A Tale Of Two Savers
I didn’t start out life with money. My roots were pretty humble. Grandpa Tako (my father) worked blue-collar jobs his whole life, and Grandma Tako (my mother) worked as a low-paid office worker (sometimes a secretary, or administrative assistant). We didn’t have a lot, but it was enough.
Growing up, I wore hand-me-down clothes from my cousins. We ate-out extremely rarely — usually at cheap places where my parent’s didn’t have to tip. Places like McDonald’s and Taco Bell were considered fine dining in my youth.
My net worth was essentially zero for the first 16 years of my life. With no job and no allowance, I had no money and no income.
My first part-time job as a teenager was as a dishwasher at a local restaurant. I made minimum wage. That was my first real experience earning money.
By the time I completed high-school, I saved $7,000 for college. Nothing terribly large, but this was way back in 1995. In 2016 dollars (accounting for inflation) that’s about $11,000.
I paid for college with savings, part time jobs, and student loans…a lot of student loans. When I finally graduated in 2000, I had $50,000 in debt.
This wasn’t a great way to start out life, but I learned some important lessons along the way.
How did I go from being an indebted student, to being worth more than $2 million in about 13 years?
Mostly by being a good saver, and marrying a good saver. Sure, we’ve had some investment gains over the years, but most of the credit is simply due to savings.
Where Art Thou Savings?
I can’t stress enough how important savings are to building wealth. While many people scoff at frugality as a way of life, it really is the key to building any significant wealth.
Still not convinced? Maybe it’s time for some show-and-tell…
I wasn’t able to find all of our records, but I was able to find the majority of records for our taxable accounts. The taxable accounts are where our dividend income is derived today. All of that came from after-tax wage savings.
Our retirement accounts (401k’s, IRA’s, Roth’s) are separate accounts, which we don’t intend to touch as part of our financial independence plan. They’re not included in the table below.
We’ve published our net worth already — it exceeds $2m (and continues to grow). But where did it all come from? How much was actually from savings? Take a look:
Our after-tax savings added up to 896 thousand dollars in 13 years. We used the same frugal principles I blog about today.
We always tried to save at least 50% of our salaries in each of the 13 years listed above. In later years, that savings rate was closer to 70% or 80%.
We both worked and both saved. Our lives are simple and relatively inexpensive. Over the years, Mrs. Tako and I saved a lot of money. We had a lot of fun, but we’ve always been good savers.
We tried not to waste money on stupid shit, but still enjoyed a lot of travel over the years — with trips to Australia, China, British Columbia (Canada), Mexico, England, Ireland, Scotland, Japan, Alaska, Florida, New York, California, Idaho, Georgia, Oregon, Nevada, and Arizona.
We had a ton of fun during the years we did all this saving, and not once did we feel like our lives were deprived!
Additional details and comments about our savings:
- 2003 & 2004 savings data is actually about $40,000 less than it should be. The data was missing from Account #1 records, but should have been about $20,000 each year. Rather than put in undocumented numbers, I omitted this savings.
- 2009 numbers are lower because of the purchase of our home, and job loss due to the Great Recession.
- 2013 marked the birth of Tako Jr. #1. Savings was not affected by this event.
- 2015 marked the birth of Tako Jr. #2. Savings was not affected by this event.
- 2016 savings numbers are Year To Date (YTD).
- 2016 is also the first year of early retirement for Mr. Tako. Savings are lower as a result
Having the Right Partner
There’s a reason why I title this post “The Tale of Two Savers”. If you want to save lots of cash, having the right partner is extremely important.
With Mrs. Tako, I got a real gem. I give her most of the credit for our wealth building success.
She was always a saver, even before I met her. When we started dating, she had absolutely no debt. She was already frugal, and had a far better financial situation than my own. Thankfully, she was humble about it, and didn’t criticise my negative net worth when we talked about money. (I was loaded down with student debt at the time)
Most surprising though, she didn’t invest money beyond her 401k. She had all her taxable money sitting in a bank account, earning a paltry interest rate. But Mrs. Tako is a smart cookie, and she learned fast.
Within a year or two of our meeting, she’d learned the basics of investing! Her cash balance got invested, and she put those dollars to work! After that, she never looked back!
