Millionaire Interview 445

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 April.

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 61 and my wife is 55.

We’ve been married for 14 years (not our first marriage for either of us), but they have been the best 14 years of my life!

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

One child from my first marriage. A son in his mid-30s.

A great overall kid who has become a very productive member of society.

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

That one is a little more complicated. Our primary residence is in Central Florida (between Tampa and Orlando), but we are currently living about 30 minutes north of Dallas, TX, for a work gig that should be completed by the end of 2025.

We will then head back to Florida, but we are also building a second home in western North Carolina that will be completed by this summer. Once that is done, we will spend summers there and winters in Florida.

What is your current net worth?

Right now, it is hovering around $10MM.

That has really taken off over the last few years as my career has been on steroids for about 6 years now.

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?

• Tax Deferred Investment Accounts $1.9MM
• Taxable Investment Accounts $7.5MM
• Cash $.1MM
• Personal Residence$ $.5MM

Once we close on the North Carolina House, we will swap $800k from the taxable investment accounts to the new home purchase.

We have no debt.

EARN

What is your job?

I am a senior executive with a large regional bank.

What is your annual income?

The total income for 2024 was $1.4MM.

Approximately $500k of that was base salary, another $350k was cash bonus, and the remainder in stock grants.

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 was at a Dairy Queen in 1979. I was 15 and made $2.25/hour with one free meal and all the ice cream I wanted. That sounded great.

Little do you realize that after about 3-4 weeks, you don’t want any more ice cream!

I worked odd jobs through college and landed my first career job as a bank teller in 1985. I made $5.00/hour to start there and moved up over 10 years to end with that first bank at $39,000/year.

I then moved to bank #2 and got a nice bump to $51,000/year and stayed there for another 10 years, ending at $121,000.

The year prior to my moving to another bank, I also got a stock grant that equaled another $100,000, so 2004 was the first time I cracked the 6-figure mark. At this point, 20 years into my banking career, I got a job with the bank I currently work for.

I started as a commercial producer and moved all the way to the executive ranks of the company. I grew my income by $100,000/year increments for most of those early years and have topped out in the low 7-figure range for the last 4 years.

That is what makes the One More Year Syndrome so tough. I definitely could retire now, but leaving that compensation is a hard thing to do.

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

First and foremost, be a people person. You need to be someone who others like to be around.

Who they recognize has their best interests at heart, not just your own. Also, make sure you do the little things that others don’t want to.

I may be an executive of the bank, but I routinely pick up trash from the parking lots when I get in and have been know to mop the lobby floor when a customer had an accident while waiting to cash a check.

Show your appreciation for the work those around you are doing and always share credit, but take blame for yourself.

What’s your work-life balance look like?

Today, it is pretty good. It is funny how you work so much harder early in your career for less money but then get the benefit of an easier workload for more money later.

You had to earn it, but the latter stages of my career have definitely been the most rewarding.

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?

None other than the income our investment portfolio produces.

SAVE

What is your annual spending?

I’ll answer that in terms of our run rate. Obviously, we pay a significant amount in taxes every year, and we tuck funds into various investment and or spending accounts for things like vacations, vehicles, etc.

I have calculated that our true “spend” for things like utilities, entertainment, dining, etc, runs about $240,000/year.

For my retirement income calculations, I am planning on pulling an income of $300,000/year that, after taxes, should net us the $240,000 we plan to spend.

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

• $2,000/month property taxes, insurance, and misc. property services
• $1,000/month future auto purchases
• $1,500/month travel
• $1,000/month country club expenses
• $450/month electricity
• $500/month vehicle fuel
• $300/month cable/internet
• $300/month household water bill
• $350/month cell phone bills
• $725/month dining out
• $1,200/month groceries
• $1,000/month entertainment
• $2,300/month all other misc. expenses

The difference between this breakdown and the $240,000/year I consider our future run rate to be is taking into account the future property taxes, insurance, and misc. services for the North Carolina house that is being built as well as inflation on all of these various categories.

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

Not really.

I do have a breakdown of where I like to place funds for future expenses and a general budget by category for things like utilities, etc, but really we have significantly more income that expenses and most of that gets tucked into the category accounts I mentioned above and then the bulk to our taxable investment accounts.

