Maximize Your Savings Rate to Retire Early – Millionaire Interview 24 (Michael Quan)

August 27, 2020

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After dozens of young millionaire interviews, one consistent fact continues to rise to the surface. If you want to become a millionaire in your 30's, you need to save and invest a substantial portion of your income. This may seem like an obvious fact, but not everyone plans to maximize their savings.

Michael Quan, the blogger behind Financially Alert, became a millionaire in his 30's by saving 60-70% of his income during his peak earning years. This helped him to truly relax and enjoy young fatherhood as an early retiree in his 40's.

I had the pleasure of learning from Michael in our latest young millionaire interview. Check it out below!

Become a Millionaire in Your 30’s: The Details

How old are you? If you have a family, tell us about them and their ages.

I'm currently 43 years old. I'm married and have two kids ages 8 and 6.

I met my wife on a blind date of all things and we just celebrated our 15th year of marriage. Time sure does fly when you're having fun.

What part of the country do you live in? Do you own your home or rent?

My wife and I both grew up in the Los Angeles area and both ventured down for college in San Diego, California. We met at the university and decided to make San Diego our permanent home. The weather is pretty much perfect year-round. We own our home here.

When did you start tracking your net worth? What was it at that time?

I began tracking my net worth in 2003 and have been doing so ever since. Back then my net worth was $124,331 and I was 26 years old.

What is your current net worth? What are your assets and what are your liabilities?

Our current net worth (my household including my wife & kids) is $2,279,630.

This is comprised of:

  • real estate equity – $ 1.2M (spread across our primary home, 2 rental properties, and misc real estate investments – eg. group investments like syndications)
  • stocks & equities – $ 680K (IRAs, Roth IRAs, etc.)
  • cash – $280K (the reason why this is so high is that I just sold off a property)
  • misc – $120K (automobiles, precious metals, angel investments, life insurance cash policy, etc.) 

Become a Millionaire in your 30's: The Process

Michael Quan and wife

What are your current sources of income? If married, does your spouse have other income sources?

Our current sources of income are:

  • my wife's teaching job
  • real estate rental income
  • dividends
  • side hustle income – consulting income from financial coaching and group masterminds.

What has been the single best thing you’ve done to increase your income up until this point?

I used to own an IT support company for 10 years and was fortunate to take a salary and realize profit-sharing for most years. This allowed my wife and me to live on a single income and save upwards of 60-70% some years.

I've since “retired early” so our income has dropped from our highest years, but we still earn enough to stay cash flow positive.

What ways do you invest your money?

I invest in a few different areas:

  • Cash Flow Real Estate – I own single-family homes, participate in syndications (group investments into apartments & commercial real estate), and occasionally notes
  • Stock Market – I own both individual stocks and index funds (I started out as an active investor, and subsequently turned passive because I'd rather be an active real estate investor where I believe the upside is better)
  • Side Hustles – I've invested in different entrepreneurial pursuits over my life. Some have earned millions of dollars, while others have lost money. 
  • Personal Development – I've invested tens of thousands of dollars in self-improvement and optimization training over the years. Beliefs are key to taking action and taking the time to map your life is always time well spent.

Did you receive an inheritance or windfall of some kind during your life so far?

I did. Sadly, my Mom passed away unexpectedly in 2005 and I inherited ~$135,000 around that time. I'd like to think that I've been a good steward of that money and have made it grow over time.

The other large blessing beyond the inheritance was a pause in my busy life. It made me appreciate the present more and ultimately led to my decision to retire early and be fully present with my kids while they were young.

What debts do you have (if any)? If so, what are they? Which have you paid off?

I was lucky. My Dad always taught us to never carry a balance.

In fact, I didn't realize you could carry a balance until I was much older. Thus, I don't carry any consumer debt. Between my wife and I, we recently had about $800k in mortgages across 4 properties. But, we just sold off one property and used the proceeds to pay off two other ones in full.

Now we are just left with $265,000 on our primary home. However, I'm not opposed to taking on more “good debt” that puts money into our pocket.

How do you track your net worth?

