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 September.
This is another long interview (which seems to be a trend lately), so I’ll break it into two parts.
My questions are in bold italics and their responses follow in black.
Let’s get started…
How old are you (and spouse if applicable, plus how long you’ve been married)?
The love of my life is just about a year older than me. I am currently forty-seven years young. We were married on a beach in MD in 2011.
If I were to sum up her life with one hashtag each, hers would be #LivingThePlantLife, mine would be #LivingTheDiveLife.
More on these later.
Do you have kids/family (if so, how old are they)?
We decided not to have children but have chosen to offer a loving and supporting role in our nieces and nephew’s lives instead.
We are guardians and host a zoo full of rescued pets. We are constantly amused by our three dogs, two cats and one little bird.
What area of the country do you live in (and urban or rural)?
My wife and I met while living in the Washington, D.C., capital area. She was a city girl and I was fine living just outside of the city in a popular multifamily HOA suburb lifestyle.
We now reside in a quiet rural neighborhood located down south in the gold coast area of Florida.
What is your current net worth?
We are currently blessed with a 1.7M+ portfolio.
It is comprised of 70% stocks and 30% real estate.
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?
Total investments are currently at 1.2M+
- 94% total stock market/ international; 6% total bond market
- Pre tax combined 401K – 638K
- Pre tax combined SEP – 60K
- No tax combined Roth – 382K
- No tax combined HSA – 22K
- Post tax combined brokerage – 105K
- Combined Cash – 30K
- Whole Life Insurance cash value – 30K
- Primary residence equity – 215K
- DC condo rental equity – 230K
Less than 250K remains on the combined mortgages (our only debt). Credit cards are paid off each month- $0 balance. Education loans were paid off years ago.
We also have two modest depreciating assets – the cars are always paid in full since 2011/2013 (no value calculated in NW). I offer a recommended strategy below.
What is your job?
I have already left corporate America in 2018. I took a year off to decompress, evaluate and plan our next move.
I decided to take a 75% pay cut to work two part time side hustles/hobbies in the hospitality and boat repair industries. Both are 1099 cash based LLC incomes. They are individual contributor roles by choice in order to simplify my life.
My wife remains fully engaged with corporate but works from our home office in the publishing industry. She does not have a daily commute or do any travel for work.
What is your annual income?
By choice, I have set up a current budget of about 30K moving forward until I get the itch to do otherwise.
Hers is in the low 6 digits.
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?
Since twelve years old I have worked. Initially I mowed lawns, did paper routes, shoveled snow and babysat every chance that I could get.
I worked through high school at the local donut shop starting at $4 something an hour. I also painted houses through college summers and breaks.
My first job after receiving a BS in college was at McDonald’s earning less than 21K in 1997, LoL.
I worked in retail after that for a few years. While there, I fell in love with the staffing and interviewing portion of those jobs while working in middle management.
I took the big leap to recruiting in 2000 and remained in that field until 2018. I helped 1000’s of people find new careers as well as led teams of recruiters who supported multi-million contract deliveries that lasted multiple years for commercial clients as well as the Federal Government.
According to the Social Security website, below is my earning history after pre tax retirement contributions have been taken out.
- 1989 – $350
- 1990 – $1,522
- 1991 – $4,412
- 1992 – $4,511
- 1993 – $3,617
- 1994 – $629
- 1995 – $0
- 1996 – $5,353
- 1997 – $20,627
- 1998 – $29,085
- 1999 – $31,138
- 2000 – $32,188
- 2001 – $43,531
- 2002 – $26,558
- 2003 – $39,445
- 2004 – $35,581
- 2005 – $35,849
- 2006 – $47,223
- 2007 – $39,215
- 2008 – $53,963
- 2009 – $57,770
- 2010 – $74,766
- 2011 – $89,497
- 2012 – $87,017
- 2013 – $91,086
- 2014 – $103,960
- 2015 – $39,432
- 2016 – $118,500
- 2017 – $127,200
- 2018 – $25,614
- 2019 – $0
- 2020 – $6,023
I prefer not to disclose my wife’s salary history.
What tips do you have for others who want to grow their career-related income?
Employers do not over compensate you for doing what you were hired to do. Bonuses are paid for doing the work that is not asked of you and for helping to make your direct boss look good.
Create and track your performance with stated and measurable goals in January of each year or at the start of your fiscal calendar year. Review your deliverables on a quarterly basis at a minimum with your direct boss. If you wait until a few months before your annual review time; it is too late to do more of something that you are doing well or possibly curtail behavior if it needs to be adjusted.
