Millionaire Interview 285

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 August.

My questions are in bold italics and their 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 46 and my husband is 48.

We have been married for 26 yrs.

Do you have kids/family (if so, how old are they)?

We have no children but we are a favored aunt and uncle to our closest friends’ kids.

What area of the country do you live in (and urban or rural)?

We live in a suburb of a very large city in the southwest.

What is your current net worth?

$3,820,000

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?

• 401Ks: $2,287,000
• Roth IRAs: $122,000
• After Tax Brokerage: $500,000
• CDs/Cash: $178,600
• Employer Cash Balances: $79,300 (no employer contribution, just earns interest)
• HSAs: $14,100
• House: $605,000 (paid in full)
• Cars: $34,000

EARN

What is your job?

I should start by saying I ended up in a career I neither planned for nor had interest in but life’s what happens when you are making other plans. 🙂

I am in a senior level compliance/auditing role in the IT division at one of the country’s biggest financial institutions. I have worked here for 25 years in 3 different roles.

Until April of this year (more on that later), my husband was also at the same financial institution in a risk management role. He worked here for 20 years.

What is your annual income?

My base salary is $130,000 with a bonus potential of 15%.

I will also include my husband’s salary prior to April 2021 as the entirety of our marriage until that point was spent as a dual income couple.

His ending base pay was $150,000 with a 30% bonus potential.

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 was at a fast food chicken restaurant making $3.50/hr in 1991. My job was to run the cash register, wipe down tables and clean the bathroom. One day I went to clean the bathroom and a customer had destroyed (not literally) the toilet. It was so bad that I decided I was done cleaning up after others and went to a local drug store making $5.50/hr. It was here at age 17 that I met my husband.

Out of high school I went to college with a major in psychology. I got a job supporting credit card terminals for $8/hr while I went to school from 1993-1995.

Husband worked for a different big bank making $7.25 as a collector. We got married in 1995 and my father decided he was no longer paying for my college because I was a married woman. Husband and I didn’t have much money so I dropped out of college. The following year in 1996 the credit card terminal company relocated and I had to find another job.

I got 2 job offers the same day…$9 doing customer service at DHL full time or $10/hr doing computer help desk technical support at a big bank as a contractor. I HATED computers and had no interest whatsoever in learning about them. But I took it because I wanted that extra dollar. Six months later in 1997 I was doing well and was offered a full time position for $25k a year.

A year and a half later a manager position opened up and I was encouraged to apply for it. It would be managing 20+ people and I had no experience managing except for being a lead cashier at the drugstore. Regardless I applied and it was me and 6 men going for the position, all of them older than me…I was 22 yrs old.

I got the job, got a pay raise to $30k and faced all the comments, speculation, jealousy, etc by a couple of those that were passed over. I had to prove I didn’t just get the job because I was a woman. It was at this time my manager suggested I finish my college degree. The bank was going to pay for most of it so I agreed to go back, but instead of psychology I changed majors to Business Information Systems since it seemed to align with my career path.

My husband enrolled in the same curriculum as I along with one of our best friends. We graduated together in 2000.

I was tired of the BS management can bring by then and transitioned to a project role in information security making $39K. This was from 2000-2005. My husband also came to my bank in an IT role in 2001. He was hired at 42K/yr.

In 2005 a new manager announced he was doing away with project roles and our whole team had to find another job or get laid off. I found my current job as a compliance person at the same bank and was hired into that role at 75K.

In 2008 I had a strong pull to do something else. I wanted to be helping people, not sitting at a computer all day. I began volunteering as a police patrol person, assisting officers at accidents, helping stranded motorists, writing parking violations, etc. I did this a night or two a week for 2 years while seriously contemplating quitting the bank to become a police officer. I had my husband’s support and was 90% mentally and physically prepared to make the career change.

Ultimately health issues intervened and that dream was off the table. I was very sad but after a year or so decided that I was going to take the blessings I had from having this good job at the bank and reach for FIRE by age 50.

The subsequent 15 years of raises led to the 130K I’m at today. The bank has given mediocre 2% raises annually the past several years so the salary hasn’t grown as high as it could have if I had made job changes or worked elsewhere. I own that choice and I’ve mainly stayed because I have an excellent boss and coworkers.

