Here’s our latest interview with a millionaire as we seek to learn from those who have grown their wealth to high heights.
If you’d like to be considered for an interview, drop me a note and we can chat about specifics.
This interview took place in September.
My questions are in bold italics and their responses follow in black.
Let’s get started…
OVERVIEW
How old are you (and spouse if applicable, plus how long you’ve been married)?
My spouse and I are both 52 and have been married 28 years.
Do you have kids/family (if so, how old are they)?
We have two children ages 26 and 21.
What area of the country do you live in (and urban or rural)?
We live in the southeastern part of the US in a suburban area.
What is your current net worth?
Current net worth is just south of $4 million.
What are the main assets that make up your net worth (stocks, real estate, business, home, retirement accounts, etc.) and any debt that offsets part of these?
We have zero debt (this obviously helps).
The bulk of our assets are in retirement accounts, pensions, brokerage accounts, and real estate.
EARN
What is your job?
I am a Counselor and work for myself.
My husband is former military and currently works for the government in a director-level position.
What is your annual income?
Together, our gross income is approximately $225,000 per year.
Tell us about your income performance over time. What was the starting salary of your first job, how did it grow from there (and what you did to make it grow), and where are you now?
When I first began my FI journey, I made about $54,000. My husband made less than I did.
We were tired of our pace, of being stressed, and wanted more for our lives. We started learning about money and our relationship with it.
We both worked hard, but didn’t feel that there was growth potential where we worked. We also lived in a very high-cost-of-living area and had a small child.
We started researching places to live and looking around for next-level jobs. We moved to a low-cost-of-living area and started hustling, both working two jobs.
We have never made a lot in salary (I know this is relative). Being in social services doesn’t pay well.
But as we know, it’s not what you make, it’s what you do with it that counts. Now, I do have my own practice.
It helps to control your business and set your own prices and timing.
What tips do you have for others who want to grow their career-related income?
Study up. Get credentialed. Seek feedback from peers and make your intentions known.
It’s rare for someone to hand you what you want. I also took a hard look at my business and realized that there were spin-off opportunities that actually pay well (like teaching private classes).
What’s your work-life balance look like?
Now, my balance is great. I still work for myself, but more part-time (about 20 hours a week).
But, when you are grinding, it is tough. Having a good partner really helps.
Being in a military family made things hard, but we made the most out of it. I feel like my husband has struggled with this more than me.
He is a workaholic and prioritizes that part of his life. As we are getting older, we are seeing the good and bad of that.
Do you have any sources of income besides your career? If so, can you list them, give us a feel for how much you earn with each, and offer some insight into how you developed them?
I have always hustled by taking odd or side jobs when they came about. For example, I was hired often to organize people’s houses.
Not my main gig, but I could make an extra $1k-$2k per week doing it. I got into this by developing a relationship with a few realtors.
They had the inside scoop on people moving and/or passing away. I took advantage of this a few times a year.
Enough to fund our Roth IRAs. Currently, we have passive income from investments (the best kind!).
SAVE
What is your annual spending?
We spend about $80,000 a year on everyday living.
We do like to travel and generally spend another $10,000 on average each year doing that (though this will change in retirement as we want to travel more).
What are the main categories (expenses) this spending breaks into?
Car and home insurance costs about $4,000 and $2,400 each year, respectively. We try to keep groceries and dining out expenses under $16,800 per year ($1400 monthly).
These are our big categories. We aren’t huge spenders in general.
I do anticipate that health insurance will be an issue soon. And of course, at any moment, a home or car expense can pop up, though knock on something, this hasn’t been a huge issue yet.
Do you have a budget? If so, how do you implement it?
We do have a budget, created by yours truly. I am the primary money person in the house, but we do try to meet on it once a month to see where things are at.
Lately, we have been talking about it more as we plan to retire soon.
What percentage of your gross income do you save and how has that changed over time?
Currently, we save about 50% of our net income. When were first started, we saved about $50 a month.
So, this is a huge change! I can remember working up to saving $250 a month and thinking that was the most amazing thing.
Throughout our lives, this number has gone up and down depending on jobs, kids, and needs.
What’s your best tip for saving (accumulating) money?
It’s ok to be a turtle. We were slow starters, but had the benefit of starting young.
Make it automatic and don’t feel bad when numbers need to change. Keep your eye on the prize.
When that emergency fund is fully set, get into the market. It’s ok to get help, but make it a point to learn because paying fees eats into your savings.
