How I Became A Millionaire (Part 4: My Thirties)

Note: This post is part of a series that starts here.

Sticks And Bricks

Having two major home renovations under our belt, we opted to create our third home from scratch this time around. In 1994 at age 30, we invested the $40,000 cash we had earned from our two previous sweat equity projects into a seven acre piece of weedy land upon which to build a barn and our next home.

We planned to live in this home indefinitely, but we picked a floor plan and house design with resale in mind anyway. We cut out the middleman and acted as general contractor, hiring, organizing and overseeing various tradesmen to do the work we weren’t qualified to perform. My husband and I spent months painting walls, laying tiles, and transforming the weedy field into a garden oasis.

An after-construction appraisal indicated that nine months of hard work had earned us $130,000 in sweat equity.

+ $290,000 post-construction appraisal (in 1994)
– $40,000 cash down payment
– $120,000 construction loan
= $130,000 net equity

My Takeaway: Learning how to be a do-it-yourself-er can pay off handsomely.

Planning Parenthood

Money ranks as the first most argued topic for many couples. It has been estimated that an astounding 80% of divorces are the result of money disagreements. Having a child is now the single best indicator of financial collapse.

I wanted children, but I didn’t want to be one of those statistics.

My choice to form my family through adoption rather than pregnancy was a decision I made when I was an idealistic teenager. The way I figured it, why “make my own” child when there are countless orphans dying for a family already.

Since I planned to adopt, my biological time clock wasn’t a ticking time bomb. My husband and I wanted to achieve financial freedom before adopting our daughter because we didn’t want to repeat our own parent’s experiences. We both grew up with young, struggling, work-all-the-time parents and quite frankly, that often stunk. We didn’t want money issues to negatively impact our family.

But how would we accomplish financial freedom while we were still young enough to enjoy parenting?

My answer came in the creation of a plan using Microsoft Money’s Lifetime Planner. I used this inexpensive software tool to problem-solve, create “what-if” financial scenarios, and monitor my progress along the way.

My Takeaway: Keep an eye on the big picture as you tweak the details.


Part One of my financial freedom plan was to make more money. Not more work, though, just more money. Neither I nor my husband were willing to work overtime hours; we weren’t interested in giving up our evenings, weekends or holidays.

For 12 years, my husband had worked as a company-employed construction worker for hourly wages, earning $20,000 to $35,000 annually. Meanwhile, his boss made many times as much revenue off of my husband’s efforts.

At age 30, my husband quit his job, affixed a rooftop pipe rack onto an old Econoline van and became his own boss. He hired a bookkeeper to handle the office-related tasks, and after a year or two, his annual net income climbed to $60,000 before leveling off. He was on the right track, but for the hours he worked, he wasn’t earning what he could.

I reviewed his business operations and found inefficiencies. My husband is an excellent tradesman with fantastic people skills; however, the math and minutiae of business management wasn’t his strong suit. Thankfully, that’s where I shine so we joined forces and doubled the annual net income to $120,000 the following year.

Statistically, the majority of millionaires are self-employed business owners. But it’s difficult for one entrepreneur to wear all the hats. My husband and I both have different strengths that we bring to the table and together, we make a great team.

My Takeaway: Stick to what you’re best at doing and get help with the rest.

Outwardly Simple And Inwardly Rich

Part Two of my financial freedom plan was to cut expenses. Rather than keeping-up-with-the-Joneses behavior, we embraced a lifestyle of voluntary simplicity. We shared one used car, shopped at secondhand clothing stores, and didn’t buy stuff.

But that didn’t mean we lived a miserly lifestyle. Far from it, actually. We learned to live our lives and spend our money in ways that are in alignment with our values. For instance, since we don’t care much for stuff (fancy cars, designer clothes, glitzy jewelry, electronic gizmos), we could afford to spend generously on things that are important to us (recreation, weekly massages, organic foods, travel). We learned how to be green. By reducing our consumption, we saved money in the process.

My Takeaway: A life well lived does not require stuff.


Managing two businesses had me working more than I wanted, so I sold my pet care and training businesses ($60,000) and put a down payment on a single-family rental investment property. My initial plan was to add a new property to my real estate portfolio every few years. I had hoped this was my ticket to a lifetime of passive income. But after three years of landlording hassles, I realized this source of income would never be passive enough for me. I abandoned this plan and sold my rental at a net profit of $15,000.

My Takeaway: If it’s not a good fit, ditch it and move on.

Dear Broker, You’re fired!

I’m sure there are investment brokers worth the fees and commissions they charge, but I haven’t met one. I burned through five brokers before realizing that no one cares as much about my money as I do. Brokers are salespeople. Naturally, they cared more about their bottom line then mine.

