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 148
Mostly saving from my salary, which has meant spending money only on things I truly value.
My parents have gifted me money over the years. About 20% of my net worth is thanks to their generosity. They didn’t completely change my financial trajectory — they never bailed me out of a bad spot or enabled me to do something I wouldn’t have done anyway.
For a long time, I even left that money out when calculating my net worth. That said, their support has definitely accelerated my path to financial independence. (If I ever get down about all that money I lost in the market, I remind myself about these gifts.)
Millionaire 149
The root of all of my net worth is from my software company, which came from many years, 15-16 hour days, working very hard.
I did not inherit anything other than my father’s work ethic.
Millionaire 150
Persistence, grit, always living within our means, always saving 10-15% of my salary for the last 30 years.
Like most things in life, there is a little luck. We purchased our house that has appreciated five times the purchase price in 22 years. However, I feel we made our luck by always saving and a marathon of a work life gradually improving and moving slowly up the corporate ladder.
Improving my education in getting an MBA and it did not help me at the time, but I was just building my foundation. It would have been harder to get the MBA two years later as my son was born.
Millionaire 151
We started tracking about 5 years ago, but can pinpoint a few specific points on our trajectory.
- 2001: -$130,000 | We were newly married, had student loans and consumer debt, and bought our first house on a zero down loan.
- 2010: $0 We upsized our house, still had some student loan debt, and a bit in investments.
- 2019: $1.15 m
A bulk of our net worth came as a result of increasing our income and accidental savings in terms of those first 403b contributions and equity in real estate. Had the real estate market not run up in recent years, we’d be worth less. Almost $300,000 of the net worth came from selling our primary residence, and another $150,000 from rental appreciation. The rest is investments and growth.
It’s not the same path I’d follow now — but it worked out for us when we were mostly financially clueless.
Our most recent net worth growth, and where we project growth for the next several years, comes from a high savings rate and contributions to index funds.
Millionaire 152
The hard way.
I was raised by my Grandmother from when I was just 13 years old. She was widowed in her early 50’s but owned her home outright and lived on $230 a month of Social Security.
It forced me to work odd jobs as a young boy. Paper routes, restaurants, construction crews.
I put myself through college but that too was done the hard way. Working a minimum of 25 hours a week in local bars while also being a full time student — at times carrying 24 credit hours in a semester.
Of course as life progressed both my wife and I got jobs after college and we earned and saved as much as we could.
Millionaire 153
Our wealth growth wasn’t sprinkled with fairy dust. We have maintained a few very simple principles.
We have always paid ourselves first via corporate sponsored 401k plans. We have never held credit debt. We have always been cognizant to live within the confines of our income and we have made wise decisions to investing in our primary residence.
It’s a simple formula that often is over thought.
Millionaire 154
I have always been a saver/investor, so that part comes naturally to me with any income I earn.
Beyond making money on the aforementioned foreclosure, I have made a higher income these past few years and have put most of my extra earnings into low-cost index funds. I also purchased a commercial office building, out of which I run my law practice.
I have really focused on my net worth as of late, and outside of travel and everyday household things, I aim to convert a high percentage of income earned to an increase in my net worth.
Millionaire 155
At this point, it was the inventiveness of H with his software that allowed us to earn sufficient initial funds to invest in LA real estate.
The sale of the software allowed us to really start saving and investing meaningfully.
Our rental residences and H’s investment in his 401k have grown steadily but not extraordinarily.
Millionaire 156
My net worth steadily increased over the years through appreciation of both the stock market and real estate.
I wouldn’t say I earned a lot of income throughout my career but I consistently saved and invested for many years.
I have held my current real estate holdings for 10-15 years now and have accumulated good equity.
I am able to borrow against that equity and use the funds to pay cash for any upcoming business investments that will in turn further increase wealth.
Millionaire 157
When I came across your website I laughed out loud. Our financial life is, quite literally, built on the name of your site: Earn, Save or Invest. It’s not “sexy”, but it sells.
And…..We’ve been very lucky. Early on I/we built a career and our capabilities and got paid while we learned. Later, I was able to pour gas on that capability by getting my MBA from a top school while working. Yes, I took on a little debt, but the ROI on that investment has been unbelievable (and leveraging it has been unbelievably hard work).
I’ve spent nearly 15 years maximizing both my experience and education versus the biggest opportunities my firm has trusted me with and earned commensurate compensation.
When I recognized that I had high income potential, saving and investing became my life’s work.
