2008-04-02

Success Stories: $800,000 Net Worth By His Early 40s?

Money brings us the story of Bill Scott. At the time of the article, Scott had been and I believe still was a master sergeant in the Marines, and from the sound of it, he had a relatively modest salary. (The article was titled, “MYTH: You need a big income to have a big nest egg.”) Scott’s net worth was about $800,000.

The article doesn’t quite say how old he is, but it says he joined the Marines after two years of college and built up his net worth over 20 years. If he went to college right after graduating high school at age 17 or 18, stayed there for 2 years, and spent 20 years with the Marines, that would make him right around 40 or maybe 41!

The article also doesn’t say what Scott’s income was. Doing some digging suggests what you make in the Marines is low, certainly when you start out. A 1999 Washington Post article titled, “Feeling the Pinch of A Marine Salary,” reports that a private first class starts out at $1,075 a month, plus a $225 a month food allowance. That’s around $15,600 a year. A more recent article discussing military salaries in 2008 and 2009 mentions examples of folks with three or more years of service under their belt—with salaries ranging from $1,949.10 to $4,763.10 per month (before proposed pay raises). Those are annual salaries of $23,389.20 to $57,157.20.

So how did Scott do it? For starters, Scott was a good saver. He mentions starting out by saving $100 a month when he first joined the Marines. As he made more money, he saved more each month.

But worried that that still was not enough, he took on some risk:

So seven years ago, he started buying properties to rehab and rent out. He’s now pulling in around $5,000 a month in rent. Being a landlord on the side isn’t for everyone, but it’s helped Scott fund his retirement—and his daughters’ education. “You have to be creative,” Scott says. “The biggest thing is to have a realistic goal and then find out how to achieve it.”

A real-estate strategy—especially in these times—seems to me to carry a lot of risk, but it’s always intrigued me. Maybe because I run into lots of stories like Scott’s! We don’t have the skill set or time to rehab properties though. We’ve bought one investment property, and I’ll be trying at some point to post about our experiences with that.


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