Here’s our latest interview with a millionaire as we seek to learn from those who have grown their wealth to high heights.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
This interview took place in October.
My questions are in bold italics and their responses follow in black.
Let’s get started…
How old are you (and spouse if applicable, plus how long you’ve been married)?
I am 39 years old and my husband is 60. We have been married for 10 years.
Due to our age difference, I feel it is important to share that we were both independently wealthy prior to marriage.
We met through our industry and have similar approaches to business and saving.
Do you have kids/family (if so, how old are they)?
We do have three children.
My oldest is 20 years old and then we also have a 7 and an 8 year old – all girls!
What area of the country do you live in (and urban or rural)?
We live in Arizona, in a suburb of Phoenix.
When I met my husband, I lived in California. When we had to decide who would move, it was an easy choice. Arizona is more affordable and has a better overall quality of life.
I retained my pre-marriage home in California and it is a rental property for us.
What is your current net worth?
Writing this article has spurred the interesting activity of assembling our net worth. A significant portion of our net worth is in real estate and the value of the separate companies that my husband and I own. I have used fairly conservative valuations on both the real estate and our companies because we do not believe in getting overly excited in boom housing markets.
Our real estate estimates are based on current valuations, minus 20% because we do believe the market is significantly overvalued and is experiencing a correction. Our total net worth, conservatively, is $8,200,000.
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?
We own 8 properties in 3 states. Seven of our properties are single family homes and we own one office building, where one of our businesses has its main operations.
The total value of our real estate holdings is $4,000,000 and we hold a total of $525,000 of debt in 3 mortgages. Five of our properties are owned free and clear.
Each my husband and I own a franchised business (from the same franchise system, which is how we met). My business is based in California and has a current valuation of about $2,000,000. My husband’s business is based in Arizona with a valuation of $1,500,000.
My 401k sits at $125,000, my husband’s Simple IRA has $400,000, our children’s 529 plans each sit at $20,000, and our other market accounts are at $200,000. The end of 2022 obviously affected the market holdings so we are confident those will come roaring back by the time I consider retiring.
We also keep $500,000 in our bank accounts at all times. When the number rises above that, we invest, most often in real estate. We carry high levels of cash on hand because, as business owners, we never want to have to turn to a bank in times of need.
Last, we do own some fine art. We acquire pieces we believe will be good investments but that will also fit well in our home. We have approximately $15,000 in fine art but this is an area we are open to growing. We will do this cautiously and keep it a negligible part of our net worth.
What is your job?
We are business owners in an industry where we care for seniors. Our company provides caregivers who help our seniors live independently at home for as long as they wish. I have been in this industry for 20 years and been a business owner for 13 years.
Prior to owning my company, I was a consultant in this industry and also worked for a small business providing the same services.
My husband has been involved in this industry for 15 years, since he became an owner of his current business.
What is your annual income?
Of course, as owners, our income fluctuates year to year but we have pretty consistently been making $600,000/year, with $300,000 being W2 income from our businesses, $116,000 from top line rental income, and the difference in profit from our companies.
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 working for a local pizza place, so close I could walk. I started about 2 weeks after I turned 15 and my starting pay was minimum wage–$5.75/hour in CA at that time. I went on to work for a 27-store franchise of a national pizza chain and worked as a manager in one of their stores where I made $16/hour, which I thought was pretty great at the time.
My first job in my current industry was as a scheduling coordinator and my starting wage was $17/hour.
My first “career” job was as a consultant in the same industry and I was making $60,000/year plus performance bonuses based on the success of the franchisees I was consulting with. When I took the plunge to becoming a business owner, my first year I made $50,000 and my income has gone up every year since that point.
What tips do you have for others who want to grow their career-related income?
I understand that different fields have different career trajectories and strategies of maximizing career-related income. However, in business, I feel that longevity in an industry–hopefully, but not necessarily, with the same company–is a great way to grow income.
Understanding the career trajectory and starting off early in your career with solid, time-bound career growth goals is important. Bouncing around from field to field can slow down income goals.
Once you have decided on a field that has the top line income potential that matches your goals, learn it. Learn everything and say yes to all kinds of new projects with the goal of learning more and more. Don’t decide at the 5 year mark that you simply know everything there is to know. Inquire, question, take extra work if it means you will learn a new area of the industry or will meet new people who can potentially be beneficial to you in the future.
At 20 years in my industry. I have far surpassed the generally agreed upon 10,000-hours-to-expert rule and I approach my industry with the mindset that there is always something to learn. The more I have learned, the more money I have made.
What’s your work-life balance look like?
I would say we have a pretty good work-life balance, one that meets our needs and interests.
I love my children but I am not made to be a stay-at-home mom. It just isn’t right for me. That said, my schedule is 8:00 am — 3:30 pm Monday through Friday.
