Millionaire Interview 438

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 October.

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 36, my husband is 38.

We have been married for 8+ years now.

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

We have a toddler, almost 2.5 years old.

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

We currently live in the upper mid-west region, a suburb of a major city.

That being said, we are immigrants here in the USA, both of us were born and raised in a small country in South Asia. My husband came for his graduate studies in 2010 and I came here after getting married in 2016.

He went to school in another state but got a job in the state we live in now after he completed his master’s.

What is your current net worth?

As of the first week of Oct 2024:

$1.67 million including $255k (conservative) equity of our house.

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?

All the below in the nearest figure:

• Cash – $40k
• Investment $1.378mil divided into the following:
• Roth IRA – $197K
• 401K – $928K (Mega Back-Door Roth – $295K)
• Brokerage – $200K
• HSA – $53K
• House – $400K, conservative estimate
• Liability – ($145K house loan)

We don’t have an education fund for our daughter, since we are paying daycare expenses now. We might open it later or we might use our Roth savings for her college expenses.

EARN

What is your job?

We are both Electrical Engineers and are in the same field. Husband has been working since late 2012.

He is a senior-level engineer and recently started a managerial role.

I have been working here since early 2017 but since mid-2023, I left my job to take care of our young kid who continuously got sick from daycare, back-to-back illnesses, and ear infections. She has just recently started going back to daycare.

I am trying to get back to work, with the current job market it could take a while since our industry has been impacted a lot with the layoffs. I am hoping my unemployment won’t go beyond the first half of 2025.

We were working in our home country for a few years before coming to the USA as engineers but the salary range there is very low compared to here.

What is your annual income?

Right now, with just 1 income around $160K including bonus.

The maximum we have earned in a single year is $283k in 2022.

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 am going to skip the income we had when we were in our home country. Since we come from an underdeveloped country, our individual income was around USD $3.5k per year.

This is our growth over the years: Social Security website doesn’t have his 2012, 2013, and some part of 2014 records since he was in OPT visa (Optional Practical Training for F1 Students).

When my husband came to the USA, his first job as a Teacher’s Assistant paid $800/month, which he tells me felt a lot at that time. Once he started a real job, he started earning $30/hr.

His salary has increased from then to about $160k now. Those are basically through promotions and job/company changes.

At one job, he had so much stress and lack of balance that he left a high-paying job and took another job in a different company taking a hit of 30K/yr (more in work-life balance question).

I started my first job at $32.5/hr in 2017, by the time I left my job mid-2023 my salary was $104K/yr + yearly bonus. For 2 of my past roles, I had to work a lot of overtime but that paid well.

My salary jumped when I went from a contract role to being a direct hire and when I got a promotion within the company.

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

Get a hold of a career that pays you and work on it. Your first job is going to determine much of your career path.

In every field, there are jobs or areas that pay you more; try to find that sector/area. Based on our experience as Electrical Engineers, had we directed ourselves to programming jobs from the very first, we feel like we would have earned much more, just stating it, not complaining.

So, choosing the path is the hardest but also decisive about your future most of the time. We think that never being satisfied or fretting over your income is going to have an adverse effect on you, always put your health a priority.

Give your 100% in your job but have a good work-life balance because you won’t enjoy wealth if you don’t have health.

What’s your work-life balance look like?

Right now, mine is perfect — not working!

My husband’s job has a good work-life balance, the hiccup is he has to drive 50 minutes one way to his office 4 days a week. This isn’t something we want.

Driving sucks the energy out of you. We have both had roles where we had to drive a lot to get to the office and we absolutely didn’t like it.

The plan is for him to move to a different role/company when his 401K is vested in the current company. They have 3-year policy before it is vested.

My husband had a job in a California-based start-up whose customers were where we are. So, he had to start his day around 8 am (our time) and could only end the day based on California time because of the kind of work he had.

Even though the job paid well, it just wasn’t sustainable and it was at a time when we had just had our kid. So, he moved to a different company with a pay cut.

As for me, I have had a fair share of stress from some of my previous roles. I didn’t go to a college in the US, and the initial jobs kind of stressed me out, not because I couldn’t do it but I felt the constant need to prove myself.

For one role, I had to present in front of an executive director, I always had no sleep the night before due to fear. Now that we have the investment foundation we need for the future I have become more laid back.

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?

