So, I saw that the Ten Wilsons newsletter had our profile listed among 20 others profiled this week. I've thought about writing up our Net Worth Story before, so here goes. Hopefully this is helpful to someone or a few someones out there. As a starting point, we are not FIRE folks, but we have looked to that community for guidance. We are in the "work hard, live well / play hard" and "you can have it all" camps.
A financial story is really a life story. It's about values, hard work, overcoming challenges, taking advantage of opportunities, and a lot of luck. We are GenX after all.
As I mention in our profile, meeting, marrying and staying with the right life partner is a hugely important financial decision (as well as a personal one). We would not be anywhere near where we are if we didn't do this together - and do it well. Our story starts at the turn of the millennium. My spouse and I met when we were both in our late 20s / early 30s. Before meeting each other, we had somewhat lengthy journeys in the sense that we were starting careers "late" since we both worked and had post-graduate educations prior to law school. However, by the time we were in law school, we had nothing saved and were net worth negative when including credit card and student loan debt.
We both grew up solidly middle class with military fathers. We both have siblings who've needed more support than we do. Our parents are fine, even comfortable, but neither of us had any financial support from our parents once we left our respective homes and went to college.
After law school, in the early 2000s, as a result of hard work (we did not go to one of the "top 14" law schools), we both landed jobs in BigLaw. We bought our first home in a VHCOL city and had our first child prior to 2005. Back then, you could buy a home with no money down if you had good credit and a steady income. That is what we did. Our first mortgage was quite literally larger than our home's purchase price, and it was interest only for 5 years. We understand now the privilege this was, and we would not have been successful if we had to save for a down payment first.
Let's talk about expenses for a moment. We have high incomes and we are not frugal. We prioritized maximizing savings in our respective 401(k) accounts, and have maxed those accounts since the beginning. We were also fortunate enough to have access to other pre-tax vehicles like profit sharing and cash balance pension plans - we maxed those vehicles as well. But after that, we matched our expenses to our remaining income, including putting savings into 529 accounts. That is why we have very little post-tax investments. (The company stock and options category is very recent for us, not to mention volatile, and we do not rely on that for budgets or retirement income). This is another reason we can't really be "FIRE" since we'll need to keep working until we reach 59.5 at a minimum.
There are lots of opinions on this subject, but in our view, it would not have been possible to get to where we are without living the way we have - that is, maintaining a high dual income and the sacrifices (e.g., no stay at home parent) that takes. That means nannies and babysitters and after school drivers/minders, housekeepers and expensive private schools from pre-school on up. To maintain this, we've both had to be really good at our jobs and we've had to find niches that allow us to enjoy our jobs - make moves when opportunities present themselves to move up. I can comfortably say that we are both in our primes at this point and are respected as experts in our fields. This takes a tremendous amount of effort, especially when you are raising two children from birth to college over this time period, as we have.
Back to the net worth journey. After our second child came, we bought and moved to a new home. We did this by leveraging the equity in our first home with a line of credit that we used for the 10% down payment on the new home. This happened to be terrible timing. We moved at the beginning of the financial crisis, just as the housing market was crashing. As a result, we were unable to sell our first home to cover the now two mortgages we had. It took us more than five years to sell that first house, and all in, after rent, ongoing maintenance and sales price, we took a substantial loss. All the while though, our incomes grew, we moved up at our respective firms / companies, and matched expenses to income (after savings).
About 10 years later we moved again. This time, we were able to use 401(k) loans and loans against whole life insurance to come up with the down payment. We rented out our prior home. And this time, we had good timing. The new home allowed us to have more space that served us well during the pandemic lockdowns and it has appreciated significantly. We eventually sold the rental near the height of the pandemic frenzy and ended up more than making up for our prior real estate losses.
That brings us to today. We are both still working, and planning to continue to work until we are comfortable we can maintain our standard of living in retirement - and that will depend a lot on how our children are doing post-college. We are also continuing to live well / play hard - vacations, travel, college tuitions, the new beach house, etc. No more nannies or babysitters thankfully!
If this has been helpful, let us know. I may write a bit more at a later date about some of the specific financial decisions we've made, pros/cons, etc. Good luck to everyone on their financial and life journeys.
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Value of deferred comp now captured
Houses updated to include basis, below Zillow value
Cash is net of credit card and personal loan debt. If Credit Card debt is a positive number (and cash = 0), such debt exceeds current cash on hand.
Kid now in college so drawing down 529 account.
$1M NW at age 40; $2M NW at age 43; $3M NW at age 45; $4M NW at age 46; $5M NW at age 47; $6M NW at age 49 |