MtoM #72 - Electrical Engineer Millionaire

This is the White Coat Investor Podcast, Milestones to Millionaire, celebrating stories of success along the journey to financial freedom.

This is Milestones to Millionaire podcast number 72, Electrical Engineer Millionaire. Welcome back to the podcast. We love having you here. We hope you enjoy these series of short podcasts where we celebrate somebody's financial accomplishment with them and use it to inspire others to do the same. If you'd like to come on, you can apply@whitecoatinvestor.com if you're looking to boost returns, lower taxes, and build wealth. Join the WCI monthly Real Estate Opportunities list for tips and strategies to maximize your real estate returns. And for introductions to exclusive investment opportunities, expect educational emails that introduce you to syndicators, fund companies, online courses, and online real estate platforms. Go to whitecoatinvestor.com reopportunities to sign up today. You can do this, and the White Coat Investor can help. All right, let's get our guest today on the phone, and let's do this. Let's find out how this electrical engineer became a millionaire. All right, we've got our guest on the line, Andrew. Welcome to the Milestones to Millionaires podcast.

Thank you, Dr. Dalla. It's great to be here.

Well, tell us a little bit about yourself. What's your profession? How far are you out of school, and what part of the country do you live in?

Sure. So my name's Andrew. I'm an electrical engineer. I live in the Midwest, fly over country, and I'm 11 years out of school.

11 years out of school. And what's your approximate net worth?

Approximate net worth as of the first of this month is $1,200,000.

Awesome. You're a millionaire. Congratulations.

Thank you.

How does it feel?

It feels good. It sometimes doesn't feel real, but the numbers don't lie.

When you were a kid, did you ever think you'd be a millionaire?

I hoped, too. I don't know that I thought that much about it as a kid, to be honest.

Well, tell us about your net worth here. What's it divided up into? Tell us about your assets and your liabilities.

Sure. So the bulk of it, a little over $700,000, is in retirement accounts, split roughly 50, 50 between Roth and traditional retirement accounts in 401 s, IRAs and HSAs. The next chunk is $325,000 in home equity on our primary residence, which is a condominium in the city we live in, have about $75,000 in taxable brokerage account and $60,000 in cash. And the newest portion of the portfolio is a $20,000 investment in a real estate syndication.

Okay. And any debts there?

Just the remaining balance on our primary resident mortgage, which we hope to pay off shortly.

So you've been investing and saving and paying down debt pretty quickly. It sounds like we have a little.

Bit of all the above strategy.

What did you start out at? What was your net worth when you came out of school? If you had to guess, it was.

Probably right around zero dollars.

Right around zero.

Maybe just over, maybe just under. Had. Fortunately, very few debts coming out of undergraduate, but also no assets.

And you have a graduate degree too, or just the undergraduate degree?

Just the undergraduate for me.

And any of this come from parents or relatives? Did your parents help pay for school or did you receive an inheritance or anything like that?

My parents did help me pay for school. Between their help and some scholarships, I was able to come out near debt free. Very small amount of debt. And we did, in the past year, receive a small $15,000 inheritance from a grandmother who passed away.

But at that point, you were just about a millionaire already anyway.

That's true. That might have been the thing that put us over the edge, but who knows?

That's pretty awesome if that's the thing that just pushed you over. You mentioned we. You married?

I married, yep.

And any children?

No children. My wife also works. She's an architect. And that's been a big help, obviously, in growing our net worth, kind of. She's been a great partner.

Yeah. Having dual income there. So what's been your range of household income, do you think, over the last 10 years?

Sure. So started at $60,000 out of college, and this past year combined, we were just over $250,000.

Okay, so pretty big range there. What have you guys done to try to increase your income over the years?

You know, work hard, focus first and foremost at our jobs, you know, self investment, getting professional licenses in our field of study, making ourselves valuable members of our team. I do have a small, small income, 1099 tutoring deal, but doesn't even pay for groceries, so that's just for fun.

So despite having a good income, lots of people don't build much wealth. You did manage to build some wealth. What were your secrets to success?

Simple living. I'm a man of simple tastes and paying myself first. Always been a saver. So socking away money from each paycheck and just staying with it just really.

Stuck to the plan and continued to do it. So as you've worked together on this, how did you guys get on the Same page. She also have interest in finance or.

Less so than I do. I think I kind of nerd out about this stuff a little more than she does, but she's always been a saver. She's also frugal minded, so in that sense it's been a great partnership. And no strife there with finances, unfortunately for us.

Yeah. Sounds like you guys never fight about money anyway.

No, rarely.

Yeah, it makes it a little easier to build wealth when you both have the same mindset on it, for sure. So where did your mindset come from? Did this come from your upbring? Was there anything in your upbringing that affected how you manage money because you got started right away out of school where a lot of people don't?

Yeah, I was raised right in the middle class. Family was always savers, but I was never wanting for anything. But I was always kind of someone who socked away summer job money allowances. I was more interested in accumulating than spending. So this whole saving thing comes very naturally to me, fortunately.

