Here’s our latest interview with a millionaire as we seek to learn from those who have grown their wealth to high heights.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
My questions are in bold italics and his responses follow in black.
Let’s get started…
How old are you (and spouse if applicable, plus how long you’ve been married)?
We are both 46 years old and have been married for 22 years.
Do you have kids/family (if so, how old are they)?
We have 5 children. Two from a previous marriage 27 and 24. Three together that are 21, 19, and 18.
What area of the country do you live in (and urban or rural)?
We lived in Italy for the last 7 years but moved back to Greensboro, NC in June. Where we live is pretty rural.
What is your current net worth?
Our current net worth is $2.4 million USD.
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 Assets equal $2.7 million and we have $300k on the mortgage. That is our only debt.
Our asset breakdown is like this:
- 0.7% Cash
- 17.9% Bonds
- 6.3% Real Estate
- 75.1% Stocks.
Approximately $1 million of our net worth is in our 401k plan.
What is your job (type of work and level)?
I am an Operations Director for a Manufacturing Company.
What is your annual income?
With bonus, approximately $200k per year.
How did you grow your income so high?
I went to college at night when I was younger working full time. It took 10 years to get a BS in Business Admin.
I kept looking for ways to add value at work and kept getting promoted. I often would do things that were outside my normal responsibilities to gain experiences that would make me more attractive for promotions. I learned to speak Italian. Things like that. I definitely planned a career path and worked hard for it.
What is your main source of income (be as specific as possible — job, investments, inheritance, etc.)?
Right now, it is my salary. We have had a year or two where our investment returns have outpaced our salary, but it really depends on how the stock market does each year. On average, I am pretty confident that we could generate $100k to $150k per year in returns to fund our life.
What is your annual spending and what are the main expenses you have?
Our annual expenses are approximately $70k. This includes a nice vacation each year.
Our biggest expense is our house. Not included is tuition for college, which is about another $30k per year.
Like I said, we do not have any debt outside our mortgage, so we can control expenses pretty easily. We spend money like we do now because we are still making a good salary.
How did you accumulate your net worth? (Did you make a lot of money, invest well, inherit it, or what?). Also, please share any mistakes you’ve made along the way that others can learn from.
When we got married we were broke. We started with the basic principle of pay ourselves first because we knew if we didn’t, we would spend all of the money and there would be nothing to save. So we started our 401k off at 6% to get the tax deferred company match and set it up to increase 1% each year at raise time. This way it increased without us even feeling the pain. We were 100% invested in the stock market as we wanted to be aggressive until we made the money that we needed to retire. We figured we had time on our side and any crash would be a buying opportunity.
As our earning increased, we started to save and invest money on our own. Initially I tried picking stocks, but I learned the hard way that the best way for a normal guy to invest is to use index funds and dollar cost average. So that is what we did after a couple of investments in single companies went south. That was the best decision we’ve made! Now as we have gotten older and are being a little more conservative, we shoot for 75% in equities and the rest in cash, bonds, and our home. We rebalance once per month so if the market is up, we sell some stocks and buy bonds, and if the market is down, we sell some bonds and buy stock at lower prices. Typical stuff. We do this in our 401k so we avoid taxes.
What have you learned in the process of becoming wealthy that others can learn from (what can others apply to become wealthy themselves)?
1. Live within your means. Do not fall in to that trap of keeping up with the Jones’. We never did. Trust me, you think other people are looking at you and are impressed. They’re not. No one cares that you have a BMW and you’ll be stuck with a big car payment. We buy cars new, pay them off, and run them in to the ground.
2. Pay yourself first by setting up an automatic payroll deduction and take advantage of tax deferred accounts like 401k or IRA’s. Make sure you get the company match, it’s free money!
3. Make sure you can live with volatility and set up your portfolio accordingly. We were 100% invested during the 2007/2008 economic melt-down, but we were mentally prepared and stayed the course, even buying when the market was down. A couple of years later we were wealthier than ever. However, we saw a lot of people panic and sell at 40% loss and then miss the rally because they were scared. Buy high sell low! It was a disaster. So if you cannot stomach the ride, make sure you are diversified and have a plan for the bear markets that are inevitable. I highly suggest low cost index funds and the proper equity/bond/cash allocation that fits your risk profile.
What are you currently doing to maintain/grow your net worth?
Like I said, we use low cost index funds and asset allocation to rebalance regularly and force ourselves to buy low and sell high. We use our 401k account to do this to avoid the taxes.
Do you have a target net worth you are trying to attain?
Not really. We have a goal of doubling our net worth every 7 years and think that it is very attainable if the market does what it has historically done. We understand that if we retire early, we still need growth from our portfolio.
What are your plans for the future regarding lifestyle (for instance, will your net worth allow you to retire early, downsize jobs, etc.)?
We are discussing early retirement so that I can pursue my blogging, charitable work, and running habit! I’m very passionate about helping people live a healthier lifestyle and would like to spend more time doing that via my blog.
