Feels risky but I want more than 7% return

You can only use $3,000 in capital loss per year against ordinary income (I.e. your salary). Beyond that, you have to have a capital gain to offset.

Trying to beat the market is a fool's errand. It's a zero sum game. For someone to beat the market someone else has to trail the market. Do you think that person beating the market is going to be some lawyer acting on hot stock tips or an algorithmic trader surrounded by Bloomberg terminals.

If 7% isn't "enough" you need to ask yourself why. Are you not saving enough, or do you aspire to serious wealth. If the former, you may just need to fix budgeting issues. I'd the latter, law may not be the right career.

[Anonymous User]

Trying to beat the market is a fool's errand. It's a zero sum game. For someone to beat the market someone else has to trail the market. Do you think that person beating the market is going to be some lawyer acting on hot stock tips or an algorithmic trader surrounded by Bloomberg terminals.

If 7% isn't "enough" you need to ask yourself why. Are you not saving enough, or do you aspire to serious wealth. If the former, you may just need to fix budgeting issues. I'd the latter, law may not be the right career.

That argument doesn't apply to leverage, which is what OP was talking about. Simple example: you and I both have $1 to invest. There is only "the market". You put $0.50 into the market and lend me $0.50. I put $1.50 into the market and borrow $0.50 from you. If the market's average return is 7% and interest rates are, say, 3%, then you earn 5% on average and I get 9%. This requires no special skill. If there is cross-sectional heterogeneity in risk aversion -- which has got to be true -- then there will be cross-sectional variation in returns simply due to differences in the amount of risk people take.

OP didn't say they wanted a higher return with no additional risk. If they want that, then I agree it's very unlikely.

[Anonymous User]

6th year, TX, Big Law, Married, 1 kid. Wife brings in an extra $130k/yr.

At EOY (with bonus but less 2024 tax liabilities and sinking fund accounts), approximately $749k.

$100k HYSA
$216k 401ks
$23k Brokerage/ROTH
$350k Home Equity
$50k Cars (liquidation val.)
$10k Valuable personal property (liquidation val.)

No consumer debt. Remaining mortgage of $1.35MM on $1.7MM home at 2.75% APR.

Not really sure how to deploy cash flow in 2024. HYSA seems fine for short-term at 4.3% APR, but may just dump into an S&P ETF.

[Anonymous User]

6th year in non-NY/DC major market biglaw . I have a kid and a spouse who recently stopped working, but I'm not including my spouse's assets.

$140k mega/backdoor Roth
$155k 401k
$135k investment account ($10k cash, $20k treasury money market, the rest misc. ETFs)
$10k iBonds (plus whatever that's accrued)
$320k home equity (based on purchase price 2021, more like $420k-$470k w/ inflation/appreciation/improvements)
$40k cars
$12k 529 plan for the kiddo
Total: ~$800k-$962k depending on whether you want to count 529/appreciation

No debt besides the remaining $880k on my $1.2m (3%) mortgage. I'm really happy with where I am, but I could have been in much better shape had I invested early on rather than hoarding cash to save for a house. Then again, hindsight is 2020, and a big crash would have made it very hard for me to buy my house.

[Anonymous User]

$1.7mil net worth
$250k cash
$1.35mil equities (incl. 401k/IRA)
$100k crypto

Graduated with ~$65k debt. NYC biglaw 9/10th year.

This is fun, I'll do what the other poster did as well. Seventh months later:

$2 mil net worth
$1.7 mil equities (incl. 401k/IRA)
$190k crypto (no new purchases, just "appreciation")
$100k cash

Just kept dumping money into the market. If it stops going up I'll be very sad. Leaving biglaw soon to go into a legal-adjacent field.

Every time I think about quitting biglaw, I come back to your post. I would be quite happy with even $1 million, so I just need to grind it out a few more years…

I'm pretty sure this was me, and I'm now down to $1.9ish mil net worth. Live by the market die by the market.

Checking in again, down to ~$1.5ish lol.

Back around $2. Still haven't gotten back to the December 2021 peak of $2.2.

