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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.
This interview took place in August.

My questions are in bold italics and her responses follow in black.

Let’s get started…

OVERVIEW

How old are you (and spouse if applicable, plus how long you’ve been married)?

I am 38, husband is 40.

Together 15 years, married for 11 years.

Do you have kids/family (if so, how old are they)?

We have one child (8).

What area of the country do you live in (and urban or rural)?

Southwestern US, urban.

What is your current net worth?

~$1.2 million as of July 2020

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?

  • Home: $350k (worth ~$700-750k, owe $350k)
  • My Retirement: $350K
  • His Retirement: $270k
  • Investments (mostly Vanguard, also HSA, 529): $150k
  • Individual stocks: $15k (husband’s “play money” to take on more risk)
  • Cash: $100k
  • Auto: ~$17k (2 paid off cars)

Only debt is our home and in our HCOL area. I’m proud of our decision to buy a house that “cheap” (paid $550k almost 6 years ago). We have adequate amount of space in a decent enough neighborhood and location has been great, as traffic can be a nightmare (at least pre-Covid). Not making payments on $1M+ mortgage, like many of our friends and colleagues, has been very beneficial.

Started 529 plan earlier this year and plan to contribute $1k/month. Both husband and I paid our own way through school so feel it is important to pay portion of child’s future tuition but not necessarily the entire amount. Our thoughts may change over the next 10 years.

EARN

What is your job?

Scientist in Big Pharma, 10 years out of PhD program.

What is your annual income?

Projected to be ~$270k for 2020.

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?

  • 2010: $32,844
  • 2011: $76,378
  • 2012: $319,549
  • 2013: $99,246
  • 2014: $153,937
  • 2015: $185,239
  • 2016: $172,295
  • 2017: $196,562
  • 2018: $202,582
  • 2019: $199,830
  • 2020: $270,000 (projected)

I attended graduate school 2003-2010 which sent me into the work force at a very bleak time in history. A classmate corresponded regularly with his friend working at Lehman Brothers circa 2008 and I remember us reading these email updates with despair. I had zero money at this point in my life so didn’t really think at all about investments or retirement accounts losing money and was thankful to be a renter.

Graduates from my Ivy League program had multiple job offers just a few years prior and that was far from my reality. During last 2 years of schooling, I applied for close to 200 jobs in a wide range of industries and locations that produced < 5 interviews. I ended up cold calling some small companies in areas of the US that I wanted to live and finally found the first job. Hallelujah! Fortunately, this set me up on a great path, both professionally and financially. Salary at my first job ($75k) was much lower than I ever expected but has increased well over time.

That is not a typo for 2012 but the result of my small company unexpectedly (to the employees at least) being acquired by a much larger company—I accepted a job at the big company and we were given a large sum of money for moving and also our virtual stock options were executed during the sale. This was the most money I had every seen in my life!

Also gave husband and I the opportunity to pay off the rest of our student loans and at this same time, I gave birth to our child. This was a significant moment in time for us as we didn’t really have any options except to make the move to the larger company on opposite Coast (very thankful that was an option!) because job market was not good, I was pregnant, we had ~60k student loan debt between the 2 of us and low savings. This moment in time sticks out to me because I realized that when you don’t have money, you don’t have (many) options. Even though everything ended up working out great, I never want to be in a situation like that again, which is why we probably keep more cash on hand than is advised.

My compensation consists of base salary plus bonuses, which partly rely on stock prices—this is the reason for the little bit of up and down over last few years.

I was promoted in early 2020.

What tips do you have for others who want to grow their career-related income?

For me, getting the PhD was absolutely necessary for my career trajectory. And I am very happy to have gone straight from undergrad to grad school with no gap years. But don’t get a degree if your desired job doesn’t need it. Perceived prestige from letters after your name and/or just not knowing what you want to do career-wise are not reasons to go back to school (and potentially in debt).

Consistently be a high performer. All those increases in base salary and bonuses add up over the years.

Work on your weaknesses. I always try to have something on my plate that makes me a bit uncomfortable—in the past this has included talks at large scientific conferences, leadership training/executive coaching, and a side project that required me to learn a lot quickly in an adjacent field.

