Journey To Become A Millionaire
It has been 18 years since I moved to the U.S. I spent the first 10 years setting up for life. I have been a middle-income earner during my early career. My income doubled after I moved to a big city. I lived through the mid-2000’s housing bubble. I had sizable medical expenses in 2010. I started investing heavily in alternative assets through crowdfunding platform in 2013. I bought a luxury car in 2015.
Graduated from college in August 2004
I graduate from college debt-free. I was still living paycheck to paycheck, but I had no student loan or auto loan. Although I graduated with a bachelor’s degree in finance, I had no relevant experience in the financial services industry. While trying to look for jobs, I realized that it was easier to find a job in the technology industry.
First tech job out of college in September 2004
In September 2004, I started my 1st full-time job at a small tech company. My salary was $32K. The company was shit and my boss was terrible. In July 2005, I found a better job at a mid-size toy manufacturing company through a referral. My salary increased to $49K base + 4-8% bonus. In late 2010, I decided to leave after the company went through multiple layoffs, cut the bonus pay, and implemented a 2 week furlough. My ending salary was $54K.
I had been living in a 2 bedroom apartment with 2 roommates for 7 years. At the beginning 2007 after I got my H1B, we finally moved to a 1 bedroom apartment. It was in the middle of a housing bubble. The rental price of this high-end 794-square-foot 1 bedroom apartment was $1,863 a month (current rent is $2,100+). It increased to $1,885 after the first lease renewal in 2007. Our rent to income ratio was close to 50%. It went up as much as $1,915 during 2008. In early 2009 after the housing bubble burst, it decreased to $1,660 at the second lease renewal. I was able to negotiate down to $1,610, but we ended up moving to a brand new apartment nearby. We paid $1,517 a month for a high-end 724-square-foot 1 bedroom apartment (current rent is $2,000+). It increased to $1,525 after the first lease renewal in 2010. We had large medical expenses during 2010. When I left the toy manufacturing company in early 2011, our emergency fund was only $40K.
$100K in August 2012 (8 years)
In 2011, I accepted a full-time offer from a mid-size consumer electronics retailer that pays $80K + 5-10% bonus. We moved to a bigger city to live closer to the new job. We rent a brand new high-end 741-square-foot mezzanine studio apartment for $1,925 a month (current rent is $2,448).
I got bored with the new job after 2 weeks. In April 2011, I left the company and started a contract job at an entertainment company. Obviously there were a lot more job opportunities in a large city. My pay increased to $57 per hour + lots of overtime opportunities (equivalent to $150-160K a year). Our savings increased to $75K at the end of 2011, and reached $100K in August 2012.
$250K in August 2014 (10 years)
In 2012, we moved closer to the entertainment company. We rent an 1,100-square-foot 2 bedroom apartment for $2,299 a month (current rent is $2,695). We were planning to start a family.
In June 2012, the entertainment company offered me a full-time position. Salary was $40.87 per hour (equivalent to $85K a year) + 5-10% bonus + overtime pay. I declined the offer and stayed a contractor for another 4 months. In November 2012, I accepted a full-time offer from another entertainment company that pays $120K base + bonus. I got bored again after 2 months. In June 2013, I left the company and started a contract job (corp-to-corp) at a financial software company that pays $75 per hour (equivalent to $180-200K a year). The entertainment company counter-offered me $140K base + bonus when I left. My net worth reached $250K in August 2014.
$500K in May 2015 (10 years 9 months)
In late 2014, I accepted a full-time offer from the financial software company. Salary was $133K + 20% bonus + $60K RSU. My net worth reached $500K in May 2015. It dipped after I paid over $100K for a dream car, but came back to $500K by the end of 2015. The investment performance was great. My gross income was over $500K in that year. I’ve done credit card arbitrage, and concentrated heavily in alternative investments.
In 2015, we moved closer to the financial software company. We rent a brand new high-end 821-square-foot 1 bedroom apartment for $2,250 a month.
$1M in December 2017 (13 years 4 months)
In 2016, I transitioned into a new job within the same company, and we moved to another city. We rent a brand new high-end 1,185-square-foot 2 bedroom townhouse for $3,495 a month.
My net worth reached $1M in December 2017. My salary stays around $250K ($153K + 20% bonus + $180K RSU). In 2017, more than half of the gross income consists of passive income. As my investable assets grow, more come from passive income and less come from salary.
What Could I Have Done Better?
Overall, I have done very well for the past 10 years. I am happy where I am today. I lived beyond my means, but I also increased my means. There are few things I probably would’ve done differently if my priority was to maximize my savings.
Live Within My Means
I’ve been overspending on rent. Luxury apartments cost me $1,000-1,200 more per month than affordable apartments. That is $12-15K extra cash per year. Our emergency fund could have been over $100K rather than 40K when I left the toy manufacturing company in 2011.
I limit myself to what I think I can do. Earning a six-figure salary was a dream. I hoped to accomplish it before I turn 40, but I didn’t believe that could really happen. I ended up staying at my 2nd job (low-paying, low-stress) too long. It took me just a few job-hopping to find a six-figure income job.
The 140K luxury car was not a “must buy” item. I could get a new affordable small car, or a used family car or compact SUV. The cost will be even greater if I account for the opportunity loss, which would be 10K extra cash per year (140K * 12% return – 40% tax). Also I moved to a townhouse with 2-car garage for my new car. Additional living expense is 1K per months, or 12K per year.