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 November.
My questions are in bold italics and his responses follow in black.
Let’s get started…
How old are you and your wife and how long married?
53 / 51 years old and we have been married for 13 years.
Do you have kids / family?
Daughter who is 23 years old from a previous marriage.
What area of the country do you live in (and urban or rural)?
Major city in Midwest – urban
What is your current 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?
- IRA’s: $2,116,000 or 54% of our net worth
- Brokerage: $974,000 or 25%
- Company Stock: $252,000 or 6%
- Cash: $162,000 or 4%
- House (paid off): $405,000 or 10%
Total Net Worth: $3,909,000
We are fortunate not to have any debt.
What is your job?
We just started our early retirement early this year.
I worked in the Medical Device industry for 30 years as an Executive for a few Fortune 500 companies running the commercial operations.
My wife enjoyed the Social Service industry for over 20 years.
What is your annual income?
Our pre-retirement income was $393,000 (mine $313K and wife $80k).
Our post-retirement income is $132,000.
Tell us about your income performance over time. What was the starting salary of your first job, how did it grow from there (and what you did to make it grow), and where are you now?
I grew up in a low-income single parent household with my mom and sister in a townhouse. The first house that I lived in was the one that I bought when I was 25 years old.
I started buying my own clothes at age 14 and paid my own way through college. Never thought twice about not having money growing up as it was just a way of life. I always felt the love from family and had the basics covered like food, shelter and education.
At age 14, I started working in a restaurant for $3.35 / hour and worked my way up the ladder over 7 years as a dishwasher, busboy, bar back and waiter. During this period, I learned work ethic, teamwork and critical thinking skill sets.
My first job out of college was in the Consumer Products industry working for a Fortune 500 company. The job required working 6 days a week most weeks and 10-12 hour days. I also had to be flexible as I would travel at a moment’s notice that would be for 1-2 overnights per week. I worked there for three years and loved the job / company.
After that, I transitioned to the Medical Device industry where I worked for the next 30 years for the a few Fortune 500 companies. The passion and belief of helping patients was very meaningful to me.
My annual income started at $28,000 out of college and my high was at $597,000.
What tips do you have for others who want to grow their career-related income?
You should pick a job and career you love. My mother gave me an article my senior year of college that stated 17 out of 20 people hate their job and I thought that was sad. Remember that you spend more time at work than you do with loved ones at your home so make your career count.
Be open to relocation during your 20’s and 30’s. I moved around the Midwest to six different locations: Milwaukee, St. Louis, Denver, Chicago (twice) and Minneapolis. These relocations were for job promotions and new opportunities.
Ask yourself each year, “what value do you bring“ to your organization. If you struggle to answer that question, then perhaps you should not be paid any more than what you are now. If you are worth more, then prove it to you manager and others throughout the organization. There are a lot of opportunities waiting for people that prove their value and have the ambition to go after their dreams. Expect the best. Attitude is everything.
Volunteer for projects, at work and in your community, so you can build new skills, learn about leadership, meet more people, and create your brand as a results-oriented person.
I am inspired by one of my favorite Winston Churchill quotes “Success is not final. Failure is not fatal. It is the courage to continue that counts.”
As a leader of a large corporation, I was always amazed with how many people had low Emotional Intelligence. This is a critical skill set that you must learn and perfect if you are looking for leadership roles and upward mobility.
Consider going back to graduate school to get your Master of Business Administration while working in your late 20’s. Not only will this help you create an edge over others in the workplace, but you will truly benefit from seeing all aspects of the organization on how they work together. This advanced degree helped my career both financially and non-financially by building my skills to work cross functionally with a variety of departments.
Finally, my mother taught me that a hard work ethic would go a long way in life, and she was right. I am baffled with some people that think a job task may be under their level.
What is your work-life balance look like?
This has been a significant challenge my entire life while working. Especially, in my 20’s and 30’s as I worked 60 hours a week and really enjoyed it as I was rewarded with upward mobility.
I traveled 2-3 nights a week in my 30’s and 40’s so that was a sacrifice not being around my family.
