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 October.
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)?
I am 65 and my wife just turned 67.
We both married late and have been married for 24 years.
Do you have kids/family (if so, how old are they)?
We have one daughter who is 19 and is currently attending an out of state university.
What area of the country do you live in (and urban or rural)?
We reside on the west side of Los Angeles.
What is your current net worth?
Our current net worth is roughly $5.7 million.
Our investment portfolio is currently $3.8 million.
Our home is worth $2 million, and we owe $200,000 on our mortgage.
Our cars are paid off and that adds an additional $50,000+ in net worth.
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 principal assets are our stock market investments and our home.
Our investment portfolio is comprised of 3 IRAs (value: $2.3 million), two Deferred Annuities (value: $700,000), two taxable brokerage accounts plus checking (value: $550,000), two Roth IRA’s (value: $150,0000). and a 529 account for our daughter (value: $100,000).
What is your job?
I worked at a large media company in various Sales & Marketing roles starting as an Account Executive.
Although talented, I never rose above “middle management” given the politics of my organization.
I worked for the same firm for 28 years and retired 9 years ago when I was 56.
What is your annual income?
My position was “job eliminated” nine years ago. At that time, my base salary was approximately $150,000 and I consistently received annual bonuses in the $40-50,000 range. (I never made more than $200,000 in any given year).
My wife worked in various roles never making more than $75,000 in any given 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?
My first job after receiving my MBA was in 1977 as an Assistant Account Executive for an Advertising Agency. It was one of the lowest starting salaries for my graduating MBA class as advertising generally paid far less than nearly all over industries.
I stayed in the advertising business for 3.5 years and when I lost my job due to our agency losing our account (through no fault of my own) I decided to switch careers and go to work in the cable television field. My starting salary as an “Account Executive” at my new company was a modest $28,000.
Over 28 years it was increased annually for about 20 years until I hit the salary range “cap” for the role I held at my company (Director level, one level below Vice President) for my last 14 years of employment. I was promoted just twice: from Account Executive to Account Manager and then from Account Manager to Director.
What tips do you have for others who want to grow their career-related income?
It is rare today to stay at the same company for essentially one’s entire career. I was able to grow my income from being one of the “top performers” at my level, however it was frustrating as I never was promoted to Vice President and I was passed over a handful of times.
Although I stayed at the same company, I would advise someone starting their career today to work hard, constantly network, and not be afraid to move from one company to another.
What’s your work-life balance look like?
While working, my work-life balance was quite good.
Although my key role was sales related, it was a good fit and I was rarely stressed over my role and/or performance.
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 had no additional sources of income during my career except for two modest inheritances from two distant relatives (approximately $25,000 apiece), and my parents (whom will be discussed later in this piece).
What is your annual spending?
I have religiously tracked household spending for over 30+ years!
When I got married 24 years ago, I told my wife I do not care what you spend if you track your spending in my “budget book.”
For the last three years (2017, 2018 and 2019) our annual spending (not counting taxes) was $166,000, $182,000, and $198,000, respectively.
Our spending increased substantially in 2019 as our daughter started college at an out of state university and we did some additional international travel.
What are the main categories (expenses) these spending breaks into?
Travel (domestic and international) is by far and away our “splurge.”
We fly business class when we travel internationally. In 2019 we spent approximately $44,000 on travel.
Our other large annual expense is our daughter’s education which runs about $50,000 per year, most of which is funded from her 529 account.
Do you have a budget? If so, how do you implement it?
We have never had a budget as we always “maxed out” our 401k and lived below our means while we were both working.
If we were on the path to “overspending” by tracking our expenses, we could have easily cut to hit a number. We have always lived within our means, so this was never necessary.
What percentage of your gross income do you save and how has that changed over time?
Maxing out my 401k was our annual savings goal for every year I worked at my former company, along with adding $5,000 annually to my daughter’s 529 account were our two savings objectives. My wife did not have a 401k.