Millionaire 160
The majority of our net worth has been earned. I did inherit around $90K when my parents passed.
We have always lived well below our means and we have always maxed out retirement accounts.
I changed jobs earlier in my career to grow personally, professionally and financially.
A big chunk of our net worth has been earned. Our investments have been good but nothing stellar. The model of ESI, Earn, Save, Invest is quite simple.
We also never carried debt other than a house payment and maybe one vehicle. My dad taught us early on we should never pay interest outside of those and he would prefer only the house. I despise debt and don’t like owing money to anyone. If I owed you $20, it would bother me until I paid you.
Millionaire 161
Our net worth accumulation was driven by earning good money, living within our means, carrying no debt (other than primary mortgage) and understanding the power of compounding interest.
While our savings rate has varied thru the years, it has taken a steady turn up over the past 8-10 years as our incomes have started to peak. All of those savings have been poured into equities.
Additionally, I’d say my investing philosophy, combined with a long bull market, has contributed to excellent returns on our money. Neither the dotcom bubble nor the mortgage crisis and resulting “great recession” swayed my investing philosophy…..we just kept trying to buy equities throughout.
Millionaire 162
I started with $0 back in 2007.
We always contributed to our 401k plans and Roths IRA’s. We actually didn’t start maxing them out until 2012.
Then when started making a little more we started investing outside our retirement plans.
Our Rule: Invest the max you can then figure out how to live on what’s left over. Never let your foot off the gas just to increase your lifestyle.
Millionaire 163
I inherited $20k when my mom died young.
When I first started working, I would save in 401(k), but I would carry a revolving credit card balance that I would put onto a 0% balance transfer card every 12 to 18 months. Never got over $7,500, but that also coincided with a time that I was drinking and partying too much.
Two years before I met my wife, I started calming down and really saving money, mostly in 401(k). My salary wasn’t fantastic, but it was still money being saved.
When I met my wife, she thought carrying a credit card balance was “ok” as long as she was saving money. I finally taught her that it was far better to pay $0 in interest and save a little, versus paying interest and saving $50 more per month.
She walked into our marriage with about $15k in debt and we spent a bunch on our wedding ($20k, and each of our parents contributed $20k). We had two weddings, remember? One Indian and one Lutheran.
Anyway, because I finally convinced her, we paid off all that debt in 12 months and transferred those payments to savings. As our income has increased, we increased savings…until….!
Kids. We had lots of fertility issues and spent quite a bit of money trying to have kids. That set us back on the savings side.
Currently, we’re in “daycare” mode, which you can see is nearly $30k/year. Our oldest goes to Kindergarten next August, which means $1k+/month additional into savings.
Millionaire 168
Pretty well all my net worth was created from the profits of the business I created over the last 30 years.
This was never easy and is still a lot of work. For example right now it is 10:30 on a Tuesday night and I am still sitting in my office alternating between writing this and pricing inventory.
You would think with a 12 million net worth I would not be spending my evenings pricing inventory but these are the sacrifices you make to be successful.
I feel I now have more than I could ever spend so I now concentrate on conserving my wealth instead of trying to grow it.
Millionaire 169
Cryptocurrency mining and cannabis stocks…yea, right…
Never received any inheritance money. The only substantial gifts were: my parents paid for half of my first new car in 1976 and wedding gifts from both sets of parents worth a couple of thousand dollars in 1980.
Vast majority of net worth came from salary and investment returns.
Here is my net worth over the years:
Can you tell that I love spreadsheets?
The above include investments and houses. No cars, jewelry, electronics, pensions, or exotic pets.
Isn’t compounding the eighth wonder, whether Einstein said it or not? Out of the $5.2M total in current investments, $2.7M are contributions (including company match and pension lump sum), and $2.5M are investment returns.
Millionaire 170
I’ve been blessed to make better than average money, I’ve saved ok and have been really blessed so far in the investment department.
I think it’s been proven out that if you can just be passable in two categories, and excel in one you will grow substantial wealth.
I’ve read a number of interviews where they’ve been extremely successful on the “E” or the “S”, so I was interested to share an example of someone who reached millionaire status by primarily focusing on the “I” from a stock market perspective (I know several business owners have probably achieved 40%+ returns).
