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.
This interview took place in February.
My questions are in bold italics and their responses follow in black.
Let’s get started…
OVERVIEW
How old are you (and spouse if applicable, plus how long you’ve been married)?
I’m 53, and my awesome husband is 72. Yes, he is eighteen years older than me!
We’ve been together for over twenty years and have been married for fifteen.
Do you have kids/family (if so, how old are they)?
Yes, we are a blended family.
He has a daughter who is 42, and I have two sons, ages 31 and 29.
We do not have any kids together.
What area of the country do you live in (and urban or rural)?
We live in the Southern U.S. in a city that is rural with lots of urban amenities nearby.
What is your current net worth?
Because we are a blended family, my husband and I keep our finances separate. All my answers in this interview are for my finances only and do not include his.
My current net worth is $1,005,028.
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?
- 401(k) account: $472,363
- After-tax investment account: $81,114
- Individual stocks: $4,556
- Series I savings bond: $10,408
- Real estate other than home: $70,000 (my half; it is worth $140k)
- Cash: $128,763. I know this is a lot of cash; it’s making 5% currently in Fidelity SPAXX, but I’m very interested in what I should do with it in the future since it seems that interest rates will come down at some point.
- Primary residence: $182,500 (my half; it is worth $365k)
- CD: $41,449. This is about to mature, and I am not renewing it since the interest rate is lower than what I’m earning in SPAXX.
- Car: $13,875. I think most readers don’t include vehicles in net worth, but I do as it’s been a long journey to achieving millionaire status, and I’m counting every penny I own!
I have some stock options from my employer (ISO) that are valued at $42,099 that I don’t include in my net worth (should I?) since they are not fully vested.
I don’t have any debt.
EARN
What is your job?
I work as a manager in the payroll department, and I am at a director level.
I have worked for the same company for 20 years, and I worked my way up from an office clerk position to the director role I’m in today.
What is your annual income?
My annual salary is $145,000 plus a bonus which varies from year to year.
In 2023 the bonus was $28,882.
2023 total gross was $194,718 which includes some incentive stock options (ISO) that I exercised and sold resulting in a disqualifying disposition that was reported in W-2 Box 1.
Without the ISOs, my gross would’ve been about $173,000.
Tell us about your income performance over time. What was the starting salary of your first job, how did it grow from there (and what you did to make it grow), and where are you now?
My first job was baby-sitting when I was 12. My first W-2 job (when I was 16) was at a nursing home where I assisted the Activity Director with the activities for the residents and did some light office work. I made minimum wage $3.35 per hour.
Here’s the table from Social Security that shows my Medicare taxable wages by year:
- 2023: $164,126
- 2022: $165,513
- 2021: $135,819
- 2020: $149,418
- 2019: $137,333
- 2018: $136,148
- 2017: $94,952
- 2016: $98,435
- 2015: $102,467
- 2014: $91,263
- 2013: $76,523
- 2012: $77,356
- 2011: $71,461
- 2010: $63,250
- 2009: $62,474
- 2008: $54,611
- 2007: $49,972
- 2006: $44,734
- 2005: $36,513
- 2004: $28,138
- 2003: $28,046
- 2002: $23,618
- 2001: $23,683
- 2000: $20,584
- 1999: $17,861
- 1998: $17,981
- 1997: $17,800
- 1996: $16,068
- 1995: $14,520
- 1994: $13,066
- 1993: $13,446
- 1992: $11,701
- 1991: $11,163
- 1990: $8,867
- 1989: $1,976
- 1988: $1,932
- 1987: $193
- 1986: $495
I made my salary grow by returning to college to complete my degree.
I attended college right after high school, but I quit after three semesters when I was 20 and didn’t return to college until I was 31. I was working full-time at my current employer and going to school part-time while raising two kids as a single mom. I started out at a community college and finished up my basic courses there, and then took in person classes at night three times a week at my university. My commute to school was 50 miles round trip.
It took me seven years to complete my degree, finally graduating with a Bachelor of Business Administration degree in Management. By the time I graduated college, one of my kids was a high school junior!
I graduated in 2008, and you can see from the table above that my income increased 14% from 2008 to 2009. When I graduated from college, I was promoted from supervisor to manager. Once I was a manager, I was eligible for the bonus program, and that contributed to growing my salary.
What tips do you have for others who want to grow their career-related income?
Identify what you’re interested in doing and speak up! You are your best advocate.
Take advantage of training and development opportunities; I have two certifications in my area of expertise, and no one told me to go get these. I learned about them and asked my employer to fund the training and test fees to obtain the certifications, and then I asked my employer to approve the continuing education necessary to maintain the certifications.
