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 October.
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)?
I am 64 years old and my lovely wife 63. To set the tone for how we think about our finances, we knew we’d need to pay for our wedding 37 years ago, so we eloped and flew to Las Vegas to get married!!
We deployed the money we would have spent on our wedding and used it as a down payment on our first home. After moving in, we invited family and friends to our new home for a celebration.
Do you have kids/family (if so, how old are they)?
We’ve been fortunate to raise 2 smart, ambitious daughters. The oldest is now 34 (married), while the youngest is 31.
We planned for and paid for both of their undergraduate college educations, while our daughters paid for their Graduate degrees by working part-time and taking out student loans (which they’ve since paid off).
Both are now homeowners and have professional jobs in their respective fields, and we are very proud of their accomplishments. They live 15 and 30 minutes away so we get together frequently for dinner, games and gossip.
No grandkids and doesn’t seem likely in the future.
I have a sister in another state while my wife has 3 brothers & 4 sisters living in town. Both our parents are gone.
Out of all our siblings, we are by far the most well off financially.
What area of the country do you live in (and urban or rural)?
We live in the sunny Southwest in the fifth-largest city in the US by population. We formerly lived in a large 2-story home on a beautiful golf course in a quiet suburban setting for 20 years.
After our daughters finished schooling and flew the nest, we downsized 5 years ago into a high-rise condo downtown with a commanding view of the city action below.
It’s not ideal for everybody – it’s noisy and busy with a lot of nearby events and restaurants we can walk to. I love it!
Our building is next to a light rail platform that takes us ever further around the city or to the airport. Most importantly, we’ve met some great new friends in the building that we travel with, go to dinner, or just hang out by the pool with some adult beverages.
Lastly, the building has 24/7 Security so it makes for a great lock-and-leave lifestyle for traveling.
What is your current net worth?
Our current net worth is $4.5 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?
- Investment accounts:
- Roth accounts $240K
- Brokerage $350K
- IRA accounts $1,665K
- H.S.A. account $20K
- Cash $125K
- Real estate investment condo’s/townhomes $1,600K
- Condo (current home) $500K
We have no debt. Credit cards are used to pay for EVERYTHING we possibly can, and balances are paid in full each month.
EARN
What is your job?
I am now retired after a career as a Risk Engineer with five different commercial insurance firms, several being Fortune 500 size. The job involved assessing risks to help Underwriters set prices on various lines of insurance coverage and consult with insured clients to help them mitigate claims.
Yep, insurance sounds very dull; however, it is anything but that. As a field Risk Engineer, there’s sometimes overnight travel, site visits with clients to learn about their business operations, and consulting with top management.
Some days are spent doing research/report writing, typically from a home office or a hotel. Over my career, I’ve consulted with many types of businesses from companies as diverse as semiconductor manufacturers, lumber yards, restaurant chains, newspapers, warehouses, trucking, large retailers, etc.
The back half of my career was focused exclusively on Construction, working with contractors. Eventually, I stepped away from the individual contributor level working with clients and transitioned into a Management role leading internal Engineering staff around the country.
Eventually, I made it to Director level, where I lasted for three LONG years before pulling the plug at the end of 2021.
My wife also worked in various insurance marketing, administrative, and claims functions throughout her career, although she stopped working outside the home for five years to take care of our young children before eventually returning.
She did not particularly enjoy the work the second time and retired in 2018. Happy wife, happy life.
What is your annual income?
Now that we are both retired, our annual gross income level this year will be ~$155K with about $130K of that coming from rental income – more on that later. My wife’s early social security is $20K and the remaining $5K from dividends/interest in our taxable accounts.
In 2026 I begin receiving another $10K in annual combined pensions from former employers (one has a COLA feature).
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?
My first job as a teenager growing up in Wisconsin was temporary summer employment at a pickle factory production line at age 16. At age 17 I landed a permanent evening/weekend job at a Holiday Inn and then a paper mill the following summer earning $7.50/hour.
My take-away from those jobs was: I’m getting a college degree. While in college, I also worked part-time at the school commissary and facility maintenance at a nursing home to help minimize student loan balances.
Following graduation with a Bachelor of Science degree, the ’80s recession created a tough job market that eventually prompted a move to Arizona for more opportunities in a growing area. It took a bit of time to establish myself but in 1986 I finally landed my first professional insurance job at $22K salary and company car!!
