How to Get a Million Dollars for Your Nest Egg

How to Get a Million Dollars for Your Nest EggBy early 2017, we had finally built our net worth up to over a million dollars.  It was a great feeling to reach that milestone, but it didn’t really change things for us – we just continued to follow our plan.

When I left my job at the end of 2018, we had a net worth of about $1.1 million and, thanks to the bull market still pushing ahead, it’s roughly $1.2 million right now.

I’ve written a few posts talking about the relevance of the infamous $1 million number:

Some folks look at that as an amazing feat for an average Joe family.  Considering headlines littering the news like:

“Half of Older Americans Have Nothing in Retirement Savings” or

“Survey: 21% of working Americans aren’t saving anything at all”,

it’s hard to argue that having a sizeable amount of retirement savings isn’t the norm.

Others think I’m taking a huge gamble and putting our family’s future at risk.  This comment thread on one of my recent posts is just one of a few pieces of feedback I’ve gotten on this.

Personally, I feel we’ll be just fine and adapt as necessary, but I appreciate this kind of discussion.  Regardless, no matter if you think a million dollars is enough to retire on or not, it’s still a good chunk of change and a goal for many.

So the big question that I often get from people is how to get a million dollars.

I mean it must have been a miracle that we were able to do what we did, right?  We’re not doctors or lawyers and didn’t receive any inheritance or win the lottery.  We had school loans and credit card debt – Ok, fine, it was me that brought in the credit card debt!

So how the heck do you get a million dollars stacked up?  That’s what I’ll be discussing in today’s post.

First off, know that there are many paths to wealth.  I’m here to tell you how we got to the place we are today.  There are easier and harder ways.  There are faster and slower methods.  This is just worked for us.


A decent income makes it easier to get a million dollars

This should come as no surprise, but the more money you make, the more you can put away.  This can greatly expedite your path to wealth.

I had a very good salary by the time I left my job, but as a household income, we were a little more than the country average.


My salary

When I left my company, my salary was a little over the six-figure level.  But it took a long time to get there.

When I first started at the company in 1999, I was part-time so I could finish school.  I was earning $25k per year.

Over the next twenty years though, that continued to grow.  This wasn’t because of entitlement.  No one should be entitled to more money solely out of longevity.

Earnings should be based on what you’re worth.  And your worth should be based on hard work, performance, and growth.

In my case, I focused on all three.  From the onset of my career as a systems engineer with no real knowledge or experience, I worked hard to understand all aspects of my field.

Knowledge is power and I wanted to be well-versed in what I did.  My boss pushed for and paid for training along the way.  I took advantage of that a lot over the years to continue to grow.

And as my proficiency and performance grew, my salary followed suit.

Then in 2005, I became the manager of the engineers.  This was a position that my boss was holding up until that point (among many others).  This was not something I took lightly and I spent the next 14 years working on streamlining various facets throughout.

As the years went by, my salary continued to grow until I reached that notable six-figure mark and a little beyond.


Lisa’s salary

My wife, Lisa, is a more nurturing person than I am.  For as long as I’ve known her, she’s worked at places that tend to take care of others including a large retirement community and the well-known Make-A-Wish Foundation.

I don’t think I could handle the “customer” side of either of these jobs – it definitely takes someone special to be able to do that.  She’s a better humanitarian than I am for sure!

That said, these are also jobs that don’t pay a lot of money in a lot of employment positions.  The most Lisa was bringing in was $39,500 per year.  And that was when she was working full-time.  Around the time Faith started school about four years ago, she dropped to part-time and then eventually focused on small side hustles instead.


What we could have done differently

It’s not like it used to be… loyalty pays less than it used to.  Although I made a nice salary, it took me a long time to get there.

Some studies have found that job-hopping can give a salary bump of $5,000 – $10,000.  Do that every few years and you can be worlds ahead of where you might stand with just sticking with the same company.

I was comfortable and treated well at my company.  But if I had left earlier in my career for other jobs, I would likely have been making substantially more money than I did when I left.

As far as Lisa goes, she absolutely could have found jobs that paid more.  But she enjoyed what she did (a lot more than I did for sure!) and honestly, that’s worth a heckuva lot more than a bigger salary.


Saving is the key

Making money is important, but what you make only matters in regards to what you keep.  If you’re aiming to get a million dollars, you’re not going to get it by spending everything you bring in.

In other words, the key to building large savings in your nest is that you actually have to save!

And that’s the area where we were able to really shine.

After realizing how badly I was in debt 20 years ago, I got on track to kill it.  But here’s the beautiful thing – after I was out of debt a couple of years later, we just kept saving the money we were putting toward the debt (and then some!).

