Millionaire Interview 422

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 June.

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 wife and I are both 39 and soon to be 40.

We have been married for 17 years this June and have been together for nearly 24 years since high school.

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

We have two kids (pre-teen) and growing way too fast.

In addition, we have a busy household with pets.

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

We live in a mid to high-cost-of-living area towards the east coast.

We grew up in a mid-cost-of-living area in the Midwest.

What is your current net worth?

As of May 2024, our net worth was $1.58 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?

Rounded for ease our net worth is comprised of:

• Cash/Savings/Checking – $95k.
• Investments – $975k: This is inclusive of 529’s, Health Savings Accounts, Private Equity Contributions, 401k, Traditional IRA, Roth IRA, and Brokerage accounts as well as a Fundrise account.
• Home Equity – $490k (at time of note we had about $10k mortgage remaining).
• Other Assets (Vehicles/Other) – $20k.

EARN

What is your job?

I have a global role in corporate finance at a senior director level for a private equity-managed company. I have responsibility for a global team and support C-Suite Executives in financial execution.

My wife is primarily a stay-at-home Mom but does multiple “side hustles” and is involved in a paid role for our Church as well.

What is your annual income?

Combined we make around $250,000 Gross Income (about $20k from this is side hustles) in salary/wages/service income.

On top of this, I can make variable pay depending on my employer’s financial performance. Most years I could expect at my current salary to make an additional $50-$100k.

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?

First a bit of background: I have a 4-year degree from a state university (Mid-American Conference) and a master’s in Accounting (Big Ten Conference) and am a certified public accountant (do not practice in public though).

My wife attended the same state university as me but chose to leave and pursue service industry management and other passions from a non-traditional school perspective.

I’m probably a bit strange from most of the interviews in that I’ve worked for the same company since joining after college. I’ve graduated to various different roles progressively over the years but remained at the same base business.

By year my salary has grown as follows (by years):

• 1: 44,350
• 2: 45,500
• 3: 52,340
• 4: 54,790
• 5: 62,000
• 6: 88,000
• 7: 93,280
• 8: 110,754
• 9: 115,737
• 10: 131,768
• 11: 135,721
• 12: 154,500
• 13: 154,500
• 14: 177,225
• 15: 182,541
• 16: 210,836
• 17: 230,000

In general, I’ve been blessed to have just over a 10% CAGR over the years and also have added more depth and increasing responsibility to my role which has kept me happy and engaged without getting bored.

My wife, pre-children, worked from an hourly front desk job to a management role that paid a salary of roughly $30k. In general, though most of her work now is hourly paid wages and/or service income.

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

I come from a football (American) background with coaches that were tough but fair so I might be too blunt but I think most people are too entitled today to think they deserve things or they are quick to just change it up.

I’ve been the example of staying in a place with your employer still IF you have people you like working with, you are not doing the same thing over and over, and you’re ok with being flexible (maybe a job move, maybe a lateral opportunity, maybe a special project).

Even if you do leave jobs make sure you have a good answer to why you’re doing it. Unless you are deep in debt money should probably not be the top of your list as to why you are leaving IMO.

It might seem simple but I’ve simply taken the approach over the years to do the following: Ask questions and ponder why things are done (a process, an output), Be someone that helps make things better not a problem – offer solutions and if they are not taken don’t hold it personally or say “I told you so.”

Work hard to do your job well but understand how your job impacts those around you. Technical answers are not needed 90% of the time but rather people just want to know how to translate what you do to actionable requests they can learn from or implement.

As you progress help your team – coach them, congratulate them, be straightforward with them, respect them. You want them to actually be successful don’t fear them being elevated past you or moving on.

Outside of the workplace make sure your career works for you personally too for what priorities you have in life for religion, work/life balance, and family time. Each person must gauge this individually as we all have different levels of comfort – just know it likely will have an impact on earnings potential.

What’s your work-life balance look like?

I’d say it ebbs and flows and for periods of my career were not ideal. How I would best describe it is I’m pretty flexible to get things done during the week for which I’m really grateful for.

If I need to leave a little bit early or start a bit earlier it’s not a big deal as long as critical meetings you are ready to go. That being said at my level it’s not unusual to spend some of my vacations in meetings or calls.

I do my best to have these in early mornings when things are quiet but it’s kind of part of the job – at my level at least. At times I manage this well and at times I don’t so always enjoy reading these responses on other’s interviews because I know I’m not the only one.

Do you have any sources of income besides your career?

