Being a black belt in finance means to have a net worth of a million dollars.

Just like a martial arts dojo, Your Money Geek is a place where we can learn about personal finance and eventually become financial black belts ourselves. In this series, we get to hear the stories of actual millionaires and see what it took for them to get to that level.

Today’s guest is Adam from Adam is 37, lives in Salt Lake City, Utah, and is a second-degree black belt (net worth of 2 million).

Now for the interview:

Give us the break down on your current net worth. What is it invested in and do you have any debt? 

I keep it simple. I have about $2.1m invested in Vanguard Index funds. No real estate or other significant assets other than a used all-wheel-drive vehicle we hope to use for many years.

Although real estate can be a tremendous boost to assets, I realized I don't especially like working on a house and would rather work on a website instead.

Your Story

How was your childhood? Was your family wealthy, middle class or low-income? 

My family was middle class, and I never worried about the essentials – housing, food, supplies. While we didn't have money for international travel, we chose camping road trips instead and had the benefit of seeing much of the country from an early age.

At times both my parents weren't working, which meant making do with less.

Did you go to college? 

Yep! I went to a state school, the University of Central Florida, from 2000-2005 on a bright futures scholarship. In Florida at the time, anyone who graduated high school with a 3.0 weighted GPA or higher was eligible for a 75% discount on their in-state tuition – an amazing deal for sure!

I had a 2.9 GPA in high school, but luckily it came out to a 3.8 weighted. That meant my college cost roughly $250/semester for tuition. It's an insanely great deal

My parents also paid for all of my college expenses for the first four years of college. That's something I'm forever grateful for, as it gave me time to experiment and learn what I wanted to do during that time.

In actual terms, that came out to about $1,300/month in help from them when you include tuition, books, apartment, car, and food. I shudder to think what the price of this is today.

My major when I started was “Undecided”, but I knew I wanted to do something with computers. I quickly changed to Computer Science, which lasted about a year before hitting Physics II and Calc II.

After that, I transferred over to “Management Information Systems” (which has to do with managing tech teams). After taking Financial Accounting I realized that wasn't for me and switched to Information Technology which I stayed in until the end.

I took most of the classes for a Digital Media minor since I loved making websites, but didn't take everything needed for it.

What is your fighting style? (Career path from first dollar ever made to present). 

My first ever paid job was working at a local startup when I was 17 that created educational videos about consumer applications – Microsoft Word, Excel, etc. At $9/hr to be indoors doing tech work in high school, I loved it!

Throughout high school and college, I started making websites for fun – learning PHP, databases, HTML, CSS, and JavaScript. I lived in Florida (St. Petersburg and Orlando) which isn't exactly a tech hub.

I sought out amazing companies to work for and did everything I could to find a way in. Usually, that meant learning what their tech stack was and becoming an expert on it before even applying for an interview.

Every job I got from college on was done using this method. I'd meet people at meetups, learn about the company, read books and write programs to become proficient in the technologies and keep my ear to the ground for a job there.

For me, this paid off big when a company I worked for was acquired by a larger company, which then went public. While salaries are lower in Florida than Silicon Valley, this windfall made up for it in a spectacular way. That one event resulted in about HALF my total assets – a little over $1m. 

Here's the simplified version from graduating college:

2005: $37k/yr as a software developer at a local company

2007: $52k/yr as a senior developer at a local large company

2009: $62k/yr as a software developer at a local startup

2011: $70k/yr as a software developer/product owner at a startup

2013: $75k/yr as a software developer/product owner at a startup

2015: $90k/yr as a software developer/software manager/team lead as a large startup

2017: $130k/yr in a bunch of roles (moving around within the same startup) including Technical Director, Course Director, Product Director, Product Manager as a large startup that was going public

2019: Retired from work 🙂

Would you recommend people to pursue the same career path? Would you choose a different job if you could go back? 

I absolutely love software development as a career. It's been fulfilling, challenging, rewarding and with so many options available.

Within development there are so many different paths you can take! You can work on-site for a small company and get some experience. Find a startup (local, or in a more startup-friendly city).

You can work for a massive company and rake in the stock options (Amazon, Google). You can work remotely for a company and travel the world or be a digital nomad. There are many options.

The one I wouldn't recommend is relying on a startup being acquired or a company going public. It worked out well for me, but it's not a path that's easily reproducible.

What is reproducible is finding companies that you enjoy working on, and finding people who love their jobs. If you join those companies then even if there isn't a big payout at least you'll love the journey.

Have you had any side hustles? 

Tons! For me, those are generally in the form of websites where I spend a ton of time creating something, launch it to crickets then move on. I counted 22 such sites in the last 18 years I've worked on.

Side hustles for me have been more about learning and creating for fun, while my day job has been my source of income. I'm always in awe of people who can make money through their own initiative, even if I've struggled with it.

