@Emma – that is a great quote and one that echoes the approach we take with our finances. It’s not the number but what it enables you to do with your life. Thanks for sharing.

@ JD – I think I will read this book.

JD, thanks also for sharing this book. It sounds interesting. However, I don’t think you can say it has a small audience – if you only have to earn $100k to be in the top 10% of earners that is achievable for many professions. With the population of the USA at, what 300m? That’s still 30million people. We’re not just talking movie stars here!

This is so true. “Overnight success” is more typically either a) the sudden culmination of factors that have been at play for a long time and are only now paying off, or b) pure luck. The first isn’t overnight, and the second isn’t really success.

The whole overnight success thing is mostly a perception.

My husband works for a private, employee-owned business. We own it and are heavily invested in its success. All profits belong to us the “owners”. Last year was probably the best in history. Because of the economy this year we will be lucky to make 20% of what we made last year. Guess what? Our lifestyle hasn’t changed one bit from last year to this year. Though I have to admit we won’t be saving the amount of money we did in 08, we are still saving and investing.

The only way that is possible is we live as if he only makes his base salary and count the rest as a bonus unlike many who live on everything that comes into the house. You can’t get to where we are by living like everyone else. It takes sacrifice and hard work. So while the economy tanked this year and most of our profits with it we could still sleep at night knowing it really didn’t matter. You can’t count on luck to get you through, you have to put yourself in a position where you don’t need luck.

That being said, “Good luck, Diane”, I know you will make it too.

We started at the bottom. His first job out of college paid us 24.000 a year. Well, it did until everyone took a 10 percent pay cut two months later. We had one old car, a very small townhouse that we rented, no cable and rarely ate out. I was pregnant with our daughter and wasn’t working. This is in the early eighties. Was he making minimum wage? No, but it certainly wasn’t a lot of money either. But guess what? We saved money from that first paycheck and have continued to save. As the years went on the more he made the more we saved.

As far as working at a job that you don’t find rewarding, we’ve been there. My husband took a promotion and moved us across the country. Two years later we realized it wasn’t working and the company wasn’t listening to us. He found another job and we moved on. We are the masters of our own fate.

As far as sounding snotty and smug, I am neither. I have been on both ends of he wealth spectrum. Our friends are solid working class people. They have no idea that we are millionaires and that is just the way we like it. In fact, even our families have no idea of how successful we have become. I am thankful every day for the place we have ended up at. Luck? Hard work? Smart choices? I don’t know but I do know I will never take it for granted.

BTW, it’s the TGIF-attitude that holds most people back from becoming quiet millionaires.

For the folks who consider themselves millionaires, does the net worth include real estate? Or is it only cash and other liquid investments? Just curious.

This puts your husband in a distinct minority. There is a reason the old saying is “Thank God It’s Friday” and not “Thank God It’s Monday.” People in jobs they aren’t exactly crazy about (the majority of us) can still achieve financial independence too, that’s largely a matter of living within one’s means. But not many of us, having been exposed to work, are willing to spend so much of our time doing it that we become millionaires. And since most people obviously don’t *need* to become millionaires in order to enjoy life, few people see the marginal utility in trying to become one.

I think it’s great that your husband found work that he enjoys, that pays well. I have a little dream of a business of my own that I may pursue at some point. Who knows? But most people (remember, the average annual household income is somewhere in the lower $40Ks) would indeed be desperately scraping together their money if they tried to accumulate a million dollars, especially if they had kids. To act like this is a ridiculous idea, frankly, makes you sound snotty and rather smug.

My husband works because ultimately he enjoys his work. Does he work hard? Yes. But he derives satisfaction in running our company and running it well. We are at a place where he could retire if he wanted to but he plans to work until age 60. Despite what some may think one’s life isn’t over at that age!

We are not “desperately” scraping together a million dollars in order to retire. We were happy when we had nothing, we enjoyed getting to where we are now and we are enjoying having “made it”. We are the “Quiet Millionaires”.