Also, volunteer to take on projects or tasks that are not necessarily part of your job description.
Last, do what you say you are going to do. I am trusted and respected at work because I deliver what is promised and I get it done on time.
What’s your work-life balance look like?
Currently, it is great.
During the pandemic, I started working remotely which I loved! As an introvert, I am very well suited to working alone at home, and just meeting up as needed via Microsoft Teams.
Once vaccines were available, I started working a hybrid schedule, which I also like (just not as much). There are some advantages to in person work, and I recognize this as a manager, so, hybrid is the best of both worlds. I work two days at the office and three days at home and am happy with this schedule.
I used to work some overtime (ten plus hours a week) pre-pandemic, but now I’m able to get my job done with minimal overtime due to hiring extra staff and delegating some of my work to give training and development opportunities to my direct reports to prepare for the day when I eventually leave.
Do you have any sources of income besides your career? If so, can you list them, give us a feel for how much you earn with each, and offer some insight into how you developed them?
I don’t have a side hustle, but I did earn about $6,000 in 2023 from interest on a CD and various money market accounts.
SAVE
What is your annual spending?
My annual spending is about $50,000 excluding federal taxes.
What are the main categories (expenses) this spending breaks into?
Groceries, travel, support for my disabled son, utilities/property taxes, entertainment & various other categories (gas, personal care, medical, clothing, etc.)
Do you have a budget? If so, how do you implement it?
No budget, but we discuss big expenditures beforehand and do research or wait for a sale to get a good price.
What percentage of your gross income do you save and how has that changed over time?
I save 11% of my gross income plus my employer contributes 3% of my gross in 401(k) match.
In addition, I save 50% of my after-tax income.
What’s your best tip for saving (accumulating) money?
Be frugal. Be smart in how you spend your money and look for discounts, sales, promo codes, etc. Don’t spend money trying to keep up with your friends, save your raises and bonuses, and automate transfers from your pay into savings.
I started reading ESI Money in 2018 and realized that if I got serious about it, I could set savings goals and retire early. I was inspired to start tracking my net worth with a goal to achieve a net worth of $1,000,000 and estimated that I’d be 55 years old when I hit this goal.
In addition to increasing my 401(k) contributions, I started investing a set monthly amount in Fidelity FZROX and started saving all my raises and bonuses. When I set out on this journey in August 2018, my net worth was $358,385. In five years, I tripled my net worth, and I made it to one million dollars two years earlier than expected!
What’s your best tip for spending less money?
Never pay retail!
I am the queen of coupons, and it is a fun game to see just how little I can pay for something. I look for coupons, promo codes and take advantage of rewards memberships, cash back rewards and credit card points.
If I get a coupon for something free, I usually will redeem it if it is something I want or can donate.
If we are buying a vehicle, we usually buy something used. We drive our cars until they are ten plus years old.
We frequently buy household items used from Facebook marketplace or at estate sales.
We don’t eat out; instead, I cook at home and freeze leftovers for future meals. Preparing your own food is fun, easy, and much healthier and more economical than eating out.
I borrow books from the library rather than buying books.
We also plant a big garden and eat locally from our garden almost year-round.
What is your favorite thing to spend money on/your secret splurge?
When I buy groceries, I buy whatever I want with no regard to price, and it feels fabulous!
I spent many years of my life living paycheck to paycheck, and economizing when buying groceries, usually buying the store brand or whatever was cheapest. Now, I buy the best groceries, and often organic items with no worries about price.
My secret splurge is spending money on facials and skin care products, but even when I buy these, I don’t pay retail. The dermatologist’s office offers monthly specials on skin care, so I’ll buy a package to discount the price per facial.
INVEST
What is your investment philosophy/plan?
Invest in low-cost index funds/buy and hold.
Stay the course and don’t try to time the market.
What has been your best investment?
I bought ADP stock in 2008 that has grown 432% since then.
However, when I invested in it, I only had the money to buy ten shares! Too bad I didn’t put more money into it, but I do still have those ten shares. It’s the first individual stock I ever purchased.
What has been your worst investment?
I don’t have any bad investments, but I made a bad decision when I left my former job and cashed out my 401(k) instead of rolling it into my new employer’s plan.
I was twenty-nine years old at the time and had saved $6,000 which seemed like a fortune to me, and retirement seemed light years away.
What’s been your overall return?
Fidelity shows 5.5% on my 401(k) and 26% on my brokerage account.
My net worth at the end of 2018 was $336,786 and at the end of 2023 was $1,005,028.
How often do you monitor/review your portfolio?
