On Becoming a Millionaire

This morning I woke up, did some email and had breakfast with my family.  The kids went out and played in 4 fresh inches of snow, and I went downstairs to read some product specs for work.  The specs, as usual, were boring and filled with anomalies, so I switched over to Quicken to check my monthly budget.  30 seconds later I checked my total asset balance and I learned that I’m now a millionaire.

It’s fascinating how anti-climactic and altogether meaningless this milestone turned out to be, especially considering that this was a goal I set 11.5 years ago, and worked relentlessly to achieve.

When I graduated college and took my $50K/year engineering job I immediately started saving aggressively.  I had a strict budget and a determination to hit $1M by the time I was 40, after which I would retire.  I figured I would get a 10% return from the market, so I could then spend $100K/yr in retirement.  I was a fool in many ways.

So as I achieve this milesone, I’d like to share some of my recent revelations:

It’s easier to decrease spending than it is to increase earnings.

I was very fortunate in my career, as I chose a path that was both exciting to me and one in which I was talented.  Because of that, in less than a decade I grew from making $50K/yr to $160K/yr.  This seems like a lot at first, but as lifestyle inflation kicks in it merely pays the bills. In fact, up until recently my monthly savings were not much more than when I first graduated.  I had $850K in savings, yet was 20+ years from retirement due to my high budget.

I was a Money Magazine reading dimwit who thought I needed $3M or more to retire.

Then I realized that my life was too important to waste away in a cubicle.  I now had kids, and I wanted to see them grow up.  Reducing hours in the office is not a good long-term prospect in my profession – so I needed another way out.  For awhile I floundered around, bordering on depression,  because I didn’t know how I could “get out of the rat race” as the kids like to say.  But then a series of events hit me – and I realized the answer was right under my nose. I could spend less.

But it wouldn’t be easy. I needed to make serious changes in my life.  I wasn’t going to achieve my objective by clipping coupons, buying a fuel efficient car, and turning down the thermostat.  My wife and I needed to downsize our house, stop eating out so much, and get rid of a car (among other things).  We figured this wouldn’t be easy, and it wasn’t… for about 2 months.  After that, we found ourselves in a new city, a small house close enough to bike to work, and with a single car.  Besides the 2 months of hard work making it all happen, the changes were actually quite easy.  Now we find that we’re making no sacrifices in our new situation, and in fact our lives are happier and more peaceful.  It turns out cutting major expenses is quite easy if you’re mentally ready to let go of the consumerist culture.

Money, as they say, does not buy happiness

I get no satisfaction reaching my million dollar goal.  None.  A surprising emptiness exists in achieving it.  I’m not regretful at all the hours I put into my career & building my salary, nor am I sad that I let some part of my life slip by in a flourescent cubicle dealing with politics and extreme careerism.  I feel… nothing.

But that doesn’t mean I’m not happy.  I am quite joyful with my life.  I have a wonderful wife who supports me (even when I’m a complete jackass).  I have two kids who I love and who love me back. I am grateful for everything I have in life, and I know I’m very lucky to have it.

But when I think about what makes me smile, it’s not spending money.  It’s watching my wife run around in the backyard with 2 laughing kids.  It’s running through trails in the mountains, kissing my kids as they sleep in their beds, sitting in complete quietness and solitude, and a cold beer after a marathon.

I know you all love cliches, so I’ll drop another one on you.  It turns out the best things in life really are free.

Financial freedom is a great thing

Despite my lack of excitement about becoming a millionaire, that’s not to say I don’t see some benefits.  Financial freedom is a wonderful thing.  For as long as I choose to work, I can act with logic and integrity over politics. I don’t have to stress about raises or layoffs.  I work in a small office where if we dry up on business, layoffs are inevitable.  My co-workers regularly and outwardly worry about this, but I don’t. Not only is this good for the soul, it also leads to better work because I’m focused purely on the output.

