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 July.
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)?
I am 50, wife is 46.
We have been married for 20 years.
Do you have kids/family (if so, how old are they)?
I have three kids, ages 9, 14, 16.
What area of the country do you live in (and urban or rural)?
We live in the suburbs outside a major city in the northeast US.
What is your current net worth?
Our net worth is $22 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?
- Public Equities – $14.6M ($4M in retirement accounts, 900K in 529 plans, balance in Index ETFs and individual stocks).
- Private Real Estate Holdings – $3.7M (a very select few sponsors, I don’t manage RE on my own).
- Private Equity – $1M (Some direct PE funds, some GP stake funds).
- Alternatives – $1M (Variety of VC, Music Royalties, Litigation Finance, Life Settlements).
- Private Lending – 600K (corporate lending via sponsors).
- Primary Residence – 700K (net of mortgage).
- Cash – 700K.
EARN
What is your job?
I recently retired. Prior to that, I worked in accounting, finance, and executive roles at a subsidiary of a public company.
I’ve been a Controller, CFO, COO, and President over that time. I started my career in public accounting.
What is your annual income?
Investment income is approximately $300-400K in retirement.
My work income prior to retirement would range from $500K to $1M depending upon the year.
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 paid $36K nearly 30 years ago. Public Accounting firms did not pay their staff much.
When I left after 5 years, I was making $85K. Upon leaving, over the next 22 years, my earnings would grow on average by 15% a year.
To break it up a bit:
- The first 5 years of my working life, my average comp was $60K.
- The next five – $170K
- Next five years – $380K
- Next five years the average was $710K.
- The last seven years it was $1.3M a year average.
What tips do you have for others who want to grow their career-related income?
The above was accomplished without changing employers, working at a subsidiary of a very large organization. There is a belief that you have to change jobs/employers to maximize your earnings.
I feel differently. You may have to change jobs to maximize opportunity, but you have it within yourself to maximize your earnings and create opportunities for yourself.
At a very early age – entry level – that looks like attitude, energy, work ethic. If you are a person who goes above and beyond to learn, to contribute, to support the team you are on – generally speaking, people take notice, absolutely love those types of employees, and will heap opportunity on you.
Maybe the environment is such that they can’t do that for you, but by and large, you can make a lot happen all by yourself.
I was an average student. I probably have average intelligence. I was way above average in the attitude, quality, and thoughtfulness that I brought to my work.
Experience and knowledge are like a flywheel, like money. It compounds massively.
The more opportunities I was given, the more mistakes and failures I could experience early, the better I became, and the earlier I was prepared to lead. But it all started at a copy machine, a fax machine, and doing crap that no one likes to do.
If you want to grow your earnings, I would say a good goal is to be making $300K in 10-12 years from the start of your career. If you are able to become indispensable to the executives around you by that time, you can start to co-create your next opportunity with them.
You earn enough trust and value that you can write your next job description. You play a very active role in defining your career path and putting a price tag on it.
There are very few moments in your career when you have a material amount of leverage with your employer. You have to use it aggressively to negotiate your compensation.
This is what made a big difference for me and can for others. You can’t be a passive participant in your career if you want to maximize earnings.
Most employers inherently won’t want to pay you more than a minimally acceptable amount and most people do not advocate hard enough for themselves. It’s hard for most people to appreciate their value, so they sell themselves short.
What’s your work-life balance look like?
Early on, there is no balance – which is fine because you don’t have a family. It took a while for me to adjust to having kids and changing my work/life balance to be more present.
However, there is a difference between being physically present and being emotionally/mentally present. I may have gotten myself out of the office and home at a good time, but I might as well have been sitting in the coat closet.
They don’t talk about it much, but balance is about being emotionally present for those you love. I didn’t realize how out of balance that was until I was no longer working.
I was great at being physically present, but I feel like I didn’t capitalize on it, as my mind was elsewhere.
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 have spent 15 years active in managing my money and preparing for early retirement. I can ratchet up the income in a variety of ways but don’t because 1). we spend much less than I have earned, 2). I am sensitive to taxable income.
Currently, income looks like this:
- Stock Dividends/Bond Interest – $130K – mostly taxable.
- Real Estate Income – $100K – largely shielded by depreciation.
- Other Investments – Alts, PE, etc – $130K – a mix of taxable/deferred, quite variable.