Unfortunately, no! Capital gains through investment and the few thousand dividends we get from those investments are our only other sources.

We don’t have dividend-paying investments so it’s only a couple of thousands. We reinvest all those so they don’t feel like income.

A few years back, when my bond interest rate was 9+%, we directed our emergency fund to it to capture the high interest as long as its interest rate was higher than our High Yield Savings Account.

SAVE

What is your annual spending?

We usually don’t track our spending. But we did a rough estimate last year, it was around $60K.

That was a shocker for us because we always thought it wouldn’t be more than 50K. But a part of the spending was/is for daycare as well, which we didn’t have before.

This year is probably going to be around $65K.

We spend on what we need so we never felt the need to track spending or budget. We like to travel but apart from that both of us don’t have expensive hobbies and we don’t desire expensive personal or household items.

We are fine with our current situation as long as life goes on smoothly. ☺

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

• Mortgage + Taxes – $14,200(2.25% interest rate) + $4560
• Utilities (Natural Gas, Electricity, Water/Sewage, Internet, Mobile phone plans, HOA): $4000
• House and Auto insurance – $3500
• Grocery and eating out or take out – $7000 + $1800
• Daycare – $7800 (so far this year since May, last year was $4500, we pulled her out after about 5 months)
• Vacation – $3000
• Other travel expenses – $5000
• Family Support – $5000
• Misc – $4000

Auto insurance is high due to no-fault insurance in our state. The “Vacation” is our traveling within the USA or to another country (not our home country).

“Other travel expenses” include the expenses made to travel to our home country, or when my parents or his parents come to visit us here. We take responsibility for our parent’s travel costs.

This has been the case for the past few years but from next year this cost will only occur every few years.

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

No, like I mentioned before.

We have always lived below our means so never felt the need to budget.

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

It has changed a lot over the years. I am using saving and investing as one since you invest what you save or whatever you invest is your savings.

At the beginning of our careers in the USA we had no knowledge of investments, stocks, and 401K. My husband was putting in the 4% minimum to his 401K just because the company automatically set it up for him.

While we had the discussion about if we should put more in 401K both of us flippantly brushed off the idea since we both didn’t want to put aside money to be used after about 30 years. We had no concept of retirement, money-making money, and growing financially. The only concept of money we were familiar with was savings.

Although he started working in 2012, he spent most of his earnings for his family’s financial stability back home. So, both of us didn’t have much on the table when we got married.

I started working in 2017, we got a house 3 months into my job. In addition to some savings, he had to get a loan from his 401K for the 15% down payment of the house.

We were “broke” after that since we had recently purchased a 37K fully loaded premium car and had put around $16K down payment (very dumb in hindsight).

It was 2018 when our mentality changed completely. We had excess money in our bank account and didn’t know what to do with that money.

I had watched Suze Orman on a public TV show where she was focusing so much on Roth, for almost every question the audience asked her. We read a lot about ROTH IRA then and opened it in Dec of 2017.

This is when we started looking more into the investment side. We really liked the idea of delayed gratification and living like no other so we can live like no other in the future.

We started watching Dave Ramsey’s shows, following other financial gurus, and following the FIRE (financially independent retire early) movement.

Since then, we built up our emergency fund ($40K), started maximizing our 401K, maximized Roth IRA, opened a brokerage account, maximized and invested HSA every year, and since 2020 we started Mega Back-Door Roth through our companies and tried to maximize for both of our accounts.

The bottom line is, what we didn’t spend went into our investment vehicles. There were multiple years when we invested a total of ~$145-150K/yr.

If there was an emergency our cash reserve would be used and would be filled up later.

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

Start investing as soon as you start earning. Learn about various ways you can have your money in the market.

Investing sooner the better. Investing early will give your money a long runway to gain in value.

I want to give an example of our Roth accounts here. With an average of around $6K annually since 2017, both of our accounts have doubled by now with mostly ETFs, Index, and mutual funds.

The total we have put in our accounts combined is $97K. Our combined value now is $197K.

Live below your means. This is achievable if you are motivated about being financially free sooner than later.

Also, if you can, paying your investment vehicles first is a sure-shot way to accumulate wealth.

What’s your best tip for spending less money?

Having a minimalist mindset has worked for us. Both of us think multiple times before buying anything.

Apart from the basics, we don’t usually buy things that have a single purpose. No popcorn maker or ice maker etc.