[run26.2]

$1.7mil net worth
$250k cash
$1.35mil equities (incl. 401k/IRA)
$100k crypto

Graduated with ~$65k debt. NYC biglaw 9/10th year.

This is fun, I'll do what the other poster did as well. Seventh months later:

$2 mil net worth
$1.7 mil equities (incl. 401k/IRA)
$190k crypto (no new purchases, just "appreciation")
$100k cash

Just kept dumping money into the market. If it stops going up I'll be very sad. Leaving biglaw soon to go into a legal-adjacent field.

Every time I think about quitting biglaw, I come back to your post. I would be quite happy with even $1 million, so I just need to grind it out a few more years…

I'm pretty sure this was me, and I'm now down to $1.9ish mil net worth. Live by the market die by the market.

Checking in again, down to ~$1.5ish lol.

Back around $2. Still haven't gotten back to the December 2021 peak of $2.2.

Are you still in biglaw? Wondering if you're still stuffing the coffers with cash.

[nealric]

Trying to beat the market is a fool's errand. It's a zero sum game. For someone to beat the market someone else has to trail the market. Do you think that person beating the market is going to be some lawyer acting on hot stock tips or an algorithmic trader surrounded by Bloomberg terminals.

If 7% isn't "enough" you need to ask yourself why. Are you not saving enough, or do you aspire to serious wealth. If the former, you may just need to fix budgeting issues. I'd the latter, law may not be the right career.

That argument doesn't apply to leverage, which is what OP was talking about. Simple example: you and I both have $1 to invest. There is only "the market". You put $0.50 into the market and lend me $0.50. I put $1.50 into the market and borrow $0.50 from you. If the market's average return is 7% and interest rates are, say, 3%, then you earn 5% on average and I get 9%. This requires no special skill. If there is cross-sectional heterogeneity in risk aversion -- which has got to be true -- then there will be cross-sectional variation in returns simply due to differences in the amount of risk people take.

OP didn't say they wanted a higher return with no additional risk. If they want that, then I agree it's very unlikely.

If you want a higher return with no regard to risk, you might almost double your money by taking it to Vegas and putting it all on "black." You are not beating the market with leverage, you are just putting money in you don't have.

[Anonymous User]

$1.7mil net worth
$250k cash
$1.35mil equities (incl. 401k/IRA)
$100k crypto

Graduated with ~$65k debt. NYC biglaw 9/10th year.

This is fun, I'll do what the other poster did as well. Seventh months later:

$2 mil net worth
$1.7 mil equities (incl. 401k/IRA)
$190k crypto (no new purchases, just "appreciation")
$100k cash

Just kept dumping money into the market. If it stops going up I'll be very sad. Leaving biglaw soon to go into a legal-adjacent field.

Every time I think about quitting biglaw, I come back to your post. I would be quite happy with even $1 million, so I just need to grind it out a few more years…

I'm pretty sure this was me, and I'm now down to $1.9ish mil net worth. Live by the market die by the market.

Checking in again, down to ~$1.5ish lol.

Back around $2. Still haven't gotten back to the December 2021 peak of $2.2.

Are you still in biglaw? Wondering if you're still stuffing the coffers with cash.

No, I left in August 2021, right around the $2 million net worth post. I make way less cash now (and simultaneously live less frugally).

[Anonymous User]

Trying to beat the market is a fool's errand. It's a zero sum game. For someone to beat the market someone else has to trail the market. Do you think that person beating the market is going to be some lawyer acting on hot stock tips or an algorithmic trader surrounded by Bloomberg terminals.

If 7% isn't "enough" you need to ask yourself why. Are you not saving enough, or do you aspire to serious wealth. If the former, you may just need to fix budgeting issues. I'd the latter, law may not be the right career.

That argument doesn't apply to leverage, which is what OP was talking about. Simple example: you and I both have $1 to invest. There is only "the market". You put $0.50 into the market and lend me $0.50. I put $1.50 into the market and borrow $0.50 from you. If the market's average return is 7% and interest rates are, say, 3%, then you earn 5% on average and I get 9%. This requires no special skill. If there is cross-sectional heterogeneity in risk aversion -- which has got to be true -- then there will be cross-sectional variation in returns simply due to differences in the amount of risk people take.

