Make 90% of the wealth after age 50

楼主 (文学城)

Better Late Than Never


David S. J. Meng


“Today is your youngest day in the rest of your life.”

If you are reading this in your twenties or thirties, congratulations! You are getting a head start in the right direction. However, don’t worry if you are older. As a scientist buried in research for decades, I myself started late investing in real estate, when I was 47. I hope that the following example will give you courage and inspiration.

Buffett made 99.6% of his money after the age of 52. I read the biographies “Buffett: The Making of an American Capitalist” (by Roger Lowenstein) and “The Snowball – Warren Buffett and the Business of Life” (by Alice Schroeder). I also searched sources, and I went through the Berkshire Hathaway Annual Reports for the past decades. These are all documents available in the public domain. Indeed, Mr. Warren Buffett made about 99.6% of his wealth after his 52nd birthday.

How is this possible? Don't people think that 52 is kind of late, and that you should have made the bulk of your wealth by then already? How did he make the bulk (99.6%) of his wealth after 52? Does this mean that, if we are already 40 or 50, that it is not too late for us to start serious investing?

At the age of 52, Mr. Buffett's wealth was approximately $376 million (= $0.376 billion). At 87, his wealth was approximately $86.6 billion. There are 35 years from 52 to 87. 

$86.6 billion / $0.376 billion = 1.1683**35.

Therefore, by growing at an average compounding rate of 16.83% annually in the past 35 years, his wealth grew from $0.376 billion to $86.6 billion. (Buffett's wealth fluctuates with the market, so the focus here is not on the exact accuracy of the numbers. The focus here is that compounding for many years can do wonders.)

With an increase from $0.376 billion to $86.6 billion, (86.6 – 0.376)/86.6 = 99.6%. Therefore, Buffett made 99.6% of his money after the age of 52.

This is truly amazing: Whatever money he had at the age of 52, he multiplied it by more than 200x after he had turned 52 years of age.

My humble story. In June and July of 2010, my 15-year old daughter became sick and was in and out of the hospital for two weeks. We later learned that she had appendicitis, but she was initially misdiagnosed by the doctors, who told us that she probably ate something bad and would recover soon.

After two weeks, her condition suddenly worsened and she was sent to the emergency room in the middle of the night. She was hospitalized for three weeks from a ruptured appendix. The rupture created a life-threatening infection of her abdomen.

Heavy antibiotics administered over two weeks failed to lower her temperature to normal. Finally, the doctors performed two procedures which successfully fought back the infection, and she gradually recovered. My wife and I stayed in the hospital with her every day for 21 days, during which my daughter lost more than 10 pounds and I lost 6 (and I had only 112 pounds to start with!).

It was during those heavy-hearted days that I realized I needed to do something for the family financially. Prior to that, as a scientist, I had focused only on my research and writing papers, and had not paid much attention to money. It dawned on me that if one of our children suddenly fell ill and became a long-term patient, my wife or I might have to quit our job to care for the patient. And if either one of us became a long-term patient ourselves, not only would the sick one be unable to work, but the other would have to compromise his/her job to take care of the spouse. Either scenario would mean a substantial reduction in income that would jeopardize the family finances.

The days with my daughter in the hospital were long, and I spent that time becoming increasingly determined to invest and secure the financial freedom for the family.

       My daughter was finally discharged from the hospital and went home to recover. I called my real estate agent and told her that I would like to buy houses as rental properties, and that I planned to buy five houses.

I had read in a book that if you buy five houses as rentals and use the rent income to pay the mortgages every month, then after the mortgages are paid off, the rent income would be enough to live on. Then you would not have to work to earn a paycheck, and you have the option to quit your job. That would mean you have achieved financial freedom.

That was why I told my agent that I planned to buy five houses. My wife overheard the phone call and laughed. She thought that I was crazy to want to buy five houses. It's not like going to the supermarket and buying five bags of groceries. Five houses? We are a regular working family with ordinary income; where would the money come from?