And when I’m ready to quit working for a living, I can simply walk away.  Those who are not financially independent don’t have that choice.  I remember not having that choice, and it sucks.

With wealth comes responsibility

I’ll admit, this is a philosophy I’m still developing.  Over the past 3-4 years, I’ve been coming to terms with how lucky I’ve been in life, and how many others have not been given the same chance that I did.  I didn’t come from money, but I didn’t grow up in poverty either.  I thought I was pretty poor, but I didn’t know what poverty was.  4 years ago I spent a month in Bangalore, India and I got to see what true poverty was. 3 years ago I spent time in Nicaragua and was again reminded.

And so I see it as fitting that I reach this milestone at the same time that the Occupy Wall Street revolt is continuing to gain steam.  I can’t help but read the stories at We Are The 99% and feel that while some of the poor got themselves into their own mess, too many have been dealt a hardship that I likely wouldn’t have handled any better.

And so I’m left trying to figure out how I should invest my time and money ethically.  When investing in US treasury bonds, am I supporting an infrastructure that will help out the people in need, or am I funding wars for cheap oil that destroys the land?  When I buy individual stocks, am I supporting jobs for the middle class, or am I raising the salaries of their CEO’s?  When financing a house renovation, am I taking advantage of the lower class person who I  sell the house to, or am I taking an unlivable house and making it livable again for someone who otherwise would be in a worse place.  Is there a way I can use my money and my increased free time to help others, and will that be satisfying to me?

I don’t know the answer to these questions yet, but I know that I feel responsible for figuring this out.

Finally, your time is a finite asset

Money comes and goes, as do  most things in your life.  But time just goes.  In the words of Chuck Pahlaniuk, “This is your life, and it’s ending one minute at a time.

I’ve learned not to waste time earning more money than I need.  I’ve learned that spending time with family and friends is not only more fun, it’s also more rewarding.  And most importantly, I’ve come to realize that the work and hours I put in to collect this large amount of money I now have would be in vain if I didn’t use it wisely – which is to say that soon I’ll  retire and spend my time in the most valuable ways as possible:  Enjoying my time with family and friends, teaching my kids values and supporting whatever path they take in life, meditating and philosophizing, learning life’s skills and becoming more self-sufficient, and having a lower impact on the environment so many generations after me can also enjoy this earth.

If I achieve all this, then I can look back at this milestone and finally smile.


46 Responses to On Becoming a Millionaire

  1. This is the best piece I have read in a while. Refreshing indeed. Congratulations!!! I’ve been following your blog for a while. Thanks for taking your time to share.

  2. millionairerednecknextdoor says:

    This article was awesome and a nice way to start my day! So glad I found this blog. Congrats and thanks for sharing this.

  3. Peter says:

    Congratulations! I discovered your blog only a few days ago, but it really resonates with me. I’m working towards a similar goal of enjoying life, not money.

  4. Nami says:

    What an amazing article. Congratulations on your milestone.

  5. PKamp3 says:

    Congrats on finding the balance and reaching your goals. Or maybe I should say: “Tomorrow will be the most beautiful day of [your] life. [Your] breakfast will taste better than any meal you and I have ever tasted. “

  6. Congratulation! I can’t believe you don’t feel anything when you found out you’re a millionaire. You must have transcend the asset accumulation phase then.
    On ethical investing, I don’t know. It’s going to be difficult. Most corporations are doing things I don’t agree with, but where else can I invest my money and get equivalent return?

    • but where else can I invest my money and get equivalent return?

      That’s what I intend to find out. I do feel that the house rehabbing I’m financing is a decent start. I do feel that I’m recovering a house that otherwise is uninhabitable, which is better for the environment and the community than letting it rot away as new houses are built somewhere else.

      But, as I said in the post, I’m still trying to figure it out.

  7. I agree with SoSo — this is the best piece I’ve read in awhile. It’s straight from the heart, which is rare these days. It asks controversial questions without trying to be partisan — equally rare.

