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 54-year-old health insurance executive living in Arizona. He’s still working but hopes to retire soon.
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.
To learn what these millionaires have taught us, check out the articles 5 Key Insights We Learned From 50 Millionaires and 5 Things 50 Millionaires Wish They’d Known Before They Retired.
And to hear more about My First $1 Million, you can check out this podcast with bestselling author and tax attorney Toby Mathis:
The Basics
How did you make your first $1 million?
I made my first million through the stock market when I was in my mid-30s. I had set a target to reach $1 million by 40, so I was very happy when we first achieved it.
We achieved it through investing proactively in company stock and a diversified portfolio outside of company stock. To be fair, I had a lot of faith in the company and overindexed buying company stock through my 401(k), betting it would continue to outperform, thus generating outperforming gains, which it did.
(Image credit: Getty Images)
Outside of the company stock, we also invested in companies we knew a lot about or in industries we were very interested in, like biotech.
Not all of these investments paid off, but many did, which allowed us to build up our post-tax accounts and use the money for many things, including further investing for our future.
What are you doing with the money?
We have done many things which are important to us.
First, we continue to invest and let the money work to earn more money. With this, we’ve realized a much higher net worth than we ever imagined! And it continues to grow. If you can leave the money invested, good things happen!
Second, we funded our children’s college educations. Education is important to us, and we are giving them the best start we can help with by paying fully for their colleges so they can pursue their dreams without initial debt.
Third, we’ve been able to have a mostly worry-free mindset. We want something, we buy it.
We aren’t free spenders (our mindset wouldn’t allow it), but we know there are certain things we like.
The rest, we buy when we want without thinking of the cost because we know we have enough, and we know we are controlled to not overspend or spend frivolously.
The Fun Stuff
Did you do anything to celebrate?
Not really. We maybe opened a good bottle of champagne and went out to a nice dinner. Not much else.
(Image credit: Getty Images)
What is the best part of making $1 million?
There are two things.
1. It truly makes me happy. Not necessarily because of the financial freedom (although that’s a nice part!), but because it’s a tangible long-term plan I can look back on and see I achieved it. I feel proud of that.
2. Taking care of my family. Family is the most important thing to me. I won’t retire until I know I’ve taken care of our children and our financial future. Then it’s time to have a little fun and take care of me for a minute.
I’m not sure when that will be, but the tug is getting stronger.
Did your life change?
No, it did not. For as long as I can remember, I’ve always had a plan to make $1 million and beyond. Making the first million was a nice accomplishment, but as our lives evolved and plans adjusted, it was just a step in our larger plan.
Does anyone know you’re a millionaire?
Our parents know because they have been great inspirations for us. We have taken many positives and challenges from their experiences and the way they’ve lived their lives to help us craft ours.
(Image credit: Getty Images)
Telling them was only to explain the thank-you and share how they’ve helped us, and our children, become who we are and what we are able to do.
Any plans to retire early?
I plan to retire early. I love what I do, but I can feel the pull to relax and step back. I’m not sure what age — originally my target was 50.
Once we started having children, I changed my target to 54. I’m not ready yet, more due to mindset and lack of a plan for what I want retirement to look like, but I know I’m not far off.
Looking Back
Anything you would do differently?
Invest to diversify our income stream through owning real estate to gain the monthly cash flows. I’ve always had an interest in doing this but never did because we wanted to keep as much money in investments to grow in the stock market.
(Image credit: Getty Images)
Because of this, we have been teaching our children about the importance of diversification, including beyond the stock market and in income-producing assets, to help give them insights we didn’t have early on.
What advice would you give to your younger self?
Celebrate. We didn’t do much —opened a bottle of champagne and went out to a really nice meal. But looking back, we sacrificed by not traveling much and holding our money in investment accounts rather than enjoying it to create more experiences.
I would tell my younger self to continue with your plan, but take a few more moments to let loose and create more experiences.
Did you read any books that helped you on your journey?
I read a lot. There’s not one book or article stream which has influenced me more than another, but altogether my reading informs my education and efforts.
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I intentionally read every day, including about financial items, to stay current and have the ability to evolve our plan forward.
Did you work with a financial adviser?
