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…
OVERVIEW
How old are you (and spouse if applicable, plus how long you’ve been married)?
I am 47 and my wife is 45.
We have been married for 15 years.
Do you have kids/family (if so, how old are they)?
We have two children. Our daughter is 14 and our son is 12.
What area of the country do you live in (and urban or rural)?
We live in sub-urban New England.
What is your current net worth?
Our current net worth is $1,121,492.
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?
Our main assets are:
- Home: $360,000 (mortgage of $284,410)
- My 401k: $448,882
- My work profit sharing retirement plan: $336,618
- My Roth IRA: $106,291
- Wife’s 403b: $40,393
- Wife’s Roth IRA: $17,486
- Wife’s rollover IRA: $12,970
- 529 college savings: $27,000
- Taxable brokerage account: $34,900
- Cash: $48,320
Other than the mortgage we are debt free.
I only use our home and investments when calculating our net worth. College savings is not included in our net worth, but I wanted to show what we’ve saved.
EARN
What is your job?
I am the Director of Production at a manufacturing company. I’ve worked for the same company for 26 years.
My wife is a patient care technician at the local hospital working part-time. She has worked for the same hospital for 21 years.
What is your annual income?
About $215,000 per year.
$185,000 is my income, $30,000 is my wife’s.
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?
I earned $14,189 my first year of full-time employment out of high school as an electronics technician in 1990.
My income has increased every year since then. I broke into 6-digit earnings in 2011.
Over the years I’ve taken on the tasks that nobody else wanted to do. I also worked at maintaining a positive attitude and worked with difficult people without giving up.
I did not go to college out of high school, but I’ve worked at my skills over the years. I earned an associates degree by going to school in the evening and I am always looking for material that will aid in my self improvement and leadership skills.
I learned over the years that you can work really hard as an individual, but your income potential is capped based on your own output. When you lead others you leverage your skills and greatly increase your income potential. I think this applies to most any career.
What tips do you have for others who want to grow their career-related income?
If you want to succeed in your career you need to be willing to do more than what you are paid for. You need to grow into your next position.
This doesn’t necessarily mean working all sorts of hours, but being productive in the hours that you do work – providing value.
You need to be the type of person that others feel comfortable working with. You need to build a reputation of being reliable. Never compromise your integrity.
What’s your work-life balance look like?
My work-life balance is very good. I spend between 45 and 50 hours per week on average at work, including commute time.
I don’t think working more hours would make me more effective. In fact, I’m sure I would be less effective.
My wife works part-time so she can be with the kids and she also helps my elderly mother.
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?
My career is my only source of income.
I would like to start up some sort of business that would create a side income, but I haven’t figured that one out yet.
SAVE
What is your annual spending?
About $85,000.
What are the main categories (expenses) this spending breaks into?
- Groceries (food and household supplies): $16,000
- Gasoline: $3,280
- Cable/Internet: $3,000
- Property taxes: $9,000
- Insurance (Auto, home, umbrella, life): $10,000
- Charity: $4,000
- Utilities (electricity, propane, garbage, water, etc.): $6,000
- Vacation $5,500
- Housing (mortgage, etc): $21,000
- Restaurants, coffee, etc: $7,000
Do you have a budget? If so, how do you implement it?
I use a zero based budget for my income, which pays most of the expenses.
My wife has a part-time income and is only responsible to pay for groceries. She does so without a budget other than the amount of money she earns.
She does not wish to participate in the budget, but we have an understanding on how money should be spent.
It concerns her that she doesn’t understand our finances and it is my challenge to figure out how to get her more involved in a way that she will be interested.
All accounts are joint accounts.
What percentage of your gross income do you save and how has that changed over time?
My wife and I both save 15 percent of our gross income in our retirement plans. This has been our main vehicle for long term savings.
I have been doing this pretty much my whole working life, while my wife has been for about the last 8 years.
I save an additional 25 percent of my income towards shorter term expenses.