I developed these revenue streams through research, trial and error over an extended period of time. It takes time to find options to invest in, then to gain access to them is the next hurdle – being an accredited investor is a start (1M net worth), and being a qualified investor (5M) helps considerably.
These are steps that build upon one another. Each allows you to gain access to the next level up.
Finding a good private debt sponsor is a good first step in generating income – hard money lenders as an example, with minimums of 100K. The income is taxable, however.
SAVE
What is your annual spending?
We spend $16K a month, Say $195K a year. That figure has risen 5% a year since 2017.
Largely linked to the growing appetite of my children, their activities, and a few healthy years of inflation.
What are the main categories this spending breaks into?
- Groceries – 13%
- Vacations – 13%
- Mortgage – 9%
- Property Taxes – 8%
- Entertainment – 7%
- Dining out/take-out – 5%
- Home Maintenance – 4%
- Healthcare Out of Pocket – 3%
(note: I will be transitioning to a private plan next year, exiting my employer’s plan. This will cost about $40K a year including out of pocket).
Do you have a budget? If so, how do you implement it?
For over 20 years I have lived WAY below my means. My wife is frugal and I do not have a need for expensive cars, etc.
I have never had a budget. I analyze my spending to understand the trends and to prepare for the future, early retirement, college savings, etc.
My wife defers to me on money matters. Our money has been joint for as long as she worked, prior to being a full-time mom 10 years ago.
What percentage of your gross income do you save and how has that changed over time?
From the moment I made $300K, 16 years ago, I have saved at least 50% of my compensation and invested it. As earnings grew per the above data, my spending never changed.
That allowed me to invest aggressively in what was arguably one of the biggest bull markets of our time.
What’s your best tip for saving (accumulating) money?
It depends upon your goals. I was only interested in money for the freedom it gives me, not the material possessions.
Plus, I love investing. I love watching money grow. I love getting into new investments.
Other people like cars. I drive a 2009 Toyota.
If freedom is important to you, then finance it. If the car is important, then finance that.
Most people spend more money as they make more money. I did not.
That makes a big difference. The habits of your partner are also very important.
What’s your best tip for spending less money?
I still roll up to the grocery store with some random coupons I get in the mail. Seriously.
When I was a child, my mom would give me a quarter to cut coupons for her and file them in her book. If I can get something at a cheaper price, I try to.
I view the world through a 10% annual return on the S&P 500… so for me – if I can save 10% on a purchase, in one transaction – I love that.
Many people are focused on the things money can buy them and “keeping up with the Jones”. You have to overcome these traps if you want to save material amounts of money.
What is your favorite thing to spend money on/your secret splurge?
Like many, I spend on experiences. I stay in nice VRBO homes, and I treat my family, my extended family.
I will stay at hotels on the rare occasion I can get away and have no problem spending $1000 a night. I spent large sums on a pool and a home remodel.
These are expenditures my family and I get a lot of value out of.
INVEST
What is your investment philosophy/plan?
It has taken years, but I have codified a set of investment principles that I use. It is a summation of the things I have learned from others, read, or discovered firsthand.
They are:
- No investment will be greater than 5% of net worth. This includes the total value of single stock positions when combined with their weighted portion of the S&P500 Index ETFs that I am in. So I have to add up my shares of NVDA plus NVDA’s portion of the index, as an example, to understand my true exposure to NVDA.
- Invest with sponsors who have been through multiple down cycles with little to no principal lost.
- Avoid higher risk categories – ground-up construction, hospitality, heavy value add, etc.
- Invest in projects that take on conservative leverage – i.e. no more than 65%. I do not want the bank to take over the project in a downturn. This principle has saved me a lot of money in the meteoric rise in interest rates.
- Ensure debt is fixed through the duration of the investment, do not assume interest rate risk. This has also saved me a lot recently.
- Do not invest your money with family or a friend you want to keep. Friendships are priceless. I’ve seen too many friendships fail from people doing this.
- Do not invest in anything that is mass-marketed to the unsophisticated retail investor – i.e. Facebook ads, podcasts, etc. These promoted platforms often do not provide the investor with any meaningful due diligence. Examples: Yieldstreet, Crowdstreet, Patch of Land, etc.
What has been your best investment?
Big tech – AAPL, META, NVDA, and the S&P overall have done well for me for over 15 years.
What has been your worst investment?