To get to our first $1 million, no. I was very interested in investing and did it on my own. After we started having children, we realized we have had a little luck to get here, and now we need to be less risky and trust experts more and more.
We did a lot of research to find a financial adviser who understands our plans, dreams, future and needs.
We’ve been with our Schwab financial adviser and team for 20 years, and the peace of mind it has given us is priceless. I’m still active with our investments, but I can’t risk our future with our adviser team at the helm.
Did anyone help you early on?
My mom and dad and a dear friend at the company I worked at. With my mom and dad, I learned what to do and not to do through reflecting on our lives growing up as children. I learned the importance and satisfaction of ensuring the family is taken care of first.
I also learned the importance of having a plan and knowing it deeply, which they didn’t always do.
My dear friend at the company I worked for helped reinforce the importance of having a plan and end goal. We are very like-minded, and in those moments of self-doubt, we were always there for each other to talk through financials and help reflect, analyze, evolve and execute as needed.
Looking Ahead
Plans for your next $1 million?
We’ve made many “next millions” off our first million already! Our plans have not and will not change: Continue to let the investments work and make more money to give us further freedom to live the lives we want and create/live the plans we make for our next chapters in life.
(Image credit: Getty Images)
Any advice for others trying to make their first $1 million?
Be intentional. Like with most things in life, when you have a specific plan and target, you can build a pathway to get there.
Have the confidence and skills to stick to your plan and end goals, but be careful — things rarely go exactly to plan. You need to have the intelligence and confidence to pause, review, analyze, evolve, execute to adapt your financial plan to the changes you encounter.
This should help you to not overreact when something goes wrong or pops up and should help you take advantage of opportunities and risks as they arise so you can stay on your path and achieve your goals.
Very few roads are completely straight — recognize the turns and adapt.
Do you have an estate plan?
Yes and no. We have a will, powers of attorney and written instructions, but we do not have a formal estate plan. Arizona has a simple wealth transfer process for heirs, but we know that’s not good enough or protected enough.
We are working on creating a thorough estate plan with all the necessary components to further protect what we have and ensure our children continue to be taken care of long after we are gone.
We also are building a charitable trust to set some money into to grow via investments and provide a yearly stream of charitable donations to issues we are passionate about, such as child and senior health.
(Image credit: Getty Images)
What do you wish you knew right now as you think about retiring?
I wish I were better prepared mentally at this stage than I am today. We have the financials to retire early, but the lack of a plan on what our retirement chapters may look like is scary.
We are learning what to think through and the many different strategies to enter our retirement years, but I feel I could be better prepared to be confident in knowing what we may want at this stage.
What do you wish you’d known …
When you first started saving? When you have a plan and end goal and understand what the plan entails, it’s OK to take some additional risks. Risks aren’t all created equal. I wish I would have known that when I started investing and saving.
I don’t regret anything and have had a life well beyond what I thought possible. That said, I know there are risks we could have taken earlier on (such as starting our own business), which would have been exciting and challenging, adding additional context to our lives.
When you first started investing? I would have paid more attention to averting future tax risk. Early on, we were intentional about building our pretax and post-tax financials, but were not very good with financial instruments such as Roth IRAs, as we typically thought the extra money pretax would build faster and provide more over the long term.
(Image credit: Getty Images)
While we found this to be true, we are facing tax hurdles in the future. We are working through this with our financial adviser team, but it is a cause of future stress in the moment.
What do you wish you’d known when you first started working with a financial professional? Trust their knowledge to continue to diversify. We made our first million primarily through aggregating investment into the stock of the company I worked for. This worked out well, but also created a mindset to limit some diversification when we shouldn’t have.
Our financial adviser team has tried to change our mindsets for years, and while we have been listening to them the last few years, we realize we incurred risk we didn’t need to, probably for similar gains over the long term. I still won’t tell them they were right. 😀
Does financial freedom make retirement or planning for retirement easy?
Not as much as you think. The financial security is definitely a plus, but without a plan and view of what you want your retirement chapters to look like, retirement is still very scary.
We are fortunate enough to be able to plan for how we want our retirement years to look, but not being clear on options, what it may take and how it may feel is universal across any financial situation.
Especially as people live longer, it’s important to pay as much attention to the mental side of retirement preparation as it is the financial side.
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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