Millionaire 171
Tracking my Net Worth over last ten years:
- 2009: $257, 285
- 2010: $294,138
- 2011: $367,056
- 2012: $443,839
- 2013: $511,800
- 2014: $603,932
- 2015: $611,270
- 2016: $1,144,266
- 2017: $1,219,705
- 2018: $1,295,318
- 2019: $1,326,721
I basically had a good but never very high income. I worked hard. The highest I ever got paid was $120,000 for about a year or two, but in the Bay Area, that is not a lot. I mostly made around $60-80,000 and saved and invested as much as I could.
I am extremely disciplined when it comes to money.
I read extensively about financial behavior and emotions around money so I could identify my biases and pitfalls as much as possible. When the 2008/9 recession hit, my salary went down by 25% and it took a decade to recover.
I bought my first home with my ex-husband in 1988. I have bought four more homes on my own after that. I have made money on all except one.
I have had two major windfalls:
- In 2014, I retired early and sold my company stock options at an all-time high (made $218,000).
- In 2016, I received an inheritance totaling $532,813.
With my stock option money and the money it made, I was able to live for three years, rent a studio for my art, pursue and pay for an MFA, fix both bathrooms and the porch, windows and doors in the rental, buy a good used car, and go to Europe three times.
Millionaire 172
I did not receive an inheritance or significant life insurance payment.
I accumulated my net worth from my earnings. I have always lived below my means. I made saving first.
Millionaire 173
I think it’s been a combination of all three parts of the ESI model. Certainly I’ve earned extremely well, particularly in the last ten years. I think the choices I made early on in my career to specialize in complex accounting areas really paid off. Specialized experience is such a game changer – I sought out advice from others in my first company and learned that was such an important thing to set up for success.
A little luck at times helped too – I was fortunate in terms of timing of promotions and joining new companies. I had well timed equity grants that paid off well in the long run.
In terms of saving, I think the early aggressiveness in paying off debt was huge. My student loans were at 8%, and I HATED the interest on those loans. Never have had any credit card debt and never will. The last 15 years, my philosophy has been that the only good debt is a sub 5% mortgage, because I have zero doubt I can beat that in the market long term.
As for investing, the early learning in my 20s (when I knew I had my prime earning years in front of me) paid off dramatically for me. Having a long term plan to mirror the market in a low cost portfolio has worked for 15+ years.
I also focused on making things tax friendly. Back in a lighter year for me in terms of compensation income, I converted my $100k IRA to a Roth, and paid the tax on conversion. I won’t be touching that money for another 20-30 years, and when I do, it’ll all be tax free, which is great peace of mind in retirement.
Millionaire 174
Simple: we earned a lot, we saved as much as possible (while taking care to smell the roses along the way), and we invested as best we could. We wish we could make it sound more complicated.
Millionaire 175
My wife inherited it and I married her. Then we tried to maintain the principal and live well off of the investments plus my steady income.
At times we grew the principal and at times it shrank.
I would say that since we were incredibly fortunate to have been provided this great gift, we are now set on not squandering it. At the same time, having “won the game” early as long as we could be FI, why not enjoy life with the proceeds?
Millionaire 176
I have been blessed to have worked non-stop for 36 years with about 4 years of college classes mixed in.
Millionaire 177
We invest early and often via payroll deductions.
We front load our payroll contributions and save a high percentage of our income and avoid, minimize and eradicate the debt we had consisting of our mortgage and her student loans.
By being debt free and avoiding the typical monthly recurring bills such as car payments we’ve widened the gap between what we earn and what we save.
Once you widen that gap, like we did, we invested in a low cost total market index.
Once the money was invested, we NEVER touched it.
Once the money was invested, I would imagine how that contribution and subsequent contributions would yield more money and that money would yield more money and so on, like an army of soldiers that worked day and night, multiplying without taking a sick day or a vacation, all while we slept.
It’s about realizing that materialistic things will not make you happy in the long term and by not finding fulfillment in spending on those items, you can save aggressively and buy your freedom. Financial Independence is the most important thing money can buy.
My wife received a $17,000 inheritance from her grandmother when she passed and my parents gifted me $20,000. That was all the handouts we received.
Once you have the desire to be financially independent or have a goal to be a millionaire, you need to start doing what others are not willing to do.
A lot of people want to live for today and can’t resist the urge to splurge on the latest iPhone, cars and eating out almost on a daily basis two or three times per day. We are bombarded with marketing from the day we are born and led to believe we’ll lead happier lives if we own X, Y or Z and it’s a lie.
Contentment comes from being happy with what you have. Not from what you want, because that will be short-lived.
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Lots of good stuff, huh?
Stay tuned, we’ll be adding to this series in upcoming future posts.
