Millionaire Interview 431

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 41. My wife is 39.

We’ve been married for almost 10 years.

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

We have a three-year-old daughter.

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

We live in Spokane, WA. We’re both South Asians.

I came to the US in 2002. My wife in 2014.

What is your current net worth?

As of now, our net worth is approximately $1.4 million. For our primary residence and rental townhome, we use the lower estimate from Zillow or Redfin.

Additionally, we need to account for closing costs, so our net worth might be slightly lower.

We began with nothing—actually, we started in the negative back in 2012 when I got the Honda Fit. Our investments have grown significantly over the years.

Note that these numbers reflect our investments and do not include the equity in our home and rental property. We have not received any inheritance.

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?

We place our daughter’s 529 plan and our HSA into our retirement accounts because we won’t be accessing those funds for another 15 years.

Our debts are in two mortgages:

EARN

What is your job?

I’m an Analyst with the city government, an individual contributor. Given the nature of the job, the salary is quite good.  I enjoy autonomy at work and benefit from great, flexible hours.

Before this role, I worked at a Fortune 500 company where, for six years, I effectively managed the workload of 2-3 people. Despite receiving the highest performance reviews for five consecutive years, my efforts were largely unrecognized outside my team.

Although my manager asked me to stay, I felt it was best to move on once he knew I was planning to leave. As luck would have it, there was a major reshuffling in the organization after I left (but not because I left).

My manager moved to a different organization and everything I did was someone else’s problem. A co-worker late told me that I got my manager his promotion.

My wife is a Registered Nurse and has much more meaningful work.

What is your annual income?

My current annual salary is $120K.

My wife makes ~95K. Her pay varies.

Weekends and proctoring pay more. Low census can cause work cancellations.

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?

I graduated during a tough year and applied to hundreds of jobs, receiving only a few responses and even fewer interviews. I spent entire days in my local Starbucks applying to jobs, got to know the baristas by name—they were probably job hunting themselves.

Eventually, I took an unpaid internship in DC but found a job soon after.

Looking back, it was an extremely challenging but valuable experience. I was on my own with no support, sharing an apartment with an immigrant family.

I slept on an air mattress and used a cheap Walmart chair and folding table (which I returned two years later with a full refund, having taped the receipt under the table). My belongings were minimal: a few clothes, a large cereal box for a trash can, one spoon, one bowl, and a butter knife I found in the kitchen (which I still have).

I lived like this for several years until my fiancé moved in with me around 2014. Then we had two of each.

These numbers are from our SS statements. My wife started working in 2015. This year, we expect her earnings to be around $95,000 due to cancellations and time off.

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

Be exceptional at your job. Be genuine, kind, and friendly.

Maintain a steady and serious attitude. Avoid pretense — keep things straightforward. Early in your career, consider job hopping (it’s easier to move within the same company).

Don’t wait for your ‘friendly’ manager to give you a raise—ask for it. Seek out the highest-paying positions, in the best companies you can find.

Commit to learning every day. Compounding knowledge is a powerful tool available to everyone.

Even 15 minutes of daily YouTube tutorials can significantly advance your career and insure against future unemployment. Cultivate a good reputation, finish what you start, and always deliver.

I only found my path six years ago when, by chance, I discovered a career that suited me and that I enjoyed. I’ve never been lazy; I’ve always been industrious and hard-working.

However, I lacked ambition and didn’t set high goals. Aim high, be ambitious, and be intentional in your career.

I’ve seen meteoric progressions—store managers becoming directors and vice presidents within just 4-5 years. Conversely, I’ve also seen many careers stagnate for over 20 years.

Be ruthless, if you can, if it’s legal, and your conscience and ethics allows you to.

What’s your work-life balance look like?

It’s very good now. I work remotely, and my job isn’t very stressful. I maintain a 40-hour work week.

My wife works 12-hour shifts three days a week, which often includes one weekend day.

Our lives revolve around our daughter’s schedule. Since we don’t have any family help, it’s just the two of us managing everything.

It’s becoming easier now that she’s older, but one of us still needs to be with her. That said, she’s very reasonable and growing up nicely.

Yesterday, she and I flew a kite together and played “Merida and Friends Go Camping” with her stuffed toys before bedtime. I’m hoping she’ll pick up books on her own in one-two years and give us a break.

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?

We have a rental townhouse that cashflows about $400 a month. We haven’t increased the rent in two years, despite rising costs for HOA fees, trash collection, and insurance.

We prefer to keep a reliable tenant long-term rather than risk having the property vacant for a month.

In hindsight, we should have sold it when we moved to a larger single-family home two years ago, especially when homes were selling “as-is.” I tend to keep a minimal and simple approach to most things in life, and the rental property has become a cumbersome asset.

