Millionaire Interview 38

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…

OVERVIEW

How old are you (and spouse if applicable, plus how long you’ve been married)?

I am 51 and my wife is 50. We have been married for 21 years.

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

We have one daughter age 17.

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

We live in the North Eastern part of the US.

What is your current net worth?

$4.5M not including the value of our home and cars which are paid off.

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?

I try to diversify my portfolio as much as I can.

Assets are as follows:

• $315K in cash
• $15K in stocks
• $340K in 401K
• $592K in IRA’s
• $108K in a 529 Plan
• $3.152M in mutual funds

We have no debt. Our home and cars are paid off.

EARN

What is your job?

I am a 50% owner in a business and my wife is a teacher.

What is your annual income?

Currently my income is $75K and my wife’s is $89K.

My salary was $150K, however, due to a downturn in our business and numerous layoffs, we felt it necessary to decrease the owner’s compensation as well.

Tell us about your income performance over time. What was the starting salary of your first job and how did it grow from there?

The starting salary of my first job out of college was $21K.

Over time I continued to educate myself by going back for my MBA, working diligently at each job and trying to make myself invaluable at each position.

I would stay at a company approximately 5 years or so and then look for better opportunities as my knowledge and skill level grew.

I went from a staff accountant to accounting manager to Controller to CFO and eventually a business owner.

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

Hard work — there is no substitute.

Educate yourself as much as possible. I live by the motto that knowledge is power. The more you know, the more invaluable you become.

Go the extra mile, stay late, work harder than your co-workers. It pays off and doesn’t go unnoticed.

What’s your work-life balance look like?

Better now than before.

When I first started out (the first 10-15 years), I worked long hours and on weekends at times.

Now, as the business owner, I try to have more balance in my life. It’s not always easy, but life is short and you have to find the time to relax and spend time with 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?

I don’t have a side hustle per se.

I do have ancillary income from my investments in the form of capital gains and dividends that I now take and don’t reinvest.

I also own half our office building and get rental income from that.

SAVE

What is your annual spending?

I would estimate that we spend approximately $80-85K per year.

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

We do not live above our means. We believe in living below our means.

Our biggest expenses are private school for our daughter, my Country Club membership which is reasonable, eating out on weekends at inexpensive restaurants and our day to day living expenses.

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

We had a budget when we first got married. Not so much now.

We both are fiscally responsible and prudent. We both watch our money closely, only buy items on sale and consult with each other when making a large purchase.

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

We save and invest a ton.

I have always maxed out on my 401K. My wife maxes out on her 403B and contributes to her pension fund.

My parents taught me a long time ago to put money into your 401K from the very beginning – pay yourself first. Learn to live without that money and you will never miss it.

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

Golf.

INVEST

What is your investment philosophy/plan?

I try to keep things simple.

I don’t try to time the market, I invest regularly regardless of what the market is doing. It’s a sprint, not a race.

I try to diversify as much as I can with a mixture of ETF’s, small-mid-large caps, bonds, stocks, etc.

What has been your best investment?

I love Vanguard funds. They are low cost and have always performed well for me. I especially like their Wellington fund.

What has been your worst investment?

I would say a few stocks I took a chance on in my younger days.

I tend to not get spooked by the market. I look at a market crash as a chance to buy more. If you were going to buy those jeans for $100 a pair and suddenly they dropped to $25 – why not buy 4 pairs of them!

Currently, I have one stock that is performing poorly and has been for a long time. I try to stay patient and not make a knee jerk reaction, but I may dump it and eat the loss.

What’s been your overall return? (rough estimate is fine)

Around 8%.

How often do you monitor/review your portfolio?

Daily.

NET WORTH

How did you accumulate your net worth?

I have been incredibly fortunate and lucky in my career.

Before I sold my other business in July 2014, I had a net worth of approximately $1.6M. Once I sold the business, I was able to net another $2M or so which greatly enhanced our net worth.

My wife and I have always lived below our means, kept our vehicles for at least 10-12 years and saved and invested diligently.

For the past 10 years or so, I was fortunate to earn a salary of over $100K. My wife’s salary was always banked and invested and we have always lived on a portion of my pay.

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

None really. We started with a game plan and have tried to execute it to the best of our abilities. It has worked well for us.

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

Status quo. We continue to bank and invest her pay, max out our retirement accounts and invest regularly.

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

I would like to hit the $5M mark.

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

I believe I was in my mid 40’s when I hit the $1M mark.

There were no behavior shifts then or now. We don’t act like millionaires and we don’t live like it either.

If you could rewind to when you first started out, what would you do differently?

I think about this frequently. A lot of people tell me I missed my calling in life and should have been a doctor. I would seriously consider going to med school if I had to do it over.

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

Not really mistakes, but be diligent in achieving your net worth growth.

It can be a long, hard road getting there, but so worth it once you achieve your goal.

If you had to give advice to ESI Money readers about how to become wealthy, what would it be?

Stay out of debt.

Live within your means.

Don’t try to keep up with others.

Ask yourself if you really need that purchase or do you just want it?

Pay yourself first — max out on your retirement accounts.

Pick a partner that has this same financial philosophy.

To me, it’s all about discipline and wanting to become a millionaire.

FUTURE

What are your plans for the future regarding lifestyle?

I could probably retire now, but I don’t think I’m quite ready yet.

My lifestyle will not change at all. It wouldn’t matter if I had $10 or $10M in the bank. I’m a conservative person by nature and my net worth does not dictate my life style.

What are your retirement plans?

My wife and I would like to work another 5-6 years and then hang it up.

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

I would say health insurance. This sector is very uncertain and we’ll have to play it by ear and see how things work out.

MISCELLANEOUS

How did you learn about finances and at what age did it ‘click’? Was it from family, books, forced to learn as wealth grew, etc.?

My parents were the first to educate me about money management.

After earning my accounting degree, I went on to obtain my MBA and it grew from there.

I also like to read about this topic as well.

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

My parents inspired me to excel in life. Now, it’s my wife and daughter.

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

Yes, my wife and I have select charities we give to.

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?

We have a will, but it needs amended. My wife and I discuss this frequently.

We don’t want to leave a lot of money to our daughter in one lump sum — especially if we should die young.

We may set up a trust whereby she is given monies at different ages and levels in her life. We want her to be an independent woman and not think she is going to inherit a large sum of money so she doesn’t need to work.

I don’t think we will have this problem since she is an outstanding student and has a good work ethic.