Our household income over the last 10 years while I was working ranged between $225,000-$275,000. We saved anywhere from $18,000-$25,000 plus $5,000 for our daughter’s 529 account so our savings rate was commonly around 10% of our income, not counting my company’s 401k match.
What’s your best tip for saving (accumulating) money?
I started saving 10% of my salary at age 28. The “Power of Compounding” is magical when you start early. This is by far and away the best tip I can give to anyone starting their career.
The second tip, and it is complementary to the Power of Compounding tip is to always “Live Below Your Means” so you can save consistently and early!
What’s your best tip for spending less money?
My wife and I have always purchased “mid-priced cars” new and then drive them for 10-12 years.
What is your favorite thing to spend money on/your secret splurge?
As mentioned previously, travelling.
And when we travel international, using a Business Class Consolidator (or occasionally our “miles”) to fly Business Class.
What is your investment philosophy/plan?
While working I invested in mutual funds through my company’s 401k plan keeping a mindful focus on expense ratios. I was always 90% invested in “equities” with a very small allocation to “bonds”.
Now that I am retired, I have become a more traditional 60% equities and 40% bonds investor.
I have also migrated many of my positions to very low-cost index-oriented ETFs.
What has been your best investment?
There have been two:
- In the 90’s I took a key focus on Fidelity’s Latin America mutual fund in my portfolio. I read about how the 90’s was a “coming of age” for South America and this investment did exceptionally well. I seem to recall that my $100,000 investment on this mutual fund tripled to over $300,000 in about 10 years.
- We purchased our home in 1996 in Los Angeles and it has more than tripled in value in 24 years.
What has been your worst investment?
Only one bad investment. In the 90’s I received what I thought was a “hot stock tip” and invested $2,000 in a tech start-up. It went bankrupt six months later and I lost my $2,000.
I learned a valuable less: do not invest in “hot stock tips.”
What’s been your overall return?
The 80’s and 90’s were very kind to equities until the dot.com bust in the early 2000’s so I was able to generate terrific year over year gains averaging 10-15% per year through-out the 80’s and 90’s.
Even though I lost 30% of my portfolio in the dot com bust, my portfolio was back to where it was before the crash by YE 2004.
Even after factoring in the two major stock bear markets (dot.com crash 00-02, financial crisis 08-09) I believe my portfolio has averaged 10%+ in investment gain (not counting my annual incremental stock purchasing through-out my career).
How often do you monitor/review your portfolio?
Monthly, however I rarely make trades except for rebalancing or tax harvesting in my taxable accounts.
How did you accumulate your net worth?
My success in accumulating a net worth well more than $5 million is due to the following key factors:
- Consistently having money put into my 401k every two weeks for 28 years.
- Being gainfully employed at the same company for 28 years and enjoying a company match.
- Never trying to “time” the market.
- Watching investment expenses; never paying anyone 1% a year to manage “my money.”
- Making a terrific home investment in Los Angeles in 1996.
Note: I did inherit $600,000 when my parents passed 8 years ago, however I was already a multi-millionaire. Inheriting this sum provided a “cushion” however it was not the principal driver in my financial success.
It is also worth noting that in my last 5 or 6 years of working, the gains in our investment portfolio exceeded our salaries and bonuses. It was very satisfying to make $275,000 in gross income and in the same year seeing your portfolio increase $250,000+ for a combined income of $500,000+.
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 would say it is a “tie” between “Save” and “Invest.”
As mentioned previously, I never made a lot of money at my job, I was just a conscientious saver from age 28.
Equally important was that I never did anything with my investments either after the dotcom bust in the early 2000’s or the financial crisis of 2008-09. I just “hung on” and continued my payroll 401K investing as if nothing happened. Doing this I was able to bounce back quickly from the losses I encountered.
Bottomline: I never “earned” a lot; however, I did “save” early and consistently, and finally I did “invest” wisely for the long term.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
I honestly cannot think of any road bumps other than the dotcom crash and financial crisis of 2008-09.
