Here's the latest in my series of six figure interviews, discussions with everyday people who have grown their incomes to at least $100,000 annually.
My questions are in bold italics and their responses follow in black.
Let's get started...
Tell us a bit about yourself (age, marital status, kids, where you live, etc.)
I am 43 years old, happily married and have 5 children (elementary to college). My wife has been a stay at home mom since our first child was 18 months old. We live in the Intermountain West.
What do you do for a living?
I’m a financial controller for a $100 million dollar division at a software company.
How much do you earn annually?
How does this amount break down (salary, bonuses, etc.)?
My current Salary & Bonus is approximately $150,000. I have also developed a side income of $20,000 per year. The side business is quite flexible with minimal time requirements.
Do you receive any additional compensation/benefits from your employer (401k match, stock options, etc.)?
I receive a small amount of 401K match (2% of my salary/bonus)
How long have you been working?
I have been working for 18 years.
How long have you earned at least six figures?
What have been the key steps you have taken that have allowed you to earn this level of income?
My income level is a result of three key steps. The first is receiving my Master’s Degree in Accounting. I was completely focused in college and graduated with my Master’s Degree in 3 ½ years without any debt. I chose a degree which would provide a solid income potential without exorbitant tuition expenses. I paid my way through school and had three major incentives to earn a high GPA.
1) The better grades I earned, the more likely I was to continue receiving scholarships. Being married and earning $7 an hour part time required to receive as much tuition assistance as possible.
2) The Master’s program was very competitive and I knew I had to do well in my undergraduate program to get in. Over 95% of MAcc graduates received a job offer from the “Big Four” Public Accounting firms before they graduated.
3) The city I wanted to work in was very competitive.
The second step was landing a job at a “Big Four” accounting firm and working hard for five years. My salary wasn’t extremely high ($30K to start) and I had a few offers after a couple of years that were for much more money but I decided I wanted to have at least five year’s experience at a public accounting firm. Be careful early in your career to make short term decisions. I might have given up $10K in salary for three years, but the extra experience I gained has given me close to $50K per year in salary for the last 10 years.
The experience at the public accounting firm paid off and I received 10-20% annual raises. I waited for not only a higher paying opportunity to come along (50% raise), but also for a job position I would enjoy.
The third step in growing my income was constantly improving processes and recommending changes bringing value to my current company. Although I may get teased at times for being a “bean counter”, I know company leaders value real dollar savings over hypothetical suggestions. Being a trusted financial advisor brought many opportunities to be promoted from within my company.
Which of the following career advancing strategies did you employ (if any) and which were most effective: a. Doing well within your current company and being promoted. b. Jumping around from company to company always seeking a higher salary & responsibility. c. Entirely changing your career path from a lower earning field to a higher earning field (going back to school, etc.).
Definitely option A – Doing well within my current company and being promoted.
What are you doing now to keep your income growing?
My income from my current position has minimal growth. I’m now at a point where I would need to move and/or travel extensively to be promoted further. I’m very comfortable with my current earnings and the work life balance it affords me and my family.
Over the last several years I have developed a side income which generates approximately $20,000 per year. I’m able to spend a minimal amount of time in this business and the time I need to spend is very flexible (i.e. when I have spare time). I also view this business as a hobby.
The business required having cash up front and knowledge of an inefficient market. I think there are many opportunities to earn a descent side income in hobbies where have expertise. Someone may make $100 on a transaction with you and instead of complaining and whining, figure out how you can earn even more money than they do!
What are your future career plans?
I enjoy coming to work each day and plan to continue working into my 60s. Once my kids are through high school in the next 10 years I will probably be more willing to take a position that would require more traveling. Currently I’m pretty content in my current role. I’m able to work out 3-4 times per week during lunch at our company on-site gym. I’m also able to coach several of my children’s sports teams in the evenings which I really enjoy.
If the stock market does extremely well over the next 10-15 years, I could see myself becoming a high school teacher to wind down my career.
Have you been able to turn your income into a decent net worth?
I believe we have a decent net worth. Our current net worth is $750,000 with $330,000 in 401K and Roth accounts, $80,000 in cash, and $340,000 value of our home less mortgage.
Why or why not?
Up until we were 40, we saved approximately 10% of our income into retirement accounts per year. During that same time we allocated a larger share of our income towards our home (down payment, finishing basement, yard, etc.).
Over the last three years we have saved around 20% per year in retirement. We have allocated a majority of the income from the side business towards retirement savings. With increased savings coupled with a strong market, we have seen substantial increases to our retirement accounts.
We also pay an additional $7K per year in principal payments. We have a low 3% rate on our home but still plan to pay our mortgage off early.
Our original goal was to be Millionaire’s before we turned 50, have $3 million in net worth before 60, and $4 million before retirement. We now feel those goals are reachable sooner and plan to have at least $5 million before we retire.
Obviously our net worth would be higher if we had fewer children and my wife worked outside the home. Our children provide us with so much joy and fulfillment that the alternative is something we never would have considered in the first place. Also, having my wife be a stay at home mom with a larger family makes sense in many areas
What advice do you have for people wanting to grow their incomes?
Study and work hard in school. Remember first impressions at your job are critical. First impressions may take a year to make. Every time you get a new boss, you need to once again focus on making a great impression.
Last but not Least – BALANCE your life! Don’t fly through your career that you neglect your Spouse, Family, and Health. One of my bosses making close to $400K per year had to retire at 60 due to controllable health issues. He passed away two years later. Another boss making close to $500K per year has dealt with stress and depression challenges. I know of too many people focusing primarily on their careers and are now divorced. Obviously money isn’t the driver behind marriage decisions, but divorces can derail financial goals in a hurry.