We’d rather replace it with index funds, which would likely provide a better ROI in the long run. Therefore, we’re considering selling the townhouse next spring.

SAVE

What is your annual spending?

It’s bonkers now. Our spending seems quite high now, but everything is more expensive. We have a larger home and daycare costs, and I’m unsure where we could cut back.

The 2024 figures are year-to-date as of July. “Misc” includes taxes, medical bills, and other expenses not categorized elsewhere. “Rec” covers recreation, primarily travel, dining out, etc.

My approach to spending has evolved over the years. My father missed out on fully enjoying life.

As old as we are, and having a three-year-old, it feels right to invest a bit more in our lifestyle now. However, I’m not sure if we’ve missed out on anything, as we’ve never deprived ourselves.

Warren Buffett sets it nicely for me, “It’s nice to have a lot of money, but you don’t want to keep it around forever.

I prefer buying things. Otherwise, it’s a little like saving sex for your old age.”

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

See table above.

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

We do not keep a budget, but I’ve tracked our expenses since 2013.

Initially, we discussed our expenses about once a week. However, my wife is not naturally inclined to look at these, so now we review them whenever she shows interest.

Even so, I update her on our financial status whenever I get a chance, especially when I have good news, often during drives.

I use Empower (Personal Capital) and update/play with my Excel spreadsheet every day.

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

I don’t have these percentages based on our gross income. They look high because these are saving rates after taxes (Savings / Net Income). Our income/savings include dividends and 401k matching.

Before moving to our current home, we were able to save the higher of our two incomes, plus some extra. With a larger mortgage payment and daycare expenses, that’s no longer possible. However, I believe we can still maintain a lifestyle upgrade while saving 30-34%.

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

Marry well. Live below your means. Delay gratification.

You don’t need two bikes if you’re not a professional biker.

A second pickleball racket? Seriously, how good are you?

We’re often not quite sure what constitutes good savings. It varies with different levels of earnings.

For instance, a doctor saving $50K might be doing very poorly, while a teacher saving $10K could be doing fabulously. The best gauge I’ve found is to save until it hurts.

If it’s not hurting, you’re not saving enough.

What’s your best tip for spending less money?

My wife and I don’t have any unnecessary toys. I have a 20-year-old guitar that needs repair, while my nephew, who doesn’t play, has two nicer ones.

Until our daughter was born, we lived in a small two-bedroom townhome and drove a Honda Fit (the best car in the world). Our friends earned less but lived in bigger homes, traveled, and shopped more.

When eating out, we always share a drink – not to be frugal, but because neither of us will finish one anyway.

My wife and I are both low maintenance. We couldn’t name a single drink or type of sushi with any confidence.

I’m literally wearing the same set of clothes in all my pictures. The only winter jacket I’ve owned (until last winter, when I got another for skiing) is one I’ve had since high school in 2001.

We live well and nicely. We don’t have a lot of things. The cool thing is that our friends and family have begun to see us in that light as well. It helps that we drive a Tesla.

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

Traveling. In the last four years, we’ve been to – internationally – Japan, Thailand, and Cancun (Mexico), and – domestically – Boston, Disneyland (LA), San Francisco, and Colorado.

We aim to do one international trip every year. I’ve taken up skiing in the winter.

We eat out more often, though we still skip appetizers and desserts.  I’ve upgraded my gym membership from a $10 one to our local rec center, which costs $38 and includes pool access for my daughter.

We also subscribe to Netflix, Amazon Prime, and I really enjoy my YouTube Premium.

INVEST

What is your investment philosophy/plan?

• We will remain unshakably VTSAX in the core.
• We will never stop investing in stocks – in VTSAX. 
• We will never sell. We never have. The only exception will be after retirement. 

As of this writing, our investments are allocated as follows:

I have VYM in my Traditional IRA, rolled over from my last job’s 401k. Aside from dividend reinvestments, we haven’t added to it. The individual stocks are at best, pure speculations.

I got TSM after hearing Jensen Huang of NVIDIA say “there is air and there is Taiwan Semiconductors” six years ago. And earlier this year, EQT was recommended very highly by Tom Gardner of the Motley Fool.

We may invest small amounts in individual stocks as pure speculations, for the thrill, just in case. The bulk of our investments will always remain in S&P 500 index funds. We are very clear on this strategy.

Currently, we do not have any bonds or bond-like funds. We recognize the need to start incorporating these as we get older or begin planning for early retirement.

What has been your best investment?

Investing in S&P 500 index funds – VTI / VTSAX / FXAIX

What has been your worst investment?

There are two that come to mind:

In 2012, I went full throttle on paying off my Honda Fit early but didn’t realize I was also prepaying future interest. I should’ve checked that those extra payments were reducing the principal.

