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. 😉
This update was submitted in August.
This one is a bit different than all the others as it’s the SECOND update from this millionaire. Here’s his first one (it’s part 2 of the post.)
As usual, my questions are in bold italics and their responses follow. We start with an introduction from the interviewee himself…
OVERVIEW
I am MI-18 and I first found the ESI Money website when there had been only a few published Millionaire interviews. When I read them I felt compelled to reach out and volunteer to tell our story.
It’s hard to believe it’s been over SEVEN years since I submitted our answers back then. At the time we had started our “exit” from my career which included building our dream home in the Midwest and starting the process of leaving California.
Our net worth at the time was $12.2 Million.
So where are we now? Like with all interviews I’ll follow the format provided.
How old are you?
I am now 58 and have been retired for more than 6 years (last paycheck was in March of 2018). My wife is now 57 and we have been married for 34 years.
We both believe that our partnership in marriage made this all possible. My interview occurred about a year before I retired at 52.
Do you have kids?
Our daughters were 23 and 20 at the time of the first interview – the oldest had just graduated with her business degree and was adding her bachelor’s in nursing in a fifth year and the youngest was still a few years from completing her Master’s.
Both work today in industries they love, our oldest is married now, and both are homeowners and on firm financial footing with no student debt and rising Roth, 401k and investment accounts. Both save well and have nice balance sheets.
The son-in-law is a CPA. All are off to a great start in their professional lives.
What area of the country do you live in (and urban or rural)?
Rural Midwest though the suburbs and city are close by. We selected this location as it includes a great 36-hole country club complex and our kids and parents were all nearby (both went to college near here and both started their careers here).
Being near family in retirement was our top priority when we left the Bay Area.
What was your original Millionaire Interview on ESI Money?
My interview was the 18th in the series (though when I submitted it only 7 had been posted) and my story while similar in terms of journey was the first to have an 8-digit Net Worth.
It was also published after ESI posted his findings from his previous interviews (right after interview 17) – however, I had submitted my interview before he published that post and it was nice to see that the decisions and disciplines that were consistent from all the prior interviews were true with us as well and were included in his analysis.
I believe one of the greatest contributions from this site is revealing to anyone (who is interested) how successful millionaires achieve that milestone. It’s a truly multi-disciplined, multi-year process and for those who can follow that path, I believe they can achieve the goal of a long stable successful financial life while working, as well as in retirement.
Earn Save and Invest REALLY works!
Is there anything else we should know about you?
When I wrote the interview we were focused on the transition from work to retirement. The house project took two years and quite frankly building a custom home from the ground up IS WORK.
It turned out to be the thing that really helped me transition from my career to the retirement I enjoy today.
We moved into the house four months before the pandemic. The total cost of the project was more than we planned to spend initially but we got what we dreamt up and didn’t have to cut back at all.
I started really thinking more about how we were paying ourselves for the rest of our lives and what that spending would mean to us.
I was one of the first mentors on the site and enjoyed the fact that it created a unique environment to share experiences, learn from others, and make some like-minded friends. As a result, I contributed the ISE (Invest Spend Enjoy) post that is archived today here.
ESI expanded on it when he brought up a dimension – Giving (IGE) – something I had not stressed which was be charitable with your wealth. We had always been charitable with our time and money, but his post motivated me to do more so we put $1,000,000 in a Charitable Lead Unit Trust in 2020 and enjoy the fact we must give 6% away each year to causes we support.
That’s what this site can do for you. It always informs and motivates.
NET WORTH
What is your current net worth and how is that different than your original interview?
Our net worth has doubled in the past seven years to 24 million (breakout below). We set up the charitable trust, and have given away in the past 4 years more than $250,000 while the trust itself has grown to more than 1.2 million.
My Roth has grown to 1.2 million, my IRA (2.5 million 7 years ago) is now worth 15.5 million, the taxable account is 2 million and the house is 4 million (net). The contents of the house or the cars are not included here.
I still use my annual cash harvesting strategy (need to find that post in the mentors section), I keep 2 years of cash expenses in my IRA to fund my 72T (which I have 2 more years to go on)
What happened along the way to make these changes?
I can’t think of any really bad experiences in the past 7 years other than having a few early-stage investments in some startups that may eventually not pay off, but I can use the capital losses if that’s the case to minimize the cost of those bets (and that is what they were)
Now for the good experiences. In mid-November of 2020, I bought 26,000 (split adjusted) shares of NVIDIA for $4 a share – a $105,000 investment in my IRA.
