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 35 years old and my wife is 38 years old. We have been married for 7 years.
Do you have kids/family (if so, how old are they)?
We have a 3 year old daughter.
What area of the country do you live in (and urban or rural)?
Southeast US in a mid-sized city.
What is your current net worth?
~$1.4 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?
- 401K – $365K
- IRA – $165K
- Taxable Account – $160K
- CDs – $50K
- Cash – $275K
- 529C – $20K
- Investment Property – $100K (no debt)
- Primary Residence – $275K ($525K minus $250K debt)
Own interest in two startup businesses that I value at zero as we have no guarantee that they will succeed and can be sold.
EARN
What is your job?
I work in sales and my wife works in finance.
What is your annual income?
~$325K per year.
My current base salary is $120K/yr plus ~$15K bonus and my wife’s base is $130K/yr plus ~$60K/yr bonus.
Tell us about your income performance over time. What was the starting salary of your first job and how did it grow from there?
Starting salary at my first job (after college) was $44K/yr in 2005. By gaining experience, adding value and moving to new roles/jobs when opportunity arises the salary has grown to $120K/yr.
I have been working since I was 14 delivering newspapers and various entry level jobs in order to have spending money and begin saving.
I was able to get both my undergraduate and graduate degrees with no debt through a combination of scholarships and part-time work.
My wife is similar as she was able to get her undergraduate and graduate degrees with no debt but she did it through scholarships as she is smart enough and worked hard enough to earn a free education.
What tips do you have for others who want to grow their income?
Education is key, both my wife and I have MBA’s which I believe has opened up many opportunities.
Take advantage of changing jobs for higher income. Companies will let you go for their benefit at any time and everyone should look to maximize their own earnings when possible.
Add value to company through you work, then document and demonstrate this to your employer when asking for a raise/bonus.
Look to add additional income streams beyond your day to day work (real estate, a side business, dividends, bonds, etc) which will snowball over time.
What’s your work-life balance look like?
I travel 50% of the time for business but work from home the other 50%.
My wife rarely travels but has a more demanding office schedule.
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?
Total of ~$12K/year.
Rental property is ~$6K year after expenses and dividends from taxable account is ~$6K/year (I enjoy dividend investing and will continue to focus on this).
SAVE
What is your annual spending?
~$70K/year.
We had kept this lower before we had a child but as parents know life becomes more complicated and costs increase. We continue to try and live a frugal lifestyle each day.
What are the main categories (expenses) this spending breaks into?
- Housing (mortgage, prop tax & insurance) – $18K/yr
- Church/Charity – $12K/yr
- Preschool – $9K/yr
- Utilities – $4K/yr
- Food – $6K/yr
- Entertainment – $5K/yr
- Travel (fuel for cars, vacations) – $6K/yr
- Insurance – $2K/yr
- Other (clothing, gifts, doctor, etc): $9K/yr
Do you have a budget? If so, how do you implement it?
I keep an excel spreadsheet that I use to track both our monthly budget and net worth.
What percentage of your gross income do you save and how has that changed over time?
After taxes and deductions, we currently save around $125K/yr plus we both max out pre-tax 401K contributions (~$18K each plus company match).
We have increased our savings over time as our incomes grows we try to maintain the same level of spending.
What is your favorite thing to spend money on/your secret splurge?
Travel. We love to visit new places/countries whenever possible.
INVEST
What is your investment philosophy/plan?
I would like to increase our investments in solid dividend companies/index funds to provide cash flow to replace our income.
I believe emerging markets have a huge opportunity ahead of them as with ever increasing technology and communication these areas of the world have the tools, information and resources to industrialize/catch up to the developed world relatively quickly.
On the flip side, I am not a believer in a planned economy being successful over the long term and feel countries with this type of system (China) will at some point face consequences.
What has been your best investment?
Staying the course through downturns.
What has been your worst investment?
Frequent (and impatient) trading in individual securities.
What’s been your overall return?
Averaging 8-9% per year
How often do you monitor/review your portfolio?
