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.
My questions are in bold italics and his responses follow in black.
Let’s get started…
How old are you (and spouse if applicable, plus how long you’ve been married)?
I am age 40 and my wife is 47. We will be married for 10 years in August.
Do you have kids/family (if so, how old are they)?
We don’t have kids. We just have a dog who rules our house.
What area of the country do you live in (and urban or rural)?
We live in rural Pa. We live in the mountains, but are only a 2 hour drive away from NYC and Philadelphia. We get to enjoy a quiet life where we live and can take a short drive to the city for sports or cultural events.
What is your current net worth?
It just exceeded $1,000,000.
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?
- Our house is worth $220,000
- The cash value of my wife’s PSERS pension is $100,000
- Brokerage Account $240,000
- Combined IRA & 403B balances $480,000
What is your job (type of work and level)?
I work in HR for a not-for-profit health care organization. I have a Manager title.
My wife is a public school teacher
What is your annual income?
Our combined annual income is just over $150,000.
What is your main source of income (be as specific as possible — job, investments, inheritance, etc.)?
Our main source of income is our careers.
What is your annual spending and what are the main expenses you have?
We live a frugal lifestyle, but not as frugal as some. We have cable TV, go on vacations, and go to sporting events. If there is a product we truly want, we buy it. We watch our day-to-day spending. We bring our lunches to work and only go out to eat on the weekend. Our living expenses are about $2,500 per month. When we buy a car, we pay cash for a Honda or Subaru and drive them for 10-12 plus years.
How did you accumulate your net worth?
We never made a lot of money. 10 years ago when we were first married, our combined salaries were just over $80K per year. When we got married, I had over $100K saved. My wife came into our marriage with the house and had a good portion of it paid for. We doubled our salaries over the past decade. We have always saved at least 40% of our combined salaries and now save well over 50%. For the last 10 years we had an asset allocation of 75% in stocks and 25% in bonds. All of our investments are in low cost index funds. We just dollar cost averaged into our savings every pay. We now have a 65% stock and 35% bond allocation.
What money mistakes have you made along the way that others can learn from (or something you’d do differently)?
By always following a basic investing practice, I never made any real bad errors there. Before I worked in HR, I worked in digital marketing. I passed up the opportunity to go into a partnership with an old co-worker. He ended up earning a few hundred grand per year now with the business. However, I was true to myself. I did not want to become a business owner. Other than that there were not too many errors. I worked a job since I was age 14 and did not start investing until I was 20. I wish I started at 14. I did not finish my BS degree until I was 29 and MS until I was 38, I guess I could have finished school sooner too.
What have you learned in the process of becoming wealthy that others can learn from (what can others apply to become wealthy themselves)?
Start saving as soon as you can. Save as much as you can. Avoid all of the noise produced by the media. The media produces so little information that is actionable other than sell in a panic or buy at the end of a bull market.
What are you currently doing to maintain/grow your net worth?
We currently save over 50% of our salaries and work on finding ways to save a little bit more each year.
Do you have a target net worth you are trying to attain?
Our target net worth is $2.5M in 12 years and $4M in 20. I already have been at it for 20 years. I know how to play the long game.
What are your plans for the future regarding lifestyle (for instance, will your net worth allow you to retire early, downsize jobs, etc.)?
Our goal is to retire in 12 years. My wife’s pension will pay her $64K per year. We are planning on withdrawing only 2% ($50K) per year from our investments. We want to wait to tap Social Security for 10 years after we retire when my wife is 70 and I am 62. We will tap it earlier if there is a long market contraction. We plan on keeping our home in Pa, but renting a condo for the winter months in a warmer part of the country. I would like to still work part-time, so I can at least contribute the catch-up amounts to a 401K and IRA. It is hard to stop doing something you have enjoyed doing for so long.
Is there any advice you have for ESI Money readers regarding wealth accumulation?
Be consistent. Take money from every pay check and invest it. Do it by way of a payroll deduction in a 401K and manually in an IRA. Tell yourself with every deposit that you are buying your freedom.