Of course, that’s the inflation-adjusted equivalent of $62K in today’s dollars, so it’s not quite as bad as it sounds, and having a company car for personal use also helped financially.
Early in my career, I pursued several professional designations within my field, dedicating additional study time during evenings and weekends. Earning these credentials contributed to my technical knowledge and increased my value to employers.
Furthermore, when my company was acquired by a larger competitor and subsequent layoffs occurred, several more experienced employees lacking these designations were let go, while I was retained. Eventually, I left on my own terms for more money and a better supporting manager.
About seven years later, that same competitor (LOL) acquired my employer, and I found myself reporting to another awful boss that didn’t hire me…NO!
Life’s too short, so I quit after receiving a better offer from another company.
To sum things up, I worked for multiple commercial insurance companies during my career. My salary hit six figures beginning in 2007, and in my final year, 2021 was $175K.
My wife’s salary was $70K when she retired in 2018. Our pay increased over time, as did savings and investments.
What tips do you have for others who want to grow their career-related income?
Networking helped grow my income, particularly in my professional national engineering chapter where I held various offices including President. Connections made while serving in these capacities increased my visibility and helped me find better-paying jobs.
My other tip would be this: don’t put up with inferior managers that don’t have your back and can make your life miserable. Unless you really love your employer don’t be afraid to change jobs to improve opportunities for advancement and grow your salary/benefits.
What’s your work-life balance look like?
Now it’s perfect since there is no work schedule, conference calls, or stress! When not traveling, we’re up at 6 a.m. to exercise, then eat a leisurely breakfast and a cup of coffee while catching up on reading.
It’s very satisfying to look out my window and watch the people and traffic below scurrying about on their way to work.
During most of my professional career, I enjoyed the challenges, and my work-life balance seemed tolerable.
At times I was a road warrior visiting clients, and other times worked from my home office and could schedule personal appointments around work.
I was a few years from retiring when my Manager told me he was retiring. I soon realized that I might end up with another unsuitable boss, so I reluctantly took the challenge and accepted his Director role because at least I knew who I’d be reporting to in that situation.
It took a toll on me with long hours associated with hiring and managing personnel in different time zones countrywide, developing strategic plans, and delivering presentations.
Although the salary was higher, the stress was too. I retired 3 years later.
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?
Rental income! We own 9 investment properties located in different geographic parts of our city.
All of them are condo’s/townhomes. The rents vary depending on size/location and we currently collect over $130K/year in total rental income.
After backing out all fixed and projected expenses, including the property manager, we deposit $65 – $70K/yr profit into our business checking account. We’ve owned these for enough years now, so I can project vacancies & repairs with enough accuracy to budget for them.
With these types of properties, my largest expense is replacing an HVAC unit since the HOA handles exteriors, roofs, and grounds. Vacancies are usually short because finding another tenant is quick – there is always a market for them.
All repairs and leasing are handled by my property manager, so I spend very little of my time on them. The properties were purchased off-market, mostly from wholesalers between 2015 – 2018 and even though we missed the bottom of the market pricewise, they have appreciated substantially.
Unfortunately, those great deals are long gone in my market.
The first property was purchased outright with cash savings. At the time, it felt like a HUGE risk.
Yet, after it was renovated and leased, we saw the income-generating potential. We did the same process for the second one.
To quickly buy our next three rentals, we opened a HELOC on our primary home for leverage. During the next two years, we saved and paid down much of the loan balance, giving us confidence to continue.
Then, using the five rentals as collateral, we obtained a fixed-rate commercial loan used to pay off the remaining variable HELOC loan balance and to buy 4 more rentals. Lucky for us, our city soon became red hot for both rent increases and price appreciation.
Our net worth really started to accelerate.
A few years later, we sold our primary home to downsize and used some of the profits to pay off the commercial loan. The smarter play might have been to keep the leverage on and let tenants gradually pay down the loan, but we sleep better this way.
We also planned on me soon retiring, so maximizing rental income became more important. Rental income substituted as our Bond portfolio, which in turn has allowed us to stay aggressively invested in Equities to this day.
SAVE
What is your annual spending?
