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 April.
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)?
My super cool and supportive wife is 59 and I’m 56. We have been married for 27 fun and challenging years.
My wife is very good with money so that has helped. We’re both on the same page.
She taught me to always pay off your credit card every month. I didn’t do this when I was young. I can thankfully say that I have never paid a dime in credit card interest for the last 27 years. Obviously, my wife hasn’t paid any credit card interest as well.
It really has been a blessing to have married her for many reasons. Money has been a big one.
Do you have kids/family (if so, how old are they)?
Our daughter is 25 and is a chemical engineer that graduated debt free from an in-state university.
Our son is 22 and is graduating with a mechanical engineering degree in May of 2022 also from an in-state university. He will start out debt free as well.
We saved in 529 plans to cover most of their college bills. They are both very independent and driven to succeed. Our daughter already has over $150,000 in investments.
What area of the country do you live in (and urban or rural)?
We live in very nice suburb of Seattle.
We do have plans to move to a smaller area in eastern Washington or Idaho where the cost of living is much lower.
The Seattle area is pretty expensive and housing has exploded here. The average house in our modest neighborhood is about $1.4 million.
What is your current net worth?
Our current net worth is about 4.7 million.
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?
- Cash: $162,000
- Brokerage: $141,106
- IRA: $1,637,352
- 401K: $527,136
- Home: $1,600,000
- Rental Condo: $700,000
- Zero debt
EARN
What is your job?
I’ve been selling advertising in print, digital and social media for my entire career (35 years). I used to be in management but have been an individual contributor for the last 15 years.
My wife has been an automotive trainer for the majority of her career (some management and some individual).
We both are happy to not be in management as we end our careers. There comes a point where you don’t want to climb the ladder any longer but just want to do a good job and bring in a decent wage.
What is your annual income?
My wife makes $115,000 and I made $175,000 in 2021.
We also bring in about $26,000 from our rental.
We were around the $220,000 mark for many years. The last few years is where my earnings have really grown.
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?
We both started off below $20,000 per year (late 1980’s) but steadily moved up year after year.
I hit $100,000 about 20 years ago and my wife was similar. She did make more money than me for at least a decade.
My wife worked for an auto manufacturer as a contract employee for a decade and made about $110,000. She continues to make that amount now with another company in the automotive field.
My income continued to grow through my advertising sales career. Some years I would fall back basically because of the economy (advertising is one of the first things cut by businesses). Thankfully, my account list has continued to grow and my commissions have really exploded in the last five years.
2020 was interesting since I made more money than any time in my career. Crazy time.
What tips do you have for others who want to grow their career-related income?
My advice would be that if you don’t get promoted within a few years then look for a job at another company where you can boost your income quicker. Most companies aren’t loyal to you so you may as well look out for yourself. Nobody cares about your income more than you. You have to be a little selfish while still being a team player.
You may want to stay where you are if you are in sales and able to grow your earnings.
I would also get educated on ways to ask for raises. There are a lot of good ideas on podcasts out there.
What’s your work-life balance look like?
Much better than it used to be for my wife. She has worked a lot of hours but finally has that under control as her career is winding down.
I’ve been pretty fortunate to work for companies where I could leave for all of my kid’s events and not work 14 hour days. Having that flexibility was really a blessing since I could spend more time with our kids as they grew.
I didn’t travel much so it made it easy. My wife was on the road at least three weeks a month. I don’t advise that for young families.
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?
Our only other source of income has been our condo rental.
We bought it a few months before we were married and moved out of it a couple years later. We then kept it as a rental and it has been easy to rent because it is right across the street from the main Microsoft campus.
We broke even for a number of years but after paying off the mortgage it became a decent investment. It brings in about $25,000 per year.
SAVE
What is your annual spending?
In 2021 we spent a little over $100k.
This included my son’s college tuition and housing so it will go down to about $80k once he graduates this spring.
We do expect it to go up again in the future due to some European travel that we want to do in a year or two.