It’s worth $3 million today. In 2018 when I rebalanced my IRA I also bought Apple Tesla and Meta In my IRA and Roth. In hindsight, I wish I had more NVDA in my Roth. 😎
What are you currently doing to maintain/grow your net worth?
I haven’t changed my investing philosophy at all and focus still on buy-and-hold investing. I don’t worry about short-term volatility but I have focused a great deal on estate planning given the current change in the lifetime exemption that is coming at the end of 2025.
There are some strategies we need to consider. Even if you do not have an 8 figure net worth having an estate plan is important – especially if politicians are successful in reducing the estate tax exemption back under 1 million.
We are not consuming anywhere near the 4% rule so I expect our market-invested assets will continue to grow. At some point, I’m sure we will become more conservative and put more money into bonds/cash but we are a decade and a half away from RMD’s.
EARN
What is your job?
I’m retired but I do sit on several boards (a few nonprofits, a few private startups, and a few publicly traded firms). I get paid in equity grants for the startups and meeting honoraria for the public companies.
As my wife says this makes me the busiest retired guy she knows (who also plays 170 or more rounds of golf a year).
What is your annual income?
At this stage of life income on the tax return doesn’t equal what we spend. Most of our income/cash comes from my 72T election from my IRA which is $238,000 a year.
Dividends and other income are $70,000 and we will augment our spending with $100,000 or so from the taxable accounts. I expect we will stay at this level more or less for the foreseeable future as we have hit our cadence post-pandemic with respect to our travel and what we spend our discretionary budget on (golf travel and wine).
How has this changed since your last interview?
Shifting from W2 work (salary, bonus, RSU’s and options) to essentially paying yourself is a very different tax profile, on top of that the tax law changes that eliminated the full deduction for SALT have had a negative impact on our finances when it comes to our net cash outlay each year.
7 years ago we had two kids in college, we had not cashed out deferred compensation, and were in our last year of EARN and SAVE mode. We were in California – the highest taxes in America.
I finally paid my last California tax bill in 2021 – 3 years after leaving. They laid claim to a portion of all of my deferred bonuses and RSU’s and Options.
They are aggressive in their tax enforcement division.
The bottom line is our effective tax rate is now much lower (though not as low as we had planned because of the 2017 tax law changes) and we can manage our tax burden through how we consume our IRA and taxable accounts.
Because of the rapid growth of the IRA, it will impact our strategies around funding our Roth account and how we eventually draw it down. This is where a good estate plan is needed for us.
Have you added, grown, or lost any additional sources of income besides your career?
Certainly, the 72T is a new source of income but like all those who retire when the last paycheck comes, everything changes. I was not on any boards while working so that stream of income is new as well.
That covers my exchange-based healthcare costs for me and my wife plus some of our golf expenses.
SAVE
What is your annual spending and how has it changed since your interview?
While working during the first interview I had outlined how we spent our net cash after taxes so I will use the same format as last time”
- Cash Available to spend: $245,000
- Mortgage & insurance: $65,000
- Utilities, Pool and Landscaping: $20,000
- Medical Insurance and expenses: $18,000
- Car expenses: $27,000
- 401k: $0
- Life insurance: $0
- 529: $0
- Other Household Expenses: $25,000
- Vacation Travel & Country Club: $90,000
What happened along the way to make these changes?
I wouldn’t say anything bad happened. I like free money (both new cars bought since the interview were financed at rates under 1%) and I hate paying taxes when it comes to using my money so when we ran a million over on the house I decided to convert that amount to a 30 year fixed rate mortgage at 3% with a balloon payment due in 2027 which allowed me to keep that money invested for seven years.
That money has more than tripled (or more) inside my IRA and or taxable account and may/will be worth even more by the time I pay off the note. I deduct the mortgage expense to the limit but SALT limitation at 10,000 means I cannot fully deduct the property and state income taxes I pay.
We are spending more (relatively speaking though inflation has had an impact) now (not working) than when I was employed. Our travel and country club expenses (we play nearly 300 rounds of golf between us) are what bring us joy and fill our weeks and what we build our time and social schedule around.
The seven years have flown right by as a result there is rarely a day when we just sit at home.
As I mentioned we do not come near the 4% rule and as a result, do not feel like we will sacrifice anything that we wanted to do in retirement. As a result, our assets have allowed us to feel confident we do not have to worry about paying for what we find joy in doing!
We know that being in his position seems out of reach to the generation entering the workforce today, we hear about it constantly. I do not believe that is true.