    And, you know, you’re the second person who has said that you felt very little enthusiasm about reaching the $1 million milestone. Blogger Andrew Hallam said the same thing. He said he was more excited about reaching his first 3-digit ($100) milestone when he was a little boy.

    • I hadn’t heard of Andrew Hallam, but I just checked out his website. It’s interesting that he had that response to becoming a millionaire but also wrote a book called “Millionaire Teacher.”

      Do you have the link to where he discussed the feelings he had about becoming a millionaire? I couldn’t find it on his site.

  8. Congratulations! Really enjoyed the article. It sounds like your life has a great balance to it between work and personal.

  9. This is surely my round up candidate. Thanks for sharing your feeling with us. The finer things in life are free, they don’t need money.

  10. Yabusame says:

    Congratulations on reaching your goal, even if it did seem a bit uneventful. The thing. Like about this blog is that you got here through hard work and difficult choices and not through selling ebooks or get rich quick guidance.

    I guess your next goal is to set a ‘retirement’ date, so, when is it?

    Keep the great posts coming!

    • June 1st, 2013. I’m only working at this point because I signed a 2-year contract when I moved to Colorado and feel obligated to fulfill my end of the bargain.

      I received nearly $60K in moving fees and signing bonuses, which I would also need to return. While I don’t need the $60K (plus 19 more months of salary income), I don’t hate my job so much as to walk away from it. Some days I even enjoy it.

  11. Congrats on hitting that milestone. That is also my goal to achieve within the next 5 years. I’m glad to hear it is possible to do within a decade of graduating college, which will be about the same for me.

  12. Congrats on breaking the $1 mil mark! Can you illustrate how you managed to save $860,000 with a $160,000 income in such a short span of time? I think that would be a great story!

    Thx, Sam

  13. Neo says:

    I really like this post! This post reminds me a bit of a post I wrote a few weeks back. Basically, I have realized that I am only really interested in healthy relationships and living a life focused on quality experiences as opposed to collecting and buying “stuff”. I view the growth of my net worth as simply a means to freedom rather than “getting rich”. Here is the post: http://networthprotect.com/2011/09/09/i-dont-want-to-be-rich-i-just-want-to-be-free/

  14. Steve says:

    I have to tell you, I’ve gotten a bit jaded about personal finance/lifestyle/etc. blogs, including my own. Too often they have “gains” which are not really gains, just staggering steps towards unclear or useless goals. I haven’t been reading your site for long – mainly since you started commenting on brip blap :) but I find posts like this one to be among the best written and most inspiring I do read. Kudos to you on this achievement, and I’ll be counting on you for more inspiration going forward.

    • I share your jaded-ness. Most PF and lifestyle blogs are pretty bad and getting worse. I only have about 5 I still follow, yours is one.

      You keep up the good work on your end, and I’ll do my best on my end…

  15. Steve says:

    Yours is better than mine – but I’ll try :)

  16. Squirrelers says:

    Very good, introspective post. I have a friend that recently hit that mark, both he and his wife make pretty good money. He commented that he just didn’t care that much about milestones, and he just wants to be free. Also, he doesn’t care about material things anymore. He once did.

    Reminds me of a story about a former Super Bowl winning coach, who supposedly said something to the effect of: winning the Super Bowl its self was anticlimactic, and it was the process of getting there and what it entailed that mean more to him than the accomplishment itself.

    Anyway, I enjoyed your own story.

  17. Paul Goodness says:

    I read with great interest your comments about luck. I too was lucky, good childhood, worked to get a good education including night school to get an MBA, was an engineer, planned for retirement. I made good money, and lived well. Then I had a “reversal of fortunes” with health problems, divorce, bankrupcy, and consecutive deaths of my younger brother, father, grand mother, and mother. Bad things can happen to good people.

    My saving grace was inheritances, owning my own house, and Social Security. I am always ammused by those who think “it could never happen to ME”. Job loss, old age, health problems, and financial disasters can happen to ANYONE.