From 2001 – 2021 our budget averaged only $45,000 – $55,000 annually, excluding one-time large expenses like vehicles and college tuition. We kept our expenses very much in check to help increase savings for investment.
In hindsight, we probably delayed spending too much. This has changed since I retired.
When I received my final paycheck at the end of 2021 the S&P 500 had rallied for a nice gain that year – our confidence was high. 2022 was a down year in the market, and our equity investments dropped quite a bit, although our rental property investments did the opposite.
With cash on hand and increasing rental income, we didn’t need to withdraw any invested funds and actually increased our spending to almost $100K. Health insurance and travel were big spends.
With a strong recovery in the stock market in 2023, we spent $150K including increased gifting, travel, and taxes on IRA distributions.
Spending in 2024 grew to $200K although $45K of that was on a new hybrid vehicle. For 2025, our intention is to maintain that same level with travel, gifting, and taxes for as long as possible while acknowledging discretionary spending will scale down eventually when we hit the slow-go and no-go years.
Our current retirement income offsets some of that spending while the shortfall is withdrawn from equity investment gains, which have continued to grow despite these distributions.
What are the main categories (expenses) this spending breaks into?
Our 2025 annual budget:Since I’ll be turning 65 and will enroll in Medicare, this is the last year I can fund the Health Savings Account so that line item will be removed from the next budget.
Do you have a budget? If so, how do you implement it?
As the financial planner, I have maintained a written budget since the beginning of our marriage. The main goal of our budget was to determine how much of our income we could save/invest after paying non-discretionary monthly bills.
I monitored it monthly.
I now update the budget and track spending annually to review with my wife. Old habits are hard to break.
After a lifetime of saving, it’s a strange feeling to realize “We’re behind on our spending”.
What percentage of your gross income do you save, and how has that changed over time?
My records go back to 2001, when I was deferring 12% of my salary to my 401K, plus the company match, which was another 4-6%. This percentage slowly increased until by 2015, I was deferring 19% plus 4% catch-up until I hit the maximum limit of $24,000 for that year.
At that time, I came to the realization that there will be a huge tax bill one day and lowered my contribution to just receive the company match. We determined that allocating additional savings to rental real estate would better diversify our portfolio and help us take advantage of the multiple tax benefits it offers.
Today we no longer need to save. Our IRA balances continue to grow over time with the market, even while taking out some of the gains as distributions.
What’s your best tip for saving (accumulating) money?
Nothing new here. Our approach for Saving: simply spend less than you earn:
- Create a reasonable budget & review/revise monthly. Include savings in budget.
- Set goals for saving, then pay yourself first.
- Automate your savings.
Another obvious approach to saving money is to Earn more by finding a higher-paying job, a part-time second job, or a side hustle. This is doable for most highly motivated people.
What’s your best tip for spending less money?
We ate a lot of home-cooked meals, which takes some advance planning. Develop a menu at least a week in advance so you have the ingredients on hand.
The internet has plenty of ideas for meals and weeknight cooking to quickly get the evening meal ready. Restaurant meals are significantly more expensive and frequently have less healthy offerings, so keep them to a minimum.
We always bought vehicles with cash and kept for 8-10 years. Car payments that include interest should not be in your budget.
If you must finance it and pay interest, that vehicle was too expensive. Find a less expensive one or wait until you save more.
What is your favorite thing to spend money on/your secret splurge?
Now that we have the time and resources, my wife and I both agree it’s traveling.
Lately, a very inexpensive secret splurge has been walking to the nearby Mexican bakery to pick up pastries such as conchas and empanadas.
INVEST
What is your investment philosophy/plan?
We are no longer in the accumulation phase. Our current investment philosophy is to let our investments do their magic and harvest the income & gains.
We collect income year-round from rental properties and gains from our equity investments. Our plan has been working well so far, with our equity investments currently quite a bit higher than when I stopped working despite taking some out.
Most of our equity investments are invested in S&P 500 ETFs, with a small percentage currently invested in four of the magnificent seven tech companies. We’re mostly past the sequence of risk issues associated with a bear market in early retirement years, so no changes planned.
What has been your best investment?
Our best investment was buying a rental property while prices were still depressed. I paid $43K total for a 2-bed, 1.5-bath townhome that just needed furniture removal and cleaning before renting.
