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September 25, 2013


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It seems like all of the wealth building factors line up for this couple. Kudos to them.

Totally unrelated to their wealth building but my favorite paragraph:

"Time and mental horsepower is limited. Avoid wasting yours on financial gimmicks like rebate credit cards and switching between high(er) yield checking accounts. The benefits from those are dubious at best, and trying to take advantage of them is mental clutter that you are better off without. Here's a secret: If you're not wealthy, you don't have enough money that an extra 0.5% yield on your savings will matter. If you are wealthy, you won't care about an extra 0.5%."

Nice post- you and your partner have really supercharged your income! You may think about investing in or buying a side business, if you wish!

Thanks #6 -- This is something I've always thought about. In fact, I suspect that retirement for me may involve starting a capital-light business oriented as much toward keeping me busy and pursuing interests as making money.

Excellent post! Thank you for spending the time to put it together.

@Erik -- this is one of my big pet peeves. When I used to read personal finance blogs more, they were always shilling rebate credit cards and high-yield checking/savings accounts.

There were comments by readers who would go through 6 or 7 checking accounts in a year. Let's say the incremental yield was $100 (it would almost certainly be less). Is $100 really worth dealing with that many 1099-INTs at tax-time?

And credit cards -- some people have a 5% rebate gas card, and a 3% travel card, and they use their discover to get an extra 5% back from certain stores in certain months. Then department store cards to get more back on Target or ??? Paying 3 (or 4, or 5) credit cards every month instead of 1? Not worth it! We do use a single rebate credit card; 2% back on everything, with no limit. My advice: Pick the single best general purpose card, and don't use anything else.

And there is a special place in hell reserved for airline mileage credit cards.

I enjoyed this post, thanks for the insight into how you manage your money. Do you have any plans for wills and estates, trusts with no kids to inherit the funds who will be rewarded with all your hard saved money.

I wish these posts would include an estimate of hours worked by the individual or couple per week/month (for those who are not retired). I think it would be useful for perspective.

@Sarah: That's a great point. I bet the answers would be all over the map.

I'd guess that we average about 50 hours/week. Of course neither of us has 9-5 jobs; there are 70 hour weeks occasionally, and sometimes there are a bunch of those in a row.

I've noticed something over the years. Within reason, hours worked does /not/ correlate to success. I'm going to throw out a lot of guesstimates below, so I apologize in advance. But I'd wager the numbers below aren't that far off from reality.

Most white collar workers waste a tremendous amount of time. I don't have hard numbers, but I'd bet that 25% of a typical worker's day is spent on non-work activities. Another 50% is wasted on work activities that don't really accomplish much very efficiently. And the last 25% is actually productive, though usually not very.

Here's the problem:
Working longer hours doesn't really help that person. Working twice the number of hours will only increase his output perhaps 50%, *if he's lucky*. More likely less than that.

But in professional "creative" jobs (engineering, law, accounting, programming, etc....) working more effectively can increase your output tremendously.

Definitely enjoyed reading this interview, particularly the "advice" section. I could relate to a lot of the information presented given my thought process seems similar (I'm in IT, so a similar "engineering" mindset).

Wanted to point our your statement that wealth can be accumulated in the corporate world. I think this often gets de-emphasized in the personal finance world in lieu of entrepreneurship (including in the Millionaire Next Door).

Thanks for sharing your story.


As I read your story and numbers, am I correct in assuming you will receive no deferred benefit pension? (Hence the large retirement account) Also, I like that you have a large after-tax account....those deferred accounts will be difficult to access until a certain age and/or you wish to use a 72t to dole it out earlier. Looks like to me your issue in retirement will also be taxes.....

@JTS: Agreed, I suspect the entrepreneurial bent comes from those whose background lies in other fields. Engineers are (generally) fortunate to have high-paying careers at large companies.

@Deserat: That's correct. Neither of us will receive a pension. One advantage of deferring taxes is that we can engage in geographic arbitrage -- by moving to a lower tax state after "retirement" (Texas, I guess?), we can decrease our state tax burden.