Monthly for taxable and quarterly for 401K/IRA
NET WORTH
How did you accumulate your net worth?
We accumulated our wealth through diligent saving and investing.
We have always tried to live below our means and save the difference from day one. It is a slow and steady race with a simple formula but it requires discipline and ignoring what others are doing.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
The markets go up and down in the short term and we have to learn to ignore the fluctuations and focus on the long-term plan.
What are you currently doing to maintain/grow your net worth?
We continue to save a large percentage of our income to grow our net worth.
We have a decent amount of cash now as I have taken some gains and am looking to reinvest this cash to continue to grow our net worth.
Do you have a target net worth you are trying to attain?
Using a 4% withdraw rate and $70K/yr in spending would give me $1.75 million but for safety I would like to reach $2.5 million.
At that point I would like to retire and spend time with family & volunteering to help others.
How old were you when you made your first million and have you had any significant behavior shifts since then?
We crossed the million dollar net worth mark when I was 33 years old and if anything I have become more frugal.
If you could rewind to when you first started out, what would you do differently?
I would have saved more as soon as I graduated from college and I would have invested entirely in index funds.
Additionally, I would have purchased a duplex or quad to initially live in which would have become a solid long term investment.
What money mistakes have you made along the way that others can learn from?
We have only ever purchased used cars but we did buy nicer used cars and should have just purchased used economy vehicles. Automobiles just depreciate and I now feel anything over the basics ends up being a waste.
In the past I invested in number of individual stocks but the returns ended up being worse/same as low cost index funds. I should have just started and always invested in low cost index funds as I would have a higher net worth today.
If you had to give advice to ESI Money readers about how to become wealthy, what would it be?
Well it’s easy to say but hard to do: Live below your means, save and invest the difference and you will eventually become wealthy.
For young people out there I would say avoid student debt and get an education/degree that provide a skill that is marketable. One of the worst financial mistakes you can make is to take out a boatload of debt and then have a degree in art history (sorry to pick on art majors) that is not marketable/has little earning potential in the economy.
We had a family ask us about sending their child to an elite private school as he got in but did not get a scholarship – the annual all-in cost would end up being ~$75K/yr. I told them that they should send him to the state school (where he got a full scholarship) and invest the $75K/yr for 4 years in the market as after 20 years @ 8% he would be in his late 30’s with that ~$1.25 million, along with what he could save (a similar amount), a pretty good education and likely the freedom to do whatever he wanted from then on.
For the curious ESI readers, they were not fond of my suggestion and he ended up enrolling at the private university.
FUTURE
What are your plans for the future regarding lifestyle?
My current goal is to reach a net worth of $2.5 million and then retire.
What are your retirement plans?
I would like to spend my retirement (hopefully early retirement) by volunteering to help others who are less fortunate.
We would also like to spend more time with family as well as world travel at very relaxed pace.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
My biggest concern is medical costs in retirement with the all the uncertainty around this in the US. We are considering living abroad where there is easily accessible and similar care at much lower costs.
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.?
I was interested in finance from a young age and learned through a combination of my thirst for knowledge and education.
Who inspired you to excel in life? Who are your heroes?
I would not say I have excelled in life as they are many others who are much more successful (in numerous ways) than I am.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
Yes, we give to our church & charities on a regular basis and give approx. ~$1K/month.
We are very fortunate (as I believe everyone who writes in this series is) and firmly believe we should give back to help others who are less fortunate.
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 setup revocable trusts for ourselves and if something would happen our assets would go into an irrevocable trust for our daughter.
This provides a safety net in case of an unexpected tragedy but beyond that we have not determined what to do with any potential inheritance.
Nice interview! You guys are doing quite well for yourselves and being generous as well. It’s cool that you and your wife both contribute significant income to your household. I suspect you’ll hit your $2.5M number soon.
Their income levels are up there! Only 35 with 300K+ family net worth – great to see what hard work can do!
Thank you. I appreciate the comment as consistent, hard work can pay off and as a bonus this is something a lot of people can do if they just put their mind to it and stay focused. I truly believe the opportunities exist for many as we just have to seize them.