OP didn't say they wanted a higher return with no additional risk. If they want that, then I agree it's very unlikely.

If you want a higher return with no regard to risk, you might almost double your money by taking it to Vegas and putting it all on "black." You are not beating the market with leverage, you are just putting money in you don't have.

Betting in vegas has a negative expected return. The stock market does not. I didn’t say anything about “beating the market”, nor did OP. OP said they want to earn a return above 7% via leverage (“ Anyone using leverage? Feels risky but I want more than 7% return ”). You got confused and thought that’s extremely difficult. I pointed out that it’s perfectly normal. Obviously it has more risk. But anybody with a mortgage and investments is already “putting in money they don’t have”.

To OP, ignore this guy. The short answer to your question is that basically everybody here has leverage via their mortgage. Using margin is little different (and in many ways much more attractive). Interactive Brokers has good margin rates. Levered ETFs are also an option, but last time I studied them in detail there were large hidden costs.

Obviously there’s risk — it’s proportional to your expected excess return above the risk-free rate. Double risk, double your expected excess return. It’s up to you what the right amount of risk is. But certainly it’s a far more attractive tradeoff than Vegas.

[Barry grandpapy]

Trying to beat the market is a fool's errand. It's a zero sum game. For someone to beat the market someone else has to trail the market. Do you think that person beating the market is going to be some lawyer acting on hot stock tips or an algorithmic trader surrounded by Bloomberg terminals.

If 7% isn't "enough" you need to ask yourself why. Are you not saving enough, or do you aspire to serious wealth. If the former, you may just need to fix budgeting issues. I'd the latter, law may not be the right career.

That argument doesn't apply to leverage, which is what OP was talking about. Simple example: you and I both have $1 to invest. There is only "the market". You put $0.50 into the market and lend me $0.50. I put $1.50 into the market and borrow $0.50 from you. If the market's average return is 7% and interest rates are, say, 3%, then you earn 5% on average and I get 9%. This requires no special skill. If there is cross-sectional heterogeneity in risk aversion -- which has got to be true -- then there will be cross-sectional variation in returns simply due to differences in the amount of risk people take.

OP didn't say they wanted a higher return with no additional risk. If they want that, then I agree it's very unlikely.

If you want a higher return with no regard to risk, you might almost double your money by taking it to Vegas and putting it all on "black." You are not beating the market with leverage, you are just putting money in you don't have.

Betting in vegas has a negative expected return. The stock market does not. I didn’t say anything about “beating the market”, nor did OP. OP said they want to earn a return above 7% via leverage (“ Anyone using leverage? Feels risky but I want more than 7% return ”). You got confused and thought that’s extremely difficult. I pointed out that it’s perfectly normal. Obviously it has more risk. But anybody with a mortgage and investments is already “putting in money they don’t have”.

To OP, ignore this guy. The short answer to your question is that basically everybody here has leverage via their mortgage. Using margin is little different (and in many ways much more attractive). Interactive Brokers has good margin rates. Levered ETFs are also an option, but last time I studied them in detail there were large hidden costs.

Obviously there’s risk — it’s proportional to your expected excess return above the risk-free rate. Double risk, double your expected excess return. It’s up to you what the right amount of risk is. But certainly it’s a far more attractive tradeoff than Vegas.

Been interested in this since interest rates were laughable but my personal hangup was seeing even Interactive Brokers jack up the collateral requirements substantially during a crunch (which is exactly when you don't want to liquidate).

As I understand it these leverage plays are generally subject to the lender being able to utterly fuck you right when prices and liquidity dry up.

If this is off please let me know, but if it's not - forget chasing a few% more returns at the very real risk of getting margin called as a senior associate. We ain't getting wealthy in biglaw anyway but fuck lighting the whole the upper class bag on fire for an extra bedroom and half balf.