       We bought our first rental house in 2011. As detailed in my book, in eight years, we expanded to 14 rental properties.

Our net worth has increased from $0.8 million in 2011 (primary residence + retirement accounts) to $5.5 million in 2019 (mostly cash-producing properties). This represents an annual rate of 27% in our wealth accumulation. 

The net positive cash-flow (after paying for mortgages, taxes, insurance, repairs, etc.) from our rental properties reached $150,000 per year.

My wife and I enjoy our jobs and have continued to work, but this cash-flow would be enough for us to live on, if we chose to retire now.

In addition, (1) with gradual increases in rent, our cash-flow will increase over time. (2) Over the years to come, the mortgages will be gradually paid off, further increasing the cash-flow. (3) The values of the properties will continue to appreciate in the long-term. The situation is a win-win-win.

We have achieved this under relatively ordinary circumstances. As detailed in my book "$5 Million in 8 Years", we do not live in one of those booming, fast growing areas where real estate prices increase by 8% or 12% per year, enabling investors to “get rich quick”. Such a “booming” may not be sustainable in the long-term, nor reproducible by you in your area.

Instead, the housing prices in our area have been increasing by a modest 3-4% per year in the past eight years, which is representative of a normal market and does not deviate significantly from the long-term historic average in the United States.

In addition, I am not a handy person who can do my own repair work on the houses to save money. My three lovely and talented kids tease me for calling a handyman to fix every small thing. Therefore, the aforementioned wealth accumulation was achieved through relatively normal appreciation by someone who is not particularly handy around a house – and I believe it is attainable for you too.

If you happen to be handy and can save money on house maintenance, or live in a faster-appreciating location, you could do even better.

Theodore Roosevelt once said: “Every person who invests in well-selected real estate in a growing section of a prosperous community adopts the surest and safest method of becoming independent, for real estate is the basis of wealth.”

Indeed, compared to many other types of investments, real estate investing with a good and safe use of leverage, as this book will describe, can produce wonderful returns at a managed and minimized risk. As the famous entrepreneur Marshal Field put it: “Buying real estate is the best, safest way to become wealthy.”

History shows that the majority of self-made millionaires made it through real estate.

According to the industrialist, business magnate, and philanthropist Andrew Carnegie: “Ninety percent of all millionaires become so through owning real estate. More money has been made in real estate than in all industrial investments combined. The wise young man or wage earner of today invests his money in real estate.”

My wife and I made 85% of our wealth in the last 8 years after I was 47. From 2011 to 2019, we increased our wealth from $0.8 million to $5.5 million. (5.5-0.8)/5.5 = 85%. Hence, in our case:

(1) We made 15% of our wealth in nearly two decades of working hard at our jobs from our late twenties to age 47;

(2) We made 85% of our wealth from age of 47 to 55 via real estate investing.

       Many people consider 67 as the retirement age. There are 12 years from 55 to 67. As demonstrated in my book, from 2011-2019, our wealth increased at a rate of 27% annually. I expect it to slow down in the coming years, because our leverage has decreased and it is not easy to get more loans from the banks. Assume in the next 12 years, we increase our wealth by 15% annually, then

$5.5 million x 1.15**12 = $29.4 million.

And, (29.4-0.8)/29.4 = 97.3%. 

In this case, we would make 97.3% of our wealth after the age of 47.

Assume an even lower rate of 10% annually in the next 12 years (The SP 500 index has returned 10% annually on average from 1965-2019), then

$5.5 million x 1.1**12 = $17.3 million.

And, (17.3-0.8)/17.3 = 95.4%. 

In this case, we would make 95.4% of our wealth after the age of 47.

Please note that the focus here is not the exact numbers. The numbers may be different for different individuals. In addition, different investors may use different ways to estimate their numbers. The focus here is: Investing can enable you to make the bulk of your wealth after the age of 50.

