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 49.
We’ve been married for 23 great years!
Do you have kids/family (if so, how old are they)?
We have a 20 year old daughter who is a junior in college and a 15 year old son who is a sophomore in high school.
What area of the country do you live in (and urban or rural)?
We live in a West Coast city.
What is your current net worth?
Our current net worth is $10.68M.
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?
- Cash – $350K
- Equities – $1.5M
- Retirement – $1M
- Real Estate – $2.55M – This is a combination of primary home ($1.3M value and three paid off rental homes)
- Business Value – $5M
- 529 Plan – $188K
- Miscellaneous – 4 cars, boat, jet skis – $100K
EARN
What is your job?
I’m part owner of an IT/Tech Recruiting & Staffing company.
What is your annual income?
This has fluctuated throughout the years but I’m consistently making around $850-1M per year.
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’ve had a job since I was 13 with a paper route.
I worked all through high school when I wasn’t playing sports and then worked during college and summer jobs landscaping to pay for about 50% of my college.
My first job out of college I made $23,500 per year. I was so happy! My degree was in Marketing and most of my family was in sales so I knew over time that is what I would do.
I started working in a marketing department for a large credit union and then moved on to a sales role for one of our vendors. My plan was to go into residential real estate like members of my family but a college friend introduced me to IT staffing. I was hooked immediately.
I grew my income 50% for the first five years of the industry topping out at about $250K before I decided to go work for one of my clients running internal recruiting. I was being groomed to run HR and that’s when I decided to pivot. I knew I didn’t want to be an HR executive and made the decision to leave (9 months notice) and start my own company.
Unfortunately, after two years of crazy success, with two partners, they ended up not being the best character/integrity guys I thought they were. I left and took some time off before starting another company in 2009, perfect timing, eh? Our company has grown year over year for the first 6-7 years or so. We now have management running the company from a day-to-day operations standpoint.
What tips do you have for others who want to grow their career-related income?
I’m a big believer in taking on projects that nobody else wants.
Stand out from the pack.
Also, earlier in your career you need to show up! It won’t kill you to be the first to arrive and last to leave for 6-12 months. It is a good habit for later in life when you need to grind and it gives a very good impression to upper management.
I think to grow our income you need to a new job/role every 18-24 months. It doesn’t mean you have to leave your current company, but you need to do something different or bigger scope/responsibility.
What’s your work-life balance look like?
My work-life balance is great now! It wasn’t always like this.
My wife was a teacher but once we had kids we knew we wanted her to stay home which meant more pressure and responsibility on me.
That being said, kids always were number one so we were always involved with their activities. I didn’t miss many parent/teacher conferences, soccer games or concerts at school.
Presently, I work at my own schedule. My office is commute is long (32 miles door to door) so I don’t go in much to our office or do during off hours.
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?
- Business Income – $1M
- Rental Income – $74,700 Gross
- Dividends/Growth – This year will be about $100K
SAVE
What is your annual spending?
We spend about $10K a month or $120K per year.
It fluctuates at times depending on summer family trips or a big international trip we might go on. We like to travel!
What are the main categories (expenses) this spending breaks into?
I break down my budget by Fixed Costs and Variable Costs. Here’s the breakdown:
- Fixed Costs – $6500 (Property Taxes, Subscriptions, Golf Club, Utilities, Boat Storage, Housekeeper, Gym Membership, Insurances)
- Variable – $4000 (Groceries, Dining, Travel, Entertainment, Gas, Drycleaning, Medical Copays, Retail/Clothes)
Do you have a budget? If so, how do you implement it?
Yes. I was a big-time Quicken guy earlier in our marriage. I would ask my wife for receipts every day. This got old quickly for her.
I do have a spreadsheet budget that I look at frequently and edit if things change in our lives.
Luckily, we are at a place now where it isn’t as a big a deal if we go over from time to time but it is embedded in me and I’ll never change.
What percentage of your gross income do you save and how has that changed over time?
At this point, we are saving at least 50%.
I don’t track it and we tend to give to charity or help out family members as needed with stuff.
I try not to stress out too much about adding to our net worth and give back as needed or asked by family and charity.
What is your favorite thing to spend money on/your secret splurge?
My wife and I both love to travel, so that is #1.
Next would be good food, wine, whiskey/bourbon and golf!
My wife doesn’t have any major vices of spending. She can crush it at Target from time to time.
Amazon packages are a daily occurrence at our house these days!
INVEST
What is your investment philosophy/plan?
I was taught early on to work hard, earn and then save.