This is the kind of plan I can get behind. Simple, but exactly how you should do it. Live below your means, save as much as you can, put it into low-cost index funds. This is a recipe for success. Glad to see that it worked out so well for you! I think you’ll get to that 2.5 million in no time.
I love posts like this, truly encouraging!
“We crossed the million dollar net worth mark when I was 33 years old and if anything I have become more frugal.”
Success makes the very behaviors that created it even stronger and more ingrained. Kudos, well done!
Wow that salary is STELLAR! Excellent interview! I love the length and clarity. This is definitely a unique and personal story. Thank you for sharing! Your goals are as good as in the bag.
Your family is absolutely killing it at such a young age! Keep up the hard work you’ll be retired working on projects you’re passionate about in no time.
Very nice job on accumulating wealth. I am trying to advise my college bound kid on Finance careers with good long term earning power as Sales is clearly not in the cards for them. What kind of Finance role is the millionaire’s wife? Or what career track should my kids pursue after college?
Thank you, my wife works as a CFO. She initially worked in accounting but moved into various sales & marketing and operations roles before getting back into finance.
Well done. Many valuable lessons here. Investing early, being frugal, charitable, etc. With regard to increasing income, changing jobs or asking for a promotion and/or raise when opportunity presents itself is very important.
Yes, the key to remember is that in the US most situations are employment at will and thus it is the individuals duty to always be looking out for themselves as we are much better off firing our employer for a better job than waiting for them to fire us.
We very much appreciate the advice so I give my two boys some career goals!
Loved this interview, especially since I’m in both Sales and Finance. Its nice to see another couple doing this through the everyday corporate job. People need to remember how good of a career sales can be, most products businesses purchase are sold through an individual and that individual is paid a portion of the gross profit. Good luck on getting to your early retirement number – MI 35
Thank you and I agree that many people get turned off about taking a “sales job”. However you are correct that sales adds a lot of value to companies and if you are successful gives you a lot of leverage as well as helps people develops skills they can use everyday.
Man oh man I love these!
Thanks for sharing your story – hope at 35 I will be able to say some of the same things as this. Admire the retirement goal of helping others!
Awesome college advice to your friends. Too bad they didn’t listen. They are destined to learn the hard way.
Both of our kids went to good state schools, worked hard, got a great education and are now working successfully with no debt ( them or us!)…. hahaha.
You guys are more than well on your way at such a young age…great job!
Thank you and yes we just see these huge debt burdens young people now take because they want to attend some elite school they can barely get into (and sometimes then get a degree with little earning potential). I hope people take a hard look for their children’s sake at the best overall option to set them up for future success.
My niece is dating a guy with $200,000 in student loans. $50K a year. My sister told her to not marry him unless he gets it under $50K in a few years. Just crazy.
Congrats on your success M40, you are certainly approaching wealth accumulation in a common sense fashion that has already proven successful at a very young age. You should be very proud of you achievements!
If you’ll indulge me, I thought I might offer a counter to your thoughts on the value of “elite private schools.” I was fortunate enough to graduate from such a school. I was doubly fortunate that my parents saved from the day I was born so that between my working at the school’s cafeteria and their contributions, I was able to graduate without debt.
I would totally agree that it is not a great investment if the child is planning a career in art history. However, if the person is planning a career in a more lucrative field where intelligence is at a premium and there is an imbalance between the number of openings and the number of job applicants, having a highly respected college on your transcript can be a huge plus. Many employers limit the schools that they recruit from to a small handful of elite colleges. The reason is pretty simple: there is a presumption of intelligence.