Enjoy what you do. The worst part of my job is the commute (it’s only 15-20 mins and no freeways so not bad at all!). Sure, there are tough moments or really challenging work to do but I’d say 95% of the time, I really like my job, my coworkers, and the bigger picture of trying to discover medicines to help patients. I think this satisfaction allows me to be a high performer because I really want to, not just to make more money.

What’s your work-life balance look like?

Pre Covid: it was actually pretty great for the type of job that I have. See next question for more details but I’m able to work 40-50 h/wk and have time for daily exercise and family dinners. Travel was limited to 1-2 international trips and 1-2 domestic trips per year.

Since March 2020: I never wanted to be a stay at home mom and so this wears on me a bit. I’m working from home basically 100% while husband goes to the hospital few days per week. Add in virtual schooling and it is not ideal. We have not hired outside childcare.

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?

Husband works in nursing and gets paid a very competitive hourly wage. We take advantage of the flexibility of his career—as his wage has increased, he has decreased his hours. Over the years, his annual salary has stayed around $70k but he’s now only working 2-3 days/wk.

Basically this allows him to take on majority of the household errands (grocery shopping, kid activities, car/house maintenance, etc) during the weekdays which leaves the entire weekends available for our family time.

SAVE

What is your annual spending?

$120k for 2019.

2020 will be drastically lower (no travel, childcare, entertainment, minimal driving…).

What are the main categories (expenses) this spending breaks into?

Annual spending (approx) from 2019:

  • Home: $55k (includes extra $17K toward principal + HOA, property tax, insurance) and ~5K for utilities (phones, internet, electricity, water)
  • Kid care (after school program, summer camps): $10k
  • “Food”: $15K (seems high but includes all spending at grocery stores, Target and Costco which isn’t necessarily food)
  • Travel: $14k (important because we do not live within driving distance of any family)
  • Auto: $4k (maintenance, gas and insurance; we own both cars outright)
  • Misc: ~$16K (includes gifts/charity, hobbies, clothes, entertainment)

Do you have a budget? If so, how do you implement it?

When I was in school and also later while we still had student loans, we budgeted carefully. I balanced my checkbook to the dollar.

During the last several years, we don’t have anything written down but we look at past spending to see where things need to change going forward.

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Generally, we contribute to retirement and meet all our expenses from our salaries (minus my bonus). When the yearly bonus arrives, we split between Vanguard, extra mortgage principal, cash holdings, and have purchased cars or larger home maintenance (replaced AC and roof) in cash.

What percentage of your gross income do you save and how has that changed over time?

20-30%

We max out both 401k plans (2 x $19k) plus HSA. From yearly bonus, $20-30k goes to Vanguard.

Started 529 in early 2020 and are contributing $1k/month.

What’s your best tip for saving money?

Choose a partner who doesn’t need to spend much money to be happy!

What is your favorite thing to spend money on/your secret splurge?

Running is my hobby so shoes, clothes, gadgets, races, travel to races, etc. Nothing is crazy expensive—I probably spend $2-3k/year.

INVEST

What is your investment philosophy/plan?

As I started learning more about personal finance, I came across the Bogleheads forum. Using those strategies, we keep things simple, mostly invested in index funds at Vanguard with low expense ratios.

What has been your best investment?

By far, this has been my education.

I went to undergraduate at my large flagship state school and still managed to accumulate ~60k in loans over 4 years.

PhD in STEM at top schools usually is fully funded by the university so I did not have any student loans from grad school. If loans had been required for grad school, I never would have chosen Ivy League without huge financial aid.

My income has grown steadily over last 10 years so the undergrad loans ended up as money well spent.

What has been your worst investment?

No horror stories here about bad real estate decisions or buying up Iraqi dinar when family members tried to get us to buy in with them (we didn’t).

I guess the fact that I didn’t start saving for retirement until I completed grad school (when I was ~28). I simply did not have any money to do it earlier and not also take on more debt. I was paid a small stipend during grad school ($20-25k/yr) which doesn’t go far in Northeastern cities.