My philosophy is to hit singles and doubles all day long. I’m not ever trying to hit a homerun with my investments. Slow and steady wins the race or the game.
I max out all retirement channels, then invest in Vanguard Index Funds and rental real estate that is more opportunistic.
What has been your best investment?
The easy answer would be my college education and my continuous learning for myself.
I read nonstop on leadership, personal growth, personal finance, etc. A book a month is my goal.
My best investment though would be the people I hang out with. That starts with my wife. She makes me better in so many ways. We are a very good team.
Secondly, I’ve been blessed with amazing childhood friends who all have become very successful. They made me better as we grew up from 1st grade to high school.
I’m a big believer of the philosophy that you are the sum of the 5 people you spend the most time with. Iron sharpens iron!
What has been your worst investment?
Ugh. Two things that come to mind.
One, leasing a car or cars. I’ve done it a couple of times and felt sick to my stomach.
Second would be whole life insurance I bought once. I got rid of it fairly quickly.
What’s been your overall return?
I feel lame that I don’t have a clear answer to this. If I had to guess it is probably around 6-8%.
How often do you monitor/review your portfolio?
Way too often. Daily. I love my Mint.com app on my phone.
NET WORTH
How did you accumulate your net worth?
The majority of our net worth has been earned. I did inherit around $90K when my parents passed.
We have always lived well below our means and we have always maxed out retirement accounts.
I changed jobs earlier in my career to grow personally, professionally and financially.
A big chunk of our net worth has been earned. Our investments have been good but nothing stellar. The model of ESI, Earn, Save, Invest is quite simple.
We also never carried debt other than a house payment and maybe one vehicle. My dad taught us early on we should never pay interest outside of those and he would prefer only the house. I despise debt and don’t like owing money to anyone. If I owed you $20, it would bother me until I paid you.
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?
They are all important but I think earning would be #1.
We all have god-given abilities and the same 24 hours a day. It is our decision what we want to do with them. I don’t have a lot of sympathy for people who are on social media all day, spend money on Uber eats and then complain about not being able to get ahead, etc.
Hard work and work ethic in general seem to be a lost art. I have tried to beat this into my kids but I feel like I’m failing sometimes due to my good fortune and success. Times are just different now.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
I’ve been very blessed throughout my years. We’ve had some health issues in our family but we have persevered.
I also had some business road bumps in the past with bad partners.
That being said, I strongly feel you learn more during times of adversity and failure then you ever will in success. Stick to the plan, slow and steady wins the race…..
What are you currently doing to maintain/grow your net worth?
I’m still active in my business and enjoy spending time with our clients and employees. I’m the “sales/rainmaker” guy and I feed off of human interaction. It gives me a lot of joy and fulfillment.
We are also buying rental real estate. It is harder to find good deals but I believe in the passive income nature of real estate along with the tax advantages. I want to build my own pension.
Do you have a target net worth you are trying to attain?
My original goal was $5M and I hit that without the value of my business.
The next goal was $10M which theoretically I have with the value of the business and could easily get in a fire sale of the company.
At this point, I’m not too concerned about going higher. I’m sure it will happen but I’m blessed in every way.
How old were you when you made your first million and have you had any significant behavior shifts since then?
Looking back, I probably had a net worth of $1M when I was about 37 years old.
What money mistakes have you made along the way that others can learn from?
I mentioned the whole life insurance and leasing thing. Ugh again!??
Some people in my circles will say I should leverage debt to grow more or that I’m carrying too much cash but I sleep better knowing I’m debt free.
I try to avoid buying the latest and greatest things like iPhones, etc.
What advice do you have for ESI Money readers on how to become wealthy?
1. Hang around people that make you better and lift you up!
2. Marry the right partner. This is key in my book. Someone who is a good friend and who you can grow old with and has a good soul that will take care of you if needed.
3. Don’t buy into the social norms. We don’t need new cars, new clothes, latest and greatest gadgets, etc. As Dave Ramsey says, “live like nobody else so later you can live and give like nobody else.”
4. Invest in yourself before anything else. Sharpen your saw daily. Have great habits. There is a great book by Charles Duhigg called The Power of Habit
.
5. Have written goals. Daily, Weekly, Monthly, Quarterly, Yearly. Put your vision of yourself and your family on paper and it will come true!
FUTURE
What are your plans for the future regarding lifestyle?
I feel like I’m living the dream right now. I’m kind of semi-retired and I’m struggling with that a bit.
I will continue with my company until we decide to sell. I’ll lean on my partner for that due to his timing and personal situation.