In my line of work, we require bright people that are fast processors, quick learners and have the ability to connect dots. My staff is probably split 80/20 with people from elite vs non-elite schools. I have rockstars from both groups and these people are compensated similarly so you could make the argument that an elite school is not “required” for this line of work, and that would be a true statement. However, since I have the luxury of perusing 100 resumes for every opening, I share that my first cut for interviews will almost always heavily weight the better schools. Given two exactly equal candidates, I’ll hire the one from the better school every time. Why? It goes back to the presumption of intelligence. I’ve hired over 100 people in the last decade and my batting average is probably 90% with people from elite schools vs. 50% from anything else. As I mentioned before, I have rockstars from both groups, but on average, I’ve found that the level of succes does correlate to the school. Hiring and training is very costly, so I gravitate to where I’ve had the most success. Is this fair to the brilliant kid that went to a non-elite college? Absolutely not. But unfortunately, it’s really hard to uncover that brilliance from a tall stack of resumes.
The other benefit of elite schools is the network one gets. Again, I fully understand that successful people come from all over, but I’m inclined to believe that the percentages are the in the favor of the elite schools. My classmates include public company CEOs, law firm partners, movie producers, screen writers, company founders, doctors, professors, executive branch cabinet members (last president), and off course, no shortage of crazy rich heirs and heiresses.
I’m a first generation American whose parents came to this country with nothing, so I don’t want you to think that my background is from the upper ends of the socioeconomic spectrum. I merely share this so that you’ll hopefully view this as an objective observation and not the ramblings of an elitist. Bottom line, an argument can be made that there are some advantages to attending elite schools that may, under certain circumstances, make the investment pay off in spades.
Again, congrats on your success!
I think everything you say is accurate, but it all essentially boils down to the idea the network. There seems to be a disproportionate number of people in positions of power that come from elite schools. But whether that’s a benefit for the kid or not would depend on the kid’s goals.
Given the choice between elite school and graduating at $0 net worth (or lower) or a decent state school and graduating with $75k/year having been saved on my behalf for four years, I would not even hesitate. Power and high income are irrelevant to me: buying my free time to pursue whatever I want, regardless of income it can generate, is my main goal. The state school, in that case, need only result in a mediocre job to help me achieve what I want to achieve in short order. And of course, if I outperform expectations as the state school graduate, I still might end p being recognized and promoted into a high-power, high-income position, anyway.
I don’t know which field you are in specifically, but most employers value “bright people that are fast processors, quick learners and have the ability to connect dots”.
Instead of saying “But unfortunately, it’s really hard to uncover that brilliance from a tall stack of resumes” and then just hiring from elite schools, perhaps learn to use that tall stack of resumes to get brilliant people.
Private schools don’t always mean intelligence. They mean finances or debt. I was the first in my family to get a bachelor’s degree, and the only way I could do that was through a state college. In my experience, employers look for a degree as a check mark in their list, and don’t care where someone graduated from. When I’ve hired team members, I’ve done the same.
One of the best managers I ever had, while working for a international technology consulting company, had a bachelor’s degree in Chinese Literature.
devils’s advocate here. there is a list of mostly “elite” colleges who no longer have a student loan component in the financial aid calculation. of course, if your family is wealthy then financial aid isn’t a concern. if you can get into harvard, you can come out an undergrad with no student loans. if i could go back right now, i would go to williams. i did graduate from a blue blood school (but had an employer paying tuition) after starting at a southern state school. as a pretty regular guy it was hard going to classes at the private school with a bunch of wangs whom i didn’t like much.
Great interview! Your relative will wish they had taken your advice on college selection one day. I keep telling my 14 year old, you’ll go to a state school unless you get enough scholarships to bring a private school’s cost in line with the public institution.
Good point about keeping a frugal mindset even though you may not have to. I’m not against spending some money on what matters to you, but there is no sense in blowing it or being wasteful etc. One of my sayings is “things are good, and you need to keep it that way.” If you start doing stupid things, all your success can start slipping away before you know it. You have to keep your guard up and still live smart.
Thank you and we like to think about it as even if you have the money you should not waste it. As long as you have that mindset you will still make good decisions as your assets grow.
Spot on about mutual funds. Individual stocks have been overall a bad thing for me. I have younger guys at work approach me about individual stocks and other types of investments. I try to persuade them to stick with mutual funds and avoid chasing after growth.
