Can you learn from a millionaire mentor?
We do, so can you
Another personal finance blog we like, www.ThinkSaveRetire.com, recently asked, “Are million dollar early retirees ruining personal finance”? The Aging with Freedom answer? No. You can learn from people wealthier than you. We did. And we continue to learn from bloggers, book authors, and podcasters — like Steve with ThinkSaveRetire. We love millionaire mentors. They did something right and different than average.
Wasn’t Always This Way
We’re now among those over $1M net worth. Debt free. One of us has retired…the second will be soon. And the real story isn’t where we are now, but that it wasn’t always this way.
Those struggling with high debt, unplanned for emergencies, and variable income? Been there and done that. Learned many of the lessons the hard way. As Dave Ramsey says, we paid the stupid tax. Many of the millionaire mentors walked your current path.
The Easy Way
So there are two ways to learn. The hard way. Making every mistake yourself. And the easy way. Learning from the mistakes of others.
We made enough mistakes to want to learn something different. Turns out that you can’t spend the same money twice. That lack of teamwork is a source of relationship stress. That worrying about where the money went doesn’t address the future. It took us twenty years to get on the same financial page. But once there? The millionaire mentors were right.
Chaos to Stable Growth
It really is possible to go from a turbulent financial decade of chaos to an emotionally stable and growing wealth decade in a few short years of changing habits.
There is some proven wisdom if you’re willing to learn and change. Who’s teaching what works? The millionaire mentors.
High Income Not Required
It doesn’t require high income. It requires high savings rates. Spending less than you earn. Paying yourself first by dedicating a large share of income to savings, investment, or debt reduction. And living within the remainder. It’s about what you put at the top of your priority list.
You can’t leave paying yourself to what’s left over at the bottom of your priorities. This is only a sampling of our new mantras learned by our millionaire mentors.
$1M+ Debt Free on Average Income
We hit that million dollar net worth mark making average salaries for our region, often with only one of us working.
And we now have a happy, comfortable lifestyle. Financial surprises are no longer a shock. Need a new transmission? No big deal. We live in a small resort community by a beautiful glacial lake. We have a comfortable home, albeit still in the process of remodeling. Not fully done because we’ve taken a pay-as-you-go approach to the remodeling. We’re close to aging parents to provide caregiving and help. And learning some lessons for our own retirement. We’re even closer to a successfully launched millennial daughter who is happily rocking her career. And the First Daughter is far ahead of us at her age. She’s a Dave Ramsey acolyte early enough in her life to have the time value of money on her side. Proud parents. We enjoy our adventure dog, Gunner the Brittany Spaniel. A good dog is always happy to see you. Life is good.
Are there people with more? Yes. There always are. But there are many with less. We’re grateful, not jealous or greedy. The millionaire mentors we follow earned it, largely by deferred gratification, not just luck.
We’re focused on our Aging with Freedom motto, High Wealth, High Health, High Purpose. Part of our purpose is to share our story with you so you can enjoy the same results. Time to give back.
Hardest Person to Lead is. . . Me
It’s not free or easy to get here. It required personal change. Guess what? The hardest person to manage and lead is always yourself. It’s easy to say (and often easier to see) what other people should do. It’s hard to know what you need to do and actually do it. It requires being intentional and persistent. Change is easier with mentors. If you want to be a millionaire? Pick millionaire mentors.
Keep score we do. Yoda. On all three of our goals. High Wealth. High Health. And High Purpose.
We are now positioned so that we could retire today (at 59 and 57) and not suffer a reduction of lifestyle.
To get there we carefully model expected income and expenses to continue to grow the nest egg. You can’t improve what you don’t measure. Mentor? W. Edwards Deming.
Health Insurance, the Big Question Mark
The one thing maybe stopping us from retirement? Access to affordable health insurance and health care pre-Medicare eligibility at age-65.
The uncertainty around health insurance in the individual market is a major problem. We can’t buy health insurance in the individual market for anything close to the same price that our large group employer (a small local college) does today. We can’t spend all our income on health care.
