My First $1 Million: Self-Employed Trader, 50, San Francisco

Welcome to Kiplinger's My First $1 Million series, in which we hear from people who have made $1 million. They're sharing how they did it and what they're doing with it. This time, we hear from a self-employed trader who lives in San Francisco. He and his wife are from Austin, Texas, but call both places home.

See our earlier profiles, including a writer in New England, a literacy interventionist in Colorado, a semiretired entrepreneur in Nashville and an events industry CEO in Northern New Jersey. (See all of the profiles here.)

Each profile features one person or couple, who will always be completely anonymous to readers, answering questions to help our readers learn from their experience.

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These features are intended to provide a window into how different people build their savings — they're not intended to provide financial advice.

THE BASICS

How did you make your first $1 million?

That's a tricky one. It might have come about the same time from two different sources. Real estate and RSUs (restricted stock units). At an early age, my wife and I began investing in residential rental properties in the Austin area. We built up a portfolio of five single-family homes.

The equity in that portfolio probably reached a million about the time my wife got a honey of an RSU package from a firm in San Francisco that was worth more than $1 million.

(So we made our first million) probably around 2019.

What are you doing with the money?

As the Austin real estate market overheated, we began selling properties and rolling the proceeds into another market with no state income tax but much lower property taxes.

We turned a portfolio of five houses into 10 houses with significantly lower property tax bills for a similar amount of rent.

The RSUs continued to grow in value, which allowed us to build a very nice house. They also provided the capital I needed to change gears and move out of my corporate finance/accounting career and into full-time trading, which now provides me with more income than any job I ever had.

And if increased income isn't enough for you, let me tell you that having no boss and no meetings and whatever schedule I choose is hard to put a price tag on.

It also allows me to volunteer more at church and help others with financial education.

A significant portion of our income goes to charity, but that has nothing to do with making a million. It has always been that way and always will be that way.

THE FUN STUFF

Did you do anything to celebrate?

No. We weren't even aware of it in all honesty. $1 million used to mean something. For us, it is just a small part of a much bigger plan and expected outcome.

Does anyone know you're a millionaire?

I can't think of anyone. We want to be known for our generosity and how much we give away and not by how much we have.

What is the best part of making $1 million?

It's the hardest million to make. You always hear that the first million is the hardest. It is absolutely true. The next millions come quicker.

The best part of making $1 million is that it proves you have what it takes to make the next however millions. There is a reason so many people will never make a million. It's hard, and it takes discipline.

Did your life change?

It didn't change our life all that much. We drive a nicer car and have nicer things, but we still live significantly below our means because we have more goals to accomplish.

You don't hit a certain dollar milestone and then just change things up. It's why so many lottery winners or superstar athletes go broke. They stayed true to who they were before the money came, just like my wife and I stay true to our principles after the money came.

Any plans to retire early?

My wife will probably retire by 55. I love being a trader and can do it anywhere as long as a market is open and at any age. It is now the annuity stream I've always sought.

I'll probably cut loose all the real estate and add the capital to my trading account. The returns are way higher than real estate. Real estate has gotten out of control on the cost side of the equation.

LOOKING BACK

Anything you would do differently?

That's hard to answer because we always assume that if we change something, it will make things better today. I like who I am today. Who I am today is a product of all the lessons learned from the past.

If I changed something and didn't learn a particular lesson, I might be worse off today.

Those tools I added to my toolbelt from those lessons equip me to do even better going forward, so no, thanks, I wouldn't change a thing.

Did you work with a financial adviser?

No. I've always had a knack for making my money work for me. I realized early on that it wasn't enough to just make money. I had to get multiple streams of income working for me, thus investing in real estate. My tenants were buying me appreciating assets.

Early on, I settled on an investment strategy based on a simple premise that I could not know how long I'd live, and I did not want to ever worry about running out of money.

I decided on a three-pronged approach:

• Personal savings via retirement accounts
• A perpetual annuity stream through rental properties
• Social Security

Social Security was deemed the least-reliable of the three and would be treated as a bonus (which is pretty terrible since it is something we've funded all our lives and should be able to count on it, but we have terrible politicians who expect us to do finances correctly while they bankrupt our country).

We have diligently saved in our retirement accounts and are in the process of paying off mortgages on rental properties.

Did anyone help you early on?

My dad taught me to be cost-conscious and pay my bills. That stuck with me. That, combined with this inner drive to maximize everything I get my hands on, turned into financial success.

LOOKING AHEAD

Any advice for others trying to make their first $1 million?

Stop watching the highlights of the world on social media. It paralyzes you. It fills you full of anxiety and FOMO.

Making a million is not rocket science. It's not instantaneous, and it's not sexy. It's wanting more, being willing to do what it takes to get more and having the discipline to control your spending along the way.

My wife and I made sacrifices in the past so we could have what we have today. Delayed gratification and investment in ourselves.

Stop believing everyone is smarter and better than you and that you'll never make it because you're not good enough. Bet on yourself and make it happen!

Do you have an estate plan?

Not yet. My CPA diligently pesters me about this, and I need to stop dragging my feet. My wife and I did not come from money and did not receive any inheritances.

Now that we have something, we want to make sure it passes as easily and tax-friendly as possible.

What do you wish you'd known …

When you first started saving? That it takes a long time, but if you keep at it, then results will come.

When you first started investing? Be patient. Zoom out on your chart and look at the years and stop sweating what is happening on the daily timeframe.

Real wealth doesn't come from buying something at the beginning of the week for $100 and selling it at the end of the week for $105. That's how I make money weekly in trading.

Real wealth comes from buying something for $100 and selling it in 20 years for $100,000. Patience, patience, patience.

If you have made $1 million or more and would like to be anonymously featured in a future My First $1 Million profile, please fill out and submit this Google Form or send an email to MyFirstMillion@futurenet.com to receive the questions. We welcome all stories that add up to $1 million or more in your accounts, although we will use discretion in which stories we choose to publish, to ensure we share a diversity of experiences. We also might want to verify that you really do have $1 million. Your answers may be edited for clarity.

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