Exploring the Hidden Aspects of Wealth Building

This week we have the financial journey of a high earning woman and her family in NYC, including changes to their income, spending habits, and overall net worth over the past four years. Her high income and high spending that might seem out of touch for many. However, her story can still be relatable through her techniques of wealth building: she highlights the importance of continually increasing earning potential through skill development and taking on greater responsibility, underscores that significant wealth came from consistent saving and investing over decades, and shares the philosophy that money is a tool to be spent intentionally on things that align with one's values, a mindset applicable at any income level.

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In their 40s:

$3,330,000 net worth - She is a 47-year-old software engineer living in New York City with her husband (52) of 22 years and their two sons, one in public high school and the other in private high school. We have financial details from two different interviews that provide a snapshot of their net worth in 2021 ($1.88 million) and 2025 ($3.3 million). Their accumulated net worth is 96th percentile for their age group. The composition of their net worth in the latest interview is Retirement Accounts (52%), Investment Property (20%), Other Investments (8%), and Cash (11%).

A major driver of their wealth accumulation has been a substantial increase in household income. Their projected total income was around $550,000 in 2021, including her base salary of $212,000 and her husband's base of $80,000, plus bonus and vested stock. By 2025, their household income surged to around $900,000, with her base salary increasing to over $320,000 and her husband's to $127,000, alongside significantly higher bonus and vested stock compensation. This increase was primarily fueled by her promotion to a more senior position with increased scope and her husband gaining access to an employer-sponsored retirement plan, though this higher earning level meant sacrificing some work-life balance

Her approach to spending has evolved over time. Four years ago, she reported her annual spending at $184,000, which even her found surprisingly high. While she didn't adhere to a rigid budget with specific categories, she managed finances by tracking cash flows and utilizing credit cards for spending. Her savings approach included automating contributions and focusing on optimizing major costs like housing rather than micro-managing smaller expenses, and she also practiced a waiting period before discretionary purchases. Despite a strong focus on saving, she felt that "money is there to be spent" and preferred a "scenic route" to wealth accumulation. By 2024, her annual spending dramatically increased to $442,000, eliciting a similar "Eek!" reaction. She characterized 2024 with a "theme of splurge", primarily driven by selling their primary residence with a low mortgage to move into a significantly more expensive rental apartment as a conscious decision for their sons' remaining years at home, the substantial cost of private high school tuition for one son, and increased travel expenses from a large international trip.

While reaching the $3 million mark was her previous retirement target, she notes that achieving it felt "true and not true". Her forecasting now suggests they'll reach $6 million by age 55, but she feels "target number" doesn't mean much anymore, as reaching the previous milestone didn't fundamentally change life. Her current wisdom reflects that money is a tool, not an end in itself. She advises readers to remember why they are accumulating wealth and to ask themselves "how much would be enough?"

Takeaways:

1. Focus on Increasing Earning Potential: her journey demonstrates that actively increasing your earning potential can dramatically accelerate wealth accumulation, even if the path isn't always straightforward. Her experience encourages others to focus on building skills and seizing opportunities like promotions or changing companies, showing that persistence and preparation can lead to significant income growth over time

2. Money is a Tool and Spending Should Align with Values: Her perspective that money is a tool to be spent on things that align with values offers a valuable lesson, encouraging readers to prioritize experiences and generosity over mere accumulation, regardless of income level. Her experience shows that intentionally using wealth for things like spending time with friends and family can bring significant enjoyment, prompting others to define what "enough" means to them based on their own values

What is the meaning behind Ten Wilsons?

The $100,000 bill is the highest denomination ever issued by the U.S. Federal Government. Woodrow Wilson is the president on the $100,000 bill.

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