Now as an early retiree not working, I do not have that work-life challenge. My wife and I are active in our health club working out at least 4 days or more a week, we hike in state parks or forest preservice at least once a week.
I started taking college classes to learn more variety of subjects and enjoy new hobbies.
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?
No, the only income came from our jobs before we retired and now through our investments in retirement.
What is your annual spending?
Our annual spending is $132,000 / year.
What are the main categories (expenses) this spending breaks into?
Here are our main annual expenses:
- $60,000 – Groceries, dining out, clothes, cell phone, health club, internet & cash
- $31,000 – Insurance: health, vision, dental, auto, home, umbrella, etc.
- $24,000 – Travel both international and domestic
- $12,000 – Home maintenance, property taxes & HOA fee’s
- $2,400 – Utilities
Do you have a budget? If so, how do you implement it?
Yes, we have budget and have tracked it the last 25 years. It has evolved over this period and now we are tracking the above categories.
I manage it through a simple spreadsheet and update it each month. Every year, I add a new tab to the spreadsheet. I must admit, it has been fun to look back over the last 25 years to see what our expenses & income have been and how they have changed over time.
This approach also helped us when we started doing our annual comprehensive financial plan with our financial planner starting 10 years ago. It was very easy to pull our expense data from our budget and forecast what it would be when we are retired. Doing both exercises, gave us more confidence that we could truly retire at age 53 years old.
What percentage of your gross income do you save and how has that changed over time?
In pre-retirement we were saving 24% of our gross income through our 401k’s, Employee Stock Purchase Plan (ESPP), non-deductible IRA’s and general savings account.
What is your best tip for saving money?
Live a lifestyle that is below your income so you can automatically save through payroll contributions and invest for your future.
Since I grew up in low income household, I was used to never having money.
My favorite Warren Buffett quote is “Investing is simple, but not easy.” This is so true!
What is your favorite thing to spend money on/your secret splurge?
Dining out and international travel are the top two ways we like to enjoy life.
Living in a large metropolitan and urban area, we have a lot of fantastic restaurants, so we take advantage of them.
We have been blessed to spend a lot of time overseas taking in new experiences, different cultures and meeting people all over the world. This makes for a great learning experience and fun way to live life.
What is your investment philosophy/plan?
Maximize all resources: 401k, ESPP, government programs like non-deductible IRA’s, 529 Plans and side savings.
Time value of money is a wonderful concept that taught me the earlier you start saving for your future, the better off your investments will be.
Dollar cost average investing so you save the same amount every two weeks no matter if the market is up, down, or flat.
Appropriate Asset Allocation for where you are at in life. We are in a growth portfolio model to enjoy higher rates of return. Our current asset allocation model is structured at US Equity 61%, International Equity 13%, Fixed Income / Bonds 22% and Cash 5%. We believe that the reward / risk is worth it since we have 40 plus years living in retirement. Sit back and watch your investments grow!
What has been your best investment?
My wife without a doubt has been my best investment. I am blessed to have met her and married her. She keeps me grounded. My daughter turned out to be amazing and started her career in Texas. I am very proud and lucky to have this family.
My education from undergraduate and graduate school paid dividends for me along with my early work experiences in high school and college. During my career, I was fortunate to be paid a lucrative total compensation package that grew each time I took on more responsibility.
Financially speaking, participating in my Employee Stock Purchase Plan (ESPP) because you buy in at 15% discount regardless if it is trending up, down or even. Where else can you be guaranteed return on investments of 15 percent!
Getting to a level of the organization where they supplement your compensation with incentive stock options in addition to your salary and bonuses. It is amazing how these can help you pay off your house mortgage and be another source to save for retirement.
What has been your worst investment?
In my 20’s, I tried “playing the market” with stock call and put options and lost over $30,000 in the market.
I remember going to a Stock Options Educational Forum and the first slide stated “80% of investors lose money” as their disclaimer. I remember reading that and saying I am a winner and not a loser so nothing to worry about….oh boy was I wrong, it was a great learning moment for me in life.
