How to Become a Millionaire in your 30’s – Interview 8 (Education)

Family on Beach at the Sunset

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This week’s millionaire 30-something interview features Drew the DIY Money Guy!

Drew and his wife are well on their way to multi-millionaire status at the rate they’re going. Check out our interview below and learn how they’ve grown their wealth while raising three young kids. My heroes!

The Details

How old are you? If you have a family, tell us about them and their ages.

My wife and I are in our mid-30’s. We have twin daughters that are three years old and a son that is just under a year old.

What part of the country do you live in? Do you own your home or rent?

We live in the Midwest and own our home outright. Mortgage free is the way to be!

When did you start tracking your net worth? What was it at that time?

My wife has been money nerd since she was a kid. She “balanced” her savings account every week starting in 3rd grade. Then as a sophomore in high school she started using Microsoft Money to track savings and a few CD’s she was invested in.

On the outbound flight our honeymoon trip she was even updating Quicken transactions on her laptop! So she has known and tracked her net worth for quite some time. I on the other hand didn’t really pay much attention to my finances, let alone my net worth until just four years ago.

Up until then I saved 8% of my salary in my 401(k) and thought that was all I had to do for personal finance and investing. Even though I was getting decent raises every year, I along with all of my friends gave into lifestyle inflation and spent every dollar I earned.

Happy Family in jumping in a forest

2014 was the turning point for us, really me, as we got in couple of bad investments and lost several thousand dollars in a raging bull market which seemed all but impossible.

I turned to a trusted family friend in the financial industry for advice and he first explained the concept of financial independence. This was the major turning point in our lives. Early retirement was not only possible, but truly feasible.

By creating a few streams of passive income our working careers would be optional. We now had a common goal wanted to strive for FI so we would have more options of how we wanted to spend our time. I first started tracking our combined net worth in 2014 on Mint. As our focus transitioned from budgeting to investing I started using Personal Capital.

What is your current net worth? What are your assets and what are your liabilities?

Our current net worth is approximately $1,750,000 with some pretty big swings depending on the volatility in the stock market.

Our assets split pretty evenly between index fund investing and real estate. For our stock market investing we have around $500k in 401(k)’s and the rest in IRA’s, 529 accounts for our kiddos, a Vanguard taxable brokerage account and our HSA. We own our primary residence (approx. $425K) and one of our rental houses ($130k) outright.

Our only debts/liabilities are the mortgages on another two rental houses that we own. We will likely leverage the equity in the paid off rental and refinance it to purchase a fourth rental home early next year.

The Process

What are your current sources of income?

I have a background in engineering and am a middle manager at a large transportation/logistics company. My wife is a partner and practices law at a small firm. These jobs provide our primary income.

My wife also teaches a few college courses, both in person and online. We also have three rental houses that we self-manage. We’re planning to acquire a couple more next year.

Our high income from our jobs has been the primary driver in being able to grow our net worth so quickly. With a focused and deliberate approach to our saving and investing, our net worth has grown by a million dollars in just the past 3 years.

Both the strong bull market and significant real estate appreciation have played a big roles in growing out net worth as well. Last year our 401(k) investment gains exceeded out contributions. That was fun to watch!

Related PodcastOptimize Your Family Life with Real Estate

What has been the single best thing you’ve done to increase your income up until this point?

When you consider your income and net worth, it’s important to remember that you yourself are your greatest asset because of your earning potential year after year.

Most people work 30-40 years before they retire, which is a little less than half the expected life span. When you consider that almost half your life could be spent working, you realize it pays exponential dividends to maximize your greatest asset by improving your education. Education and personal development will usually have the greatest return on investment because of the increased earning potential but it can be hard measure this so many don’t pursue this.

What ways do you invest your money?

Real estate – specifically, buy and hold single family rental homes. We also have a chunk of money in RealtyShares, a crowd funding real estate site. We also have a good amount of money in Vanguard index funds.

Did you receive an inheritance or windfall of some kind during your life so far?

Nothing yet!

Quite the opposite actually, we encourage our parents and grandparents to have a plan for their money but they should focus on spending their money in ways that make them happy rather than worrying about leaving any money to us.

What debts do you have (if any)? If so, what are they? Which have you paid off?

The only debts we have are the mortgages on two of our rental properties.

Our primary residence is paid off, one of the rental houses is paid off. Although, we’ll likely refinance our paid off rental property early next year to purchase a fourth rental property. Our vehicles are paid off as well.

How do you track your net worth?

Initially Quicken but have now transitioned to Personal Capital.

Do you live on a budget?

We do not live on a budget.

A couple of times a year I’ll review our spending in various areas and see if there are any trends of increased spending we should talk through to see if it makes sense. During these reviews it is also a good time to reflect and see if we our spending supports our values and the things that are important to us.

What are your annual expenses?

Our expenses over the past twelve months have been right around $95K. $35k of that being daycare for three kids that with another $10k home remodeling.

What is your favorite fintech tool that helps you grow your wealth?

Personal Capital is my favorite tool. Both the web versions and the phone app. There are so many great features from basic budgeting to their 401(k) fee analyzer and it is all free.

Another fintech tool that took me way to long to get on board with was Bank of America’s phone app. Up until then I was still going to ATM’s to deposit checks.

Related Article7 Free Money Tools Will Help You Build Wealth Today

Young Millionaire

Why is it important for you to build up your wealth?

Our goal is financial independence so we can spend more time with family and friends and pursuing our hobbies and interests. I can’t think of anything more worthy.

What is one financial mistake you’ve made during your young millionaire journey?

We’ve made our fair share of financial mistakes but most of them while in my 20’s and with smaller amounts of money.

  • Letting a “financial advisor” sell us on a variable universal life insurance policy which ended up having ridiculously high fees and cost us several thousand dollars to get out of.
  • Getting into credit card debt.
  • Taking out a pretty good-sized loan to buy a used car. And many others.

What book has been most influential to you?

The Two Most Important Days by Sanjiv Chopra, Gina Vild. A great read on how to be happier, healthier and finding your purpose.

What is one financial hack that has helped you that you think most people don’t know about?

Travel hacking using miles & points for almost free travel.

We both really enjoy traveling and learning about other cultures and frequent flier miles has allowed us to travel to 20+ countries for a fraction of the cost. With a lot of strategy and planning, we have been fortunate to run with the bulls in Pamplona, Spain to going SCUBA diving with whale sharks in the Maldives.

If you pay off your credit card(s) in full every month and want to travel more, I would encourage those interested to take a free crash course on travel hacking at  to learn more at TravelMiles101.

(Note from Andy: I completely agree with Drew! TravelMiles101 opened my eyes to nearly free travel. Check out our $6k trip to Cabo that only cost $300!)

Where do you find the most joy in your life?

Traveling and sharing new experiences with family and friends. My wife and I are always looking for more ways to turn smiles into dollars.

For the 20-something with a $0 net worth, what advice would you give them to become a millionaire in their 30’s?

Learn about compound interest and use the power of time to maximize your investments. If you can keep living like a student after school, keep your living expenses low and invest the rest, you will be well on your way to becoming a millionaire in your 30’s.


Are you a 30-something millionaire or will you be soon?

I’d love to hear from you!


 

Author: Andy Hill

Andy Hill, a mid-30’s father of two living in the metro Detroit area, pens the MarriageKidsandMoney.com (MKM) blog taking you through the trials and tribulations of being a young parent and husband who is planning for his family’s future and winning with money.

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