It’s also important to understand that Mrs. Tako isn’t the kind of lady that buys designer handbags, luxury cars, or expensive jewelry. Those kinds of things don’t interest her. She’s smart enough to see how shallow and pointless those displays of wealth really are.
On top of that, she’s a thoughtful, caring mother — A mother who also understands that love doesn’t come from buying stuff for our kids.
Honestly, I don’t know how I got so lucky. Somehow I ended up with the best wife ever. There isn’t a day that goes by that I don’t thank my lucky stars I have her with me.
We’ve been on the same page about money since day one, and we’ve been on the Road To FI together since day two.
The two of us are gears that work in tandem to drive that wealth-engine forward.
Practice Makes Perfect
Being good savers isn’t something that happened to us overnight either. We got better at saving as time went on. Salary increases had something to do with that, but we also had large cost increases that offset those salary gains — We bought a house and had two kids.
A large chunk of our increased savings over the years was from “getting better at saving”. We stopped eating out so much, and started doing most of our cooking at home. We stopped buying flavored waters, and lunches-out every day. Now, we use the slow cooker more.
Most changes were gradual. It didn’t start out that way, but eventually we started doing most of our grocery shopping at our local asian grocery store to save money.
We’ve learned all kinds of saving tricks over the years, like using Amazon to save money (No tax, and free shipping!!) on practically everything. Using programs like Bing Rewards to generate gift cards helped too.
Eventually Mrs. Tako also found online sharing communities like Freecycle, and the Buy Nothing Project. They helped us save a ton of money on stuff for the kids.
We try not to be expensive parents either. Most kids don’t need a whole lot, and our kids already have far more than I ever did.
Sometimes I worry my boys will grow up to be the arrogant wealthy if they don’t experience any hardship in life. But, then again, don’t many people view frugality as deprivation or hardship?
And Beyond!
Mrs. Tako and I learned patience and appreciation for our imperfect lives over the years. Our wealth wasn’t built on big salaries or windfalls, it was built on savings.
We don’t feel deprived at all. At this point we haven’t even started on many of the money saving tricks you see posted on the internet — common stuff like credit card hacking. We’ll get to that stuff eventually, but there’s just sooo many places to find savings!!
Want to save more money? All you really have to do is try!
What’s your favorite money saving tip?
[Image Credit: Flickr1]
That is a great story and it certainly makes life a lot easier when you are walking down the same (financial) path together. We are fairly frugal folks but one area we really work hard on is keeping travel costs low. We do this by using shopping portals (especially for our rental house purchases) to increase the number of points/miles we earn and had I known about those 10 years ago, we would have sooo many more miles banked! But I am certainly glad I know now!
Way to be consistent in socking money away every year!
I was checking out your net worth disclosure. Tax-advantaged accounts are much lower than taxable accounts. Have you posted the reason for not maxing those out through the years?
What makes you think we don’t max them out? We *absolutely* utilized them over the years! Mostly, we maxed them out too!
Unfortunately I don’t have records for the taxed advantaged accounts going back that far.
Value of $330k as of the net worth post. $330k / 13 years / 2 people is ~$12k per year and that’s excluding appreciation / interest / dividends, so contributions would be lower than that.
We didn’t always work at positions that had tax advantaged accounts. Sad, but true. That number is also missing one of our accounts.
When we had them, we used them. I had some significant periods of unemployment too. My work situation hasn’t been “easy” for the last 7 years.
Got it. Thanks for the explanation!
I’m with you. My favorite money-saving tip is to partner well with someone who inspires you to be a best version of yourself. I am doing so many awesome things in my life and career because I have a girlfriend who believes in me and makes me see new possibilities for myself. It’s awesome.
Thanks for sharing your story. It is truly inspirational. Did you ever care about what the market was doing when you were investing or just invested in low cost index funds regardless what the media said?
We’ve got a mix of index funds, individual stocks, REITS, and preferred shares. We invested when the market was up and when the market was down….and tried not to pay any attention to what the media thought.
Love the twist – and that the other saver is your wife.
I share the sentiments completely. I’m a little behind because I stayed with the wrong partner for nearly 20 years, and it absolutely positively takes two. Only one? Like swimming with an anchor around your neck.
I wish I had the courage to correct that decision back in year 3 or 4 when it became clear. You only get one life, one chance to get it right. Fast forward two more decades with the “right” partner and we’re up around a million ahead. Feels good to be safely away from day to day money worries. I owe wife 2.0 a huge debt of gratitude.