Always give your boss a solution if you identify a problem. If they are unwilling to do something or you don’t have the autonomy to make the change happen yourself, always give them a chance to respond prior to going to the next level of management to make your recommended changes.
Finally, participate in company events and make it seem like you are having fun. This includes going out for lunch with your colleagues on a semi regular basis as well. You don’t have to be bff’s or anything, just fake it until you make it if need be.
Volunteer in your industry. Identify social media moderator or online admin roles that you can use to help the industry flourish that you support. It could be conferences, after work social meetups or even produce short video tips and tricks on YouTube and become the influencer that you always dreamed of becoming. Become a trusted advisor in your space.
I did not apply to the last three career moves that I made. I was invited in for a meeting and took a solutions selling approach. I asked detailed questions to uncover problems in their work flow and offered a few solutions. After each meeting (usually 5-7 before an offer was made) the content deliverables became more and more detailed.
What’s your work-life balance look like?
My wife has always held the traditional 40 hour work week, home on the weekends.
I used to live in front of a laptop answering 250+ emails a day 6 days a week. Most weeks I had my 40 hours in before taking lunch on Wednesday.
After burning out in 2018, life has gotten so much simpler for me professionally allowing so much more time to focus on family and friends.
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?
Before leaving corporate, I started to work part time on evenings and weekends teaching scuba diving for about five years earning about 4-6K annually. I was not concerned about the compensation rather than the chance to buy gear at cost and or barter for services and learn how to be an instructor.
I wanted to see if there was a legitimate chance to turn the part time hobby into a full time lifestyle change which included a relocation to a lower cost area of the country with a warmer climate. The second phase of that plan went into effect in 2018 when we downsized and relocated to Florida so I could turn that PT side hustle into FT play time.
I also had other types of work fall into my lap. I started boat painting and repair work after working on my boss’s boat for a few months last year. After that boat was ready to sail several people have approached me to help me with their projects as well. There is nothing like meeting an outstanding craftsman willing to teach, willingness on my part and on the job training to turn inexperience into deliverable results.
What is your annual spending?
Currently we spend about 85K of our combined earnings of 137K.
What are the main categories (expenses) this spending breaks into?
By far the largest expense is paying ourselves first with over 47K towards our financial future.
The second is the primary mortgage at $9,000/750 a month. Tenants have mostly paid a condo loan down to less than a dozen years.
Line items 3-4 are our grocery bill and vet/pet food for our fur babies at about 12K annually for both.
Insurance of all types (umbrella, liability, auto, home, and health) at about 4K annually would round off the top five list.
We carve out volunteer time for several different causes which have no financial incentive or burden, but we firmly believe in giving back to less fortunate causes or folks than ourselves.
Do you have a budget? If so, how do you implement it?
I like to know where the income and expense goes, so technically yes but it has been on autopilot for years.
I mostly use Personal Capital by logging in twice a month to double check if the correct categories are assigned.
We have a quarterly wine, seltzer and pizza party to financially check in with each other. I give her a quick debrief of our progress since she has given me complete fiduciary access to all of her financial information. She has no desire or interest to manage this minutia but trusts me to have our best interests at heart.
I also run an annual Pralana Gold Retirement Calculator (PRC) audit and update our totals from the previous year around the first of each year just for my own consideration. This type of granularity would put her to sleep.
Besides the pizza and a bottle of red “bribe” is well worth it to ensure that our goals remain on the same page. 😉
What percentage of your gross income do you save and how has that changed over time?
Currently we save a combined total of 35% of our gross income. I save 53% and she saves 30% of our respective earned incomes.
We max out her 401K at $19,500. Our Roths at 12K. Our SEPS at 3K. Our HSAs at $7K+ and finally we add an extra 6K towards the principal on the investment property. The last few years’ savings has been about 47K annually.
When I was working in corporate America, the savings percentages were a bit higher than 45% along with the principal payment amounts on both mortgages.
Seeing John mention over the years that he either over-saved or could have retired earlier gives me pause to not fall into that same trap.
We plan on allowing our invested assets the chance to double prior to initiating the drawdown at about 3.25%.
Simply having enough to cover our expenses, help family members if and when needed and give away the extra at the end is enough of a solid goal for both of us.
What’s your best tip for saving (accumulating) money?
Good old Nike said it best. Just Do It!
