Millionaire Interview Update 72

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 June.

As usual, my questions are in bold italics and their responses follow…

OVERVIEW

How old are you?

I am 46 years old, and my wife is 44 years old.

We’ve been married for 16 years and counting.

Do you have kids?

We have 3 active kids. Twin boys who are 11 and a daughter who is 9 years old.

We are part of a home school charter (hybrid of home school and being on campus), in which the kids absolutely love their school and learning in general. They are all active with their respective sports and activities.

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

We live in Southern California, which is a change since the Millionaire interview. We relocated here about 3.5 years ago, after a wildfire burned through the Colorado city we lived in and destroyed 1,000 structures and disrupted the lives of families.

Our home was spared, but there was so much destruction in the surrounding neighborhoods, we decided to take a 6-month road trip, hoping that cleanup would be complete, but various obstacles and opportunities led to us settling down in Southern California.

What was your original Millionaire Interview on ESI Money?

I was Millionaire #302.

Is there anything else we should know about you?

Due to the fire, we relocated from a relatively high cost of living area (Boulder, CO) to a very high cost of living area in San Diego, not to mention the high CA taxes. In addition, we decided to purchase a home in So. Cal and converted our previous primary residence in Colorado into our second rental property.

My original plan was solely to house hack with one rental property, which has now turned into two rentals. The net results of all expenses + income generated from rentals yields a relatively small increase to monthly expenses compared to when we only owned our primary residence.

So in that sense, I count this as a blessing and see it as an opening for options down the road and a potential way to assist the kids when they come of age (only if necessary) to help them gain a head start to home ownership.

NET WORTH

What is your current net worth and how is that different than your original interview?

Current net worth is $5.7m, which is $1.5m more than 3 years ago when our net worth was $4.2m. I had to leverage some cash from my taxable account as a down payment when purchasing our current primary residence, hence that category reflects a decrease in comparison.

What happened along the way to make these changes?

In all honesty, we have stuck with the ESI principles and allowed time and compound interest to work their magic.

We’ve continued to save, but on a % basis, it has not grown in parallel when compared to our total income. This was a conscious mindset shift as we are in the early innings of shifting our focus towards the art of spending more (for experiences) vs purely the mindset of saving.

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

Utilizing the foundational principles of ESI, I have been sticking to this plan over the last 3 years. The additional savings within retirement accounts + the tailwind of a bull market have enabled us to continue growing our net worth.

I don’t foresee us deviating from this path until I fully depart from W2 work and begin utilizing savings.

EARN

What is your job?

I am in a similar role, compared to 3 years ago, albeit with a different company. I am at a Sr. Director level for a high-tech company, located in the Bay Area, and thus far still have the convenience of working from home with minimal travel required.

Although my title has remained the same, my income has increased over the last few years, mainly due to incremental RSUs granted by the company for being a high performer.

What is your annual income?

Total annual income was approximately $650k in 2024.

My W2 income has increased from approx. $375k (3 years ago) to approx. $550k now. The growth was mainly attributed to switching companies and additional RSU incentives.

In addition, when we converted our formal primary residence into a rental, the combination of both rental properties yields $100k of gross income.

How has this changed since your last interview?

The most material change has been relocating from Colorado to California. Although I (the husband) love Colorado, my wife prefers the warmer year-round climate which So. Cal offers.

Plus, our kids who are going into middle school and upper elementary are firmly established in our church, school, and sports communities. Plus, there are more resources for homeschooling here in So. Cal vs the Boulder area, and thus we are making a conscious trade-off by staying in So. Cal for the time being.

Have you added, grown, or lost any additional sources of income besides your career?

As mentioned above, the conversion of our former primary residence to a rental resulted in some incremental income.

That, plus being a high performer at my W2 wor,k has yielded material benefits to earnings.

SAVE

What is your annual spending and how has it changed since your interview?

Our spending was approx. $80K per year during the summer of 2022 and is now approx. $140k per year. See reasons below.

Our spending has jumped up for three reasons. 1) Post-COVID vacation travel is back, especially now that the kids are older, and our travel aperture has expanded to international travel.

2) Higher cost of living area compared to previous location, in addition to inflation-driven increases. This is related to all things in life, not to mention the palpable increase in appetite from 3 growing kids.

3) Our intentional desire in learning to spend more on experiences, such as traveling to various National Parks and checking out local amenities and experiences.

What happened along the way to make these changes?

Personally, coming from a natural saver mindset, seeing a $12k per month run rate still feels high to me, but when my wife and I discuss our monthly budget, we remind ourselves that we only have a handful of “good” years remaining in our kids’ childhood (before they enter the late teenage years and transition into adults).

Thus, we are willing and intentionally creating experiences which we can share as a family to further solidify the bond we have with one another. As the saying goes, “the days are long, but the years are short.”

Both my wife and I are seeing the transition of our kids from children into young, independent individuals. Thus, we understand that adulthood will come in the blink of an eye.

If that means forgoing incremental savings, especially given we sacrificed early in life in order to build a financial foundation, this closing window of opportunity is something we are willing to apply more resources towards.

INVEST

What are your current investments and how have they changed over the years?

I have stuck with the same investment mindset by utilizing low-cost index/ETFs with a diversified portfolio. I like to KISS (keep it simple stupid) on this front vs trying to seek after grand slam investments.

I certainly recognize that we may have the ability to take a defined % of resources to seek greater returns, but I recognize that my personality will suck me down a path which will yield negative opportunity cost of being “present” in life and focus in on chasing returns.