In the end, I cleared a 5-year loan in about 2.5 years but ended up paying over a year’s worth of interest in advance.

In 2008, I took out about $10K in student loans for grad school (where I had a full ride) because they offered it. I figured I’d trade and make a profit before the loans came due. I lost it all.

One standout disaster was China Digital, which now doesn’t even have a ticker symbol. I’m not sure how to even get it off my account.

I also invested in an oil company in Calgary and kept throwing money at it until even the website vanished. There was also a Chinese educational firm and an Indian entertainment company—both, or at least one of them, were probably fake.

I’m incredibly grateful these flops happened early. They taught me that stock picking is a fool’s game and that investing in the S&P 500 is the way to go.

What’s been your overall return?

Depending on the source, the S&P 500’s average annual return over the past decade (2013-2022) is about 12%, so we should be close to that.

I track the growth of our nest egg (excluding real estate equity, see chart in Question 4), and over the last seven years, the average annual growth has been around 19.17%. This includes our savings, but market returns have been surpassing our individual savings in the last few years.

How often do you monitor/review your portfolio?

Every day, and multiple times a day. I’m like a proud parent watching my portfolio grow and imagining it turning into a financial superstar. I tinker with different rates, withdrawals, and scenarios like a mad scientist.

It gives me a great sense of comfort and accomplishment. Growing up with friends and relatives who had money, never had to pay their own mortgages, and didn’t need to get full-time jobs, it’s especially sweet to know I made it on my own (with my wife, of course).

Though I still don’t golf, domestically or internationally.

NET WORTH

How did you accumulate your net worth?

Our net worth accumulation has been a mix of disciplined saving, strategic investing, and consistent contributions.

Here’s a breakdown of what we did:

• Early in our investment journey, we saved the higher of our two incomes.
• Roth IRAs: We’ve maxed out our Roth IRAs every year since 2014.
• 401(k) Contributions: From 2016 to 2022, we maxed out both of our 401(k)s. Currently, we max out my wife’s 401(k) and contribute close to half of mine.
• Dollar-Cost Averaging: We dollar-cost average whatever else we can spare, irrespective of the market conditions.
• On the expense side, we keep a close watch. We never deprive ourselves, but at the same time, we’ve never really been into things.

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?

Many moons ago, I read that in the early stages of wealth accumulation, earnings and savings are key. Eventually, your investments become the rockstars, overshadowing your income and savings.

The trick is to hit that mark ASAP. The earlier you start, the sooner you get to the fun part where your money works harder than you do.

That’s exactly what happened to us. Our market returns have lapped our savings, thanks to our aggressive allocation in a stellar market.

Nearly 96% of our investments are in broad market index funds (primarily VTSAX/VTI, FXAIX, with smaller dashes of VYM, TSM, and EQT).

In a nutshell: save and invest until it stings, stick with S&P 500 index funds come rain or shine, keep throwing money in, and let those dollars compound. And remember, don’t sell unless you absolutely must.

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

I really wish I’d known about 401(k)s when I first started working. Back then, I was clueless and distracted—until 2017 when I finally got access to a 401(k). If I’d started a 401(k) back in 2007 with my first job, I’d have had an incredible 17-year runway instead of the measly 7 years I got.

To compensate for those missed years, we saved and invested as much as we could.

Lesson learned: start early, stay informed, and appreciate how powerful compounding is.

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

We’re as prudent with our money. Our strategy is simple: keep funneling everything we can spare into S&P 500 index funds, and let those dollars work their magic.

We’re in it for the long haul, so selling isn’t in the cards until we retire. While we do enjoy spending a bit more these days, we know better than to go over the top.

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

We don’t really have a set target, but here’s the game plan:

We need $2.5 million in invested assets to generate $100K in passive income at a 4% withdrawal rate. Most of our investments are in retirement accounts, which we won’t touch until we retire.

Meanwhile, we’d love to “somehow”; grow our non-retirement accounts to around $1 million in the next 8-10 years. A nice chunk of $150-$200K should come from the sale of our rental property (if we decide to go that route).

With a 6.5% return and annual savings of $50K (historically, we’ve saved more), we should hit $3 million (excluding real estate) by the time we’re 56. That seems like a solid target to aim for.

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

We hit the millionaire milestone on 10/16/2021, just after I turned 39.

No dramatic behavior shifts, but we did buy a bigger place a year later to give our daughter more room to grow and because it felt like the right time. We also upgraded to a Tesla Model Y when our trusty Honda Fit started feeling a bit too vintage for the interstates.

We’ve allowed ourselves a few more conveniences, like taking Uber, but overall, we’re still your everyday common folks – just what we want to be.

