Have you ever heard the saying, “If you can't measure it, you can't improve it”?
It rings true for a lot of us … especially those of us who are looking to improve our financial situation.
Our next Young Millionaire, Blake from The Dividend Pig, decided to track his net worth for the first time just three years ago. That tracking (and his hard work to improve his situation) helped him to increase his net worth by $300,000 in just 3 short years.
Check out Blake's incredible story of 30-something success!
How old are you? If you have a family, tell us about them and their ages.
Howdy, everybody, I’m Blake – AKA: The Dividend Pig. I’m 39 years old and married to a wonderful lady and we have one fantastic child. The purpose of The Dividend Pig is to chronicle my path (and keep me accountable) towards my goal of early retirement. My plan is to reach FI by 45 and cash flow my retirement with dividend income.
What part of the country do you live in? Do you own your home or rent?
I live in the South – Atlanta, GA to be exact. Atlanta is a great place to live, minus the traffic, with a reasonable cost of living. I have owned a house (with a mortgage) for the last 15 years. The home I currently live in was purchased in 2010 after home prices dipped nicely.
While we bought during a great time, my home was also my biggest financial mistake I’ve made. I was ignorant about long-term financial planning when we purchased our home and thought we should buy the biggest house we could afford. That was not a smart move on my part. We now own a house that is significantly larger than we need that has been filled with more stuff than any person could ever desire.
Related Article: How to Increase Your Net Worth by $700,000 in 7 Years
When did you start tracking your net worth? What was it at that time?
I began tracking my net worth about 4 years ago after a conversation with a friend. He encouraged me to focus on my financial life and become a more active investor. I took his recommendation to heart.
I began reading everything I could on investing and quickly determined that dividend investing was the investing philosophy for me and my risk tolerance. You could say I jumped into the deep end and I’m very happy I did. My wife and I had led a pretty frugal lifestyle and had a net worth of $774,278.76 in June 2015.
What is your current net worth? And what is it made up of?
I report my net worth on my website each month, so this is quite easy to break out.
Real estate makes up a large portion of our net worth. We have over 600k in properties (home and a rental home) with roughly 250k in mortgages. A second rental home which we recently sold and turned into cash is sitting in a high yield savings account with a bit over 233k. Our investment accounts:
– 250k in a 401k
– 133k in our ROTHs
– 100k in a brokerage account
As of September 2018, our total net worth is $1,088,108.96.
What are your current sources of income? If married, does your spouse have other income sources?
The vast majority of our income comes from my job. I work and travel a lot. It’s taxing on me and hard on the family which is why I’m shooting for financial independence (FI) at 45. Only 6 more years to go!
We are a single income family. My wife has the hardest and most important job between the two of us, she homeschools our child. Other than that, we do have passive income from a rental property and of course, dividend income which is growing every month.
Related Article: 7 Steps to Grow Your Salary to 6-Figures
What has been the single best thing you’ve done to increase your income up to this point?
Getting raises at work. Sadly, I don’t have any tricks here to offer with regards to making more money at your job. The only thing I can say is to do your best, care about the quality of your work and you “should” be rewarded. I say “should be rewarded” as it’s really dependent on whether your managers are good at taking care and advancing their people. Sadly, managers recognizing, nurturing and advancing their reports doesn’t always happen as it should. I’ve been lucky in this regard.
Now on the passive income side, I have saved and invested as much money as I can every month. Since I began tracking dividend income 4 years ago, I’ve earned almost 20k in passive income from dividends alone. On average, an extra 5k a year is wonderful, and I didn’t have to trade an ounce of my sweat to earn this money. All I had to do was read reports and click a few buttons.
What ways do you invest your money?
I am a dividend growth investor and only invest in individual stocks that pay me cash to own them. My dividend portfolio now produces a little over $13,500. This means I only purchase stocks that reward their stockholders with a percentage of their profits in cash. These small payments are usually paid out every quarter. On top of that, I focus on companies that raise their dividend yearly. For example, the last 2 months, my dividend income has grown over $75 each month through company dividend raises alone.
Related Article: Our $6,000 Family Vacation to Cabo Only Cost Us $300
Did you receive an inheritance or windfall of some kind during your life so far?
I proudly stand on the shoulders of giants. I was born into a middle-class family with extremely loving, caring and generous parents. My folks gifted me a college education which allowed me to come out of school with zero debt. This was a generous, expensive gift and a legacy that I will pass on to my child.
My wife managed to escape student loans as she is brilliant and hardworking. She went to a state school on a full scholarship. On top of education, we’ve also received roughly 65k after grandparents passed away. This money was put directly into our home purchase we made in 2010.
What debts do you have (if any)? If so, what are they? Which have you paid off?
Let’s start with the debt we don’t have. We have zero credit card or consumer debt. As I mentioned above, we are very fortunate never to have the burden of student loan debt. My wife and I were both taught to pay off our credit cards every month and never purchase anything you can’t afford to pay for in cash. This has been an extremely valuable lesson which has kept us clear of bad debt.
