Prosperous New Millionaire: Federal Employee and Analyst, Age 55, Residing in Hawaii
Hawaii-Based Federal Employee Hits $1 Million Retirement Milestone
A 55-year-old federal civil servant and analyst living in Hawaii has reached a significant financial milestone, amassing a net worth of $1 million. The individual, who wishes to remain anonymous, has been diligently saving and investing since their early 20s, and their journey to financial independence has been guided by a combination of traditional investments, multiple pensions, and passive income streams.
The individual started their investment journey with the encouragement from their parents, who instilled in them the importance of saving and investing from a young age. They began investing in their retirement accounts monthly, maxing out Individual Retirement Accounts (IRAs) by their mid-20s and 401(k)s by their early 30s.
Three years ago, the individual made a strategic shift, opting to invest in Roth 401(k)s instead of their traditional accounts. This decision has been instrumental in their growth towards the $1 million mark.
The individual's investments have primarily been in low-fee index funds or dividend-reinvestment programs, with a significant portion coming from Dividend Reinvestment Plans (DRIPs). This approach has allowed for steady, consistent growth over the years.
The individual sought the advice of financial advisor Dave Ramsey during their journey, which occurred around the 2010s. They also utilised a fee-based financial adviser twice for sanity checks on their planning and progress when they were 10 and five years out from their projected retirements.
Despite their success, the individual regrets not opening an IRA when they were 16 and assumes they would have been in a lower tax bracket or that tax rates would have been lower in retirement. However, they find a sense of security in having made $1 million and celebrate this milestone with a beer while looking at their Quicken account.
The individual's next goal is to have their next $1 million come from growth in Roth accounts. They also offer advice for others trying to make their first $1 million: save and invest regularly, live within their means, and take a retirement planning course multiple times throughout their career.
In addition to their financial achievements, the individual has an estate plan and keeps their million dollars invested, maintaining the same low-risk, diversified portfolio that has served them well thus far. They are open to being anonymously featured in a future My First $1 Million profile.
Despite their financial success, the individual's life did not change day-to-day, but they have a greater sense of security. They are the only known millionaire by one family member, a testament to their humble approach to wealth.
