Today I have an update for you from a previous millionaire interview.
I’m letting three years pass from the initial interviews to the updates, so if you’ve been interviewed, I’ll be in touch. š
This update was submitted in January.
As usual, my questions are in bold italics and their responses follow…
OVERVIEW
How old are you?
Iām 49 (turning 50 in a few months) and my spouse is 52.
Weāll celebrate our 20th anniversary in 2024.
Do you have kids?
We have 16 year old twins that are starting the college search process. Weāve hired a private college counselor to assist them since the whole process is so different than when my wife and I went through it a few decades ago. Right now theyāre both planning on going to four-year universities following their high school graduations next year.
Thereās a chance that could change as one of them may be a good candidate to start at a community college before transferring to a traditional four-year school or taking a gap year to work. Weāve encouraged the kids to think about the skills they want to learn and the value they want to develop for an employer or themselves if they want to be entrepreneurs rather than stressing about getting into particular schools.
Speaking of schools, we have a great public education system in our area. Our kids were never interested in private high schools which has helped us to save and invest additional funds (as well as stock away money in our 529 plans).
What area of the country do you live in (and urban or rural)?
We live in the suburbs of a Northeastern city. We also have a second home in a Mid-Atlantic beach community where we spend about half of the summer and long weekends.
We may explore selling our primary suburban home when we become empty nesters as I can work from anywhere but we arenāt under any pressure to do so. We live on a great lot in an established community with a desirable school district which has helped keep the housing prices inflated here.
What was your original Millionaire Interview on ESI Money?
I am Millionaire Interview 185 which Iād encourage anyone interested to take a look at as I consider this to be the Part 2 of that story.
I also wrote in two years before I shared my initial millionaire story to solicit feedback from the ESI audience here. As you can tell, Iām a big fan of this site as well as the Millionaire Money Mentors forum.
Is there anything else we should know about you?
Iām writing this update on January 1st 2024 following a year with two big personal developments.
First, I have just completed the highest earning year of my life with over $1.1M in total income. I led the development efforts for the largest single new business sale in my companyās history in 2022 and started reaping the benefits this year. As well, Iāve helped build out a new practice group at my company which generated a separate large new contract this year.
Iām expecting another large income year in 2024 with $900k-$1M in income. Thereās potential for sizeable annual earnings in future years, though nothing is guaranteed in my role if I donāt sell new business.
Second, I finally pulled the trigger on going back to school. I was accepted into an industry-specific program offered by an Ivy League university that Iāve been interested in for some time. Iāve now completed the first of four sections and have enjoyed the material as well as learned a lot from the instructors and my classmates. The additional Masterās degree (I earned my MBA years back) will provide additional credibility in my field and help me further expand my network.
But perhaps the biggest reason that I moved forward with the additional Masterās degree is that I have a long-term interest in teaching at the college level. Thereās a need for instructors to teach the next generation of professionals in my industry, and I think Iād be a good instructor based on my passion for what I do as well as my skill set. This Masterās should help me round out my credentials for a role at a college or help me create a program focused on my field.
NET WORTH
What is your current net worth and how is that different than your original interview?
My current net worth and the values from almost four years ago (I wrote the original post in March of 2020) are shown below:
- 401k Balance: $362k (was $129k).
- Brokerage Account: $596k (was $124k).
- Traditional IRA (consists of primarily of rollover 401ks): $812k (was $463k).
- Roth IRA: $70k (was $40k).
- Wifeās 403B from prior employers: $248k (was $146k).
- 529 Savings: $326k total, $163k per child (was $176k total or $88k per child).
- Savings Account: $100k (was $20k). Weāre planning to buy a new replacement car for my wife which will take this down, but I plan to reload it with a sales bonus thatās coming in Q1 2024.
- Universal Life Policies: $49k cash value (was $35k) .
- Primary Home: $550k net: $711k current value less $161k remaining mortgage (was $293 net: $520k market value less $227k mortgage). The mortgage will be paid off in 2030.