Each year, I’d compare our broker-managed IRA accounts’ long-term performance with the stock market indexes (Wilshire 5000, S&P 500, Dow Jones Industrial Average, NASDAQ, MSCI EAFE, etc.). I found that despite paying a decent sum to brokers for their expertise, our portfolio was under-performing the standard index benchmarks.

I decided to make it my job to learn how to invest. For two years, I studied equity investing via books, web sites, and conversations with other investors. Once confident that I had acquired the knowledge, confidence and skills necessary to invest successfully on my own, I fired our broker.

Not only did our return on investment (ROI) improve, but over the course of our lifetime, we will save thousands of dollars in commissions and fees.

As I watched the astounding power of compounding grow our portfolio, I knew I’d discovered a source of passive income I could embrace. I paid ourselves first, investing 15-20% of our income plus all unexpected windfalls (such as tax refunds). I made maximum allowable annual contributions to our IRA retirement accounts and automatically reinvested the interest, capital gains and dividends.

My Takeaway: Become the expert of your own money.

Bubble Trouble

In 2004, I read a book that at the time sounded like science fiction. But author and economic consultant John Talbott presented the facts so well in his book, The Coming Crash in the Housing Market : 10 Things You Can Do Now to Protect Your Most Valuable Investment, that I was convinced financial aliens would soon be landing upon our house to snatch away our sizable home equity.

Talbotts’s analysis made so much sense to me that I decided to foil the aliens by selling our home and cashing in. We became renters.

In doing so (and when explaining why) most of our friends and family thought we’d lost our marbles. “Renters throw their money away”, they’d say. Everyone seemed to believe that real estate prices would always go up. So did many readers of my blog, when in the fall of 2007, I first shared that I was a renter. But there is no doubt about it now — the equity-sucking aliens have landed upon our rooftops. It should come as no surprise really; a 120-year historical graph shows that home prices in the U.S., adjusted for inflation, stayed relatively flat for 100 years, then began rising in 1981 and surged from 1997 to 2006. No irrational bubble can continue to inflate indefinitely.

In 2004, after sticking a “For Sale By Owner” sign in the front yard and selling the home we had built and lived in for nine years (at a net profit of $335,000), we rented and invested the cash – and our monthly savings — into a diversified portfolio of mutual funds.

Renting was much less expensive for us than owning and by putting our equity to work, our net worth surged exponentially.

My Takeaway: Follow common sense, not the crowd.

… continued in Part Five: My Early Forties

The beginning of this series started here: How I Became A Millionaire: Childhood

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Millionaire Mommy Next Door

A self-made millionaire shares her recipe for success, happiness and financial freedom.

24 thoughts on “How I Became A Millionaire (Part 4: My Thirties)”

  1. Thanks so much for sharing you journey. I am 29 years old, living in Canada. I am a newlywed, my husband is in College to become a nurse. I work a full-time job, and also have a photography business on the side. Many of our values are aligned with yours- I want to be very present in my kids lives as they grow up, and we want to live simply. In every choice I make, I am motivated by whether or not it will create freedom for me and allow me to live the lifestyle I want (I struggle with the notion of giving up my free time 9-5, Mon-Fri).
    I too have seen that understanding investing is a great key to building wealth (skip the middle man broker). I was wondering if you would be willing to share what books/websites you think are current and insightful on the road to understanding how to invest for yourself. What avenues do you use to invest in mutual funds? Do you have a discount broker account through a bank? I’m fairly new to this…any tips you have would be great. I know Canada will have some differences. For example, what’s an IRA account?
    Karen in Canada.

  2. PS. No kids yet- not until my husband is finished school, hopefully! Also very minimal debt- only a few thousand in student loans. My full-time job pays for our cost of living. We’re renting a 1 br. apartment.

  3. Hi Jen,
    I did all of the same things that you did but here is where you and I parted ways. In 2001 I sold my home (after buying, renovating a few homes etc. just like you did) But I did BOTH afterwards: bought another downsized home for cash with the equity AND invested the rest. 25% of the investment in the stock market, mutual funds and the balance in CD’s which everyone said I was crazy also (all of it should have gone in to the stock market but I learned from ’87 & ’01 NOT to trust the stock market 100%)

    I agree with you currently, however, that this past year it was advisable to rent rather than own. But since we don’t have a mortgage and we built the final home ourselves, our bottom line is so low that it doesn’t matter what the housing market does. We’re still ahead. Taking in all costs to live and run the home, it costs us only $816 a month to live in our home which is way less than rent.

    The holdings I had in the stock market lost most of their earnings. I’m just not that good with the stock market like you are. I’m great, however, with building wealth through home ownership. A feat that is not quite easy to replicate today. (the CD’s are fine)

    I had an opportunity to buy a second home in Florida but I heeded your words and rented instead. Smartest thing I ever did. Since I would only have used the home 3 months out of the year, it was insanity to buy a home in Florida. And now looking at the devastation in Florida housing ($700K homes are only worth $200K now) I am very happy that I listened to you (despite my kicking and screaming).