Yieldstreet. Early on, trying to diversify from public equities, this was the type of investment we found first because it is mass marketed and access is easy.
There is no due diligence provided. Fortunately, I invested a small amount and my losses were modest (approx. $40K). The losses were in marine finance and real estate.
What’s been your overall return?
12-15% a year with the bulk of that coming from the S&P since 2010.
How often do you monitor/review your portfolio?
I check in on news, markets, and my stock portfolio daily.
I do a full balance sheet and P&L at the end of every month.
NET WORTH
How did you accumulate your net worth?
I started with nothing. My net worth was driven by investing every dollar I could in my late 20’s/early 30’s.
My spending habits and investing approach remained unchanged as my earnings grew. The impact of compounding and high earnings later in my career made a significant difference.
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?
Investing. I could have retired many years ago with a net worth of $6M. At this point, I had earned 40% of my total career earnings.
That money grew through aggressive investing and would have been enough to sustain me. After that period, earning is what got me from $6M to $22M, coupled with aggressive investing.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
The biggest challenge is gaining access to diversified investments uncorrelated to the stock market.
This creates some misfires and poor investment selection as described further below.
What are you currently doing to maintain/grow your net worth?
I continue to diversify from public equities as cash becomes available. I maintain the same principles stated above. I would like more private equity exposure.
When Interest rates fall, I will borrow modestly against the portfolio to grow it further. This was something I had conservatively begun to do towards the very end of the low-rate cycle.
Do you have a target net worth you are trying to attain?
I wanted to be at $20M to retire by 50. I have been modeling out my net worth for the past 15 years, estimating growth over the next 50 years, and do have a rough estimate of where I want to be each year end.
I can adjust all the variables to see what my range of outcomes can be – conservative to optimistic. Conservative is knocking the S&P down to 4%, inflation up, taking down non-public investments to 6-8%.
These values are less than half what the expected outcome is.
How old were you when you made your first million and have you had any significant behavior shifts since then?
I was 33.
I have not changed my behavior at all.
What personal habits and/or traits have you developed that have made you successful at growing your net worth?
Track your money. Develop your Excel models to project out what your net worth can become. At 20 or 30 you can run these scenarios.
When you put data like this on paper it brings some clarity to what could be meaningful goals for yourself. It’s no longer a nebulous “I want to be wealthy, I want to retire early”.
Lay it out on paper and see what it actually requires of you, not just the end result – You want $XM in 40 yrs?
Instead, what is the journey to get there? What does next year have to look like? Where do I need to be 5 years from now?
With these goals, you have the context to assess your job compensation, your saving rate, your investment return, etc.
What money mistakes have you made along the way that others can learn from?
When you start to have money, you are like a blind man feeling his way around. My first stop was a financial advisor, paying 1%, thinking tax loss harvesting and investing was something I couldn’t do myself.
I stopped that after a few years and put my money in a cheap S&P ETF. The next stop is a journey through alternative asset classes – Peer-to-peer lending platforms (Lending Club), Platforms like YieldStreet, etc.
The next stop is poor sponsors and investment projects. The theme around all of this is access.
You are so excited to gain access to a new investment alternative that you are biased and inexperienced in your risk assessment. My advice is to skip over all of these steps and keep your money in the S&P until you can go straight to accredited investments with proper sponsors and due diligence.
These funds require minimums of $3M or so. At my current net worth, I can’t take that concentration, so the challenge becomes finding feeder funds/entities/advisors to get you into them when aggregated with their other clients’ money.
That is where I am now and will likely be for a while.
What advice do you have for ESI Money readers on how to become wealthy?
Maximize career earnings by creating opportunities to advance in your profession as described above. Invest as early as possible in your life, ideally in your 20’s, or aggressively in your 30’s.
Forgo the big incremental purchases as your income increases, instead invest in your earnings growth. Let it multiply, and spend it later.
Many will say “What’s the point in having money if you don’t enjoy it”. This is a tradeoff.
There is joy in not having stress about how I will get my kids through college, being able to retire at 49, etc.
FUTURE
What are your plans for the future regarding lifestyle?
Having retired 8 months ago, I don’t have any plans to adjust my lifestyle for some time.
What are your retirement plans?
I plan to spend as much time with my kids as possible. My oldest will be heading to college soon, so I want to maximize my time with him.
I feel quality family time is the primary luxury that my net worth has afforded me. This should be a special summer together unlike any I’ve experienced before.