- Second Home: $615k (was $430k. I paid off the small mortgage we had years ago which I discuss in the āHelp a Readerā column from 2018).
- Company Discounted Stock Purchase Program: $106k (new since 2020). I started participating in this program a few years ago and the stock has done very well.
- Deferred Compensation: $134k (new). My company offered this to me a couple of years ago when I started consistently earning a higher income. In short, it allows me to defer a portion of my present earnings to a later date. As well, the company matches a healthy percentage of what I defer. This year, I was able to defer $85k until the years when Iām considering retirement and will likely have a lower income which helps a bunch from a tax perspective. All of the proceeds would be paid out if I leave the company before the distribution dates that I elected.
- Stock Options/Performance Awards: $348k which vests between 2024 and 2028. I donāt normally include this in my net worth as these options go away if I leave the company before they vest.
Net Worth in 2018: $955k (this is when my income started taking off and we ramped up our savings).
Net Worth in 2020: $1.856M (though that was in March 2020 during the COVID market depression).
Net Worth Today: $3.968M (not including the $348k in future options and awards).
A few comments:
- All of our holdings are in low-expense index funds or Target Retirement investments through Vanguard (all personal investments) or the company-provided investment firms (401k and deferred compensation).
- I have just under 7 years left on my primary home mortgage at a 2.625% interest rate. My heart tells me to pay it off, but my head says that the historically low interest rate that we have dictates that I should continue to direct my money towards other investments.
- It can be argued that we have too much in our 529 accounts. However, both of our kids have expressed an interest in private colleges and one has already talked about graduate school. The recent changes to how 529 funds can be used has alleviated a bit of the overfunding concern. Having said that, we arenāt planning to put more money in until we have a better view on the anticipated future costs of our childrenās education.
- The universal life policies were taken out by my Dad when I was a kid. They havenāt proven to be great financial investments, and I set up the dividends to pay the premiums years ago so they donāt appreciate in value very much. But the early termination penalties make closing down the policies undesirable and the life insurance component is still a benefit. My wife and I have term life policies that cover our primary needs in this area.
- Compound interest and market growth have clearly been our friend. Iāve been able to stock money away over the last four years (and especially this year) but weāve ridden the wave of growth since 2020 to new heights.
What happened along the way to make these changes?
The biggest thing weāve done has been to focus on earning more income through my sales career while not increasing our spending dramatically and investing the difference (Earn, Save, and Invest. Sound familiar? š ). The growth in our personal brokerage account, Traditional IRA, 401k, Deferred Compensation, 529s, and savings accounts are largely attributable to putting money away once itās earned as soon (or before) it hits our personal account. My income growth over the past 5 years has allowed us to do that more aggressively than we had previously forecasted.
It helps that we donāt live extravagantly at all. I think our friends and neighbors would be surprised to hear about our net worth or about how much Iāve been earning over the past couple of years.
I have also learned the hard way about living paycheck to paycheck. We probably bought too much house when we acquired our current residence during the height of the local real estate market back in 2006. Iāve also lost one job and had another change its compensation structure suddenly over the last 20 years which has given me an appreciation for squirreling money away.
Lastly, we never developed expensive tastes or a desire to keep up with our neighbors when it comes to spending or toys. I imagine that many of our friends donāt have much in savings when I look at their expenses relative to what Iād assume they make based on their occupations.
What are you currently doing to maintain/grow your net worth?
The biggest thing Iām doing right now is continuing to focus on my career and growing my practice group. I took a risk in coming to the firm Iām at several years ago, and have been fortunate that the market has turned in favor of my companyās focus area. Economically, weāve decided that the best thing for me to do is to continue to ride this wave for the next several years.
Weāre also keeping our spending low, though weāve been setting up a few more expensive vacations and not worrying about the cost as much. Our kids wonāt be home for much longer and we want to capitalize on the time we have together as a family.
EARN
What is your job?