My husband and I walk our girls to the bus stop every morning and get ready for work after. That is a family favorite activity.
We spend our evenings and weekends with our children and take plenty of vacations. We do NOT work on vacation.
We also spend our summers at our vacation home in Northern Michigan. We work very part time during this part of the year but we are not in a position to take it off completely. It works out for us that summers in our industry are a quieter and more reasonable time to cut down on hours at work.
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?
We manage our own rental properties.
When we moved in together, my husband had his primary home and one rental property. I had my primary home as well, which I then began to rent out. As our family grew, we moved into a larger home and rented out the home we shared.
We then purchased two more homes with the purpose of using them as rental properties, purchased the office building we run our Arizona company from, and we purchased a vacation home. We use a significant portion of our earnings to pay down mortgages as quickly as we can, both by increasing the principal payment monthly and by putting lump sums toward any remaining debt at the end of each year.
When we have extra cash, it is always earmarked for wealth generation activities.
Our top line income from rental properties is now $116,000 per year.
What is your annual spending?
Our annual spending is approximately $200,000.
What are the main categories (expenses) this spending breaks into?
- Mortgages – $85,000
- Food/Household Supplies – $24,000
Do you have a budget? If so, how do you implement it?
Part of our personal quality of life involves not sticking too strictly to a budget on a day-to-day basis. What we operate on is a saving plan.
My husband and I agree to annual goals of paying down mortgage debt (we carry no other debt), money toward philanthropic activities, and savings account balances. We also decided to agree on purchases over $1000 and anytime we want to spend over $3000 in a single month on any non-standard expenses, which almost never happens. Beyond that, we do not stick to a budget.
However, in the early days, prior to meeting each other, we were both fans of Dave Ramsey. I followed his plans almost precisely other than his strict policy of only buying used cars for cash. I do believe that being strict about budgeting when I did not have much disposable income gave me the savings and spending habits that have made me successful.
What percentage of your gross income do you save and how has that changed over time?
At this point we are saving about 30% of our gross income if you include all of the extra money we pay monthly toward our mortgages.
What’s your best tip for saving (accumulating) money?
Say no. A lot.
When I was in my 20’s, my friends loved spending money. They would go to the bar, go to movies, out to eat, buy expensive clothing or accessories, etc. On the other hand, I liked to stay home, play board games and I would never buy alcohol except at the grocery store. If I went out, it would be to a house party.
I saved every dollar. I shopped at Ross for clothes (and still do), meal planned so I only spent money on food I would actually eat, and didn’t spend anything other than the basic necessities of life.
It sounds boring but when I was in a position to purchase a home in 2008 (short sale, of course), I had the 20%+ to put down. A year later I still had cash to put toward the purchase of my company.
I did not start with a lump sum of money but rather with $5 here and $10 there, looking at ways to save money and putting away every single dollar I saved. I also reviewed all of my expenses and figured out where to trim down. I removed cable (way bigger deal when I did that before streaming services existed), cut gas and electricity by getting on better plans, and bartered babysitting so I didn’t have to spend money on that but could still have a night off on a regular basis.
What’s your best tip for spending less money?
Don’t hang out with people who spend a lot of money and stop looking at social media because there is always someone who has something better, cooler, or more expensive.
Material things stand in contrast to true wealth.
What is your favorite thing to spend money on/your secret splurge?
Art. I love art.
I love museums, I love performing arts, and I especially love appointing my home with unique pieces that are likely to retain or increase their value.
What is your investment philosophy/plan?
My philosophy is to invest in things you understand.
I do not understand the stock market. That doesn’t mean I don’t invest because there are obviously a lot of good reasons to grow wealth in this manner. What it means is I invest enough to reap the tax benefits and sometimes a bit more than that.
However, my plan is to continue investing in very specific types of real estate. I understand the market, understand how to make money on long term real estate holdings, and track more subtle indicators to market activity. This has always been, and likely will continue to be, where I feel most comfortable investing my money.
The debt snowball is another part of our strategy. We typically pay all extra payments toward a single debt. Now that the interest rates are rising again, we have pulled back a bit from this strategy because we don’t want to pay down our low interest debts at the expense of extra cash that we can sink into future real estate purchases, reducing the amount of money borrowed at 7+% — a number which is astonishing to me but not to anyone who lived through the 70’s and 80’s RE markets.
What has been your best investment?
Real estate has been our best investment, specifically individual family homes.
What has been your worst investment?
Our worst investment ever was Real Estate Investment Trusts.
Part of this was timing–it was in the run up to the 2008 financial crisis.
Part of it is because we didn’t like the lack of flexibility with selling and cashing out.
We acknowledge that typically REITs have pretty good returns but that was not the case for us.
What’s been your overall return?