Awesome. Okay, so let's go back a bit. Let's say there's somebody that's just like you. They're coming out of college, you know, maybe they have a little student loans, maybe they don't, they don't have a massive income. You know, they might have a high five figure income as an engineer, et cetera, architect maybe. What advice do you have for that person if they want to do what you've done a decade out to be a millionaire already?

I would say start now. It's never too early or too late to start. You know, focus on earning more, spending less, and investing the difference as cheaply as possible. There are a ton of great resources out there in the world. Online books. I found you through some of your posts on the Bogleheads forum and I've enjoyed listening to your podcasts. And there's, you know, no shortage of resources out there. But my advice would be to start now. Come up with a great plan, automate everything, forget about it.

Tell us how you came up with your investing plan.

So I became familiar with the investing policy statement through the Bogoheads. So several years ago wrote up one of those for my wife and I and we've been more or less sticking to it ever since. Fortunately, she doesn't appear all that interested when I show her spreadsheets. Every once in a while she nods her head. So that's great. So that really helps because it allows me to take it a little less seriously.

You know, it's interesting. I see A lot of people that do it yourself investing or that want some help. Was there ever a moment when you had some doubt that maybe you could do this on your own, that you thought maybe you should go out and hire a financial advisor? Or were you sure from day one? No problem. I've got this. I can do this myself.

I would say for me, probably day one, maybe at first it was hubris. You know, I was a young, cocky guy, thought I could potentially beat the market, thought I could do all these great things. Fortunately, I was put on the right path early on in my career. Found the bogleheads, found kind of a simpler path to wealth, and it's been a pleasure really for me ever since. I enjoy reading about personal finance, listening podcasts, talking with other people. So it's kind of a hobby and one that kind of has a productive outcome at the end of the day.

Yeah, that's pretty awesome. So what's next for you? What's next in your financial goals? What do you hope to accomplish going forward?

Well, as I mentioned earlier, we would like to pay off our mortgage in full, which, given that we have a very low fixed rate mortgage, seems a little irrational if you look at the.

Numbers, especially with inflation running at 9%.

Yeah, I always told myself this would be great. Lock this in for 30 years, inflation will come back and I'll be making money. But we'd like to simplify our budget, get the largest line item in our budget out of there, improve cash flow and give us options. I've always been inspired by the writings of Morgan Housel and it's more about psychology than it is about the numbers. And as long as you can stick to your plan and keep your goals, whether those are the perfect goals or the perfect plan, you'll be just fine.

Yeah, I think there's a lot of truth to that. What I've found, you know, everybody debates, you know, paying off debt or investing, but in my experience, the people who are good savers that invest a lot also pay down their debt. So it's not really an either or. I think most people building wealth are doing both quite honestly. And, you know, there's not necessarily a right answer of how you blend those two together. To be successful, you probably need to do both at some point, so you might as well do both as you go along.

I haven't heard of too many people that have regretted paying off their mortgage early.

So, yeah, it's not like you can't go out and get another one anyway. Even if you don't like it. But anyway, congratulations on your success. This is pretty awesome. You know, I'm. I obviously can see you on video. If people are watching this on YouTube, they can see it as well. You're not an old guy. You're a young guy and you're already a millionaire. And you have, you know, most of life ahead of you, and the rate you're going, your wealth is just going to continue to grow. So congratulations to you and thank you for coming on the podcast and inspiring somebody else to do the same thing you've done. Because it isn't complicated. It is relatively straightforward, not necessarily easy, but it is straightforward to do what you've done. And your example shows that. So thank you for coming on.

Thank you, Dr. Dalle. It's been a pleasure.

Great example there. You don't have to be a doctor to be wealthy. There's actually a lot of people on the Bogleheads forum that are engineers because engineers love to get into these details and do spreadsheets. You know, totally nerd out on all the financial concepts because they're cool and they're interesting. But having an interest is worth a lot. You know, if you have the interest, you can learn what you need to learn and you can develop the discipline that you need to be successful. But it's hard to instill the interest in someone who doesn't have it already. I've been trying to learn how to do that for the last decade and hopefully getting better at it as I go along. But it's hard sometimes to make people interested in this financial stuff. So when you are, it's very, very powerful. If you're looking to boost returns, lower taxes and build wealth, join the WCI monthly Real Estate Opportunities list for tips and strategies to maximize your real estate returns. And for introductions to exclusive investment opportunities, expect educational emails that introduce you to syndicators, fund companies, online courses, and online real estate platforms. Go to whitecoatinvestor.com reopportunities to sign up today. You can do this, and the White Coat Investor can help. All right. If you want to come on the podcast, you know how to do it. Whitecoatinvestor.com Milestones and we'll share your experience with others and use it to inspire them. Till then, keep your head up, shoulders back. You've got this and we can help.

The hosts of the White Coat Investor Podcast are not licensed accountants, attorneys, or financial advisors. This podcast is free entertainment and information only. It should not be considered professional or personalized financial advice. You should consult the appropriate professional for specific advice relating to your situation.