Here’s our latest interview with a millionaire as we seek to learn from those who have grown their wealth to high heights.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
My questions are in bold italics and his responses follow in black.
Let’s get started…
How old are you (and spouse if applicable, plus how long you’ve been married)?
My wife and I are both 49 and have been married for 28 years.
Do you have kids/family (if so, how old are they)?
We have 4 children (20, 18, 10 & 7). We are often asked about the age gap. The two youngest are adopted.
What area of the country do you live in (and urban or rural)?
We live in a suburban area.
What is your current net worth?
$2.4 million (broken out in next question). I have not included the value of our cars, home furnishings, jewelry, etc. I have also not included value of my Long Term Incentive (LTI) program or pension program.
What are the main assets that make up your net worth (stocks, real estate, business, home, retirement accounts, etc.) and any debt that offsets part of these?
- Retirement accounts – $850,000
- After tax investment accounts – $800,000
- Home – $750,000 (paid off)
We have no debt.
I have not included the college accounts as those are being spent out.
What is your annual income?
$300,0000. I also have an LTI account that will start paying out this next year. Current value is around $1 million and annual payments will now run about $200,000 a year as I will hit my first vesting period this year.
The LTI is substantial. Can you give us some additional insights about it?
It comes in the form of restricted stock grants. It vests over time. If I leave before retirement, it would go away. You can take retirement as early as 55 and then you would get pro-rated amounts of the LTI (in addition to retirement healthcare benefits). Between the LTI, pension, retirement healthcare benefits and deferred compensation program, it is hard to leave the job (golden handcuffs).
What is your job (type of work and level)?
I am an executive (VP level) in a business function.
What is your main source of income (be as specific as possible — job, investments, inheritance, etc.)?
My job is the main source. I do not take income from my investments (reinvest interest and dividends).
What is your annual spending?
Spending this year is $113,965. I run our budget off a spreadsheet.
How did you accumulate your net worth?
My income from my job has driven my net worth. I have focused on growing my career. The income has jumped in the last few years after our company was bought out and I joined a much larger company.
What have you learned in the process of becoming wealthy that others can learn from (what can others apply to become wealthy themselves)?
Personal and business advice – Understand risk and be prepared to mitigate if and when it arises. Businesses value someone that can address problems immediately. Personal hardships are much easier to deal with when you have a plan prepared (job loss, extended illness, etc.)
Investing advice – It is hard to beat the market and you can lose a significant amount of money trying to do that. Further, you need to be mindful of expenses associated with investing. Low cost index funds are hard to beat.
What are you currently doing to maintain/grow your net worth?
With the impact of my LTI vesting, I will be able to save even greater amounts of money. We have a great deferred income program at work that I will now take advantage of as well.
Do you have a target net worth you are trying to attain?
My target number is $6 million. My pension plan will cover almost all of my expenses. The reason for my somewhat high number (when taking everything into consideration) is that we may need to address certain needs for one of our children.
What are your plans for the future regarding lifestyle (for instance, will your net worth allow you to retire early, downsize jobs, etc.)?
I enjoy working and will continue to do so for as long as I am able. After hitting my target number, I want to expand my support of a local Christian school and to help build out several of their programs, including special education services for those with learning disabilities.
I was recently approached by an investment group to buy out a company. I would be one of four that make up the key management team in building the company. I will only consider this move if the equity portion exceeds $2 million (because I would be giving up my LTI program) and that the project value of equity is expected to hit $10 million by year 7.
Is there any advice you have for ESI Money readers regarding wealth accumulation?
I like Dave Ramsey’ advice about having a plan for each dollar. It is easy to spend money when you have a windfall.
Note: This interview was first published on my previous site.
photo credit: Theo Crazzolara Chocolate coins via photopin (license)
Erik @ The Mastermind Within says
Wow, LTI at $200k a year? That’s awesome and interesting at the same time. Massive companies seem to treat the best employees very well over the long run.
With $200k a year + your investment income from pre and post tax retirement accounts, you’ll be in a great spot.
Thanks for sharing.
Joe says
Thanks for sharing your details. Looks like the buyout was a big win for you.
In the new buyout offer you described, do you have to invest any of your own money?
What influenced your decision on paying off the house early?
Question for ESI: have you done any millionaire interviews past or pending on anyone in Silicon Valley?
ESI says
I don’t think so, but I’ve done so many they are beginning to be a blur. 🙂
Dads Dollars Debts says
I would be happy with $50K LTI. That is great. I also like that they have their home paid off and decided to take on 2 adopted kids. My wife and I often talk about it and I have always wanted to wait until our son was at least 8 or 9 before thinking about it.
Spen says
Have you interviewed anyone who has got to Millionaire status whilst earning a more normal salary such as $35,000. I’ve never earned more than that but now have $750,000+ Wealth. Getting to Millionaire status on a Salary of $300,000 is easy, Noted the work pressures and effort to get there will have been tough so not knocking this guy.
ESI says
I have one coming up, though not as low as $35k.
I also have a post coming up about others who have become millionaires on low salaries.
It can be done, but is hard to do. That’s why I emphasize the “E” (earn) so much here — it makes things a LOT easier!
gtmoney says
I am always impressed with people who have saved with a lower income. $750k on $35k a year is amazing!!!
I am on the opposite side of the equation, very high income has grown significantly in the last 5 years and focusing heavily on savings and investments. looking to retire in 9 years and should not have a problem doing it.
RetireSoon says
Spen, sounds like your interview is 3-4 years of compound interest away.
DS says
Spen,
I’d like to hear more of your story. Curious how old you are, career, etc.
Spen says
I am in my late 40’s, Quite simply it is a case of good advice, poor economics and a bit of tragedy. I am in the UK where wages seem to be lower and Property prices have risen stupidly. I started work at 16 years old full time as an Apprentice (Mechanical Engineer) and joined a final salary pension scheme, this is currently my major asset. This year they offered me $370,000 to transfer it from them. 16 years ago my Partner was diagnosed with MS from that day I saved and saved in Funds and company share schemes. Once these non pension investments + my redundancy entitlement ($45000) were worth more than my Mortgage I knew I could pay off the mortgage if required. My Partner needed more care, Poor IT at work was driving me crazy and they announced a redundancy so I took it (. The House and Car (which was less than 2 years old) were all paid off. Plus I had a facility with the bank to borrow $70,000 This I used up at a really low interest rate to move to a Bungalow ($200,000) so that my Partner could move around freely in a wheelchair. My Partner passed away at just 40 years old. The insurance paid me the equivalent of the borrowed facility. I then needed a job as all social security died with my partner and changed industries. I now work in telecoms infrastructure and have been promoted once in 5 years and expecting another quite soon. I have been investing in individual shares monthly for the past 5 years and re-investing the monthly dividends which now equate to $500 a month at the moment. My Partner and I had bought many expensive goods during the good years which I will sell off when I do retire soon (current market value $26,000 Yes I have a good amount logged and itemized). Can’t wait to quit work I may never hit the Million mark. I still drive the same car which is 9 years old, I am not extravagant I still wear T-shirts and hoodies that are 2 or 3 decades old! I do still eat out regularly, Drink the odd beer and go to Live music events. I have a new Partner, when circumstances are right the plan is to free up the value in my house (sell it) to provide more income as my Partner has a House (not included in my figures) more suited to how we intend to live.
Dave says
Thank you for sharing your success with us. Stories like yours are inspiring. It is good to know that there are people building financial independence for themselves and their family by way of hard work, sacrifice, and smart living.