And stay away from debt. It’s the killer of dreams.
What’s your best tip for spending less money?
I am always having an internal dialogue about whether something is a need or a want. Then my mind goes into what opportunity cost I am up against.
We want to retire before the traditional retirement age. That is more of a driver to me than going out to eat because I didn’t feel like cooking.
Scramble some eggs and suck it up!
What is your favorite thing to spend money on/your secret splurge?
Traveling for sure! And I don’t mean big travel (although we do like that).
Little trips throughout the year to see family, friends, or just get away.
INVEST
What is your investment philosophy/plan?
Start early, keep it consistent, and don’t get spooked. With that said, I feel that I am a conservative investor.
When the whole ‘VTSAX and chill’ movement started, I couldn’t get on board. I still had a mix of cash and short-term investments because I am a wimp with risk!
What has been your best investment?
A real estate investment that we sold and made just shy of half a million in 5 years. It was our primary residence for most of that time.
But we always knew that it would be about a 5-year plan. I had been watching the market and neighborhood for about 5 years.
It was new to us, and we took a chance. Because I am a wimp with risk, the idea of holding it was always on the back burner.
But I had a hunch that it would skyrocket, and it did. I do not think I would ever do that again, though.
What has been your worst investment?
Starting our investment journey with an advisor who charged horrible fees and encouraged us to get into a variable universal life policy.
We paid these fees for decades before I felt comfortable moving on.
What’s been your overall return?
Honestly, I am not sure of our overall return.
Looking at my paperwork to prepare for this, I would guess about 13% over time.
How often do you monitor/review your portfolio?
Given that we want to retire soon, I feel like I am looking at it constantly. But over our lives, I would say I monitored it about once per month.
I don’t recommend the skittish approach of looking constantly!!
NET WORTH
How did you accumulate your net worth?
We started young. We were in our early 20’s, saving $50 a month.
When our income increased, so did our savings rate. Managing your spending is key.
It’s so common to spend more as you earn more. When we first started, we put money into bonds because I was scared of risk.
Eventually, after reading and learning, I realized that approach wouldn’t work long-term. We started getting into the market, primarily at that time, with large-cap funds.
I am a big fan of target date funds, which we do use for my husband’s workplace plan. To me, it’s investing for dummies.
I am not a financial planner, so keeping it simple and with things I can understand is key for me. When we made a bunch in our real estate deal, we invested a good portion of that and just let it grow.
Each month, we religiously save. We have never had a magic wand or a great Aunt Sally to leave us anything.
Just slow and steady saving and investing.
What would you say is your greatest strength in the ESI wealth-building model (Earn, Save or Invest) and why would you say it’s tops?
Saving is definitely my superpower. But it’s not always a positive.
Saving and not properly investing actually costs you money with inflation. So be mindful of your own money issues and lean toward logic, not emotions, when making money decisions.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
I think being conservative and just overcoming our pasts and differences were some of the roadblocks. My husband is hands-off.
He has never really learned or been interested in money. We come from different backgrounds.
He never worried about money growing up, and I was wearing my brother’s hand-me-down sneakers. Communication with your partner is key and can make or break your plan.
We always shared a goal of early retirement and financial stability. He let me take the lead on defining that.
Thankfully, we haven’t had any major roadblocks (health issues, loss of job etc.).
What are you currently doing to maintain/grow your net worth?
We are still saving, but will soon hit the point of spending.
I am nervous about that day!!
Do you have a target net worth you are trying to attain?
Oddly, no. We are lucky to have some annuity payments (military pension, work pension).
It helps to run numbers and have stable entries. We are able to live off of these payments alone and will use investment income as our ‘extra’ money to travel, be philanthropic, and make us feel comfortable.
How old were you when you made your first million and have you had any significant behavior shifts since then?
We were in our mid 30’s when we hit our first million.
It was energizing and made us more aggressively save!
What personal habits and/or traits have you developed that have made you successful at growing your net worth?
Hands down, managing spending is the number one for us. We don’t covet expensive things and don’t dream of depreciating assets.
What we dream about is seeing the world and having more time for each other. We have consistently saved.
It is also not lost on us that careers were chosen for stability more than income. We knew that we would have two pensions on top of savings and investments.
That, in my opinion, became part of our everyday thinking and habits. We were in it for the long game.
What money mistakes have you made along the way that others can learn from?
I wish we never got into that life insurance policy. It eats at me to this day. It eats at me that we were paying fees to an advisor for so long.