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

Currently, we are saving roughly 50% of our gross income. Nearly 1/3 goes to taxes, and we are only spending about 20% of the gross on true expenses.

That is obviously much higher today than in years past as my income has grown so significantly in the past 5 or so years.

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

Increasing your income is the number one recommendation. The larger the pot to work with, the easier it is to accumulate money.

Almost as important, live well below your means as your income grows. We could easily afford a house that is 5 times the cost of our current home, but the one we have meets our needs and keeps all the other costs (taxes, insurance, utilities) lower as well.

Based on how we live, most people would think we make a fraction of what we actually earn.

What’s your best tip for spending less money?

Probably a little contrite, but do not try to keep up with the Joneses. We spend money on the things that provide meaning to us, but do not waste a lot on buying frivolous material possessions that end up just sitting around collecting dust.

We try to take nice trips every year, and I feed a motorcycle hobby I have, but we do not eat out that often (my wife is a fabulous cook), and we don’t spend a lot on clothes. We have nice cars, but we keep them for long periods of time.

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

If my wife were answering this, she would definitely say travel. We have only been married a little over 14 years and have had multiple overseas trips, cruises, and domestic travel.

My personal answer would be motorcycling. I got back into it 3 years ago after a 30-year hiatus.

I now own two large expensive motorcycles, and we like to trailer them around the country and do scenic rides. I can’t wait until I am retired and can spend significantly more time on the open road.

INVEST

What is your investment philosophy/plan?

We have remained fairly invested in equities even as we approach retirement age. Within those equities, we have begun leaning in more on dividend-paying stocks with an eye to producing more income once employment income ends.

We do currently have a significant cash position in government money market funds, but that is in anticipation of closing on the North Carolina house as well as taxes on some remaining stock grants that will vest over the next few years.

What has been your best investment?

Most definitely my career. Not only because of the income it has provided but the equity I have been able to amass has made up a large portion of our net worth gains over the years.

We have diversified out of my company stock over the last few years but still hold a rather significant amount (approx. 35% of my net worth). The 0plan will be to continue to lower that as well obtain long-term capital gains treatment and even more when we move to a lower tax bracket post-retirement.

What has been your worst investment?

I had the great pleasure of learning a valuable lesson in the late 90s when I took about a $50,000 loss in WorldCom stock. At that time, it was probably the same as me taking a $1.5MM loss today.

It really hurt, but I had bought in (averaging down along the way) only to realize the futility of my plan. I sold at $16 down from $50, but it went to zero, so at least I didn’t ride it all the way down.

What’s been your overall return?

We typically average 8-10% a year.

The large cash position as well as the slant toward dividend-paying stocks has dampened our returns relative to the overall market, but we are pleased with the results and sleep well at night.

How often do you monitor/review your portfolio?

Daily, but only because I’m a junky for it.

We rarely trade and follow the investment advice of a broker out of New York who we have been pleased with.

NET WORTH

How did you accumulate your net worth?

I don’t want to oversimplify this, but it really boiled down to paying attention to advancing my career, getting the income gains that came from that, and then not inflating our lifestyle as the income grew.

We have been somewhat conservative in our investing, so no home runs, but no strikeouts either. It is truly more about the amount coming in vs what we let go out into non-productive expenses.

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?

Earn. Without the income, we have the other parts are much more difficult.

That having been said, Save is a close second because it only matters what comes in if you keep it.

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

I would say the biggest road bump my wife and I both experienced is the effect of divorce. Both of us have been married before, and at least for me, the economic effects of getting divorced later in life were devastating.

Luckily, I knew I had a good income and have every reason to believe it would continue to get better over time, so rebuilding was always an expectation. However, the amount I’d be worth absent the divorce is a multiple of what I am now.

Luckily, my wife and I both have a wonderful perspective on the path that brought us together. Neither of us would probably appreciate what we share today but for the prior experiences.

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

Staying the course.

We continue to put away a significant portion of our income and feel very confident in the financial portion of our retirement plan.

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

Not really. We are currently at $10MM, and I suspect by the time I retire in another year or two, that should be closer to $12MM.

Of that, less than $1MM is in things other than financial instruments. I need $7.5MM to generate the $300,000 in income to support our lifestyle so we have some good margins of safety and can withstand the risk of a market downturn early in our retirement.