Husband started retirement account with first job at age 22 so we weren’t completely at $0 but I definitely felt like I need to “catch up” during my 30s after doing almost nothing in my 20s.

This has been assisted by my high salary which enables us to max out the accounts each year plus my employer provides generous 401k contributions.

What’s been your overall return?

No idea.

How often do you monitor/review your portfolio?

We calculate net worth every 6 months and I look at all the accounts probably 2-3 times/month but there is very minimal tinkering.

NET WORTH

How did you accumulate your net worth?

Majority of our net worth has come from my job. As I mentioned earlier, I’ve worked hard to be high performer at work which has resulted in higher salary increases and bonuses.

We still have multiple areas in our spending that can be cut further to optimize savings but I think we’re doing a good job in prioritizing saving for retirement, paying off our mortgage a little faster, not buying expensive toys or cars, and being intentional with most of our spending.

Including:

  • We own 2 compact cars in a world where seemingly everyone needs an SUV/crossover
  • Public school for kid
  • Bought house in lower income neighborhood (not low income, but none of my colleagues live here)
  • Have no interest in expensive clothes, jewelry, home furnishings
  • I don’t drink coffee! And don’t have another daily expensive habit

What would you say is your greatest strength in the ESI wealth-building model (Earn, Save or Invest) and why would you say it’s tops?

Probably in that order: Earn, Save then Invest.

Even living in a HCOL area, my salary is still a lot of money! When I was in school making $20K/year, I barely had enough to eat, let alone go to the dentist.

Increasing my compensation has made a huge difference in my life.

What road bumps did you face along the way to becoming a millionaire and how did you handle them?

Salary at my first job out of school was quite a bit lower than expected. I definitely had doubts that the 6+ years of intense grad school were worth it (financially, mentally).

Being a high performer has helped quite a bit in creating opportunities for promotion but there was definitely some luck involved when my first company was bought and I didn’t lose my job.

What are you currently doing to maintain/grow your net worth?

Husband and I continue to work and continue to increase our savings rate.

There has been lifestyle inflation since my grad school years but we’ve worked hard to keep life more minimal than our peers (without completely sacrificing some key areas of our budget like travel).

Do you have a target net worth you are trying to attain?

Not really. Both husband and I are relatively young and like our careers.

We don’t envision staying in our current city indefinitely and would save a lot of money living in most other places.

How old were you when you made your first million and have you had any significant behavior shifts since then?

This was less than a year ago so 37.

If anything, it has made me want to learn more about Investing.

And also think more about where are the “better” places to keep our Savings.

What money mistakes have you made along the way that others can learn from?

I didn’t negotiate at all when I received my first job offer.

This was 2010 and I had been searching for a job for a long time so I felt like I had no leg to stand on. I remember asking my grad school mentor about it and he also advised me not too. I have no idea what might have happened. Now that I’ve been on the other side of the table multiple times, I’ve been able to see the types of things candidates ask for and what we’ve been able and willing to give so I feel much better prepared for future situations.

Not buying term life insurance before I was pregnant. I had the medical exam conducted while pregnant and my rate ended up being surprisingly high. After baby was born, we tried to get rate reduced but that was unsuccessful.

What advice do you have for ESI Money readers on how to become wealthy?

This is very much a learning process for us and we are early in the adventure. I have shared our experience but don’t really feel like I’m qualified enough to give advice. There are a lot of good resources out there!

I wanted to share my story to show that yes, there are women breadwinners with kids out there and yes, women can be in control of their household’s finances.

That consistent hard work, both through Earning and Saving, results in an increasing net worth even if less knowledgeable on the Investing part.

I guess I feel like this is the slow and steady approach. 10 years ago our net worth was negative and now our net worth is >$1M.

FUTURE

What are your plans for the future regarding lifestyle?

Husband’s career would allow us to live anywhere in the US for short or long periods of time and he can work flexible hours with healthcare benefits.

Current dream is for me to continue to work until I am 50-55, then cutback/retire while husband continues to work part time wherever we want to live.