I am very focused on the present day and am purposely not thinking beyond that. It is a massive adjustment to step away from a top executive position.
I don’t know what will satisfy me 1 year from now, 5 years from now, etc. Right now, my motto is – if I’m not enthusiastic about doing X, I don’t do X.
Many of the things I expected to do in retirement, I am not interested in doing at this time. I spend about 15 hours a week on my finances – which I view as managing a mini-family office.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
There is uncertainty about how I will spend my time in the years to come.
But I am addressing that by focusing on the day and being open to where the tide takes me.
MISCELLANEOUS
How did you learn about finances and at what age did it “click”?
My father was very influential. We spent a lot of time talking about business, money, and careers.
He backed a business I started at 13. He was less interested in making any money than creating an opportunity for me to experiment and learn.
Who inspired you to excel in life? Who are your heroes?
My hero is my father. I became an accountant because he did. He was a very good man, good to people, and enjoyed helping others.
I try to follow in his footsteps. Helping others is a passion of mine, usually helping them invest their money or navigating a financial challenge.
Do you have any favorite money books you like/recommend?
Reading was not something I had much time for.
I hope to start.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
I donate to Goodwill a slew of possessions each year.
But other than that, this is an area I would expect to do more of as I grow my net worth.
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 goal was to die with nothing. However, that is not likely to happen.
I am very sensitive to leaving significant sums to my kids as I want them to earn like I have.
They are expecting to pay me back for their college tuition. I likely will forgive that under certain circumstances. Overall, my plan here is TBD.
Any inheritance would likely have a variety of strings attached – funds for special purposes, etc. It really depends on how things progress over the next 40+ years (hopefully)!
Given you are relatively young to retire, how did you make the decision to retire at this point vs. earlier/later?
I almost pulled the trigger 8 years ago. I am happy I did not as the earnings from my career increased significantly.
Ultimately, this is a weighing of several variables: 1). The joy you get from your job, 2). The alternative joy you are forsaking because of your job, 3). The wealth you need to sustain the balance of your life.
The joy from my job was declining, somewhat rapidly. What I was missing at home, with my kids, and my wife, was growing.
Then it just became about money and courage. I felt I had enough of a cushion a couple of years ago.
It’s never an easy decision to leave the people you have been leading at work for so long. They are an extended family.
Your job can become your identity. A situation presented itself for me to exit, and I took the opportunity. Had it not been for that catalyst, that nudge, I may not have had the courage to do it.
This is a very foreign and unknown world to me now. With my family and myself, at the center… this feels like the right foundation for a new journey.
I am starting to feel more comfortable…one day at a time.
Good for you! I retired ten years ago at 49 also and, although my net worth was about half of yours, a lot in your article resonated with me and how I built my wealth and planned my life. I just wanted to offer you my advice and support in what is very uncharted territory for people like us when we make the brave decision to step off the treadmill. Firstly, you’ll never look back or regret it. Secondly, give it a little time – it took me around 2 years to feel ‘normal’ in my new role and be able to confidently and unapologetically tell people I was retired. Lastly, I like that you have no real plans or goals because the beauty of your life now is that many diverse and different leisure or life opportunities will crop up and you can choose to do whatever you want. Have a wonderful next chapter my friend!
Hi, thanks for the comment and advice. It is certainly hard to truly articulate the limbo one feels in this situation. It’s also not as simple as – you have saved/invested/made a lot of money and go enjoy it. As I have three kids, my daily life actually can’t change that much! Except that I do more driving of them around! What did you ultimately find yourself doing 2 years out if I may ask?
Wow, you’ve done very well.
Your assessment on Alternative Investments are very valid, I would add one more rule for someone starting out would be to place your money into a fund instead of individual assets; then once you built up enough you can diversify into individual assets. You may want to consider becoming a part-time financial advisor in alternatives; if you are interested you can contact me, I think you would enjoy it and help a lot of people out, that’s what I’m doing after I retired.
Hi! Thanks for reading. I agree that a fund is a good place to start. I would leverage some of the same rules toward that fund sponsor as I would an individual investment. Then I think you can move to specific deals with proven sponsors that fit your criteria. There are those that raise money for deal by deal vs. those that are raising capital for a blind fund. It is a bit of a balance – the benefit of knowing the asset specifically vs. not, but having some diversification. I will ping you on the advisor idea. Sounds interesting!