Here is a partial breakout from 2021:
- Restaurants: $14,000
- Property taxes: $13,000
- General Merchandise: $8,200
- Vacation: $7,500
- Insurance: $7,000
- Entertainment: $6,000
- Groceries: $3,700
- Home Improvement: $3,200
- Utilities: $3,000
- Cable/Internet: $2,600
- Gas: $1,600
- Clothing: $1,200
- Pet: $600
What are the main categories (expenses) this spending breaks into?
The main things we spend on our taxes, restaurants/food, and insurance.
We’ve always had eating out issues. It’s an easy place to cut when times are tough but eating out is something we enjoy and it’s convenient with both of us working.
Property taxes for our home and rental are a large expense but there isn’t anything we can do about that.
Our insurance (home, auto, umbrella, condo) will hopefully go down (auto) once our college age son goes onto his own policy once he starts his career this summer.
Do you have a budget? If so, how do you implement it?
We created a budget together many years ago. We actually copied it from the Dave Ramsey book “The Total Monday Makeover”.
We don’t follow it that too close any longer. We basically know where are spending is going and it’s in control.
What percentage of your gross income do you save and how has that changed over time?
We save about 30% of our pay.
My wife doesn’t have a 401k at her work so I max out my 401k.
We also both put $500 each into future car funds. We will have plenty of money to pay cash for the next cars.
I also have two brokerage accounts that I invest in as well.
What’s your best tip for saving (accumulating) money?
Obviously, automating is the easiest way to invest money. This works great for 401k, IRA’s and brokerage.
Secondly, you really have to watch your spending. You don’t have to keep up with the Jones’s. They don’t care about you anyway.
We always shopped our insurance to find the lowest rate since it is such a large expense. We use coupons on other deals wherever we can. Used cars were also the only thing I would buy. My wife has had a company car for most of her career. That has really helped save a lot of money.
I would also encourage people to get as educated as possible about investing through books, magazines, podcasts, and YouTube.
What’s your best tip for spending less money?
Investing first really helps. You just don’t have money sitting around to spend.
I believe that you also have to be disciplined with your overall spending (credit card). When you do need to spend, be a relentless shopper. Find the best deal and don’t be afraid to negotiate. I never hurts to ask for a discount.
What is your favorite thing to spend money on/your secret splurge?
We like to spend money on watching sports, travel and craft beer. Attending college and professional sporting events are a big part of our entertainment budget. It something we really enjoy so we don’t skimp. We’ve created wonderful memories over the years.
We also take one big trip a year. This usually comes in at about $8,000 even with using airline miles and hotel points. It’s very important for both of us to get away from our jobs and think about something else. It is creates memories and experiences for our family. Family is number one in our book.
Lastly, I’m a craft beer fan and really enjoy going to breweries. I find it to be a fascinating business with a huge variety of products. It also seems to attract fun and talkative people to socialize with. I guess it’s more of a hobby than a splurge.
INVEST
What is your investment philosophy/plan?
My philosophy has always been to be balanced with my investment across all classes.
I used to 90/10 then when I turned 45 I moved my allocation closer to 80/20. The big dip in March/April of 2020 made me realize that I was too aggressive for my own good. When the market moved back up I adjusted my portfolio to 70/30. I fell much better at this time in my life. I don’t want to lose what I have built over all of these decades.
I’ve also used index funds along with actively managed funds. I like actively managed funds like the Fidelity Growth Fund. However, I’d say more than 50% of our investments are in index funds. Mainly the total stock market and S&P 500 funds.
We’ve done the same with our bond funds. About half are indexed and the remainder are actively managed.
We have always tried to keep expenses low and indexing is the best way to do that.
What has been your best investment?
As stated prior, my best investment has been marrying my wife.
On the product side, I have done really well with the Fidelity Growth Fund in my 401k. It grew by nearly 70% a few years ago and has been stellar for the decade that I’ve owned it.
What has been your worst investment?
My worst investment has been too much cash sitting in savings accounts and CD’s.
We’ve always kept a large cash reserve. It keeps my wife calm.
What’s been your overall return?
On January 1, 2011 my portfolio was worth about $600,000. It is now worth about $2.5 million.
The growth has been great in my view but I don’t have actual numbers.
How often do you monitor/review your portfolio?
I’m one of those guys that breaks the rules and checks my portfolio every day after the close.
