Jerry and Lynn Moser
Age: Jerry 47, Lynn 46
Occupation: Regional sales manager and secretary
Salary: $106,000 combined
Investment accounts: $225K
Checking: $3,000
Home equity: $90,000
Achieving financial security, let alone becoming a millionaire, was a distant dream for Jerry and Lynn Moser 14 years ago. At the time, the yet-to-be married South Dakota couple had battered credit ratings and virtually no savings. Lynn was working two jobs trying to pay down a high credit card balance, while Jerry, recovering from a drug and alcohol addiction, was earning just $6 an hour working in an appliance store warehouse.
Recognizing how dire their financial situation was, the couple, neither of whom earned college degrees, began studying up on money management, learning the fundamentals of personal finance. While Lynn juggled her job and two daughters (now 20 and 16), Jerry logged 60- and 70-hour weeks, working his way up to his current regional sales manager position.
Now the Mosers boast a combined salary of $106,000 and a combined net worth of over $300,000, and they say that their credit rating is in tip-top shape. “We went from disaster to success in a relatively short time,” says Jerry.
What’s their saving secret? Nothing fancy, explains Jerry. The couple contributes 15 percent of their pre-tax income into their respective 401(k) accounts and $2,000 each into their Roth IRAs every year. They carry very little outstanding debt (other than the mortgage on their home), rely on coupons and research long and hard before making any big-ticket buys.
The Mosers are confident they will reach millionaire status by the time they reach their mid-sixties. “The process is in motion,” said Jerry. “All we need is time for our money to compound.”
That goal is well within the Mosers’ reach, and that’s not even including the equity in their home, says Lisa Kirchenbauer, a certified financial planner and president of the Arlington, Virginia-based Kirchenbauer Financial Management & Consulting.
In fact, Kirchenbauer recommends they could even scale back some of the aggressiveness in their portfolio - which has large doses of international stocks as well as energy and real estate funds. A more diversified portfolio would better position them to weather a downturn.
In addition, says Kirchenbauer, they should set a more ambitious goal . “I think to be able to have the comfortable retirement and especially to provide some inheritance, they will need to shoot for something more like $2 million,” says Kirchenbauer.
To do that she recommends that the Mosers increase their retirement account contributions closer to the Federal max - $15,500 for 401(k) and $4,000 each for their individual Roth IRAs. Living in a relatively inexpensive part of the country and with their children almost grown, they have a lot of time to earn and save even more, says Kirchenbauer.
She also notes that the couple should also build up their cash reserves for an emergency fund. In addition, they should ensure that they have a reasonable amount of life insurance and a strategy to cover their health care expenses during retirement.
–By David Ellis, CNNMoney.com staff writer
Are you a millionaire in the making? Tell us why at millionaire@cnnmoney.com
Cities where there is a life?!? Are you kidding me? If you want to live in ridiculously expensive areas, that’s your choice. Don’t complain that you can’t do as well financially as those who choose to live in “better” places where the cost of living is MUCH lower. (and, by the way, where our home values are essentially stable right now!)
Gawd, these stories make me feel like such a failure. I’ll probably never make over $100k, and I really don’t think I NEED to — but, with a mother now paying for assisted living, I get more and more scared every day that I’m screwing myself out of a comfortable old age. I don’t spend a lot, but I’m not depriving myself, either. I feel like I’m going everything I can to save, and then I get screwed on taxes. I went to a financial advisor once, and she said I was already doing everything right. Why don’t I feel secure, then??
as u can see all this supposedly millionaires are living in cities where it best suits them. lets see u become a millionaire in san francisco or new york where there is life
It is interesting to read comments like ” I definitely advocate saving money…(and so forth) ” then you see this big BUT in the sentence later. I used to say that during my age 25-35. During those ages it seems to be the time I don’t make much money yet I wanted to spend the most (with my friends).
Frankly the money you spend is the money you don’t save. Say all the justification words, i.e. BUTs, all you want. You could be kidding yourself! The point is the money during your young time will grow the most in your savings. If you have some money to play without putting on your credit cards, go for it. Otherwise you are in debt and won’t have much left (like most Americans.) So, I hope you are not using “have balance in my life” to justify credit card spending, car leases and spending you won’t remember. BUT, chances are, you are broke and have nothing to show for.
this is a very good point that needs to be brought to the attention of the youth. they dont feel its important to save for the future thinking its so far away..i thought that way and did and spent whenever i wanted…finding myself divorced with a 1 yr old son showed me different. raising him was a very joyous but financial struggle. with gods blessings i did make a good living and raised him well but was walking the floors many a nights and almost lost our house, our electric went off a couple of times and i had 3 jobs most of his younger years…im now 51, im just starting to build my retirement..im in real estate and i rent to many a retired couple who cant even come up with a security deposit. i dont want to be one of them and neither should any of you. i taught my son to enjoy his life and make the right choices at a young age because time is the real benefit to saving and having a comfortable future. we live longer lives so we at 50, 60 and onward, want to vacation, go shopping/dine out also… start young so your lifestyle will never change now or later….
Those who talk about donating to needy, churches etc…..quit it.
Charity doesn’t mean anything. Yeah its great if u can spare a change or two, but why mention it when dealing with self net worth??
I have donated to charity before occasionally when I think i need to, but lets not talk about charity when one is talking about building net worth.
My best friend lost his life at age 31.
He refused to purchase a new car, even though he wanted to, because he said “it wasn’t a good investment.”
Basically, I believe we all should make saving for our future a priority, but when words like “obsession” come in to play, there is a problem.
Life shouldn’t be about the pursuit of things, nor denying onself until you are in your elder years.
Balance. Balance. Balance.
