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Case Study: Retire a Multi-Millionaire With a $11 per Hour Job

This article was written by in Frugality. 21 comments.


When it comes to getting rich slowly, I’m generally a skeptic. The typical path to getting rich slowly prescribes investing $1,000 a month for thirty years into the stock market, earning 8% each year. At the end of thirty years in this example, you will find yourself with $1.5 million, but there are major assumptions that must be overcome:

1. Do you have $1,000 each month to invest? Many people live paycheck-to-paycheck. $1,000 may be 25% to 30% of your monthly pre-tax income.

2. Will you earn 8% each year in the stock market? It’s possible; over long periods of time, the stock market has provided this level of return, but it isn’t guaranteed. Taxes and fees eat into this return as well. Many professionals believe 8% is too aggressive an assumption; stock brokers will tell you it’s too conservative.

Even after considering the above, there is one major problem remaining: inflation. If you accept the government’s measurement which declares that money loses purchasing power at a rate of about 3% each year, to find the “real value” of your future investment, reduce your assumed return percentage by that amount. Suddenly the $1.5 million 30 years from now looks more like today’s $836,000. Although most Americans do not have a balance that large in savings and investments, in most social circles, that balance won’t earn someone the title of “rich.”

NavoneDespite my thoughts about the fallacy of getting rich slowly, an enticing but ultimately disappointing endeavor, people make it work. Paul Navone from Vineland, New Jersey is an example. He worked in a mill for never more than $11 per hour, but he retired with millions. He doesn’t say how much he has to his name, but it was enough to become a significant philanthropist, giving away millions of dollars.

The below is from the Philadelphia Inquirer, from an article no longer available online.

The day he turned 16, Navone left the eighth grade and applied for a factory job at Wheaton Glass in Millville. When he got his first paycheck two weeks later – Navone was earning 75 cents an hour – he thought he was a Rockefeller… At 21, he joined the Army and spent two years assigned to the base post office in West Germany. Back home, Navone moved in with an older sister until he had saved $6,500. With that stake, he bought his first property. He moved into one half and rented out the other…

“I lived on the income the one unit provided me, and I saved my wages from work,” Navone said. Not just saved, invested. He acquired a second rental property, then a third. Eventually, with the advice of stockbrokers, Navone expanded his investments.

So while Navone was working at is $11 per hour job at the mill, he was also earning money in property. That’s the key in this particular case, despite Navone’s penchant for cutting expenses. Even so, living frugally puts money in the bank and certainly contributes to a large bank account.

  • He seldom watched television.
  • He has never read a book. (What?!)
  • The last girl he had a crush on contracted tuberculosis and died; he has avoided relationships since.
  • He has no children. (Now this certainly contributes a lot to his bottom line!)
  • All of his clothes come from thrift shops.

Navone’s mantra is, “I’ll work for the money, and then I want the money to work for me.” It sounds to me like he attributes his wealth to his investing prowess rather than his extreme frugality habits.

Updated September 8, 2011 and originally published January 14, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 21 comments… read them below or add one }

avatar ~Dawn

The first thought that popped into my head, “Is he happy?”
I’m sure he is in his own way.
And being single with no kids allows you the opportunity to save a lot of money that being married or starting later in life, doesn’t.

I hope he is content at the very least.

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avatar ChristianPF

“He seldom watched television.
He has never read a book.
The last girl he had a crush on contracted tuberculosis and died; he has avoided relationships since.
He has no children.”

What in the world did this guy do with his time?

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avatar KMC

What an utterly depressing story. Here’s a guy whose only apparent avocation is hording money (notwithstanding his current philanthropic endeavors). Speaking only for myself, I know my life would be significantly diminished if I’d never read a book, loved someone, or had children.

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avatar Sandra

That is fine for you, but didn’t work out for him. He doesn’t seem unhappy to me.

Personally, I wish I had NEVER gottem married. I am not sorry for having kids yet, but at times… Anyway, you can always adopt as a single.