    Like you I learned to live simply with less and to take joy in what I DO have. Maintaining a POSITIVE attitude, and a net work of suportive friends (that you support too) are critical.

    Life is too short and dear to waste it on consumerism, “career” (which is only a JOB), and people who bring nothing to the party. Congratulations on your self awairness and acting in a thoughtful, and self helping planned life. Paul Goodness

    • It wasn’t long ago that I had the “it could never happen to ME” mentality. Then one day I found myself sitting in the PICU near my my 16 month daughter who was lying unconscious, breathing through a tube, and I didn’t know if or when I’d get to see her smile again. It was the first and only real crisis of my life, and it woke me up from the coma of invincibility I was living in. She has since recovered, thank God.

      Ever since then, I realized what you said: “Life is too short and dear to waste it on consumerism, “career” (which is only a JOB), and people who bring nothing to the party.

  18. I really enjoyed reading this post as I am new to the whole ‘reduced spending as a means to early retirement’ angle. I started with a few MMM posts and have found your blog as well.

    I particularly enjoyed reading your 2011 – Year in Review post. Family, friends and good health are invaluable. Realizing what you have can be far better than working hard to get something you don’t have.

    I’ve subscribed to your RSS and look forward to reading future posts.

  19. Poor Student says:

    Right now I have the same goal, to become a millionaire. I like that you gave me the perspective of how little the number is different than any other net worth. But I do think that if I aim for one million, it will encourage me to get in the right habits that I need anyway.

  20. Andre900 says:

    Congratulations on reaching the $1MM mark! I expect to hit that in 3 years as I reach my 50th birthday, but unlike you I didn’t have such phenomenal salary growth. Here it is 2012, and due to layoffs and other job changes that didn’t go as expected, my salary is $67K per year, the exact same as it was in 1999. Keeping expenses reasonably low and having no expensive hobbies has allowed me to save and, of course, the compounding effect really starts to show after $250K or so.

    • I’m looking forward to compounding interest. Everyone talks about it, but the truth is that I started working in 2000 with no capital, and in general the market has been flat. This whole compounding interest thing would be great. I’d be rich! :)

  21. jackie says:

    Wow! What a read! So down to earth, so motivating, I admire your determination!

    I’m a single mom of one beautiful daughter who is 15; I’m 32 yrs old, full time college student – I wasn’t born in money and I still don’t have much. But after working for 10 yrs with only a high school diploma, I had saved up $40,000 by 2009. Since then, I’ve lost my 7 yr job and in hoping for a better future, I have joined college and I’m now down to my last $13,000. I refuse to give up and I know that I can do it.

    After reading some of your comments (which I loved reading) I’m hoping that I can one day achieve my goal to retire comfortably.

    I don’t want millions of dollar, I just want to wake up every day loving.my life. Doing things because I want to, not because I have to, and to spend as much time with my daughter as possible in supporting her dreams.

    I’m sure I will learn a lot from you. Wishing you the best in future as well. Wish me all the best in my
    Journey.

    Jackie

    • Hi Jackie –

      Welcome to the site, and thanks for the complement.

      I’ve had a stressful weekend with our two kids – drawing on walls with crayons, throwing tantrums, breaking a door knob…. I love them, but it’s stressful.

      (I literally just had to step away from writing this to go deal with another tantrum…)

      Which brings me to your post, which came at a perfect time. I can’t imagine raising a kid as a single parent, it’s hard enough with a partner. Then to do it at such a young age and having to work full time – that too is inspiring and helps put my own rough weekend into perspective. Thanks for that.

  22. jackie says:

    Hello BNL,

    I have just noticed your reply to my post, partly because I’ve been busy with exams and partly because every time I visit your site I find something new and interesting to read and learn. I’ve read many of your blogs since this one, each one more inspiring than the previous.

    I was wondering if you might be able to point me in the rght direction. I’m already quiet thrifty (lol) and I do use my money wisely (but so far that has meant only spending as little as possible), but i’d really like to make my savings work for me.

