Through the years, I have interviewed hundreds of millionaires with the goal of learning from their experiences and knowledge.
I’ve published these as Millionaire Interviews, featuring my specific questions and their responses.
After a few hundred interviews, I realized that there was phenomenal wisdom in several of the questions I asked, especially when the responses from different interviewees are read one after another.
I’ve decided to publish these here on ESI Money in my Millionaire Wisdom series.
Note, not every millionaire answered every question and I did change around questions from time to time, that’s why every millionaire isn’t listed below.
Today we continue the series (see part 1 here to start the series) with millionaires addressing the following question:
How did you accumulate your net worth?
Here are their responses…
Millionaire 60
We have calculated our net worth for many years and have saved it all in a spreadsheet. I like the net worth spreadsheet because it gives us more of a long term perspective for money. The following table gives a brief summary of our net worth each decade as our savings progressed:
In many ways this was a family effort. My wife provided a second income for 8 years. She did most of the spending and kept costs down. She spent a great deal of time resolving insurance issues. The latest health insurance issue was for a $50K hospital bill that took over 6 months of follow up to get it paid.
For the three children who have attended college, they all received excellent scholarships. Two of the scholarships were full tuition, room, and board. To get good scholarships, we’ve found that it helps not just to have good scores on the ACT and SAT, but also to spend some time on school selection. We didn’t apply necessarily to the most popular schools and made a point to include some out of state schools. Colleges want to attract out of state students and will offer better scholarship money to do so.
Millionaire 61
The majority of our accumulation has been by our savings, living below our income and saving/investing consistently.
I did, unfortunately, inherit a few hundred thousand dollars which allowed us to pay off our mortgage.
Millionaire 62
My wife and I didn’t inherit anything.
I’d say in our case the accumulation was 50% due to brute force and 50% due to investments.
But really the whole key is investing early and for that you need to make more than you spend. Preferably a lot more but any amount is worthwhile.
Find joy in experiences rather than just stuff. Stuff is a short-term fix but experiences last forever. And experiences can be super cheap or even free!
If you can change your attitude on what’s really important, everything else will follow.
Millionaire 63
My wife and I built our net worth via our teaching jobs.
After building a combined student loan debt of $45k, I took an ESL (English as a second language) job in Jubail, Saudi Arabia in July of 1996. After about two years, we had paid off our loans and had a net worth of $0. (Let me tell you, that was a joyful day knowing that from that moment on, we were working for ourselves!)
We spent three more years in Saudi and our net worth grew to $100k. After 9-11 happened, we returned to the States in December of 2001.
In 2002 we began teaching public high school in LaGrange, Georgia. Our combined salaries were $85k for the 2002-2003 school year.
That year we began fully funding our traditional IRAs at Vanguard and our 403b accounts. We saved $30k our first year teaching; that was the least amount of money we have saved during our working years.
In 2004 we started saving some money in our 457 account, and in 2013 we began saving in an HSA. Our net worth was built by simply saving our salary in our 457, 403b, IRA, and HSA accounts. Hardcore savings in those accounts pushed us over the 7-figure mark.
Millionaire 64
We lived moderately, my job provided a free car and gas and wife drives the wheels off of hers.
We are still in our only and first modest house.
We just never found fun in buying things. We found fun in playing with our kids and active, low-cost hobbies.
We never ate out much. We enjoy cooking together.
Since we always had extra money and never borrowed to buy anything but the house we just saved and invested everything that was left over by maxing out 401k, Roth, after tax IRA, and regular savings and brokerage accounts.
We never felt deprived. We had everything we ever wanted, there was no perceived sacrifice.
I helped run a couple of $30-60 Million endowment funds as a volunteer so I received a lot of advisor advice from that which convinced me to invest 100% into stock funds and later index funds.
I inherited a few hundred thousand after I was already a multi-millionaire.
My wife made learning fun for the kids and we encouraged them to learn good study skills. We also taught them to work and save. That paid off when all three obtained free four year degrees due to academic scholarships. Tuition, fees, books, room and board were all covered by scholarships. They all worked their way through their advanced degrees without help from us. Only the doctor has school loans for his MD degree. But he will pay those off promptly.
Millionaire 65
We earned and saved all of our net worth. No inheritance (yet) but we are very fortunate to have loving supportive families that gave us every opportunity.
We have been very lucky to have been able to grow my salary significantly over time by accepting new challenges (new roles, new companies).
We have been willing to stretch outside our comfort zones more than most people would and that, coupled with our strong work ethics (Thanks Mom and Dad!) has paid off over time.
We have always lived below our means and spent less than we earned. We have always saved and have accelerated our savings rate as we became financially wiser.