When markets are down I like to buy. I keep about 20% of my 401k in cash just for days that really stink.
It’s a lot more fun than just automating all of it. I guess it gives me a rush to buy when stocks are down and it’s not my usual deposit day.
NET WORTH
How did you accumulate your net worth?
Buying and holding has been our path to being multimillionaires. That applies to real estate and investments.
My advice in real estate is to buy and hold it for as long as you can. There will be down years and flat years but it keeps growing over the long term. We bought our condo for $90,000 in 1993 and now it’s worth $700,000. We purchased our home in 1996 for $189,000 and now it’s worth $1,600,000. Both properties are in great locations with big employers nearby. I think that’s a big key.
Our investment also helped us along the way. Again this is just by constant buying in our 401k’s, IRA’s and keeping cash for everyday life. The old saying that time in the market is better than timing the market is 100% true in my book. Even when it’s scary, keep making investments.
I inherited about $30,000 when my parents died but I was already a millionaire by then. I’m glad that they spent their money instead of giving it to their kids. They earned it and I’m glad they enjoyed it.
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 think we balance all three.
We both are good at earning so that has been helpful.
My wife is a better saver and I’m the better investor. She is very conservative and I’m much more aggressive with our investments. I think that balance has been very good for us.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
The two biggest bumps were losing jobs and the market losing big in a few different years.
The job loses hurt so we cut spending to the bone and then worked like crazy to find acceptable new jobs.
When the market went down big in 2009 it was really tough to continue buying the whole way down. I wondered if it would ever bottom and of course it did. I sure am happy that I bought in those down years.
I deployed extra cash in 2020 as well. Since I had been there before it was easier to do.
What are you currently doing to maintain/grow your net worth?
Since we don’t have debt on our two properties, we have been growing those just by letting the market do its thing. We have a little over 2 million in real estate and that is plenty for us.
I do continue to fully fund my 401k and also buy in our brokerage account. We’ve laid off our IRA’s for a few years as we paid extra on our home for a couple years to get it paid off.
Do you have a target net worth you are trying to attain?
My net worth isn’t my first goal. My first goal is to have 3 million in liquid investments. We could be there right now if we sold our rental property.
This would allow us to withdraw $120,000 year (4% rule) and that should be plenty. We will have to pay taxes on it so we have taken that into consideration.
How old were you when you made your first million and have you had any significant behavior shifts since then?
We were in our late thirties and early forties when we had a million in net worth. We didn’t change at all because we knew that one million wasn’t enough to retire on.
Of course, some of that net worth was tied up in our home and you have to live somewhere. Even now with over four million we still live the same life. It will shift with an increase in travel once we fully retire.
What money mistakes have you made along the way that others can learn from?
Before I was married I lived beyond my means. I had about $13,000 in consumer debt. (Remember that was in the mid 1990’s. Probably would be about $25,000 in todays dollars).
I paid it all off before we were married because I didn’t want to bring debt to our new marriage. I’m glad I did that. My wife was very helpful in helping me put a plan together to get it done. Maybe she was the female Dave Ramsey before Dave became big. Bottom line, don’t be dumb with spending like me.
I’d also say to make all of your early investments into index funds. This way you can set a solid base while learning about investing. I chased a lot of “hot” funds and they eventually fell flat.
I’d also recommend to keep fees as low as possible and to make sure you get your employer match if it is offered.
Lastly, I’m a little heavy in retirement accounts. I would advise young people to build your after tax accounts so that you have more balance when you’re in your mid 50’s like me.
What advice do you have for ESI Money readers on how to become wealthy?
I would automate as much of your financial life as possible. Keep those weekly, bi-weekly or monthly investments moving into your accounts.
Don’t be afraid to take calculated risks as well. Especially, being aggressive when you’re young. Go for it. You have time to make it up with the market dips. And it will dip. It always does. It always comes back too!
The big one is to marry well. Don’t mess that up.
FUTURE
What are your plans for the future regarding lifestyle?
We are looking at retiring early. My wife may retire next year at 60 or wait one more year. I’m not too far behind her. I’d like to work another year or two as well. We are both doing well financially and with no debt we can save and invest to make our retirement very comfortable.