I believe the path to financial independence is achievable for most if they are willing to do what the interviews of over 400 millionaires prove: invest in yourself and a career to EARN, spend less than you make to SAVE, and educate yourself about how to put your money to work so you can be knowledgeable about INVESTING.
INVEST
What are your current investments and how have they changed over the years?
I mentioned above that I have maintained my buy-and-hold strategies and still own single stocks in all accounts. Still, look for category leaders with positive cash flow and let them grow.
With the 72T I now keep cash in my IRA but do not feel like I am missing any market opportunities. In the ISE phase, we are still investing but now we are spending too.
So while it hasn’t changed the investing strategy it HAS impacted the “what do we sell” to build the cash reserve.
The stocks I own across all accounts are:
- NVDA
- TSLA
- META
- AAPL
- MA
- V
- CNC
- GPN
- CMG
- WMT
What happened along the way to make these changes?
No truly bad experiences though I took a chance in my Roth with $100,000 on the EV maker Workhorse when it looked like they might get the USPS fleet deal. Looking for a tax-free home run return by using the Roth and have lost 97% of that choice.
As a result that was a one-and-done decision. We cannot all be Peter Thiel with an oversized ROTH full of tax-free money.
The next real set of decisions is on how to manage converting the IRA to the Roth. This will involve working around tax years. And what we do in any single tax year.
Working through the analysis post 72T where the withdrawal strategy goes something like this (subject to whether or not marginal rates align with the amounts projected to be shifted/withdrawn).
Q4 year 1 withdraw year 2 spending needs. Year 2 only do Roth conversion.
Each quarter of year 3 withdraw year 3 and year 4 spending needs. Year 4 do only Roth conversions.
Repeat sequence until RMDs are required and change the amounts withdrawn. I’ll run the scenarios and post about them.
MISCELLANEOUS
What other financial challenges or opportunities have you faced since your last interview?
No challenges but since I retired I have received an ongoing barrage of startup funding requests. I have made a few but plan to make no more.
The opportunity to turn a $50,000 investment into a $2 million tax-free return (if set up properly under IRS QSBS rules) is no longer of interest given the growth of our net worth. No need to deviate from the strategy that has gotten us here.
If we cash out I’ll let you all know (I have three such type investments all in startups run by former colleagues).
Overall, what’s better and what’s worse since your last interview?
I do not miss work. I loved what I did, I was able to retire at 52 and commit with my wife to a comfortable financially stress-free retirement – a new chapter in our lives we know that we are blessed to experience and one most may only dream of.
I wouldn’t change a thing and hope everyone on this site each earns the chance to live their post-work lives any way they want to. I can say though without a doubt I am busier than I ever thought I would be.
We actually need individual as well as a combined family calendar to keep track of where we are supposed to be each day!
My health is better now that I replaced both knees and I am much more aware of what I eat.
What’s worse? Our national debt. It’s out of control and it’s an existential threat to everyone – rich or poor Republican libertarian independent or Democrat.
No one is doing anything about it. If we don’t then a million dollars down the road won’t have much value anymore.
The problem cannot be solved by taxing anyone or anything more. As a result, there may be new investing and saving strategies we all need to contemplate.
We will see what the next few years brings. No matter who wins I’m afraid this issue will not be addressed and if it’s not then two things are relatively certain, the great transfer of boomer wealth will be a target of the government AND retiring rich will be much more difficult even if you follow the approaches found here on ESI Money.
What are your plans for the future?
More travel and time with family are on the agenda. There may be a second home which would be in Arizona and not Florida – we will visit Florida but choose to live in Arizona should we decide to have a second home.
I know the kids would like to go to the 28 Olympics in LA so I am sure we will do that. We will simply continue to build a portfolio of joyful experiences.
There is no need for any more or new stuff.
Given that you have a bit more wisdom and experience, what advice do you have these days for ESI Money readers?
I’m glad this is the last question in the follow-up. The thing about this site I appreciate the most is that while there are really only a few ways to EARN and SAVE, there are nearly a million ways to INVEST and this site has helped me appreciate the fact that there are some great strategies to learn here.
My grandfather owned rental real estate and I always felt that would be a great active thing to do as a career but it’s interesting to see how many people here have careers and are passive real estate investors. There are folks here who also TRADE as part of their investing strategy and that can yield great returns as someone with a master’s in finance I can tell you that isn’t for everyone.
You have to be really good – though there are great ways to learn without having to have an advanced college degree.
So my wisdom and advice after 7 years is this. Retirement is when you really have to understand your finances.
