Millionaire Interview 14 – Mr. Hobo Millionaire

Millionaire Interview 14. 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 14, 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 14 – Mr. Hobo Millionaire

Millionaire interview 14 is with the anonymous blogger of the Mr. Hobo Millionaire blog. He is originally from San Francisco, CA, grew up in North Louisiana, but now lives north of Dallas, TX. He will be 55 this year and is married with one son. He owns a software company and also produces movies. He reached the $1 million mark on paper in his early-40s. His current net worth is approximately $3.5 million outside of his business. Now let’s take a look at Millionaire Interview 14.

• Tell us a little bit about yourself.

I will turn 55 this year. I am originally from San Francisco, CA… I grew up in North Louisiana (West Monroe, Monroe, and Shreveport) … and I now reside just north of Dallas in McKinney, TX. I have one 30-year-old son. I got my Bachelor of Science in Computer Information Systems in 1988 from DeVry University (yes, the DeVry you’ve seen on TV). I own a small software company.

• 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?

I am currently at ~$3.5M in assets outside of my business. That’s roughly ~$2.2M in stocks (~$1.3M in SEP, ~$850K in brokerage, and ~$50K in HSA) and the ~$1.3M in Real Estate ($900K primary home — which I bought for ~$475K and have put $100K into, and the rest is equity in two rental homes which I rent to family). My business is a small software company valued at ~$3M – $7M. It generates yearly RECURRING software subscriptions of $600K plus another $50K or so in new sales. My “take home” profit from that is about $500K – $550K per year. I am NOT trying to grow it. I am letting it die a slow death. I am in a niche software business that I have grown over the last 20 years. It peaked at $720K in sales three years ago. It is quite easy to maintain at this point, and I only have to work about 1 hour per day on the business itself. By the time it dies in 10 years or so, I should be at $7M – $10M in stock holdings (which is of course more than enough). 

I first became a millionaire “on paper” probably in my early 40’s based on recurring software revenue ($100K+) from my business, but I did not feel like a millionaire. I was in a town home that was upside-down in value, I was behind on taxes, and I had zero saved. In assets outside my business, it was some time around 2016 that I accrued $1M in net worth between the value of my paid off personal home and stocks. 

My personal home has been paid off since the end of 2016. One rental is paid 100%. The other rental I have ~$150K of debt remaining on a super low 2% 15-year mortgage I re-did this past year when rates bottomed out (this rental is worth just over $350K at this point). I am generally anti-personal debt, but I did take out a 3-year loan last year on a brand new 2021 F-150 Platinum. It was a 0% loan, and I did not care to pay off the ~$50K balance immediately. I’ll probably pay it off early by the end of this year. Note, this was the FIRST NEW car I have purchased in probably 20 years. They were all used since my 30’s. I did a lot of dumb, new car purchases in my 20’s.

• How did you become a millionaire?

My millionaire journey is not a typical one where you earn and save over many years and things peak with a high paying job. I quit W-2 work in May of 2000. I was almost 33 years old. I had started a consulting business on the side 3 years prior and I finally had enough in the bank to give it a go.

Long story short, I also got divorced around that time, some consultants that were working part time for me backstabbed me and caused a huge loss in income. Between that and my divorce, it all snowballed into debt and survival for many years (and that’s how I got behind on taxes, too).

I eventually started trying to sell software in my niche market, and then in 2007 I implemented a recurring yearly subscription. It took a VERY long time, but over the years it kept building, and it eventually snowballed “up” and saved me. I had many, many, many years of 60 – 80-hour weeks consulting, training, and coding (from 2008 on it was primarily coding).

I cleaned up my tax issues from 2008 – 2010 (via a payment plan with IRS to pay back taxes). I bought my current house in 2013, started making extra payments, and started saving in an SEP (401k-type) fund. There are a number of other side stories, but this is the core of my millionaire journey. 

• What is your investing philosophy, and do you use a particular strategy?

Anyone who follows my blog knows I am 100% in the VTI ETF (or VTSMX/VTSAX as a mutual fund). It is a “total market” US index ETF from Vanguard. So, I literally own a small piece of EVERY public company in the US (and you can, too). Pretty cool, huh? It tracks very closely with the S&P 500 Index – some years slightly up, some slightly down. In general, I can expect a 7% – 10% average return every year (even though historically it’s averaged 12%). With 7% – 10%, though, it means my money will safely double every 7 – 10 years. I’m good with that. I’ve had enough risk in my life, and I’m very happy with the “average” of the stock market return from here on out. 

Here is a popular blog post of mine on VTI:

Why I Have My Entire Stock Market Holdings In One Single Stock (VTI)

And here is a good overview of Vanguard from Dividend Power:

Vanguard vs. Blackrock Funds: Is One Better Than the Other

• What was your best investment? What was your worst investment?

My best investment has been in myself via my software company. My second best has been in VTI.

My worst investment was in independent movies. I have been an independent movie producer since 2001. I had no business getting into it, and it’s a terrible investment, but it’s a part of who I am. I have made seven (7) feature films. Most of them have aired on Showtime, Starz, Lifetime, and now some are available on Amazon and Netflix. One movie, the US rights were purchased by Sony. I have made ZERO dollars from these movies. I partially made some of my principal investment back, but I’m still upside down.