Our son still has three years of high school so we will stay active while with our kids while they launch into the world.
My in-laws are healthy, but getting older so we spend a lot of time with them and with our siblings.
Hopefully we will continue to travel more, stay healthy with exercise and give back and volunteer as much as possible with causes that are close to us (children, elderly, military vets).
What are your retirement plans?
Oops, I think I answered that above prematurely.
We would also like to roam the states in an RV. There are so many beautiful parks and towns that we would love to visit.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
Like many, healthcare is the main one. That will be a big expense.
Overall health in general. We are all living longer and taking care of our mind and body should be a top priority for all.
MISCELLANEOUS
How did you learn about finances and at what age did it ‘click’?
I learned from my dad. He was sharp.
He was a foreigner who came to the US when he was 18 to go to college. He understood hard work but also finances really well. He could have easily been an accountant/CPA.
I would say it clicked at a young age for me. I loved games like Monopoly, Risk and even the board game called “Trump”. I would play these games all the time with my friends.
I also watched the news and specifically the business segments when I was kid. I was a bit weird that way.
Who inspired you to excel in life? Who are your heroes?
Both my parents for sure. But, my dad is #1. Hard worker. Great character and integrity. Always teaching “lessons” to us. Miss him every day.
He was a hard ass and sometimes I didn’t like it but it always made pragmatic sense.
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?
There are so many. Some that had an early impact on me.
First was The Wealthy Barber
. My best friend’s dad recommended to us while we were in college. I read it so fast and it resonated with me.
The second was The Millionaire Next Door
. I remember reading it right after we bought our first house and had our daughter. I just kept telling myself that would be me!
Lastly would be Rich Dad Poor Dad
and Rich Dad’s CASHFLOW Quadrant
. I strongly believe business ownership is the path to wealth. That coupled with being an “owner” and not an “operator” is key to an even better, more fulfilling career/life.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
Yes. We give to various charities.
As I mentioned before, mostly for kids, elderly and vets.
We also give to our church, not regularly from a tithing sense which I’m ashamed of.
Lastly, we help family out with stuff.
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?
Yes, we plan to leave something to both our kids.
I struggle with what is the right amount.
We are starting them off on a good foot with zero college debt and will probably assist with their first homes. They do need to make it on their own though. They aren’t expecting anything and realize this too.
Both our kids are unaware of our wealth but know we live a very good, fortunate life. They both are hard workers and will strive to do this too for their families.
I enjoyed your story. It seems like you are both well grounded people who value family and bringing up well adjusted kids. We are at a similar point of life, and I get that taking a lot of risks to grow the egg makes little sense. We are good with first and second base hits as well. The area we are challenged with is how to best be a generous giver. We have extended family we have helped a lot over the years, but sometimes we sense we are enabling more than helping. Also, since I am also semi retired, I feel a need to still make a difference by volunteering, but it’s hard to know where to start.
Thanks for your nice words. I agree about the enablement piece. It has been hard sometimes, especially when they sometimes expect it. I really enjoy volunteering and am doing more and more of it.
Great story. You seem like a great human being as well… but importantly- what kind of whisky do you drink? I hope it not the cheap stuff! lol
I’d like to see the answer to this question as well.
LOL. Some of the cheaper stuff can be good. That being said, I really like Bourbon and Japanese Whiskey. My go to Bourbons are Michter’s, High West, Whistlepig. Japanese Hibiki, Suntory and Yamazaki are solid. I tried a new one called Ichiro and really enjoyed.
Cool. Yeah I rarely spend more than $100/bottle… and haven’t really liked the expensive ones. Not much of a Bourbon guy but I do love Hibiki Harmony- my favorite but prices are jumping sadly. Whistlepig Rye is good too. Balvenie 12 is probably my 2nd favorite Whiskey.
Great share here. Hey the only thing I might suggest if you’re having trouble with semi retirement – hey buy a bicycle ! It’s a lot of fun.
You have the rest well covered. Again thanks for the story !
Thanks for the advice. I actually got one last year and would ride it to the gym Mr. Money Moustache style! :-).
First of all, congratulations on a kickass job on growing your net worth! Absolutely I agree that slow and steady wins the race. It is when we swing for the fences that we strike out the most. I have never before commented on one of these interviews, but I feel I have to this time around, because of the remarkable similarities between your investment approach and my own. For example:
1. I too have achieved significant wealth despite taking a very conservative approach to investing.
2. also like you, I have always filled up my tax-advantaged accounts, then dumped the rest into index funds and finally (reluctantly) into rental properties.