What is your favorite thing to spend money on/your secret splurge?
We like to take one nice family vacation a year. Lately that has been to Disney World.
We are homebodies, so we like to spend money on our home.
Last year we moved to a nicer house and we are having an inground pool installed for this summer.
INVEST
What is your investment philosophy/plan?
Keeping it simple. Boglehead investing. Broadly diversified, low expense index funds.
Our retirement investments are mostly invested in the “three fund portfolio,” which is comprised of the Total Stock Market Index fund, Total International Stock Market Index fund, and the Total Bond Market index fund.
What has been your best investment?
To be honest, I don’t have a single good investment. Time has been my friend. Investing regularly in boring mutual funds.
What has been your worst investment?
I dabbled in individual stocks when I first started out, but soon felt they weren’t worth the aggravation.
My worst investment has been purchasing brand new cars and trading them in 3 to 4 years later. I did this up until 5 years ago. I wasted a lot of money doing this.
What’s been your overall return?
Sadly, I have absolutely no idea.
I always focused more on doing the investing than measuring how the investments perform.
I have been investing in broad index mutual funds for many years, in a portfolio ranging from 100% stocks to 80% stocks, 20% bonds today. Since my portfolio isn’t trying to beat the market, I really don’t pay that close attention.
I can say that I would not be a millionaire today if I hadn’t started to invest 26 years ago. Most of my net worth is investment gains.
How often do you monitor/review your portfolio?
I monitor my portfolio at least weekly. I use Banktivity to monitor my finances so it is very easy to see where my finances stand at any given time.
NET WORTH
How did you accumulate your net worth?
Most importantly I always lived below my means.
I did not use credit cards to fund my lifestyle. If I don’t have the money in my account to buy something, I don’t buy it.
I learned early the importance of “paying myself first.”
I made it a priority to save some money out of each paycheck before I started to spend.
I am a natural saver, so this wasn’t all that difficult for me.
I took full advantage of all employer savings plans. The 401k is my largest asset.
I work with people who say they can’t afford to save money in their 401k. I say you can’t afford not to save! Compound earnings over time are so powerful and are how I’ve accumulated what I have so far.
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?
Investing in my retirement plans has been the key to my wealth. I am a good saver, but it is too easy to spend your savings. Retirement funds are protected from spending and are allowed to grow.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
Stupidity with money was my greatest road bump.
There are a lot of purchases that I’ve made over the years that did nothing to improve my quality of life for very long.
As I stated before, purchasing brand new vehicles and not keeping them for more than 4 years really slowed my wealth building down. Especially after I got married and started to purchase two vehicles at a time.
What are you currently doing to maintain/grow your net worth?
I am getting more serious about budgeting my income. I would like to direct more money to long-term investments.
I’m also constantly working to improve my skills through self-education — trying to read more books and consume more valuable content on the internet so I can advance my career and earn more money.
As I earn more money I want to make sure it goes towards wealth building and not lifestyle creep.
Do you have a target net worth you are trying to attain?
I would like to reach $5 million to become financially independent.
Hopefully we can reach even more, but $3 million is really the least I would like to attain before leaving the workforce.
How old were you when you made your first million and have you had any significant behavior shifts since then?
I was 46.
Even though my net worth is over a million, I don’t feel like a millionaire. If anything it has motivated me to be more intentional with my money so I can achieve the multi-millionaire status as soon as possible.
What money mistakes have you made along the way that others can learn from?
I would have started to budget my money a lot sooner than I did.
You really need to have a plan for how you are going to save and spend your money.
I would save up a bunch of money and then go buy a brand new car. Really stupid.
If you have a pile of money without a plan for it, that is an invitation for some big time stupid spending.
What advice do you have for ESI Money readers on how to become wealthy?
I think there are so many more tools available to people today than there were when I started out.
I didn’t have any good mentors to teach me how to invest, so I had to stumble for several years before getting any good focus. Now there are so many awesome resources on the Internet (the Internet didn’t exist when I started). Blogs such as ESI are such great sources for knowledge and inspiration.