Looking forward to speaking with you.
Great write up! Thank you for sharing. The one day at a time approach resonated with me for a long time.
Thanks for reading. Happy that resonates… it certainly is a journey to get to that mindset and I think I may be on step 2 of infinity in that regard!
“Make $300k 10-12 years from the start of your career” … This feels out of touch. Sure, some very large organizations are now back to in-person/hybrid, but still a numerous amount are remote. And moving up that quickly doesn’t happen without facetime. I think it’s a great goal, don’t get me wrong, but as a hiring manager, and someone who is not in sales (which is where people can really make the most money) companies A) aren’t paying that and B) very few people will be afforded those “opportunities,” to move intra-company and do many jobs, luck plays a big part in that.
I am 33 years old, have a +$1M net worth but just started making $200K (11 years from the start of my career). A lot of that was luck, even with the same principles of: attitude, energy and work ethic. Saving and Investing are core principles everyone reading this has, or wants to have, no matter how much you make, I think the author expresses that same sentiment. What was the savings % before this person started making 300k at age 34? It had to be fairly high and consistent, before the 50% @ 300k, which I think makes my point on the S & I principles.
It would have been nice to read in more detail the career trajectory, exact positions and compensation at those positions, even industry this very large organization was in, because to me this is not reality. I also would love to know more about navigating large organization “politics” as the buzzword goes, because that definitely plays another role in success. This story is very impressive, I agree with a lot said, and even something I am striving for, but the initial comment that started my post rubbed me the wrong way. We as a community can articulate ESI principles better vs. telling people to make a lot of money (~2% of the US population makes 300K – via a quick google search). I think we should temper expectations for the ~98%.
Hi, thanks for reading and your comments. Regarding the 300K goal – let’s take accounting as a semi-widely accessible profession. Starting salary in public accounting is approximately 75K. Using the 12 year timeframe – at that time, that higher performing accountants would be in or around the SVP, EVP, Controller, CFO title. The base salary of that individual will likely grow more than 10% a year on average as they get promoted. A bonus of 20-40% cash/stock would not be uncommon. In professional services, generally, after 12 years, the top performers are typically in leadership roles of some kind. Department head, service line head, or higher. From my experience handling compensation in professional service settings as well as overseeing HR, talent acquisition, etc. – this is attainable in finance, consulting, marketing agency environment, healthcare (pharma), to name a few, the size of which can vary – big to small. The 300K figure I used can be adjusted for location and cost of living. Ultimately, I think what drives the compensation to be upper echelon, is the rarity of the performance, more so than the scarcity of opportunity. Performance creates the opportunity in my opinion. My guidance is more about the effort required to be able to influence your outcomes and the importance of doing so, than “go make a lot of money.” Regarding savings – my savings rate was fairly high in my 30’s. Less so in my 20’s. Regarding politics – who you are working for and with, does matter. There are politics in every setting. I developed a reputation for not being the typical political operative some become when they move into leadership roles. The executives you become indispensable to, as you move up the ladder, become important allies in your blunting the political agenda of others. They likely are moving up the ladder as well, ahead of you. In situations where I ran into a political spat, initiated by others, those allies helped. My tenure at that company likely helped, as my reputation was one of hard working/talented but also a good person who cares deeply for the people he is leading. If there weren’t people above my paygrade that were similar, like minded, I wouldn’t have stayed there.
I’m a huge fan of your advice on work ethic and how it can differentiate and put you on an exponentially improving path.
Quantifying it ($300K) is a bit more controversial – too much depends on profession, location, and other contextual factors. But regardless of the number, that model for outperforming others applies and for me that is your key message, not the 300K number.
I do feel those are timeless qualities that make the greatest impact – Attitude and Work Ethic. It doesn’t matter the technological age we may live in, what century it is, etc. These things make such a difference and it usually starts very early on – when you are standing shoulder to shoulder with 30 other new hires in an entry level position, where you all know just about the same thing – Nothing.
Loved the interview—congrats on all your success! I find it absolutely fascinating how, if you succeed professionally, the compensation in the last few years of your career can surpass all the money you’ve earned, saved, or invested over time. Your compensation in those final years was phenomenal to see, and I believe that’s typical of senior comp structures.