I log in and look at my account several times a week, but I don’t make any changes (I just like looking at my money).
I rebalance my 401(k) annually.
NET WORTH
How did you accumulate your net worth?
I didn’t inherit any money, nor did I ever have any meaningful financial help from my parents. Everything I have is because I worked hard to earn it.
First, I went back to school at age 31, and earned a college degree at age 38 which gave me a path to earning an increased salary. I went into management, which pays better than non-managerial positions. I make a good salary/bonus (but only have made a six-figure salary since 2018), and I don’t spend everything I make.
When I still had a mortgage, student loans and other debt, I used my raises and bonuses to pay those down until they were paid off. Now, I have no debt, and I live well below my means.
I realized that to increase my wealth and to have access to that money pre-retirement age, I needed to put more money in the market in an after-tax account, so I started investing in Fidelity Zero Total Market Index (FZROX). My fund balance is up 22% since I started investing in it in 2018.
I also married well (in my second marriage lol). My husband does all the repairs around our house, saving us thousands of dollars over the years. We bought our house from a foreclosure, and then my husband fixed it up initially and has remodeled it himself over the years. He also has been my biggest cheerleader career-wise, encouraging me to take a better position with my employer over 20 years ago that put me on the path to the director role I have today. We are like minded when it comes to money, although he is way more frugal than me!
Even though we keep separate finances, his influence and DIY prowess has been a big assistance in helping me accumulate my net worth.
What would you say is your greatest strength in the ESI wealth-building model (Earn, Save or Invest) and why would you say it’s tops?
I think Save is my biggest strength, and it is tops because even when I lived paycheck to paycheck, I always contributed at least 6% to my 401(k) no matter what (this is the amount that must be contributed to maximize the company match).
As I earned more money, I always increased my savings rate instead of spending the extra money (other than paying down debt).
I’m good at not spending money and at finding ways to reduce what I spend, enabling me to save more of my salary.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
The odds were against me being a millionaire. I had many obstacles to overcome to make it to where I am today.
When I was growing up, my parents had serious drug and alcohol problems and home life was unstable because often a night of partying ended with them physically and verbally assaulting each other. They would often break windows or punch holes in the walls during these fights, so our house was quite ramshackle, and I never wanted anyone to know where I lived.
I’ll spare you the details, but the chaos all culminated with my mom (in an alcohol/drug fueled rage) attacking and seriously injuring my dad during my senior year of high school. This was quite traumatic, and I coped by skipping school. I ended up losing my credits for my senior year of high school for truancy. (They didn’t have the programs they do today to help at-risk teens graduate high school nor did anyone know about my home life; I never told any adults at school about my problems.)
I quit high school in April of my senior year when it became apparent that I would not graduate and took the high school equivalency exam to get a GED instead. I went to college that fall but quit after three semesters.
Along the way, I had two kids by the time I was 24 and it seemed I might be destined to stay trapped in the cycle of dysfunction. However, I recognized that I needed to earn a better living, and that I wanted my children to have a better childhood than I’d had. I resolved to make my life better, so I went back to school at age 31, attending part-time for seven years until I completed my degree at age 38.
There were so many more road bumps than what can be shared here (maybe my side hustle should be writing a book? lol). I managed the road bumps by being resilient, perseverant, and staying focused on my goal to have a better life.
One of my big dreams when I was growing up was to live in a brick house where nothing was broken and I’m happy to say I finally made it to that brick house when I was 31!
What are you currently doing to maintain/grow your net worth?
I increase my savings every year by the percentage of my annual raise.
I save my bonuses and control my spending.
I continue to invest in the stock market, and I am taking advantage of the high interest rates available in money market accounts currently.
Do you have a target net worth you are trying to attain?
Now that I’ve made it to one million, it seems like $1.5 million could be achieved.
How old were you when you made your first million and have you had any significant behavior shifts since then?
I was 53 when I made my first million, and no significant behavior shifts since then.
I celebrated by doing this interview!
What personal habits and/or traits have you developed that have made you successful at growing your net worth?
I am frugal and disciplined.
I don’t care about spending money on status items or about owning a lot of possessions, so it makes it easy to not overspend.
What money mistakes have you made along the way that others can learn from?
If I could do it differently, I’d finish college the first time around.
I could’ve had a lot more higher earning years if I had graduated at age 22 instead of age 38.
What advice do you have for ESI Money readers on how to become wealthy?
- Focus on earning, saving, and investing, just like ESI says!
- Automate your savings and invest in the stock market.
- Set financial goals and stick to them.
- Don’t spend money to support a certain lifestyle; live below your means and save the rest.
- Save your bonuses and raises.