3. finally, I have always avoided debt at any cost. I carry no debt at all, not even mortgages on my any of my real estate holdings.
I have felt like an anomaly for many years, so it is a great relief to finally know that there at least one like-minded investor out there! My interview has already been submitted but not yet published. Your story is so similar to my own in so many ways that readers might even think I copied yours.
Best Wishes!
I felt the same way reading this one. Many similarities, although MI-160 has us beat in the NW metric by 3x. Great read. The low spending relative to earnings is super impressive.
Thanks for the nice comments. The anomaly is spot on. I will also feel guilt from time-to-time thinking I have too much and don’t deserve this. My late father would blast me for saying this because he knew what kind of work ethic he instilled in all of us. It’s great to know there are others out there that walk the same path.
Just reread the last part of your interview:
“We are starting them off on a good foot with zero college debt and will probably assist with their first homes. They do need to make it on their own though. They aren’t expecting anything and realize this too.”
I’m a little further along as my 2 kids are finished with college… but we did pay most of their fees. We wanted them to have a little skin in the game so we had them take out so small loans. ~$7500 each seemed to be a good enough amount.
But the next big question is helping them with their first homes. To me, I’m not really sure what to do. I’m mixed about this honestly. My kids have NO expectations but it’s a big step that I want to help them with… maybe. LOL. More thoughts on this?
I hear ya. I actually struggle with this too but my mind got changed after I discussed this with several older mentors. The kids are raised already and their characters have been built for the most part so we know they won’t go off the rails Paris Hilton style.
Congratulations, well done! Since you appear to have won the game, may I ask…why do you keep playing? Why not travel more, immerse yourself in your hobbies? You may discover when you do “retire” that you could have/should have done so earlier (I did). Enjoy it, you can’t take it with you. 🙂
Hi Maverick. Great question. One I ask myself everyday. We will definitely travel more once our younger child starts college. My in-laws are still alive and we want to be with them as much as possible. The semi-retirement track is a good cadence at the moment. Plus, I still love what I do and the interactions with employees and customers. I just get to do it at my pace and schedule for the most part. Make sense?
For the record, I don’t know MI160. That being said I vote for MI160 as the most well rounded MI to date. Good work ethic, consistent application of ESI philosophy, a rational earnings/spending ratio, no obvious holes in the interview, along with honed nurturing and introspection skills. I wish his family the best of health and a long enjoyable “retirement.”
Thank you…
Loved reading. Guy reminds me of myself.
Just one thing – the business owners in these interviews need to account for taxes if they want to incorporate the value of their business in their net worth. After all, it should be “net” after taxes.
The definition of NW is pretty clear and it says nothing about accounting for taxes, so I respectfully disagree. The classic NW definition is a good apples to apples metric for comparing the various millionaire interviews.
That said, you have an excellent point in that for planning purposes, everyone needs to consider how to extract value from their assets with the minimum tax impact. I’m not quite at MI-160’s NW and income, but still in the upper 7 figures, and the way I think about it is that with sufficient advance planning, there will be numerous options to navigate the tax hit, which is why expressing NW net of taxes is more distorting that informative.
When I look at my own retirement and estate planning, I run a scenario that is after-tax and after friction costs (ex. broker commissions)… in the worst case, this tends to shave a couple mil off my NW number… ouch, but I am currently researching techniques like 1031 exchanges, trusts, opportunity zones, etc.
I would certainly be very interested in how other millionaires think about tax planning.
We have been considering this for a while as well, and one thing we did this year since we can now make donating a key part of our retirement plan, is to open a donor advised fund. This allows us an upfront tax deduction for the giving we had planned anyway, and we can give appreciated assets. We would be interested in hearing other ideas. One area is how to get more funds into tax free vehicles like the Roth IRA? I am self employed and semi retired, so no 401k to roll over.
I’m no expert but have the impression that there are many ways for self-employed to create tax-advantage pension plans for themselves. Our primary household income is my wage slave 1099, but from our family side-businesses I have to say that self-employment offers massive and totally legit tax-advantages. HUGE…..
It does however add more complexity, but c’est la vie.
MI-160,
Congrats on a stellar financial performance. Your balance sheet looks a lot like many business owners I’ve known, which is to say very concentrated in terms of value of the business… actually you’re a even a bit more diversified than many.
So, I’m curious as to how you think about the concentration risk and if you have plans to sell or otherwise monetize the business in the future. Also, to the point above on taxes, have you thought about how to deal with what I’m sure would be a big capital gain if you sold.
