Welcome back to the millionaire interview series. I started this series to get inside the heads of actual millionaires and see what they did to get there. It really matters who you get your information from so I thought it best to go out and find millionaires we can listen to.
Today’s guest is Mark from TheRetirementspt. Mark is 65, married and has two adult kids. While Mark is currently at the typical retirement age, he became a millionaire much earlier in life! Like everyone, Mark has an interesting, unique story and there is some great, actionable advice you can glean from this interview.
What is your net worth and what does it consist of? (Is it in stocks, real estate, something else? Do you currently have any debt?)
I have no debt. I don’t believe in debt. In fact, I have never paid a credit card finance charge. That would be anathema to my phiosophy.
For a detailed budget breakdown, you can check out this post.
At what age did you become a millionaire and how long did it take?
Around the age of 39. I began investing earnestly around the age of 29. So, I would say it took me ten years.
Tell us a bit about your childhood, where are you from, what were your parents like? Did they teach you much about money?
I learned finances myself. I am an Accountant by trade. I have a neurological disorder but I wasn’t going to let that define me nor was I going to live in poverty because of it, but it made me realize I needed to plan my financial life.
I have 13 siblings. My mother was a stay-at-home mother. My father never made a lot of money. He was the first in his family to go to college although he never finished his last year of college. He was an Engineer at IBM.
Although my father didn’t make a lot, we never went hungry.
What I do remember is my father was a product of the Great Depression. His dad died while he was in high school. This gave him a strong work ethic. He never trusted the stock market but he did like Real Estate.
At his death, his estate was valued at a little over a million dollars mainly due to the one property he kept when he sold to move to the town I grew up in Los Gatos.
What my dad taught me and mainly by example was the value of Real Estate and the ravages of inflation.
How did you learn what you know about finance?
I learned finance from my background in Accounting, School and reading books and listening to every money talk show imaginable, and making plenty of mistakes along theway.
What is the best advice you’ve received about money?
The effect of compounding. If you understand the time value of money and how compound interest works you are well on your way to creating wealth. Understanding the time value of money allows you to understand how to beat inflation.
What is the worst advice you’ve received about money?
The worst advice I have ever received is that there is some magical trick to timing the market. I actually escaped the dot-com crash by following a newsletter. I thought I was a genius, I thought Bob Brinker, the author of the newsletter, was a genius.
The 2008 crash and subsequent bear market brought me back to reality. I totally missed that one.
Did you go to college? If so, where and what was your major?
Yes, I graduated from San Jose State University with a bachelors in business with a concentration in Accounting and an MBA from Golden Gate University in Management.
What is your career story and are you still working?
I am currently retired. I was forced to a retire at the age of 40 due to my disability. I was an accounting manager in the Tri-valley area of Livermore, CA for a medium size computer company with 500 million dollars in sales.
Are you happy with your career choice? What would you have done if you had to do something else to make a living?
Hehe when I first stepped into an accounting course with a friend, I told myself I would never graduate in this. It is so boring. I was majoring in languages at the time. I speak Spanish and French.
The next thing I knew I graduated in it. I changed my major when I realized I needed a job and languages was not going to get me a job. Moral – like any investment, when you invest in yourself, make sure there is a good return.
What has been your average annual income up to this point?
When I left the workforce I was making 65,000 dollars a year. In today’s, that would be in excess of 100k. If I were still in the workforce, my income would have approached 200K based on what the employees who worked for me are making. I estimate my disability cost me 3 million dollars in lost earning power.
If you’re married, what has been your spouse’s annual income up to this point?
My wife makes 90,000 dollars but will soon retire too.
What was your average savings rate from the time you started making money until the time you became a millionaire? (roughly speaking)
I saved about 40% of our income. My intent was always to live on one check.
What was your spouse's savings rate?
We combined the savings rates. We never looked at our savings rate individually.
What is your average annual spending?
I calculate my average annual spending between 90-100K.
Have you had much debt over the course of your life?
First car, and a mortgage. Always kept my mortgage way below what the bank would allow usually ¼ of my take home pay, and I paid my mortgage off in ten years.
What has been your investing strategy?
- Stay out of debt.
- Max out all tax deferred vehicles.
- Take advantage of all employee programs like stock purchase plan, paid education.
- Buy individual securities and/or index funds.
- Don’t try to time the market although there are times when lowering equity exposure is prudent.
What was your best investment?
A duplex I purchased with my brother. He approached me and wanted me to buy a duplex with him. He would occupy one side, I the other. It was owner financed and a 6 year loan interest only balloon payments at the end of each year.
I had not yet graduated college. I was earning 1,000 dollars a month as an accounting clerk in the early 1980s. My wife was a recent immigrant from Nicaragua and she was working temporary as a secretary.
We took the risk and it turned out to be a great investment. Sold it at the end of the six years for a 40K profit. Used it as the down payment in my current residence.
What was your worst investment?
My worst investment was Enron. Yeap I did no due-diligence. Bought because everyone was buying it. I invested 10,000 dollars and lost 10,000 dollars ouch.
What has been the average rate of return on your investments?
Are you currently trying to accumulate more wealth or are you done with that phase of life?
Well I am trying to accumulate based on what I already have but I will stop contributing this year when my wife retires. That is the plan. We shall see how it goes.
What would you have done differently with your finances if you could go back?
I would take on more risk, started earlier and spent more on my education.
What was the biggest roadblock to becoming a millionaire?
Never thought of that. I would guess it would be not having started earlier, taking my time to graduate, everything that slowed down the process.
What is your favorite thing that you’ve done with money in your life?
Traveling to Europe and having the wherewithal to help my kids when they need it.
Has giving money played a part in your finances?
I have always given when I see a need to my church or to people I have found in need,
Do you plan to leave an inheritance when you pass or where do you want the money to go?
Yes – however, in my old age if my kids throw me to the curb he he, then I may think about it. I have leverage ha ha.
Do you think anyone can become a millionaire today?
Yes. it takes discipline and patience.
What’s you’re one piece of advice you would give to someone trying to become a millionaire?
- Invest in yourself – Education is the key. your earning potential will create wealth faster than anything else.
- Start early.
- Stay debt free. Only debt should be a mortgage and maybe first car.
- Invest at least 20% of your income.
- You get a raise, use it to pay off debt or invest.
- Be disciplined in your savings strategy.