I am still working on producing a couple more properties, but I am not risking huge amounts of money. When I was putting up money in the 2000’s, it was super foolish. I mean… I didn’t even have a positive net worth at the time. I did learn A LOT about making movies, and I met a few famous actors.

I am now making small, animated versions of my wife’s children’s books. So, there’s some good that has come from it (the knowledge), but never invest any of your money into anyone’s movie idea. It is a VERY difficult business to make money in. 

• How much time per day or week do you spend reading financial news and going over your investments?

I have never had a financial advisor. I grew all of my financial knowledge from reading books and blogs (really since about 2012). My stock investments are all in VTI, so no, there is not much review. I do watch the market on a daily basis go up and down, but I am not affected by it. Over time, the market always goes up… and if it ever doesn’t… it doesn’t matter what you’re invested in. 

I do have two CPAs who keep me straight on taxes. One keeps my books for my business, and one does my yearly income taxes. I meet with my income tax CPA once a year to discuss general tax implications and new laws/taxes that may affect me. 

• What habits helped you become a millionaire?

Consistent, daily progress, hard work was the habit that led to my success. Unless you’re lucky, it’s the ONLY habit that will make you successful. Make forward progress in SOMETHING on a DAILY basis. Twenty to thirty years of forward progress will eventually lead to success. I’m more of a believer in systems, than goals.

Goals can be a bit fluffy. I’m not saying don’t have them… but you need to implement daily systems that get you to your goals. You can have a goal to save 1M dollars, but if you don’t have a system in place to take action, the goal will never be reached.

I’ve pretty much only had one lifetime goal, and that was to reach some level of financial security. I did not know exactly what that meant when I was younger, but I did know I did not want to worry about money all my life… working hard in my later years (50 and older). I have accomplished that goal.

I would also like to note I re-married in 2010. My wife has worked with me side-by-side since then (and actually she started working with me two years prior after we had been dating two years). She is a key component of my (our) success as well. 

I would not consider myself frugal, but I watch my money and try not to be wasteful. I turn off lights when not needed and turn the air up-and-down when not in use… that kind of stuff. I don’t really budget. I have a loose budget at this point in my life of about $10k/month. We save and invest all the rest. This equals about a 60% savings rate after taxes. It has been this way for about the past 10 years. 

• What are your three favorite books related to investing, personal finance, retirement, and financial freedom?

It’s not fair to give just 3… The 4 that had the biggest impact on me early on were:

THE MILLIONAIRE NEXT DOOR – Thomas J. Stanley

THE LITTLE BOOK OF COMMON SENSE INVESTING – John C. Bogle

A RANDOM WALK DOWN WALL STREET – Burton G. Malkiel

THE SIMPLE PATH TO WEALTH – J.L. Collins (via his blog at first, and then book)

1 bonus book that recently came out that I think is fantastic:

THE FIRE PLANNER – Michael Quan 

• Why do you blog about your investing and journey to millionaire status and financial freedom?

I blog at MrHoboMillionaire.com. I enjoy sharing more what I’ve learned in life in terms of business, hard work, and success. There are plenty of resources to find investing advice (not that I agree with all of them, but there are many to choose from). I prefer to share stuff I know in my gut to be true (struggle, hard work, systems, and daily progress) — ultimately, that’s what I blog about. And I share to help prevent others from experiencing the pain I have… although pain can be good if it motivates you to move forward.

• Besides investing what else do you like to do?

I enjoy spending time with my wife, music (I drum), walking, relaxing on my patio reading or listening to podcasts, some video gaming, and I’m about to start playing golf. I haven’t really played since my 20’s. I kind of penciled in 55 to start playing golf.  

• Anything else you would like to add?

Hard work is the key to success, and it’s absolutely worth it. I have been driven to succeed since my teen years. I started working in high school. It took a good 30 years where my work finally paid off. And the “financial peace” I have now at almost 55 is priceless. Now, you… go do the work.

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Final Thoughts on Millionaire Interview 14

I hope you enjoyed reading about the anonymous author who blogs at Mr. Hobo Millionaire in Millionaire Interview 14.

Check out his blog when you get a chance. He writes about his insights in life and hard work. He wants his readers to think differently about money.

The author of Mr. Hobo Millionaire has shown that it is possible to reach $1 million by your early 40s. His path was not a straight line and his story is interesting.

In an earlier article we identified the three principles of dividend millionaires: spend less than you earn, invest your savings, and reinvest the dividends. Your odds of becoming a millionaire are about 3.6% in the US. Achieving FIRE is a process. However, I would argue that through careful planning, high saving rates, and investing you can improve your odds.

The author of Mr. Hobo Millionaire showed us it is possible in your 40s in Millionaire Interview 14. Recall, in the US, the average net worth is about $728k in 2016 dollars for those between 35 and 44 years old. We have written previously on net worth targets by age.

As a final note, Dividend Power has 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 14 – Mr. Hobo Millionaire!

You can read Millionaire Interview 13 – RV-on-FIRE as well.

Related Articles on Dividend Power

• Is $1 Million Dollars Enough to Retire?
• How to Live Off Dividends

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