How to Become That Stealth Millionaire Next Door

millionaire next door
Written by Sean Collins

You don’t see them. You can’t hear them. Lavish lifestyle is not their thing. But the stubborn building of wealth and free life is. If you happen to live in the US, go outside on the street and look both ways. There are at least 25 millionaires along the street.

9% of the US households have a net worth of over $1 million.

That’s every 11th home. More or less same situation is in Western Europe and some parts of Asia.

All in all, there are over 250 million people across the globe which net worth exceeds the $1M threshold. 150 million holds 86% of everything this planet has to offer. 75 million hold 46% of all the money we have in the system.

How do they do it? What’s their secret?

They know how to play the money game!

What an average man do when he needs a car or when he’s looking to settle somewhere with his young bride?

He runs into the first bank, picks up the loan for the brand new car and takes yet another loan (mortgage) to buy a nice, suburb, overpriced 2-story house.

That automatically drives him into the red zone, and he’ll most likely be spending the biggest portion of his life paying back the borrowed money. Before he manages to pay his mortgage, the house will have to undergo a thorough adaptation. So he picks yet another loan or takes the second mortgage.

At that moment, something that can hardly be sold for more than $50K will be ultimately paid over half of million dollars.

All because he sucks in this crucial type of game.

Instead of working to reach the point of sync, his actions and total oblivion about how the system works and what is the proper way to handle the money will lead him to opposite direction – to the sinking point.

4 case studies prove that anyone can build wealth far over the $1M threshold

TFT or The Fiscal Times interviewed four “everyday millionaires,” including Darrow Kirkpatrick, 55, of Santa Fe, New Mexico; Julie Rains, 55, of Winston-Salem, North Carolina; Jeremy Jacobson, 37, world resident; and Jeff Johnson, 41, of Somerset County, New Jersey.

Through disciplined saving and savvy, yet simple investing, they grew their wealth enough to travel the world, went to an early retirement and enjoy peace of mind.

“These millionaires next door don’t have lavish lifestyles,” says Farnoosh Torabi, a personal finance expert who also interviewed these everyday millionaires on her daily “So Money” podcast, “but they enjoy their lives. They are very conscious how they want to design their lives to get a lot of financial security.”

So how did they do it?

Some of the commonalities among the four include hyper-saving, smart and consistent investing and thoughtful spending when it comes to homes, cars, vacations and small treats. They also benefited from earning higher salaries during their working years versus the median income along with other blessings when it came to covering education expenses and health care costs.

Here are their secrets.

Save…and Then Save Some More

millionaire next door saves moneyAmericans on average save 5.5 percent of their after-tax income, according to the latest data available, while the conventional wisdom is to put 10 percent away. But these everyday millionaires are socking away a whole lot more. “They are super savers,” says Torabi. “They cut it out of their budget and live with what they have left.”

Jeff Johnson, who works in pharma marketing and sales, says that he and his family live on less than half of his take-home pay and save the rest. That may not seem like a lot to live on, but it’s enough to allow his wife to stay home to care for their three-year-old son. “Whenever we had an opportunity for a bonus or promotion, we never increased our lifestyle,” says Johnson, who estimates his net worth at $2.5 million, not including his home.

Jeremy Jacobson and his wife, Winnie—whose net worth is well north of $1 million—put away more than 70 percent of their income for over 10 years before retiring more than three years ago to travel the world with their baby son. Jacobson said when he first met his wife in Beijing on a business trip, she was already saving half of her income. They worked up to the 70 percent by making small changes to their lifestyle along the way.

“If you’re looking at the after-tax income and you’re saving 10 percent, after about nine years, you roughly have enough money to take one year off,” Jacobson says. “But if you’re saving 90 percent of income, you can take nine years off after saving nine years.”

Invest Wisely

millionaire next door investsA large part of their success was investing their savings on the long term. That meant maxing out contributions to 401(k)s, IRAs and ROTH retirement plans and getting the full company match on employer-sponsored plans if one existed.

After that, the majority of these millionaires kept their investing strategy simple. Darrow Kirkpatrick, who has a net worth between $1 million and $2 million, has only seven holdings for his money. “They are mostly mutual funds, index or very low-cost managed funds with about 50/50 stock and bond,” he says. “That’s pretty much how it’s been since the early 2000s.”

Jacobsen and Johnson also use mostly index funds. Interestingly, all three swear on Vanguard’s funds, which are low cost.

Julie Rains, who said her net worth is in the millions but didn’t disclose an amount, prefers mutual funds, exchange-traded funds, and individual stocks. “It does take some time to pick those stocks, but I do like the process,” she says. “What I like to look for is a solid performer that is well-priced.”

Reduce Large Expenses

millionaire next door reduces large expensesKirkpatrick claims that one of the keys to his success was not overspending on real estate. He and his family owned one modest home in Tennessee for 17 years and only renovated before selling it. “We weren’t house-swapping. We also didn’t dump a lot of money into the house,” says Kirkpatrick, who retired in 2011. “It’s clear that people put huge amounts into their homes and that has huge costs for their financial freedom.” Now, he and his wife rent their two-bedroom condo in Santa Fe for $1,500 a month.