What personal habits and/or traits have you developed that have made you successful at growing your net worth?

We spend where we must but naturally don’t desire much. We’re grateful to have decent jobs and live modestly, mindful of our expenses.

We’re ordinary folks, maybe a bit more cautious with our money. We avoid wastefulness and delay gratification.

I’m a financial hawk, tracking every dollar we spend. These habits have kept us grounded and steadily grown our net worth.

One particular habit that’s really helped is reading lots of FIRE bloggers and articles online, and listening to financial podcasts every day.

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

Not starting a retirement account early on. I didn’t appreciate 401(k)s until 2017.

I didn’t have easy access to one—or at least my employers did a very poor job of explaining it – they actually didn’t. If I’d known better, I’d have jumped on the 401(k) train 10 years sooner.

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

I may sound like a broken record, but earn, save, and invest as much and as early as you can. They are the Holy Trinity of wealth-building.

Don’t waste your time—enjoy life, but don’t splurge on lifestyle too soon. You can drive a budget-friendly car when you’re 25.

Can you live in a more affordable place? Plan where you want to be in the future and stick to that roadmap.

The real magic lies in knowing why you want to be wealthy. That’s your ultimate motivator.

For me, it’s all about ensuring my family’s comfort, securing a blissful retirement for my wife and me, and giving my daughter a stellar start in life.

FUTURE

What are your plans for the future regarding lifestyle?

We can afford to ease up on our savings now. My wife could even work fewer hours if she wants to.

Not sure either of us wants to stop working anytime soon, though. We’ll travel—at least one international trip every year.

What are your retirement plans?

We don’t really have set retirement plans. Honestly, I wouldn’t know what to do with myself.  I wish we could take long sabbaticals, but that’s not the nature of our jobs.

Financially, we’ll aim to hit $3 million in our investment portfolio, with $1 million of that in non-retirement accounts by the time I’m 56.

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

A million bucks isn’t what it used to be. We’re not entirely sure how much we’ll need in retirement, so we want a comfortable buffer.

Technically, we’re probably ‘Coast FIRE,’ but we’ll keep saving if only to reduce our taxable income.

Financial concerns aside, our daughter is our primary focus. We hope she grows up to live a full, responsible, and meaningful life. And we hope the same for ourselves.

MISCELLANEOUS

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

I’ve binged on hundreds of FIRE bloggers and personal finance experts over the years. I follow a few very closely—Jonathan Clements (the Humble Dollar), JL Collins, and ESI Money to name a few.

I’m eternally grateful to all the FI bloggers for sharing their wisdom.

Financial podcasts have been instrumental in my learning. I regularly listen to Clark Howard, Millionaires Unveiled, Stacking Benjamins, Choose FI, Morningstar’s Long View, and Motley Fool Money.

I remember waking up on my 30th birthday thinking, ‘Oh shit, I have nothing.’ I had a low-paying job, didn’t have any assets (see chart in question 4), and no clue where I was headed.

I still don’t, not very clearly, but the pursuit of FIRE has ensured that things will be okay.

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

My parents – I spent years chasing what I thought would make them proud, but remember, it’s your long-term goals that count. Tune out the noise and don’t sweat what others think.

My wife and daughter – I want them to have good, comfortable, and happy lives.

As for heroes, I love rags-to-riches stories. Lots of FIRE folks, many who’ve been interviewed here, inspire me.

Especially those ordinary office dwellers not making crazy income. If you’re pulling in $250K a year, hitting a million isn’t rocket science.

I only started making six figures in my late 30s, when I was already close to a million in net worth.

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 have two that are straightforward, no-nonsense guides that have been instrumental in shaping our financial strategy.

“The Simple Path to Wealth” by JL Collins. This book provides clear, actionable advice on achieving financial independence through low-cost index investing.

JL Collins’ straightforward approach has been a cornerstone of our financial strategy.

“How to Retire Early” by Robert & Robin Charlton. This book is particularly resonant because Robert and Robin’s experiences mirror ours.

Robert was a cubicle dweller, and Robin a RN – just like us. Their practical advice on early retirement, coupled with their relatable journey, has been incredibly motivating and useful for our own plans.

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

We support four orphan students in a developing country, contributing about $500 – $1000 a year.

We’re also generous with our credit cards to our families during special occasions—birthdays, graduations, etc.

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?

Absolutely. Our daughter will inherit everything we don’t spend—lucky kid!

We want to make sure she’s prepared for a future that’s likely to be incredibly competitive, environmentally challenging, and just plain tough. Our plan is to live off the passive income generated by our investments, so she gets the principal.

It’s our way of insuring against the uncertainty of the world she’ll face—because, let’s be honest, she’ll have enough on her plate without worrying about finances.