The strategies you use for the first 20 to 30 years of monthly saving and investing are very different than those you will use when you no longer are receiving a paycheck and paying yourself FIRST (the money you invest) and within most 401k’s where mutual funds are what you buy, use those 20 or 30 years to improve your investing skills.
It never hurts, it only helps and if you are able to make decisions and play an active role in your assets management you will save money on fees (and that can add up a lot over the LAST 30 years of your investable assets lives since your balances will be much higher).
I would also add that a good strategy is to pay yourself like you were working. Your expenses are going to be “monthly” so pay yourself at least 12 times a year and that approach will also help with how you pay your quarterly estimated taxes.
Lastly, and I think this is the most important part of the wisdom I have gained over the past seven years – develop a social network. Travel and entertain and hang with friends.
I’m in a wine club, a bourbon club, and a golf group, my wife is in a book club, a bunco group, a wine group, and a golf group. All of these people were folks we did not know before we retired and moved.
That’s it. I hope everyone gets to a comfortable retirement on their terms and has as much stress-free fun as we do collecting and building a portfolio of joyful experiences!
Many many thanks to John and what he has done here in his little corner of the internet. This is an invaluable site for those at the start of their save-for-retirement journey, not just for the ESI advice but for what you can learn about the personal decisions and outcomes the millionaire interviews reveal.
It’s a potent recipe for success.
Congratulations on your continued success. And by this I mostly mean your great attitude, your ability to move across the country and develop friendships, and your great advice to build a portfolio of experiences.
That truly is much more important than the size of your accounts (which are impressive, too.)
Thank you. I truly believe this site contains invaluable insight and crowd sourced wisdom that is more valuable than anything a single personal finance guru can sell you.
I hope you find something useful in every single interview here as well as in the mentor section.
Happy new year
Thanks for updating your story! ESI website certainly does contain lots of great info to help people along life’s financial journey. And, you’re story helps as well, even for those of us not as loaded as you. Blessings!
Thank you. Everyone here has achieved their financial independence or is on their way. I am always happy to share what I’ve learned or to help in any way I can. Congratulations on your accomplishments and have a great 2025!
Fascinating update. What stocks (small or mid-cap) do you think have massive growth potential right now? I bought Nvidia and Tesla years ago too. Wish I had bought Bitcoin back in 2011 when I was throwing around the idea! Have some crypto allocation with a favorable cost-basis. What are your thoughts about quantum computing? I’ve bought several hundred shares of IONQ. I saw that Nvidia’s CEO thinks that quantum computing is still decades away from broader integration. These AI companies are churning out massive amounts of data so much so that their data centers are going to require an enormous amount of energy. I’ve started buying some nuclear stocks like OKLO. Would love to just hear your thoughts about these emerging sectors if you’re interested!
I will respond with my list later this month. Still doing my research
Seeing your net worth double is just incredible, the power of time and smart decisions. You’ve reached the pinnacle in life, good health, wealth of time, and enough money to do whatever you want. Thanks for sharing your story and enjoy!
Fantastic. Great stock picker!
Awesome stuff! My inspiration! One thing you neglected to share. Is your golf game better or worse in retirement? 🙂
Much better. Two new knees have helped immensely!
Could you tell us more about the cash harvesting strategy please?
Sure
I actually posted this the other day in the forum when the issue of how to avoid feeling bad if you have to sell on a down day (let’s say you sell monthly on the 15th of the month like clockwork)
You can read it here:
https://forums.millionairemoneymentors.com/t/does-selling-stocks-make-you-twitch/11453/21?u=mi-18
If you can’t access this let me know and I will cut and paste it
Besides your incredible success in ESI and retirement, it is very helpful to me to hear that you and your wife made friends in your new location. I am struggling with building a new social circle in my new city, especially retiring in my mid-50s.
This was probably my biggest concern for both of us though more so for me than my wife as she has lifelong childhood friends here she never lost touch with while we were away.
Try volunteering. At the local hospital, your church, a non profit. You’ll start filling your schedule and you’ll meet like minded people. Join a gym or a club (social tennis or golf political). I’m 5 to 20 years younger than my circle of new friends
I hope this helps. It took about 6 to 9 months to feel like we were part of the group and it can be humbling at times but trust me you’ll find some folks you will eventually think that you’ve know all your life
You are exactly who I want to be when I grow up. Although I don’t have a great income (public school teacher) I have been smart with my funds and continue to save, invest, and pay down debt. One day I hope to retire to golf, travel, and spend lots (more) time with family and friends.
Just trying to stack a big pile of investments up so I don’t have to depend on my states pension fund (which will likely bankrupt by the time I retire/thanks Illinois).