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Comments
Kevin saysThis quote is awesome. “Tell yourself with every deposit that you are buying your freedom”
Nicely done. This is the closest story interview to my own situation so far.
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- ESI says
I like that one too. I’ve heard it a few times and will likely write a post on it. 🙂
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- Richard Ryan says
Totally agree. I’d say this was the most “relate-able” millionaire interview I’ve read so far.
And the closing advise was spot on. I’ve been “pounding” that advice into my kids for years.
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- John Bennett says
Yes, this is the kind of millionaire interview I’m looking for.
Somebody started with average salaries and worked hard and consistently to grow them into a good income. They are relatively young, have lived a life that requires discipline, and have saved a good amount.
Looks like I have four years to make $470k to stay on pace of this good example.
And another reminder that if you keep your mistakes low in the beginning, it makes the future much less difficult.Reply
- ESI says
Haha! Glad I finally got one for you!!!! 😉
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- TheLateSaver says
This is my favorite millionaire interview as well. Great perspective from someone who, along with their partner, only makes $150K per year.
Loved this, too:
“Avoid all of the noise produced by the media. The media produces so little information that is actionable other than sell in a panic or buy at the end of a bull market.”
- RetireSoon says
“Only makes $150k”
Agree this is a great example of a more moderate income vs many of the other millionaires on here. With that said, $150k is a good chunk of $.
I think the key to M25 path was a recent ramp (doubling?) of income and keeping spending in check. This has been the critical component of my networth growing over the last few years.
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- TheLateSaver says
I’m in the same boat: Increase the salary, but don’t increase the spending.
I also think that not having a children is a factor in getting to their first million. M25 is a great model for me.
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- ESI says
I thought that too. Wow, when $150k is an “only” we have some big earners here!!!!
That said, they make $150k COMBINED and they are in their 40’s. This is very do-able for a couple starting out today.
For example, if each person in the couple makes $40k out of college, they are already at $80k at 22. $150k in their 40’s seems very reasonable.
Then again, the purchasing power of $150k in 20 years will be much lower…
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- TheLateSaver says
To be clear – I was comparing M25’s to many of the other interviews you’ve done; If I remember the rest correctly, M25 makes less than most of them.
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- ESI says
Yes, most of them do make more than $150k.
And as I pointed out, the $150k here is combined.
Many (most?) of the others have one person in the family making more than this which makes this interview much more “normal” for many people.
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- FIRE Marshall says
ESI, I wonder if you would consider some sort of table comparing all your millionaire interviews showing age(s), marital status, field of work, salary, net worth breakdown, expenses, and so on. It would be nice to see all of that data together in one easy reference.
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- ESI says
I’m considering it for readers in general, but not really for millionaires at this point due to: 1) low number and 2) frequent changes given I’m doing one of these a week.
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This is my favorite millionaire interview. They have average salaries, live a normal lifestyle and have average jobs. This kind of interview is the type that shows “normal” people they can save their money too and reach their goals. Nothing fancy going on here, they’re just working and saving a good percentage of their salaries.
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- Paper Tiger says
This is a solid story for a hardworking couple who have a good plan for achieving FI based on their current set of circ*mstances and chosen lifestyle. I understand that a lot of people on this blog get frustrated when they see higher net worths tied to larger incomes because they don’t see these incomes as “realistic” for most people.
It really all comes down to what you want from life and what you are willing to do to get it. In my case, I did want a family with at least one child and that costs additional money. I also wanted to push myself on achieving my potential which means I had to take more risks in my career and also investing time in myself to create more skills to make me more attractive for higher paying jobs. I wanted a spouse who had the same drive and was willing to make the same kind of personal investments to create more opportunities for herself as well.
For our child, I wanted to be able to fund a strong education and give her options for her chosen field and schools that would be within her reach and not limit those choices because of a lack of money. I wanted to focus on FI but I had no real incentive to worry about RE. I think the focus on RE limits one’s potential and ability to achieve the max you have in you. Yes, it does free you up to pursue higher callings and time with family but I also worked on my life balance in those areas rather than sliding too far in either direction.
