Starting with a net worth of less then zero to having a net worth over a million before I was 30, this series will show you how my family and I did it. This is the first of the series of my journey to becoming a millionaire in eight years, or should I say how I acquired a net worth of over a million dollars. In these posts I will be sharing our year end net worth along with a few other key financial numbers so you can see just how I did it with my wife and family. My hope is that these posts will help paint a clear picture for you of how I managed to do it as a frame of reference for you.
One day as my wife was trying to clean house and purging our house of a lot of old paperwork, I saw her throwing away a lot of old bills and some other financial paperwork. I quickly jumped in and annoyed her by pulling out a lot of it and looking through it all. There was a little sentimental side of me that wanted to see my first paychecks and all of those old bills and bank statements. Corinne can get a little annoyed at me slowing down her work and told me-
“Copy down what you want but I want it out of my house within a week!”
That was her nice way of saying-
“All of this crap has been sitting here for a decade and now, the minute I go to throw it away you pop in and stop me, you have got to be kidding me. You are such a pain in the butt!”
So I figured I would take and copy as much of it down as I could into excel spreadsheets so I could pour through the numbers. We didn’t have cool things to track our expenses back then like The Birdy or Personal Capital.
I would like to apologize to my wife because what ended up happening took much longer than a week. I proceeded to really go through all the papers and pull it all out and copy it into spreadsheets. From there I started really going through the numbers, I have always been a big numbers guy so I was in heaven with this. I was able to really look back through our life and see how well we did.
So that is how this all started, I mean all of it. I don’t think I would have ever started blogging or sharing this if it wasn’t for Corinne purging our house of clutter on that one fateful day.
What I am about to present next is what happened between the time that my wife started throwing things away and a little over a month after. Through this series of posts I am going to show it all to you.
I am starting with 2002. I decided to start here because this was the year that Corinne and I:
(Sorry the pictures are so small, I had to scan them from a small print)
I graduated midyear from Brigham Young University with a bachelors degree in engineering. Corinne graduated a few months before me also from BYU with a bachelors degree in photography. It was great to finally be done with school. I spent most of my time while I was at school looking for a job that last semester. As it came closer and closer to me being done with school I was getting worried. The job market seemed a little soft and there seemed to be a lot of people around me not getting jobs in their desired professions. As graduation time got closer and closer to the end I devoted more and more of my time to finding a job and less and less to my studies. My grades did a little worse that last semester but I still did fine. I was determined to find a decent job and not just move back home and taking any job I could like I saw many others doing.
-Found our first real job
Finding a job can be stressful. I had created more resumes than I can count, catering each one to the job I was applying for. I am not exactly sure how many jobs I applied for but I am sure it was into the hundreds. As I was applying for jobs I was hoping to find something that would get me back closer to our families in New York State. But as time went on I realized that I would be happy with any job anywhere I could find one. I eventually landed a job in Modesto, California. It was a really cool job for sure where I got to work as an engineer manufacturing parts for Toyota. Looking back I never realized how good of a job I had there. It was a great work environment.
-Decided to start a family
My wife and I had decided while we where in school that we would start having kids after we graduated and had better health insurance and a better income to support a family. So I had just started my new job and we decided it was time. I had originally heard how it takes months or sometimes longer to finally get pregnant and that is kind of what I was planning on in the back of my head. But surprise surprise, my wife was pregnant almost immediately. It was pretty scary for me to think I was going to be a dad. I could not believe it would happen so quickly. I really felt I needed to prepare so much more for my now growing family, which led me to my next adventure………… starting my first business.
-Started a little side hustle to make extra cash (this turned into so much more)
There was something about knowing that I would be a father and really wanting to provide more for my family that put a spark in me. I really wanted to provide so much more for my wife and unborn child at that point. So I started thinking about making a little extra money on the side. It was not that we needed it, but I knew that I wanted to have more money for the future and what it might hold in store. So I started brainstorming with my wife some things. We stumbled upon the idea of muslin backdrops for portrait photographers. Corinne had toyed with the idea of starting a photography business on the side and putting her degree and past experience working in portraiture to use. So we started looking at purchasing a few backdrops for her. As I realized how expensive they where to buy we started looking at how to make them ourselves. At first I looked at the numbers and saw that I could make these for around $50 and they where selling for several hundred and up. So we went ahead and made our first backdrop. It turned out good so we made a few more. Then I got the idea of making even more and selling them on eBay. At first I was thinking just a few to make a few extra bucks and to pad our bank account a bit, but as we did a few and they sold well we just kept on going with it. I will have many more updates on our business as it grew into what it is for us today in future posts.
Yeah, so kinda a big year for us…a defining year for us for sure.
Here are the numbers-
- Gross Income $35,750
- New Business Venture/Side Hustle ($1,042) (This was money we spent, we did not make any money on this in 2002)
- Amount Saved through the year $9,388
- Vehicles $9,000
- Cash $11,388
- Student Loans ($15,264)
- Net Worth $5,124
Now to explain them a bit.
This is the total amount we made taken from our 2002 tax return. Corinne had a job working for the college in archives until we moved. I had a job working as a teaching assistant until we moved. Then I just had a job working as an engineer for the rest of the year, I was on a salary of 47.5K a year. These where our only sources of employment income.