    Live and learn.

    I’m currently renting a home for February in Fl, but next year will do Jan, Feb & March. No matter how low the homes go down here, with the monthly maintenance charges etc, it’s just not worth it. (But there are a couple of bargains at only $45K-I have to hold myself back-LOL)

    Thank you for all your great advice.

  4. Pingback: Parenting by Facebook « Parents as Teachers National Center | What Makes a Good Parent
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  6. Thanks for this series of posts Jen. Great reading and very enlightening.

    P.S. I RSS feed your blog so I hadn’t noticed the website changes, especially the new photo of you and Melia. Hasn’t she grown!

  7. Hello,

    I so enjoy reading the story of your life!

    I share those values of living a simple life
    and not following the Joneses.


  8. That was a great read. I am an artist so Millionairdom is probably not in the cards for me but one can always hope (lol)

  9. Great post! I always like hearing your stories because I hope to have similar stories (but with my own twist of course) in the near future!

    Thanks for sharing your story!

  10. Hi there

    That’s a fantastic story. I really think it’s great when people share their successes as I believe their is more than enough to go around. All the best with your future.

    Kind regards

    Ryan Kilfoil

  11. Eric, as I’ve shared before, most of my money is currently parked in FDIC-insured accounts (and has been since I pulled it out of the market in early 2008). In a previous post I wrote: “Since my investment style is to follow momentum trends, I’ve been moving out of stock mutual funds and into cash since early 2008. 86% of our investment portfolio is parked in FDIC-insured banks; the balance is invested in a variety of Upgrader funds. When the markets show upward momentum again, I’ll move my cash incrementally into the new market leaders as they emerge.”

    Eric, the markets never move straight up and only up. Investing is a long-term approach to wealth. Since I constantly “upgrade” to new market leaders as they appear, I have ample opportunities to take money out of the market if/as needed. And actually, we’ve reduced our living expenses so much over the last couple years that we haven’t had to take anything out of our investment portfolio. We’ve managed to live off of our part-time business!

    I’ll be expanding more on this in my next series update (my early 40’s).

  12. You seem to be making all the right moves, until you say you sold your house and began investing in the stock market. You say you are living off your returns from the stock market. Now… I know dividends can create some income, but there have been no returns with any stocks the past year (except McDonalds and Walmart), and stock losses have been more than enough to cancel out any gain in dividends. How have you done it? Frankly, I don’t believe you that you are living off stock market returns.

  13. This is a very inspiring story. I rent too and all my friends think I’m a looser. I don’t have debt and I have considerable savings. My goal is to buy my home cash. Hope I could :)

  14. Hello canadianbanks,

    I actually think that you are a WINNER, not a loser.
    Don’t listen to your friends, you are the one on the
    right track.


  15. Thanks for the inspirational series – as Im now in my 30s and trading currencies online. Wholeheartedly agree that we are the masters of our own fortunes.
    Trading results that make you say W.O.W.
    Follow me on

  16. We live at about half the lifestyle of our friends who have half the income we do. We had to go through three realtors to find one who didn’t want to just sell us a house based on what we’d been approved for. We ended up buying one about 1/3 of the pre approval. Our housing market was artificially low when we moved here, and has remained stable so far. Our friends laugh at our car we laugh at their $600 payments. I wouldn’t trade being a frugal rich person for being a flashy poor one any day.

  17. Thanks for all the info you share about what you do and your way of life,I find it very encouraging as we are also closet Millionaires in New Zealand and no one really knows this as we live well below our means in every way.My husband works partime by choice and I am am a fulltime home and lifestyle facilitator and the money manager of the family:)

  18. Hi Sharon

    That’s fantastic! NZ is such a beautiful place, and you sound like you deserve all the success you have. All the best,

    Kind regards

    Ryan (The Kiwi Millionaire)

  19. I love your entire story! You’ve made some great moves throughout your life. I’m curious, how hard (or was it all hard) to talk your husband into selling your home? Did he just have complete faith in you? Or was it a joing effort? Just curious because you said so many around you were skeptical of selling your home to rent.

  20. Great read. Though i would have to point out that if you had become a parent in your twenties, the likelihood of gaining so much wealth would have been significantly small.
    The majority of people who become parents in their 20’s and 30s do not gain a large amount of wealth due to all the expenses attached to parenthood. The exception of course may be the doctor, lawyer or investment banker who make substantial amount of money to begin with.
    But in reality, It really isn’t that hard to gain substantial wealth in a two income, frugal family with no children. The true challenge for many of us is managing our households on modest incomes when there are children involved. I have found that even being extremely frugal have yielded very modest results.
    It is true that the majority of millionaires and others “well off” are self employed (own businesses).

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