Goal would be to balance retiring a bit early with also continuing to enjoy our time to get there (especially since we like and value our careers).

What are your retirement plans?

We would love to explore the US more thoroughly, especially the National Parks and remain active (running, biking, golf, hiking).

Are there any issues in retirement that concern you? If so, how are you planning to address them?

Same answer as everyone: healthcare.

I think the pandemic (and several months long stay at home orders in my state) re-confirmed that my husband and I really enjoy each other’s company so at least I don’t expect that to be an issue!

MISCELLANEOUS

How did you learn about finances and at what age did it “click”?

My parents taught me to get by with very little. There were no nice clothes, nice toys, nice house or vacations growing up. But we always felt secure in having food (even if it was Hamburger Helper and canned pasta) and roof over our head. They worked at low/modest paying jobs but always paid bills on time.

During the 80’s, they bought several rundown rental properties in a bad area. Between never-ending repairs and deadbeat tenants, they taught me I want nothing to do with being a landlord!

Financially, what I learned most from them, and it may sound harsh, was the type of marriage that I never wanted to be in. Even in middle school, I was aware of the household inequality. My father worked the primary job that paid a little more than my mom’s, but she also worked full time AND did everything for 4 kids AND did all cooking, cleaning etc. Yet my dad controlled the finances so she had to ask for money for anything (even groceries) while he would spend without her knowledge.

This led to a lot of their fighting over my childhood years (at least that was my perception) and my mom always lamented how she couldn’t or didn’t have anything without my father’s permission. So. This greatly affected my perspective on future relationships.

My husband and I have separate credit cards and accounts—we talk openly about purchases, review our account balances together often and have similar saver mindsets but each have the freedom to spend and build our own credit. It is our money but set up in a way that we would be financially ok independently.

For many people, money is not spoken about openly. When I started my first job, my new boss was buying a home and was very transparent with me about expenses during the whole process. It was the first time in my life than an adult revealed so much financial information and it was a pivotal moment for me in thinking about finances.

Who inspired you to excel in life? Who are your heroes?

This is a surprisingly hard question to answer because in some ways, it feels so ingrained within myself. I can point to several math and science teachers from middle school and high school that recognized my nerdiness, challenged me and believed in me until I believed in myself.

And there are several scientists/doctors in my scientific field as well as adjacent fields who are crazy smart and serve as amazing visionaries and leaders—their overwhelming desire to help patients is really remarkable. Many people see ‘Big Pharma’ as evil but there are a lot of passionate scientists who give their blood, sweat and tears to move science forward to benefit society.

Do you have any favorite money books you like/recommend? If so, can you share with us your top three and why you like them?

This feels a little embarrassing to admit but I haven’t really read many.

I initially discovered Personal Finance by watching Suze Orman and Til Debt do us Part (on CNBC) years ago.

Then I came across blogs by White Coat Investor and Physician on Fire more recently—even though I am not an MD, many of their teachings apply as I had years of education with no money, a late start in life (financially speaking) and eventually higher than average earnings. I enjoy the information but also the bluntness of their voices.

From there, I’ve found multiple other sites linked from their blogs, including the Bogleheads.

Do you give to charity? Why or why not? If you do, what percent of time/money do you give?

During my HS and college years, I volunteered with several organizations routinely (because I had no money to give). During grad school, I had no time or money.

For the last 10 years, we’ve donated regularly to a few organizations like local food bank and patient advocacy groups.

As my kid is getting older, I would like to volunteer someplace kid-appropriate with them regularly but am not currently.

Some of what I consider our charitable giving (although others may classify these just as gifts) is toward needs within our extended family. Husband and I are in better spot financially than our relatives so try to be generous without insult. Includes contributions to nieces/nephews college funds and stocks for Christmas, supplementing our siblings a little through job losses and parents through medical issues.

Also, we are generous with kid’s school and classroom. We gave ~$6k last year.

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?

Honestly, haven’t thought much about this. No one in my family or husband’s family has ever had enough money to leave an inheritance!

I have one child so at this point they would get it all.

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