Today it’s worth almost 5Xs that figure while still netting on average over $625/month profit after all expenses.
My next best investment was hiring a professional property manager (so that our rental properties didn’t run my life). Even though I’m retired now and have the time to self-manage, I don’t want to spend my time doing that.
He also has economies of scale for having repairs done cheaper than I ever could, collects the deposits and rent, does the leasing, and keeps up with all the legal issues.
What has been your worst investment?
Hiring a so-called professional financial advisor following the bear market of 2008, during a moment of weakness. This clown gave advice such as “don’t buy rental property,” and instead let him manage our investments.
When his results didn’t even track the market averages, he was fired a few years later. That was my “price of admission,” and I have managed our finances ever since.
What’s been your overall return?
I really don’t know what returns were from our earlier investing years, or how to quantify them, but they weren’t keeping up consistently with market averages. After learning about S&P 500 index ETFs, most of our investments have been allocated to them, resulting in an average annual return of around 9-10%.
Over the past few years, I’ve also bought/sold some of the Magnificent Seven stocks and still hold four as of this writing, which juiced our returns a bit.
How often do you monitor/review your portfolio?
I look at our brokerage website maybe daily, unless we are traveling. I admit to looking at Yahoo Finance headlines daily to stay up on financial headlines. I can’t help myself.
From a bigger picture standpoint, I’ve had a free account with Encore (formerly Personal Capital) for many years that aggregates all our spending and investments. I also have a similar plan setup with Boldin (formerly NewRetirement) and used both sites for projections on when I could retire and how much I can safely spend.
They gave me confidence that my retirement plan was viable and to increase spending these past few years. Boldin is not free, however, it has many more extra features that make it worthwhile to me, including projections for tax savings on Roth conversions.
NET WORTH
How did you accumulate your net worth?
I don’t think we made an extraordinary amount of money, nor were we hugely successful stock market investors. We accumulated our net worth slowly over time by saving and investing.
When I look back at our net worth gains, it’s amazing how it really grows once we built a cushion and just allowed our investments to compound and grow.
Buying rental real estate while prices were still low helped to grow our net worth by over $1.5M in appreciation alone, without factoring in rental income.
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?
Save was our greatest strength because I don’t think we were superstar earners.
We were OK equity investors, much better investors on the real estate side.
What road bumps did you face along the way to becoming a millionaire and how did you handle them?
Well, the road bumps to becoming a millionaire are having children, ha-ha.
They are expensive, but other than that, I can’t think of anything we couldn’t overcome. Slow but steady wins the race.
What are you currently doing to maintain/grow your net worth?
We’ve been doing NOTHING new to grow our net worth since retiring almost four years ago, yet our equity portfolio has increased well over 20% since then despite taking hefty distributions and spending far more than we ever had. We have been lucky so far to be aggressive with a heavy weighting in equities and no bonds.
We were also very fortunate to own rental real estate that ran up quickly in value. All the projections I run show net worth continuing to grow over time.
We intend to postpone taking my Social Security until age 70 to receive the maximum payments.
Do you have a target net worth you are trying to attain?
No. Sure, another few million would be fantastic!
We have enough to fund our desired lifestyle now, and history suggests that it will continue to grow.
How old were you when you made your first million and have you had any significant behavior shifts since then?
Our net worth first exceeded one million when I was 54. It’s very true the first million is the hardest. In the past ten years, it’s jumped over 4Xs that AND considering I haven’t worked for over 3 years, that seems incredible.
Our behavior has only recently shifted in that we (try to) spend more freely now.
What personal habits and/or traits have you developed that have made you successful at growing your net worth?
For many years, we lived in a low-cost-of-living city with very reasonable housing prices. That helped for many years to keep our housing expenses down, however, our city is much less so now.
Of course, we profited from the flip side of that when our rental properties appreciated substantially over the past ten years.
Our home was the only debt for many years. We refinanced multiple times to take advantage of falling interest rates using no-cost refinancing.
I always used a (free) mortgage broker to shop around to find the best rates. I could refinance with my current mortgage holder on my own, but our broker had access to even lower rates from the same bank.
Housing costs are the major expense, and anytime we could reduce that burden every month it allowed me to direct excess funds into investments.
What money mistakes have you made along the way that others can learn from?
