Richard (not pictured) said he and his wife retired with more than $2 million in assets despite costly investment mistakes.fotodelux/Getty Images
An Idaho couple retired with a net worth of more than $2 million by living frugally and making smart investment decisions.
Richard learned investing techniques later in life after losing thousands in the dot-com bubble.
Richard's story highlights the “near millionaire” mentality of diligent saving and careful investing.
Richard, in his 70s, has never had a high-paying job and made various investment mistakes that cost him thousands in his lifetime.
However, the Idaho resident said frugal living, prioritizing retirement accounts, and making smart housing decisions allowed him and his wife to retire comfortably with more than $2 million in assets after working in state government and consulting.
Richard learned about investment strategies later in life after losing thousands in the dot-com bubble. Afterwards, he said that his method of growing wealth was modest and careful. He asked to use his name only for privacy purposes.
His approach is indicative of the “millionaire next door” mindset, which combines concerted efforts to save and invest using more accessible strategies, rather than flashy but risky get-rich-quick schemes or high-paying, high-paying jobs. However, he acknowledged that not all retirees have the resources to save a lot of money for retirement.
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“Being good at work has helped me throughout my life, not only in accumulating wealth but also in making people see that I am a reliable person,” said Richard. “You have to be honest, you have to be kind, and you have to help other people.”
Richard said the way he was brought up “close” taught him the value of money and hard work.
As a teenager, he worked as a paper boy, production clerk, ice cream vendor, and root beer stand cashier. He estimated that he earns about $5.25 a week in high school, or about $53 in 2024 dollars.
“I saw the value of money because it gave me the freedom to buy the clothes I wanted to buy, it allowed me to buy Christmas presents for my siblings and parents,” said Richard.
He also admits that he grew up in a time when the necessities of life were easily accessible. In her small, middle-class town in Illinois, she said, a family can be supported on one income. He worked and lived frugally while attending the University of Illinois, which he said cost him just $173 for his first semester. He paid back his student loans shortly after graduating with a degree in psychology.
While serving in the Air Force for nearly six years, he bought a modest home in Sacramento. He and his wife grew food in their garden and made granola from scratch. He said he sold the house when its value had doubled.
“I never thought about what my financial goals were until later,” says Richard. “I remember coming home one Sunday, and I said I really don't want to live a middle life. I'd like to do better if I can.”
In graduate school, he worked as a teaching assistant, started investing using the advice of a stockbroker friend, and bought a condo. He admitted that because his parents weren't very financially savvy, he wasn't “a very smart saver or investor,” although he knew he couldn't get into huge debt.
He said he was not sure how to invest properly. Some of the more common vehicles now meant to make it easier for everyday savers to make a variety of investments, such as exchange-traded funds, hadn't been invented yet, and he said he invested heavily in penny stocks and risky investments. He decided to save and invest as much as possible while building his IRA and paying off his existing mortgage.
While his career was stable, he suffered two layoffs and lost thousands in investments when the dot-com bubble burst in 2000.
“I haven't been a good, smart investor in my whole life, but I've lived frugally,” said Richard. “I bought real estate and invested whenever an opportunity arose, so it's an incomplete background. But it shows that even if you make those kinds of mistakes, it's still possible to accumulate wealth.”
Richard maintained his savings as he neared retirement, avoiding big-ticket purchases.
Richard retired at the age of 62 when he realized he could be “released from a lifetime of work” and have enough saved. He waited until 65 to receive Social Security, noting that he never wanted to rely solely on Social Security for retirement. His wife retired in 2013, and their assets are now estimated at $2 million, split equally between their investments and their home.
They live comfortably on about $3,500 monthly in Social Security and dividends from investments, investing about $25,000 a year with annual dividends of about $120,000. Richard said they have long-term care insurance and put most of their money aside for health care expenses.
Richard described his investment strategy as “unusual.” They mainly invest in mutual funds that pay high dividends every time around 10%. At their age, Richard said he wanted to get rid of individual stocks.
“Even though the market prices go up or down, we always focus on the return rates and we hope that it will not change in an appreciable way,” said Richard. “So far, this is working, and we are satisfied to have income without selling funds to generate income.”
They still live within their means, but sometimes they travel abroad. They keep costs low by flying, avoiding expensive restaurants, never going on trips, and staying at Airbnbs.
“I've never stayed in a five-star hotel, and I've always had used cars,” said Richard. “We don't order takeout every day, and we might go to a restaurant once a week. Add that up, and you're saving tens of thousands of dollars.”
In retirement, Richard produced more than 70 books about his hometown, American history, and travel guides. He also directed a local community group and now volunteers as a tour guide.
“Retirement has been a great joy; it's like having a second child where you have complete freedom, and your job is to keep yourself happy,” says Richard.
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