My husband got into risk in 2011 and assumed ownership of a niche product that literally one other person in the bank had knowledge of. He did well in this role and got 3-4 promotions over a 10 yr period, ending as a manager of the product until this past April.

What tips do you have for others who want to grow their career-related income?

Be likeable. More than any degree/certification/technical skill, etc, if you are not a team player and likeable there is a high probability you will not get as far ahead as you could have. Keep relationships strong as you never know when you may need a helping hand and a colleague remembers you and puts in a good word for you.

Deliver work on time or earlier than you committed to. Become dependable.

Know what you do not know. I do not always have the answers to my users’ questions. I admit I don’t know and then go find the answer and circle back. Your honesty and follow-up will encourage people to trust you.

Understand sometimes you have to do the work for a while before you get promoted for it.

What’s your work-life balance look like?

In my 2 prior roles here I worked swing shift, graveyard, weekends, holidays and had to provide on call support every 6 weeks. I remember one particular weekend I got 31 calls. I do not miss that!

Now it is excellent. My boss is a great guy who strongly believes in work/life balance. He does not watch the clock and charge people PTO for appointments, etc. As long as we are getting the job done he is happy. And when he asks the team to step up they do because he does a lot for us.

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?

The only other income we have is dividends and interest from the brokerage and CDs.

This kicks out about $20K a year which we’ve continued to reinvest.

SAVE

What is your annual spending?

About $85,000.

What are the main categories (expenses) this spending breaks into?

• Groceries $7200
• Electricity/Water/Gas: $4300
• Gas for cars: $1000
• Home/auto/umbrella insurance: $2650
• House maintenance: $1500
• Property Tax: $2700
• Landscaping / pest control / cleaning people: $3600
• Cash: $6000
• Cable/internet/cell phones: $4700
• Non monthly expenses (birthdays, Christmas, HOA, car tags, alarm etc): $9000
• Travel: $18,000
• Golf club membership: $600
• Massage membership: $1800
• Misc eating out / shopping / salon / movies etc: $15,000

The remaining 10K we allow ourselves from our bonuses to do upgrades on our home.

Do you have a budget? If so, how do you implement it?

Yes. I have maintained a paper budget since the day we got married. I monitor it very closely and we adjust as necessary.

We discuss together how we want to allot things and then I take it from there. It’s interesting to keep track as I can see where over time we’ve allowed spending to increase. Mainly in the food and travel categories. We ate a lot of ramen and $1 Totino’s pizza in the beginning. 🙂

Today we allow about $1200/mo for misc stuff–amazon/golf/eating out, etc and when it’s gone we patiently wait til the next cycle if we want something.

What percentage of your gross income do you save and how has that changed over time?

As of April of this year we were saving approximately 40% of our income. We lived on 30%, saved 40% and taxes/payroll deductions took up the other 30%.

Our company match is 6%. We started contributing this amount in the mid-late 90’s and used excess income to aggressively pay off a car (42K) and my small student loan (6k). After the car was paid off we saved the payment every month and since 2005 have bought cars for cash. We do buy new but we each get one every 10-12 yrs. I am currently driving a 2011 and he drives a 2014.

After 2005, every time we got raises (in those years the bank gave 5-7%) we would put half of it into our 401ks, eventually to the point where we were each doing the annual max. We then opened Roth IRAs and contributed until we exceeded the income limit. This system worked well for us because we still felt like we had more spending money since we did allow ourselves some of our raises.

After the Roth was no longer available to us we began to aggressively pay down our mortgage by paying double payments monthly. It was paid off in 2015. Fortunately I had listened to my husband when he said we should go to a 15 yr mortgage in 2005. We saved nearly a hundred thousand in interest doing this. After the payoff we then began saving the double payments in CDs and after 2 years of that switched it to investing in our brokerage.

What’s your best tip for saving (accumulating) money?

Out of sight out of mind. We set up 2 bank accounts, 1 is for savings/brokerage and 1 is for daily living. Since savings is taken out first we don’t have to consciously decide to put it aside. The daily living account is at a credit union where they allow multiple “buckets” under 1 account #. This has helped separate vacation / house maintenance / non-monthly, etc and makes it easier to manage.

Save half of all raises. You feel good seeing your net worth grow and you still get a small bump for your present self too. You already were living on the old salary so this hopefully should be attainable.