What are you currently doing to maintain/grow your net worth?
In addition to company matching my 401k investing (in part), I also benefitted from a pension (until it was frozen a few years before I left my company).
I was offered the option of receiving a lump sum (about $900,000), or a monthly fixed pension ($5,000) at age 65. I opted for the monthly pension so I can sleep better at night knowing that when we turn 70, between Social Security and my Pension we will be able to cover are annual “basic” expenses.
When my wife takes her Social Security at age 70, our combined annual income Social Security income will be $65,000. Having $125,000 in “guaranteed” annual income during retirement ($60,000 pension plus $65,000+ in Social Security) allows us to have a “higher than typical” retiree investment allocation in equities, ranging from 60-65% of our overall portfolio.
This is especially important now with bond income so historically low, and likely to continue to be low for the next 2-3 years.
I feel very good at the decision to annuitize my lump sum pension (“joint life” with my wife receiving 50% should I pass first).
To assist me in maintaining and growing my investment portfolio I subscribe to an excellent Fidelity newsletter (cost $169 per year) and have been a Morningstar “Premium” subscriber for over 10 years. Morningstar provides great tools on their website including a “Portfolio Evaluator.”
Additionally, I became a “Life Member” of the non-profit group, the American Association of Individual Investors (AAII) in my mid 40’s. AAII publishes a monthly magazine (no advertising) called the AAII Journal. It is excellent!
Additionally, every few years I will hire a Financial Advisor for a few hours to check for investing “blind spots” (never spending more than $500) in my portfolio.
I have found that this “recipe” (Fidelity Newsletter, Morningstar, AAII and an occasional outsider’s review of my portfolio) has given me confidence to continue to self-manage my multi-million dollar investment portfolio.
Do you have a target net worth you are trying to attain?
No. My wife and I are looking to enjoy life and travel as much as we want to over the next, hopeful, several years.
I am fine if our net worth recedes during our retirement.
How old were you when you made your first million and have you had any significant behavior shifts since then?
I started tracking my net worth in 2000 and at that point (I was 45) my net worth was $1.3 million.
My best guess is I likely became a millionaire around age 42.
What money mistakes have you made along the way that others can learn from?
I wish I had not sold my condominium when I purchased my home in 1996 as my old condo has more than quadrupled in value since 1996 and would have provided outstanding rental income.
What advice do you have for ESI Money readers on how to become wealthy?
- Start Investing early and regularly
- Do not try to time the market
- Live below your means
- Pay off ALL your credit cards in full each month
- Purchase a home and try not to move frequently (big benefit as we “stretched” ourselves when we purchased our home in 1996 and have never felt the urge to move).
What are your plans for the future regarding lifestyle?
My early saving and stock market investing acumen allowed me to comfortably retire at age 56 when my former corporate position was “job eliminated.”
What are your retirement plans?
I am an active volunteer at two non-profits, including being in a leadership and Board role with one non-profit.
I play golf twice and week and frequently do bike rides.
My wife and I also both enjoy snow skiing.
My wife continues to work part time because she loves her part time work.
Should our daughter decide to permanently live out of state when she finishes college we will likely relocate.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
We are fortunate and have no problem areas at this stage of our retirement.
With our home’s sizable equity, we have decided to “self-insure” for long term care should that be needed for either (or both) of us.
Thinking long term, since our home is on five levels, we will need to move at some point to likely a single floor home.
How did you learn about finances and at what age did it “click”?
I am completely “self-taught” about investing.
When I started at my corporate role in 1982 and learned that the company offered a partial match on retirement savings, I intuitively knew I had to take advantage of this. A little bit of “money smarts” coupled with some “good luck” at making this early decision to invest part of my paycheck each week has paid off in ways I could not have imagined at age 28.
Who inspired you to excel in life? Who are your heroes?
My mind is honestly blank on this one….
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?
I have quite a library on money books! Here are a few of my favorites:
The Millionaire Next Door (isn’t this one on most people’s list?)