The point is you can strive for higher net worth but there are tradeoffs. I started with a diploma in hand and no debt but also no assets and then went to work on setting the bar higher than I thought I could achieve and going for it. I made sacrifices and exchanged short-term fun for longer-term gains. This is how I achieved an above average net worth and still manage to have a successful 24+ year marriage and raising a daughter who just started a Top 50 college and who is motivated, secure, and self-confident.
Neither approach is right or wrong. It just depends on what you want out of life. If you want more, you simply have to be prepared to give more and stop making excuses. I’m convinced that in this great country we live in, higher salaries and better opportunities are always available to those who are willing to work for them and make choices that put them in positions to achieve.
So stop selling yourselves short and go make it happen!
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- ESI says
Love, love, love this comment and its message!
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- Dave says
Thank you all for the kind words and support. I am glad that many people have enjoyed my interview. It is a honor to be able to share some of my story on my favorite financial blog. Btw, I thought we were doing well earning $150K per year ?.
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- TheLateSaver says
Oh goodness, now I feel bad. “Only $150K” was meant comparatively to some of the other interviews.
You guys are doing great. 🙂
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- Dave says
Don’t feel bad. Yes, some of the past interviews had very high salaries. We live close to two major markets, but far enough away where the cost of living is low.
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- ESI says
“We live…where the cost of living is low.”
This is a HUGE one-two punch — high income and low cost of living city!
The combination of these two is a MAJOR boost to any net worth.
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- Paper Tiger says
Dave, you guys are doing “fabulous” to have worked your salaries up to 150K/yr. That places you in the Top 1% of the World’s family incomes. The issue is a lot of other people still consider that even unachievable for most. We seem to have too many people willing to settle for mediocrity because they just don’t see a path to that kind of income and my whole point is that your beliefs tend to dictate your attitudes which in turn dictate your results.
I just want people to take another look and realize they can be more optimistic and higher net worths and salaries are available for those willing to create a new mindset and work a plan that puts them in position to be more successful in life. Like all of you, I love my country and what it represents. The planet needs our country to be exceptional and remain the leader of the free world. To do this, we need more exceptional people and not more people willing to just accept mediocrity because that in turn ultimately creates a country that is mediocre as well.
I want the Generations X, Y, and Z that are behind me to strive for bigger goals and have bigger dreams. I want a nation for my daughter that believes in itself again and pushes the boundaries of innovation, technology, bi-partisan politics, improving international relations, discovering the cure for cancer, poverty, clean water everywhere, etc.
Mediocre people don’t achieve these results. Exceptional people do. As I said, let’s all stop selling ourselves short and get to work!
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- Dave says
Thank you. We have worked hard to get where we are. We also were blessed to have supportive parents to push us. As you said, anything is still possible in this country if you are willing to work hard and make sacrifices. I too want all of those dreams for Gen X, Y, and Z. All of those dreams are still within our reach.
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- RetireSoon says
Btw, I thought we were doing well earning $150K per year ?
…
I purposely chose “moderate vs other $M series interviewees”. Life is very relative!!Financial samurai does polls on income in his site. I’m guessing ESI readership has a high average income as well.
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- Laurie@ThreeYear says
I echo many of the other comments here. You guys have slowly and steadily saved, and are seeing the benefits! Saving half of your income, and slowly trying to improve that number, is a great strategy. That’s our strategy as well–slowly improving how efficient we are with our expenses. I think you also hit the nail on the head when you said that you spend what you want–you’re not excessive but you’re also not constantly depriving yourselves, so you can enjoy life as you save for retirement. And I agree that $150K is doing great. I hear a lot of people these days say “just $150K” with regards to people’s salary, and actually asked a question about that on Rockstart Forums–seemed (and seems!) like a good amount of money to me, and I can’t quite wrap my head around the idea that it’s a small or insignificant amount. I know people in this comment thread weren’t saying that, but I’ve heard that comment before, and it always throws me!