Start saving early so you have more options/choices sooner if you want to change careers or if health issues intervene in your plans.

If possible/tolerable, get roommates. We rented 2 rooms to our friends in the late 90’s and saved all the rent $. It furnished the house we built in 2001.

Avoid interest-bearing debts as much as possible. Ensure paying off your home, credit card, and auto finance debts is a priority.

What’s your best tip for spending less money?

Use coupons for stores and restaurants if available. A friend of mine’s mother said to me “I don’t need to use those anymore.” I was amused. Really? I don’t either but why would I give the business money that I could be keeping?

My husband and I use the 2 week rule. If we see something we want say for over $200, we wait a couple weeks and then ask ourselves, did I think about that item a lot during this time? If not, we don’t buy it. If we’re still interested, we make the purchase within budget constraints.

Try to limit a home purchase to no more than 3 – 3 ½ times your annual salary. The bigger the house the more to maintain/cool/heat/landscape, etc. As our income grew it was very tempting to buy a more expensive home, but instead we continue to update our current one and we’re as happy here now as 20 years ago when we built it.

Maintain consistent communication with your spouse/partner about expenses.

What is your favorite thing to spend money on/your secret splurge?

Travel as evidenced by that category above. LOL.

We both LOVE cruises, Vegas, group tours, traveling with friends and family, etc.

We’ve been to several countries and cannot wait til Covid restrictions ease so we can resume this.

Husband is an avid golfer — he will pay for a good club or a nice golf course.

A couple times a year we’ll visit an expensive seafood restaurant or steakhouse.

I have a thing for watches and will indulge in a nice one on a milestone birthday or anniversary.

INVEST

What is your investment philosophy/plan?

Maxed out 401ks for years — currently invested in small, midcap and large cap index funds plus company stock. All dividends reinvested. The equity/bond ratio is pretty aggressive in these as we do not intend to use these for 11 yrs. We will start to adjust the ratios as we do Roth IRA conversions.

We reduced the 401K contribution to 6% a few years back so that we could focus on investing in our brokerage instead. We put 6K a month in here the past few years. We realized if we want to retire early we have to have after tax money to live on for at least 5 yrs while Roth conversions occur. Husband extensively researched dividend producing ETFs and the brokerage is invested in 60% equity ETFs/stocks and 40% fixed income ETFs.

What has been your best investment?

The man I married. Although I’m happy to say it’s worked out for us, I’d recommend people wait until they are a bit older than 19 & 22 to tie the knot. Maturity comes a bit later. 🙂 All kidding aside, we both came from very frugal households and were taught a strong work ethic at a young age. Having like minded spending/saving philosophies has definitely contributed to where we are in life today.

Educating ourselves on finance. Since I discovered FIRE blogs, I have obtained so much useful information that I didn’t formerly know about or understand. Things like ETF suggestions, understanding the impact of investment fees, ROTH conversions, retirement calculators, how to navigate the ACA health insurance, etc. As a result we’ve been able to change investing strategies and plan for the future differently.

What has been your worst investment?

MCI Worldcom right before the dot.com blowup. It was literally our 1st year investing outside our 401 and we lost a couple thousand dollars.

The other was a local company that was going to be selling some great handguns to the military and was supposed to make us a ton. Husband’s uncle talked us into buying $2500 worth of stock because the CEO was some friend in the real estate business with him. It ended up being a Ponzi scheme and the CEO killed himself after getting indicted. UGH. We had no business forking over $2500 as we were barely engaged and didn’t have much in savings.

What’s been your overall return?

About 10-12%.

Roths have averaged around 11%, Brokerage around 9% and 401ks about 12%.

How often do you monitor/review your portfolio?

Way too often. Daily.

During March of 2020 I was watching market movement and investing when the market would tank. That was a tough month to stomach.

NET WORTH

How did you accumulate your net worth?

Outside of an inheritance of $45K I received at my grandparents’ death in the last 2 years, all other contributions to our net worth have been from our jobs and methodical investing every month over the course of 26 years in the ways I outlined above.

We made $25K combined the year we married. Over time we grew our careers and tried hard to not inflate our lifestyle too much.

We also stayed the course and continued to invest during the dot.com, Great Recession and Covid related stock market plunges.

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?