Similarly, Rains has lived in the same home for decades and when she bought it, she didn’t stretch. Both Kirkpatrick and Rains don’t borrow to buy cars—Kirkpatrick and his wife share only one. They buy recent, used models and keep them for as long as they can.

“If you’re making a car loan payment, you’re not investing that money,” says Rains.

Jacobson and his wife didn’t buy a home and don’t have a car. They chose rentals in Seattle that were located in a walkable neighborhood, close to the bus line and as cheap as they could find. Jacobson also biked to work to save on commuting costs.

Cut Out Frivolous Line Items

millionaire next door cuts on frivolous line itemsEven when Jacobson and his wife went on vacation — which weren’t lavish — they did it with saving in mind. “We would sign up for a credit card reward program to get free flights and hotel,” he says. “Our honeymoon was 10 days hiking around Mt. Rainier in Seattle. It basically cost us nothing.”

Johnson, who lives with his family in the townhouse he bought in 2004, carefully monitors their spending. It’s a practice he started as a senior in high school, which made him realize how much money he spent simply by buying a lunch.

“I still bring my lunch to work,” he says. “Is it worth spending $2,000 a year on lunch?”

To get around the urge to eat out, Jacobson’s wife spent a lot of time becoming a serious cook. “Ninety percent of our food comes out of our kitchen, and her cooking is better than most any restaurant we could go to,” he says.

The sacrifices paid off. They are now globetrotting around the world, spending a few months in different countries—now in Malaysia, Europe in the spring—with a $40,000-a-year budget. They found out that they can live like kings on that budget in many low-cost countries.

Possibility Starts With a Good-Paying Job

millionaire next door negotiates higher paying jobTo be sure, these everyday millionaires were blessed with a few advantages that helped catapult their net worth. For starters, each had a job that on average make more than the median income.

Johnson works in pharma sales and marketing and his wife, before staying home to care for their child, worked at a university as a department psychologist.

Jacobson was an engineer at Microsoft and his wife was a project manager at Dell.

Kirkpatrick was a software engineer. He also has affordable health insurance in retirement because his wife, who was a public school teacher, was allowed to buy into her health insurance.

Rains’ husband still works as a logistics manager, working toward a full pension, and provides medical insurance through his work. Before, they profited from his company’s stock program “that did very well,” says Rains, who previously worked for a regional bank and now is a part-time freelance writer.

As for college expenses, Rains had one son go to the in-state university with the affordable tuition that was covered by savings.

Kirkpatrick’s son ended up getting a full scholarship to a public university, while Johnson himself got a scholarship for his schooling. His wife, though, ended up with serious student debt. Both Jacobson and his wife were saddled with huge student loans they paid off.

Manage the Bumps in the Road

The journey toward a seven-figure net worth wasn’t always smooth. “I did some dumb things in the beginning, fortunately with small sums of money,” says Kirkpatrick. One of his most memorable mistakes was getting involved in the dot-com mania. “I invested a few thousand dollars, quadrupled my money and then watched it go back down to the price I bought at,” he recalls.

Jacobson tried and failed at real estate investing and picking individual stocks. He ended up settling on index investing. “It’s easy, even if at first it feels like you aren’t getting any traction,” he says.

Rains found that she hadn’t saved enough for her youngest son’s college education. He went to an out-of-state school, which cost more. “I definitely would have set aside money in a 529 more quickly when they got popular,” she says. “I would have also taken my child to visit more in-state schools during high school.”

Johnson fell for his weakness for cars, but not too hard. He bought a BMW five years ago with cash. “If I take a step back, I could have saved $5,000 or $10,000 buying another car. Was it the smartest thing?” he says. “You got to live too and enjoy life. You can’t always save. I still enjoy driving that car.”

So, what do you do now when you know all of this?

You start adjusting your actions and money-management. Clearly, you’re not doing it right. Money, as you could see for yourself, has to be returned to the system if you ever want to live free. There is no other way.

Even if your paycheck is looking generous and abundant, make no mistake: you’ll always spend the last dime if you fail to set up the investment portfolio.

Here’s the deal.

Start learning the theory of investment by setting up the free account at

While you’re learning the meanings of specific terms and methods that are used in investing game, start working on several sources of incomes by setting up the smart, low-risk business which will eventually evolve into something much, much more profitable.

That’s all you need to start building wealth in a stealth mode without attracting too much attention. If nothing else, you’ll prevent being asked for money all the times.

This right now is your chance to start doing it right. Remember: over 150,000,000 people are doing it right. You don’t. Don’t you think it’s time to change something?

About the author

Sean Collins

An investigative journalist with the thing for business, confidence, societal, and human behavior topics. The straightforward guy with the opinion that doesn't always agree with the mainstream. We call him Choozo. Cuz he's picky. About freakin' everything.