I'm just in awe of where you are in your life to think that I am the same age. We are doing well and have similar degrees to you. However, we chose the wrong industry. You have certainly climbed high within your companies.
Good Job! We will continue being super savers just like you.

I liked this post a lot, and agree that corporate jobs can be rewarding but may take many years to develop/vest.

One thing that that I'd like to commend you for is that you list charity as 20k/75k of your spending (exclude taxes and savings.) I think this is a great percentage.

For me, I'm trying to drive to 10% of my spend (ex tax and svgs) but you have truly set a tremendous example. I would advise you to be giving appreciated securities for this (even my church takes stock!).

@M: Yes giving appreciated securities is great advice. It's marginally more complicated, but a great way to get a bit more out of one's giving.

@Shanieral: Какая прекрасная история!

@Mel: Sounds like you're doing the right things as well!

@EL: Great question about the wills. We're leaving everything to about a dozen charities. I have considered setting up a 'donor advised fund' and putting money in there, but honestly have just been too lazy to look too much into it.

Thank you #7 ( and #1- #6 too).

This series is great.

FMF-- I appreciate how you think outside the box and come up with these great vehicles that allow me (us) to learn.

Hey #7--what language are you and Shanieral speaking? I feel a bit left out. Maybe her comment was the best one yet and I will never know !

And could somebody translate for the rest of us?

JNEW: Definitely agree with your sentiments. I have enjoyed reading Reader Profiles, Millionaire Interviews, and am looking forward to the Six Figure interviews.

Also, Google translate is your friend. :o)

Shanerial wrote:
"There is a beautiful legend that once there was a perfect being, and then it was divided - a man and a woman.

And if the two halves of the lost suddenly meet, there will be a full merger (happiness, understanding and love attached).

And that poor half-hearted soul (represented by men and women) are searching for their missing part.

But somehow find a quarter or 1/16, and sometimes one hundred and twenty-eighth."

#7 wrote back:
"What a great story!"

#7: not sure if you actually speak Russian, but well-played with the reply.

@JTS- Thank you. Google translate IS my new friend !

Many years ago my wife and I were sitting around the table in the Mess tent chatting while we were on a trek in the Annapurna range in Nepal. We were in our 50's and there was an older man in his 70's that was a university professor. This professor said, "Why don't we go around the table and each of you tell us, "What is the most important thing in your life?" After we had all said our piece he replied "You have it all wrong." The most important thing in life is "To love someone and to be loved back by that same someone."

After discussing it we realized he was right and our mostly materialistic replies were wrong. Now, after a 57 year marriage I realize the wisdom of his statement. What good is money if you are not in a very happy relationship.

I love the advice to have your paycheck deposited straight into a MM account. I'm definitely going to have to give that a try.

Постоянно меняю форумы, но нигде нет даже сочувствия…может, хотя бы вы подскажите, как быть?