It’s expensive, partly because health care is expensive. Partly because individual health insurance is now a wealth transfer tax. And partly because the entire burden of guaranteed-issue for the uninsurable is focused on the small slice of the individual market. If you’re healthy enough to work for a large employer, guaranteed-issue for pre-existing conditions is more academic. The individual market has all those who can’t work and don’t yet qualify for Medicare or Medicaid. Individual health insurance is out of control, but also out of our control.
I Don’t Want to Wait
But we also want to travel while we have the energy to do so. We may bite the bullet on health care for the freedom to travel. I don’t want to wait for our lives to be over before living them. (I Don’t Want to Wait, Paula Cole) The whole point of Aging with Freedom is the freedom to empower choices beyond mere survival or existence. The joy of life is in living a life of purpose beyond mere survival or even leisure.
You Always Have a Choice
One of our key tools and lessons? You can, and need to, control both sides of the formula:
Resources (Wealth + Income) ≥ Expenses
We don’t live in a mansion. But we don’t need a mansion to be happy. We don’t drive a brand new car. Maybe with emerging self-driving vehicles, we won’t even need to own a car in the future. Or, our car may be off making money for us, driving others, when we don’t need it.
It’s amazing the power you get from distinguishing wants from needs. You must believe, you always have a choice. Thanks, Dave Ramsey.
Can’t Eat the House
A major problem for many baby boomers is how much of their wealth is tied up in their real estate – their home. You can’t eat the house.
So one of our strategies is to limit how much of our wealth is in illiquid, non-income generating real estate. Our house is different than an income rental property. We do have to live somewhere. But our house is really an expense not just an asset. It’s an expense with maintenance, taxes, and utilities just to preserve the asset. It may or may not appreciate in value. But you can really only practically access the value by selling. And again, you still have to live somewhere. All lessons we learned from Rich Dad, Poor Dad, Robert Kiyosaki.
Proof that we learned from people wealthier than us. Our “mentors” include, but are not limited to:
- Dave Ramsey — www.DaveRamsey.com. We’re Financial Peace University graduates and facilitators.
- J.D. Roth, of Get Rich Slowly, www.getrichslowly.com and www.moneyboss.com. Blame J.D. for our rebranding. He convinced us it was necessary at FinCon17 in Dallas. But he also knows how to have a conversation about money.
- Robert Kiyosaki, Rich Dad Poor Dad, What the Rich Teach Their Kids. And the Rich Dad Blog.
- Stephen Covey, Seven Habits of Highly Effective People, www.StephenCovey.com, (and more).
Thomas J. Stanley, The Millionaire Next Door: The Surprising Secrets of America’s Wealthy. The rich really do live differently, but not how you think.
- Vanguard founder John Bogel and his acolytes at www.Bogelheads.org. And various Bogelhead books, like The Bogelheads’ Guide to Investing.
- Warren Buffett, the Oracle of Omaha. www.BerkshireHathaway.com. Yes, we own some Berkshire Hathaway, albeit B-shares. Wish we’d bought A-Shares when we were first aware.
- David and Tom Gardner — The Motley Fool www.fool.com.
- Teresa Ghilarducci, How to Retire with Enough Money: And How to Know What Enough Is. See our review of this book: Retire at 62.
You can find and learn from millionaire mentors too. Don’t let a mentor’s current net-worth deter you from listening. The real story is how the mentor got there. It wasn’t always any prettier than your current reality.
Retired Doesn’t Mean Unproductive
Think Save Retire makes some great points about being retired from working for others. It doesn’t mean total disengagement from income and economic contributions. Worth a read.
Money now Works for Us
We’re focused on making our money work for us rather than working for our money. Money alone isn’t enough. Financial freedom is necessary but not sufficient. Getting your financial house right empowers the freedom of choice essential to Aging with Freedom.
Who are your favorite mentors?