I would love some advice from you on how to approach burnout. I’m a 35 year-old with a total net worth of $3 million, making $400K to $500K annually in corporate America, but I’m completely burnt out. As a result, my health is suffering. I don’t want to walk away from everything, but I’m struggling with how to manage it. What would your tips be for dealing with burnout? Any strategies that helped you delegate and manage professional and personal life?
You’ve won the game already. You could work or consult part time to cover costs and your $3m left untouched will be worth around $10m-$12m by the time you are 50. As such, you don’t need to hustle for extra income unless that $10m won’t be enough. Instead, you could consider focusing on work you love and/or spending more time with your family.
Thanks, Peter. Unfortunately, I live in a high cost of living state and still need to purchase a primary home, which has become very expensive. So, it looks like retirement is still a bit further down the road for me.
Thanks for reading. For comparison – at 35, my comp was 400K and networth 1.5M. Congratulations on your success. At 35, I can recall feeling a lot of stress and burnout. The biggest positive impact I could make at that point was restructuring my team around me. I had not yet graduated to that mindset of surround yourself with people who can take your job today. I thought I could develop the staff under me to succeed me. Part of my challenge was the business around me was growing at a rate exceeding the rate of growth of my team and surrounding infrastructure. I worked under an desire to promote from within, grow the talent around me into new positions as the business grew. The rate of growth however exceeded the rate at which the team could learn and develop. So we all were getting crushed. I had to hire from the outside to install the personnel I needed. Ultimately, I did lose some people along the way – more from the burnout than bringing in someone above them. I operate from a general assumption that if you/we are working ridiculous hours, our structure is not right. So we have to fix the structure. That is the first place I would look. The other thing, there is no way that I would have achieved what I did if I had not made those hires to bolster my team. It allowed me to move to other responsibilities and grow professionally. So it had a significant dual impact on me – curing the burnout and providing for growth in my career. It was also beneficial for the entire team and the company overall. Every few years, given the growth rate, we had to reevaluate structure. Identify and fix the cause of the burnout – whatever it may be. If it’s hours – look at staff and structure. Happy to help further – feel free to DM me.
Thank you, these are all great tips. Unfortunately, I’m in an individual contributor role with very limited support, and most of the workload falls on me. Did you ever hire an executive assistant out of your own pocket, and did that end up helping you? And did you ever take executive coaching?
Also, I recall you talking about “financing your freedom versus financing your needs.” I’d love to learn more about that concept as well.
Hi, I think it depends on your work situation what the levers are that you can pull. If you are burning out, then it is a function of hours worked or perhaps travel required, time away from home, etc. Can your situation be alleviated at all by hiring or restructuring? If you are in sales, that can be the hiring of a support team, additional salespeople, etc. A meaningful argument can be made to whomever controls the money – a founder, a CFO, etc. If you are in a revenue generating role, the discussion is easier because it generally is around scaling what you do to generate more revenue with the right structure. If you’re in an overhead type role, the discussion is a bit harder – because the motivator to help you would have to be someone’s care for you. Which hopefully exists somewhere in the organization. I can get more specific with some more specifics on your situation. The company paid for my exec asst as well as my exec coach. I would to have to pause if I felt I had to pay for these things myself in order to support my career when my employer is the direct beneficiary. Your employer is responsible for your quality of life, quite a bit more than you are with whatever subpar habits you may have accumulated. You can find ways to improve how you operate, but those will likely provide marginal relief compared to material changes your employer likely can leverage. With what you get paid, you must be doing great work of significant value. So if there is no support available from your employer, then is there a better situation perhaps with a different employer who you can take your skills to?
Freedom was my primary objective in generating wealth. I saved, invested in order to finance that freedom. Much more than my peers. Knowing that I would one day achieve that freedom if I stayed on track provided me with more comfort and joy than a car, a watch, etc. would. As the numbers started to grow, so did my excitement about what could be. The experience of growing your net worth is a lengthy journey – investing, watching it grow, researching new investments, etc. it is as much an activity as collecting/enjoying nice cars, fine wine, golf trips to Ireland, etc. Perhaps that is one of the reasons why I never really spent any of it. The more I left invested, the more I can play with. Many people feel very differently and get a lot of joy out of spending, and there’s nothing wrong with one or the other. If anything I am only learning how to spend some now and we’ll see how that feels when I do.
Thanks love the bit on freedom, it is certainly fun watching your investments grow and kind of addicting. If you have any executive coaches you recommend, please do share if you’re comfortable. thanks!