We have always invested in the stock market aggressively (mostly mutual funds) regardless of any gyrations, drama or other nonsense. We are pretty good at ignoring the noise.
Millionaire 66
Hard work, switching jobs, getting pay increases, saving as much as possible, and watching our spending.
Millionaire 67
Lived below means, paid off primary residence in 15 years, and saved aggressively.
Made a lot of money relative to others that work for non-profit organizations, due to industry specialization, earning a professional certification and cultivating long-term relationships with the organization’s key donors.
Millionaire 68
The foundation of my net worth was built between ages 18-27 by the classic ESI lifestyle. I hustled harder than anyone my age, automated all my disposable income before I could blow it, and invested regularly.
FULL DISCLOSURE, I inherited 100k in life insurance money after my mother passed away when I was 23. I was fortunate to have already built the healthy money habits up until that point to use the inheritance to further strengthen my plan already in motion. I used this 100k to put 20% down on both my rental properties and build my investment account. I have also mentioned above the privilege of being able to live at home with minimal expenses until I was 24.
The real magic happened following the Trudeau election. My first of many investments was in Canopy Growth Corporation at $1.42 (peaked this February at $44). I spent the next 3 years riding the waves of explosive growth and volatility. I was able to learn a ton from fellow investors along the way and experienced some very fortunate timing. I have been able to partake in some very successful private placements with several up and coming companies that have produced incredible returns. Many of these private placements came with 2019 warrants that offer me a risk free option to capitalize later if I choose.
The mantra I have learned to remind myself every single day is “I am NOT a talented trader. I am the beneficiary of a ‘free money market’ where I was in the right place at the right time”. I have weathered an incredible amount of volatility the last three years. I am confident there will be one more media fueled buying frenzy as we enter the summer of legalization here in Canada. I plan to exit during the last spike of news and transition out of the cannabis sector and diversify into a mix of dividend stocks and ETFs. I will move a portion into another speculative sector.
Millionaire 69
I accumulated what I have, including many mistakes, and setbacks, by working hard for many years and saving and investing in the stock and bond markets.
Due to some of the things that didn’t work out well financially for me, it took me until my early 40s to really get on track. When I reached my early 40s and started a new job in a new city, I created a spreadsheet to track my assets and how much I need to save each month to reach my goals. So starting 14 years ago, I have been more and more focused on my financial freedom and knowledge.
During the past 14 years, there was a roughly 2-year stretch (mid 2010 to mid 2012) when I wasn’t adding to my wealth due to some difficult personal circumstances. The moral is, no matter how much you plan, the unexpected still happens.
I’ve made modest revisions to my goals over the years, but for the most part I have stuck with the same financial goals.
My goals have been two fold. One goal includes being prepared to leave the corporate world today (i.e. as of now) and being able to manage and be self-employed (getting whatever business I can at my own pace) and the other goal is an alternative, where I work until age 61 and then can leave the corporate world and live as comfortably as I do now, without working at all, unless there is really something I want to do.
Millionaire 70
I am in a high paying industry and have had a strong career trajectory which has allowed me to propel my earnings over time significantly. As mentioned I am making 10x what I started out at coming out of college if you include base/bonus and 20x what I started out at if you include base, bonus and equity.
I accumulated my net worth, beginning at age 34 through very aggressive savings of my total compensation and through employer stock (which is awarded based on high performance). Big picture- I have been lucky (right place, right time), blessed (thank you!) and disciplined in my finances….and these I attribute my net worth accumulation.
Millionaire 71
We have always made sure that we have fully funded our 401k and took advantage of the matching funds. While our full-time job matches contributions at 5% (work at same employer), splitting my contributions ensures I also pick up 6% from the part-time job. We both have contributed the maximum amount to our 401ks since we started work and tried to put money into IRA\ Roth IRAs as well. As you can see, the majority of our wealth is from 401ks and our IRAs. We decided early on that fully funding our 401k was a non-negotiable.
We also made the decision that if things get tight, the answer is not to cut our savings but to bring in more money other ways. This is what started my second job years ago.
Our intent was to never to become a millionaire, so were caught off guard when it happened. We both will get a pension at retirement, so our original intent was just to save some to help rough out the edges in retirement. Once we started putting money in our 401k, we never missed the money and just kind of snowballed from there.
Millionaire 72
Saving, budgeting, and investing.
And trying to move up in a crazy real estate market by making the right choices.
Millionaire 73
I moved from Canada to the US (I am a dual citizen) in 1995 with a net-worth of negative 20,000 as had borrowed money from a home equity line of credit (co-signed by my parents) to invest in a penny stock that went bankrupt.
I am pretty proud of the fact that 100% of our net-worth is self-earned with about 5M coming from saving and 3.42M coming from investment gains (all in the past 8 years).
