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.
My questions are in bold italics and his responses follow in black.
Let’s get started…
How old are you (and spouse if applicable, plus how long you’ve been married)?
46, spouse 40. Married 20 years.
Do you have kids/family (if so, how old are they)?
1 teen son, 15 years old.
What area of the country do you live in (and urban or rural)?
Urban, UK. Greater London metropolitan area.
What is your current net worth?
Assuming current GBPUSD exchange rates USD 1.29M
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?
Figures net of all debt:
- Real estate: 597K USD
- Home: 243K USD
- Retirement accounts: 212K USD
- Stocks: 153K USD
- Cash: 144K USD
What is your job (type of work and level)?
Mid management Executive in Large Tech Company.
What is your annual income?
Total from all sources USD 248K:
- Salary income (main employment) USD 135K.
- Spouse salary USD 25K.
- Rental Income USD 88K.
How did you grow your income so high?
Technology in general is well paying, if insecure.
I’ve invested in myself – MBA from Top Business School and I work for a well-known company.
Having said that, I don’t really expect my income to increase much in the future as I believe my career has plateaued. Any future growth in income will be from side hustles.
What is your main source of income?
Main source is employment.
What is your annual spending and what are the main expenses you have?
Biggest ticket item is mortgage, about 40% of my net monthly salary (not total family income).
It’s this high largely because of equity withdrawals to fund other property purchases.
Then two nice cars, about 15% of my salary.
Finally, about 12% for son’s college/other expenses fund and another 12% for reserve/household expenses.
Annual spending would be 100% of total income from all sources, but that would include debt repayment and modest monthly savings.
Savings are primarily through pension contribution, 18% of my salary.
How did you accumulate your net worth?
Mostly side hustles with property.
Our main residence was purchased in 2006 has appreciated significantly.
Equity withdrawals and encashing some savings have enabled the purchase of 6 flats that generate rental income and capital appreciation. 100% of most debt has been invested.
Some of my emerging market investments in India and China have done extremely well but as the overall amounts are not as large as property investments, the impact on overall net worth is also less.
My strategy, as it were, is significant capital appreciation of my expanding property portfolio and a few high growth equity investments (ETFs for UK SMB & China & India Equity), the key here being that none of these will be touched over the next 20 years so that they can continue to appreciate (hopefully!). These incremental investments come from capital appreciation.
Other than these “untouchable” investments, once I put in a target amount (say USD 135K for developed world equity ETFs) any appreciation on an annual basis I reinvest in other areas to create a balanced portfolio (so in this example, if there is a 10K annual appreciation, I leave 135K as it is and invest the 10K gain in something else that is a planned part of my diversification, say a bond ETF).
What money mistakes have you made along the way that others can learn from (or something you’d do differently)?
The main mistakes have been:
- Getting in and out of investments at the wrong time and not being able to hold for longer. I’ve bought Gold at all-time highs and sold China/Brazil/Russia ETFs when I needed the funds (these subsequently appreciated further).
- Not investing in property earlier. I believe property to be the best investment available primarily because of leverage, if held for 20 – 40 years, so the earlier one buys property the better. With hindsight I would have started investing in property 10 years earlier than I did.
What have you learned in the process of becoming wealthy that others can learn from?
My main lessons are:
- There is no substitute for time. One needs 20 – 40 years for serious wealth accumulation so the earlier you start the better.
- No one knows what will work best so best to diversify, starting with the big impact highest potential areas – property, emerging market equity, etc and then adding less dramatically high growth investments to balance – bonds, developed market equity, etc.
- It’s essential to let the winners run over years and decades. This is very difficult because of the pressures of life, one needs money at inconvenient times and often has to encash great investments which would turn out to be phenomenal investments if held another 10 or 20 years. Returns over 40 years are exponential, you may make very good returns at 5, 9, 13 years, but these increase exponentially beyond 20 years.
What are you currently doing to maintain/grow your net worth?