Is there any advice you have for ESI Money readers regarding wealth accumulation?
Get rid of excuses. Everyone has them, but if you want to accumulate wealth, it’s about keeping some of the money that you make each month and investing it. When gas prices doubled, people paid. They complained, but they paid. Now that they have come back down, I would bet most people are not saving that money, they are spending it on eating out or cell phones or whatever. Do what you need to do today so you can do what you want to do later…
[email protected] says
Great interview! We also used a similar strategy to get started on our wealth accumulation–we started funding our 401Ks enough to get a company match and then, as we got raises, slowly increased the percentage until we were maxed out. You didn’t mention how you saved money for your kids’ college. Is it something that you fund each year, do you ask them to get scholarships, or did you have a bunch saved in a 529 account before they went? Looking forward to checking out your running blog! 🙂
We didn’t save for our children’s education per se, we knew that we would pay for their undergrad work and figured that the wealth we built would be used to pay for their education as well. We did not opt for a 529 because we move a lot, and there were restrictions tied to the locations with that program if I recall.
Lance @ My Strategic Dollar says
Excellent post! 1) I love that you learned Italian you get promoted, that’s commitment! and 2) your advice about not making excuses hit home. I have so many friends that say they could save more if only they made more. To me, that’s only an excuse and I don’t think it’ll get them very far.
Lance, I agree. You can make excuses or you can make plans.
I love the fact that you are are living on only 35% of your income. I just wrote a post on my blog about how we live on 15% and how everyone should try living on less than 50% of their income.
I also like your agressive investing strategy. At what age did you start it? And at what age do you plan to end it? Or are you always going to be a little bit aggressive?
ESIMoney, I’m new to the scene, and the first thing I did was read all your millionaire interviews. They are really inspirational and I learned something new from each one of them. If you don’t mind, I would like you to interview me as we started from the bottom as new immigrants and now we have a networth of about $2M, a $400K/yr salary & we are in our 30’s… only just getting started.
Looking forward to hearing from you and keep up the good work!
I just sent you an email…
We started when we were 24 years old, and as stated we will stay invested around that 75% equity level to ensure we get the necessary growth from our portfolio.
Erik @ The Mastermind Within says
Thanks for sharing ESI. I love these interviews!
Dads Dollars Debts says
Another motivational interview. I am always impressed by the millionaires with multiple kids. 5 kids are not cheap to raise (let alone easy). So Kudos to you! I think you said it right when housing is the biggest expense. It will be amazing to see what the monthly paycheck looks like when our home is paid off.
More of these! Best way to learn. I am 2% stocks and 98% cash now. Not working in early 50s makes me a lot more cautious. Hopefully find work outside of Japan as it seems to dry here after a year of endless CVs. Knock on wood for the early years here.
Jeff B. says
You are going to get little growth and inflation will eat away at your money.
Amy @ Life Zemplified says
Sounds like you’ve done very well, Joe. Thanks for sharing here. I’ll be sure to check out your blog further.
Thanks Amy, I hope that the post here helps your money situation and that my blog can help your health! Regards. Joe
Great job Joe. Question on your 6.3% in Real Estate. Is that in physical real estate assets for rental purposes or in REIT’s?
It is the equity in our home. We rented it when we were in Italy, but we are back living in it now. I agree with ESI on the rental property thing, it’s a good investment when done well.
Jerry Higdon says
Thanks for participating in this forum Joe. I went out and watched your interview on your blog site, it was very inspirational. Keep it up, our world needs positive Innovative thinkers. God bless you and your family. I said a little prayer for you today and that your transition back to the States goes well.
Thanks Jerry, I appreciate the prayer. We are back and we are doing great! I am training for a 40 mile race in October, so follow along on my blog!
Joe, thanks for sharing your story and path!
ESI, no surprise, but these interviews are getting predictable:
1. Earn $200k’ish. Invest a good amount(%) of income and you’ll have $2-3M when mid/late 40s
2. Earn $500k and do abover and you’ll have $4M+.
There’s no magic to it, but I still look forward to each email saying a $M interview is there to be read. Keep me coming.
Are you saying E-S-I is the path to wealth? 😉
Exactly! Wish I would have found you 20 years ago and hit the savings rate harder out of college. Took me earning significant income to hit the 50% savings … we spend too much but a healthy income can compensate.
Hi Joe, I am from GSO as well. Thanks for the post!
Doug, nice to meet you! Are you a runner? Maybe we’ll see each other on the trails!
Great progress and I hope that you continue to reach your goals – I especially like the fact that you were very purposeful in how you developed your career – i see too many people who just show up and think that meeting expectations opens doors. Going above and beyond is the only way to truly get noticed. I wish more people understood this fact. Also congratulations on 22 years of marriage.
I bet you would agree that the support of your family was critical to your posting in Italy. The trailing spouse, the newness of a different culture for kids, new colleagues make it a difficult thing to do but you proved, and I have seen it too, that an expat assignment can be a great wealth and career builder
Can you share with everyone on how your overseas role helped you and maybe talk about what might have happened if you had not taken it?