So even though we weren’t earning a lot of money at the time, we were saving what we could.  And then over the years, as my salary continued to increase, I kept increasing the amount I was saving as well.

Looking at an old paycheck, back in the year 2000, I contributed $3,500 into the 401(k) plan offered.  That’s when I was making $35,000/year.  10% is a pretty decent contribution for that kind of salary.

Here’s the fun part… back then, I had no idea what I was doing.  Even though I was contributing a fair amount of money every paycheck, I didn’t understand what I was investing it in and I also didn’t comprehend how valuable that employer match was.

But it didn’t matter so much because just by saving the money instead of spending it, we inadvertently set ourselves up for a future of financial success.

For as far back as I remember, my former employer had given what came out to be a 35% match on contributions up to the federal max.  In other words, you were getting a 35% return on your money even before taking any stock market returns into consideration… that’s incredible!

That’s also the reason why financial advisors push most everyone to take advantage of an employer match before doing anything else.  That’s a huge return on your money for doing nothing!

Over time, my salary increased and I increased my contributions.  I don’t have all my super old pay stubs (stupid hard copies!), but I did find that for 2005, I had contributed $13,332.36 when the limit was $14,000.  And I finally started maxing out my contributions every year starting in 2007 (the limit was $15,500 that year).

When we’re discussing how to get a million dollars for your nest egg, that’s what we’re talking about…

It’s not about making risky moves and doing fancy things – it’s just about saving as much as you can over the years and allowing it to grow.

As the years continued, I started learning and understanding a little bit more.

  • I moved us out of stupid funds that were crushing our money with useless fees.
  • I opened Roth IRA accounts for each of us and eventually started maxing mine out.
  • I moved our savings account from the useless big banks paying 0.01% to an online bank that’s currently paying 2.2%.
  • I discovered how valuable the Health Savings Account (HSA) is and started maxing that out.
  • We woke up one day and realized that material things like new cars aren’t what makes us happy.

Because of that, we just kept saving more and more while our lifestyle expenses seemed to decrease.  And not by coincidence, our level of happiness actually became greater.

So by 2017, we became a millionaire household and found our way closer to financial freedom.

In the meantime, even with Lisa no longer working and us on just my income, our personal savings rate was floating around 60%.  In retrospect, the power of saving and compound interest is really what provided us the ability to retire in our early 40s.


Exploring other options

Although you can easily get to a million dollar nest egg by just following the two steps above (earning and saving), there are other options.

In our case, another meaningful piece of the puzzle was real estate.  Real estate provides a lot of great benefits, but at the time, I just wanted to have an asset producing some cash flow for us.

Before I realized that you don’t have to be rich to be financially independent, I had dreams of being a real estate mogul.  And there’s nothing wrong with that – you can do great making that most or all of your portfolio.

But knowing what I know now, I wish I’d purchased more properties – but just enough to be a bigger balance against the market.

In 2003, I bought my first rental property.  Lisa and I were only dating at the time and we moved into it together.  The plan was to fix it up and rent it out.

The two problems were:

  1. I didn’t know what I was doing and bought a house that was in the middle of a bad area.  Like bad enough that there was a shooting right in front of it just a few years ago.
  2. I also didn’t know anything about home repair… I was in way over my head.

Somehow, with the help of a good friend of mine though, we managed to get it fixed up and rented.  And the tenants stayed there for about 9 years.  We even made good money on it month over month.

However, they destroyed the place and I ended up selling it last year after they moved out.

In the meantime, I figured out what I was doing a little more thanks to a lot more reading and the help of my financial mentor.  In 2015, I bought a duplex for a fantastic price in much better condition, in a better area, and with a much better return.

We still have the duplex and that continues to generate a nice flow of cash for us every month.  That alone isn’t a huge part of our portfolio, but it does help hedge against a bear market.  Even if the stock market tumbles, our rent checks will continue to roll in.  That’s a nice feeling.

These are the choices that worked for us.  If you’re trying to figure out how to get a million dollars for your nest egg, this should help give you a little motivation to realize that this is possible for a regular household.

I didn’t have an elaborate plan and no big strategy seemed to make this happen.  As boring as it may sound, it really all came down to just saving and investing for us.  See, told you it would be boring.

Regardless of what choices you make, the only way to get more than a million dollars in your nest egg is to put it in there yourself.  And the way to make that happen is to earn more or spend less and then sock away as much as you can.  Just make sure to do that without forgetting about the importance of today.

And of course, there are other ways to optimize your taxes and investments.  However, these are just icing on the cake.  If you’re saving and investing a good portion of your income, it’s almost foolproof.


Are you surprised (good or bad) to realize that getting your nest egg to a million dollars can be fairly straightforward?


Thanks for reading!!