In general not much outside of my salary/bonus. I mentioned my wife has side hustles and for the sake of privacy I won’t get into all of the specific items but they are non-passive meaning she has to be on-site or performing services to earn.

In general, it’s hard work for not a lot of income something which I remind her of as it can cause her a lot of stress at times.  I don’t discourage her from doing it but remind her we are blessed to be in a position where she doesn’t have to do it or can tell people no.

Passive income is an area I’d like to focus on in the next 10 years although I’m not sure exactly what I plan to do and my current sources are quite limited. Here are a few areas I’ve executed or thought about though:

Credit card cash back – I probably earn about $1,000/year from just using my card on normal everyday purchases and then paying in full each month.

Crowdfunded real estate – I have within the past two years diverted just over $10k into Fundrise. This is basically hands-off other than keeping up to date on performance/market trends.

Physical rental real estate – I like this idea but really don’t want to manage properties or deal with the hassle with young kids. I’m not sure my wife would want to either. That said I could see us buying a condo in an area near the beach where we’ve vacationed for the past 15 years as we’ve both had many conversations on this topic.

We’d likely rent out the unit until our kids are out of college OR I’d potentially have my parents move into it (the latter is not likely as I’d really not want to have family tied up in my investments). So in short we are still thinking about this area.

Interest Income – our cash is in high-yield online savings accounts and generates at least a little bit of income monthly for doing nothing special or extra.

Dividend Income – I do have a brokerage account which can provide dividend payouts although the balance is quite small at this time. At this point of time those funds are reinvested.

Blogging – I do enjoy writing and had even signed up at one point to start a project but life was too busy to focus enough to accelerate this. I will work to make this more of a priority over the next 5 years.

Overall, most of my effort was put into my career and thus these areas have been secondary. Getting a few of these in action still helps offset some of annual expenses and would help create more safety buffer in the future.

SAVE

What is your annual spending?

About 120k or so at the moment with two kids in our house.

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

Based on the last twelve months’ spending I’d summarize as follows:

• Mortgage 18k
• Medical Premiums 5k
• Travel 5k
• Utilities 6k
• Groceries / Restaurants 20k
• Accrued costs (529, cars, medical savings) 13k
• All Other 62k (Charity, Kids sports, Insurance, Home maintenance, Amazon)

Commentary: This could definitely be cut back more if absolutely needed to. We generally eat out 1x week casually at kid-friendly restaurants and we use meal prep service 3x week for dinner.

Our kids both play sports and the fees add up quite a bit too. Our travel usually consists of a few road trips back to our hometown per year (staying with family), a local driving distance travel in summer, and a summer trip we fly to at the beach.

Accrued costs are basically contributions to kids’ retirement or health savings accounts plus contributions for replacing our cars down the line. We typically drive our cars for 10 years and reach 150k miles or more before we move on.

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

When we were in our 20s I was much more into that probably to the annoyance of my wife. I try now to have more frequent conversations with her on large upcoming purchases and alignment on major spending goals (vacations, house renovations, kids sports, etc.).

If something is not trending well we have a discussion around and it works to change behavior but we don’t watch to a number each month.

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

35-40% depending on what bonus is for me is how I’d answer that. As my income has grown this is probably higher but I’d say I’ve always had a minimum of 15%.

What’s your best tip for saving (accumulating) money?

Automate where your inflows go to especially if your income is consistent. This makes it a lot easier to manage day-to-day.

If you are trying to manually move things all the time it takes a lot of brain power and discipline to do vs having money swept automatically. Those with uneven incomes I feel for – I’d recommend a larger savings buffer in that case and still to automate as long as you’re comfortable you can draw down savings as income fluxes to continue saving.

What’s your best tip for spending less money?

Leverage savings where possible for things you buy vs spontaneous buying. It’s ok to buy things too but make sure you are comfortable saying “no”.

If I buy big things I also try to wait a day or a week or a month to see if it’s still the same feeling. You can’t always do that but it helps to level set you.

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

I don’t mind spending money on experiences and/or travel. That is much more of a desire than tangible things I use each day.

For example, I went to the Super Bowl a few years back but I don’t regret doing it at least once given I’m a huge fan.

INVEST

What is your investment philosophy/plan?

Roughly 60% US stocks, 20% international stocks, 10% bonds, 10% Other (Real Estate, Cash, Ibonds).

What has been your best investment?

I don’t invest in anything beyond index funds/retirement funds so nothing I can pound my chest on.

What has been your worst investment?

