Journey To Become A Millionaire

  • It has been 18 years since I moved to the U.S. and 14 years since I started working full-time. I spent the first 10 years setting up for life.
  • I have been a middle-income earner during my early career. My W-2 income hit the $100K milestone in 2011, $200K in 2016, and expecting to hit $300K in 2018. I grew my salary by working hard and switching jobs.
  • Brand new luxury apartments are always my favorite. My rental expense to total expense ratio has always been around 50-60%.
  • I had 2 large one-time expenses, $25K for medical spending in 2010 and $140K for a dream car in 2015.
  • My first alternative investment was in peer-to-peer lending space in 2014. I expanded my portfolio to small business lending in 2015, real estate crowdfunding in 2016, and litigation funding in 2017.

Ground Zero ($0 Net Worth)

I graduate from college debt-free. I was still living paycheck to paycheck, but I had no student loan or auto loan. Although I graduated with a bachelor’s degree in finance, I had no relevant experience in the financial services industry. While trying to look for jobs, I realized that it was easier to find a job in the technology industry.

In September 2004, my first job out of college with a small tech company paid $32K. The company was shit and my boss was terrible. After 6 months, I took a job with a mid-size toy manufacturing company for $49K base + bonus and grew my salary to $54k over a five-year period. During this time, my focus was primarily on stabilizing my life in the U.S. I went through various types of visa status – F-1 to J-1 to H-1B. In late 2007, I finally got my Green Card (the U.S. Permanent Residency Card), and I started job-hunting immediately. Job opportunities were limited and my interview skills were bad. I didn’t get a single offer for six months. I eventually gave up on my job search. Although I was making $10-15K extra cash with a side hustle, gross income of $60-70K wouldn’t allow me to buy a small townhouse. I knew I had to do something if I wanted to become wealthy one day. I just didn’t know what to do and where to start. In late 2010, I decided to focus once again on job hunting after the company went through multiple rounds of mass layoffs, cut bonuses, and implemented a two-week furlough.

I had been living in a 2 bedroom apartment with 2 roommates for 7 years. At the beginning 2007 after I got my H-1B, I finally moved to a 1 bedroom apartment. It was in the middle of a housing bubble. The rental price of this high-end 794-square-foot 1 bedroom apartment was $1,863 a month (current rent is $2,100+). It increased to $1,885 after the first lease renewal in 2007. My rent to income ratio was close to 50%. It went up as much as $1,915 during 2008. In early 2009 after the housing bubble burst, it decreased to $1,660 at the second lease renewal. I was able to negotiate down to $1,610, but I ended up moving to a brand new apartment nearby. I paid $1,517 a month for a high-end 724-square-foot 1 bedroom apartment (current rent is $2,098). It increased to $1,525 after the first lease renewal in 2010. I had large medical expenses during 2010. When I left the toy manufacturing company in early 2011, my emergency fund was only $40K.

Six Figures ($100,000 Net Worth)

In early 2011, I got a full-time offer from a mid-size consumer electronics retailer that paid $80K + bonus. I moved to a large city to live closer to this new job. I rented a brand new high-end 741-square-foot mezzanine studio apartment for $1,925 a month (current rent is $2,430). That job was shit. In April 2011, just after 5 weeks, I left the company and started looking for another job. There were a lot more job opportunities in a larger metropolitan area. I was able to find a contract job at an entertainment company after a week. My pay increased to $57 per hour + lots of overtime opportunities (equivalent to $150-160K a year). My savings increased to $75K at the end of 2011, and reached $100K in August 2012. It took me 8 years to achieve a six-figure net worth. Maximizing my hourly wage was all that mattered during this time. I haven’t thought much about investment yet. All extra cash was parked in a high-yield savings account.

Quarter-Million ($250,000 Net Worth)

In early 2012, I moved closer to the entertainment company. I rented an 1,100-square-foot 2 bedroom apartment for $2,299 a month (current rent is $2,695). I was planning to start a family. In June 2012, the entertainment company offered me a full-time position. Salary was $40.87 per hour (equivalent to $85K a year) + bonus + overtime pay. I declined the offer and decided to look for another job in the same area. I was fortunate to receive multiple job offers that paid six figures. In November 2012, I accepted a full-time offer from another entertainment company that paid $120K base + bonus. That job was fun, but I hated business trips. In June 2013, after 7 months, I left the company and started a contract job (corp-to-corp) at a financial software company that paid $75 per hour (equivalent to $180-200K a year). The entertainment company counter-offered me $140K base + bonus when I left, but I didn’t take it. My net worth reached $250K in August 2014. As my savings approached multiple six figures, I started to think seriously about investment. In early 2014, a new investment option caught my eye – peer-to-peer (P2P) lending. I decided to invest most of my money in Lending Club.

Half-Million ($500,000 Net Worth)

In late 2014, I accepted a full-time offer from the financial software company. Salary was $133K + 20% bonus + $60K RSU. My net worth reached $500K in May 2015. The investment performance was great and my gross income was over $500K in that year. I continued to expand my investment portfolio across various different asset classes – small business loans (DLI Fund), short-term residential real estate loans (Groundfloor), short-term mezzanine and preferred equity capital for commercial properties (iFunding). In 2015, I moved closer to the company. I rented a brand new high-end 821-square-foot 1 bedroom apartment for $2,250 (current rent is $2,400+) a month.

Double-Comma Club ($1,000,000 Net Worth)

In 2016, I decided to transition to a different team within the same company, and I moved closer to the new location. I rented a brand new high-end 1,185-square-foot 2 bedroom townhouse for $3,495 a month. In August 2018, my net worth reached $1M milestone for the first time. I’ve been consistently earning $250-300K total compensation and a six-figure passive income. I concentrated my investments in one asset class – litigation finance. Although this was an early-stage highly speculative investment, I saw explosive growth opportunities in this industry and decided to go all in. Only time will tell if I made the right decision.

What Could I Have Done Better?

Overall, I have done very well for the past 10 years. I am happy where I am today. I lived beyond my means, but I also increased my means. There are few things I probably would have done differently if the most important thing in life was to maximize my bank account.

Live Within My Means

I’ve been overspending on rent. Luxury apartments cost me $1,000-1,200 more per month than affordable apartments. That is $12-15K extra cash per year. My emergency fund could have been over $100K rather than $40K when I left the toy manufacturing company back in 2011.

Think Big

We limit ourselves to what we think we can do. Earning a six-figure salary was a long time dream. I hoped to accomplish it before turning 40, but I didn’t believe that could really happen. I ended up staying with a low paying job too long. It took me just a few job-hopping to find a six-figure income job. That being said, making six figures is not as hard as you would think. If you are working so hard and not making six figures, you are doing something wrong.

Luxury Trap

Buying a new luxury car that cost me $140K was unnecessary. I could have bought an affordable small car, a used family car, or a compact SUV. The cost would have been even greater if I accounted for the opportunity loss, which would be $10K extra cash per year ($140K * 12% return – 40% tax).