Websites like Bogleheads.org offer so much wisdom. Listen to Jim Rohn seminars. I found out about Jim about a year ago and he has so much valuable inspiration to share.
My mistakes were caused by ignorance. I didn’t understand investments and the true power of compounded returns early on.
If you can find some good mentors, either in person or virtual, who can point you in the right direction, that will give you a great start.
Avoid debt as much as possible. Better yet avoid it all together.
It may be necessary for most people to have a mortgage to purchase a home, but additional debt reduces your choices and freedom. It holds you captive to your past spending instead of allowing you freedom to spend and save as you please in the present and future.
What special skills or talents are needed to become wealthy?
Being consistent and intentional with your money combined with time is all it takes to become wealthy.
There is nothing special about me. I’m pretty boring actually.
I made up my mind several years ago that I wanted to be wealthy. Not so I could buy fancy houses and impress others, but so I could eventually experience financial freedom.
To me financial freedom is the point when your money earns more than you do.
When you no longer need to work to live, but you can work for the enjoyment of it.
I’m not there yet, but I’ll keep the slow and steady progress going in that direction.
FUTURE
What are your plans for the future regarding lifestyle?
I expect that my net worth will allow me to retire early. It all depends on how much satisfaction I get from my job as my net worth grows.
It will be difficult for me to go from growing my net worth to drawing it down.
What are your retirement plans?
The idea of not having to answer to anyone is very appealing to me.
I’d like to have the flexibility to do some traveling. There are so many places that I would like to see.
I see retirement as an opportunity to volunteer my time to help others to keep engaged.
My goal is to have a large enough nest egg to be able to live off of the earnings of my investments.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
The cost of healthcare is of great concern. I am hoping this situation will improve by the time I am ready to retire.
If not, I’ll just need a larger nest egg before I will be able to be free from needing to work.
I find when I’m home from work I tend to spend more money. I notice things that need to be done around the house, etc. I will need to be sure to stay within a budget so I won’t spend too much of my retirement savings.
MISCELLANEOUS
How did you learn about finances and at what age did it ‘click’?
I’ve been interested in finances for as long as I can remember.
My parents provided me with a good example for handling cash flow. They never used debt. They never borrowed even one cent. They never had a mortgage. They used envelopes filled with cash to budget their money.
Where they failed is investing. My father received a decent inheritance from his mother, which included a half dozen blue chip stocks. I remember my mother demanding they be cashed out because she didn’t trust stocks! When I think about it now I think the stocks were worth about $60,000 in 1984. I honestly think if left alone they would be worth well over a million dollars today. What a huge mistake!
I didn’t really start to make progress until my late 20s when I started to understand the importance of investing. I would go to the library and read all of the personal finance books.
I think the book, The Millionaire Next Door was the most inspirational money book for me. It gave me some actionable ideas on how to build my net worth.
Who inspired you to excel in life? Who are your heroes?
I’ve always looked up to successful people, but I never had a good mentor.
In my twenties I started to read biographies of successful people. John D Rockefeller, J.P. Morgan, and Andrew Carnegie. While Morgan had a successful father to get him started, Rockefeller and Carnegie made a fortune on their own. I don’t have anywhere near the drive to succeed that they did (see my net worth), but I still found their stories fascinating.
More recently I’ve been inspired by Dave Ramsey and Jim Rohn to take responsibility for my own future and success.
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. This book provides the blueprint to wealth. Habits and behavior with money are so important to wealth building. Just because someone looks wealthy doesn’t mean they are.
The Bogleheads’ Guide to Investing by Taylor Larimore, Mel Lindaeur, and Michael LeBoeuf. Simple straight forward financial advice that shows you how to handle your own finances.
The Simple Path to Wealth by J.L Collins. Becoming wealthy doesn’t have to be complicated and in fact it is easier to become wealthy if you keep it simple.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
Yes, we give to charity, but not in the conventional sense.