As a blogger, I've been publicly tracking our net worth for the past 5 years. I use Personal Capital's tools primarily but started out with a good old fashioned spreadsheet. People are sometimes shocked that I share this publicly. I get it.

However, I do this is for the benefit of others. It's the numbers that I wanted to see when I was younger because I like details. 

Do you live on a budget?

Not any more. I used to do a lot of annual planning before, and still teach others how to do this. However, our expenses are pretty much set at this point and we don't veer too far away from them.

I will say that we spend more on food than most families. However, we cut back in other areas that don't mean as much to us (like clothes).

What are your annual expenses?

Our annual expenses (pre-COVID) were about $92k per year (not counting debt service for rental properties). Our largest expenses were:

  • mortgage for primary residence ($35k per year)
  • health insurance ($10k per year)
  • other insurance ($10k per year)
  • dining out ($12k per year)
  • gasoline ($3k per year)
  • groceries ($4k per year)
  • travel ($3k per year)
  • kid activities – ballet, taekwondo, swimming, etc. ($5k per year)
  • misc – phones, internet, utils, clothes, charitable, etc. ($10k per year)

What is your favorite fintech tool that helps you grow your wealth?

I use Personal Capital the most often. Their tools are simple and nicely automated.

Become a Millionaire in your 30's: Young Millionaire Journey

Michael Quan and family

Why is it important for you to build up your wealth?

It's always been important to build up wealth quickly because once you can reach F.I. (financial independence) you can live life unchained from money.

Not having to worry about money is priceless. It's the inflection point where you can pursue any passions you want, and be fully present with your family. Work is no longer a necessity, rather a choice. I've chosen to do “work” that aligns with my values.

Fast forward to today and things have come full circle. My passion and “work” now is to help as many people as I can to achieve financial freedom as quickly as possible. Life is short. I say play full out!

What is one financial mistake you’ve made during your young millionaire journey?

Which one?  😉

Well, one of my biggest mistakes was purchasing an “investment” property that I later found out I couldn't rent out! I failed to review the full HOA documentation and found out that there was a rental restriction in the community. 

Thankfully, I wasn't deterred and ended up buying the house across the street. I still have this house today and it's performed phenomenally.

What book has been most influential to you?

The book that had the biggest impact in my life was Unlimited Power by Tony Robbins. I read this in high school and was blown away by the wisdom and strategies contained for creating a life by design.

By finding perspective early on, I made some choices (like starting a company) that most would shy away from.

What is one financial hack that has helped you that you think most people don’t know about?

Save your money BEFORE you see it. It's always harder to cut and budget after you're used to a certain level of income. But, if you pre-plan and automate savings whenever you get a raise, then it's a lot easier to save it away because you haven't gotten used to it yet. 

Let's say you picked up a 15% raise one year. Why not save two thirds (10%) of it from the beginning? Then take the extra 5% and enjoy it. It's the best of both worlds.

Where do you find the most joy in your life?

I'm an avid fisherman and love taking my family up to Mammoth Lakes during the summertime. It's the perfect place to connect, find adventure, be active, and have fun.

For the 20-something with a $0 net worth, what advice would you give them to become a millionaire in their 30's?

Take an assessment of your money beliefs – they are critical.

Beliefs >> Actions >> Results.

Don't follow the crowd. Most 20-year-olds are not thinking about building their net worth. But if you choose to invest early, you'll have the best wealth-building tool on your side – compound interest.

Proximity is power. Find the few who are hustling, and/or those who are more experienced than you. Seek their advice, coaching, or mentorship.

If you truly believe you'll become a millionaire quickly, you will find a way!

How are you working to maximize savings? How would life be different for you if you became a millionaire in your 30's?

Please let us know in the comments below.

Andy Hill

Andy Hill is the award-winning family finance coach behind Marriage Kids and Money - a platform dedicated to helping young families build wealth and happiness. With millions of podcast downloads and video views, Andy’s message of family financial empowerment has resonated with listeners, readers and viewers across the world. When he's not "talking money", Andy enjoys being a Soccer Dad, singing karaoke with his wife and watching Marvel movies.

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