Millionaire Interview 7. I have started a series called Millionaire Interviews. There is no better way to learn how to build wealth than from those who have already done so. Along those lines, I ask millionaire bloggers or even millionaires who are not bloggers a series of 11 questions that they answer. The questions are highlighted in bold and the answers are below each question. Hopefully, the answers are enlightening and will help you on your journey to build wealth and attain the $1,000,000 mark and beyond.
The millionaires in the Millionaire Interview series became millionaires at a younger age than the Secret Dividend Millionaires. This comes down to mostly having higher incomes. Second, they are not very frugal to the point of austerity as some of the Secret Dividend Millionaires but certainly save more than they earn and save more than the average person. Lastly, most have multiple sources of income.
Before we start with Millionaire Interview 7, if you are a millionaire blogger or even a millionaire who doesn’t blog and want to be a part of this series, just send me an e-mail or message me on Twitter.
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Millionaire Interview 7 – Minafi
Millionaire interview 7 is with Adam Fortuna, a blogger and early retiree from Salt Lake City, Utah who blogs on Minafi. His blog, Minafi, focuses on reaching financial independence by investing, minimalism, & mindfulness. He and his wife reached the $1 million mark somewhere in his early-30’s after saving, investing, and benefitting from a startup acquisition. It took another 2 years to clear $2 million due to an IPO of his employer. His current net worth is more than $2 million. Now let’s take a look at Millionaire Interview 7.
- Tell us a little bit about yourself.
Hey hey! I’m Adam – nice to chat with you. I’m a 38-year-old early retiree who grew up in Florida and recently moved to Salt Lake City.
My wife and I have been together for 15 years (!) after we met sitting next to each other in a computer networking class in college and started dating not long after. Based on that class you can probably guess I worked with computers. I was a computer science major, then switched to MIS (management information systems). I struggled with financial accounting and ended up as an information technology major.
All of my spare time and electives went towards making websites – which would eventually become my career as a full-stack web developer. I love how fast the web moves. You can have an idea, create a website and publish it to the entire world in minutes. How cool is that? No other platform or time in history has that been possible.
Like most developers, I changed roles throughout my career: a software developer, a software manager, a product manager, various director roles. Even though I’m no longer working anymore (I retired 2 years ago) I still consider myself a programmer even though I mostly blog at Minafi.com nowadays.
- What is your net worth? At what age did you become a millionaire? How many years did it take to become a millionaire? Do you have any debt?
We’ve focused entirely on growing our wealth through two routes – increasing income and investing in the stock market. That took us on an unusual path through multiple startups, acquisitions, and unexpected windfalls.
I was fortunate to go to a state school on a scholarship and graduated debt-free (thanks to some parental help and various side jobs). The summer I graduated college my mom passed away. The next year left me drowning in research, lawyers, and home repairs – all while trying to understand what to do with the $100,000 she left me.
I knew that was a life-changing amount of money at that age. I had no idea how to invest it, what an index fund was, or how to build a three-fund portfolio! It took 13 years of investing, saving more, and benefiting from a startup acquisition to grow that money into $1 million. It took another 2 years to grow it to $2 million thanks to an IPO of my employer.
When I was born, I lived with my parents in a 1-bedroom apartment. They worked a paper route just to save up the down payment for a house. They instilled in me the importance of hard work, and a good work ethic, while also providing an environment where I was able to become fluent with computers at an early age.
That forethought on their part provided me a bunch of skills that helped me thrive later in life. Even though I have worked very hard at times, many others who have worked as hard (or much harder) have not had the same benefit purely due to the luck of where and when they were born.
- How did you become a millionaire?
What’s worked for me is diversification and time (and some luck). I’ve focused on long-term, diversified, tax-optimized index fund investments. This is nothing complicated, just a portfolio with 3 funds – a Total US Stock Market Fund, a Total International Stock Market Fund, and a total bond fund. I’ve invested roughly 5% of my portfolio in speculative investments over the years. Some have doubled or more (Apple, Tesla, Bitcoin), while others I wasn’t so lucky with (Southwest).