I am still a senior level sales professional in the financial services industry.
I am considered a top producer for my company which is one of the leading firms in our industry sector.
My wife has been a terrific stay-at-home Mom since we had our kids which has made the travel required for my job more palatable.
What is your annual income?
I just earned $1.1M in 2023 which is by far my highest income year yet.
Iām forecasting $900k-$1M in 2024 based on business that Iāve already written, and then weāll see how things progress in future years.
How has this changed since your last interview?
I reviewed my career and earnings over the years in my first post if folks are interested in more details.
Hereās a look at my income growth over the last decade:
- 2013: $155k
- 2014: $158k
- 2015: $215k
- 2016: $185k
- 2017: $201k
- 2018: $409k
- 2019: $582k
- 2020: $375k
- 2021: $315k
- 2022: $800k
- 2023: $1.1M
- 2024: $900k-$1M (forecasted)
There have been two big reasons for the increase in my income over the years.
First, I was let go from a firm that was acquired in 2013 and fortunately landed quickly with a stable job at a longstanding regional company. I could have stayed there for the rest of my career, but in 2015 I was recruited to help launch a new practice group for a global competitor. I took a risk and made a business decision to move to the new opportunity. That has paid off, as I never would have had the income opportunity at the regional company that I have now.
Second, I really pushed myself once I joined the global firm to work to be one of the best in my field. Itās been an eight year journey, but I feel that Iāve reached a level where Iām considered to be one of the key personnel in a specific niche for a leading company in my field. Of course, now the challenge becomes repeating that success year after year. But, as the saying goes, pressure creates diamonds.
Have you added, grown, or lost any additional sources of income besides your career?
My primary source of income has always been my sales career. Iāve never had a true side hustle, though I do occasional consulting calls in part to get market intelligence on the aspects of my industry that investment firms are looking at for a relatively nominal amount of money.
As previously noted, we made the decision years ago that my wife would stay home to raise our twins. That wasnāt our original plan, but the cost of child care in our area would have absorbed the vast majority of income that my wife would have brought in had she continued her career.
Iāve never felt that I had the time ā or candidly the sincere interest ā to look into rental real estate or similar side investments. Iāve always been focused on growing my career and spending my personal time with my family. I donāt regret that at all ā especially now as my kids are 20 months away from potentially leaving home for college ā but thereās risk in being the sole breadwinner.
In 2013 I was let go with two weeks of severance when the firm I was at was acquired. In 2009 another employer went through a restructuring that led to my bonus ā 30% of my income ā being eliminated. Changes like that hit hard when a family is relying solely on one income.
SAVE
What is your annual spending and how has it changed since your interview?
We have never meticulously tracked our spending. I found it interesting to see that most of the other millionaires featured on this site donāt either. Instead, my wife and I are generally thrifty people with a good mutual understanding of how much is too much when it comes to spending.
One thing weāve done well has been keeping our spending relatively consistent despite the growth in earnings, especially over the last 5 years.
I would say that weāve done a good job of not increasing our spending as my earnings have grown. Also, we try not to spoil our kids too much though my Mother-in-Law would say that weāve failed in this area.
What happened along the way to make these changes?
The biggest thing Iāve done has been to focus on getting a little bit better every day in my career. Thatās meant taking on new and challenging assignments, pushing myself to do the things that others donāt want to do (and not many people want to do commercial sales), and networking intentionally over the last two decades.
I didnāt see true results for a long time. If you look at my earnings history, I didnāt experience a meaningful income difference for a number of years. But I hit an inflection point a few years back and now Iām seeing a lot of the seeds that I planted start to grow in terms of both new business and long term professional relationships.
Iād recommend the book āAtomic Habitsā to anyone interested in learning how to truly progress in anything. A lot of the principles ring true to me ā especially the concept that consistency trumps talent over time. Iām not the smartest person in my industry, but Iām pleasantly persistent and have outworked many of my competitors.
INVEST
What are your current investments and how have they changed over the years?