Saving.

I could have earned more had I returned to management, switched positions or changed companies. I say savings over investing because although our investments have done fairly well, it’s the amount of money we’ve been able to save that really made the difference.

What road bumps did you face along the way to becoming a millionaire and how did you handle them?

Mainly being dispassionate about what I do for a living.

I’ve long had a call to help others and want to become a volunteer financial coach and also return to volunteering with police. So in 2010 after realizing I wasn’t going to be able to become a police officer, I decided to look at my job as a means to be done working earlier so I could pursue the other things I want to do without the constraints of a full time job.

What are you currently doing to maintain/grow your net worth?

I continue to work and invest 6% to get the company match. We also save about $400 a month outside of that, but we are reaching the end of the accumulation phase.

My husband’s managerial role was very stressful. He was on edge, thinking about work on weekends and very, very unhappy. Most of our disputes were about his job. We had planned to retire together in April 2023.

This last year was a real eye opener for him. We knew some older people that passed from covid, my oldest friend died suddenly at 45, and another dear friend had a quintuple bypass at 44 and then was diagnosed with stage 4 cancer a month later. My husband told me on his birthday earlier this year that he wanted to retire before he died from stress. We agreed and he quit on April 9th.

He has taken 5 months off to decompress and is now looking into a butchering job as he loves cooking. He is happier and taking care of his health now. He’s also had time to cook for our sick friend and do multiple projects around the house that have saved us thousands. It’s been wonderful to see.

Do you have a target net worth you are trying to attain?

Originally it was $2,800,000 (not including cars and house) for $98K a year at a 3.5% withdrawal rate.

How old were you when you made your first million and have you had any significant behavior shifts since then?

I was 34.

There wasn’t a big behavior shift. I think I told my husband and he shrugged and said “cool, let’s keep going.”

What money mistakes have you made along the way that others can learn from?

Several! LOL.

Bought our first house for $115k with a $109k mortgage. We allowed this guy to come over to sell us whole life mortgage insurance for $73/mo that reduces in value as the mortgage is paid down. Not sure what the he- we were thinking but we realized after about 6 months we could simply get more life insurance through work for far cheaper and it wouldn’t decrease in value.

Went to open husband’s Roth IRA in 2005ish with $3000 to invest. Banker was snide and said she wasn’t used to dealing with such a low amount but would do us a favor and help anyway. Husband tells her not to put it into any front loaded mutual funds. You guessed it, she did, earned her cut and we didn’t figure it out until a couple years later.

Back to credit card terminal support job from age 18.5-21. An older man I worked with asked me if I was contributing to my 401k because the company matched 5%. I laughed and said “dude I’m 18. No, I’ve got plenty of time.” When the time came for me to leave and go to the banking job, he pulled me aside and said “hey I want to tell you before you go that had you invested in your 401k, gotten the match and with the market’s good performance of late you’d have had about $10k.” I felt so stupid. I enrolled in the 401k at the bank the first day I was eligible at age 21. Today I tell that story to my friend’s kids and they are investing at very young ages.

What advice do you have for ESI Money readers on how to become wealthy?

A lot of what many of the other millionaire interviews have said.

It’s hard but try not to keep up with everyone else. There will always be people with more money than you. At your death people are not going to talk about how big a house you had or what kind of car you drove, they will remember what kind of friend, mentor, spouse, parent, sibling you were.

It is not about how much you earn, it’s about how much you spend.

FUTURE

What are your plans for the future regarding lifestyle?

I’m fairly certain due to the recent stock market run up that we’ll be ok if I quit in 18 months when I’m 47.

There is also the possibility of a layoff as the product I support is being retired. I have done endless calculations and frequently fear I’m stuck in the one more year syndrome as the calculators show it’s ok to go now.

What are your retirement plans?

Travel.

Volunteer as a financial coach — ideally with women who are on their own for the first time and have no experience managing money or with youth as there doesn’t seem to be any focus in high schools on teaching personal finance.

I’d also like to volunteer again at the police dept.

Additionally the husband and I would like to volunteer together at a food bank.

Learn to play pickleball.

Take daily walks with the husband.

Yoga.

Read.

Spend time with loved ones.

