The New ‘Success Sequence’

The ‘success sequence’, conceived in a 2009 Brookings report, describes the roadmap young people ought to follow to optimize their likelihood of success at life. But there are numerous confounders, and I’m skeptical of the data or the conclusions drawn.

1. The underlying variable could be family wealth. Having rich parents or having wealthy in-laws may increase the likelihood of being married early in life, and is also the source of wealth or apparent success of married couples.

2. Family wealth is not the same as individual wealth, and studies either conflate these two or ignore the latter. This also overlooks increased expenses, such as the high costs of having children–both monetary and in terms of opportunity cost, which obviously offsets income. And also, the high potential costs of supporting a spouse. Sole breadwinners or lopsided incomes are the most disadvantaged here. Being married means your assets become pooled, including child support, so even if the household is wealthier collectively, you’re still possibly poorer at an individual level as a result.

3. Such studies, similar to studies about incomes and IQ, are based off of old data. A lot has changed over the past 30 years, such as an economic climate that more than ever rewards individuals who prioritize careers and credentials over family, as well as increasing returns to individual talent and IQ, with a greater share nominally and relatively to superstar performers. Adjusted for student loan debt and inflation, white collar salaries are more lucrative than ever before, and especially since 2010.

Today, the success sequence is somewhat different. Based on my own observations of ‘FIRE subs’ and high-net worth individuals online overall on Reddit, the sequence tends to be as follows:

1. Whilst in high school, aim for attending a competitive college, which means procuring high test scores, skills, extracurriculars, and other attributes to distinguish oneself. Instead of the dead-end, low-paying teen Summer job, learn valuable skills, like coding.

2. Get at least a 4-year degree, ideally in a STEM field with a high-paying white collar career in mind. A graduate degree may be preferable. This may also mean incurring student loan debt, but this is not a concern. As “Grave Goods” mentions downstream in a Twitter thread by “VB knives,” there are tons of payment options and other aid, which is often overlooked or ignored in the scaremongering about college:

You’d have to really screw up or have the worst luck in the world to not see a positive ROI from college. When one runs the numbers, even humanities degrees from low-ranking colleges have a positive lifetime ROI.

3. Waste no time between high school and college, or after college. Try to enter the professional workforce as soon as possible after obtaining said credentials. Build connections during and after college. Leverage one’s college credentials whenever possible, even for non-career things, like lower insurance rates or for social status. This matters a lot when trying to start and build a career. You don’t want to get in a rut of doing low-paying jobs, in which that defines you.

4. Move to a VHCOL area, either during college or after when seeking a career. From my own research, the vast majority of young (under 35), high-net-worth individuals online live in VHCOL areas. This seems to also be a perquisite, although the sample of Reddit may be biased. As it’s said, “You get what you pay for.” VHCOL areas tend to have higher incomes and more job opportunities, as well as greater home appreciation (like in the Bay Area), and this is easily more than enough to offset the higher cost of living.

5. Save and invest diligently. Live frugally. Invest all unspent income in index funds and or real estate on a consistent basis regardless of market conditions. There is no evidence to suggest market timing works, and the huge stock market rally of 2023 after all the doom and gloom in 2022 about inflation and rate hikes, demonstrates the value of ignoring the media and staying invested. Marriage may be optional here. If married, the spouse often has a high income and similar education level (assortative mating is really common). ‘DINK’ households of $300k/year or more incomes are not that uncommon among high-net-worth couples. Buy a home as soon as possible; avoid renting.

6. Continue #5 until desired net-worth is achieved, usually within a decade if market conditions are favorable and no emergencies or other negative unforeseen events. Net-worths in the $2-5 million range by age 35-45 are not that uncommon by following these steps. Also, this makes the student loan debt negligible by comparison, as well as the expenses of living in a VHCOL area (home appreciation also helps). It’s not that uncommon to read stories of millionaires still paying off student loans, or paying them off as a lump sum. Competitive white collar salaries have seen the greatest wage growth since 2010, so this also helps offset inflation and contributes to compounding.

A major caveat is this does not apply to most people. A high IQ is a perquisite, as well as optimizing one’s life at every stage.