Many financially independent Americans don’t let their wealth interfere with their lifestyle.Getty Images; iStock; Natalie Ammari/BI
Not all millionaires have big houses, boats, or fancy cars.
In fact, six people told BI their strategy for growing wealth – and keeping it – is the 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 name ten years ago.
Currently, the Indiana couple is worth about $1.3 million.
Gary said he had an “unbelievably average” path to wealth, emphasizing wise investing and a simple life.
He made a decent living in real estate, saying he and his wife never made more than $200,000 in a year. With two kids and the rising cost of living in the US, that money can go fast. So, for a decade, Gary has stuck to a meticulous budget.
“We shop at Aldi,” he said. “We are doing enough things to make significant gains in our lives that 10 years of combined efforts have brought us quickly 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 parents at 30, bought a small three-bed, two-bath house for $200,000 in suburban Indianapolis. They may qualify for a larger home, but having financial flexibility is more important.
Gary advanced his career in real estate, jumping from position to position while negotiating raises. He started a brokerage and bought houses to convert into rental properties. He said he “deliberately understated” his income to spend more time with his children. They prioritize maximizing their retirement accounts and investments.
Anthony Drew Gary said his path to wealth was “extraordinarily average.”Anthony Drew Gary
To avoid the lifestyle, they stick to a strict monthly budget, take vacations when lodging is cheapest, and shop for their children’s clothes and toys with other families in the neighborhood. They say it’s an easy way to live simply without sacrificing quality of life.
“I play a lot of golf – I’ll hit as many bad shots on a $100 polo as I would on a $25 polo,” Gary said. “My story is one of doing the right boring thing to make a really good life, depending on how much we want in the coming years, we might be able to work until we’re 40, even if we have two children.”
Some stories about rich people and early retirement involve seemingly unrelated circumstances, such as family wealth, entrepreneurship, or a superstar career at the top of the corporate ladder.
But many of the billionaires Business Insider has spoken to over the past few months aren’t facing any immediate problems. Instead, they spent a decade or more investing wisely and living simply. Most emphasize that the importance of budgeting and frugal spending should not be overlooked, although it can be difficult to ignore the social pressure to keep splurging on luxury items and experiences – before and after you become rich.
Xiao Yu, 37, got into the habit of saving as a child. His parents were rice farmers in China who moved to the US and worked in restaurants for minimum wage. He said he was an average student, although he never had student loans from a state university.
He worked until becoming a CPA and financial manager, achieving financial independence with his wife, a housewife, in October 2023 and trading in corporate life for early retirement and a tax advisory business. He earned about $180,000 before retirement and will earn $100,000 a year self-employed.
Xiao Yu and his wife save 35% to 45% of their income.Xiao Yu
Yu, a father of two who lives in a 2,100-square-foot house in suburban Indianapolis, said he and his wife built their wealth by consistently saving 35% to 45% of their income, creating an annual budget, avoiding lifestyles. by driving decade-old vehicles, and changing companies or seeking internal promotions every one to two years. He also monetizes his financial coaching skills by helping his colleagues with tax returns and planning advice.
They allow them to generate income to spend on vacations, renovate their homes, and invest in their children’s futures. He spends his time trying new hobbies such as building a backyard garden.
“We are not flashy with our wealth because money is not our ultimate goal – financial freedom to choose how we want to live is our goal,” Yu said.
Of course, many Americans practice budgeting and living modestly just to get by, not to get rich. Americans who live paycheck to paycheck won’t have much investment or risk-taking, making it nearly impossible to grow their wealth. Some families say that with six-figure salaries, they struggle to invest for their future or buy a home.
According to the Federal Reserve’s latest Economic Well-being report, 14% of families making $50,000 to $100,000 are unable to pay their current month’s bills in full, while more than half of all households experienced a decrease in savings over the past 12 months. Only 63% of families said they could cover a $400 emergency expense using 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 several years, suggesting that many people are having a harder time keeping up.
Still, many Americans refuse to keep up with the Joneses and have learned to be content with what they have. Lawrence Delva-Gonzalez, 41, worked as an auditor in the Washington, DC, area and built his net worth from $150,000 in debt in 2012 to over $1.3 million in August. However, he said he has no plans to reduce his savings rate.
Delva-Gonzalez was raised in Port-au-Prince, Haiti, where she says she was “never rich.” He remembers his grandmother waking up at 4 in the morning to work to earn money. He said his mother never made more than $30,000 a year.
Lawrence Delva-Gonzalez and his wife increased their net worth from $150,000 in debt in 2012 to $1.3 million in 2024.Lawrence Delva-Gonzalez
After moving to the U.S., he got his bachelor’s and master’s degrees from a public university, and was more than $100,000 in debt. His first job paid him $27,000 a year before taxes, and he said most of his income was spent on food.
However, considering his finances remained stagnant, he decided to reduce his monthly student loan payments and invest some of that money in the stock market and retirement account.
“The more you can invest in the front end in a tax-advantaged account, it will have an outsize return for you in the back end,” Delva-Gonzalez said.
Marine Corps veterans jump from job to job to increase pay, start tracking all expenses using a budgeting app, and save more than 50% of their income by cutting unnecessary expenses. He bought a condo for $132,000 in 2016, which he says saves money long-term given how quickly rents go up in DC. Once she and her husband had a stronger nest egg, they purchased a rental property in Tallahassee, which increased in value.
“It’s just reckless human nature: We think that wealth is somehow unattainable,” Delva-Gonzalez said. “The more you do what you have to do, the more you create opportunities to do what you want.”
After all, becoming a millionaire isn’t just about retiring to a beach house. Justin Hall, 56, considers retirement important but says the goal of building wealth is not just about living a life of luxury.
Hall discovered the FI strategy in 2017, although he says he has always been frugal and built his wealth slowly. He and his wife, a civil servant and a teacher, respectively, arrived at a combined seven-figure net worth in Virginia with enough passive income from investments for an early retirement fund and a full-time nomadic lifestyle.
Justin Hall and his wife are now living a nomadic life after early retirement.Justin Hall
Hall, who served 20 years in the Air Force, started investing young, put a lot of money in 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 current pension is $61,600 a year. He also earned slightly below six figures every year during his 10 years as a civil servant. He and his wife also earn $34,000 a year in real estate and $64,000 in investments.
He has many hobbies as a musician, coin and stamp collector, and cyclist, although he sells most of his items to focus on improving himself and keeping his expenses low.
Hall admits that he made a variety of 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 wary of the market during the 2008 recession. little, and a tight budget allows him to retire at age 52. He and his wife are downsizing about 98% of their possessions by 2023 and have been traveling the world for the past year.
“I push back against the worn binary either make money to have a purpose or retire early and sit on the beach all day sipping fruity drinks,” said Hall. “I strongly believe that early retirees can live comfortably without paid work.”
Are you part of the FIRE movement or do you live by some principles? Reach this reporter at nsheidlower@businessinsider.com.
This story was originally published in September 2024.
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