Financially speaking, we will live on the brokerage and cash for 9 yrs until he’s 59.5 and eligible to withdraw from his 401/Roth and do Roth IRA conversions prior to that once I stop working. We’ll also have dividend income of around 30K a year between the brokerage and our bank stock once we turn off dividend reinvestment. We will use our cash balance plans to pay for the ACA premiums.

Are there any issues in retirement that concern you? If so, how are you planning to address them?

I would say until this past year I’ve been a huge planner and constantly wonder if I’m accounting for everything.

But lately I’ve felt differently after some of the above mentioned experiences last year.

Now I think the worst case scenario is we have to go back to work part time.

Otherwise I want to enjoy life and do something more meaningful.

MISCELLANEOUS

How did you learn about finances and at what age did it “click”?

I learned to save at a younger age but several people/blogs along the way helped. First was the man at the credit card co that let me know I had left 10K on the table by not investing in my 401k. That got me immediately investing at my next job.

Around 2005 I started religiously watching the Suze Orman show on CNBC and read several of her books. I was inspired that a woman who was waitressing at 30 went on to become so successful. She’s a huge champion for women getting more involved in money management and growing their careers.

In 2014 or 2015, a friend of mine who also watched Suze mentioned he came across a blog he thought I’d like. It was ESI Money. 🙂 Since that time I’ve become a voracious consumer of FIRE blogs and as referenced above, learned so much from these writers that I probably wouldn’t have otherwise. I probably read 30 articles a week across many different blogs I subscribe to. Specific articles that keep resonating with me relate to One More Year Syndrome and When You’ve Won the Game Quit Playing.

When my husband quit his job it was hard to not think about all the $ left on the table. He had started receiving RSUs worth thousands once they vested. He walked away from it all. But seeing him happier, reading and rereading the blog posts mentioned, life is about more than money and I’m going to take the leap soon too. I thank all the writers who’ve led me to this point, not just ESI but several others.

Who inspired you to excel in life? Who are your heroes?

My grandparents on my mother’s side. They immigrated to this country with $400 to their name and ran a small convenience store. They worked their butts off, taking 1 day off a year on Christmas. They were very generous with us and I lived with them for a while in my teen years. I saw how hard they worked to climb out of poverty and have a good life here.

My grandfather on my dad’s side. He lived through the Great Depression and unfortunately was a POW in Germany during WWII. He came out and worked hard as an engineer and then later as a financial planner. He would always tell me to buy Merck stock, like when I was 10. LOL. I saw how well he did with his money, but in all honesty he was way, way too frugal and probably died the richest man in the cemetery. I think lots of folks from that era worried about losing it all after the GD.

My father was one of the hardest workers I know before he retired at age 63. Like 80-100 hours a week all the time but he still made time to come watch me play softball or run track. He had us save 50% of all birthday and Christmas gifts for “a rainy day.” He now tells me he was too frugal with our family and tells me to save less LOL.

My husband’s inspiration came from a lesson from his father about the power of compounding interest — “Take a penny that doubles each day for a month or $1 million”. This exercise encouraged him to save and invest in a 401k as early as it became available at his first job.

I think with these folks as examples, I’ve strived to have a good balance of saving and still living/enjoying life now.

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?

Some of the old faves frequently mentioned:

• The Millionaire Next Door — I really enjoyed learning the characteristics of wealthy people in America
• Your Money or Your Life — This book really puts into perspective whether what you spend $ on is in line with your values.
• Rich Dad Poor Dad — This was a good overview on how to make your money work for you. And also that you don’t need to earn a ton of money to become wealthy.

Do you give to charity? Why or why not? If you do, what percent of time/money do you give?

Yes, for many years via payroll deduction to the American Cancer Society (him) and me to a local domestic violence shelter. We also do food bank financial donations at Christmas that our company matches. If any stories in the news resonate with us we will do contributions to a few go fund me accounts each year.

As mentioned I also volunteered my time at the police station prior to some health issues which are now mostly resolved and I look forward to getting back to that. Also my husband mentored a young boy from age 12-18 under the Big Brother Big sisters program. We look forward to doing much more volunteering in the coming years.

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?

Our estate plan is split up between my 2 brothers, my niece and nephew, a few of his relatives in his birth country and then with some very close friends that are like family to us.

They have been there during not only our most triumphant moments but also in times of darkness. We’d like to thank them.