Millionaire In The Making (Top 3 Tips)


The first million in net worth is a struggle for 99% of people. There are those lucky 1%, but most of us will have to build that first million the hard and long way. But the really hopeful thing is that is it possible and there are many examples of ordinary folks doing it. Welcome to Millionaire in the Making.

Millionaire in the Making

Photo by Josh Moore on Unsplash

Welcome to “MIM” or Millionaires in the Making. Here we provide highlights and top 3 tips from middle class folks who are on their way to building a million dollar net worth. Let’s get to know Tom, Michele and their young child.

  • Tom & Michele plus young child, both in their late 30’s.
  • Currently have approximately $760,000 net worth, including $260k in primary residence equity
  • Top 3 practices that are working for them: bought a house, low cost hobbies, automated contributions to investments

Tom and Michele are your average middle class college educated couple with 1 child. They agreed to let us peek at their finances and do an overview of their situation, what they have done right to date and some areas that could use some improvement. Tom works in real estate as a mortgage broker and Michele has a State government job working in forestry. Tom makes about $120,000/year and Michele makes $52,000. These are good solid middle class salaries, but they do live in a higher than average cost of living area.

Bought a House

Tom and Michele are very happy they bought their home at about age 30. 9 years later they avoided massive rent increases in their area and have built considerable equity. Their millionaire plan is aided by this for a couple reasons. one, their monthly housing expenses are fixed while the price of everything else rises around them. They also own an asset that is building equity that could be leveraged in the future if they so desire.

Low Cost Hobbies

Tom and Michele swear by their low cost hobbies. And this is no small thing. They enjoy hiking, camping, cooking and doing as much outdoors with their young daughter. These hobbies extend into a general aversion to high cost activities, stuff, etc. They will splurge on quality at times (like a Yeti mug), but overall they drive normal gently used cars and steer clear of high end restaurants.

Always Contribute Something

They have not been able to ever max out their retirement accounts, but they have always at least contributed 7-12% to receive an employer match. We are always shocked when we hear people tell us they have not got around to signing up for their companies 401k plan or have not set up an easy withdrawal account into a company like Vanguard. People! In other words, we have to do this now and let it ride to be a millionaire. Therefore Tom and Michele have always contributed at least something each and every paycheck. This has resulted in retirement accounts with hundreds of thousands in them, aided as well by the last decade of stellar stock market returns.

Debt Sensitive

Finally, Tom and Michele mentioned a “sensitivity to debt” as another secret to their building wealth. They have credit cards, but they religiously pay off the balance each month, no questions and no exceptions. In general, they are “debt sensitive” which means they don’t like it. They do have mortgage debt, but no other besides that.

TOP 3 Holdings for a Potential Millionaire

Tom and Michele currently hold the following investment vehicles as part of their retirement accounts:

  • Vanguard Growth Index Fund (VIGAX)
  • Vanguard Russel 2000 ETF (VTWO)
  • Berkshire Hathaway BRK-B stock

In my opinion this is a very simple and reasonable growth oriented mix of investment vehicles. Over the long run the companies within these funds should thrive and grow. But, we give no individual stock advice, therefore this is just listed for informational purposes. But, would like to see more diversification and branching out of asset allocations.

Areas of Improvement

They mention a couple areas they could improve. First of all, with a young child, they have failed thus far to put together a Living Trust. They are young so it is no fun to think about bad things in the future that could impact a family. But most financial planners will stress the importance of a Living Trust. The nice thing, is that once it is all done, a person can put it away and sleep better at night knowing that their loved ones will be taken care of. A millionaire will do this for their family


For having a relatively high net worth at a young age they are not too well diversified in their investments. I believe strongly in strategic diversification in what we call the raging 20’s. Check out our portfolio set up for this era of volatility:

Financial Literacy

They also mention improving their financial literacy. This is something all of us can continually work on and seek future investment opportunities. They have admittedly benefited from passive investing the last decade as everything pretty much went up. They acknowledge that those gains may be a little harder to come by going forward and will need to seek out alternative opportunities. Also check out the book “The Millionaire Next Door”.

5 Main Concepts for Building Wealth

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