7

Seems obvious, but if someone says, "He made his first million before 25" does it mean you have paid taxes on a million dollars by the age 25? Or does it mean you have right now $1,000,000 in cash / liquid?

Or, could it mean you have something not liquid but valued at over $1,000,000? Like a business.

Just curious how this is interpreted.

15

I'd interpret it as "Net Worth" reached 1M where "net worth" = assets - liabilities.

5

I've not heard it used in any way other than one's net worth reaching a million. No 30 yr old lawyer brags that his cumulative income just passed $1M because he may not have saved a dime of it.

  • So in this interpretation as with Vitalik you are saying. Cash in bank, retirement, stocks, paid off property/houses, etc - your credit card, areas of debt ... that would need to be over a million. This to me makes the most sense. I don't think it's a huge accomplishment to have sales of millions if after it all you don't have anything for yourself at the end. Thanks! – Ryan Doom Nov 28 '10 at 15:42
  • Right. The sales thing, for a business is a milestone, but as you suggest, it speaks nothing of profits. – JoeTaxpayer Nov 28 '10 at 18:18
3

When people are crowing about their achievements, they often take liberties with those achievements. Vitalik's interpretation -- net worth, is probably what you would naturally come to mind. But when someone is bragging, that could mean anything -- $1M of total revenue.

  • Agree. I see it more like $1M of income[be it salary, business sale, tangible/intangible] without actually counting expenses or liability. – Dheer Nov 28 '10 at 15:19
  • So if they had a sole proprietorship and had revenue of 1,000,000 but they had to pay out 500,000 to sub-contractors, suppliers etc. Think they would still claim they 'made their first million?' They would (roughly) pay taxes on the other 500,000 which is what I think of as 'made' because you have it in hand, cash at the end of the day. – Ryan Doom Nov 28 '10 at 15:31
  • Selling anything (business, goods, real estate) for $1M is not "making a million". It's silly, i can probably buy 950K worth of goods and sell it for a million. I will not make my first million this way. As for the salary - you might be right, people may count pre-tax salary but let's be honest: who has 1M in salary? They probably have a pretty high net worth already. – Vitalik Nov 29 '10 at 2:22

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