Looking back, our discretionary spending was a little too restrictive during our working years. I say that because today we’re in a much better financial place than we ever expected to be in, and spending freely.
I sometimes forget that life happens in the present.
What advice do you have for ESI Money readers on how to become wealthy?
Follow the ESI blog recommendations, which are simple: spend less than you make, save more, and invest those savings.
Our progress to wealth was gradual; however, we consistently invested and saved for many years throughout both favorable and challenging economic periods. We made some of our better investments by buying depressed rental real estate during bad economic times.
Likewise, although it seems painful at the time, we continued to invest when the stock market is down and stocks are “on sale”.
If you have a partner/spouse, make sure they are like-minded on spending and financial goals.
FUTURE
What are your plans for the future regarding lifestyle?
I retired just after turning 61 and have absolutely no desire to work a W2 job or even part-time.
Looking back, I could have stopped working a few years sooner, but at the time couldn’t foresee how well our real estate and equity investments were going to pay off.
What are your retirement plans?
I’m already living them! Financially, we’re set to enjoy ourselves.
My wife and I both enjoy leisurely meals, exercise, socializing, and traveling together. I have not come close to being bored.
Are there any issues in retirement that concern you? If so, how are you planning to address them?
I’ve had challenges settling on a course of action for Roth conversions. We have a high percentage of our equity savings in pre-tax IRA’s and to help minimize some large tax bills due when RMDs kick in, I’ve done some Roth conversions as well as distributions over the past few years since retiring.
Projections I’ve run in Boldin suggest we should convert even more to Roth’s (along with paying a hefty tax now) to save on future taxes, but the savings amount doesn’t seem worth it to me. It’s true, our estate value would be much higher if we continue Roth conversions, and our daughters would not have to pay taxes on any inheritance, but we’d rather annually gift some now while they can utilize and appreciate it rather than a huge windfall when we’re gone.
I am not sure if I’m right in my thinking here, so again, it’s still something I wrestle with.
MISCELLANEOUS
How did you learn about finances and at what age did it “click”?
I recall reading Money magazine in my 20s and always being interested in personal finance, even though I didn’t have much to invest at that time. After the internet became widely available, it opened up a whole new source of information and ideas.
My financial philosophy was initially influenced by the Mr. Money Mustache blog sometime around age 52. Well, better late than never for me!
That site had great articles on saving, spending, and retiring early that appealed to me. I discovered many other blog,s including Go Curry Cracker (travel rewards and taxes), BiggerPockets (real estate), and of course ESI.
Who inspired you to excel in life? Who are your heroes?
This is a difficult question for me because I can’t think of any person who was that influential in my life. I was always an independent self-motivator.
I don’t have any personal heroes to write about either. That may sound sad, but it’s true.
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?
The Simple Path To Wealth by JL Collins is my favorite book for explaining financial investing in simple terms that make sense to me.
Rich Dad Poor Dad by Robert Kiyosaki is a classic because it shows how someone without a real high income can succeed and to make your money work for you.
Retire Rich With Rentals by Kathy Fettke will appeal more to new property investors but has some smart real estate strategies on how to finance purchases, tax management, and passively managing property. Good starter reference book that’s a quick read.
Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
Philanthropy is part of our financial plan, and we are using a Donor-Advised Fund (DAF) to donate some appreciated stock starting next year, but for now, it’s family first. Since retiring, we’ve gifted our daughters $250K mainly to help with down-payments on a home and subsequent renovations.
We understand how difficult it is to get into homes these days with higher prices and interest rates.
Once my social security begins and after that required minimum distributions (RMDs) on our IRA’s, we’ll have far more income coming in than needed. At that time we’ll ramp up charitable giving and plan on using qualified charitable distribution (QCDs) to give to medical-related charities.
Volunteering is something we may consider when we slow down from traveling. Our current preference is to maintain a lifestyle free of rigid schedules.
That freedom allows us to enjoy retirement and pursue activities spontaneously.
I am interested in a volunteer income tax assistance program that prepares free tax returns for low-to-moderate income. My wife previously volunteered at an elementary school, working with young children after retiring, and would like to continue that at another school.
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 an inheritance for our daughters is not a priority for us.
We are currently focusing on increased spending and wealth distribution to our family and charities during our lifetime.