Thank you for sharing your story. Savings is a fantastic concept that not everyone learns about. I see a lot of my friends who just graduated college and are in debt but still uses their paychecks to buy plane tickets and taking a lot of frequent out of town trips for fun. I was talking to my supervisor the other day and was looking at probability of retirement at age 65 at somewhere in the 90% and was significantly lower when she inputted age 55. I couldn’t believe that and I am hoping that I don’t have to work till I’m 65 to retire!
Sadly, your story echos the behavior I see in my own peers. Hedonism is alive and well.
Save 50% or more of your income and you’ll be in good shape.
Great story, you two savers have been killing it. I am also lucky to have a great teammate who shares the same goals in life. Working as a team makes all the difference.
Congratulation on your success!
I’m interested to hear why you stopped working. You are an FI and ER guru for certain, but why pull away from what must have been a nice payday (when you are FI and work becomes discretionary, you are better at it than peers) and in a position of ‘at will’ to make your day, year, and life out to be whatever suits your needs with increasing upside. Most folks, in this situation, only quit early to become entrepreneurs but I haven’t figured you out
Mostly it’s about spending time with the kids. At my last job, the most time-off I ever got was one week after the kids were born. It wasn’t a cushy job (very few benefits), and the work was very stressful at times. Ultimately the company decided to close the West coast office, and I was layed-off. Now I get to spend time with the kids.
Today, I build things on my own terms and don’t have to report to a manager or deal with office politics. I might take some part-time work or do something entrepreneurial in the future, but for now I’m pretty happy.
Thanks for taking the time to reply, really helps! Kudos for being an at-home parent too, it’s not easy and glamorous, and sometimes unique challenges for SAHDs. I have tossed around the idea of ER myself and still don’t know the right answer! I blogged about it for a year and realized I had the numbers worked out as best as could be hoped (including SWR, ACA, and funding college), but made almost zero progress on knowing if I wanted to ER (and become the SAHP, since my wife decided to go back to work). So far life has continued on pleasantly enough, either way, my job continues to be pretty good to me and offer a variety of interesting opportunities and challenges and my wife continues to be up and down about if she’ll keep her teaching gig.
I love this blog!!! thank you for sharing your inspiring story for those of us tracking on a similar journey!
Thanks TTR!
Wait a minute… I thought *my* wife was the best wife ever. Did I get lied to?
Seriously though: good job on the saving. I always was a bigger income earner than my wife, but she always was the frugal one. Looking back, I think I brought maybe 2 more years of work on myself due to my poor saving habits and some pretty bad financial mistakes in the past…
It sounds like we’re pretty similar in our financial mistakes, but yes, clearly you were lied to. It’s my wife who’s the best ever! 😉
Great story. I have been saving over half my income and hope I can keep it up if we have kids! You give me great hope!
Hey,
I just clicked on your name from the comments section on Frugalwoods.
If OK to ask, what were your average gross income over those 13 years? What’s the highest and lowest salaries did you have? Just by looking at your impressive taxable savings, it sounds you both had great jobs. What are your professions? Does your wife work now and you’re a SAHD? If so, that’s a neat set up if your wife likes that plus you don’t need to struggle with ACA choices.
Indeed, you first need well paid jobs, then a very compatible partner, and you’ll become FI reasonably fast. $50k salaries will not make rich fast unless you do some lucrative sidekicks.
Mr. Tako,
Your story is very inspiring and an example for anyone with kids who think they can’t save. I have friends who have kids and they tell me they can’t save much despite making six figure salaries. It boggles my mind.
I had a very humble start as well and had to almost major in Dish Washing while going to school to study engineering. Dish Washing and other odd jobs taught me value of hard work and respect for others who may not be as fortunate I am.
Thanks for sharing your story.
Having the right partner is key to many things in life. Savings, career and definitely happiness! Kudos to you for giving your wife credit. Mrs Tako is a lucky lady 🙂
Your post here is spot on. Especially about the impact of your spouse. The number one killer of wealth in the US? Divorce. The top cause of marital discord in the US? Money issues. While not the only criteria, it certainly seems that choosing the right partner is key to financial health.
Very nicely done Mr Tako. You and your wife obviously make a great team!