I have always been a believer in the Warren Buffett School of putting your money into low expense index funds since the vast majority of mutual funds and actively traded stocks donāt beat the market with any consistency. I largely āset it and forget itā as I try not to look at my investments too frequently.
This is a good place to mention another change: I started working with a personal financial advisor. My company offers a benefit to folks in my income range where they pay to have a high net worth advisor provide advice and analysis. Iāve always been reticent to work with an outside party but I havenāt been pushed to buy any products yet and Iāve been clear about my risk appetite and long-term focus. So far, my advisor has helped in two big ways.
First, heās helped me pull a complete financial picture together and provided forecasts on various retirement scenarios. As well, heās provided useful tax advice as Iāve moved into a higher income bracket. Thatās been very helpful to me and my wife.
Second, he walked me through how to maximize my companyās deferred compensation program once I became eligible. That allowed me to earn the company match for several years which was nice. But it really paid off this year when I was able to defer income from my highest earning year to the future which will help a good amount from a tax perspective.
What happened along the way to make these changes?
Iāve read and would recommend many of the same self-study investment books that have been recommended on this site. Iād also suggest that I havenāt fallen into situations where Iām working for a start-up and a lot of my potential earnings are tied up in stock options that may or may not ever become reality.
Instead, Iāve worked in a great but unsexy industry doing great work and going the extra mile for whatās turned into several decades.
I also listened to my Dad who encouraged me not to invest in things that I didnāt understand or hand my money over to sole investment professionals that I didnāt trust implicitly. I did invest early on with an old drinking buddy from my 20ās who was a nice guy for a while. But I look back and see that my comparatively small account had a lot of movement between investments on a quarterly basis which drove up my expenses. I ended up moving those funds (largely 401k rollovers) to Vanguard over a decade ago.
He later confessed that his firm didnāt pay him much for accounts under $250k at the time so there were no hard feelings. I think heād be stunned to see where my investment volumes are now.
MISCELLANEOUS
What other financial challenges or opportunities have you faced since your last interview?
When I wrote the initial post in March of 2020, the COVID lockdowns were beginning to dramatically impact the economy. I said then that I expected my industry to slow down which would have a corresponding effect on my income.
Instead, and much to my surprise, the opposite happened. Many companies that hadnāt considered our practice group before started reaching out as they weighed alternative solutions to the challenges that the economic slowdown created.
Iād say that I was in the right place in the right time. But I also feel itās fair to say that I took a risk in coming to my current employer and worked hard for several years to be in a position to receive the opportunities when they came. Those opportunities drove my higher earnings over the last several years.
Overall, what’s better and what’s worse since your last interview?
Better ā my earnings level, net income, and overall financial outlook are much better.
Iāve cut down some on my traveling to capitalize on being around my kids more before they leave for college. I work from home and have a lot of say in how I spent my days. I also largely get to set up my travel schedule to I avoid missing family activities. Weāre also traveling more as a family which I really enjoy, and Iāve been able to spend most of the last few summers at our beach house when Iām not on the road.
Worse ā my job is stressful and nothing is guaranteed.
This is a true first world problem but Iāve been feeling a bit stagnant in my current role. There isnāt a realistic promotional opportunity at my current company, and they strongly prefer that I remain in an individual contributor role as Iām one of their top people. As well, the number of management jobs in my industry has shrunk over the last several years.
Everyone needs a top producer, and thatās preferred to more managers. Plus, running a sales team again would mean a drop in income at a time when Iām at the peak of my earnings. Iād say I earned roughly 3x what my manager did in 2023.
What are your plans for the future?
Great and timely question. I had the age of 55 circled in my mind as a potential soft retirement date for much of my 40s. My kids would be four years out of high school by that point, and I would have told you then that Iād like to have $5M in net worth and be in position to take a step back.
I still think Iāll work until 55 as Iām not sure Iād be comfortable not having a steady income while my kids are still in college. Iād also like to have more in net worth ā say $6M or more ideally ā before I step back.