During my working career, I saved between 20% and 60% of my income each year. By itself that would have been enough to reach financial independence somewhere between 12 and 37 years. During that time, I thought if everything went well I could retire by 60. My income increased a bit, and I lowered that goal to 50. Then the startup I worked for was acquired and that number dropped to 40.
The startup path is a gamble. I took a lower salary than I could have made at a large tech company in exchange for more equity. My salary was about $100,000 at the time I hit $1,000,000 in investments. I was all-in on my job and didn’t have any outside income. If it didn’t pay off, I’d have needed to work another 10 years or so.
- What is your investing philosophy, and do you use a particular strategy?
I have always focused on long-term, diversified index fund investing. I was fortunate to read The Bogleheads Guide to Investing after my mom passed away and that book was like a light bulb for how to grow wealth using the stock market. The approach just clicked, and I went with it.
That did mean losing out on many speculative investments over the years. I’ve always reserved about 5% of my investment allocation for companies that I believe have a shot at breaking out of a niche into the mainstream. Looking back now I think I could have taken even more risk and bumped that speculative investment portion of my portfolio up to 10% or even 15%.
That’s not a blank check for me to invest in anything. Instead, it’s a go-ahead to invest in specific companies that I believe I’ve discovered early enough to ride the wave. I also set an upper limit for when to get out and a lower limit in case my bet doesn’t pay off.
- What was your best investment? What was your worst investment?
I’ve made a bunch of both over time. The top ones that come to mind are not stock market investments!
My worst investment was buying a house in Florida back in 2005. I’d just inherited a windfall when my mom passed, and I put a large down payment on a house. Every news article and person I trusted kept repeating the lines “the housing market always goes up” and “renting is throwing your money away”. I thought I was making a good investment.
That was absolutely not the case. I ended up selling the house 11 years later for a $60,000 loss. Add in the tens of thousands of dollars in maintenance and we could have lived care-free in a luxurious apartment during that time for the same cost. The experience soured me on real estate. Now we’re loving apartment living.
My best investment was learning how to manage other people at a job. In programming jobs, there’s a reluctance to embrace that role. It leads to a low bar for managers and lets in some not-so-great ones. I was fortunate to have good role models and read countless books on the subject (Peopleware and Software Estimation are two that stand out). This creates a team that trusts each other and that can communicate clearly. Physiological safety comes first before specific skills for everyone on the team. Building that takes patience but is absolutely worth it.
- How much time per day or week do you spend reading financial news and going over your investments?
My approach to investing is similar to my approach to anything else that I don’t need to pay attention to set it up and forget about it. I don’t want to read financial news every day or watch financial TV. My only news about the markets is whatever people share on Twitter or reaches the top of Reddit.
Every quarter I’ll review my portfolio to see if my asset allocation matches my target allocation. Since I’m no longer working, I’m now selling funds, this helps me choose what ones are on the chopping block.
At different times in my life, I’ve used financial service professionals. I started with a financial advisor who charged a 1% advisor fee and choose a bunch of funds with a 1% expense ratio. As soon as I learned enough to know how significant this expense was, I transferred my money away and never looked back. During the years where I had windfalls, I worked with tax professionals to make sure I was paying the proper taxes. I’d be hesitant to write a check for taxes to the government for $200,000 without someone else looking over my numbers.
Today things are simpler. Enough so that I can do my own taxes and optimize my own portfolio. Every few years I’ll chat with a fee-only advisor or an accountant and have them look over things to see if they have any recommendations.
- What habits helped you become a millionaire?
Both my wife and I were raised in frugal households. We almost never ate out, travel was road trips and camping, clothing was whatever was cheapest. That frugality helped us curb our household spending to under $60k even as our household was earning more than double that.
While we don’t budget, we do track our expenses. Being able to look back at our spending over time helps us understand if we’re experiencing lifestyle inflation or not.
Since we don’t have kids and live in an apartment, our biggest splurges are on experiences. During non-COVID years, we’ll spend $15k of our $80k yearly spending on travel. Now that we’re retired, I’m excited to see how that changes. Once things settle down, we’d love to try slow travel – spending a few months away rather than the usual 2-week trips loaded with activities.
- What are your three favorite books related to investing, personal finance, retirement, and financial freedom?