- Don’t take on unnecessary debt and if you do have debt, pay it off quickly and at zero interest if possible.
- Maintain a high credit score; it opens doors to favorable lending terms, better prices on insurance, etc.
- Invest in low-cost index funds and stay the course; don’t try to time the market.
- I am also focused on maintaining my health. I exercise, eat right (mostly), and have almost no health issues. Being healthy is key to being wealthy because no matter how much money you have, life is quite diminished if you don’t have good health.
FUTURE
What are your plans for the future regarding lifestyle?
I think my net worth will allow me to retire early; it is certainly my goal!
I do not think I will have to work to my full retirement age, but it’s not clear to me yet exactly when I’ll be able to retire.
What are your retirement plans?
I am thinking of retiring in about four years. I estimate that I can earn about $750,000 in the next four years, and that would allow me to increase my nest egg.
In the meantime, I am considering becoming an IRS Enrolled Agent. From the IRS website:
“An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee.”
I enjoy preparing taxes (lol, yes, I really do enjoy it) so I think I could retire from my current job in a few years and use tax preparation as a source of income in retirement where I only work part of the year. It would give me an income stream, flexibility to not work outside of tax season, and I would have earned income so that I could buy health insurance on the government exchange.
I have volunteered in the VITA program (IRS Volunteer Income Tax Assistance) and enjoyed it quite a bit, so getting paid for this seems like a good plan. My husband suggested taking it further and creating a business from it, but I am not sure I want to work that hard.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
Yes, I am concerned about retiring too early and running out of money, so I’m going to work for a few more years.
I’m also concerned about how to pay for health insurance prior to being eligible for Medicare (possibly this will be resolved if I do some part time work as an enrolled agent—see my answer to the previous question).
Last, I’d like to increase my primary insurance amount (PIA) with Social Security to make my monthly benefit larger. I have about five years of earnings being counted in my top 35 years of earnings that are from my teenage earning years, so I’d like those low earnings years to be replaced with earnings from my higher earning years.
This is important because I have an adult child who is disabled and qualifies for disability benefits from Social Security. He receives Supplemental Security Income (SSI) now, but when I take my Social Security benefit, he will receive half of my benefit instead of SSI. Upon my death, he will receive my entire benefit. Considering this, I want to leave him in the best shape possible to maximize his benefits, especially after I’m gone.
MISCELLANEOUS
How did you learn about finances and at what age did it “click”?
I learned a lot about what not to do with your finances from my upbringing.
My parents spent everything they earned, lived paycheck to paycheck and never had any significant savings. They would ruin their credit every seven years or so, getting new credit cards and charging them up to the limit, inevitably falling behind on the minimum monthly payments and ultimately not paying the creditors.
Who inspired you to excel in life? Who are your heroes?
I did not have positive role models growing up, so this is a hard question to answer.
I have been extremely motivated to not make the same poor choices and mistakes as my parents.
Do you have any favorite money books you like/recommend? If so, can you share with us your top three and why you like them?
- The Millionaire Next Door by Thomas Stanley
- Your Money or Your Life by Joseph R. Dominguez and Vicki Robin
- The Snowball: Warren Buffett and the Business of Life by Alice Schroeder
I found these books to be educational and inspirational, especially the concept of trading time for money.
Also, I highly recommend Kiplinger’s Personal Finance. I’ve had a subscription to Kiplinger’s since I was in my twenties, and I’ve learned a lot from them.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
I do give to charity. It is important to give back and to support causes that are important to me.
I don’t give enough though; I’m only donating about one percent of my gross income to charity.
I plan to increase my contributions going forward.
Do you plan to leave an inheritance for your heirs (how do you plan to distribute your wealth at your death)? What are your reasons behind this plan?
I do plan to leave an inheritance for my children to divide between the two of them.
The main reason is that one of my kids is disabled, and I want to be sure there are resources available for his support.
I recently updated my will to establish a special needs trust for his benefit.
My older son is an attorney, and he will be the trustee of this trust for his brother.
MI 228 says
Congratulations! You have accomplished so very much. Kudos to you for nit allowing childhood circumstances to dictate your path in life. There is always a choice and you made great decisions!
MI 405 says
Thank you for your kind words! It’s very gratifying to have come so far.
m says
Well Done! Your perseverance and progress is amazing.
I understand the desire for separate finances with blended families,
but one thing to consider, especially with the age difference between
you and your spouse, is if he pre-deceases you, are you secure in your
housing, or would you need to buy out his share from his other heirs.
Best wishes.
