Attaining financial independence (F.I.) is a simple mathematical concept – save much more than you earn for a period time, the length of which depends on how much you save v. earn. The challenging part is convincing your brain that this radical idea is not only possible, it can be achievable early in the life. The journey towards becoming F.I. can seem arduous at first, but each milestone along the way helps reinforce the value of becoming FI. The biggest milestone in my opinion is becoming a millionaire.
After 12 years of hard work, planning, and some luck, I have become a millionaire for the first time! This pretty much summarizes how I feel right now…
But seriously, it’s an amazing feeling. Some bloggers say they do not feel different after joining the double-comma club, but I do. To me it feels like that moment in movies when the audience realizes the person everyone believed was crazy – turns out to be the only person who could see the truth.
Over the years I’ve told others of my plans to become F.I., and their reaction was mostly skepticism. They typically thought my plans were too ambitious or that I was delusional. Achieving millionaire status at 35 years old reminds me that I am not crazy – it is the people who plan to work for 40+ years to retire with little to show for it who are have the odd view of reality. In other words, reaching this milestone validates all the hard work and sacrifice that it took to reach this point.
Incredibly, just last month, my mother also attained millionaire status. My mother’s journey was much different than my own and I encourage you to read her story here. In my eyes her accomplishments were much more impressive than my own because she overcame adversity and setbacks throughout her life. My path to becoming a millionaire was much more straightforward by comparison – and I had the support (plus dual-income) from my loving wife along the way.
My Financial Journey
I started working at the age of 14 – and since have never stopped. I started in fast food, then worked at various movie stores, then pizza delivery, and eventually as a waiter/bartender. These were the odd jobs that got me through high school and college.
In 2008, I got my first salary job at age 23. I was hired only one month before the financial collapse took hold in America and my employer put in a hiring freeze. This was my first lucky break. My starting salary was $30,000. A few months later I bought my first home, a foreclosure, which I fixed up to generate equity (not reflected below due to cash-out refi).
In the summer of 2009, I married my spouse, and we officially became DINKs (dual income, no kids). Our wedding was a frugal one that took place outdoors in a family member’s home, which was a great decision in retrospect. Of course, it still cost around $8,000. My wife and I combined our finances prior to marriage, but now our merger was official. Our household income at this point was around $70,000.
In early 2011, my wife and I moved to the East Coast so I could accept a big promotion at work. I was underqualified for this position and was only offered the job because of my previous work with the hiring manager. Yes, I worked hard to earn the hiring manager’s respect, but still, I consider this lucky break number two. My wife was an educator, so she was able to easily relocate. When I first asked her to consider moving, she literally cried. The idea of uprooting our life was traumatic – our whole family, and all our friends were in the mid-west. Yet this was a big opportunity that would nearly double our income and come with more responsibility. Eventually we agreed to make the move – and looking back – this was a key decision for our financial life. It immediately catapulted our incomes from $70,000/year to $120,000, but more importantly, it opened us up to a world of opportunities that would have otherwise not been possible. We kept our home in the mid-west, which is currently a rental property.
In 2012 we purchased our primary home that we still own today – a 2-bedroom, two-bath condo – for $358,000. In same year we started a decade of pursuing higher education for our family. First my spouse completed her master’s degree, then I received my law degree, then my wife started a doctorate program, which she will finish this year. In total these graduate programs cost our family around $160,000 out-of-pocket – but we worked full-time throughout these endeavors, which made the finances more manageable.
Each new educational attainment came with promotions and salary increases. For my spouse, the most notable increases came from the transition from educator to administrator, eventually becoming a school principal. For me, I had numerous options when I graduated from law school and I leveraged this to negotiate a big raise and received an additional boost when I was later promoted. My promotion was lucky break number three. My work originally hired someone else for the position, but they didn’t work out, so I got the job instead.
In 2014, we purchased our second rental property, which was also in foreclosure. We paid $115,000, and after around $10,000 in work, it now is valued at $170,000. It has been steadily rented for six years. We got a great deal on this property partly because it was inaccurately listed on the MLS for $20,000 more than the seller actually wanted. The real, lower price was only listed on some non-MLS websites like Zillow. As a result, most other buyers had been scared away from the inaccurate MLS listing so we had no competition when submitting our offer. This was lucky break number four. We would have bought more rentals after this one, but for years I was too busy completing law school. Someday…
Our family income now stands at $300,000/year – which still seems surreal to me. This dramatic increase from our humble beginnings did not happen overnight. Rather it came from being good at our jobs, simple hard work, but also making smart strategic decisions. It also required sacrifices like having no social life while pursuing higher education, moving across the county, and avoiding lifestyle inflation over the years.
Below is a breakdown of our net worth over time. There are several reasons our net worth began accelerating starting in 2016. First, our growing income was clearly a factor, but additionally we stopped making big investments in homes by this point, so the fruits of our labor were beginning to show. We bought homes in 2009, 2012, and 2014. Each of these homes was a significant investment. By 2016, we started to grain equity with each payment alongside the rising housing market. By this point we also had assets in the stock market that were starting to produce compound growth, which is key to becoming wealthy.
Here is a quick breakdown of the assets and liabilities that we now have as millionaires:
- Stock investments: $710,000
- Personal home: $102,000 equity
- Rental home #1: $77,000 equity
- Rental home #2: $72,000 equity
- Side business: $40,000 in assets
- Student loans: $38,000
- Cash: $38,000
I posted about reaching millionaire status on Twitter and many of my followers asked for my thoughts on the top things that contributed to my success. In part two of this series, I will outline my top advice for successfully pursuing financial independence.
But before I go, I would like to thank a few financial minds who have influenced me throughout the years. First, I would like to thank my spouse, who has been my rock throughout my crazy journey, including trusting me completely with our family finances. She is an equal financial partner in our marriage, so this achievement is as much hers as it is mine.
Second, I would like to thank my brother, who has inspired me to take chances to achieve my goals and to think bigger than I normally do (think The 10X Rule). My life has been a series of calculated decisions that aimed to maximize my potential while limiting downside risk. In contrast, my brother has reinvented himself several times to achieve his life goals. I would be a better person, and more financially successful, if I had the fortitude to completely dedicate myself to what I believe in like my brother.
Third, I would like to thank my mother and father (corny, I know, sorry). I discussed my mother’s contributions to my financial journey here, at the start of her guest. My father taught me countless lessons about running a business, entrepreneurship, and self-reliance, all of which have helped shape me into who I am today. I think the biggest lesson was to never undervalue oneself. My father used to send bills to his clients that were valued at two to three times what he felt his time was worth – but they would pay them without compliant. This highlighted that self-perception often vastly differs from others perception of worth.
Finally, I’d like to thank a few financial bloggers, who provided a basis for my financial education. First is the original owners of Punch Debt in the Face and Budgets Are Sexy. These sites were sold during the last decade to new ownership (who are still great), but their original creators introduced me to savings, reducing debt, and basic financial planning. In addition, in subsequent years I found the two often cited Mr. Money Mustache & Mad Fientist, who together took my financial education to the next level.