What has been your overall return?
We have averaged 7% return on investment.
How often do you monitor/review your portfolio?
We track each of our investments every month.
We monitor our expenses monthly.
We have a quarterly meeting with our Certified Financial Planner to review our portfolio to determine any course corrections in our asset allocation model and / or re-balance the portfolio.
We complete a compressive financial plan each year to make sure we are on course.
How did you accumulate your net worth?
I started in my 20’s and continued to increase the dollars each year in our investments.
I read constantly on how to grow my career with earnings, learn new ways to save and be aggressive with our investments.
What would you say is your greatest strength in the ESI wealth-building model (Earn, Save, or Invest) and why would you say it is tops?
We are blessed to have great high paying jobs and good mentors to save.
Investing in a diversified growth portfolio is my strength.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
I bought a luxury BMW car thinking I needed it for my social status in my life and it would make we feel great. Wrong, I just was spending money on an expensive depreciated asset.
We drive Honda and Mazda cars and are happy.
Do not feel you need to buy a new car every 4 years, instead we keep our cars until you need a new one, which could be 10 – 15 years.
Do not drink the Kool-Aid of get rich quick with buying calls and put stock options. That was a very valuable lesson I learned when I lost $30,000 in my 20’s.
What are you currently doing to maintain/grow your net worth?
I read daily on the economy, companies, international news, and all types of personal financial planning topics.
We regularly monitor our investments and expenses.
We make minor changes as needed to our portfolio through asset allocation modeling and rebalance.
Do you have a target net worth you are trying to attain?
No. We anticipate 40 years of living in retirements, so we have a “growth” asset allocation model.
Using the Monte Carlo simulation for our personal finance plan model, our CFP’s say we are good shape based on the outcome data using the portfolio models we use.
How old were you when you made your first million and have you had any significant behavior shifts since then?
I was 35 years old when I had my first million.
No, we have not had any significant behavior shifts since then. We have stayed the course for saving and investing the last 20 years.
What money mistakes have you made along the way that others can learn from?
When I was 30, I used a “stockbroker” instead of a Certified Financial Planner (CFP) to manage our money. He charged a ridiculous high fee of 1.5% for assets under management compared to the 0.4% we pay now.
All those annual costs we paid for the 5 years we were with him, were costly.
What advice do you have for ESI Money readers on how to become wealthy?
Be sure to read the book The Millionaire Next Door.
Live life to be enjoyable to yourself, your family, and friends.
Pick a job and industry that you love, not just like.
Excel at your job so the promotions and money will follow you. If you pursue money first, you will never be happy.
Find 1-2 successful family member or friends, preferably the ones that started an earlier retirement, that can mentor you on personal financial planning.
We use two different levels of service in a large financial investment company. First, we use “robo advisor” accounts for 2/3 of our money that charges us 0.3% and secondly, we use “private client relationship” accounts for 1/3 of our remaining money that charges us 0.5%. This hybrid approach has worked well for us the last five years with a blended expense of 0.4% between the two types of service we use. This helps us manage our expenses better without hindering our growth in our portfolio.
Take advantage of the 529 Plans for your children’s college education. The day my daughter was born, I opened a 529 account and put in $5,000 plus started making $400 monthly contributions to it. The plan was to continue until she started college, however the growth was so good that we stopped funding it when she was a sophomore in high school.
We paid 80% of her college and she paid 20% through scholarships and loans. The thought process was, if she has skin in the game, then she will get up for those 8:00 AM college classes instead of sleeping in and be motivated to graduate college.
Read lots of books and web sites on Personal Financial Planning.
Use a reputable Certified Financial Planner (CFP), not a financial consultant or advisor that anyone can call themselves. A CFP is a boarded role and has fiduciary responsibility to you as client. This reduces or eliminates any conflict of interest.
We prefer using a large public national financial service investment company that has different levels of service during our journey that could match our needs instead of working with a small private wealth management firm to help us with financial planning.
What are your plans regarding lifestyle?
We downsized our $600,000 house to a smaller $400,000 house a year before our early retirement.