MI 405 says
Thank you so much! I appreciate your feedback. Considering our age difference, I have definitely spent some time thinking (worrying lol) about this, and when we did our wills, we decided to leave each other our primary residence. I’m grateful that my husband agreed to this and it really gives me peace of mind that if he goes first, my housing situation is not affected and same for him if I go first.
MI-400 says
Great story and way to persevere and finish school. Invest in yourself first and sounds like you will earn well over the next several years.
You asked, I wouldn’t count invested stock in your net worth. I used to track mine separately. Most times you will leave some behind.
Good luck on making the leap in four years.
MI 405 says
Thank you! Good point on not counting the stock options in my net worth. You are right; likely I will leave some behind since they vest over a five year period. I will continue to track separately.
MJ says
Here’s all I needed to read from your interview:“I am frugal and disciplined.” Those two traits, and your perseverance for the win every time. And your husband, even more frugal and DIYing it around the home front @ 72? that’s cherry on top. Well done. Best of luck for a successful retirement in 4 years. Thank you for doing the interview.
Heather says
I rarely comment but I had to for your story. Well done! Wow! I’m so happy for you and I’m so impressed with all of your determination, strength, disciple and perseverance! Enjoy your retirement once you feel ready! You have made it!
MI 405 says
Thanks for the encouragement. It was actually rather hard to tell this story, and I haven’t shared the details of my upbringing with very many people. So it’s been great today to read the comments and know that my story might help inspire others.
MI 405 says
Thanks so much! And, my husband appreciates the kudos too. Cherry on top is a great way to put it.
Scoreboard says
This interview is so different than many of the others and so refreshing. I had to comment for the first time ever. What a great story of perseverance. Congrats on all you have accomplished so far.
MI 405 says
Many thanks! That really wows me that you were inspired to comment for the first time and makes it so worth the effort it took to share my story.
MI-404 says
What a powerful interview! You turned your family situation growing up into a cautionary tale, and those can be as motivational as success stories – sometimes more so.
And I’m fine with you counting your car as part of your assets, especially to get your interview out earlier so it can motivate more people.
Here’s to your continued success in life and achieving at LEAST $1.5M in NW in the next four years. I’m sure you will do it.
MI 405 says
I like that phrase “cautionary tale”; that really sums it up. I’m happy to report that I don’t even need to count my car anymore! I wrote the interview as of Dec 31 2023, and my net worth as of May 31 is $1,112,443. My investments (401k and after tax accounts) are up about $64k, and the rest is savings from my salary and a bonus I received earlier this year.
SMB116 says
Wow…a well deserved congratulations! As a single mother of a disabled son, I truly can appreciate your determination and commitment to go through school while working and raising your children. I am so happy you found your second husband and he definitely sounds like a great guy! I wish you all the best and hope you can retire when you hit your $750K goal. I retired this year and just love it. You worked hard your whole life, now take some time to enjoy it.
MI 405 says
Thank you for your good wishes! If my ten year old self could see me now, I think she’d be very happy. It has truly been quite a journey.
Financial Fives says
You’ve overcome a lot of obstacles and your resilience is inspiring! Thanks for showing what’s possible even when luck is sometimes against you. And what a return on ADP!
MI 405 says
Thank you! I’ve very happy to be part of this community that has so inspired me. It feels really great to be able to share my accomplishment.
Maverick says
Well done on getting yourself out of that “ditch”. Many others wouldn’t find the fortitude to do so.
MI 405 says
Thank you! Appreciate your comment.
Theresa says
Wow! You have accomplished so much on your own – without anyone giving you anything (including advice!). This is impressive on its own, but doing it as a single mother with a disabled child is even more so. Kudos to you & I am certain you will reach your next set of goals!
MI 405 says
Your comments are much appreciated! I hope my story helps others reach their goals too.
MI-236 says
You have an inspiring life story. Truly a testament to the ethos and values of hard-work, courage and the will to improve one’s life. This is the stuff of the American Dream, the clarion call that has brought immigrants to this country.
MI 405 says
Thank you! It wasn’t easy but so worth it.
MI 343 says
Thank you for sharing your story! The resilience to overcome your childhood is astounding and a great example for others. May the Lord continue to bless you to continue moving forward and be a light to many other people.
MI 405 says
Thank you for the good wishes!
D Salmon says
Impressive!!! So happy for you and your family.
I was a college professor and most of my students were +/-40 years old. I taught Computer Science, so it wasn’t exactly easy for my students. But anyway, my best students were the ones under the most life stress (supporting families, working difficult job to pay the bills). It was always such a pleasure when I would see them several years later in professional job and earning a sustainable living. I could literally see the comfort level adjustment in them.
I give them all the credit in the world.
D
MI 383