Millionaire 74
Our net worth has been a combination of consistent investing, along with boost from inheritance and a few small one-time gifts from parents (as they did some estate planning).
Once I landed my first job out of college, I started saving a portion of my pay. At my first job there was no “company plan” (401k) instead it was an ESOP. At the company’s discretion they directed a portion of profits to the ESOP employees did could not contribute. So, I went ahead and started saving some of my pay on my own. I picked a couple of mutual funds, and a few individual stocks (see note on WorldCom).
Once I left this company I had shares vested in the ESOP, which I left alone. A few years later the company was sold and I received a good-sized check for the value of the ESOP and invested it across the funds I had at that point.
Millionaire 75
The bulk of our net worth came in through real estate.
We bought several properties when the market took a dip in 2009. We purchased homes thru 2013. It took us 30 years to accumulate our first million. The next million only took 4 years and one quarter. And the 3rd million I expect will take about 3 ½ years. [Editor’s note: Another data point showing the first million is the hardest.]
Millionaire 76
We accumulated our net worth through good investments.
Salary was pretty good but dedication to continuously investing is what really made the difference. Being fortunate enough to totally invest my wife’s salary was a tremendous help. Health insurance was also covered by her job for us. I have tended to select and stay with the same broad index funds. Obviously monitoring but it has been beat into me that trying to time the market is futile.
Our only inheritance was received in the late eighties and was less than 5% of our current net worth.
Millionaire 77
I started the health care business about 14 years ago. It grew slowly in the beginning before it really picked up the last 5-8 years.
Then with the extra cash I saved, I started investing in rental properties about 5 years ago.
My advice to fellow ESI readers is that you will never get rich working for someone else, so find a way to start your own business as soon as possible. Maybe you can work for someone else for the first 3–5 years after you graduate from school, but the sooner you can start working for yourself, the better
I was fortunate to have worked in a variety of industries (IT, retail, food servicing, trading, government, financial brokerage, healthcare), and even blessed to have been fired from all those jobs. The key is to always learn something from your jobs, and use your experience as a stepping stone to eventually start your own business.
As for the key to owning your own business, no matter what industry you are in, always create a “business system” or SOP, where the business is generating cash even when you are laying on the beach somewhere 3,000 miles away.
Millionaire 78
All our money’s been made the slow way – one penny at a time. It’s really just been a matter of living modestly and saving more than we earn. It’s only been over the past handful of years that we’ve really pushed up our savings rate as high as it is.
I started investing in my 401(k) plan once I was allowed to at my regular job. But, I believe 2005 was the first year I either got close or actually started maxing it out. Back then, my investments were pretty haphazard and were high-fee funds that I just picked out randomly. I didn’t switch to the low-cost Vanguard Target Retirement fund until it became available a few years ago.
I get about a 35% match dollar-for-dollar up to the federal max from my employer, so that’s been helpful. It’s also been the driving factor for me to always max that account out first.
My wife’s always contributed to her 403(b) and 401(k) plans as well, but not as much because she didn’t make that much money, the funds were terrible, and the matches have been next to nothing.
We opened Roth IRA accounts back in 2005 (that must have been a good year!) and started contributing a little to those over the years. I didn’t start maxing that account out until a few years ago.
We were bad investors. We just bought individual stocks because we liked the companies. Some worked out and some didn’t. It was stupid. Now we just invest those in low-cost index funds in Vanguard (catching the theme, here?!).
Real estate entered into the picture in 2003 when I bought my first house. It turned out not to be a great investment, but we got lucky. We made some money on it, but nothing to write home about.
More importantly, though, it gave me experience. The duplex we bought in 2015 was a solid investment. Better location, better numbers, newer place (fewer repairs), etc. That property cash flows nicely for us every month and should continue to do so even more as rents go up over the years.
You’ll probably notice that we’re not doing anything crazy here. The moral of the story is that we saved a lot more than we made and just invested it along the way. The investments have just gotten a lot smarter as we’ve continued to learn along the way.
Millionaire 80
I spent 12 years in school AFTER high school, as many docs do. This put me behind the eight ball versus my other friends who started working right out of college.
After paying off school loan debt, I turned up the notch and started investing heavily in Vanguard index funds. Other successes include: investing in 2 online real estate crowd funding platforms and with an individual that puts together apartment syndication investment deals.
Millionaire 81
Investing in higher education which lead to solid incomes.
Fields that have provided continuous employment with big growth at various times.
Continuing to invest in the market regardless of volatility.
No inheritance & we hope both our parents use their money to enjoy their lives to the fullest.
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Lots of good stuff, huh?
Stay tuned, we’ll be adding to this series in upcoming future posts.