Great interview. Welcome to the club M40. You and your wife have reached a high net worth at a young age. Congrats and enjoy. I agree that education is key. I also related to the importance of living a balanced life.
When you have two well-educated professional people in a household, it’s amazing how high that combined income can get. Anyone that ever questions the value of a degree (especially in certain fields) should read this interview and see what it gets you over time.
Thanks, as long as individuals focus on a education that is valued and can be monetized additional education will pay off in the long run.
Reading your story gave me the impression that you and your wife are not only intelligent academically but also financially. At $300+ a year combined income, you guys are really doing really well. Also, thank you for thinking about helping the unfortunate when you retire. With that kind of mindset, you will surely achieve your goals in life. A piece of advice though, sales is a stressful profession. Make sure to keep stress in check and thanks for sharing your inspiring story!
Love a good story showing how obtaining a sound education and hard work pay off. Congrats on doing both so well!
As another “Sales” guy, great story. My wife and I, have almost the exact same age/income/careers as you all. I think you’ll find that your projections are conservative, and you’ll hit the $2.5 mil faster than you think.
Nicely done!
TL
Nice interview. I get the feeling these are good, hardworking professionals who did most things right financially. Only thing I would suggest is a decent college fund for their daughter but I am sure they will easily cover that in the $0.75 million buffer they are planning in net worth. They are among the rare 30’s cohorts. Well done #40!
Excellent job! I, too, loved the “state school advice” you gave your friend despite the fact they ignored it. That’s exactly what we’re planning to do for our kids.
Thank you, we have setup a 529C for our daughter that we fund quarterly. This will continue to grow over time to help her cover her future education costs.
These interviews have become my favorite pieces to read, and that’s not a lie.
First off, congratulations on hitting the millionaire mark in your mid 30’s! You are already well positioned to succeed financially for the rest of your life. It is becoming more and more apparent the simple traits of financial success:
1. Education (without needing debt)
2. Employed in a marketable/profitable field (although doesn’t necessarily have to be breaking the bank profitable)
3. Consistent saving/investing over the long-term
4. Investing in low-cost index funds
5. Diversification and creating multiple income streams over time.
Great interview, and I wish you and your family nothing but the best moving forward!
Well, no matter what you people say, I am a double threat to the globe with my history major/art history minor . . . so what if I owe 21k to a state school to learn 1) humans are cruel, historically, 2) history repeats, period, 3) evil occasionally triumphs, and 4) nice artwork is simply nice, all while barely staying awake and otherwise politely, respectfully salivating over those trust fund babes in the art department. All kidding aside, I got good grades, it was the UW; I’m saving up for a certificate in financial advising, 100% prepaid this time around, for a late ‘career’ shift, if you’d like to call my ten years plugging away in a casino that (lol). Living wages, perks, and benefits, yes; job satisfaction? Pull my finger, kids, though I will take high marks for resilience. I also got wise to low-cost index funds, living well below my means, extracting 36% out of every paycheck to invest and save like hell. Very glad to see another sober, albeit simple, analysis of US healthcare, a potential menace to all. Anyone with a nest egg below 4 million should seriously consider an expat retirement, Panama perhaps. Here and there, a couple gems. Pretty sure I’ll this house feet first, but that’s cool; it is my whomping #1 investment in this super hot real estate market that’s erupted like wildfire around me. Already had the occasional realtor knocking, wondering if I’d sell. Only my soul for 10 million, babe, otherwise the answer is NO. Best of luck to all.
*LEAVE this house feet first, should say, though I’ve discovered something else: I don’t really care about housing. One room with a lightbulb, a stack of books and the basic essentials, and that’s it. The gf has other ideas, so I play. She likes the house, I’m all about the garage spaces and backyard forest, which I would probably not easily trade out for anything now. Nevertheless, I sincerely would like to capitalize on the exponential value of this investment, but in crazy WA state, it begs the question, where? Because it’s pretty much crazy everywhere, not to mention the politics. My greatest regret remains, not buying a duplex or quad as a live-in op when I could. No chance now, only some other state, or much worse place than this.