The Only Investment Guide You’ll Ever Need (Andrew Tobias)
Money for Life (Steve Vernon)
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
Once our daughter finishes school I anticipate stepping it up in this arena. Currently we have no direct giving strategy and instead make donations to a wide number of charities.
Our current percentage is modest, and we do anticipate this growing.
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?
We have just one heir, our daughter. We do have a will and a trust however plan to update this when our daughter finishes her schooling, which will likely include post graduate work.
My wife and I will need to discuss how to split up our assets between charities and our daughter.
The Millennial Money Woman says
Thank you so much for sharing your advice and thoughts! I really appreciated reading your story about how important it is to save and invest from an early age. It doesn’t matter how much money you earn – what matters is how much you spend. Income does not equal wealth. I’ve learned as well from an early age that the earlier you save and invest, and as long as you are saving and investing consistently, the more likely you will be financially successful as you start nearing your retirement age. Thank you for sharing your insights!
Seeing people of all different ages at different stages in the process of accumulation versus preservation etc., is so enlightening, at least it is for me but I’m sure the same is true for many other readers. We can see our future selves in these folks who have done so well. Also ideas like for example self insuring for long term care using accumulated home equity are priceless.
I would say that whether or not you are a high earner is a subjective matter. Many would consider you a high earner at $150k-200k per year. Based on 2019 data, $100-150k puts you above 66% of American households and $150k – 200k puts you above 81% of American households.
At $275k in gross income in your last 5-7 years as you mentioned, you are now in the top 10% of American households and this is probably higher because if I’ve done my math correctly, those 5-7 you mentioned were in 2003-2010 when those dollars were worth more than in 2019.
So I say, kudos and you really did well in all facets of ESI. Perhaps you didn’t make it to the levels of earning you wanted but you most definitely did very well for yourself in that area.
Thank you for sharing MI231
Agreed! The “Power of Compounding” is amazing if you start saving and investing early. Kind of reminds me of the story between the tortoise and the hare.
Well done. I too, subscribed to the following tenants
Start Investing early and regularly
Do not try to time the market
Live below your means
Pay off ALL your credit cards in full each month
Purchase a home and try not to move frequently
Interesting in that none are that difficult to follow, just takes discipline.
This was a great interview for me as my wife and I can relate to your story. We are 10 years younger but I left a long term employer due to a downsizing three years ago with a comparable income you experienced. I did not return to corporate america due to accumulating similar assets to you through the same principles you mentioned, starting early and living below your means. For us it allowed freedom to pursue a different type of career/work.
Also, thanks for the tip on the fidelity newsletter as we currently have accounts with them.
Great job on setting yourselves up for retirement.
Thanks. I’ve really enjoyed non-profit work since I was an early retiree (56). By the way, the name of the excellent Fidelity newsletter is “Fidelity Monitor & Insight.” I’ve been exposed to many newsletters over the years and this is the best one by a large margin.
Accidentally Retired says
Great interview. Love that you just kept socking away 401 (k) money for years and years. Shows that you don’t need to do a whole lot else to become wealthy.
I also like the advice of not moving around a lot. There is something to paying down your mortgage, while letting your property value continue to rise over time.
Congrats ok a job well done!
I have to admit I am a little jealous. I earned a little more than you, spent a lot less than you and never had children, but still I’m financially at a similar place. My mistake is always thinking the market has peaked, and therefore often being afraid to put too much in. I read your story almost doubting it could be mathematically true, although I know the historical market results support your story. Congratulations!
First, congrats on extraordinary success in the ESI game of prosperity and ultimately retirement. I enjoyed this read because I see a lot of my own situation to identify with. It’s good to see a modestly high-earning professional in a very high-cost region actually living below their means (while splurging on certain things like travel and housing) and making it to FIRE and then some.
I say “modestly high-earning” because as Kevin pointed out (complete with national stats to back it up) a ~$275K gross income in the last years of your work-life ain’t exactly chickenfeed. But, I do get it… in the big city bubble we live in it can surely “feel” middle class when all your neighbors and business colleagues seem to be raking in the dough and living the high life.