[Anonymous User]

Trying to beat the market is a fool's errand. It's a zero sum game. For someone to beat the market someone else has to trail the market. Do you think that person beating the market is going to be some lawyer acting on hot stock tips or an algorithmic trader surrounded by Bloomberg terminals.

If 7% isn't "enough" you need to ask yourself why. Are you not saving enough, or do you aspire to serious wealth. If the former, you may just need to fix budgeting issues. I'd the latter, law may not be the right career.

That argument doesn't apply to leverage, which is what OP was talking about. Simple example: you and I both have $1 to invest. There is only "the market". You put $0.50 into the market and lend me $0.50. I put $1.50 into the market and borrow $0.50 from you. If the market's average return is 7% and interest rates are, say, 3%, then you earn 5% on average and I get 9%. This requires no special skill. If there is cross-sectional heterogeneity in risk aversion -- which has got to be true -- then there will be cross-sectional variation in returns simply due to differences in the amount of risk people take.

OP didn't say they wanted a higher return with no additional risk. If they want that, then I agree it's very unlikely.

If you want a higher return with no regard to risk, you might almost double your money by taking it to Vegas and putting it all on "black." You are not beating the market with leverage, you are just putting money in you don't have.

Betting in vegas has a negative expected return. The stock market does not. I didn’t say anything about “beating the market”, nor did OP. OP said they want to earn a return above 7% via leverage (“ Anyone using leverage? Feels risky but I want more than 7% return ”). You got confused and thought that’s extremely difficult. I pointed out that it’s perfectly normal. Obviously it has more risk. But anybody with a mortgage and investments is already “putting in money they don’t have”.

To OP, ignore this guy. The short answer to your question is that basically everybody here has leverage via their mortgage. Using margin is little different (and in many ways much more attractive). Interactive Brokers has good margin rates. Levered ETFs are also an option, but last time I studied them in detail there were large hidden costs.

Obviously there’s risk — it’s proportional to your expected excess return above the risk-free rate. Double risk, double your expected excess return. It’s up to you what the right amount of risk is. But certainly it’s a far more attractive tradeoff than Vegas.

Been interested in this since interest rates were laughable but my personal hangup was seeing even Interactive Brokers jack up the collateral requirements substantially during a crunch (which is exactly when you don't want to liquidate).

As I understand it these leverage plays are generally subject to the lender being able to utterly fuck you right when prices and liquidity dry up.

If this is off please let me know, but if it's not - forget chasing a few% more returns at the very real risk of getting margin called as a senior associate. We ain't getting wealthy in biglaw anyway but fuck lighting the whole the upper class bag on fire for an extra bedroom and half balf.

Yes, margin calls are a real risk. Whether those are periods when it’s bad to sell is definitely not a settled question (the evidence that expected returns are high in those periods is very thin, but so is the evidence against that view). If you aren’t levered to the hilt, though, that’s less of a problem.

Additionally, there are different kinds of leverage. Again, a mortgage is a liability on your balance sheet just like a margin loan. And a mortgage is a term loan so doesn’t face margin calls. If you want leverage and don’t want that risk, then a mortgage is a better choice.

Another choice: buy call options. The tax implications aren’t great, but in an IRA that wouldn’t be an issue. And then there’s no margin call risk at all if they’re fully paid for. SPX at-the-money calls are very liquid and have large leverage built in. People will argue about the historical returns, but if you’re a CAPM/efficient markets/I’m-no-smarter-than-average type, then an investment in options is no better or worse than any other market investment (in terms of risk/reward tradeoff, anyway).

[nealric]

Trying to beat the market is a fool's errand. It's a zero sum game. For someone to beat the market someone else has to trail the market. Do you think that person beating the market is going to be some lawyer acting on hot stock tips or an algorithmic trader surrounded by Bloomberg terminals.

If 7% isn't "enough" you need to ask yourself why. Are you not saving enough, or do you aspire to serious wealth. If the former, you may just need to fix budgeting issues. I'd the latter, law may not be the right career.

