Have you ever thought to yourself, “Well, yeah, I could definitely save a lot more if everything wasn’t so freakin’ expensive?!”
Our newest inductee to the Young Millionaire Club thought the same thing and decided to do something about it. Anand decided to move his family overseas for a few years and use the power of geoarbitrage so he could save 80% of his income. By banking that income, he’s accelerated his path to financial independence and he’s become a millionaire.
Let’s learn more about Anand!
How old are you? If you have a family, tell us about them and their ages.
I'm 38 and my wife is 37. We have two kids, a daughter aged 7 and a son aged 4.
What part of the country do you live in? Do you own your home or rent?
I am an immigrant to the US and spent most of my years in Boston and we call Boston home. We do own a home in Boston that has been rented out as we've been living in India for the past year. My dad has Alzheimer's and I did not want to regret not being there with him and maa and so we chose to move to India. My parents live with us for about half the year.
When did you start tracking your net worth? What was it at that time?
My dad had an early onset of Alzheimers 3 years before his retirement at an early age of about 59. Work was always a priority to him but just when it was time for him to sit back and enjoy the fruits of hard work, he isn't physically capable of doing so. I probably read up every article on the internet about quitting the rat race and early retirement and soon realized that financial independence is the only way to get there.
Although I had a feeling I was doing well financially, I started tracking my net worth in 2017 after moving to India to be close to my mom and dad.
What is your current net worth? What are your assets and what are your liabilities?
My current net worth is about $1.94 MM at the end of Oct 2018.
About half of my net worth ($870K) is tied in my paid off home that has been generating rental income since we moved to India. I have about $750K in my 401(k) retirement account and about $300K in liquid assets (cash, CDs and after-tax brokerage).
I have no liabilities. Although it didn't make financial sense to pay off my 2.875% 7/1 arm Mortgage, I paid it off in about 2.5 years. I don't like debt.
Related article: How to Increase Your Net Worth by $700,000 in 7 years
What are your current sources of income? If married, does your spouse have other income sources?
Our income comprises of my salary and annual bonus from work, rental income from our property, CDs and dividend/capital gains from brokerage accounts.
What has been the single best thing you’ve done to increase your income up to this point?
There are quite a few things that have helped me increase my income up until today, but I consider two of them the most important.
Firstly, investing in myself and learning as much as I could at the job to have a very differentiated skill set that is not easily replaceable. And secondly, I never hesitated to ask for more from my employer if I thought what I was asking was fair. The saying “you don't get what you ask for” is so true! I have written more about my experience with always having an alternative here.
What ways do you invest your money?
If you look at my net worth chart, I had quite an aggressive investment portfolio with more than 95% of my 401(k) and my liquid after-tax dollars invested in stocks. My current portfolio is extremely conservative for two reasons: (a) I do anticipate some turmoil in the stock market after the incredible run we've had in the last decade, and (b) Capital preservation to me is now more important than asset growth.
Did you receive an inheritance or windfall of some kind during your life so far?
I do expect about $1MM in inheritance from my mom and dad but I haven't counted them in my net worth. My dad always wanted to fund my kids' education and so I know what to do with the inheritance.
What debts do you have (if any)? If so, what are they? Which have you paid off?
As of today, I have zero debt. I had a mortgage debt that I carried for about 2.5 years when I paid it off.
How do you track your net worth?
I used to add all the “external accounts” to my Vanguard 401(k) account to view my net worth in one place. But now I use an excel spreadsheet to track (and project my future), income, expenses, and net worth. I like the idea of physically keying in the numbers once every quarter or so.
(Andy here … Check out Tiller for automating your spreadsheet. It will automatically update your numbers for you.)
Do you live on a budget?
I do not track every dollar I spent and I do not live on a budget. But I do question every little purchase decision even if it's a little toy for our kids.
What are your annual expenses?
I've been lucky to have benefited from geoarbitrage. We lived in Malaysia as an expat from 2013 to 2015 and have been living in India since the summer of 2017. The cost of living here is low and our annual expenses stand at around $30K. Housing is cheap compared to home (Boston) but we send our kids to an international school that makes up for the gain in housing cost difference.
What is your favorite fintech tool that helps you grow your wealth?
I use a simple discounted cash flow model to evaluate any project or investment decision. This is something I often use at work to justify multimillion-dollar projects. I have read through numerous blogs and come across FireCalc and Mad Fientist‘s tools but never really ended up using them myself.
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Why is it important for you to build up your wealth?
I do not like the idea of someone else dictating what I choose to do because they pay me. Having sufficient wealth to be financially independent adds a backstop and takes out the worries that come with “What-if”!
What is one financial mistake you’ve made during your young millionaire journey?
I've probably made quite a few, but two that stand out to me are:
- I bought a brand new Acura RDX in 2007. A $35K car at 3.9 % APR and I ended up paying a total of about $40K over a 60-month loan! And this was only during my second year of real employment when my total compensation was around $80K. We absolutely didn't need an SUV for my wife and I at the time and we absolutely had no need for a car that could take voice commands. I couldn't curb my temptation :)
- In 2007, I had just started a brokerage account and I bought into quite a few financial stocks that were dropping knives and that later went bust during the Great Financial Crisis! I had at least three $10K to $15K investments in individual stocks that went bust. A $10 stock that was $40 just a month ago does look cheap and that's what happened to me then.
I'm happy to report that I haven't repeated the same mistakes so far.
Related article: Increase Your Salary in 7 Steps
What book has been most influential to you?
I read a lot of blogs on the web but not many books. However, the one book that had some influence on me was Tim Ferris' “The 4-hour workweek“.
Although I do not buy everything that's in the book there certainly are a few things that I took away. Perhaps the most important one of them was to work yourself out of the information circle. You don't need to know everything about everything, especially the things that you have no control over and the things that you cannot influence. Ever since reading the book 4 years ago, I stopped watching the news … completely.
I do not have Facebook on my phone and I do not even have a Twitter account. I use social media to stay connected with friends and family but then it's hard to draw a line. I'm working on getting myself completely off social media.
What is one financial hack that has helped you that you think most people don’t know about?
It was serendipitous to have ended up with overseas job assignments where the cost of living is very low. My savings rate 2013 to 2015 was probably in the 80+% range when I lived in Malaysia and I think they've again been in the 80+% range since 2017 while I've been living in India.
I think people should explore options to travel and live internationally enriching their lives culturally as well as reducing their spending. This is especially true for those who are working remotely or are retired.
Where do you find the most joy in your life?
I love being outdoors, hiking/cycling in the mountains or walking in the forests. In the summer of 2017, I rode 600 km in the Himalayas at altitudes of 18K feet. From someone who used to find joy in things (my 2007 Acura RDX), I've changed into someone who finds joy being in the woods, in places away from the crowd and in things that are really basic. My philosophy is slowly evolving and I've started to believe more and more in the fact that you don't really need a lot of money to enjoy life.
Related article: 15-Year Mortgage Paid in 5 Years
For the 20-something with a $0 net worth, what advice would you give them to become a millionaire in their 30's?
My top advice would be to invest in yourself, learn as much as you can in whatever you do (for a living) and strive at becoming the best in what you do. Work on finding and strengthening your USP (unique selling point) that would later make you irreplaceable and would give you the power to dictate your terms.
And needless to say, but question every purchase decision you make and think of the cost of anything you purchase in terms of the number of additional days you'd have to work to make that purchase.
I'll close with a cliche: The best things in life are free.
Where are you in your net worth journey?
Please let me know in the comments below!
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