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- Joe says
M25;
So, have you factored in health insurance cost? And how did your wife amass $64,000 a year pension at this age; is this the estimate upon retirement at age 67 or is it for the current period.
Actually, $64k per year for 15 years would be $960K which is countable towards you net worth ie; vested pension annuity. Correct? Thus, you are actually closer to your $2 million goal.
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- Dave says
We are covered under her health insurance until age 65.
She is a public school teacher in Pa. The $100k that I listed is what she would get if she decided to withdraw it now. However, that would be a financial disaster. The formula is years of service x 2.5 x the average of your 3 highest salary years. To access the pension early the two key milestones are to teach for 25 years and reach age 55. The full pension age is 35 years and age 62, she will have 25 years in at 57. If she retired at age 57; she would get around $55k. If she worked until 62, it would jump to over $80k. Age 60 is her goal.
2018 is the last year for pa teachers or state employees to have access to this system. The new plan is a 403B with a match. My wife also has access to the 403B, but not the matching in the future.
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- Scott McGovern says
I thought she might be a teacher, when you mentioned the pension. I used to be one, so I know how they work and how valuable they are. Good on her for being part of a great profession.
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- Dave says
Thanks Scott. I will pass that on to her.
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- M22 says
Wow – That is a great pension for a teacher…My wife retired as a public school teacher, had 21 years of experience and gets a pension of $9890 per year, $14.7K in SS benefits and health care medigap insurance for $25 per month. Good thing we Saved a lot, Invested wisely, so to be able to retire comfortably. Keep up the good work!
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- Rick says
I agree M-25 is relatable to more people in a tortoise-vs-hair kind of way. Other millionaires you’ve interviewed have what many people would consider remarkable incomes. Certainly, M-25 shows the power of being a DINK when wealth accumulation is a goal, and shows the future value of a defined benefit retirement plan. Having a net worth of $1M in their early 40s (average age) is pretty good. I was a few years later reaching that goal, but the powers of compound growth have been very good to me since then.
The lesson I take here—and the one I share with my kids—is that a consistent and dedicated effort sews the seeds of later wealth. And, living below your means (at any level) both fills the coffers and establishes a frugal lifestyle that will serve them well in the future.
Keep up the interviews; each one proves “success” is personal, and there is no limit to getting there.
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- Darren says
I can’t help but to point out the obvious here but in short: we have two people with standard incomes but no kids. If you simply utilize the 401k or IRA and throw it in index funds, by your 40’s or 50’s you’ll have a 1M net worth. It’s so simple with no kids. That being said the overwhelming majority of my fellow Americans can’t figure out this basic concept and have no saving are are still broke. I have two kids, have a standard income and had a net worth of 1M at 40 and it was a piece of cake to accomplish. Everybody needs to learn the basics and this guy and his wife figured it out and I give him props on that! Nice job. Where it get’s tough is when you have kids. In my part of the country if you have two kids in daycare that runs about 2k a month or so. That’s where you need to get creative.
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- Ben says
So average household income in America is 59k a year. 150k is nowhere near a standard income. It’s a fantastic income. The majority of FI bloggers are people who are affluent compared to most of the country, but would like to appear as average folks who worked hard. They are far above that. This is a compliment to the community as it is filled with above average folks, but to sit here and suggest that 150k is a standard income is a fallacy.
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- Darren says
The whole idea here is to first get an education. These two have that. Ballpark a starting salary after graduation of around 40k, future value that 20 yrs and 25 yrs per individual and you have 150k. College educated people with 20-25 yrs in the market having combined income of 150k is standard. We’re no comparing apples to apples here. You can’t make a blanket statement that 150k is not typical if you include high school grads here. This couple have degrees that’s my point.
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- Art says
Love this interview as it is very comparable to my circ*mstances. I am a factory worker married to a school teacher ( NY state with similar pension). I will also have a small pension. Our net worth is approximately 1.6 million (not counting pensions) at the ages of 46 and 48. We have three children and making saving and investing a priority while also living a little. Our annual income is about 170k and we will retire early at 55. Delayed gratification is worth the pain. Great job M25!