A couple things:
- Scaling my trading business.
- My investments are increasingly well diversified as I add to them – Property, China, UK SMB and India equity for long term capital appreciation (and developed equity, bonds, cash, gold, other emerging equity, cash for balance). I don’t want to touch (and hope that I don’t have to!) Property, China, UK SMB & India Equity for the next 20 years – this is a 100% capital appreciation play, with all dividends reinvested in the same instrument. The focus is on putting in my targeted amounts into these first (India completed, others work in progress), before other investment areas.
Do you have a target net worth you are trying to attain?
USD 12M by 65, ie another 20 odd years.
I plan to do this primarily through the capital appreciation plays above, with the addition of another 6 properties (funded by capital appreciation of existing investments).
What are your plans for the future regarding lifestyle (for instance, will your net worth allow you to retire early, downsize jobs, etc.)?
I need my job for the time being. It pays the bills, and is not uninteresting.
My focus is on scaling my forex trading business, another side hustle, into my primary source of income. Once this is the case, I’d like to leave my current employment. This will actually enable greater income with much less time.
I don’t want to retire at any point, as the trading effort (after 10 years of work to get to this point) is a few hours a day, so happy to continue this indefinitely as I enjoy it. However I will be the complete master of my time, schedule and commitments. Decent money, with plenty of time to enjoy it!
Accidental FIRE says
“There is no substitute for time”
Very true. Which is why I’m semi-retired now. Having lots of it back is amazing.
Great job millionaire 37!
Jason@WinningPersonalFinance says
Haha. I had not seen this until after posting my comment below. Great minds think alike.
The Physician Philosopher says
Had the same thought! As someone who didn’t start their career until 32, I am reminded of this daily when looking over the FIRE blogosphere and seeing people retire at my age or just past it. I am just starting! No replacement for time, but I’m going to help my kids avoid this mistake! Paying it forward, at least.
Lots of rental income! I wonder how involved that side gig is to generate that kind of money? I bet it’s time consuming.
Jeff B says
Lots of renters in London. 🙂
Jeff B says
My step brother got to live in London for two years on the South side of the Thames. Their apartment was like 1,200 sq ft for 2 bedrooms and it was like $6,000 a month.
M37 says
Thank you. It’s not all that time consuming, though can be at the wrong times (tenant moving in/out coninciding with work pressures etc; Murphy’s law, all at the wrong time!)
Lily | The Frugal Gene says
Wow those 6 rentals is pulling in great returns! We have skin in India and China as well. If I had to bet on any two countries, it would be those two and Malaysia. Great interview!
Mike at Balanced Dividends says
Related to Lily’s comment, the rental property income and % of net worth in real estate jumped out to me right away.
Overall, great use of RE to augment your already impressive income.
Very helpful points here – thank you for sharing and congratulations on your progress. – Mike
Jason@WinningPersonalFinance says
“There is no substitute for time” is so very true. Wouldn’t it be great if our high earning years where in your 20s and the entry level salary years were in our 50s and 60s. One can dream right?
Sean @ Frugal Money Man says
Thank you for highlighting “time” as such a critical factor in obtaining serious wealth. I have been out of college for about 3 1/2 years now and working every since. I am now starting to see the fruits of my aggressive investing since age 22, in that there a days where my investments are returning higher numbers than my paychecks.
My fiancée and I will also be taking your advice of getting into property early, because we plan to buy our starter home in about 3 years (at 27 & 28 years old for us).
Great interview!
M37 says
Thank you. You have time on your hands and a 20 years head start. The sky’s the limit if you execute flawlessly – and that is the key!
Arrgo says
I liked the comment about exponential returns when holding investments over 20, 30, or 40 years. Im 48, and have been investing for about 25 years. I’m no expert and have just been putting money into my IRA, then later 401k and regular stock mutual funds. This latest market rally has really put me over the top over the last 2-3 years. I’m sure there will be some rough spots but I wonder if in another 10+ years we have another big rally what that will do to your accounts?