My net worth is slightly better than these people(millionare in making), but how can we sure about anything about future? An accident, desease, layoff,…etc can change the course. We need to be humbel, everything in God’s hand, so my goal is not being a millionare, instead to live a life everyday that I believe it should be.
This is a nice article, however it would be great to know if any of the families were donating or committing part of their salary to the church or other needy organizations ? demonstrating charitable giving along the way to becoming millionaires…
With all due respect, the idea that one most sacrifice happiness to save money is ludicrous. The feeling of security that comes with living within your means and having money set aside for unexpected emergencies is akin to “happiness.” The sad reality is that these medical emergencies and other financial traumas do not belong solely to the elderly. Those holding Bryant’s attitude would do well in considering that.
I don’t feel like I’m depriving myself by saving 30% of my income. I don’t make an extravagant salary but enough that I don’t live paycheck to paycheck. I travel frequently, here and abroad. I love to shop, but I also enjoy finding a deal. I know that I will have the freedom to retire at 50 if I so desire. To me that gives me a lot of happiness in the here and now, even if I never make it to 50.
All of that money saved isn’t going to make them happy. Someone or something will be there to wipe them clean of their savings. It’s inevitable.
I agree–the Mosers would benefit from putting more into their 401(k) plans at work, the maximum of $15,500 each ($31,000 total) a year if at all possible. In the 25% tax bracket, they would only be paying 75 cents for every dollar contributed to their account.
I’d like to suggest some additional savings vehicles for the Mosers prior to retirement:
1) If their company has a cafeteria health reimbursement plan (Sec. 125), they should take advantage of it. That’s money that is not subject to the 7.5% floor or the 2% floor for itemized deductions. It would directly reduce their taxable income.
2) If their company’s health insurance plan has a high deductible to begin with, they should consider switching to a qualified high deductible health plan and a Health Savings Account. What they don’t spend now on deductibles and copays will be there when they retire.
3) If their company offers a low-cost Long Term Care plan, qualified or not, they should definitely take advantage of it. If the company does not offer such a plan, AARP offers a fairly low-cost plan for those 50 and over. With Lynn’s health history and what looks like Jerry’s future health problems (based on his photo), this would be a prudent move. Even if both of them were in perfect health, it would be prudent. In their situation, I might also consider supplemental long-term and short-term disability insurance until they reach retirement age, although they are not tax-deductable. You usually get a better deal through an employer’s group coverage.
In response to Bryant.I enjoyed spending my money so much in my youth it almost killed me.I just didn’t save any of it.
Living within your means and saving money does not mean you deprive your self of luxuries and having fun.I buy new cars,high end electronics and have gourmet appliances in my kitchen.I just
budget and save the money before I make a purchase or go on vacation.
My advice is enjoy your youth but pay your self first.Time is a valuable asset if you save a little money when you are young,the magic of compounding will do the rest.I guarantee you will appreciate it when you get older.
I WOULD LIKE TO ECHO ON THIS COMMENT BY SAYING THAT ENJOYING YOUR MONEY AT A YOUNG AGE IS MORE IMPORTANT THAN BEING RICH AND OLD.HAVING YOUR YOUTH IS PRICELESS AND A MILLION DOLLARS CANT BUY THAT.
I love eating out and vacations as much as anyone else, but…It is really disturbing when I see someone in their 60’s or 70’s living essentially paycheck to paycheck. Your health does indeed become more tenuous as time goes on, and that is all the more reason to save. Granted 80% of current income in retirement seems somewhat ridiculous to me, but I would rather have too much saved then have to worry.
I doubt we’ll see this as a choice between “saving for retirement vs. having a life” once we reach retirement years.
I suggest both - save all you can now, get used to that standard of living, and at the same time have a life sleeping nicely knowing that you’ve planned well to be self-sufficent in retirement.
I’m sure these people are still enjoying their lives…plus IMO, it is better to error on the side of caution and have a little left in the bank when you kick the bucket. Better to be prepared. And if you don’t spend it all, well, that leaves your family a legacy.
Too many people in the US live in the here and now and don’t plan for the future. That’s when the rest of the population and the government has to tax us and pay for their mistakes.
nobody is really talking about what is next after you have enjoyed your millions by yourself and families and then die shortly after in your 80’s 0r 90’s .do we then call that a success? or what if you saved those money and spent 90% of it for people who can hardly make it for basic stuff like potable water,medicines and food as the case in impoverished countries,would it be called a waste?
I could not agree more with Jeremy from Annapolis.
While saving is extremely important, I think articles like this miss the importance of enjoying life. What’s the use of a million dollars at the age of 65 if you have a physical condition that doesn’t allow you to fully enjoy life? Or, what happens if you don’t even make it to retirement?
I would much rather keep a better balance and do the things I enjoy/want to experience throughout my life. Eating out, vacations, etc are a necessity while working hard to earn that money. Enjoy life while you live it!
This whole analogy of millionaires in making is incorrect. In about 10-15 yrs, which is the time line for becoming a millionaire in each of the cases, a million dollars will really be little over 500K in todays dollar amount by taking inflation into account.
In my opinion we should call this article debt free in making as opposed to millionaires.
First let me state, I definitely advocate saving money, but these stories seem to follow the other extreme to overspending. I prefer balance in my life between work/vacation and enjoying my income/saving. I think I save a good amount of money but I also enjoy eatings out, taking vacations, etc. While its great to be a millionaire at 60, I’d rather be enjoying the fruits of my labor when I am younger as well. Truth be told I know a lot of people in my family that died and never even got to enjoy their hard earned money.
So I guess my motto is save for tomorrow’s rainy day, but don’t forget to enjoy the here and now.
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Not paying for college for the girls???