But, I don’t think that is a detriment for people if they take an active role with their advisor and understand what is happening (though fee only is best in my opinion). As a young adult, I abused credit cards horribly.
I didn’t understand how money worked and how to leverage it. I certainly wish I knew that earlier!!
What advice do you have for ESI Money readers on how to become wealthy?
Be a turtle. Slow and steady really does win the race.
There are generally agreed-upon steps. They start with living within your means!
That it is ok for money to be boring. I know for some, speculation in the market is a thrill.
But this wasn’t the case for us. I feel like were are good examples of the time value of money, consistency, and resiliency.
We didn’t always do the right thing. We didn’t always say no to splurges.
But we always knew what our goals were and got on the same page with them.
FUTURE
What are your plans for the future regarding lifestyle?
We definitely will be retiring within the next 2 years. We plan to do some travel in and out of the US.
I love reading about cheap travel ideas!!
We haven’t decided about where to live exactly. We certainly won’t be living in a high-cost-of-living area (fine for others but doesn’t meet my cheapo lifestyle).
We own our home outright, but don’t want to settle in a specific place just yet. The military gave us wanderlust.
I do think both of us will keep some kind of side gig work or will find established volunteering plans. We both do some of this now and already find it fulfilling.
What are your retirement plans?
We do want to learn how to spend. I know it sounds funny, but going through decades of saving has made me wary of spending.
I think it might be a real problem!! Even our desired activities are cheap.
My husband has volunteered walking dogs for the shelter, sharpening knives for people, etc. We both love the outdoors and being active.
We would also like to support our children a bit. We have always encouraged them to forge their own path and both pay their own way through life right now.
But neither are homeowners or have their own children. I think it will be fun to see them enjoy financial gifts at some point.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
I am worried a bit about our health and long-term care. We do not have long-term care insurance (I am on the fence with the worthiness of this product).
While we have no super major health issues at this time, we aren’t spring chickens either. I am also worried about how we will emotionally handle retirement.
After so many years of doing a job, we like to think our worth isn’t tied to it. But I have seen the decline of some people in retirement and worry.
We talk a lot about all of this. My husband thinks I am crazy 😊
MISCELLANEOUS
How did you learn about finances and at what age did it “click”?
I learned about finances when creditors were calling me to collect on past due credit card bills when I was in my early 20s. It was so stressful.
I am sure I made mistakes in things I said or did. But after a few months of this, I made it my mission to learn.
And each time I thought I had mastered a concept, new concepts came about, and I realized I had to keep learning!
Who inspired you to excel in life? Who are your heroes?
I always looked up to an aunt. She seemed so secure and stable in her life and finances.
She was always the ‘rich’ aunt to my siblings and I. Back then, no one talked about money. But she made me want to have more.
We grew up poor, so dreaming wasn’t even part of our world. But she made it seem possible.
On a more recognizable scale, I love Jean Chatzky. She has a practical approach to money that has always resonated with me.
Outside of all things money, I love underdogs. Give me a hardworking underdog, and I will be their biggest cheerleader.
Do you have any favorite money books you like/recommend? If so, can you share with us your top three and why you like them?
My favorite books (I picked 4 sorry) about money are: Crazy about Money by Maggie Baker (a more scholastic book), The Automatic Millionaire by David Bach (my first money book), Learn to Earn by Peter Lynch and The Military Guide to Financial Independence and Retirement by Doug Nordman.
Each came at the right time in my life to make use of them and, in some ways, let me know that I needed to learn more. I am really interested in the behavioral aspects of money, so the Crazy About Money book really drew me in.
There are also some great relationship books that aren’t about money per se, but definitely help with relationship issues that could impact money.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
We have in the past donated dollars. Now, we prefer to donate time.
I don’t always love the way money is handled at the places we enjoy volunteering, but it’s clear they need manpower. We believe donating our time is just as valuable.
I would love to explore the option of an endowment for a specific purpose, such as a scholarship for education.
Do you plan to leave an inheritance for your heirs (how do you plan to distribute your wealth at your death)? What are your reasons behind this plan?
Leaving money in death isn’t a priority. Sharing while we are alive is.
To be honest, we haven’t quite figured out what this will look like yet, though. With that said, I believe making your death as easy as possible for the living is important.
Designate beneficiaries, set up trusts, do a Ladybird deed, have people on accounts or whatever you personally need to do to accomplish your goals is important. We have completed these tasks for our needs and encourage others to as well.