My skills and experience are combination of accounting/financial analysis and IT, which lend themselves really well to temporary, hourly, contract-based work. I will have my condo paid off in two years when I’m 41. At that point, being completely debt-free and already having a savings cushion, I can live on approximately half of what I currently make in my full-time job each year. So I’ll be able to take the on-again, off-again approach to work. Work for a few months and stockpile cash, then take off for another cycling tour. Come back home and pick up another work assignment, and start piling up the cash again. That’s not to say I wouldn’t take another full-time job someday – in fact I might just do that for a small stretch at some point, if I got offered something paid really well. But see, if I took the usual approach of “desperately try to scrape together enough spare change to accumulate a million dollars and then retire,” I’d be too old to do cross-country cycling by then. Like I said, I don’t see anything horrible about having to work part of the time when I’m 60. I sit at a desk, I don’t lift concrete blocks. What seems horrible is the idea of spending the next thirty years of my life with only three weeks of vacation a year.

I requested the book from the library, and I’d be interested to read Millionaire Mommy’s interviews too. I’m interested in becoming a quiet millionaire – so that I can enjoy my life now AND later. Why choose one or the other?

Thanks JD!

“Isn’t the whole reason you would want to have a million dollars that you would want to spend it on something?”

Not necesarily. I want a million dollars so that I can do what I want. Allow me to explain more. Currently I enjoy blogging, reading, politics, poker, and thinking of small biz to launch. If I had a million dollars I could do all these things, and hopefully make money doing them. It is a safety net and a security blanket that gives me time to do what I want without the pressure of bringing in money to pay for bills.

I think a very refreshing philosophy can be found in Stephen Pollan’s book ‘Die Broke.’ I’d like to see it on this website.

Our neighbors and most of our friends don’t know that our net worth is over a million. They see us driving a reliable 11 yr old car, living in a typical middle-class neighborhood (renting, in fact), and wearing consignment store clothes.

OTOH, they notice that we have a lot of free time to spend with our daughter, enjoy a wide variety of hobbies and recreational activities, and travel for a month or two at a time.

We are do-ers, not have-ers. We’re frugally happy.

@emma and @ackislander1: I am interviewing other millionaires who are self-made, first generation and age 55 or less. Men, women, employed, self-employed or retired are most welcome and appreciated. Interviews will be published on my blog and/or my upcoming book. Interviews can be conducted via email questionnaire or telephone conversation. If desired, your name and other personal information can be modified for privacy. Please contact me if you’d be interested in sharing your story with others — click on my comment name hyperlink to reach me. (J.D. I hope you don’t mind me inviting them through your blog.)

It’s for readers who are out of debt and building wealth.

Does this mean that the mortgage is paid in full? Or the car is paid in full? For instance, my husband and I are almost finished paying off our last revolving credit, a line of credit, actually. But we’ve started building our wealth through investments. Would this book not be informative to us?

thanks-
Little House

I don’t think it is necessary to be in the 10% of income earners either- that would make it easier! Instead if you have time you can just be a top saver!

The median US income is ~50K; certainly a good saver could save %10 or $5,000 each year.

How long will it take to reach $1M? That depends a LOT on the investments returns; here is a table with a few rates of return:

Return: 8% 9% 10%
$1M takes: 36 33 31 years

If you want to get to $2M it takes longer, but not even close to double.

Return: 8% 9% 10%
$2M takes: 44 41 38 years

Let’s say you can manage $10K year instead, the time comes down but it is still a long time:

Return: 8% 9% 10%
$1M takes: 28 26 24 years
$2M takes: 36 33 31 years

If you only had 10 years, how much would you need to save per year?

Return: 8% 9% 10%
$1M $65,500 $61,600 $58,200

Time is money! That’s more than the mean US salary! If you want to get to $1M quickly you need to be a top income earner.

There are never any guarantees either- top income earners can always spend more than they make and stock market returns aren’t very predictable in the short run.

