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 November.
As usual, my questions are in bold italics and their responses follow…
OVERVIEW
How old are you?
My wife and I are both 38.
We’ve been together for 12 years and married for 8.
Do you have kids?
Yes! We had some difficulty getting pregnant and experienced a loss along the way, but in 2022 we welcomed a baby girl to the world.
She’s just turned 2 and is the literal highlight of our lives, but we are not sure that she will get a sibling…
I never saw myself as a parent to an only child and my wife and I are confident we would be just as happy with 2 kids, but the process was not easy, we’re approaching 40, our house is too small, etc. Jury is still out, but I think it’s fairly likely we will be stopping at one.
What area of the country do you live in (and urban or rural)?
We are in a small rural town in the northeast after relocating from the Bay area in 2020.
Since my original interview, we’ve moved one town over and purchased our first house in 2021.
What was your original Millionaire Interview on ESI Money?
I was Millionaire #249, which I completed in January 2021, just shortly after relocating. It was published around the end of May 2021.
It’s approaching 4 years since then!
Is there anything else we should know about you?
We could probably retire at this point if we kept spending tight, but I’m tied to my current job (more below) for the short term, and I don’t feel terribly motivated to stop working yet. However, I do see the potential for a transition coming in the next 5 years or so to consulting or something else to start gliding into retirement.
My wife is now a SAHM, but she is toying with a different transition – back to school for a degree in Nursing.
NET WORTH
What is your current net worth and how is that different than your original interview?
Our net worth as of 10/31/24 was $2.165M.
It’s up almost exactly half a million dollars from our original interview (12/31/20 – $1.66M).
What happened along the way to make these changes?
We hit a high water mark of about $1.85M shortly after my first interview and we hovered there for most of 2021. At the end of 2021, we purchased a house that I value fairly conservatively (~80% of the purchase price, essentially erasing our down payment equity) in our NW calculation as we bought at what felt like the peak of the market in our area.
We intentionally bought at the lower end of our budget and did not buy our ‘forever home’ due to the frenzied market and what we expected to be a relatively short hold.
In 2022 we saw our NW drop considerably, to a low of 1.25M in October. This was a 30% drop compared to a 20% drop in the S&P over the same period, and it was primarily driven by individual stock and ETF losses.
From the trough in 2022, our net worth has charged upwards, approaching $2M twice before finally breaking through this year in June 2024. Since that low in October 2022, our net worth has grown 61% and the S&P has grown 60%, implying some changes in our investments which I’ll address below.
What are you currently doing to maintain/grow your net worth?
Our net worth is split as follows:
- Checking & Brokerage: 59%
- Retirement: 35%
- RE Syndications 4%
- Crypto: 2%
I’m still working and contributing almost every spare dollar to our portfolio. One decision on the horizon is when/if to forgo the tax benefit of 401k contributions to continue socking more money into after-tax accounts.
If retiring in our 40s is a potential outcome we may want more money producing accessible income.
EARN
What is your job?
I’m still an Operations executive (VP level) at a medium-sized consumer products brand.
What is your annual income?
My annual income is $190k, with a 20% annual bonus potential.
How has this changed since your last interview?
In my original interview, my income was $150k, and I implied I would get a 20% bonus annually. Since then, following another exec’s departure in early 2022, my scope has grown which yielded a 20k raise. This year, I asked for a further 20k raise to $190k.
Since my interview, I have received a partial bonus twice, and no bonus twice. 2024 is pretty dubious, and it looks as if I won’t be receiving a bonus.
If that’s the case, in 5 years with my current company, I will have received less than one full year’s bonus. My bonus is based entirely on company performance, and while the company is growing, our PE ownership pushes for bigger revenue and profit budgets than seem to be achievable, and we keep falling short.
Have you added, grown, or lost any additional sources of income besides your career?
I have continued my reselling hobbies (merchandise, gift cards) at approximately the same pace but the income is negligible (~5k/yr) compared to my W2 income.
I haven’t done any consulting in 2023 or 2024.
SAVE
What is your annual spending and how has it changed since your interview?
I finished my initial interview about 4 months after moving from SF to the East Coast and starting my current job. Prior to our move, our expenses were fairly stable and totaled about 40k/yr for necessities and 10-20k/yr discretionary spending.
Spinning up two cars and a down payment for a house since then has led to some significant spikes – our overall spending ballooned to $175k in 2021. But our spending has been sliding back to more comfortable levels in the last couple of years, $93k in 2022, $76k in 2023, and $66k YTD 2024.
I think the years of $40k spending are behind us, but I think <$75k/yr is probably doable for the foreseeable future.
What happened along the way to make these changes?
We bought one car outright and took a 3-year loan on the second. Both cars are now fully paid for.