Our overall return is probably going to come in at 10% once the 2022 numbers are factored in, drawing that average down.
How often do you monitor/review your portfolio?
In a good market I will check quarterly but in the last quarter of 2022 I do not plan to check at all.
We are long term investors so there is no reason to damper the mood when the long term outlook is good and the short term outlook is gray hair-inducing.
How did you accumulate your net worth?
Both of my parents are alive and I support both of them so I don’t expect an inheritance.
My husband’s mother is alive as well and we don’t expect an inheritance from her.
I was raised as an only child by a single mother. We struggled. My mother was not a good saver and she readily admitted that so the first thing I did when I became an adult was learn to be a good saver from someone else.
The first resource I found was Dave Ramsey. Beyond the know how, I have definitely been a high income earner for a large portion of my career and saved every dollar I could.
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 feel pretty confident in rating myself as “excellent” in both Earning and Saving.
I rate myself as “good” in the investing category because I still have a lot to learn about investing in the market.
I always believe in understanding your own investments which has held me back from a more aggressive approach.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
The first bump in the road was being a teenage single mother. You read that right. I had my oldest daughter when I was 19 and my daughter’s biological father embodied all of the things that parents fear for their daughters–he was controlling, had no desire to pursue gainful employment, used drugs, and was generally a hindrance to success. This was my high school relationship which, unfortunately, became an 18 year commitment.
Shortly after my daughter was born, her father was prescribed prescription painkillers after a car accident we were both involved in. He became addicted and began what would be a 17 year addiction to prescription opiates and hard drugs, peppered with multiple jail terms, the longest of which was 5 years.
At that time I was working full time in a close-to-entry-level position in my current industry. I poured myself into excelling at work and learning everything I could.
I was unable to finish college because of the hours I put in at work and caring for my daughter. Having a child at a young age and not finishing college were my two largest speedbumps to overcome.
What are you currently doing to maintain/grow your net worth?
I am a saver by nature so I will continue to live well below my means. My husband has a very similar money mentality to me.
We will also continue to look for real estate opportunities and learn more about investing in the market so we feel more comfortable adding to this segment of our portfolio.
We also plan to continue growing our businesses to grow our earnings and the eventual values of our organizations.
Do you have a target net worth you are trying to attain?
I would like to attain a net worth of $10M prior to factoring in the value of our organizations.
Our pace for adding to our net worth has been accelerating so I see this as feasible inside of the next 10 years before we slow down.
How old were you when you made your first million and have you had any significant behavior shifts since then?
I was 27 years old when I first became a millionaire.
My strategies have not changed significantly since that point other than being more financially aggressive with acquiring property because as our financial buffer has grown, we have become more comfortable with acquiring property at a faster pace and paying down property at a faster pace.
What money mistakes have you made along the way that others can learn from?
I don’t feel like I have made any significant money mistakes.
I am fairly disciplined and was on the right track from an early age with my strategies.
What advice do you have for ESI Money readers on how to become wealthy?
Set SMART goals for yourself. Goals that do not fit the criteria of SMART goals are really just hopes and dreams. SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound.
When I hear people complain that they are not reaching their goals (explicit or implicit complaints), I do tend to see some trends in their behavior. Going back to something I mentioned earlier in this interview, I do feel that many people struggle from a lack of discipline. So many people want to “arrive” before they arrive. Meaning, they want to act like they have money before the money has been had. This might result in purchasing designer or luxury goods, overbuying a home, overbuying a car, eating out as too large a portion of their budget, or any other version of living beyond their means.
When people do this, they hamstring themselves. Anytime an opportunity arises, you want to be able to seize it, right? Seizing a dream usually comes with a price tag and if you are unprepared or unable to pay that price, the dream can’t be seized, or at least it cannot be seized in the way you originally intended. Don’t let that happen.
You don’t need designer jeans or dinners at steakhouses. You need to be ready for opportunity. No amount of income can make up for poor spending habits so get that piece of your house in order first.
What are your plans for the future regarding lifestyle?
We plan to retire around the time our youngest finishes high school.
College for our two youngest will be funded with our contribution long before that time and our current debts will be paid off much sooner.
We currently own a vacation home in Northern Michigan and plan to snowbird between Northern Michigan in the Summer and Arizona in the winter.
Retirement to us might not look like no work at all. We enjoy being busy so our plan is to continue to own our businesses and have our team run the day-to-day operations.
We own 3 homes in our neighborhood and currently live in the largest one. It is likely that when we begin the snowbirding era of our life, we will downsize into the smallest home and use the additional income from renting the larger home to finance our lifestyle or put toward other things.
What are your retirement plans?