-Rick Francis

In my retirement plan, I only really look at inflation-corrected numbers because that allows me to compare my current income with post-retirement income properly. If you just want to become a millionaire, inflation will get you there but what kind of an objective is that?

I like the reminder that I shouldn’t feel entitled to things I don’t have. For instance, seeing beautiful homes makes me wish I owned one rather than renting an apartment. But then I have to remind myself that I’m still in a great position and that I’m reaching my goals along the way.

I also like the idea of valuing what is important to me in my life. Right now I’m about to have a baby and want to raise my kid during the day rather than earning income. That also means not having my current income and instead hustling to freelance. But that’s where being mindful of and picky about my money comes in useful. In forgoing XY and Z that aren’t as important to me, I’m (hopefully!) going to be able to do what I want: raise my baby.

In our culture we live by self serving/justifying mantras like “you have to spend money to make money” or “if you’ve got it, flaunt it”, and that’s how the majority of people function.

I’ve known some selfmade millionaires and it really is amazing how flashy they aren’t. And they don’t need to be. Financial strength gives them their sense of worth; they don’t need to buy mcmansions or fleets of high end cars to let everyone else know what they’ve got.

Even their language is different. They don’t talk about what they bought, what they invested their money in, or brag on which top university their kids are or will be attending. They talk about the widgets they’re making in their shop, or the problems they’re having with suppliers. They’re too busy doing real things to sit around and chatter on about the fluff the merely prosperous like to surround themselves with.

This may sound harsh, but it really is true. Self made millionaires don’t have the time or interest to get caught up in pop culture preferences. By many peoples standards, this would be a boring way to live. At least until the money starts to really pile up…

I think it is important to distinguish between spending money foolishly and spending money that makes one’s life richer.

We just bought a freezer because we realized we could off set the cost of it by taking better advantage of sales and buying in quantity. We watch all of our expenses and cut those that are reasonable. We have yet to turn on our air conditioner this summer. My husband mows our lawn with an old push mower that is slowly dying. All of our neighbors have riding lawn mowers.

But we flew across the country last weekend and spent a couple of days hiking and canyoneering in Zion. Those kinds of experiences we think are worth spending our money on. We spent one night in Vegas to see a show. We didn’t spend one penny gambling. A show to us is money well spent, gambling is spending money foolishly.

I just didn’t want people to think we live like misers. We don’t. But by being very careful with our money in our younger years has put us in the place we are today where we can enjoy our money. It really is worth the sacrifice.

And RB, I am working on an MBA from a top 25 business school but there is no way that I pull $110,000 the year after graduation. Where are you getting those numbers from?

The average 28-29 year old out of a Top 25 business school makes $110,000 his/her first year for example. For folks who are in industries that regularly shell out six figures, GRS is a breath of fresh air. If someone can make $75,000/yr but still end up with millions upon retirement, that is my inspiration and my reality check that I better not fail by 40.

Foxie, I wrote a car article today thinking of you. Not sure if you will like the choices though!

RB

The dinner was not at one of the many local fancy restaurants but had been cooked by one of the husbands. Though we are all very well-off and privileged to live in a very desirable place, we all laughed at how we still use tiny spoons and mini-scrapers to get the last of the mayonnaise out of the jar and are annoyed when any of it escapes us. Like good Quiet Millionaires, we drove to the dinner party in our 1995 Jeep Cherokee, though we are going to Paris next month.

As Malcolm Gladwell demonstrates in his latest book, “Outliers,” some of our good fortune was just that. We have all had good health, we have all had encouraging parents and supportive spouses, and we have been lucky enough to find careers that people would pay us well to do.

But we have always lived less well than our peers, we have invested rather than consumed, we have pursued education and experience rather than things, and we have never, ever felt that we were suffering along the way.

Spend less than you make, invest for long term returns, don’t get a divorce, don’t do drugs or heavy booze, and never feel that you are entitled to something you don’t have. And you too can be sitting around the table laughing with your friends, having retired early, enjoying the fruits of your work.