Welcome to Kiplinger’s My First $1 Million series, in which we hear from people who have made $1 million. They’re sharing how they did it and what they’re doing with it.
This time, we hear from a married 48-year-old banking executive who lives in the Southeast but is originally from the Northeast. He’s still working, but his wife left her job when they had the first of three children many years ago.
See our earlier profiles, including a writer in New England, a literacy interventionist in Colorado, a semiretired entrepreneur in Nashville and an events industry CEO in Northern New Jersey. (See all of the profiles here.)
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Each profile features one person or couple, who will always be completely anonymous to readers, answering questions to help our readers learn from their experience.
These features are intended to provide a window into how different people build their savings — they’re not intended to provide financial advice.
THE BASICS
How did you make your first $1 million?
We eclipsed $1 million in net worth in 2012 when we were both 35. My goal was to hit that threshold when I was 40, so I was excited to have been ahead of schedule.
Our combined incomes up to that point had been less than $200,000 each year. We just did it by rigorous budgeting and saving for nine years. No business, no real estate, no inheritance.
(Image credit: Getty Images)
Just fully funding retirement and health savings accounts (HSAs), starting college accounts, investing and dollar-cost averaging.
We don’t spend recklessly. I’ve had the same car for 12 years.
I was interested in saving and investing at a young age and invested all of my summer job income and lifetime savings ($1,800) at age 18 into a Fidelity Select Technology Mutual Fund.
We actually still use the same Excel file that I’ve used for the past 20-plus years to track all of our income and expenses. We categorize spending by must/core expenses and then other/optional.
Additionally, I update our balance sheet at year-end. We still track it today, and we have been able to grow our net worth with the luck of home price appreciation, higher income, the magic of compounding and adding a couple of real estate rental properties in the past 10 years.
Here’s a graphic of our income growth since 2003:
What are you doing with the money?
We paid off our mortgage early, increased our charitable giving as we made more, bought some rental property, and now we spend a bit more on vacations.
THE FUN STUFF
Did you do anything to celebrate?
We probably went out to dinner.
What is the best part of making $1 million?
Security.
Did your life change?
Not really, but we felt a lot more secure and knew we could face an emergency and do some more fun things and give back a lot more.
(Image credit: Getty Images)
Any plans to retire early?
I’d like to retire around age 55.
LOOKING BACK
Anything you would do differently?
Not that I can think about, other than investing early in Apple (AAPL), Amazon (AMZN), Nivida (NVDA) and some others! 😊 Maybe we could have gone out to dinner more.
What would you tell your younger self about making $1 million?
“Well done!”
(Image credit: Getty Images)
Did you work with a financial adviser?
Yes.
Did anyone help you early on?
Not really. My finance and accounting background in college and my first job as a credit analyst served me very well.
LOOKING AHEAD
Plans for your next $1 million?
Now that we are at $6 million, I’d like to double that to $12 million in seven years (about a 10% rate of return).
Any advice for others trying to make their first $1 million?
Track everything so you know where your money goes. Estimate what you will make, take home and spend in the next year and set savings goals.
(Image credit: Getty Images)
Do all of this with your spouse — recap the prior year and talk about the next year’s goals together.
Do you have an estate plan?
Yes, we have a revocable living trust, wills, powers of attorney, health care proxies, etc. We set those up after reading Money magazine and Kiplinger all these years.
We wanted to avoid probate and prevent our kids from inheriting a ton of money at too young of an age if we died early.
Anything you’d like to add?
The best lessons learned were all in the first decade of my investing career (that was a tough decade!).
I graduated from college right before the tech bubble in 2000 and learned to not rely too much on what stock pickers say or on individual stocks (especially avoiding companies that don’t make money or have too much debt 😊).
(Image credit: Getty Images)
During the financial crisis in 2008-2011, I learned to not panic-sell and stay the course. I started investing more in low-volatility and value companies.
Once we got through two bubbles, I felt real estate would be a great way to build wealth (especially in such a low-interest-rate environment).
If you have made $1 million or more and would like to be anonymously featured in a future My First $1 Million profile, please fill out and submit this Google Form or send an email to [email protected] to receive the questions. We welcome all stories that add up to $1 million or more in your accounts, although we will use discretion in which stories we choose to publish, to ensure we share a diversity of experiences. We also might want to verify that you really do have $1 million. Your answers may be edited for clarity.
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