When my husband turns 70 (in 10 years and 3 months, wow!) he will take Social Security, which will be about $5700. By this time he should be mostly retired but will still be in charge of our property management to keep him busy. He also works out, rides his mountain bike, and plays hockey. In 10 years he will most likely hang up the hockey skates as far as games go but will likely still use skating as aerobic exercise.
I will also be in a position to retire in 10 years and will be 48-49. I will not be working in the operations of our businesses but I do a lot of volunteering and plan to continue to do so.
We both love to travel and currently do a lot of travel with our kids. We look forward to taking some couples trips as things slow down and our kids grow.
In 10 years, we estimate our income to be as follows:
- $300,000 from work/business-related income
- $68,000 from husband’s Social Security
- $150,000 from residential rental income
- $96,000 from commercial rental income
- $40,000 from my husband’s IRA
This comes out to $654,000/year.
We will have zero mortgage, which is our largest current expense.
However, from this money we estimate approximately $50,000 in property tax and other expenses due to the rentals, still leaving us around $600,000 before taxes.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
My husband is significantly older than I am and my only concern is non-financial.
Our strategy has set us both up for life but I do hope that we get to spend a long retirement together.
How did you learn about finances and at what age did it “click”?
I was raised with no financial know-how at all. My mother was a single mother, loved to shop, hated to save, and we struggled because of that.
When I was 18 I found Dave Ramsey and immediately knew that many of his basic strategies were what I needed to be able to survive and thrive.
I had no idea at that time where I would wind up but his basics absolutely started me on the way.
Who inspired you to excel in life? Who are your heroes?
My grandma is my biggest inspiration. She passed away 13 years ago but instilled countless nuggets of wisdom in me. More than anything, she taught me how to treat others.
She retired early and although she didn’t teach me any strategies, she did teach me how important it is to save.
She and my grandfather bought a 4 unit apartment building in Venice Beach, CA about 15 years before they retired. They poured sweat, tears, and every single extra dollar into that place. When they retired my grandfather was 62 and my grandmother was 48. The rent from 3 units gave them money to travel, albeit frugally, and the freedom to leave their jobs. She is my hero.
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?
There’s that name again – Dave Ramsey – if you are new to saving. The discipline it teaches is a bedrock to success.
The other two books I would recommend have nothing to do with money but since the “E” in ESI stands for Earn, these two books helped me get to where I am in the Earn category.
They are An Invisible Thread by Laura Schroff and The Professor and the Madman (predates the movie) by Simon Winchester.
I recommend An Invisible Thread because it is an amazing true story that gets to the core of how we should treat each other as human beings. ESI is a great strategy for building wealth but all the wealth in the world won’t mean anything if we don’t care for our fellow man. In my line of work wealth does, however, correlate to people who are great leaders. This book taught me about servant leadership and the ability to help other people maximize their own potential. Maximizing the potential of others has absolutely correlated to maximizing my own wealth.
The Professor and the Madman is a favorite of mine for similar reasons but also serves to remind us that material wealth and professional success is only one way to make an impact on the world and that people of all shapes, sizes, backgrounds, experiences, and skill sets are important to making this society function. Understanding that all people have intrinsic value and great leaders can put the right people in the right roles to accomplish amazing things is also a skill that has helped me in the Earn column.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
Yes, we do give to charity. Not all of our giving is official but a lot of it is. By “official” I mean through a 501 c3 or similar entity.
For example, we do not participate in Black Friday. I do not want my children seeing as normal standing in line overnight at some big box store just so they can trample their fellow humans on the way to a deal on a new TV. How depressing is that? Instead, we use Black Friday for a service project.
One of the most popular service projects with my kiddos is putting together care packages for the homeless. We get a small backpack and fill it with socks, toothbrush, toothpaste, nail clippers, bandaids, snacks, ziplock bags, money, and a Bible verse. We usually make about 200 and give them out throughout the year.
I want my children to know that with great power comes great responsibility – thank you Uncle Ben/Stan Lee.
In addition to financial giving and our service projects, I run the financials for a high school swim team that my oldest daughter swam for before she graduated. I love creating a great season for the athletes and their families.
I also volunteer my time as the President of an HOA for a 55+ community that we own a home in and as the Chair of an Owners Advisory Council for my franchisor.
Doing things that benefit the community and using my unique gifts to do so is all part of what we consider charity.
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?
My husband and I have a trust which will be used to care for our children in the case of our untimely demise and in that case will be paid to them at the age of 25 years old.
Our vacation property will likely stay in the trust and be used by all of our children and their families.
Legacy money is not something that either my husband or I had and it is something we would like to do for future generations of our family. I simply do not believe that anyone younger than 25 would be mature enough to make good decisions with large sums of money that was just gifted to them. I also want my children to be able to take pride in some accomplishments before they walk into a substantial inheritance. Hopefully we well outlast them all turning 25 and this will be a legacy that will affect them later in life.