For anything that is required a few times, we try to buy from Facebook marketplace. The less material goods you have the happier you are.

You won’t have to make space for the material, clean it, maintain it, etc., a lot less work!

Getting the most out of everything, especially household goods. Just because something is old doesn’t mean we need to buy new as long as it works.

Both of us aren’t into social media (except marketplace) so we don’t feel the need to justify or show off. This has been a blessing.

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

Traveling! Cruises! We like water bodies/water sports, beaches, camping, going for a stroll in parks etc.

But it’s been exhausting traveling with a toddler now. It is not a splurge but we also like to stay at home lazily, watching our favorite shows and movies or just relaxing.

INVEST

What is your investment philosophy/plan?

Invest as much as you can, as early as you can. If there are tax advantage accounts, fully utilize them for investing and using the money for the right purposes like HSA.

If you have excess money, Invest! Invest! Invest!

Simplify your portfolio, and avoid expenses as much as you can. Initially, we had a lot of mutual funds and sector funds.

The sector funds went nowhere and mutual funds had a lot of expense ratio. We have kept a few good-standing mutual funds but have removed others.

We redirected the sector funds to fidelity FZROX and/or FSKAX and have automated the funds. This has made things easier.

Automating investments. We have always stayed by this and will continue in the future.

This takes away that emotional side of investment, we just don’t look at the day-to-day fluctuations and/or try to time the market.

We have tried to time the market in the past mostly for individual stocks, although they are a very small part of our portfolio. There are always some unforeseeable events and news in the market.

Many times, we lost the money or we had to wait multiple years to break even. Those investments made us regret later thinking about the opportunity cost through the years!

Having it simple and not timing the market has worked for us.

What has been your best investment?

Roth IRA and our 401Ks. They have grown so much since we started putting money in them.

When I left my job in mid-2023, my company 401k was at $286K, it is now at $434K with $0 added after.

Both of our Roth IRA accounts are flaring well. We have invested a large portion of our 401Ks in growth funds since we have a lot of years before we can take out that money so that has helped with the gain.

What has been your worst investment?

Buying a sedan in 2016 for $37K was the worst investment, hands down!

We have bought some individual stocks in our Roth account trying to ride the hype. I bought one Chinese coffee company for the waves it was making and an e-commerce company just because its stock value went down.

One went bust (from $20-30 to $2-3) when the news about the company falsifying its sales and revenue data came out, and the other stock didn’t go up in years. So, I sold both at a lot of loss.

My husband bought Roblox stocks a few months after it went public. The stock hasn’t been doing good and he is still at a loss, waiting for it to break even to sell.

What’s been your overall return?

Umm that’s a tough one.

Probably 13-15%, not quite sure.

How often do you monitor/review your portfolio?

We use Personal Capital to monitor our wealth.

We just view our portfolio probably once or twice a week but we hardly do anything with the accounts.

NET WORTH

How did you accumulate your net worth? 

It was by having regular jobs, regular earnings and regularly investing. We both are engineers by profession.

We had average type of earnings from our first jobs in the US but with every other job, our income increased so we were able to save and invest more. I wrote more about this in the “income” question above in the “Save” section.

We lacked a lot of “money” knowledge but slowly started learning about finances through blogs, podcasts, and videos. Watching Suze Orman’s talk by chance was the one moment that got us on the path of Roth accounts, which then led us to other investments.

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?

It probably is investing. We are pretty frugal, and we invest at every paycheck as well as what is left at the end of the month.

We have auto-invest set up and try to keep it simple. We have seen returns that we would have never made just by salary increments or savings.

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

The one would be being really ignorant about money and investing.

We lost a few good years due to not realizing the value of investing and not knowing how to invest.

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

My husband is working and I am trying to get back to work. He is maximizing his combined employee and employer contributions in 401K this year.

We already contributed to Roth IRA for this year. We don’t have any desire to climb the corporate ladder or take on extra loads for a few thousand dollars.

We want to maintain our current pace and grow our portfolio. Instead, we want to focus on health, exercise, outdoor activities, and spending more time with our daughter.

We want to continue what we have done so far as it pertains to investing. Slowly, we do want to increase the money in our brokerage account to be prepared to retire early.

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

I want to be pretty safe before retiring, for me it’s $4mil but he wants to retire soon with $2.5mil.