Despite the rash of nationalism that we are seeing, Brexit, Trump, etc. the world is actually becoming a smaller place. So spending 6.5 years in Europe allowed me to have first hand experiences in regards to how other countries conduct business teaching me so much in regards to globalization. In my opinion, the companies that are going to win are the ones that think globally but act locally. My observation is that to conduct business successfully worldwide, you need good people locally who can help you navigate your business. Trying to do it “your way” most likely won’t work.
My family and I now speak Italian and have travelled all over Europe, enriching our lives and opening new doors at every step.
It’s hard for me to say what would have happened if we didn’t go, because we were doing well when we left, but I can say that we all feel that we are better people for the experience.
Thanks Joe for the straight forward answer. I have conducted business in over 50 countries and I agree 100% trying to get things done “your way” is a sure fire way to failure. Trust is critical to doing business anywhere on the planet and trust takes time to earn and it can’t be faked or earned quickly.
Good luck on your journey
For the sake of any other low-level ‘browsers,’ I’d like to add there are others way to hack it, get ahead, cultivate a certain quality of life, and prepare for the end. Now excuse me if this sounds like bragging, but let’s compare values, in full light of those with millions above me. Although this section of town is more accurately described as suburban, if you walk on paved trails the equivalent of two city blocks away from my house, backyard forest, hedgerows, and extensive gardens, the road hits the dunes . . . within minutes, no matter how high or low, you will be standing on the sandy shores of the mighty Pacific Ocean, one incredible beast. I’ve always been heathen, but that is most certainly my god, astoundingly beautiful, infinitely greater and more powerful than myself, and utterly indifferent to all our lives, meanwhile blessing us with its attendant riches. Needless to say, I don’t feel much of an urge to travel. In WA state, many wonders lie within modest driving distances anyway, and this is certainly not the socially chaotic hellhole Seattle is becoming–not yet, though the area and all regions her are growing rapidly. Yeah, the threat of a tsunami, but the real killer would be a giant earthquake. No one on the west coast is immune to that, so I don’t sweat it; I’m pretty aloof anyway. There are no tornadoes or poisonous snakes is the way I generally look at it. I’m on the edge of the central forested region, so will never have to pay the extra FEMA insurance like those on the canals, or directly oceanside. My monthly mortgage currently runs at $504 for a nice 2 BR, two-bay garage stick-built home, slab on grade. No air conditioning required, just the occasional open window, dehumidifier out in the garage. My casino job is largely recession-proof, or at least was during the Great Recession. Our customers make me sick, but they’re generally okay or nice, despite that most serious problem of theirs. I do not gamble; cured for life. My gf makes her own money, drives a nice car. I’m slowly driving my beloved old SUV into the ground, at which point I’ll cry a little, then buy another–cheap, used, but good, for my eight-minute commute. Only the routine of driving, a few minutes saved is keeping me from bicycling up the beach to my job instead. I don’t want a tan, or get rained upon, hard. Not yet. I’ve been thinking about that more and more, though, to boost savings beyond 36%, some of that, eventually most all, into a rock-solid index fund. I grow maybe 80% of our food, organic, non-GMO heirloom ‘stuff.’ We do not have any inheritors or want them. If we’re both dead, her sister will probably get it all. If I go first, the gf gets it all. Dirt simple. No need for long-term care insurance at our modest levels, single, no intention of marrying. If I need that, the house might be at stake, or some of my nest egg, so I’ve taken out life insurance to cover that distance as it grows. She may have to move away and buy something with that . . . boohoo, life is tough, but she could live on without me and do pretty well, think kind thoughts for my consideration. Just sayin’ . . . I never cared for work much (lol). The next tier up from me requires a pay cut and worse hours, also longer ones. Beyond that, you MUST be tribal to be promoted, then go from my 30-hour schedule (full medical), wage and tips, to a salary, probably 50 hours, for just a few thousand more. No thanks. Anyway, like I said, not trying to brag, but how many millionaires live on the Pacific coast, eat all-organic, live within their means, adequately insured, fully vested, on a 30-hour schedule, without any more fear? I don’t have to worry about a lesser recession, or losing it all; I’ve come too close before, just ten years back. It’s all relative, baby, but don’t get me wrong; I would love to see 2M+ and call it a day, then never work again. Till then, this will do.
That definitely sounds like bragging (lol), but I don’t know. The canals and lakes, sometimes the beach are still pretty empty. Chalk that up to complacency; you can get used to anything. Like I’ve said before, I think it’s really about the percentages, being on the right track, then a certain quality of life at a certain price point. The broad middle ground is where others are most vulnerable to losses, taxation, health crises. I look forward to reading Alexander Green’s ‘Beyond Wealth’ for a little more insight on this front, somewhere between the hyper-minimalists and the alpha deca crowd. Everyone has a sweet spot; you’ll know it when you get there. I work on building and preserving that, without necessarily losing my soul or precious TIME.