И быть ли вообще…Дело в том, что уже второй год, как я познакомилась со своим любимым. Мы живем в разных городах и возможности иметь какие-либо нормальные отношения у нас нет. Я с самого первого дня, когда его увидела начала испытывать симпатию к нему, он тоже не остался в долгу – искал возможность лишний раз встретиться, поговорить и т.д. В общем, мы начали сближаться. Но пришла пора мне уезжать. Я не сильно переживала, только потом, приехав домой, поняла что потеряла. Утром, проснувшись, я осознала, что у меня нет ни его адреса, ни его телефона, да и работа, на которой он трудился (мы познакомились именно там), довольно таки непостоянна, так что мы можем больше никогда и не увидеться. Началась депрессия, посыпались проблемы, все стало валиться из рук, да и с друзьями я перестала находить общий язык. Я чувствовала себя неполноценным человеком – без него. Через несколько месяцев, когда все более менее утряслось раздался звонок моего мобильного. Это был он. Не знаю, как он нашел мой номер, может общие знакомые помогли. Мы говорили не о чем. Но мне было так хорошо. Он, похоже, тоже остался рад, мы просто говорили, наслаждаясь голосами друг друга. И все. Потом снова и снова. И так целый год. Я понимала, ничего серьезного, он просто считает меня приятным развлечением, т.к. потом разговоры пошли не на детские темы – доходило даже до совместной мастурбации по телефону: он описывал, как я ему нравлюсь, что его возбуждает, говорил, чем он занимается сейчас и все в этом роде. Но я забыла о гордости. Да, я не унижалась, частенько устраивала ему «Полет с небес на землю», но остановиться тоже не могла. И снова целый год я была для него чем-то вроде службы секса по телефону. Мне было наплевать, только слышать бы его голос. Прошло нес-ко мес. И мы встретились. Он знал, что у нас есть лишь день, а потом я уеду, он был ласков и заботлив, я таяла, общаясь с ним, и он тоже наслаждался моим присутствием. Я столько готовилась к нашей встрече – выглядела изумительно, он постоянно говорил мне об этом, но как только пришла пора прощаться…мы стояли обнявшись, я сказала ему – ты поцелуешь меня на прощанье? Тут он переменился в лице, опустил взгляд, замолчал. Я спросила, может что-то не так, но то, что он сказал, не дает мне покоя до сих пор (мы не виделись уже пол года). Он поднял глаза и посмотрел на меня, сказав, что будет хуже. Я обиделась, спрашивая, кому хуже, ведь ты мечтал столько времени обо мне, о ночи со мной, и вдруг даже не хочешь поцеловать? Он ответил, что хуже будет мне. Что я не права и скоро это пойму, что не нужно ничего усложнять, просто не стоит…я нравлюсь ему, я знаю это, женщины умеют чувствовать мужскую симпатию, да и он не раз искренне говорил об этом, но те слова…они до сих пор мучат меня…почему он так переменился? Разве я попросила его о чем-то серьезном? Не знаю, как быть, когда кончаются слезы…

Preeeetty sure the Russian people are spambots.

Thanks for sharing, #7.

Great tip on dividing up your income so you only put enough money in your day to day account to cover your budgeted items. It keeps you on budget without having to be pedantic about specifics on a daily basis.

Glad you identified some of the emotional aspects of money management. Often that is missing in this series.

This is my favorite part of this post:

Time and mental horsepower is limited.

So true - something to keep in mind.

Thanks for this post. I found it useful.

From the entire interview, the areas of investment is not dealt with clearly. I would have liked the mention of proper investment areas where the concerned millionaire has invested or is planning to invest. After readng the whole story, it seemed that the person is happy with what he is earning from the work he is doing. That's fine and nothing wrong in that.But it aches me a little bit because that's not what Millionaires do. Though he mentioned about some stock options but still I believe they are from the same company which he is working for. I'm not a skeptic of investment in one's own company. But I would have liked the person to diversify his investment, especially outside his own company, essentially on the ground of Hedging and not Speculative. Just consider the case of the workers and managers of Enron, which winded up overnight despite of being in the top most Forbes List.

@derick: "That's not what millionaires do". Actually I think the whole point of FMF putting on this series is to find out what regular millionaires do. Not celebrity rich people like Kiyosaki, but regular rich people (not that I consider us rich; I don't).

But your point is well taken. Here's a bit more info.

We do not invest in company stock (outside of options of course). Given that our income is tied to our employers' health, we are already /overly/ invested in the company's success. If allowed (it's not), the prudent course would be to short the company stock and invest the proceeds elsewhere.

~60% of our liquid savings, both in tax advantaged accounts and after tax accounts, are in target retirement funds. Another ~20% are in other conservative index funds. ~15% is in cash (money market accounts). ~5% is my 'play account', where I invest in individual stocks.

Our employers invest our respective deferred compensation account relatively conservatively.

This has been our strategy since we started saving. I've always had my account where I've dabbled with other strategies (covered calls, shorting, etc..), but honestly I've at best broken even. We've talked with wealth managers who have tried to interest us in more exotic investments, but I'm not biting.

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