Important point. Therefore, you can earn the majority of your wealth by investing, even if you start late. Don't let “I am old”, “It's too late”, or other excuses stop you.

Here are other factors that may help erase your concerns and increase your confidence. (1) I am not handy and not physically strong; (2) I spend 50+ hours per week on a day job, and I spend only a few hours per week on real estate investing by building a team and using other people’s time and talents; (3) I live in a relatively slow housing price-appreciation market; (4) My wife and I have raised three kids and paid for their college tuitions with 0 student loans; (5) We sent money to help parents and relatives.

I truly believe that if my wife and I can do it, you can too.

I would like to emphasize the following main points.

(1) You should be able to achieve an annual rate of return of 15% to 20% in real estate investing by sufficient and cautious use of leverage. (The SP 500 returns 10% annually in average from 1965-2019; it is passive and you do not have to do anything except look at it once a year. If I cannot obtain 15% in real estate, why spend the extra effort and time?)

(2) After holding your properties for several years, with rent increases, principal reduction and house value appreciation, you can build substantial cash-flow over time and achieve financial freedom, even if you are already in your 40s and 50s when you start.

(3) Of course, the younger you are when you start, the better. Remember that compounding over time is the 8th wonder of the world. Pull the trigger, get started, and do not wait. The best time to start is now.

(4) Don't let anyone tell you that you are too old to do this. The age of 50 is not the end. It is not even the beginning of the end. It is only the end of the beginning.

(By David S. J. Meng)



1. 你的房子(不是你的净财产)平均每年升值大概多少。

2. 你现在还上班么。

3. 你现在生活消费跟以前有什么不同。

Thank you for your questions. Below are my answers.

[1].  The houses in my area in the past 8 years have appreciated at about 3-4% annually. [2]. Yes I am still working. I spend only a few hours per week on real estate. The nice thing about real estate is that one can use other people's money, other people's time, and other people's talents. [3]. Life is less stressful knowing that there is cash flow and appreciation every year. We are frugal people, but we spend money a bit more freely now.  We also send money to help some other people.  As you probably know, people in some villages in China don't have much insurance; cancer treatmenbts can wipe out the family. We try to help a few families. Thanks.

Thank you. You have a good sense of humor. I have already answer

I have deleted all links to my book, to avoid any appearance of advertisement.  Hope my article will be useful and beneficial to some people.  I have a colleague, a genius from Australia, whose name is Brian.  Years ago, he spent a lot of time and wrote and published a book.  I asked him: "How much do you get paid from your book?"  He laughed and said: "It's about $0.05/hour for the time I spent in writing the book, much lower than the minimum wage."  I said: "That's not worth it.  Why did you do it?"  He smiled: "Three reasons.  First, humans have a need to express themselves.  Second, it's a hobby.  Your purpose for the hobby is not to make money.  Third, if my book can inspire, encourage and lift up some people, it makes me feel that my life has more meaning."


15% annually increase of wealth is VERY aggresive

Even the best hedge fund managers can't guarantee they can gain more than 10% annually with big capital.

The reason? with big captial the increase of wealth will be in a much slow rate.  

Yes you are right. For small landlords and using leverage, it is

Yes you are right. For small landlords and using leverage, it is possible to get 15% to 25%. But once the landlord grows, it is difficult to scale up. If one has big capital, it is good to just dump into an SP500 index fund. SP 500 returns on average 10% annually from 1965-2019. It beats most of the hedge funds who charge hefty fees. Most hedge funds only make the managers rich; they underperform the SP 500 in the long term.



开始为1. 20%DOWN,资产5,净资产1(4倍贷款)。



Yes, 看我上面算的帐。
well said . thank you for sharing.
Thank you!
谢谢楼主的分享,pretty clear writing in English




这个投资逻辑是没问题的,我支持您。谢谢分享!也会分享给孩子们,看能不能启发他们成为小地主 lol