We need to meet at a common point.

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

My husband was 37 and I was 35. It has definitely given us more sense of security.

We don’t think about money as much as we used to before.

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

Moneywise: Being aware of how much comes in and where it goes, areas where it can be saved. We always lived below our means but never constrained ourselves.

We usually know what is necessary and trust each other’s decisions.

We are from an underdeveloped country. My father was the only person working to look after 8 members of the family (including him), so money was always scarce and we grew up learning to manage with less.

My husband’s side of the family had a regular income source, and some savings so the economic condition was much better than mine but not in abundance. We saw that our families didn’t have much.

Books and having a degree were the only solutions we saw that would break us from the financial constraints that our parents faced. However, ironically, even after a degree in engineering we had no concept of saving, income generation, or investing.

Having seen scarcity and poor economic conditions since childhood, both of us are frugal. We don’t have expensive hobbies (not intentional) and utilizing technologies to automate savings and investing are some of the traits we developed over the years that helped us gain momentum to be where we are today.

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

That would be buying a fully loaded new vehicle. We could have used the vehicle down payment for our house down payment, that would have saved us a bunch of money.

Back in 2019, my husband got an offer from a new company. His current company at that time was announcing a bonus at the end of the month.

He resigned a few weeks before. We realized only later that the company wouldn’t provide bonuses to employees who left the company before the announcement even if they were with the company for the complete fiscal year.

This cost us around $15-18K.

Also, when we bought our house, we didn’t know about the expenses that came with the house like taxes, inflated utility bills, roof replacement, maintenance costs, etc. This isn’t something of a mistake but has been a learning process over the years.

We were thinking of getting into syndicated REITs after being accredited ($1Mil) but dropped that idea after reading online reviews of the syndication companies. This probably would have come under this topic if we had gone ahead with that.

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

Get into a sector where there is money, where you are paid well. Work to gain knowledge, gain more experience, and with time your earnings will increase.

Save and invest consistently throughout this time. Start now! Read, learn, and research about money and investment.

Do not compare your situation with others, income, and way of living. Comparing is only going to make you miserable and do things irrationally.

Every person has unique circumstances, what works for others might not work for you. It is important to have your goal/target and work for it in whatever way it works for you.

FUTURE

What are your plans for the future regarding lifestyle? 

We would definitely want to retire early but we are not at that point right now. I want to work for 7-10 more years and then either not work completely or work part-time.

My husband’s plan is the same. We have a toddler so we feel the need to provide her with good health care and education.

What are your retirement plans?

We haven’t really thought about this in detail. We do want to travel.

My ideal retirement would be getting an RV and going across the US and being financially free to travel the world and our home country often. We want to move somewhere in the mid-east coastal states (but inland) since our current state is one of those cold states.

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

Yes, healthcare! That’s the number one concern for us.

But since we are nowhere near retirement, we haven’t thought about it much.

MISCELLANEOUS

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

I am the kind of person who is interested in anything to everything but nothing in particular. So, back in 2017, I was watching Suze Orman in a public TV show.

The Roth IRA talk/discussion from it became our launching pad. It then took us some time to embrace another medium of investment.

My husband is an avid financial enthusiast, he was the one who learned about Back Door Roth provided by our companies, end-of-year tax harvesting, and other tax minimizing ways. In the beginning, when we were just getting started on this path, every weekend we watched hours and hours of Dave Ramsey’s shows.

We were around 31 (me) and 33 (my husband) years old when the finances clicked.

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

I don’t have any particular one. He doesn’t have any either.

Having some extra money just inspired us to make it come to use properly. Also due to our upbringing, the hardships, and seeing that our parents had little to nothing for the rainy day, we knew we didn’t want to live that way.

This probably was our single most inspiring factor towards higher education and an Engineering Degree.

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?

• The Millionaire Next Door
• The Richest Man in Babylon
• Rich Dad Poor Dad

All these books are simple yet powerful. They enlighten you, give you the perspective to get you motivated, and above all teach you the power of consistency.

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

We donate through GoFundMe time and again but it isn’t significant.

We financially support our families back home every year. We help them during emergencies and general family expenses time and again.

Giving to charity is in our plan but right now we want to focus on accumulating so we can help others more later.

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?

Yes, to our daughter.

Again, this is something we haven’t thought about at the moment.