We have found great satisfaction in directly helping people in need.
Last year we knew of a few people who were going through rough medical problems which resulted in financial stress. We were able to write some checks that helped to ease their burden.
It was very satisfying to see our money help people without the middleman.
We would like to work towards becoming more generous in our giving to people in need.
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?
Ideally our wealth will outlive us and if it does the current plan would be to pass it along to our two children.
That could change if we find them to be irresponsible with money.
If we were to leave money to them we would want it to be a blessing, not a curse.
Hopefully as they get older we will be able to teach them the money values we have developed and they will be receptive. I feel if they will listen to what we have to say, they won’t need any money from Mom and Dad.
Neither my wife nor I have or will receive any money as an inheritance, so we don’t see it as a priority.
MMiguel says
Congrats on joining the MM club. You and your wife sound a lot like my Millionaire Next Door in-laws. Father in law earned his college degree part-time on the GI bill, while supporting a wife and three kids, same employer for over 30 years, gradual career climb to management. Mother-in-law went back to work to fund kids educations. They embodied that genuine New England austerity, lived well below their means, burned their mortgage after 20 years, and ultimately retired millionaires (when it was a lot harder to reach). Even in retirement, they maintained their NW, barely tapping it, though this was aided by the magic of pensions, social security, and good healthcare coverage.
Great reminder that there are many paths to wealth.
MI131 says
Thank you. A millionaire certainly isn’t what is was years ago, yet many still do not achieve it. It’s always a challenge to keep lifestyle creep in check!
GenX FIRE says
Lifestyle creep is the biggest challenge of them all. I am on my second job after my military service, and it’s been 17 years since I took off my uniform. I started out earning $18,000 my first full year as a young LT, and now I earn a lot more than that. Certainly, things have happened, I have a wife and child now, but it’s hard not to spend more because I have more. I wish I was smarter when I was younger. When you finally start earning more, after those years of wisely not building up debt, or not too much, and really start having more options, that it gets harder to keep it in check.
BSue says
Great achievement!
One quibble . . . Don’t wait until your kids “are older” to instill a good understanding of money! They are in prime ages to see their friends use money as an emotional crutch rather than a tool to reach their long-term goals. Equip them now to understand why they should be different.
ChuckK says
Dave Ramsey has some great training for teens that kids will “get”.
MI131 says
I have tried to teach the kids about money, but they just aren’t that motived to learn yet. The best I’ve been able to do is to model the behavior that will help them succeed. Hopefully that will stick. I won’t give up.
Aussie Jaypes says
There’s a great book called “The Barefoot Investor for Families” from Australian author Scott Pape. It’s got some great stories, steps and actionable advice to teach kids about finances and investing. It’s written in a very Australian, relaxed tone, but it’s a great read and easy to follow. Hope it helps. Enjoy!
M127 says
Great read and awesome advice.
“If you want to succeed in your career you need to be willing to do more than what you are paid for. You need to grow into your next position.”
I always tell my kids that success and winning means doing things others are not.
MI131 says
Thank you! Yes, this is advice that I wish I knew about years ago! Reflecting on my career so far, it has been true for me. So many people aren’t willing to take on more responsibility without first being paid for it and that can hold them back.
Karl B. says
Congratulations on your success. You and your wife are the true definition of self-made millionaires. You’ve done it through hard work and taking on greater responsabilities while living below your means and saving and investing. Your story should be a template for everybody.
MI131 says
Thank you! That is the main reason I wanted to share our story. Many people think they can’t become wealthy so they just continue to behave poorly with money. As I walk around at work I hear so many people talking about their jet skis, boats and other “toys.” These are the same people who complain they can’t fund their 401k. They live for today and figure tomorrow will take care of itself.
Phillip says
Run your numbers to make sure your early retirement plans are realistic. You say you want at least $3M, preferably $5M before you retire. Your NW is $1.1M including your residence and you have 2 kids going to college soon and only $27k in a 529 plan. And most “experts” claim the market is high and due for a correction.