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

My individual net worth crossed $1MM in 2007. The markets took it below that in 2009-2011 but then went significantly below that with the divorce.

No change in behaviors (other than marrying a much more equally yoked spouse). I kept my head down at work, saved a large portion of our income, and put that into revenue-generating assets.

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

As I said earlier, I am a people person. I invest time and effort in developing relationships.

Often, that is from the perspective of what I can do for them, but it almost always comes back around to be of benefit to me as well. I am conservative by nature, so keeping spending in check has not been a negative life experience for me (or my wife) in any way.

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

Easy to say in hindsight, but don’t marry the wrong person. In looking back, all the signs were there; I just chose to ignore them.

Also, to the extent you can, avoid over-concentration in your portfolio. I have too much invested in my company stock, but that is because of two reasons.

They keep giving me more, and I am expected to keep certain percentages of the grants for long periods of time.

I could sell, but I have great insight into my company and the industry. I feel very confident that my plan to begin to lessen that concentration once retired will work out fine in my overall plan.

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

I guess I’ll just reemphasize things I’ve already said. Focus on your earning potential.

Do what others won’t so you stand out. Be a people person.

Invest in others whether you see an immediate benefit to you or not. As your income grows, do not inflate your lifestyle at the same rate.

You can certainly enjoy the benefits of your efforts, but think more about the future you than the present you. I suspect folks that read the ESI blog have already drank that Kool-Aid.

FUTURE

What are your plans for the future regarding lifestyle?

We have enough to technically retire now. My plan is to work until April 2027 to get one final year in as well as that year’s bonus (paid out in March).

My company is aware of my plans and is supportive. We will then split our time between Florida (October-May) and North Carolina (June – September).

A lot of motorcycle riding in my future.

What are your retirement plans?

As previously stated, my plans center around motorcycles. I also want to learn to play the guitar and will continue a lifelong love of reading.

I’ll still dabble in the markets via a small account I can afford to lose, just because I enjoy the game.

For my wife, she’s been retired for a few years now and enjoys yoga, pottery, weaving, and riding on the back of my motorcycles.

We will hike together for exercise and because we both love the outdoors.

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

As most people say, healthcare is a concern. I will continue my current family health plan via COBRA and when available, get on Medicare.

At that point, I’ll need to purchase healthcare via the ACA for my wife. We have a separate fund for healthcare that,t together with both of our HSAs should provide in excess of $500k for medical expenses not covered by insurance.

MISCELLANEOUS

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

I feel like I’ve always been interested. I grew up in a lower-middle-class family.

We didn’t have much, but as a kid I didn’t realize it. We had food to eat and clothes to wear.

It wasn’t until high school that I began to realize the clothes we wore were different from many of my friends. Once I had my first job, I have never been without paying work my whole life.

Having the freedom that comes from “charting your own destiny” has never left me. It is one of the reasons I went into the financial profession.

As far as when did it “click”, that probably happened in my late 20s. Books like Your Money or Your Life and Millionaire Next Door shaped my general approach to finances.

Add to the blogs like ESI have been tremendously helpful to learn from others who have walked the path we are all trying to walk.

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

Hands down my grandfather on my mother’s side. He was as solid as they come. Great work ethic and believed in getting the most out of everything he earned.

I also must give my mother a lot of credit. She raised my brother and I in a single-parent household for many years.

She dragged us to church and made us pay attention. Also, she was a 30-year high school English teacher (taught me honors English my junior year).

Education was a non-negotiable in our house, and my written and verbal communication skills I owe all to her. They have served me well in my adulthood.

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?

Your Money or Your Life – excellent way to look at the value tradeoffs you make.

Millionaire Next Door – living below your means and not keeping up with the Joneses.

The Richest Man in Babylon – great financial principles told through easy-to-understand parables.

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

We tithe to our church and also support many local non-profits both financially and with our time. I would expect that once we are retired, we will be spending more time than money on these endeavors, but always want to be generous.

To be blessed is to be a blessing.

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 do not have specific plans, but we certainly do not expect to spend our total wealth while we are alive. In fact, it is very interesting to read of many who have retired and end up with more rather than less when it is all said and done.

I certainly expect we will leave a sizable amount of wealth to our son but will also have specific gifts to the charitable causes we believe in as part of our final accounting.