The debt we do have are home mortgages, 2 of them. One for a rental property where we have roughly 45k left to pay. The other, our big mortgage (our home) has just over 218k left. We could pay it off with cash now, but we already have such a large percentage of our net worth in real estate. We are holding the cash to invest in dividend growth stocks as values pop-up.
How do you track your net worth?
I use a simple Google spreadsheet. The first day of every month I make a copy of the last months net worth spreadsheet and add a new column and update the data. It’s quick and simple.
Since I’ve been tracking my net worth over the last 4 years, our net worth has grown over $313k. Tracking our net worth monthly has been one of our most important steps towards FI. If you don’t know where you currently are financially, it's very hard to plan for the future. Tracking your net worth monthly allows you to realign your goal with your actual spending to ensure you are on the right path. If you don’t do it already, start today.
Do you budget your money monthly?
Yes, well, kinda. We have a budget but we are at a point in our lives where we don’t have to work hard to stay inside of it (perhaps that means our budget is too generous). We pretty much buy the same stuff we did the month before so staying inside the budget doesn’t require much effort to maintain.
What are your annual expenses?
We spend a little over $5k a month. However, that includes our mortgage as well. Here are a couple of monthly line items as examples – Groceries – $550, Dining out – $50, Car insurance – $200, Internet – $65, Cell phone – $40. Once our home is paid off, or more likely we downsize to a smaller home, our monthly expenses will be roughly $3,300.
We have focused on keeping our spending reasonable. Here are some the ways I save 14k a year more than my peers.
What is your favorite fintech tool that helps you grow your wealth?
I like both Mint & Personal Capital. Mint for everyday transaction tracking and personal capital for investment data.
Why is it important for you to build up your wealth?
The purpose of building wealth is for peace of mind and ease of life. I don’t want to be forced to work a job for a paycheck anymore and I want to be able to spend more time with my family. Once you have a decent amount of wealth, that wealth can do the heavy lifting for you allowing you to live the life you want, not the one you’re obligated to live.
What is one financial mistake you’ve made along your young millionaire journey?
As I mentioned, buying my stupid big house. We are close to having a McMansion sized home where we have over 1,200 sq ft per person. If I had known, I would have purchased a normal sized, three bedroom forever home, in a good neighborhood and it would be paid off by now.
What book has been influential to you on your financial journey?
The Millionaire Next Door. If you haven’t read it, I strongly suggest you do. Dr. Stanley interviewed millionaires and discovered some very interesting findings. Spoiler alert, all the millionaires were extremely frugal and didn’t waste their money on stuff. Oh, and obviously, check your local library for a copy… they’ll have it.
Related Article: How to Become a Millionaire in Your 30's with Dividends
What is one financial hack that has helped you that you think most people don’t know about?
I like to think about potential purchases in relation to dividend income. For example, the new iPhone X is cool, but it costs 1k!! Do I need it? Heck no. Do you need it? Heck no. Do you want it? Maybe. Here’s how I evaluate spending money on most purchases.
If I were to instead invest that 1k into dividend stocks instead of buying an iPhone X, I would earn roughly a 3.5% yield on that 1k which equals $35 a year… forever (hopefully – dividends aren’t guaranteed).
I would much rather earn $35 per year and keep my old phone and reinvest those dividends.
In 10 years (with a 5% dividend growth rate), instead of spending 1k on a phone, I would have made a little over $440 in dividend income and would be receiving almost $55 a year. For me, it's a no-brainer, I would much rather the income than the phone. Think about what your money can earn you, not what you can spend your money on.
Where do you find the most joy in your life?
Without a doubt, the most joy I receive in life is from my family. I am extremely blessed to have a wonderful and supportive wife. There is nothing more rewarding for me then watch my child grow, learn and love.
What’s one piece of advice you’d give to someone who wants to become a young millionaire like you’ll be?
If you have a plan to marry, be certain to marry someone who’s financial values mimic yours. If you want to retire early, don’t marry someone who likes to go out to eat every night and has to drink alcohol with each meal.
For someone who values financial independence and is looking for the family life (and overall happiness), spouse choice is the most important decision one can make. If you and your spouse aren’t rowing in the same direction financially, you’ll go nowhere or worse, backwards.
I truly believe it’s not about what you earn but what you spend your money on that will provide long-term financial success. Other than that, save as much as you can and invest in assets that provide cash flow… you, too, will surpass the 1 million mark. Good luck!
Where are you in your net worth journey?
Please let me know in the comments below!
Track your net worth today for FREE with Personal Capital. It’s the first step on your journey to becoming a young millionaire!
Its not what you earn but what you spend your money on, that determines your long term financial success. Very rightly said! Saving small amounts right now can help us accumulate good wealth in the coming years. Financial planning at an early age usually helps to achieve our long term objectives.
Spot on Harleen! The earlier we start practicing our saving and investing, the easier wealth building becomes.