New Business Venture:
We had started doing things with our business. At the time we didn’t even realize it would turn into to something. It was more for making extra money on the side. This is the money we put into this at the beginning starting out. The numbers where very good for what we where doing but it required us to purchase some materials to get going in this. By my calculations for every dollar we put into this we would make at least three times back in the end.
This is how much we managed to save. I started working as an engineer in July of that year, so we were only able to save for the last six months of the year. It was not as much as we had planned to be able to save, we came very close to hitting our goal of saving half our income but I had high hopes of being able to save so much more, I have much more on this down below.
We had two cars, a 92 Dodge Shadow, and a 96 ford explorer.
This is the total amount of cash we had at the end of the year. As you can see we left school with a little bit of cash in the bank, but we really started making this number grow over the last six months of the year.
This is the total amount we had between the two of us. We both had to get through school on our own, my parents did not give me any money toward school and my wife’s parents only helped her out the first year of school. I could talk a lot more about this but I will save it for other posts.
This is a pretty easy calculation at this point in time. Add the vehicles value with the cash in the bank and subtract the student loans. We did not have any other debts at this point in our lives(no car loans, credit card debt, personal debt, did not owe parents or anyone any money, nothing else). It was not where we wanted to be but for being only 6 months out of college beggars can’t be choosers.
Budget for 2002
So here are some budgeting numbers we did back in December of 2002. We have never been the best at laying out a budget for our money. I am not trying to knock budgets or anything, some people function great with budgets and really need to budget to keep their spending in check. But Corinne and I have never really done one.
We have always been good savers and did not purchase things we did not need. When we graduated college our goal was to save 50% of every penny we made from then on and that has been our driving force to save ever since. So I pulled all of these numbers from looking through our 2002 credit card statements, bank statements, paycheck stubs, tax return, and old bills. I am so glad I was able to catch these before my wife got rid of them.
Here it is-
|Gross Income||3994||47928||This is the monthly income we had before anything was taken out.|
|Taxes/benefits||834||10008||This was the total amount taken out every month for all that government stuff and insurance.|
|Net Income||$3,160||$37,920||This is the take home amount. The total amount I actually see.|
|Rent||700||8400||Pretty self explanatory, in the area we lived this was more on the lower end, we could have afforded more for sure, but we wanted to save as much as possible. Corinne put a good month into finding the cheapest place possible, but still nice enough that we would not have to fear for our lives when we went outside. As an added bonus we where only a few miles from my work so I often road my bike or roller bladed. We could have easily dropped down to one car in our situation and looking back at things I really wish I did.|
|Cell Phone||45||540||Looking back this was an expense that we probably could have saved on, or at least gotten rid of the home phone.|
|Phone/Internet||48||577||I don’t think we could have lived without internet.|
|Electric||40||480||What I would give to have an electric bill like this again.|
|Gas||10||120||The same goes for this, I cannot believe how cheap it was living in that small apartment.|
|Car Insurance||68||814||We both had clean driving records. This was for two cars. We only had Liability on our Shadow, but we did have collision on our Explorer.|
|Gas||110||1320||This is back when gas was under $2 a gallon. We did a lot of driving around back then, we went a lot of places and really got out and explored for fun. It seemed like every weekend was a road trip to somewhere. That number would be a lot higher today.|
|Grocery||125||1500||We where still liking on a college diet at this point. Doing everything we can to keep those expenses low.|
|Entertainment||50||600||This was pretty much movies and eating out, mostly just eating out. We always ate cheap, we never really went to expensive restaurants or anything like that, it was always street vendors and fast food dollar menu. So even there we did not spend anywhere near what our friends spent on eating out.|
|Tithing/Charity||399||4793||Both Corinne and I always paid 10% toward tithing since we were young. We have always done this and will continue to do this in the future as well. I could talk a lot more about this but I will save it for another time.|
|Savings||$1,565||$18,777||In the end this is how much extra we had on average every month for those six months.|
This chart is the six month average for the last 6 months of 2002. So keep in mind that the total for the year is an average and not the actual for our complete 2002. Our actual is basically half of what you see in the year column. I laid it out this way because is it nice to see a what it would have been for a complete year.
So in the end we just barely missed our goal of saving 50%. I remember when we first came up with the totals on this I was really disappointed that we did not make our goal, we did good, but not as good as I wanted to. I had actually thought we would be able to save a lot more than the 50% at first when I took the job. We looked back over things trying to think of what else can we cut out and knowing that once the baby shows up we would be saving even less. I wanted to cut things out but I didn’t want to stop living. In the end we just kept doing what we were doing.
Looking over our budget what would you have done?
Well that is it, please let me know what you think of the format and let me know what else you want to see.
So this is my first post showing my financials. It took me forever to decide how to lay it out and what exactly I should show. I am still not sure if I have the format exactly right but I figured enough is enough and it is time to just put it out there. So please do comment and tell me what you think about this post and this format. As I keep going with these let me know if you would like to see anything else or if I need to explain anything better.
Author: KC Beavers
KC Beavers is a semi-retired entrepreneur. The subject of personal finance has always fascinated him. In an effort to not bore those around him with all his love of personal finance as much he has come here to bore all of you instead.