When we are retired we will both likely do some part time work just to keep busy. After working for more than 30 years, I’m not sure what I would do with all my time. I have some ideas but I still wonder. The unknown can be scary.
What are your retirement plans?
We will likely sell our main home in the next couple years and move to a lower cost of living area. We expect to have about $700,000 remaining after we buy the next house.
The biggest thing we will do is travel. We have a to do list of travel that includes many places in America as well as around the world.
Other parts of retirement are unknown since we don’t know where our kids will end up. We don’t need to be close but it may be nice to be within driving distance if grandkids enter the equation.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
The big concern in retirement is paying for health insurance. We just have to put it in our budget and pay it.
I’m pretty healthy so I feel good about retiring and not being too worried about health care.
My wife has some knee issues so she may need to have replacements before we quit working to let my insurance cover it. It’s covered at 100% right now but it is a big decision to get her knees replaced.
MISCELLANEOUS
How did you learn about finances and at what age did it “click”?
In my late 20’s I discovered the book “The Millionaire Next Door” and it really clicked with me.
That book pretty much set us off on our journey of spending less and investing as much as possible.
Who inspired you to excel in life? Who are your heroes?
My dad inspired me the most. He was an easy going guy that was a true entrepreneur. He never worked for anyone his entire career. He was one of those guys that believed in finding a way and not relying on the government. He believed in himself and I think that helped me have complete confidence in myself.
He not only inspired me but he was also my hero. He and my mom always told me how proud they were of me. This meant an awful lot. They encouraged me to be my own person and to do things my way.
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. When I read this in my late twenties, it made helped me understand that to make money you had to spend less than you bring in. Seems so basic but I had to have that drilled into my head. It also made me realize that being frugal was really important in getting a handle on our finances.
Total Monday Makeover was one of the early books that we both read. It helped us get out of debt and stay out of debt. Granted our only debts were cars and homes but it still kept us focused. I believe this book can be great to get people on a solid plan. Once you are out of debt it’s time to move on to books like The Simple Path to Wealth.
The Simple Path to Wealth. The author JL Collins really does make it simple to figure out how to invest. Basically, use index funds and set them up on auto payment. You’ll eventually get there with index funds that beat 90% of the active managers. It really doesn’t have to be that difficult. Just index and forget it.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
We normally give about $3,000 to our church every year.
We also give to a local university for scholarships since we believe that education is the best way out of poverty.
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?
Right now our estate will be split evenly between our two kids. This may change in the future depending on the size of our estate.
Both of our kids don’t expect a dime from us. They both have said that they want to make it on their own. We’re really proud of them for having that attitude.
BSue says
Your comment about your parents enjoying their wealth reminded me of my parents.
They were Depression era folks who were amazed by the wealth they achieved. We would say that they enjoyed their money as much as they could stand. Their three daughters received pretty large inheritances as a result.
MJ says
Hello, fantastic interview M-314. Love how u acknowledge and give credit to your wife for steering u in the right direction financially. So important to have the right partner I totally agree. Most impressed w your not paying much interest on credit cards, and reducing interest payments on mortgages by paying them off early. Pros and cons always regarding the mortgage payoff strategy, and I personally favor paying it off. Any specific strategies you used in your approach to retiring mortgage debt? Would love to hear your technique(s). Thank you for doing interview. You guys finances are solidly impressive!
MI-314 says
To knock out the mortgage we used our profits from the condo rental to pay extra on the home mortgage. We put away enough for taxes and insurance on the rental and then completed the mortgage on our home.
People can debate paying off mortgages early all they want. My wife is very conservative and it made her happy. I was good with that even though I’m more aggressive.
D says
Great job!
Have your bucket list ready for retirement and enjoy your new life and adventures… 🙂
Sask to AB says
Wonderful post! Thank you for sharing.
Paper Tiger (aka MI-27 & MIU-8) says
Congrats on all you have accomplished and on using a common-sense approach to saving and investing. Your recipe has worked well for you and is a nice roadmap for others to consider as well. Good luck in retirement and may you prosper in both your finances and your health.
m24 says
Y’all are going great. Good on ya.