MI131 says
My goal is to be in a position to retire early. I’m not counting on early retirement being a reality. I hope to continue to develop my career so I can continue with rewarding work. I’m really looking for some financial freedom so I will have more options. My income has increased dramatically over the last couple of years and gradually so is my savings rate, so I’m hoping to build up some momentum.
As for the kids college education, our retirement comes first. If retirement funds aren’t doing good, neither will college funding from Mom and Dad.
Paper Tiger (aka MI-27) says
I like to play with financial calculators and ran some numbers on your scenario. If you guys make $215K per year I will assume your after-tax income is around 150K. If you spend 85K per year, that leaves you with $65K. If you put 15% of your gross income into your 401Ks, that takes out another 32K leaving you with ~33K for other spending/investing. You mentioned saving an additional 25% of your salary for shorter-term expenses. I assume those are after-tax dollars because the numbers don’t work on your gross amount. If I factor that in, that probably takes you down to about ~6K for additional discretionary spend. Maybe your extra savings for discretionary really isn’t 25% because it would not leave you much left?
I ran some calculations assuming the following:
You begin today with ~1.12M in current investments and you will invest ~$3K/mo. in future contributions toward your 401K. I assume a future average annual rate of return of 6%, annual inflation of 2.9%, a federal tax rate of 25% and a state tax rate of 6%.
If you run these numbers for the next 10 years, you would have $2.5M. With these assumptions, it would take you 13 years to get to $3M.
If you could take some of your discretionary money and increase your monthly savings another 1K/mo. for a total of 4K/mo. you would hit 3M in 12 years. At 4K/mo. in savings, you would hit $5M in 19 years and at 3K/mo. it would take ~20 years.
If you can average an annual return of 8%, at 3K savings per month, you could get to $3M in 10 years and $5M in 16 years.
Recommendations: save $4K per month in combined pre-tax and after-tax investments and invest aggressively enough to try and average an annual 8% return. Doing this gets you to ~$3.1M in 10 years and you should be in great shape for your retirement years at the ripe old age of 57 & 55!
Paul says
Paper Tiger – I appreciate the use of calculators as well – what calculator are you using? I did the same calc but the $2.5M is a future dollar value vs current value unless I’m missing something. In other words, it would be about $1.8M after 10 years.
Paper Tiger (aka MI-27) says
It is a bankrate calculator.
https://www.bankrate.com/calculators/retirement/investment-goal-calculator.aspx
I believe you are correct on the FV. The numbers I mentioned are before taxes and inflation. I did not catch that at first because they have a line in there that discusses stated inflation and tax rates, leading you to believe those were included in the calculations but then it goes on to say they are not in their calculations.
There is a box called “view report” that you can open which shows the calculations with inflation and taxes included and those numbers are closer to what you were coming up with.
MI131 says
Thanks for the calculations. The percentages I call out in the post are rough and only 401k investing is off gross. I agree that increasing savings is a goal I want to achieve. Through promotions my income has increased by about 50% over the last two years, so the amount saved to current income may not add up. I expect to ramp up savings in the future. At the same time I don’t want to miss out on opportunities today because tomorrow is not guaranteed.
Steve says
MI 131 – Great story and congrats on reaching a million plus. I’m a similar age, live in suburban New England as well and your insurance seems a bit high though I don’t know all the specifics of your situation. I’m running a little over $3K annually for auto, home (house insured for $400K), umbrella and life. I keep it this low by running huge deductibles ($15K house, $2.5K cars), shopping around every few years, periodically challenging the amount the insurer wants to insure my house for, and only obtaining term life insurance. The way I look at insurance is because I have enough cash I only need it for catastrophic events (house burns down, major lawsuit, etc.). I use Amica for auto, home and umbrella and SBLI for life insurance. In my opinion, given the age of your children, you likely only need life insurance for another 8-10 years max (and you only need insurance on your life as you earn far more than your wife – there is likely little reason to get or keep life insurance on your wife). It could be your expenses are higher due to where you live, driving record, health issues for life insurance, cash value life, etc. but your numbers are so far off of mine (over 3x), I’d thought I’d pass on my experience to see if possibly you could save a little to help you get to FI quicker (PS I don’t think you need $5M to be FI given your annual spend). Again great story and I enjoyed reading this. Keep up the great work and enjoy the journey! Sounds like you’re in a great spot and your consistent investing over the years has paid off.