— Jim


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14 thoughts on “How to Get a Million Dollars for Your Nest Egg”

  1. My story is very similar. One difference may be that I asked for and worked on getting a raise every year. Bosses love the question of what it would take to make the next title within the next year. It also changes the game from a put in your time dynamic to a results one. If anyone would have ever told me it was simply a tenure thing, I would have changed jobs, but they never did say that. I learn fast and don’t want to waste time staying at a company that holds me to a bell curve. I think that the first million is mainly about saving. It was for you and also for me. No one gets paid what they are worth. you get paid what you ask for and the perception of what you deliver. A bigger salary is a huge help to saving more. My early goal was to save enough that at a 6-8% annual return my savings investments would overtake my salary in annual earnings. Everything just blows wide open when your money starts to work for you

    1. I think the point that you made that resonates with me is “No one gets paid what they are worth. you get paid what you ask for and the perception of what you deliver.” I don’t think most folks realize that point and are afraid to ask for more money because they’re afraid of scarring their reputation or losing their job. It’s hard for some people to ask for more money, but if your performance really does justify a raise, that should be something that folks should do. Or they should consider looking at another job elsewhere (unless they’re content with their salary to begin with).

  2. Congrats on reaching the million! 100% agree that an average Joe family can do it. My husband and I were able to amass a 7-figure portfolio even living in a high-cost city (NYC), which is another thing that surprises people. But if you’re determined, you will find a way.
    I also share your wishfulness for amassing more real estate earlier. We’re 50/50 real estate/ paper assets now, and we made that switch within the last 6 years, but had we started amassing properties sooner, we’d be much further along paying down the rental mortgages. Oh well! Better late than never!

  3. Saving aggressively is the key for us too. In the beginning, you have to save a lot to build up your portfolio.
    I like real estate too, but now we need to sell them. The market is very slow now so it’s really tough to be a seller. Now, I don’t like real estate investment so much… It’s a pain to sell.

    1. I hear you on that, Joe – I have days when I hate the complexity of the rental property. I’ll be writing soon about the train wreck we just ran into. But on the other hand, I do like having a little diversification from the stock market. Maybe when I grow this site big enough, I may want to join you in selling off my rental. Good luck on selling it!

  4. Rich Engelhardt

    Jim (and others that manage to do it) – I give you a lot of credit for being able to maintain a steady lifestyle as your income increased. The vast majority of people that are out there will live up to their level of income – new fancy cars & houses in gated communities, expensive and frequent vacations, going out to eat three to five time a week, etc, etc. That’s a major accomplishment! As far as real estate goes,,,,it has it’s pros and cons…one thing is for certain about it, You are either in – or out – there is no dabble. The one thing I like about having just single family rentals is that they sell quick.

    1. Awesome points! Going single family vs multi was something that weighed on me a little bit. I like that even when one unit’s empty, I generally have income still coming in from the other unit. And most of the time, I make more than I would with two single-family homes. But you’re right, that if you want to sell, you’ve got a much bigger pool of potential buyers with a single family. With multi-family, you mostly only have investors to sell to. The other downside is that turn-overs in multi-family tend to be a lot more frequent than SFH and I do see that in mine. That ends up eating some profit with the lost rent for about a month each time.

  5. Yup, there are a million ways to get to one million dollars, but it really starts with being a good saver.

    That said, I think people focus on that first million too much. It really isn’t *that* much anymore. Depending on where you live and what kind of lifestyle they want, a person might have to save several times that amount!

    1. Couldn’t agree more, Mr. Tako! That million is a great start for a naturally frugal family like ours living in a low cost-of-living, but that’s not the norm in a lot of the country. And we’re hoping to help buffer our number with some additional income somewhere along the line anyway.

      But it’s definitely a number that still is important. Although it’s probably not enough for a lot of folks, if you’ve gotten to a million, chances are you’ve now gained a little more knowledge to realize a little better as to where you need to be.

  6. I’m not really surprised, no. Save more and spend less is pretty much how you have to go, with rental properties definitely helping when they’re possible.

    Alas, I don’t have a 401(k), so no free money from my employer. But such is the hazard of contract work. Instead, I’m focusing on maxing out my SEP-IRA, which I finally opened last year. Better late than never, I suppose. I have a lot of catching up to do, so I won’t be hitting the $1M mark I’m afraid. But I can do my best to sock away as much in the SEP and the Roth to ensure that I have some money in my golden years.

  7. Being a good saver goes a long way and I definitely give you credit for being a good one. Maintaining your life style and avoid lifestyle inflation is a key.

    1. That’s a great one, Bob – lifestyle inflation is the stash-building killer for so many folks. And unfortunately, most don’t realize it until they’re close to what should be their retirement.

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