Becoming a millionaire seems out of the realm of possibility for most Americans. Jeff and Helen Brown are not most Americans. Their conservative financial strategies have allowed them to amass multiple millions. These are not 90-year-olds who have 70 years of compounding investments behind them. Jeff is 52 years old. Helen is 50.
Their Strategy
The strategy that the Browns have employed is not far outside the ordinary recommendation for folks in their early 50s. Their asset allocation has 60 percent of their portfolio invested in stocks and the other 40 percent in bonds and cash. Much of this nest egg is currently invested through index funds that charge low fess and just try to track the overall market. They also have some of their savings in actively managed funds. Additionally, about 60 percent of the portfolio that the Browns own is held in tax-advantaged retirement and educational savings accounts. This has allowed them to increase their savings at a more rapid rate because less money is going to the tax man each year.
High Savings Percentages
Saving a few bucks a month will not build up a million-dollar portfolio very quickly. Helen Brown began saving early and often. In fact, she started out saving 35 percent of her take-home pay immediately out of college while selling computers for IBM. Rather than buying expensive toys, she was laser-focused on savings. Today, the couple has three kids, and Helen ended her tenure working outside the home. Jeff, a corporate attorney, is still able to save a third of his pre-tax income. The couple also pushes any money that’s left over at the end of the month into their investment accounts. Jeff works to make sure that he maxes out any tax-advantaged investment accounts to make the most of his income.
The Browns handle most of their investments themselves. Jeff takes around 30 hours each month to track how the family is coming along with their investment goals. They continued with their plan and continued investing throughout the Great Recession, which allowed them to build wealth while most people panicked and sold at the bottom. The couple meets with a financial planner yearly to discuss any major plans. Their impressive level of organization has allowed them to grow their wealth over time. Few people can say that they are multimillionaires. The Browns count themselves among this elite group.