Dave Went from No Savings to Millionaire by 49 (Median Income)

The Rock Star Dream and Financial Reality [00:00:00]

• Dave Siemens initially pursued a career as a musician, inspired by the idea of never working a day if you love what you do.
• By his 40s, with a family, he realized the need for financial stability and began transitioning to a teaching role.
• This transition sparked an urgency to understand personal finance and "figure out the money thing."

  "I always wanted to be a rock star. And I just remember reading an article, you know, back in the 90s about if you do what you love, you never have to work a day in your life. And I've really followed that."

Musical Pursuits and Early Career [00:01:30]

• Siemens holds a degree in music performance and performed in the Dallas area starting around 2000.
• His musical work includes playing in tribute bands (Guns N' Roses, Aerosmith, Kiss), solo performances, teaching lessons, and singing telegrams.
• One Guns N' Roses tribute band has a large following, with one performance attended by 26,000 people.

  "People tend to just go crazy for Guns N' Roses. And I think we do it really well. We try to replicate the authentic looks and sounds of the original band."

Financial Snapshot in 2019 [00:03:30]

• In early 2019, Dave's net worth was approximately $150,000, primarily composed of home equity.
• His wife had a teacher's retirement fund, and he had a small city retirement fund and a past variable annuity.
• At this time, his income was around $20,000-$30,000 from music and $10,000-$15,000 from lifeguarding.

  "If I had to be honest, I think early 2019, our net worth was probably around $150,000. Almost all of that was home equity."

The Epiphany for Wealth Building [00:05:00]

• Working hard as a teacher, Siemens felt an urgency that his current path wouldn't sustain him financially in his later years.
• He decided he needed to figure out his finances immediately and was willing to do whatever it took.
• This realization led him to seek out resources like BiggerPockets in early 2019.

  "I just felt an urgency from just working so hard as a teacher, you know, that I thought this is not going to work in my fifties or sixties."

Implementing a "Money Date" and Budgeting [00:06:00]

• A pivotal change was adopting the practice of having a "money date" with his spouse.
• Starting January 1, 2020, they committed to a monthly budget, discussing income and expenses.
• His wife had previously taken a "Money Wise" class, making her receptive to financial discussions.

  "Honestly, the biggest, most important change that I made was listening to you guys talk about having a money date with your spouse."

Transforming Money Conversations [00:07:30]

• The "money date" shifted their financial conversations from arguments to productive planning.
• They implemented cash envelopes for categories like dining out and entertainment.
• This approach allowed them to still enjoy activities but within a set budget, involving their children in the decision-making process.

  "It flipped the script on our money conversations because up to that point, it seemed like anytime we talked about money, it was a fight."

Significant Spending Reductions [00:09:00]

• By critically examining their spending in late 2019/early 2020, they reduced grocery spending from $300/week to $200/week.
• Restaurant spending was cut from $500/month to $100/month.
• These changes immediately freed up an extra $800 per month.

  "Initially, when we started looking at it in late 2019, early 2020, looking at those things critically, at that time we had five in our household and we were spending about $300 a week on groceries and $500 a month on restaurants."

Relational and Financial Synergy [00:11:00]

• Beyond finances, the "money date" significantly improved their marital relationship, fostering security and support.
• This positive dynamic motivated Siemens to work harder and pursue more self-education.
• The shared goal and productive conversations positively impacted other areas of their marriage and family life.

  "The fact that we have this money date and we sit and look every month as we see our net worth grow, my wife feels more secure."

Embracing Minimalism and DIY [00:13:00]

• Siemens discovered minimalism through authors like Joshua Becker, which complemented his financial goals.
• He learned to perform car repairs, fix appliances, and appreciate what he has, reducing reliance on external services.
• This DIY approach, like changing his car's catalytic converter for $800 instead of $3,300, saved significant money and built valuable skills.

  "Just doing my own car repairs, you know, living and appreciating what I have. It goes hand in hand with what you guys say about, you know, experimenting."

Strategic Investing and House Payoff [00:16:00]

• The extra $1,000 saved monthly was directed into Roth IRAs, aiming to max them out.
• They invested in index funds like Fidelity's S&P 500 (FNILX, FSKAX) and mutual funds (FOCPX, FBGRX).
• In June 2020, with $38,536 remaining on their mortgage, they made it a priority to pay it off.

  "We started directing that extra $1,000 into our Roth IRAs early 2020. I just stuck with the plan."

A Whirlwind Year: 2020 [00:18:00]

• In 2020, Siemens was furloughed from his lifeguarding job, receiving an extra $600/week in unemployment.
• His wife began working in property management in January 2020.
• He also earned income from online music gigs, singing telegrams, virtual guitar lessons, and TCPA lawsuits.

  "And at the same time, in January, 2020, I had been listening to you guys. And one of the things was, if you want to learn real estate, one of the things you should do is get a job working in the real estate market."

The TCPA Lawsuit Side Hustle [00:20:00]

• Siemens learned about suing telemarketers for TCPA violations, which can result in $500-$1,500 per violation.
• He meticulously records calls and files claims in small claims court, often settling for a portion of the statutory damages.
• Over seven years, this side hustle has generated approximately $80,000.

  "As I started, you know, listening to you guys and investigating side hustles, because as I felt more secure in my marriage, it was like, all right, I started feeling that every dollar I made wasn't just going into this empty pit."

Paying Off the Mortgage and Maxing IRAs [00:23:00]

• They successfully paid off their remaining $38,536 mortgage in the first week of December 2020.
• That same year, they also managed to max out both of their Roth IRAs ($6,000 each).
• This was achieved through a combination of unemployment benefits, gig income, and his wife's property management earnings.

  "First week of December, 2020. Wow. Did you also max out your Roth IRA that year and your wife's Roth IRA? Both."

The Power of a 50% Savings Rate [00:27:00]

• Siemens adopted the principle of achieving a 50% savings rate as quickly as possible.
• He focused on controlling the "big three" expenses: housing, transportation, and food.
• This high savings rate allowed them to invest, save, and give generously.

  "Well, Scott, I'll quote you and say, get to a 50% savings rate as fast as possible. And the big three, like housing, transportation, and food, you know, we wanted to get to that 50% savings rate as often as possible."

Leveraging Tax-Advantaged Accounts [00:29:00]

• He actively utilized tax-advantaged accounts, including a state pension with a city match and a 457B plan.
• They opted for high-deductible health insurance, covered by their emergency fund, and utilized the Saver's Credit.
• The goal was to minimize taxable income by maximizing contributions to these accounts.

  "My city job, we have a state pension. You know, I can put 7% into that and the city does a two to one match. So every dollar I put in the city puts in $2."

Reaching the Million-Dollar Milestone [00:32:00]

• By April 2023, at age 49, Dave Siemens achieved a net worth of over $1 million.
• This milestone was reached despite never earning over $100,000-$115,000 annually from his primary income sources.
• His journey highlights the power of consistent saving, diverse income streams, and disciplined financial management.

  "We hit a million in net worth back in April. Yes. Hooray. That's awesome. The double comma club."