We have spent a bit on homeownership – $32k total on a roof, driveway, oil tank, tree removal, and gutters. None of this was planned, but neither was it terribly surprising.
We had a baby! Surprisingly, this hasn’t impacted spending too much.
The one very strong positive of my job is the secondary insurance for executives – we did not pay a penny for fertility, pregnancy, labor & delivery, etc. I’ve tracked about $4k spent on baby stuff (the rest coming from the shower, birthdays, and hand-me-downs from my older sister’s kids).
Our grocery spending has grown a bit to $6k/yr ($4k previously) but this is still well below average according to our friends.
INVEST
What are your current investments and how have they changed over the years?
Following the market downturn in 2022, I took the opportunity to do some significant loss harvesting and rotated the majority of our investments into index funds. About 70% of our investments are now in VTI.
Most of our investments outside of VTI are individual positions we’ve been holding for a while and plan to continue to hold.
What happened along the way to make these changes?
I watched some of our trendy individual stocks get gutted and decided that I was tired of following YouTube “experts” and reading paid investment newsletters from my father-in-law. I wish I had made the decision sooner, as I later realized I was dedicating a lot of needless thought and brain power to it.
I continued to track the stocks I sold and on average they have returned 40% since October 2022 (with several going to 0), whereas the VTI I purchased has returned 63%. Good riddance.
MISCELLANEOUS
What other financial challenges or opportunities have you faced since your last interview?
I helped a PE firm do some pre-purchase diligence on a company in my field and was given a seat on the board after the acquisition. This has been an interesting opportunity as I have a small equity stake in the company, and it has been performing extremely well.
I don’t carry this in my NW calculations, but it could amount to $250-500k in upside within the next couple of years.
I’ve invested in two Real Estate Syndications, and it seems the timing was not great with the rapid interest rate hikes. One seems to be plugging along and the other has paused distributions but also seems like it will survive.
Luckily, with the purchase of our house, I didn’t have much liquidity and therefore didn’t get too deep into these. I’ve always been enamored with the asset class, but one of the best things about the MMM forums is how quickly I’ve learned how little I know!
The expertise around real estate in the forums is so expansive, but for every mentor that is a RE pro, there are probably 3-5 mentors reading along but sitting on the sidelines enjoying their index funds. I think that is going to be me for the foreseeable future.
My company is also privately held, and I’m hoping for a transaction in the next two years. It’s been particularly tricky to value my equity, but this will probably be about $500k upside as well.
Overall, what’s better and what’s worse since your last interview?
Life is generally better. I always knew I would enjoy fatherhood but it’s already rewarding beyond my expectations.
It’s also taught my wife and me a lot about teamwork. We were a great team before our daughter, and that has certainly improved since.
Our net worth is obviously a bit better, and it’s nice to see the return to growth after 2022.
On the not-as-good side – my job is not great. I like the company, the teams, and the day-to-day, but my boss (CEO) leaves a bit to be desired.
We continue to get signed up to hit budgets we all know are unrealistic, so our yearly incentives are often missed. Beyond that, I’m concerned about our ability to get the business sold under his leadership.
I have $300k+ in vested stock options that keep me tied to the role and the area, but I have a hard time envisioning a successful exit in the short term. To add complexity, we’re outgrowing the house we bought because we didn’t intend to be in it for 5+ years.
Some days I get pretty down on my work situation, but I was reading Same as Ever by Morgan Housel the other day and there’s a quote from Jeff Bezos:
“People have very high standards for how they want their work-life to be. If you can get your work-life to be where you enjoy half of it, that is a home run, that is amazing.”
I don’t know if that’s true, but it was a nice way to reframe how I was feeling about work. I certainly enjoy at least half of my job.
What are your plans for the future?
For the next couple of years, we’re tethered to my job, unless things get bad enough that we decide to walk away from the equity. After that, I would love to switch to a consulting role or a W2 with a bit less responsibility since I think we’re pretty solidly CoastFI at this point.
On the other hand, I expect we may want to move to get closer to our families, but the cost of living is significantly higher nearer to them. Where we choose to live next will be a big driver in determining how much longer we’ll be working.
Given that you have a bit more wisdom and experience, what advice do you have these days for ESI Money readers?
I reread my advice from my original interview, and the first bullet point still really resonates: Pick the right partner.
Talk about money with them long before you get married. Set goals together, have fun along the way, and celebrate your successes.
Beyond that, one I’m living through right now: Beware of bad bosses.
Make sure to use interviews as bi-directional, and try to uncover if you will work well with the person you will report to. This is true at every level of your career.
And lastly, be happy! Figure out what makes you smile and ensure you do that enough. Life is too short to not make happiness a top priority.
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