A lot of what you write resonates with me but with some key differences that I think are interesting to contrast to.
My current income is 2X your max but it only got there recently, so at a similar age I’m only quarter of the net worth you are. Projecting out from here, I pay a lot of attention to spending needs and wanting to get net worth to the right level to support it. I am far more of a spender than you ($150K cars are awesome. $50K vacations too, you get the picture ..) so I know that $5M net worth can’t sustain that and retire.
So my point is that I have reasons to keep working until let’s say 7.5M net worth to support ~300K/year spend. Taxes will complicate that some, but it’s a good enough estimate.
But in comparison you blew far past the net worth needed to support your more modest spending. I’m curious why. Why didn’t you stop at $5M or soon after that, if you don’t want to spend more than $200K and don’t want to give kids enormous amounts?
Hope my Q doesn’t come across as confrontational or critical – I’m just genuinely curious. I wonder if I might end up doing it too.
And Congrats on being the safest retirement numbers I’ve read on here!
Hi, thanks for the comments and I don’t take them as critical/confrontational. There a number of reasons why I kept going. As I mentioned, 2016 or so, at 6M would have been doable. However, retiring at 42 was a scary concept. Very young kids, 50 plus year retirement seemed fairly dauting. What could happen during that time? What black swans would we run into, etc. I am fairly conservative, risk averse planner. In business, I am pretty aggressive, but less so with myself. Also, my portfolio wasn’t set up to kick off income to live off of. I hadn’t diversified my investments as much at that point. The changes I would have to make to my investments would have been pretty significant to gear them towards tax efficient cash flow. I had a lot of stock concentration risk at that time. So my approach was to continue earning – knowing that my comp would grow significantly in the coming years. I would use that money to dilute the weight of my concentrated stock positions, as I invested in other asset classes, some of which generated cash flow in a more tax efficient way (e.g. real estate and depreciation). About 4 years ago the cash flow from dividends, real estate, other alts was enough to more than cover our spending. So hitting that milestone was helpful financially and emotionally. The biggest reason perhaps though is that I wasn’t ready to walk away from my career which was expanding with each year. This turned out to be a good decision. A few years of comp at the levels you are earning can make a significant difference in the cushion you are building – for me – that cushion translates into happiness. I feel a lot better knowing I don’t have to worry (even though I still do, trying to get better). Lastly, my spending rate is what it was because of how much I enjoyed investing and growing NW. My assumption is that my spending will increase significantly now that I have achieved the freedom I wanted. We will see if that happens. But i ran my retirement model as if I was spending 30-40K a month. I wanted to allow for that possibility. I’m not sure If I will get there, but I am looking at 80K for a new car, so that is a start. Compared to my 2009 Toyota, it’s pretty nice, albeit no 6 disc CD changer. 150K must be amazing. But I am a ways off from that. Investing/saving is a journey… so is spending!
What a wonderful answer – thanks for sharing your internal thought process. It makes a lot of sense that you weren’t hating your job enough to quit, it was compensating well, you enjoyed the investment scene, it was a bull market so everything was winning, and even though you were “secure” there’s still always “more secure” to crave. This was helpful to me thank you.
$40K/month is more like it! Your $80K car will probably cost you $10k/year so try harder !!
I would encourage you to reconsider asking your children to pay back college expenses.
You are in a position where providing this gift of education and a start in adulthood without debt is possible without impacting your own quality of life.
Many people our age remember paying for college with summer and part-time jobs but the cost of college has skyrocketed since we were students. Your income will rule out most forms of aid that a college might otherwise provide.
Many young folks today feel trapped by educational debt. Why put your kids in this position if you don’t have the need to do so.
Thanks. I do plan to forgive the debt of college tuition. However, I want them to go to college believing that they will be paying me back… say over 30 years, no/low interest. I want them to have some skin in the game and I am not sure how else to do it. I am open to suggestions. I did not have skin in the game and I squandered at least 2 years of a top notch education. The belief that he has to pay me back has my son asking the right questions – what will my ROI be on this education, what majors lead to jobs that I am interested in and will provide for me financially, etc.
I liked your comment, “Many will say “What’s the point in having money if you don’t enjoy it”. This is a tradeoff.
There is joy in not having stress about how I will get my kids through college, being able to retire at 49, etc.”
Thanks for sharing your story!