    I’m depleting my savings fast due to school and no job (I’m currently just focusing on finishing school asap) so I’m hoping to learn about some low risk investments – where do I even begin to learn about this?

    Help!

    Sincerely,

    Jackie

    • Hi Jackie,

      There are many great books out there to learn about various types of low risk investing (Personally, I reduce my risk by investing in a variation of the Permanent Portfolio). On the other hand, based on your last post about having just $13K and falling as you pay for school while not working – you need to consider the timeline of when/if you’ll need to tap into that money.

      When you are working and saving money from each paycheck, with a long-term outlook on building a “nest egg,” then short term volatility can be ignored since you’re in it for the long haul. On the other hand, when you’re tapping into the savings to pay for living expenses, then short-term volatility is a very real thing to consider. For example, even a conservative mix of stocks and bonds could easily rise/fall 10% in just a few months.

      I’ll avoid offering specific investment advice since I’m not a professional, but I would just caution that if I were depleting my savings to pay for school and had less than one year of living expenses saved up, then I would keep my money in the least volatile place I could find – even knowing it was not beating inflation.

      So… How long until school is done? I’m sure you’re anxious to start seeing your savings rise again. :)

  23. jackie says:

    By the way, I hope you and family had a relaxing weekend, I know I’m certainly enjoyed my week off before school begins!

    Hope you have a great day and thank you for taking the time to reply to your readers comments, much appreciated!

    Jackie

  24. jackie says:

    Thank you kindly for your advice, it is much appreciated!

    I’ll be graduating at the end of this year, I’ve always stayed on the low risk side of investments and if I’m understanding you correctly, I should continue doing that.

    I’m just happy that being thrifty come naturally as my parents always taught me that a penny saved is a penny earned; and because of having the mind to save up early, I’m able to afford paying for school without having to work while I do it.

    Thank you again for your reply and now I’m off to read your latest post about kids and retiring early!

    Keep up the posts, have a good long weekend to you and family

  25. Ellen says:

    Having recently reached that milestone myself I know what you mean. It’s an impressive accomplishment but I mainly appreciate the freedom it gives us to make choices. I chose to leave a job and start my own business so I can work from home and have more time with my kids. I get far more happiness from that than I would have from buying stuff instead. From those to whom much has been given much is expected. I do a lot of pro bono work and look for meaningful ways to share our financial blessings. I agree that’s important. Nice post.

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  27. […] I first decided to retire early.  It’s been an emotional roller coaster from the joy of becoming a millionaire and having my passive income surpass my expenses, to loneliness when I was scared I was making the […]

  28. Scott says:

    Hi Brave New Life….
    Was this million dollar mark based on total net worth or investable assets?
    I ask cause I currently have a net worth of $900k with $600k in investable assets and the rest being house. I am trying to get a feel for how far off I am from FI.
    Thanks

    • I’m trying to remember….

      I think this did include my house, but at the time I also still had a mortgage so I would have subtracted the outstanding balance for that (which would have been around $120K-$150K). But when it comes to FI, I wouldn’t worry about comparing yourself to my situation. What really matters is your savings relative to your expenses. Whether you use a 3% SWF formula, a 4% SWR, or actual passive income via dividends, rentals, etc – it comes down to what you can expect to make passively vs. what you spend.

  29. thegoblinchief says:

    I probably won’t ever become a millionaire, and you know what? I don’t care! I live simply enough that I can be FI long before the million mark.

  30. earlyretiree says:

    Fantastic article

    I too was a fool in chasing an out of reach goal of multi-million dollar portfolios. It’s when I found your blog and ERE, Mustache etc that I realised I’d already made it! Life has been great ever since. I’m loving life more than I have in a long time living in the now. Thank you for all you contribute in your blog and love your way of writing

    • Thats great news, and I’m just glad I can be part of your awakening. It’s funny how happy we can become when we realize that we already have so much, and quit worrying about constant growth and never-ending goals.

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