As we’ve aged, we’ve come to realize the value of time outweighs the desire to seek above-average returns.

What happened along the way to make these changes?

From a financial standpoint, not much has changed. Although I’m excited to see our net worth expand over the last three years in a material manner, we are now shifting our conscious mindset on ways to utilize this blessing to help others, build memories through experiences, and begin determining how to transition into the next phase of our lives.

Which will likely entail early retirement from my W2 job, or at the least, downshifting into a smaller role in a W2 job as we transition into a discovery phase of figuring out where we will devote our time and energy, once we fully retire.

MISCELLANEOUS

What other financial challenges or opportunities have you faced since your last interview?

We never intended on leaving our Colorado home base. Matter of fact, most of the 3 years spent were Covid years, but we were finally feeling settled from our departure from the Bay Area and Colorado finally felt like home.

We left Colorado with the full intent on returning, before pivoting away during our 6-month road trip by deciding to stay in So. Cal was both financially impactful (down payment on house, heavier tax burden and higher cost of living) and also emotionally challenging.

For me (husband), Colorado was and still is the ideal choice of residence, if the decision was solely mine. However, when taking my wife and kids into account, it would be a selfish choice for me and would disrupt their well-being in their current life stage.

Lastly, from a financial perspective, Colorado certainly provided lower state income tax vs. California. Not to mention, if one contributes to the Colorado College Invest 529 program, you could offset the entire state income liability, and thus, at my current income level, would be a material difference against the CA state income tax I am paying.

Overall, what’s better and what’s worse since your last interview?

Overall, I am counting my blessings. We have our health, we have each other, we have the luxury of choice, and most of our problems are considered 1% problems.

Thus, at times, I may grumble about the inability to optimize our finances, but I need to make a conscience reminder that I am blessed beyond what I deserve.

Growing up from humble beginnings, I would be over the moon if you told me that I would be blessed with a supportive Proverbs 31 wife, 3 thriving kids who are coming into their own, have the privilege of owning 3 homes, and by all means have more than I will need in retirement…I would have NEVER believed my future self as I was standing in line with my parents at the local food bank waiting to pick up our weekly groceries.

What are your plans for the future?

From a career standpoint, I am contempt at my current level and income. If anything, I am now actively considering and working on plans towards taking the corporate ladder down and working towards sunsetting from a high-visibility job.

From a family perspective, I want to utilize the next 10 years to develop a stronger relationship with my wife (now that the crazy baby years are behind us) so that we can begin discovering ourselves in preparation for becoming empty nesters in about 8 years. I also want to use the final years of our kids’ childhood (before they become full-fledged teens with their own lives) to build more memories, travel together, serve and go on missions trips, and live intentional lives with one another by guiding them towards becoming individuals who contribute to society and the world.

From a personal development perspective, I am in the process of writing a bucket list and refining along the way. Example: Continue working out 2-3 times per week, reading more books, friends trip with lifelong friends, fly fishing in Colorado, learning to play the piano, etc…

Overall, I would like to expand the aperture of my own life towards learning new things, building relationships, and discovering new potential passions.

From a financial perspective, as boring as it sounds, it’s more of the same. I plan to continue saving in my 401K if I’m employed.

I will begin seeking ways to convert the portfolio into an income source in the future, with the goal of not touching principal and only living off the growth during up years and not selling on the down years (to avoid materializing losses). My goal is to keep 3 years’ worth of living expenses in a high-yield savings account, thus enabling me to peel off growth in good years and ride out challenging years.

But the goal is to maintain the principle, minimize taxes, and be able to leave a generational inheritance to my kids or charities of choice.

Given that you have a bit more wisdom and experience, what advice do you have these days for ESI Money readers?

I suspect that many ESI readers have either gone through, are going through, or will be going through a phase in their financial journey known as the boring middle. I am certainly in the middle, if not the later stages of the boring middle, whereby all of the initial hard work in setting up foundational behaviors are paying dividends.

If you’ve been blessed with the ability to continue on this journey for a few decades, you are now starting to see a compounding effect on the numerous decisions (big and small) made from your early years.

For those in their early financial journey, please continue to learn and practice the principles shared on ESI and other great financial resources. Always be learning, reading, and putting into practice the behaviors from the learned principles.

Invest in your personal development, skill set, and relationships! Invest in growing your income source and diversifying your income source!

Then save as much as you can, within reason, while balancing spending on experiences (not material possessions) in your 20s and 30s.

For those midway in their financial walk, I hope you are beginning the see signs of your hard work compound and counting the blessings of having additional choices in life and career. For those who now have a family of their own, potentially elderly parents to take care and countless obligations pulling at you, I would encourage you to view this season of life as a blessing, vs. a burden.

Having Mom or Dad show up on your phone when it rings is a blessing, and someday, we would give anything to see them show up just one more time. If you have been entrusted with kids to raise, cherish the moments you have, be present physically, mentally, and emotionally, as those moments will quickly turn into years gone by.

Be intentional with age-appropriate bucket list items, build memories, and laugh as much as possible!

But amid all this, don’t forget to place your spouse as your top priority in life. Be kind, be present, be there for them, and remind them and yourself that you married this person and made a vow to do life together through good and challenging times.

For those who are on the tail end or have entered into the golden years…I would welcome any advice or wisdom you can share with someone who is nearing this stage in life. Any principles, thought processes, or practical advice would be more than welcome!