A Beginner’s Guide to Becoming a Millionaire

For this particular blog post, I will be performing a guest interview with Rob the Dog, discussing his journey towards becoming a millionaire and how he was able to achieve this benchmark. Enjoy the dialogue!
Background
How old are you (and spouse if applicable, plus how long you’ve been married)?
I am in my mid-to-late twenties. I am not married and have never been married.

Do you have kids/family (if so, how old are they)?
I do not have any kids.

What area of the country do you live in (and urban or rural)?
I live in the South Central region of the country. It’s mostly a rural community.

What is your current net worth?
My current net worth is $1.01M. I recently crossed the $1M mark with no plans of stopping the growth of the current valuation.

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?
My net worth can be broken into the following categories:
– Stocks: $400K
– Real Estate: $370K
– Other private investments: $55K
– Municipal Bonds: $45K
– Pension: $35K
– CDs: $100K
– Cash: $1,500
– Debt: $0
I am a little allergic to cash as you can tell but I also need to get rid of all the CDs and get that allocation working a little bit more. I am planning to use the proceeds and capital from the CDs to purchase a rental in the near future.
Earn
What is your job?
I am an entrepreneur.

What is your annual income?
Last year, I made about $240K based on filed taxes.

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?
The starting salary at my first job back in college was $7,738. I think the next year, I made around $40K and then I have been able to grow it to its current level through working. Currently, I am between $200-300K and the variance is just based on the performance of my investments.

What tips do you have for others who want to grow their career-related income?
Honestly, it is just hard work and being smart about it.

What’s your work-life balance look like?
My work-life balance is really good. The fun part about finding a job you love is that you do not feel the pressure of work and everyday is always an exciting day.

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?
The other sources of income are from my investments. I can consistently generate $40K – $60K off the investments yearly. The investments were developed through time using knowledge and capital acquired. My current goal is to get that up to $100K per year within the next couple of years.
Save
What is your annual spending?
My spending is probably my strongest suite to acquiring wealth over the years. Last year, I probably spent around $30K. Again, I do not have children so that definitely helps out.

What are the main categories (expenses) this spending breaks into?
Housing accounted for a third of the spending, food accounted for a fourth of the spending (about $7,500), traveling across the country through flights was around $2K.

Do you have a budget? If so, how do you implement it?
I do not have a budget. Saving is extremely easy for me since I am happy with everything I own and see no need for a new toy.

What percentage of your gross income do you save and how has that changed over time?
Over the years, it has varied quite a bit but between 60% to as much as 90% in recent years.

What is your favorite thing to spend money on/your secret splurge?
I would probably say some really nice shoes and traveling, of course. I have been to over half the states in the US within the past 5-6 years.
Invest
What is your investment philosophy/plan?
My investment philosophy has changed over the years due to some investment mistakes in the past but going forward it is to simplify my holdings, invest in companies with solid balance sheets, acquire more private investments, and continue to invest in myself.

What has been your best investment?
My best investment purchase was Apple as that holding more than doubled. My actual best investment was my Education. I really do not have a ROI number for my education as to me, it is unlimited.

What has been your worst investment?
My worst investment was purchasing an offshore service company called Seadrill. The company ultimately went bankrupt and I lost all my capital invested in that.

What’s been your overall return?
I have been blessed to be in a relatively bull market within the past ten years. My returns have followed the S&P500 within that period due to my allocation through the years.

How often do you monitor/review your portfolio?
It depends – I tend to review my portfolio for any unexpected charges or activity. I like to stay on top of that.
Net Worth
How did you accumulate your net worth?
I accumulated my net worth by just really working, saving, and investing. It has been really easy and a lot of fun.

What would you say is your greatest strength in the wealth-building model (Earn, Save or Invest) and why would you say it’s tops?
My greatest strength is saving but I would say what builds wealth the fastest is income, no question.

What road bumps did you face along the way to becoming a millionaire and how did you handle them?
I would say is to consider the opinion of others especially if they have proper reasoning behind it but do not get sucked into those that do not. Also, achieving self-actualization has been a major breakthrough for my personal journey.

What are you currently doing to maintain/grow your net worth?
Currently, I am looking towards purchasing a rental and continually acquiring knowledge while building a business.

Do you have a target net worth you are trying to attain?
I honestly do not have one in the long term. I do not like to place limits on myself. We will have to see where the journey leads. I tend to want to enjoy the journey.

How old were you when you made your first million and have you had any significant behavior shifts since then?
I recently reached the million mark a few months ago.

What money mistakes have you made along the way that others can learn from?
The biggest money mistake I have made was falling into the trap of high yield stocks with a terrible balance sheet (too much debt on the books).

What advice do you have for Finance Savant Money readers on how to become wealthy?
Focus on what you are really good at. The wealth will follow.
Future
What are your plans for the future regarding lifestyle?
I do not expect my future lifestyle to change dramatically. I will probably purchase a new car using the proceeds of my gains from some of my investments.

What are your retirement plans?
At this point in time, I am not particularly sure. I hope to be doing something that I have a lot of passion around similar to what I am doing now.

Are there any issues in retirement that concern you? If so, how are you planning to address them?
There are no issues that concern me at this time. Some might mention social security but honestly, I have no concerns. I could retire right now if I wanted to but what would be the fun in that?
Miscellaneous
How did you learn about finances and at what age did it ‘click’?
It probably clicked for me when I was 18. My dad bought me shares of a company on my birthday worth $250 at that time and I added in an additional $500 over time. I ultimately sold those shares for $1,760 after 10 years of having it.

Who inspired you to excel in life? Who are your heroes?
My heroes are my parents. They are really good people who have been very caring as far as I have been alive.

Do you give to charity? Why or why not? If you do, what percent of time/money do you give?
Yes I do. I recently made a donation to the Arc Westchester Foundation. It is a foundation for children, teenagers, and adults with intellectual and development disabilities. I also volunteer my time with United Way at various food banks.

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?
Yes I do. It should be a while before I “pass away” but I expect to have a detailed estate plan before doing so.
                TRACK AND MANAGE YOUR MONEY USING PERSONAL CAPITAL

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