I remember getting one of my first apartments after college for $600 a month. It was important for me to budget $167 a month for Roth (2K back then) and receive the company 401K match at 5% of my small salary. I bought my first town home at the age of 23. No way was I going to let a landlord get rich off of me. I wanted to start earning equity ASAP.
After selling the first home, I have no longer had to pay PMI since I was putting down more than 20% each time. Since then, I have bought and sold two other properties by myself. I could have afforded larger places or nicer cars but what would I have to show for all my hard earned dollars? I always bought starter sized homes since I know they always sell quickly and appreciate 4-6% annually. As for the recently bought hopeful forever home, I put down more than 50% at closing but rented for a year prior to doing so.
My wife’s experiences are very similar to mine which has impressed me since meeting her in 2009.
If you have a spouse and access to an HSA account, open up two accounts, put in equal amounts to get the current 2021 annual max of $7,200.
When the first spouse turns 55, you can add an additional 1K into both accounts to sock away 9K+ annually. Most FI bloggers fail to mention this little additional 1K tip. We do not plan on using ours until the age of 65 to help keep our AGI down.
After tax accounts are so precious to us. Having long term capital gains over multiple decades with no tax liability are the key for us to solving a large portion of our healthcare conundrum.
We plan on paying for our co-pays, any medication or any other healthcare related costs with a credit card so we can receive the points. The HSA account will then pay the credit card off.
What’s your best tip for spending less money?
If you aren’t going to be your biggest advocate then who will?
Since I received a bi-monthly paycheck for most of my career, I paid my main credit card twice a month. I first paid $200 every 2 weeks towards my main credit card.
As my career income grew, so did some of my lifestyle creep but not by much. Sometimes I received a credit card bill and it listed a credit, sometimes I had a small amount due. If I “needed” to buy a large item, I tightened up the spending for a few months prior. Once I had enough credit on my credit card, then and only then did I make the purchase.
Before downshifting my employment, I used to run everything through my card. I have earned more than 3K in lifetime cash back points. Since 1992, I have paid less than $10 in interest charges on my primary credit card with this strategy. If I could do it, then surely you can as well with proper planning.
My wife and I have both agreed that we do not need to consult with each other for a purchase less than $500. We run things past one another prior to the purchase if it is above this threshold.
There is a big difference to needs versus wants. The sooner you learn this, the easier your FI journey will be.
What is your favorite thing to spend money on/your secret splurge?
Fresh cut flowers for my bride. She does not have to wait for a special occasion or event in order to receive them from me for us both to enjoy. Usually they show up on or around our wedding anniversary date on the 18th or was that the 28th? LoL
We also enjoy landscaping as well as gardening. This is where my wife gets her #LivingThePlantLife. I taught her everything that I knew from my grandfather’s teachings. He raised more than 5 acres of crops for personal consumption to support two households as I was growing up. That teaching rubbed off on me, and now in turn I have shared my love of slowing down in life to let my wife and I admire plants in their respective bloom cycles together. While living at the DC area townhome that was sold in 2018, we had 7 different bloom cycles incorporated into the landscape.
This is the second summer that we have been at our hopeful forever home and have been buying native plants at our local nurseries left and right to incorporate into our oasis.
What is your investment philosophy/plan?
“When others are fearful, be greedy. When others are greedy, be fearful.” – Warren Buffett
“The time to buy is when there’s blood in the streets…even if the blood is your own.” – Baron Rothschild
Both of these quotes resonate with me. I forgot where and when I read these but keep them on my personal finance long-term memory jogger Google sheet. I started it in 2018 while I was recovering from burnout from corporate. Currently the document has over 7000 words on 14+ pages.
Each time I read something that I might want to implement, I take a mental note, do more research and write more “homework” notes to myself to save for future reference or potential implementation. I talk about my findings on occasion to others and sometimes share the 30,000 foot concept with my wife for consideration to green light and implement.
Learn to invest small amounts of money for longer periods of time. For example, I pay a small monthly “car payment” to myself but it is an actual investment added to my brokerage account for the life of the use of the car, usually around 10-12 years. I get the quarterly dividends and stock appreciation over the duration of driving the car. So far since my 20’s I always cash in long-term capital gains when it is time to get a new or used ride. Rinse and repeat.