I’d say you achieved a near perfect blend of earning vs saving vs investing, especially if you didn’t have to kill yourself to get there.
Like you, I’m the primary breadwinner by a big margin and always maxed out my 401K/IRA. I’m a few years younger than you and not yet retired but accumulated contribution retirement accounts just squeaked past the $2mm mark in this month’s run-up. And that was mostly on my 401K contributions – wife never had access to these types of plans as mostly worked for herself (except for a small inherited 401K). We have also saved at least as much in after-tax accounts, but that was more from banking various windfalls. Mostly I’m amazed at what 30 years of compounding and employer matches can do in the 401K accounts… and I was a bit of a slow starter. It’s possible to become a 401K multi-millionaire on primarily one strong income just on 401K/IRA contributions alone – I never could have imagined it 30 years ago. A $1mm yes, $2mm no way.
I also agree with your tenets for building wealth:
– Start Investing early and regularly (YUP)
– Do not try to time the market (YUP)
– Live below your means (ALWAYS, BUT ENJOY SOME TOO)
– Pay off ALL your credit cards in full each month (ABSOLUTELY)
– Purchase a home and try not to move frequently (MOSTLY AGREE, BUT WE ALSO BENEFITED IMMENSELY FROM ONE BIG TRADE UP)
I’ll add one….
– Marry the right partner – a mistake is usually beyond costly…
Yes are situations have alot of parallelism. I was amazed at how much fast my 401k (now an IRA) grew from 1M to 2M (vs getting to 1M). Once again, that is all do to the magical power of compounding! The “rule of 72” says that if one nets an annual investment return of 8% it will take just 9 years to earn your second million (and that is with no additional investing). If you continue to sock away $20,000/yr, that should reduce your 9 years to around 7 years. In contrast to get to the first million it will take around 20 years…
David @ Filled With Money says
Congratulations! Even though the passing over from promotion after promotion, you’ve managed to make a very good living for yourself and a great net worth for your family.
I know career ceilings happen but I’ve never personally seen it happen. Great to hear from someone’s perspective who has gone through it.
Charlie @ doginvestor.com says
Impressive, you can really see the power of compounding in your example. Age 42 to be a millionaire, took a long time at $25-$30k per annum into 401k, spending more than saving. Then from there till you retired you just kept socking away the money, and each million compounds quicker and quicker, until your investment income significantly exceeds any potential savings.
I like this story since it is still possible to build significant wealth by saving consistently, not just FIRE saving at 50%+ rate.
Interesting that SS will contribute so much, but not be a requirement at all, just an added level of safety for sleeping better at night. I think more countries should provide social benefits of the scale as the US, it must be a wonderful cushion to have!
Congratulations — your loyalty to your company has clearly paid off! Wondering if you could share how you found your hourly advisor — seems like I always find that they require at least a small percentage of your portfolio to be with them vs just hourly since the business model isn’t sustainable?
I like referrals so I will give you a couple: Rick Ferri and Allan Roth. Both are googleable and very well known in the financial planning world. Rick charges $925 for new clients and this involves 3-4 ours of his expertise. Allan Roth can be hired on an hourly basis, although you will likely spend more and this process will be more comprehensive. There are also websites like Zoefin.com that will refer you to adviser. I loathe paying a 1% AUM fee as I do not believe investing is that difficult.
Thanks MI231 — appreciate the advice and timely response!
Tom from MD says
Great article – thanks for your insights, MI231! I’m a bit younger and shy of your portfolio numbers, but I’m really interested in how you made the move from employed to retired. What gave you the comfort level to finally say “I’m just staying retired for good”?
Another question, if you don’t mind. How have your expenses changed since you retired? I hear all this claptrap about “you can retire on 70-80% of your pre-retirement income,” but I’m wondering if that bears out. Especially since I like to travel like you do, and I want to bring my family on some amazing adventures, too. (Safaris, island getaways, exotic destinations, etc.)