The first book I read about investing is still my favorite: The Bogleheads Guide to Investing. It gave me the confidence to start investing on my own.
My favorite financial independence-related book is Quit Like a Millionaire: No Gimmicks, Luck, or Trust Fund Required by Kristy Shen (Millennial Revolution). I love her writing style both in this book and on her blog.
I’ll throw out something different for the last one: The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future by Andrew Yang. I’ve been extremely fortunate financially during a time of growing wealth inequality in this country. Unfortunately, there’s no easy fix to level the playing field. I sometimes feel that it’s impossible for one person to make a difference. Yang’s book focuses on the big picture happening in the US and what policies we can push our representatives to pass that will make the most difference for the most people.
- Why do you blog about your investing and journey to millionaire status and financial freedom?
My blog, Minafi (pronounced min-a-fy) focuses on using investing, minimalism, and mindfulness to reach financial independence. Rather than focusing on trying to get 1% better returns with some elaborate investment strategy, I write about how to create a life where you can get back to what you love. Focus on what’s important to you and automate the rest.
The more coworkers and people I talked to about investing, the more I realized how big a financial education gap there is in this country. Even though most Americans have access to a 401(k) account, so many people still choose what to invest in based on the past year’s performance. Minafi is a way to help spread the message: you can confidently invest on your own and retire early by sticking with the basics.
- Besides investing what else do you like to do?
Our hobbies have expanded to the outdoors since moving to the mountains. I never thought I’d enjoy hiking, but now it’s become a part of my week (when it’s not snowing). This year I rented skis and I’ve been hitting the slopes a lot. Although I’m only an intermediate skier, it’s been a chance to get outdoors after being cooped up inside for all of 2020.
Besides that, we watch a lot of movies, listen to a lot of audiobooks and I’ve started reading comics and manga. I’m training for a marathon, which is a love-hate relationship.
I keep a list of 101 personal goals that I want to accomplish in life. Whenever I feel directionless, I’ll review this list. Whenever I do I feel inspired to take action.
Once COVID is over I’m looking forward to hanging out with friends and playing board games in person again. We’ve played some online board games but it’s just not the same. There’s something about showing up with a bunch of games and getting exposed to new ones that doesn’t work in the online world.
- Anything else you would like to add?
Early on when investing I tended to focus a lot on it. I felt like the more time and effort I put into it, the better off I’d be. It took me many years to realize I wasn’t in control of what the stock market did. There was no amount of trades I could make that would put me in control of what direction my portfolio went in.
Once I fully embraced that, investing got easier! It became less about obsessing about what I was invested in and more about getting the basics set up and getting back to everything else in my life.
Final Thoughts on Millionaire Interview 7
I hope you enjoyed reading about Adam Fortuna and Minafi in Millionaire Interview 7. Check out his blog at the links above. There are good articles on financial independence, mindfulness, and investing. His story shows that by saving at his rate and investing in diversified index funds and a little bit of luck you can make it to millionaire status. Adam invested in three very common passive index funds and that worked out very well for him and his family. Very little of his portfolio was in higher growth or more speculative investments. He has shown that it is possible to reach $1 million somewhere in your early-30s.
In an earlier article I identified the three principles of dividend millionaires: spend less than you earn, invest your savings, and reinvest the dividend. Your odds of becoming a millionaire are about 3.6% in the U.S. Achieving FIRE is a process. But I would argue that through careful planning, high saving rates, and investing you can improve your odds. Adam Fortuna in Millionaire Interview 7 has showed us it is possible at a fairly young age of before 40 in Millionaire Interview 7. Recall, in the U.S., the average net worth is about $728k in 2016 dollars for those between 35 and 44 years old. I have written previously on net worth targets by age.
As a final note, I have another series called Secret Dividend Millionaires. This one is about ordinary people who became millionaires by investing in dividend paying stocks for the most part. Most of these people were only discovered after they died and left their money to charities and other non-profit organizations. Often, they became millionaires through very frugal if not austere living, investing their savings in stocks that paid dividends, and reinvesting the dividends.
Thanks for reading Millionaire Interview 7 – Financial Freedom Is A Journey!
You can read Millionaire Interview 6 – Financial Freedom Is A Journey as well.
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