MMiguel says
Steve,
The reason he would need life insurance on the wife is that, heaven forbid, she meets an untimely death while children are still young, MI-131 would need extra funds for childcare-related services. If he were a single parent, it also stands to reason that he may not be able to focus on career the way he is currently able to. My wife is fond of laundry-listing all the things she does for our household, as a result of her more flexible, less onerous career situation, which has allowed me to full throttle focus on the EARN part of the equation. And she’s right – replacing all that she does, even though a lot of it does not generate a tangible income, would cost a small fortune.
We have unfortunately seen this play out in the distant past – men are ill-equipped to become sudden single parents. For this reason, I’d recommend keeping insurance on the wife.
P.S. Completely agree on using very high deductibles to keep car and home insurance down. Once you’re in 7-figure NW, you really only need insure against disaster. Low deductibles only encourage filing claims, which ultimately get your premiums raised or your insurance cancelled altogether…. funny how that works.
MI131 says
Steve – Thanks for pointing out the high insurance. I’m not sure how I came up with that number. I think I might have also included medical insurance?
Home/auto/umbrella is $2,500
Life insurance for me at $1M is $550
Life insurance for wife at $500K is $330
Medical insurance for family is $5,500
That still doesn’t add up to $10K.
I don’t think I’ll need $5M either, but that’s what I would want to have if I were to consider retirement today. If I didn’t go to work I’d have too much time thinking about projects around the house, etc.
Steve says
MI131 – Got it and that makes sense! With medical being 5,500, do you have option to do Health Savings Account. If so, if you can, you may want to pursue the triple tax advantage of investing in the HSA and letting it grow.
MMiguel – I have no doubts that his wife is likely doing a ton for the family, and I agree that when children are young and FI has not yet been reached, that life insurance is needed. But with his children being 14 and 12 now, I think its less important and likely could be stopped now or in near future. At this point, the income being generated is not needed to make end meets (so doesn’t need to be insured), and teenagers do not need child care. To be safe, and if the thought is someone would need to be hired to take kids to events/after school activities, then perhaps keeping insurance until oldest is 16 could make sense. But I understand your perspective and I do understand why people may feel more comfortable keeping life insurance for a while. And it could depend on the children as well (for instance, if they had special needs or issues, then certainly care might be needed).
MMiguel says
All good points Steve – I’ll have to agree to disagree (just a little bit). I think it’s hard to predict the needs of children/teens in the loss of a parent, and would err to the side of more vs less preparation. I think teen years can require a lot of parental overhead and cleaning, cooking, shopping, shuttling, etc. do take a lot of time and effort. If MI131 has a large extended family nearby that can pick up the load, then maybe you’re right and insurance is a waste. If it were me, I’d keep the insurance until they were past 18.
My wife and I debate this sort of thing a often as she wields the budget cutting ax. Our NW is upper end of 7 figures and we still carry some life insurance, as well as disability on me. Her position is “why do I need it, we have more than enough resources.” My position is “cause I simply don’t want you to have to worry about liquidating assets and such in a worst case tragedy/crisis, I want cash to be readily available to do whatever you need to do for as long as you need to do it.” She usually says “that’s sweet dear…. but seriously stupid…” Yes, she is very direct and usually right. So, we’re reducing the insurance each year.
Sometimes it just comes down to an irrational security blanket.
MI131 says
For $330 per year, I’ll keep the policy through it’s 20 year term. Obviously I hope it expires, but should my wife die, it would be money for the kids college, etc. If I continue to pay it, Murphy will keep my wife healthy.