Great questions… When I retired I ran “my numbers” (basically net worth, future Social Security vs anticipated annual spending allowing for inflation) on a couple of Retirement Calculators. You also plug in data for big expenses (college for kids, etc) and future savings (like when your mortgage will be paid off). Fidelity and Personal Capital both have terrific “Free” retirement calculators. For a more robust calculator (newretirement.com) you’ll pay a modest fee. Second question… most experts believe most retirees have 3 phases in retirement (go-go years- lots of travelling, “slo go” and “no go”). Generally your expenses are the greatest at the beginning and end of retirement (health care). I would say 80% probably works over the long haul however you will spend more initially. For example, our two week trip to Africa last year ran $25,000+ (but was well worth it!).
I’ve heard/read/observed similar patterns to the “go-go, slow go, no-go” phases… nice way of visualizing it. Makes sense. For several years I helped manage my (now deceased) retired in-laws finances (budgeting, taxes, etc.) and they very much fit the pattern. What impressed me was how little they spent and still had a really nice, contented lifestyle spending winters in a sunny climate and rest of year in their suburban home in a moderately expensive COL region. After settling down from the travel phase, they spent on average about $60-70K annually (before-tax) with zero debt, basically living off pension and SS, never much touching the nest egg until the very end. I budget a hypothetical range of $250-300K for my wife and I for retirement, which is very doable given our assets, but what my in-laws example tells me is that if we had to make some radical adjustments, we could do it and life would not be too shabby at all.
One of the ways in which typical rules of thumb fall short for high-income, high asset folks is that the 70-80% rule of thumb might insure that you would be able to carry on the same lifestyle as before, but t doesn’t allow for the fact that you might NOT want to carry on the same lifestyle as before. I for one, intend to greatly simplify my lifestyle once I don’t need to live in a major metropolitan area for work any longer. I’d like to only have one $1mm home (instead to 2) or maybe rent the second or third home for flexibility.
What I’ve been saying to my wife is that we have the means to do just about anything we want… toys, vacation homes, travel, etc so long as we maintain the flexibility to significantly adjust if we hit a big market correction or other radical black swan event.
Thanks for your reply. Makes total sense – logically. I’m a numbers guy in all other respects, but just can’t wrap my head around how rapidly NW accelerates after the 1st mil. I’ve experienced it, many times over at this point, thru recessions and corrections, the numbers don’t lie. But, its still a cognitive disconnect of sorts.
Tom from MD says
@MI231 and @MMiguel – thanks for your replys. It’s funny that yesterday on a run with my wife, we had this exact discussion and came to the same conclusion. Great minds!
We decided that if the market corrects by 25% or if our renters just stop paying, we can postpone the safari. 😉 First world problems!
I actually have an appointment with a financial advisor *today* and I’m going to ask them for a “checkup from the neck up” on my situation and scenarios. One thing I haven’t done is try to account for sequence-of-return risks. The good thing is that those risks should only affect a few legs of the retirement stool!
Great story! Nice to see that slow and steady is still a winning strategy! I stayed with one company for my entire career as well and the pension was one of the main reasons. It is so nice waking up knowing my basic living expenses are covered without Social Security (yet) or pulling out of the nest egg.
I was intrigued by the Business Class Consolidator statement. I had to Google it since it was new to me. Sounds like a system I would like. Do you use a specific company or monitor multiple sites for the Business Class Consolidator?
JeffB MI20 says
I am a travel agent in my retirement and there are a few consolidators out there. The cruise ships buy in bulk from certain cities. So depending on what city you fly from, there can be some deals. Happy to also send you any quotes. BTW, TAs don’t make very much from booking airfares, but due to COVID, there were many unhappy people since certain airlines didn’t give refunds on cancelled flights. Most just gave you the money in a future credit. My opinion after 2020, book on the American carrier even if it is code sharing. The DOT has jurisdiction over the US Airlines. If you book on Air Canada and you fly on a United plane, you are subject to Canadian rules and AC refused to give refunds on airfares when it cancelled flights. My wife was fortunate to get a refund from Lufthansa and I got my refund from Qatar Airways. We still have a credit on South Africa Airlines. You can email me at [email protected]. Travel agents aren’t obsolete just yet.