I’ve had some idle investments sitting money market or cash type of accounts that were not dealt with timely. They did not lose but I had opportunity cost of missing out on other gains.

I’ve also aggressively paid down my mortgage and should be done with it shortly. Others will say this financially is not correct because my rate was low vs investing.

I look at it as my expenses permanently go down now (risk mitigation) and my peace of mind is more important than the incremental investments I lost out on.

I still was contributing to savings despite the pay down as well so again I feel ok with this choice being the right one and I look forward to dumping the extra money soon back into investments.

What’s been your overall return?

A bit lagged to S&P 500 due to a small portion of bonds and international stock holdings in the index funds I have.

In general, though it follows directionally how US stocks are doing overall.

How often do you monitor/review your portfolio?

A couple times a week I look at Empower.

I tend to do deeper dives into the actual portfolio around the holidays though as time off work is longer and we approach the calendar year end.

NET WORTH

How did you accumulate your net worth? 

We’ve received no inherited money and have grown on strictly the backbone of earning, spending less than we earn (i.e. saving), and investing.

We have a nice shovel for income (although you will find plenty of interviews here which are higher) and we are not super materialistic so do a nice job saving.

Investment strategy I shared above and it is not complicated.

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?

Good question to think about. I’d probably say saving.

I earn a healthy income no doubt but consistent saving and spending below our income have enabled us to avoid debt and grow our net worth.

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

Probably not as big as others that I’ve read on these but we’ve had house issues, car issues etc. all that made us dig into savings we had established. I can’t stress enough to those just starting, having funds beyond the day-to-day bills is a big game changer.

For the most part though, we’ve been fortunate and have avoided big big issues.

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

Spending less than my inflows. Earning an income that allows me to add significant contributions on top of investment gains themselves.

Working hard at the workplace to ensure I still provide value and don’t just become an expensive knowledgebase that is stuck in old ways.

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

I suppose 2 million since it’s the next up.

I don’t believe you ever can set a bar high enough but if I ever surpass 5M then I’m fairly confident I will not be able to overspend that on an ongoing basis.

Thus that is probably the next “level up” for myself.

Beyond that is more a function of the inputs than me driving to a number. I’ll also note I’m really trying to make sure I don’t treat this as a game to score the highest points (i.e. net worth) and then not actually enjoy any of it.

If I think we are at a level to sustain our spending and have risk I can live with my goal will be to pivot to something more in line with our schedules vs keeping the corporate job.

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

2021 – around the time I was turning 37.

Behavior wise nothing has really changed as we still are very much in accumulation mode.

It is more noticeable now on days when the market is really good or bad that the net worth balance can change in a meaningful way.

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

Nothing too extreme I can think of.

Of course, I could have saved more or invested earlier in high school but I’m not sure I’d call it mistakes as much as missed opportunities.

What advice do you have for ESI Money readers on how to become wealthy?

Know your “why” and what you want your money to do for you. Compared to 20 years ago there are so many free resources that you can literally become extremely knowledgeable with relative ease.

I’ve always learned things well by having 3 things or less to takeaway so my suggestions would be:

1. Own it: how you got somewhere is something you have to own good or bad. Don’t make yourself a victim or blame others for what happens.

Mistakes are not bad too if you were knowledgeable on the subject and took on an acceptable risk that you could live with. Use your experiences to make you stronger vs letting them be a reason you can’t move forward.

2. Build it: You get to decide how much of a shovel you want working for you and as well you get to decide how much of what you bring in you will save. You need to build to what you “want” though as earning a mountain of money and being miserable is not the way to achieving happiness in your life.

Some may be perfectly content with lower expenses and working longer while others go for a high income low career span. It’s yours to decide!

3. Direct it: Automate things where possible to force scarcity yourself to some extent. Meet your objectives by properly spending/giving/investing your inflows.

You do not need to be a genius or have paid for financial advisors to have a strategy that works for most people.

FUTURE

What are your plans for the future regarding lifestyle?

From the projections I’ve done, we still have a bit to go in current jobs before we change anything up. Likely when kids are done or completing college I’d like to find something more laid back that can simply allow us to cover living expenses so our investments can continue to grow.

I do not see myself working until 65 in my current job but I also see myself doing something for a long time just much much more flexible to hours I want to work and money being much less important for why I chose to work. More details below.

What are your retirement plans?

Age 40(now)-50: Continue in current job or similar type job. I’m assuming here I can make it another 10 years with still drive/passion and work that is fulfilling.

I realize this could change and can/will model other scenarios if my drive or passion changes.