That argument doesn't apply to leverage, which is what OP was talking about. Simple example: you and I both have $1 to invest. There is only "the market". You put $0.50 into the market and lend me $0.50. I put $1.50 into the market and borrow $0.50 from you. If the market's average return is 7% and interest rates are, say, 3%, then you earn 5% on average and I get 9%. This requires no special skill. If there is cross-sectional heterogeneity in risk aversion -- which has got to be true -- then there will be cross-sectional variation in returns simply due to differences in the amount of risk people take.

OP didn't say they wanted a higher return with no additional risk. If they want that, then I agree it's very unlikely.

If you want a higher return with no regard to risk, you might almost double your money by taking it to Vegas and putting it all on "black." You are not beating the market with leverage, you are just putting money in you don't have.

Betting in vegas has a negative expected return. The stock market does not. I didn’t say anything about “beating the market”, nor did OP. OP said they want to earn a return above 7% via leverage (“ Anyone using leverage? Feels risky but I want more than 7% return ”). You got confused and thought that’s extremely difficult. I pointed out that it’s perfectly normal. Obviously it has more risk. But anybody with a mortgage and investments is already “putting in money they don’t have”.

To OP, ignore this guy. The short answer to your question is that basically everybody here has leverage via their mortgage. Using margin is little different (and in many ways much more attractive). Interactive Brokers has good margin rates. Levered ETFs are also an option, but last time I studied them in detail there were large hidden costs.

Obviously there’s risk — it’s proportional to your expected excess return above the risk-free rate. Double risk, double your expected excess return. It’s up to you what the right amount of risk is. But certainly it’s a far more attractive tradeoff than Vegas.

I think you are missing my point. Of course Vegas has negative expected returns. But it was illustrative of the idea that ratcheting risk to chase yield can lead to bad decisions. It's not about specific strategies. It's this: why do you feel you need to add risk to your portfolio to increase returns? Why aren't the market returns of an unleveraged portfolio enough for you such that it's worth ratcheting up the risk?

Of course most people have some leverage in their personal finances. But it can be very easy to take on a risk that is well beyond what you are truly comfortable taking without realizing it.

At least in my mind, the risks are asymmetric. At market returns, you will have enough for a nice (and early) retirement. Financial independence should be possible in one's early 40s if you are making biglaw level wages. If you manage to win the game with leverage and you end up with $10 million at 45 instead of $5 million, it won't dramatically change your life. But the losing side of the equation where your net worth ends up close to zero is a potentially much more dramatic change in circumstance.

There's also the behavioral element. The key to making market returns is not to panic when the market tanks and keep investing through the downcycle. That's hard enough when you are unlevered. Do you have the nerves of steel to keep at it when your portfolio loses 50%? That will probably happen at least once in your life with an unlevered portfolio. With a leveraged portfolio, it will likely happen many times (depending on how much leverage you are using).


Anyhow, here's a cautionary tale of someone who used a leveraged strategy and blew up spectacularly:

https://www.bogleheads.org/forum/viewtopic.php?t=5934

[The Lsat Airbender]

Betting in vegas has a negative expected return. The stock market does not. I didn’t say anything about “beating the market”, nor did OP. OP said they want to earn a return above 7% via leverage (“ Anyone using leverage? Feels risky but I want more than 7% return ”). You got confused and thought that’s extremely difficult. I pointed out that it’s perfectly normal. Obviously it has more risk. But anybody with a mortgage and investments is already “putting in money they don’t have”.

At current interest rates and with CAPE where it is—and accounting for taxes—it is not at all obvious that leveraged stock investing has positive expected returns. Roulette really is a fair comparison (house edge is only a single-digit percentage after all). Using levered ETFs to get 110% or 125% exposure to equities, reasonable people can disagree about that, but let's not pretend it's a free lunch.

Also, you quickly will reach a point with leverage where you have significant risks of getting wiped out in a 40, 50, 70% drawdown. The possibility of a catastrophic margin call reduces expected returns.

[Anonymous User]

$600K

$450K 401(K) (mostly S&P)
$150K cash
NO Real Estate (still rent)/NO debt

I am such a millenial it hurts.

Just edited to add: In my opinion the best thing to do for investing is invest in the S&P with pre-tax savings and company match.