Thanks, Jeff. Have noted your email address for futures. And yes, I have scored some great deals when I have purchased travel through a cruise line. Also, good to know about booking on an American carrier.
I have now used two travel agencies to book “business class” when we travel internationally. Both are good! Theyare Business Class Consolidator (businessclassconsolidator.com) and Cook Travel (cooktravel.net). (Note: Cook Travel is not related to the travel agency Thomas Cook Travel).
When we book our next international trip I will call both BCC and Cook Travel and have them “compete” for my wife’s and I international business class tickets.
Amazing read and nicely done! Thank you for sharing some details and tips for those who are not there yet but are on a path to get there. If you could share what was your NW at the time of your retirement and any specifics on the investment side that you have consistently invested and held on to let it compound and grow. Thanks again for such an awesome story.
When I retired in 2011, our stock market net worth (excluding the equity in our home) was just over $3.0M. For the last 5 or 6 years we have been averaging annual expenses (including taxes) of roughly $200,000 per year. During this time period my wife has been working part time making $35K a year. We also have my pension ($60K a year) which we began in mid 2018. Social Security ($25K a year) started in late 2019. Our portfolio has been roughly 65% equities/35% bonds and cash during this time period and has been average 6-8% growth per year. Given a $3.0million portfolio that translates to annual appreciation of $200-300,000 per year. We have been drawing our around $75,000 per year. What is fascinating (and unexpected) is that over the past 10 years our stock market net worth has increased from $3.0million to $4.2million as I write this! I have achieved this growth by being primarily invested in a well diversified portfolio using index funds! I have “tilted” my portfolio towards technology and health care utilizing a few specialized mutual funds or ETFs. I am NOT a market timer. I also do not pay anyone 1% to manage my portfolio. I also keep my expenses down. Hope this helps!
Thank you very much. It does make sense. I do have a couple more specific questions since i am also on the west coast – will it be ok if I direct messaged you. I can be reached at [email protected]. Thanks again for your help.
I just emailed you as I do not know alot about DM. Please let me know if you received my email.
Success Triangles says
I feel your pain regarding this:
“My first job after receiving my MBA was in 1977 as an Assistant Account Executive for an Advertising Agency. It was one of the lowest starting salaries for my graduating MBA class as advertising generally paid far less than nearly all over industries.
I stayed in the advertising business for 3.5 years and when I lost my job due to our agency losing our account (through no fault of my own) I decided to switch careers and go to work in the cable television field. My starting salary as an “Account Executive” at my new company was a modest $28,000.”
My wife started her career in advertising (as a media buyer) and her starting salary was $25,000. She topped out at around $50k years later and was eventually laid off due to the loss of a big client. She tried some freelancing here and there but the pandemic has killed the industry – at least in our market. She has basically given up and become a substitute teacher and continues to sell jewelry on the side.
Advertising/media is a tough industry that I would stay away from if you are starting out your career – unless you start your own company or are an excellent salesperson. The clients are extremely fickle and will take their business elsewhere at the drop of a dime.
Totally agree about the fickleness of ad clients. The advertising business has also changed so significantly given we are now in a digital world. Working in NYC for a big agency in the late 70’s was exciting, however I think those days are in the rear view mirror for most newly minted college grads.
Good interview! Lots of parallels to my path, in particular the slow and steady nothing too exciting approach. What is most timely reading your interview is that you went through two downturns, stayed the course and in the end it all worked out. History should repeat itself and we will also survive the current downturn we are seeing now in June 2022. Your interview reinforced for me that I should just stay the course and keep doing what we are doing now.