50-60: Scale down is key here. At this point, I’m planning to effectively pay for all my living expenses with work or passive income.

Exactly what job this is and how many hours it is and what it looks like I’m not sure of yet.  I could do my own business, do project work in my field at extremely less hours and more flexibility, or do a lower-paying job for close to full time.

This time period should allow my invested assets to continue to compound. Flexibility is key here.

60-72: I’m expecting I will come up with something that creates passive income but my current plan suggests only covering about a one-third ratio of income to my expenses. Thus I will need to draw down on assets during this time period.

To me, this looks like a very limited part-time work or both of us doing some fun side gigs that keep us engaged and active.

Age 72 and onwards: I’m assuming social security will kick in some fashion and along with my passive income will largely cover my annual expenses.

With my projected assets growing as much as they do it’s very likely my overall financial picture actually still grows over the years which gives me options (more travel or gifts) or a lot of safety net.

If for some reason I lost my job earlier or the market did worse or we had major expense changes I feel like this can be reworked fairly easily.

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

Think it’s more of the non-finance part – as humans we are wired to work and have structure and purpose.

In retirement I just see it being a challenge to continually reevaluate that and not let yourself lose the edge you had when you were all hands on deck.

I’ll probably have a better answer to this over time.

MISCELLANEOUS

How did you learn about finances and at what age did it “click”?

Growing up I naturally was never a spender and was quite content with a few things I enjoyed doing so probably was easier than some kids are. I remember saving birthday money and any extra money I got to buy a 30-inch TV back during high school.

All that said I knew absolutely nothing about investments or personal finance really until late in high school and mostly college. I opened up my roth IRA in college and that is where I started to figure out things slowly and surely over the years.

Almost entirely though I’ve self-taught as I’ve grown.

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

I can point to a few different people and will comment on how it relates to my finances:

Mother – I’ll admit she’s not the smartest financially but she always acted like she knew what to do or whom to talk to for advice. She is always positive and was encouraging me growing up.

My parents are divorced so a father figure in my youth was not always front and center to guide me. She encouraged me to go into accounting because I was good at math (side note: I don’t think being excellent in math is really all that necessary in that profession unless very specialized).

I also appreciate that she and my father split my undergraduate bill out of pocket so I could avoid student loans.

HS Football Coach – I’d like to think I’m super resilient and “tough” because of my experience in those years playing football. Practices were hard and at times frustrating but I saw firsthand how he got every ounce out of a group of kids that was limited in core attributes (size/strength/natural talents) and we were extremely successful.

The work you put in was visible on the other side and unless you have had a similar experience it’s hard to explain in written form what those lessons paid off with today for me.

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?

I don’t traditionally read books but have read the Dave Ramsey, and Suze Orman books that I received when I was younger.

Most of my insight (or laughs) come from these sources:

• Podcasts – used to listen frequently when walking Dave Ramsey (I’ve kind of outgrown it but I do love the debt-free screams and Millionaire call hours) and now have listened more to Financial Samurai/The Money Guy show. I still listen to Suze Orman’s podcast too when the right topic is on point as she tends to cover deeper dives into areas near retirement that as a younger person I’m not always thinking about.
• Blogs – Creature of habit but I visit this site, Financial Samurai, and one/two others frequently at least a few times a week concurrent with the posting schedule. I enjoy reading the comments/interactions as well.
• Reddit – I’m newer to this than maybe some younger folks but I enjoy reading posts others have. It has a lot of ridiculous feedback/comments but also sometimes some insights/comments I would not have thought of.

I’d caution if you’re younger to go beyond just this given misinformation can be posted but it’s still entertaining at times to read.

My recommendation since I don’t read a lot of books is to simply find what works for you and is digestible given your current financial knowledge and goals. It’s more important to do something with your financial plan than sit idle and I’d recommend diverse sources over time so you keep perspective.

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

I do and it’s not enough (about 1-2% of our income per year on average). My wife as mentioned does work (paid) for our church but also has significant other tasks she does that are unpaid.

In general, I’ve held back so we can get 100% debt-free so I’d know for sure I’d have our own house under control but this reasoning is poor from my religious view. Over the second half of my life, I hope to be much more spontaneous giving and I think I will enjoy it as much as buying material things!

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 are not targeting this per se but if our investments do well beyond the conservative modeling we’ve done then it will indeed happen where it’s likely we won’t be able to outspend our annual returns.

This is an area though that will be frequently reviewed as we enter the other side of our 40’s where tax planning, giving, and estate planning become more important to hone in on.