Great question. This is part of the reason I save so much. I want to make the value of my business less and less percentage of my overall net worth. This is one of the reasons I like saving so much. I’m pretty much playing with house money now for most part and any sale of the business will be icing on the cake. I also will continue to buy rentals for cash to build a cash flow where I wouldn’t have to touch my distributions/income from my business or the sale.
Makes sense, though maybe not exactly tax efficient, since you are taking your savings from a sizable salary (taxed as earned income). But its all in balancing objectives – this sounds like the best/easiest way to quickly achieve greater diversification. I would imagine a business like yours is difficult to value, especially if you subtract the “rain maker” (i.e. you) from the equation. And so, perhaps that is why your approach may be the most direct way to extract value.
Really enjoyed this article and like others found a LOT of similarities and one of my favorite Millionaire articles (although I enjoy them all)
One thing to consider to set aside more tax deferred income is a Defined Benefit Pension plan although not sure the rules if you own a company with employees but in my case (only 1 employee – me) it worked out great as I am able to save 200K-300K a year tax free as well as can still make the 19K 401K contribution for both my wife and I. There are some fees as I pay a firm that specializes in this $2,500 a year but have put in 900K over the past 4 years and due to a great stock market it is up to 1.37M and even though I maxed out my 401K every year prior to the finding out about the Defined benefit plan my total 401K (IRA’s) are worth 1M (20+ years of investing although tried to hit some “home runs” early on before the single/double approach and hurt myself). I can transfer the Defined Benefits plan to an IRA once I decide to retire.
Millionaire 73
https://esimoney.com/millionaire-interview-73/
Nice bro. Love it. I knew staffing was a great business to be in. I could picture myself getting into that line of work eventually. Currently work in finance, but speak with headhunters frequently and it’s always interesting to hear how they decided to go that route. It’s always crazy to me to see multi millionaires didn’t hit millionaire status until late 30s, that seems to be a common theme on these interviewers. Makes me realize I’ve got to be patient and just keep working until that day comes. Thanks for the info.
It’s crazy for me to hear that it’s always crazy for you to see that most of the millionaires on ESI don’t hit the first million until late 30’s. I’m sure you’ve read several times over that the first $1mm is the hardest. I think popular culture promotes the image of successful people going from garage band to superstar overnight, and maybe that does happen sometimes, but even in the entertainment industry, as well as finance, business, medicine, etc when you peal back the covers often what you find is years of hard work, honing skills, and establishing oneself before the big money comes.
truth. thanks
You mentioned that your childhood friends have all become very successful. I found that statement interesting, because I think many childhood friends go on divergent paths. Did you attend public or a private schools?
Public schools throughout. Good solid neighborhood and no divorces.
I was going to ask that same question! I have teen boys and have intentionally kept them in the dark as to our actual wealth. We literally are the millionaires next door….and nobody knows including our kids. We have done this intentionally. Although we could afford private schools, we chose public. I frequently second guess this decision as of course we do not yet know the outcome. Good to hear of a data point where public worked out well for a group of kids (now adults), but it sounds like much of it was driven from good homes as is usually the case.
Hit singles and doubles all day long…great analogy and one I will take with me and share…great post!
Great story and thanks for sharing. I was also the “sales rain-maker” in the business I used to be partners in. We purchased a small mildly profitable business and turned it into a medium sized wildly profitable business. Mostly due to my other partners business acumen that was operationally involved and my creative engineering capability to out think our competition and also sell it at very high margins for our industry. (for reference 12-14% EBITDA was the norm and we performed in the 32-36% range). We had 3 other no-operational partners.
Once we hit 4-5 years of solid earnings, we attempted to sell our business on 3 separate occasions. In each case after due diligence and several interested parties, not one was willing to purchase without the operational “rain makers” staying on board and not cashing out. I get that every business is different, but I would recommend either two paths. 1) own it forever and pay yourself handsomely for your efforts, don’t consider the business to be worth anything 2) do the near impossible and find 1-2 young superstars to take your place over the next 3-5 years, pay them very well and give them equity if need be. This will make selling a hell of a lot easier. (note: we tried this and could not find the superstars, so I understand how tough this is.)
Selling a small business can be challenging, even with the past 5-7 years have been very frothy. I was fortunate enough to engineer and exit and couldn’t be happier, but that is another story. With you being the “man” and in total control, I’d choose the own it forever category and stack cash outside of the business while business is good.
Congrats and good luck!
Thanks for your story and feedback. I think this is the path I’m going to take and keep the business. Golden Goose………