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- RetireSoon says
I see a M26 interview coming … or maybe it’s M57 depending on how many ESI has in the queue.
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- Dave says
Thank you. I am glad that you liked the interview and that you related to it. Great job on reaching your financial milestones. Yes, it is worth the sacrifices along the way. Good luck on reaching your goal of reaching FIRE at 55. As RetireSoon stated, I hope to read your interview in this series.
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- Lisa Mease says
Although I am 6 years, 2 months and 6 days away, I often ponder my retirement wardrobe. I’m thinking tunics and leggins. Boots for winter and sandals for summer. Looks cute and is comfortable.
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- Lisa Mease says
I meant to post this on the dressing for retirement article, not here. Sorry.
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- Art says
Thanks for the kind words. I have been fortunate marrying a wonderful women who has gone along with the master plan.
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- Stop Ironing Shirts says
Love the interview series – Let me know if you want to put me through the ringer sometime soon!
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- Richard says
Well, I also enjoyed this one quite a bit–until I read the comments! Oh, the things I could say about public schools, and maybe 90% of their staffing, top to bottom. Yeah, I’m hooked up with one; and here I thought MY job was bad (lol). Needless to say, we have no children, and I vote down every levy. People love to talk about good schools, or even great ones . . . no doubt they exist somewhere, right next to the first dead sasquatch on record. They say my former high school is great–more like a black market drugstore for amateur gladiators; meanwhile, the results are out the window, yet they never fail to have such excellent excuses! Obviously more funding will solve it all. I suppose they teach that in graduate school (lol). Even at the UW they had a couple clowns on display; uh, to tenure that noise, much worse pay for the pleasure. Not that I didn’t have a great time. I give them this; it’s a very challenging job. Hour for hour, and by that I mean accounting for all those unpaid nights, uncompensated expenses and so on, I smoke her on every front with my troubling casino job. Medical is paid in full (no premiums), free prime rib and king crab and so on, though I don’t eat red meat or crab. Other stuff, sure; I’m a picky f*cker. Round the perfect index fund hiding in the middle of my 401(k); meanwhile, she won’t even talk about her 403b. It must be ‘great’! I know, no love . . . even she admits it’s worse, not to mention her student loan debt is 3x more. Gotta work for a living though. I’m gearing up to become a financial advisor (lol); hard to believe, some of you must be thinking, but I’ll be sure to keep my mouth shut, as necessary. About 5k and I’m in, for real. Working on it as we speak. Obviously an overwhelming number of Americans are in dire need of the most basic advice in regard to such things, referenced in curt passing here. I’ve got more ‘mustache’ than elite ESI vigor anyway, but it’s a complicated world. There’s plenty left to be learned here, though perhaps a greater amount resides between the lines, unsaid.
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- Richard says
*FOUND the perfect index fund . . . and no offense to M-25. Excellent job, for real.
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- Richard says
Politics and personnel, then your work. I get excited about what to do with money. Strong benefits and perks chain me. Golden handcuffs.
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- Richard says
In this field, everyone has a story to tell. I should do more listening. So should you.
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- Richard says
Ten years out, if she stays, the joke’s on me; until then and perhaps all points beyond I’ll be relentlessly nasty and crass about it. Thanks to the WEA, I finally concluded that modern union life, especially teacher’s unions, are inherently evil and a much greater threat than corporate abuse, bad as that gets. I get excited when they talk about eradicating the Department of Education, but oddly enough, I believe tech alternatives and AI will help reshape it anyway going forward. Same thing in regard to the entire healthcare establishment, hopefully including the way we classify, train, and compensate all medical workers. These institutions are unsustainable as is, not to mention the error rate and poor service record. No excuse for the opioid slaughter, or the spread of fentanyl. Free market solutions might be nice, but these things could really be helped, hopefully by the great use of force–gone wanting for decades, they generally stink badly and require aggressive restructuring and reform.
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