Meet the millionaires next door

• Not all millionaires have big houses, boats or fancy cars.

• In fact, six of them told BI that their strategies for growing wealth – and keeping it – are the exact opposite.

• “We are not flashy with our wealth because money is not our ultimate goal,” said one.

Anthony Drew Gary, 35, and his wife had a combined $5,000 to their names a decade ago.

Now, the couple from Indiana has a net worth of around $1.3 million.

Gary said they had an “incredibly average” path to wealth, emphasizing prudent investing and modest living.

He makes a decent living in real estate, saying he and his wife combined have never made more than $200,000 in a year. With two kids and the rising cost of living in the US, that kind of money can go fast. So for a decade, the Gary family kept to a meticulous budget.

“We shop at Aldi,” he said. “We’re doing enough things right to have a significant margin in our lives that 10 years of combined efforts have put us on the fast track to where we want to be.”

Gary worked his way through college and graduated debt-free from a public university. He and his wife, now a stay-at-home mom, married at 27 and became parents at 30, buying a small three-bed, two-bath house for $200,000 in suburban Indianapolis. He could have qualified for a bigger house, but having financial flexibility was more important.

Gary grew his career in real estate, bouncing from one position to another while negotiating raises. He started a brokerage and bought houses to turn into rental properties. He said they “don’t intentionally maximize” their earnings to spend more time with their children. They prioritized maximizing retirement and investment accounts.

To avoid a lifestyle slump, they stuck to strict monthly budgets, took vacations when accommodation was cheapest, and traded children’s clothes and toys with other families in the neighborhood. He said these are pretty simple ways to live modestly without sacrificing quality of life.

“I play a lot of golf – I’ll hit just as many bad shots in a $100 polo as I do in a $25 polo,” Gary said. “My story is one of doing all the boring things right to set ourselves up for a wonderful life where, depending on how much we want to spend in the coming years, we could probably finish working by 40, even with two children.”

Some stories of people getting rich and retiring early include unrelated circumstances, such as family fortune, entrepreneurship, or a superstar career at the top of the corporate ladder.

But many of the millionaires Business Insider spoke to in recent months got there without a quick fix. Instead, they spent a decade or more investing wisely and living modestly. Most emphasized that the importance of budgeting and spending modestly shouldn’t be overlooked, even though it can be difficult to ignore the social pressure to keep spending on luxury goods and experiences—before and after you get rich.

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Shining wealth is not the goal

Xiao Yu, 37, got into the habit of saving when he was young. His parents were rice farmers from China who immigrated to the US and worked for minimum wage in a restaurant. He said he is an average student, although he has never had student debt from his public university.

He went on to become a CPA and financial manager, reaching financial independence with his homemaker wife in October 2023 and trading in corporate life for early retirement and a tax advisory business. He earned about $180,000 before he retired and is set to earn $100,000 a year in self-employment.

Yu, a father of two who lives in a 2,100-square-foot home in suburban Indianapolis, said he and his wife achieved their fortune by consistently saving 35 percent to 45 percent of their income, hiring stick to an annual budget, avoiding the drop in lifestyle. driving decade old vehicles and switching between companies or looking for internal promotions every one or two years. He has also monetized his financial coaching skills by helping his colleagues with tax returns and planning advice.

It allowed him to use his earnings to spend on vacations, renovate his home, and invest in his children’s future. He spends his free time trying new hobbies, such as building a backyard garden.

“We are not flashy with our wealth because money is not our ultimate goal — the financial freedom to choose how we want to live is our goal,” Yu said.

To be sure, many Americans engage in budgeting and modest living simply to get by, not to get rich. Americans living paycheck to paycheck won’t have much to invest in or take risks on, making it nearly impossible to significantly grow their wealth. Some families said that even with six-figure salaries, they struggle to invest for the future or buy a home.

According to the Federal Reserve’s latest economic well-being report, 14 percent of families earning between $50,000 and $100,000 were unable to pay their bills in full this month, while more than half of all households experienced reduced savings over the past 12 Monday. Only 63 percent of families said they could cover an emergency expense of $400 using all cash.

Meanwhile, credit card debt just hit a record $1.14 trillion, and according to the Federal Reserve, 3.25% of that debt is delinquent or at least 30 days past due. While the rate of Americans falling behind on their credit card bills is lower than it was during the Great Recession, it has risen over the past two years, suggesting many people are finding it harder to keep up.

However, many Americans refuse to keep up with the Joneses and have learned to be content with what they have. Lawrence Delva-Gonzalez, 41, works as an auditor in the Washington, DC area and has built his net worth from $150,000 in debt in 2012 to more than $1.3 million in August. Still, he said he has no plans to slow his savings rate.

Delva-Gonzalez was raised in Port-au-Prince, Haiti, where he said he was “never rich.” He recalled his grandmother waking up at 4 a.m. doing various side jobs to earn money. He said his mother never made more than $30,000 a year.

After moving to the US, he received a bachelor’s degree and a master’s degree from a public university, leaving him over $100,000 in debt. His first job paid $27,000 a year before taxes, and he said he spent much of his earnings on food.

However, noticing that his finances remained stagnant, he decided to reduce his student loan payments each month and invest some of that money in the stock market and retirement accounts.

“The more you can invest on the front end in tax-advantaged accounts, it will have a huge return for you on the back end,” Delva-Gonzalez said.

The Marine Corps veteran jumped from one job to another to increase his salary, began tracking all expenses using budgeting apps, and saved more than 50 percent of his income by cutting unnecessary expenses. He bought an apartment for $132,000 in 2016, which he said saved him money in the long run, given how quickly rents have risen in DC. Once he and his wife had a more robust nest egg, they purchased a rental property in Tallahassee, the value of which increased significantly.

“It’s just casual human nature: We think wealth is somehow unattainable,” Delva-Gonzalez said. “The more you do what you should do, the more opportunities you create to do what you want to do.”

After all, becoming a millionaire isn’t just about retiring to a beach house. Justin Hall, 56, appreciates the importance of retirement, but said his goal of building wealth isn’t just about living lavishly.

Hall discovered FI strategies in 2017, though he says he’s always been frugal and built his wealth slowly. He and his wife, a civil servant and teacher, respectively, have reached a combined seven-figure net worth in Virginia, with enough passive investment income to fund early retirement and a full-time nomadic lifestyle.

Hall, who served 20 years in the Air Force, started investing young, put a lot of money into an IRA and maintained a minimalist lifestyle. He earned a combined gross income of $128,000 in his last year in the Air Force, and his pension is now $61,600 a year. He also earned just under six figures every year during his 10 years as a public servant. He and his wife also earn $34,000 a year in real estate and $64,000 gross in investments.

He had many side hobbies as a musician, coin and stamp collector, and cyclist, although he sold most of his possessions to focus on improving himself and keeping costs down.

Hall admits to making various investment mistakes, such as losing thousands of individual stocks, buying mutual funds high and selling low when the dot-com bubble burst, and being too cautious about the market during the 2008 recession. Still, careful saving, low debt and a tight budget allowed him to retire at 52. He and his wife divested about 98% of their holdings in 2023 and have been traveling the world full-time for the past year.

“I’m ditching the worn-out binary of making money to have a purpose or retiring early and sitting at the beach all day sipping fruity drinks,” Hall said. “I strongly believe that early retirees can have a fulfilling life without paid work.”

Are you part of the FOC movement or live by some of its principles? Contact this reporter at [email protected].

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