If you have a spouse, how have they contributed to your net worth? *

I've been with my wife for 13 years and married for 2 years now. Having two incomes helped to save a higher percentage of our income during our earning years.

Since I retired in December 2018, my wife decided to continue working which means we have health care covered!

How old were you when you became a financial black belt? 

I track a number of things in a spreadsheet monthly – income, spending, total net worth, investments net worth, 6/12 month moving average on spending and savings rate. According to that, I had $1m in April of 2017 when I was 35.

At what age did you start seriously saving money? 

Just 3 months after I graduated college (at age 23) my mom passed away unexpectedly. The next year was a whirlwind – both emotionally and financially.

Aside from the heart-wrenching process of grieving for a parent, I also inherited about $100,000 to my name with no idea what to do with. I talked to an investment representative at my bank and they put my money into a series of index funds.

I now know that these were high-fee funds that the advisor received a commission for. Learning that was eye-opening for me, and lead me to learn everything I could to not be taken advantage of again.

Who was your financial sensei? (Most influential person/source of information in your financial life). 

The Bogleheads Guide to Investing is an absolutely amazing book. I recommend it to everyone I can. It taught me the importance of diversification, index funds, tax-efficient fund placement and more.

Are you pursuing FIRE (financial independence/retire early)? If so, how much money do you plan to retire on and are you going to quit working for money altogether? 

Yep! I FIREd last year at age 36 with about $2.2m saved up and haven't looked back. My wife and I are riiight on the edge of how much we need, since our historic spending is around $80k/yr. For now, my wife is continuing to work, which means we're in great shape.

Mind Over Matter

Do you think psychology plays a more important role than math with finances? 

I'd say it plays an equal part. You reach your FI number without any idea of what you want to do with your life, but then figure it out after. 

Having money buys time to explore that. Another route is determining your life's goal, drives and mission while you're still accumulating wealth, making the transition far easier. It's a lot easier to retire TO something than FROM something.

What was your toughest mental opponent on the path to your black belt? 

Two stand out. The first is making sure my wife and I are aligned in our goals. Having a shared goal impacts everything: budgeting, spending, long-term planning, where you'll live, what success looks like, what you'll do after work. 

I've come to realize you don't need both people's FIRE track to look the same, but there are parts you need to agree on. There are things I spend money on my wife wouldn't and vice-versa.

The other is not becoming obsessed with FIREing as soon as possible. It was nice to daydream about a future without work, but it's dangerous when it was at the cost of making progress today.

There are a lot more financial white belts than black belts out there. How do you think differently than the average person when it comes to money? 

It's easy to get accustomed to higher spending and then have trouble easing it back. In our 20s we didn't travel remotely, we rarely went out to eat, we didn't drink much alcohol or spend much money. That was one of the reasons why we were able to save upwards of 60% of our income at the time.

We do all of those things now, and our spending is a LOT higher – but we can afford it! It's not a bad thing if your quality of life improves, but be mindful of the impact on your wallet.

What does wealth mean to you? Should everyone pursue it? 

Wealth to me means time. Time to do what you want, when you want. That could mean time to spend a day in bed watching Netflix, time to go on a hike on a Thursday, or time to volunteer and get out of the house. Even without FI-level money, pursuing that abundance of time that allows you to do what you love is something I believe everyone should pursue.

Should people follow their passions or just do something practical? 

I'm a firm believer that passion follows proficiency. I fully support following your passion – putting the time in to validate if you really enjoy it and can become proficient to the level you want in it.

I don't believe people should go “all in” on their passion before first trying it out. You shouldn't sign up to be a Piano major in college before you've ever touched a piano because it's “your passion”.

Likewise, you shouldn't make a career change to writing because you enjoy writing but have never made a penny from it. Ease into it and make sure you enjoy it AND enjoy making money from it.

Bonus Round

What’s your weapon of choice? (Favorite money app/tool). 

I'm all about low-fee, diversified index funds from Vanguard. You don't need many funds for broad market diversification either – just a US Market fund, an international fund, and a bond fund.

What has been your favorite way to earn money? 

Working on interesting products with amazing, passionate people. There's nothing better than having a group of talented people all pushing forward on a project, creating something better than anyone could create alone.

What’s your favorite way to use money? 

Food and travel are our biggest splurges. There's not much we won't eat, and love to try new cuisines and explore the world through local restaurants when we can't physically get away. One thing we want to try is slow travel, where we spend months in a single location. I've excited to try that next.

What’s your one piece of money advice to us financial underbelts? 

Focus on lowering your expenses and raising your income. Simple right? One of the best ways to raise your income is to become better at what you do than others in your field.

That can sound daunting, but with even just an extra hour a week focused on improving at your profession, it will add up over time. The more you can become amazing at what you do, the more opportunities you'll have.