Agree with the comments about time. I dont mind working, but its the long 40+ hr weeks plus commute time that start to wear on you. Its takes up all your energy and the best part of your day and leaves not much left for yourself. Getting some more of that time back for yourself is important.
Jeff B says
Just assume 8% a year and the rallys can be wiped out by one bad year. Just keep buying and holding.
M37 says
2 points about market crashes at inconvenient times (1) I rebalance annually, all capital gains go into other different investments. Over 20 years, your entire investment in capital gains has been reinvested elsewhere, most of your holdings are capital gains, which makes the crash somewhat less painful, though obviously not painless. Without rebalancing it would be much more severe (2) not everything should crash at the same time. If stocks tank, bonds, property and gold are buffers or some combinations. Plus EM, DM – within equity classes
Carlos says
Congratulations on your success! My takeaways from the interview are :
– “There is no substitute for time”
– “I believe property to be the best investment available primarily because of leverage, if held for 20 – 40 years” — The 6 flats are really paying off now
I once tried my hand at Forex Trading and did terrible.
Good luck to you, and keep on growing your networth.
Wise Money Tips says
Everything here fits in with the profiles of many other millionaires. Good income from employment, saving, and investing in real estate, stocks, etc.
The trading in forex does stand out, though. It is an especially difficult area to make money for non-professional traders. Interested to know if interviewee has had success in this field, or just hopes to get there.
M37 says
FX trading has been the hardest things I’ve ever done, and it’s taken me 10 year and about 5000 hours of application to get to a level where I’m on the cusp of potentially taking things to the next level. And maybe another 5 years away from it generating a significant primary income.
Ms ZiYou says
It’s great to see a UK millionaire featured! Strangely I’m getting closer to being a dollar millionaire with the upswing the pound, but I’ll only consider myself a real millionaire if it’s in pounds.
It’s a good use of leveraged rentals, but nowadays the tax position on buy to let looks less attractive, especially for higher rate taxpayers.
M37 says
Agreed, so while on an income basis I make modest money monthly and annually after the new UK tax changes; this has always been a capital appreciation play. I’m in it for 20 years plus, for 100% + capital gains minimum, which over a million pound plus portfolio, is significant returns. 2 of my flats are purchased through a company and subsequent ones will also be, which mitigates the tax aspects. The key with property is to be able to hold on, despite the pressures of life to cash in your gains, over decades, I hope I can do this.
Ms ZiYou says
Yeah, the limited company was a smart move, well done there.
I agree, over the long term the capital appreciation will be considerable – I’m sure you’ll manage to keep them long term.
Chris says
First congrats. I found it interesting your current nw is 1.29 but your target is 12. That seems like quite a leap. So if you get to say 6 or 8MM you plan on continuing to work? I am the same age, and my target is 3MM before I hang it up.
M37 says
It is aggressive and assumes significant appreciation over 20 years from Property, India, China and UK SMB equity. However if these don’t appreciate over 20 years, I don’t know anything that will, but then who am I, this is just my strong subjective view. Not to underestimate how hard it is to not encash an investment that’s already done very well for you.
snowcanyon says
I am impressed, and even more so by 37’s goals. We are similar ages (45 and 48), and can’t even begin to imagine getting to 12 million, even with a 2 million stash between the two of us, two pensions, and lucrative, stable careers.
It goes to show that running a business is the only way to achieve real wealth. Impressed and humbled.
M37 says
I’d suggest if you have a portfolio of 12 high quality properties in the London area (or comparable US metro area), plus a diversified portfolio focussed on high risk/high growth areas (like some of my other holdings); you will get there more easily than I may; based on your more prosperous starting point. Again, relentless focussed execution is key here. Good luck!
Jason says
I hope MI 37 you have continued success. I am curious if you are going to stay in the UK or move back to the U.S?
M37 says
Thank you. I’ve always been UK based, no chance of moving “back” to the US 😉