We remain active by working out at our health club regularly and continue to educate ourselves on a wide variety of subjects through college courses.
What are your retirement plans?
We plan on doing a lot of international travel in retirement.
We started doing international travel when we were in our 40’s and have never looked back. We have been to many places around the globe including: Costa Rica, St. Kitts, Ecuador, Galapagos Island, Philippines, Montreal, Vancouver, Dubai, Abu Dhabi, Oman, Netherland, Thailand, London, Mexico City, Vietnam, Cambodia, and Singapore.
Our next adventure is Panama and many others in our bucket list for years to come.
Take college courses to continue learning variety of subjects.
Working out at our health club and hiking new places throughout our city and state.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
We have no major concerns about early retirement.
Health Care insurance is a minor worry. We budgeted $2,000 / month and that seems more than enough for our needs.
On the non-financial side, people asked me the first six months of early retirement if I was bored and was ready to go back to work. I always laughed when someone would say that to me. The reality of it is we are both busy doing the things that make us happy, active, and productive. We are blessed with our lives and have no plans to going back to work.
How did you learn about finances and at what age did it “click”?
I was fortunate to have learned at a young age of 25 from a family friend and my father in law.
These two individuals taught me the fundamental basics of saving and investing that included all types of equity, fixed income, importance of asset allocation and the dollar cost average.
Also, I really enjoy reading from many different sources on personal financial planning and the importance of it. I still consider myself a lifelong student of finance.
Who inspired you to excel in life? Who are your heroes?
My wife is amazing and a great life partner. She encourages me to be the best I could be and never settle. She has also been great at work / life balance as I struggled with this concept through my professional career. She always had a great perspective on life like enjoy new experiences, trying new food, different cultures and having strong family values. Again, I was lucky to meet her and marry her.
I was fortunate to have a Big Brother (from Big Brothers Big Sisters) as a child and maintained my friendship into adulthood for life in general.
Mentors were critical to my professional career. I was lucky to have met and worked with several influential people during different periods of my life that helped me grow my successful career. They never dodged my many, many questions on advice and getting their opinions.
For financial matters, my father in law who spent many Saturday mornings walking me through the basics of personal finance, stock, bonds, investing, etc.
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 – This is the best book ever on personal financial planning and how to live your life. This is one of the most influential books of my life.
Charles Schwab’s Guide to Financial Independence – This teaches how to use and leverage all company and government resources available for saving for your retirement.
Work Optional – This book helps you retire early in a non-penny pinching way and keep your head level in life.
Keys to a Successful Retirement – Focuses on the non-financial goals like staying happy, active, and productive in your retired years.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
Here are our annual donations that are 5% of our gross income:
- $2,000 – We tithe to our church.
- $3,000 – We donate to a non-profit professional mentoring national organization.
- $1,000 – Instead of exchanging Christmas gifts each year for my wife and I, we research a different non-profit organization every year that speaks to us on their needs and how we can support their mission by donating to it for that particular year. We started this 10 years ago and is one of the best things we have done as a married couple. Feels terrific.
Regarding our time, I am mentoring a 15-year boy now and find it very meaningful.
I also serve as an executive board member (not paid) to a large national non-profit children’s organization that is very rewarding.
I am an alumni of a national college fraternity and just joined a chapter advisor role of a college near us. I am looking forward to mentor some young men.
Finally, we have a donor advisor fund that we started through our financial service investment company that we use to help us make our donations. This has helped us reduce our taxes and donate more resources to the non-profit organizations. This is a win / win situation for all parties.
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 completed our estate planning that includes our will and other important documents.
Yes, we plan to distribute any leftover resources when we are both gone equally to family members and non-profit organizations.
My final thoughts to the ESI Millionaire readers are to believe in yourself, push your limits, experience life, conquer your goals and be happy. People think early retirement can happen based on the financial success only and I strongly disagree with that premise. An author once said, while your financial wealth is an important aspect in life, lets also remember that your time / freedom and physician health is even more important to have a happy, active and productive retirement.
Best of luck and enjoy your life journey!