My wife and I would like to travel more in retirement and not be concerned about going out to eat more or enjoying the finer things when we have more free time. I suppose Fat FIRE is a target goal now.
I mentioned my desire to teach. In an ideal world, I see myself stepping back from my current role (or an equivalent one) in 5 years to teach students about my industry at a college in a desirable location. Iād focus on improving the employment prospects for college students by day while refereeing soccer games, working out, and playing a lot of golf in my spare time to stay in shape.
Given that you have a bit more wisdom and experience, what advice do you have these days for ESI Money readers?
I saw this statement in an article I read recently and itās stayed with me:
Most advice stinks. Itās given without context for the specific people or situations involved. Also, itās often a reflection of the person giving the advice rather than helpful feedback for the person asking for it (though the advice in the Millionaire Money Mentors forum tends to be highly specific and targeted).
I gave a lot of advice in my original interview. Here, Iād like to share a couple of thoughts:
- Trust Your Own Gut: Iāve had a lot of people tell me negative things about the path that I had chosen in my career. I stayed the course and feel good about the results Iāve created. Iāve had plenty of failings ā heck, Iād argue that Iāve largely learned from the School of Hard Knocks more than anything else ā but my actions and choices are mine. I hope your actions and choices are yours as well.
- Thereās Danger In Moving ā¦ And Danger In Staying: You have to take risk to get rewards in life. Many people see risk in leaving a stable company for a new job. But thereās also risk in staying where you are. Iād argue that the two biggest misses in my career were staying in two different jobs for a year too long each because of vague promises made by my managers at the time. I wouldnāt have nearly the income or personal freedom that I have today if I hadnāt bet on myself and moved to a new opportunity eight years ago.
- Thereās No Such Thing As āSafeā Anymore: Things are constantly changing whether you see it now or not. Be your own life manager. Donāt let yourself get stagnant or rely on your company to develop your career. Iāve seen too many people get complacent only to have Donāt be afraid to take risk ā in fact, Iād argue that you should be afraid of getting too comfortable. Your life is half chance, so make the best decisions you can with the information you have and keep moving forward.
Thanks for taking the time to read my story. Iād love your comments and plan to respond to each note that I receive.
Vladimir M says
Nice story. Thanks for sharing.
MI-185 MIU-54 says
Thanks for reading Vladimir!
M268 says
Nice story and congratulations on growing your income to the point you are. Impressive! I am curious you say you want to grow your net income to $5M or $6M before you retire…curious how you plan to get there from your current income level of $1M? Will your current job support that or do you have a change in mind? Or, I’m wondering if you don’t mean net worth instead?
MI-185 MIU-54 says
Hi M268 – great catch – I did mean Net Worth, not Net Income. I’m not one that’s too concerned with how much I make. I’m more focused on how much I keep. I don’t think it’s realistic that my annual income will be much more that $1M per year over the next few years, not that I’m complaining about that number.
ESI says
I missed it too! I updated it to reflect net worth versus net income…
If it’s in more than one spot, let me know — maybe I missed that too!
M268 says
Thanks for response. To me the greatest value to this board is finding others with similar situations and reading about their own thoughts and how they got there. I read posts that resemble my situation with a lot of interest and attention to detail…it gives me great confidence in my own position / planning — all the modeling in the world is great, but hearing from others in like situations is icing on the cake! $5M Net Worth does have a super nice ring to it.
MI-185 MIU-54 says
I’m definitely trying to condition myself against “One More Year” Syndrome while also making sure that I’ve saved enough for my wife and I to travel and live the way we want once I stop working. Hopefully I’ll get a sign when I know it’s time to hang up on my career.
Bernd Doss says
A good read and review. Your advice to others, based upon a life lived, in my mind and thoughts similar to those expressed within this article tells me you will be an extraordinairy teacher to others seeking knowledge. Good luck on your future mission.
