Richard (not pictured) said he and his wife retired with more than $2 million in assets, despite some 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 choices.
Richard learned investment strategies later in life after losing thousands of euros in the internet bubble.
Richard’s story highlights the “millionaire next door” mentality of diligent saving and careful investing.
Richard, who is in his mid-70s, has never had a well-paying job and has made several investment mistakes that have cost him thousands of pounds over the course of his life.
However, the Idaho native said that by living frugally, prioritizing retirement accounts and making smart real estate decisions, he and his wife were able to retire comfortably with more than $2 million in assets after a career in state government and consulting.
Richard learned about investment strategies late in life after losing thousands of dollars in the dot-com bubble. Afterwards, he said his path to growing wealth was modest and cautious. He asked that his first name only be used due to privacy concerns.
His path is indicative of the “millionaire next door” mentality, which involves concerted efforts to save and invest using highly accessible strategies, rather than flashy but risky get-rich-quick schemes or an elite, ultra – get a well-paying career. Still, he acknowledged that not all retirees have the resources to save a significant amount for retirement.
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“Having a work ethic has helped me throughout my life, not only in accumulating wealth, but also in having people recognize that I am a trustworthy person,” Richard said. “You have to be honest, be kind and help other people.”
Richard said his “almost ideal” upbringing taught him the value of money and hard work.
As a teenager, he worked as a paper boy, produce clerk, ice cream salesman and cashier for root beer stands. He estimated he earned about $5.25 a week in high school, or about $53 in 2024 dollars.
“I realized the value of money because it gave me the independence to buy the clothes I wanted to buy, allowing me to buy Christmas presents for my siblings and parents,” Richard said.
He also acknowledges that he grew up in a time when the necessities of life were more affordable. In his small, middle-class hometown in Illinois, he said a family could survive on one income. He worked and lived frugally while attending the University of Illinois, which he said cost just $173 his first semester. He paid off his student loans immediately 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 doubled.
“I didn’t really think about what my financial goals were until later,” Richard said. “I remember coming home one Sunday and saying that I really don’t want to live a middle-class existence. I would like to do better if I can.”
In graduate school he worked as a teaching assistant, started investing on the advice of his stockbroker friend and bought an apartment. He admitted that because his parents were not financially literate, he was not a “very disciplined saver or investor,” although he knew he would never take on major debt.
He said he wasn’t always sure how to invest properly. Some now-common tools meant to make it easy for ordinary savers to make diversified investments, such as exchange-traded funds, had not yet been invented, and he said he was investing too heavily in penny stocks and riskier investments. He decided to save and invest as much as he could while building his IRA and paying off his existing loans.
Although his career has been fairly stable, he has endured two layoffs and lost thousands in investments when the Internet bubble burst in 2000.
“I haven’t been a disciplined, smart investor all my life, but I have always lived frugally,” Richard said. “I bought real estate and invested when the opportunity arose, so it’s an imperfect backdrop. But it shows that even if you make these kinds of mistakes, it’s still possible to accumulate wealth.”
Richard maintained his frugality as he moved closer to retirement, avoiding expensive items.
Richard retired at the age of 62 when he realized he could be “liberated from a lifetime of work” and had enough saved. He waited until age 65 to claim Social Security, noting that he never wanted to rely solely on Social Security for his retirement. His wife retired in 2013 and their assets now amount to about $2 million, split evenly between their investments and their home.
They live comfortably on about $3,500 a month in Social Security and dividends from investments, and invest about $25,000 annually with annual dividends of about $120,000. Richard said they have long-term care insurance and have set aside much of their money for health care costs.
Richard described his investment strategy as ‘somewhat atypical’. They invest mainly in mutual funds that consistently pay high dividends of around 10%. At their age, Richard said he wanted to eliminate individual stocks.
“While market values may fall or rise, we remain focused on returns and hope that will not change noticeably,” Richard said. “So far this is working and we are happy with a stable income without having to sell money to generate income.”
They still live within their means, but occasionally take international trips. They keep costs down by flying frugally, avoiding expensive restaurants, never going on tour and staying in Airbnbs.
“I’ve never stayed in a five-star hotel and I’ve almost always had used cars,” Richard said. “We don’t order takeout every day, and we might go to a restaurant once a week. Add that up and you save tens of thousands of dollars.”
In retirement, Richard produced more than 70 books on his hometown, American history, and hiking guides. He has also led a local community group and now volunteers as a tour guide.
“Retirement has been a total joy; it’s akin to having a second childhood where you have complete freedom, and your job is to enjoy yourself,” Richard said.
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