Every car dealer says that you can’t use a credit card, but that is hog wash. Every Finance manager who wants to close the sale ends up charging multiple $4,990 transactions to get the cc points, then pay that credit card bill off from the previously mentioned brokerage account. Sign a few papers in front of the finance manager, then mention the small credit card charges. If they balk, stand up and proceed to the door. Not once have I made it to the end of the hallway before being called back into their office.
Most of the time my wife and I are driving “free” cars thanks to Mr. Market minus the small taxes that are owed on the total stock market sale.
What has been your best investment?
In myself by paying myself first. Discipline with savings for my/our future and the art of practicing delayed gratification.
Every raise I received from work after changing jobs, half of that increased income would get invested moving forward. Each career advancement pay increase was treated the same as well.
I never made a career change for anything less than a 15% increase or more. 100% of every bonus received would also get invested as well.
If we could have paid the bills before, what rationalization could change the desire to spend that money on a newly desired something shiny? Sure, an extra nice dinner and the theater night out on the town would happen, but that was the extent of what we did with those large cash infusions for either of our promotions or newly added clients to support.
100% of any side hustle income also gets invested instead of being spent on frivolous items.
As stated before, paying ourselves first in the total stock market VTSAX/FSKAX was crucial to our modest success. I learned to trust the rule 72 formula for quick investment calculations to double within each account. I base that off a very conservative (5.5%) stock market return over 13 years. Your mileage may vary.
I believe installing our own 9.6 kW DC STC solar panel system with net metering also qualifies as income. We believe that it is the socially responsible thing to do as well. We invested 18K cash and are realizing approximately $1,500 a year in savings. We now have a $10 a month electric utility bill.
I did our own install so labor was “free”. I view this mini investment as an inflation protected bond that pays monthly dividends. The cost of power generation will always go up. The break even on this investment is approximately 8-9 years. This year’s Federal credit on our tax return will result in almost 5K off to boot!
With our current negative bond forecast for the next decade, we can continue to keep more of an equity stake in our portfolio. In essence, we have created a synthetic bond. When it is time to replace our cars, we plan on investing in hybrids or EV’s to further take advantage of this small investment.
What has been your worst investment?
Investing during the series A round into a startup. I actually volunteered for over 6 months of free payroll in exchange for more company shares. Once we had 14 employees, I invested 50K to help make an impact towards ongoing expenses. Within a year everything folded. What is even worse, my wife even got involved on the company’s payroll as well.
Those were the most expensive laptops and monitors that we have bought in our lives since they were our parting gifts!
At one point I calculated that we lost over 150K and almost a year’s worth of regular salary working elsewhere. He shoots and doesn’t score. 🙁
Once I bought a tip from a stranger regarding some American funds that were class A shares that came with a 5.75% front end loaded fee. Thank goodness it was for only 20K and stayed in that position for less than 3 years before wising up with that annual .75% ER.
What’s been your overall return?
Between my legacy positions over the last 30+ years held at Sharebuilder, Janus and now everything consolidated at Vanguard, I’d say about 17%.
I remember even buying a CD held at Emigrant Direct. Does that date me or what?
Thanks to Suzie Orman’s 9 Steps To Financial Freedom, I have been investing since I had an account on my 13th birthday. My Dad had to co-sign on the account for me which I later gained full access to manage myself at the age of 18.
My wife has achieved a slightly better return with her accounts since we rolled over the majority of her legacy accounts in 2008 into Vanguard as well.
We have given each other access as a trusted contact with our respective Vanguard accounts. We have also listed each other’s accounts to Transfer on Death (TOD) to hopefully help ease the stress during that trying time in our lives which is hopefully a long time into the future.
How often do you monitor/review your portfolio?
Every 2 weeks or so. Sometimes more on or around our birthdays to calculate our decade+ 72T strategy.
Note that the new IRS single life expectancy table became effective earlier this year. I chose to execute the Substantially Equal Periodic Payments (SEPP) method for us. We have been doing this tax optimization strategy since 2019 that should be continued until at least the ages of 60 in 2032/2033.
Rule 72T allows us to take substantially equal periodic payments (SEPPs) from our 401K accounts early. They are free of IRS early withdrawal penalties as long as we keep them up and pay small amounts of taxes from outside of the account assets and fund our Roths.
We want to keep our pre tax accounts below 500K each so we can easily manage RMDs later on in life in an ongoing tax efficient manner. I do the exchanges each year around our birthdays.
Pretty good story so far, huh? Well, there’s lots more to come!
Stay tuned as I’ll run part 2 of this interview soon and you won’t want to miss it.