MI-185 MIU-54 says
Thanks for the kind words Bernd. Teaching is something that I’ve been thinking about for awhile. My current classmates from my current degree program have also been supportive of the idea.
M says
I think he meant net worth too since heād be retiring. Net income of 5-6 million after retirement would require at least 60 million dollar nest egg (assuming at least 8%).
MI-185 MIU-54 says
You’re right M – I meant Net Worth rather than Net Income. And here I thought I’d done a good job of reviewing what I wrote… š
MI-21 says
Great update. Your post-retirement plans sound just like mine. I retired at 58, 4.5 yrs ago with a NW of $3.9M. Since then I’ve become an adjunct at a local university teaching Corporate Finance at night, coach HS football by day, a bit of consulting, and lots of time for fitness and hobbies. It’s been wonderful! plus, the NW has grown to $5.8M.
MI-185 MIU-54 says
Thanks for this feedback MI-21. Curious – was the transition itself difficult for you?
I still have a few years before I pull the trigger, but I do get nervous when I think about turning the page on a steady income and health benefits.
MI-21 says
Once I pulled the plug and announced to my employer, the transition was surprisingly smooth. But, the process of getting there was not smooth. I had decided probably a year earlier that I was done. Just burned out. C-suite role and an out of state commute every week. I liked my job and company and I was at the top of my game so that made it extra difficult to actually walk away. I probably chickened out on 20+ Mondays. But when you’re ready you’ll know it. I had an additional 6 month transition to assist them in hiring my replacement. All in all it worked out great and the extra retention bonus and compensation helped to pad the portfolio. Definitely a challenge to work through but you will know when the time is right.
MI-21 says
Also, I’m Retirement interview RI-23 if that helps. I think I went into more detail on my process in that interview.
MI-185 MIU 54 says
Thanks MI-21 for the feedback. I’ll definitely check out your retirement interview. I’m also learning a lot from the Millionaire Mentors Forum. I joined as a Mentor but have learned so much from all the members of that group.
Financial Fives says
What a great way to start of 2024! to increase your income so substantially when you’ve juiced your investment and retirement accounts, as well as locked in such a low interest rate, puts you in an excellent spot to retire whenever you wish and enjoy your hard work.
Curious if you’d be open to sharing what your job actually is. I’m in the financial services industry as a planner, but always wanted to look more towards the sales side with more variable comp. I know your quote is very wise in most advice stinks, however would be curious what you’d recommend to your 35 years old self.
MI-185 MIU-54 says
Thanks Financial Fives! I work in a niche sector of the commercial insurance claims industry. I initially fell into the industry when I was 29 and have spent the last two decades learning and trying to get a little better every day.
My advice to the 35-year old me: Focus on building your network and your skill set consistently every day. These small gains will snowball and lead to tremendous opportunities later on. I think of it as creating compound interest in my career. You and others won’t notice the small improvements for awhile, but then they’ll start to really build to something. This concept works for your finances as well as your career.
D says
I also had a low interest rate mortgage and chose to ride it out and invest instead of paying it off early. It is incredibly nice looking at a home you own and investments worth many times the value of that home in years to come. No regrets!!!
Yes, get your retirement plans together. It is awesome to own your life!
Great job and best wishes!!!
D
MI-185 MIU-54 says
Thanks for the feedback D! I keep telling myself that our home will eventually be paid off right around the time that I plan to retire. If I get another significant windfall commission over the next few years then I may pay off the mortgage for peace of mind, but having a cushion for my kids undergrad tuition comes first.
MI 343 says
Thank you for sharing this update!
FeistyFire says
Congrats on your success MI-185. Any career or other advice for a 36 year old Tech sales professional? Your interview and journey resonated with me. The comp. can go up and down and it rarely stays the same. I’m in the IC route as well. I’ve done quite decently with savings and investments but need advice on the tax front and comp. deferment etc. Any tips on engaging with a finance or tax professional that does not push you to buy their product?