How we grew our net worth to 900,000 € by age 35

When I learned that the author over at Budgets Are Sexy has a combined net worth a little north of $920,000 I thought "damn, this blogging legend is so far ahead!" But it turned out he's not so much ahead as I first figured. Many people count net worth as a combined household number. I never thought of that!

For me and my wife it has always been completely natural to keep our wealth separated. Both of us have high salaries, a very frugal take on spending and we both invest everything. Where we don't always see fully eye-to-eye is how much risk we should be taking with our investments. I'm a risk taker as you might have figured from buying a camel in Somalia and owning crypto currencies. I once bet 30,000€ on a single stock, because I thought I had something more than a hunch of it. I didn't and it was stupid, but luckily it turned out quite ok still.

I've been asked about my net worth a few times, and I've said it's about 400k€+, but the truth is I haven't really calculated it for a while. But, since in combined worth we might be nearing in on a million euros, I've asked my wife to update her net worth as well.

Before we go into detail of how much we own, how did we get to where we are?

Becoming a millionaire rule number 1: get a well-paying job

"Is this the advice? Geesh! Yeah thanks for nothing!"

I know what you're thinking: getting a well-paying job is easier said than done. I know! I didn't say our method was easy! This is what we both did, or do still, rather. Our household income last year was about 240,000€, which in Finland is a lot. I feel embarrassed to mention this but both of us separately are in the top 2%. So we're far from average.

I'm not saying this to brag, I'm saying it's easy for us having such high-paying jobs. If you want to become a millionaire, this route is still one of the likeliest, but it depends on how far you are in your career.

Becoming a millionaire rule number 2: live below your means

Work hard, play hard. Right? Wrong.

There's nothing wrong with spending a bit on luxury every now and then or enjoying the money you have. However, if you seriously intend to become a millionaire one day, it's best to have your expenses in control. We have worked hard for over 10 years to be where we are, but we have put effort into keeping our expenses in line - mostly.

Both of us love to travel and we don't pay a lot of attention to money when we're on vacation. We ended up paying around 12,000€ on traveling last year, which isn't exactly frugal. But, at the same time we saved well over 40% of our combined salaried income!

It is of course much easier when you have a well-paying job. Once you get there though, you shouldn't let lifestyle inflation get to you.

Becoming a millionaire rule number 3: be a better-than-average investor

To become a millionaire fast, you need to be better than average as an investor. Luckily, being better than average is much simpler than being a little worse. All you really need is this book: The Gone Fishin' Portfolio. Why? Because this is the only book out there that instructs in detail what assets to invest in, how much to allocate and what ETF ticker to use, in order to beat average stock market performance. Yes, that's right. Simple and effective.

Gone fishin' portfolio is dead simple
Simply saving what's left of your expenses is not enough to get to that first million, you need to put your savings to work. If you don't want to let it consume your free time, read this book. Here's the allocation instructed by the book:

% Ticker Asset
15% VTSMX Total US stock Market
15% NAESX US small cap index
10% VEURX European stock index
10% VPACX Pacific stock index
10% VEIEX Emerging markets index
10% VFSTX Short-term bond index
10% VWEHX High-yield index
10% VIPSX Tips fund
5% VGSIX REIT index
5% VGPMX Precious metals fund

If a simple strategy isn't for you, I suggest looking into a paid service I use called ValueSignals. They have a superb stock screener and an awesome newsletter with two stock picks every month.

I'm personally a risk taker and invest heavily in peer lending instruments. I find it great for diversification and the returns have not been anything to scoff at either.

Our combined net worth is just under 900,000€

There you have it, just under 900,000 € combined net worth (880,353 € to be exact). One fifth of it is in real estate and the rest is split in different kinds of investments. I haven't split my wife's investments into more detail, but it's less varied than mine for sure.

We began building wealth over 11 years ago when we started our careers. It takes time and dedication, sure. There are those who criticize the path to financial freedom by saying they'd never throw away so many good years of their lives living like crap, but being where I am now, I couldn't be more satisfied with the choices we made 11 years ago.

Our path can perhaps best be displayed with a line chart of my personal net worth progression:

That's where we are now, nicely on target! Heading steadily to the first checkpoint of one million together, and hopefully soon after separately as well. Unless we retire before that 😉.
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