DJ says
wow. you guys are solid! I see no holes in your financial game, no consumer debt, no mortgage, and kids off and running w high salary entry level degrees w no student loans, daughter over $100k by 25, incredible. All this while living in a HCOL area w salaries that are not bloated, you guys are the blueprint for how to live a solid middle to upper middle class lifestyle, financially. Were kids influenced by STEM focus in immediate Seattle area to both study engineering? Millionaire Next Door stuff for sure. Write a book! Well done, and wishing u guys well when u finally decide to hang it up.
MI-314 says
Kids were really into math and science so we went through a bunch of majors that may interest them. We went through all the engineering disciplines and that really helped each one of them. The WSU engineering school was a great place for them.
E-S-I-Parent says
Nice interview, lots of wisdom! Thanks!
Any idea what led to your children following in your ESI footsteps? I have read other interviews where children sometimes seemed to be „turned off“ by parents‘ ESI successes and not interested in learning more about it.
MI-314 says
My kids are both very disciplined and have seen some nice things in life that take money. We made it very clear from an early age that they will need to earn that money to make things happen. Getting degrees that “pay” was a big part of it.
MI-314 says
My kids are both very disciplined and have seen some nice things in life that take money. We made it very clear from an early age that they will need to earn that money to make things happen. Getting degrees that “pay” was a big part of it.
Dave says
Have you ever thought about selling your condo?
At $700k you are only getting 3.7% return on a fully depreciated property. There would be capital gains unless you did a DST(Delaware Statutory Trust) or you could pay the long term gains and move to high yield fund like CEFs or some REITS just to spread out the risk to that $700k. You could still probably beat your current returns with the after tax sale proceeds with less risk (money not tied to one asset). Plus less work than dealing with renters.
I see half your net worth in just two assets. Seems risky. Moving is a pain so selling your home may not be an option. Although you would get the $500k gain exclusion (or go live in your condo for two years instead of getting a new renter, then sell and use the gain there..joke..but would work).
Just ideas I had when reading this. We all have different approaches to managing our net worth so just sharing my thoughts.
Scott C says
Funny, I also calculated a quick and dirty return and felt like a nerd about it. Glad there are at least two of us!
I really enjoyed the read, thanks for sharing.
Presuming $26,000 is after all expenses and $700,000 is accurate (tough to tell these days), I also think selling could be the best financial move. It is nice to have steady monthly income, but with depreciation no longer shielding any condo income I believe you can do better. If you really like the monthly income, explore another real estate deal with better numbers, or look at income type funds or REITs. Of course all of those things introduce some risk to what seems a pretty safe investment, so your mileage may vary! Thanks again and good luck!
MI-314 says
We thought about selling it when it was worth $300k but it keeps growing in value. We may use it as a second home in the future so we’re holding it for now.
As I said in the write up, we will likely move to a lower cost of living area and therefore eliminate some of real estate risk.
Thanks.
B says
3.7% of cash flow on the equity seems correct… However, with appreciation added, the total return to net worth has been, and should continue to be, much larger (but not guaranteed, I know). Lately, the overall return (appreciation and cash flow) could be well over 10% or even 15%.
Holding real estate as an inflation buffer can help significantly, as we’ve seen lately.
I realize that the primary residence serves the same purpose, and there are many different considerations… but I wanted to point out that if one is *only* thinking about 3.7%, they might be significantly short-changing the value of that asset.
MI-314 says
We thought about selling it when it was worth $300k but it keeps growing in value. We may use it as a second home in the future so we’re holding it for now.
As I said in the write up, we likely move to a lower cost of living area and therefore eliminate some of real estate risk.
Thanks.
Scott C says
Thanks for the reply. I should have read all the replies before posting about the condo. Either way, you are winning, so congrats!
MI 160 says
Another PNW’er! I loved your story! Having the right partner is key and kids who get it and understand the expectation you have set. We have done the same thing. Well done!
Rhys Keller says
Love the transparency and candid take on achieving financial success, M-314! Thank you for sharing.
MI-202 says
Excellent read, MI-314. My wife and I just spent a week up in that area. It is gorgeous, and I couldn’t believe how many dogs I saw out on hiking trails, grocery stores, etc. I have to live my dog dreams vicariously through others so it was great for me.