MI131 says
My employer offers a generous health care plan that has low copays and generous benefits, so an HSA is not an option / not necessary.
Steve says
Interesting… my wife pays $0 premiums in her plan, and she has a $4,000 family max. out of pocket in network. In addition, her employer contributes $1,500 a yr to her HSA. So our total health cost spend is a maximum $2,500 a yr and she is allowed an HSA. Sounds like you’re at 5,500 per yr and they don’t allow you to do an HSA because of the way the plan is structured… perhaps you can lobby them to set up an HSA one day. The HSA is incredible – we get to avoid 37.65% in taxes (fed, state AND FICA) so we put in max – so our 7K contrib yields 2,600+ in tax savings so its a good deal. And the fees are fairly low with Vanguard index funds for investing (we don’t draw from the HSA to let the investments compound, and instead pay medical bills out of pocket). I save the receipts so I can take money out tax-free one day. The account will provide a lot of potential flexibility to manage taxes later (i.e. in retirement, we can draw from HSA w/o tax consequences to meet spending and ensure subsidized healthcare / no/low taxes).
And I completely understand keeping the life insurance (and have yet to stop our premiums with my youngest being 8). From a numbers / expectancy value (low odds of payout, but high amt to be paid our for the bet has that lottery feel to it) usually insurance doesn’t work but from an emotional/sleep at night standpoint its a winner. And who knows the odds may actually be in your favor (or odds even) as you near the end of the 20 yr policy (guessing you took it out when your first was born or around then). $330 is not much.
GT says
Congratulations you have done well. Given your stated goals it sounds like retirement is a ways off.
Completely agree on your thought on your kids. Neither my wife nor I received any inheritance in fact quite the opposite, we both gave a lot back to our families early on and still do.
I want to leave money to my kids but I absolutely want it to be a blessing and not a curse. Very well said. I think about this a lot and while I am not perfect I try to limit the lifestyle creep as much for them as for my retirement. They are truly blessed kids though, and all the kids in our neighborhood are exposed to a certain level of affluence. Cars, vacations, clothes, iPhones, etc…
Interesting comments in this thread on insurance I tend to want low deductibles and pay for it but its so true if you use insurance it becomes harder to get and much more expensive. A truly backwards industry if you ask me. But I need to look at increasing my deductibles.
MI131 says
Early retirement isn’t my primary goal at this time. Naturally like most anyone I would love to be independently wealthy, but for me FI is more about choices.
GreenEngineer says
Congratulations on joining the millionaire club.
This millionaire interview really resonated with me. Ages, children’s ages, length of marriage, annual combined salary, annual spending and debt-free less mortgage all had me looking in the mirror to my own numbers. Reading this interview reassures me that my own situation and strategies can lead to my ultimate goal of financial independence and early retirement.
I really liked the comment, “Stupidity with money was my greatest road bump.” After the birth of my daughter, my wife and I entered into a one-third share of a beach property with family. One year later, SIL wants out of her one-third share and we have to chip in that much more to cover the mortgage before selling at a loss ten years later. If we hadn’t been stupid with money, our net worth would likely be $200k-$300k higher today.
MI131 says
Thank you! As they say, hindsight is 20/20. We all make stupid mistakes. We need to learn from them and move on. The most successful people I’ve studied have made HUGE mistakes. Risk is what brings reward. Trial and error is how we learn.
Best of luck to you!
Brenda says
Great interview! I especially appreciate your recognition of money mistakes – buying new cars every 4 to 5 years. There’s definitely a learning curve when you grow up in a working or even middle class family that is afraid of investing. That’s my experience too. Nicely done!
MI131 says
Yes, the money I could have saved if I spent less on cars! I have been much better about resisting the urge to buy a new car the past few years, even with my wife saying I should go for it! I like sending my car payment to VTSAX. Cars are getting so expensive I cringe at the price now.