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avatar Brian

I’m sure this would be an interesting story, but I’ve never read a story, so I sadly can’t appreciate it.

Seriously, never read a book? Avoided relationships? Other than turning oxygen into CO2 through respiration and sorting glass 8 hours a day, this guy has done nothing worthwhile for decades.

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avatar David Mackey

Congratulations to him on the money, and I imagine he wouldn’t be doing it that way if it didn’t make him happy…but I have to agree with the other commenters, what does he do for recreation?

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avatar Adfecto

Life is all about balance. Sadly this fellow missed out on a lot because he didn’t understand that. I have a few coworkers that are in the same boat. They have plenty of time and money but still haven’t gotten a life.

Now, he has redeemed himself by giving away his horde of cash, but that won’t bring back a lifetime of missed opportunity. I hope that I’m wrong, and he has found joy and fulfillment being able to give those large donations. I doubt it and I know that isn’t the life for me.

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avatar omniver

something doesn’t add up…

he makes daily trips to the library but has never read a book?

I think the reporters are screwing this story up.

—”for filling up the tank of his ’88 Isuzu SUV to make daily trips to the library or the mall.”

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avatar omniver

Adfecto-

different strokes for different folks

some people are able to live complete, fully satisfied, and happy lives with radically different lifestyles than the norm

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avatar anon

Agreed. What a sad story. Almost makes going into debt while having fun sound less problematic. Before I even read the article, I surmised that the guy must have no children, no spouse, etc. I suppose I too could be a millionaire if I got divorced, got rid of my dogs, house, cars, motorcycle, surfboards, vacations, classes, books, and moved into a shoebox. On second thought, I’ll try my luck this way, paying cash most of the way, minimizing my expenses, shopping and playing hard for bargains, and stashing as much cash as I can given the other priorities.

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avatar Andy

I did read he plays a lot of golf. So he does do something for fun.

The rest of the time though, he spent working. From what I’ve read in other articles, he regulary worked 60 hours a week. So twenty of those hours he was making well over $11 an hour. I think that is a very important key to this story that is left out. Most of teh time, he was making 75% more than this story actually indicates.

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avatar Enough Wealth

Living reasonably frugally and aiming to get-rich-slowly DOES work (I’m well on the way). And you don’t have to live like a hermit in the process (unless you choose to – I think the guy in this story enjoyed his lifestyle). The main advantage of the get-rich-slow approach over get-rich-quick is that it is usually much more reliable. The main disadvantage is that it WILL take quite a long time – so it doesn’t suit those that want the sports car and regular restaurant meals while they’re still accumulating their first million, and want it before the turn 30.

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avatar Dividends4Life

That was excellent! I enjoy reading posts such as this. Thanks for sharing it.

Best wishes,
D4L

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avatar Ellen

This is a great story. How do I get someone like this to do a kind deed for my small homeschool group. We need more people like him in the world. The true saying is “there is more happiness in giving than in recieving”. He looks pretty content and happy to I me.

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avatar moneymonk

I agree with Dawn and KMC, he did not have a life. Poor guy

having money but not being fulfilled in other areas = unsuccessful

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avatar Chris

What does being married have to do with saving or spending money? If you don’t have a wedding or ring in your budget, guess what, you don’t have to spend money on it.

Combining finances with your significant other is fine but if they’re spending your money and making it impossible to save and achieve your financial goals you have a serious problem. I would never marry someone who thought that they were entitled to my money.

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avatar DR Knowknot

Why is it that someone in todays society is considered a “sad story” or “missed out on life” solely due to his lifestyle? First, one cannot miss what one has never had. If the “idiot box” was not a priority to him, I am pretty sure he never thought twice that he even realized what he may have missed.
How can this be a “sad story”? This proud gentleman did something very rare in todays society. He WORKED! He SAVED! He was FRUGAL! I am probably accurate in stating that this gentleman didn’t even enslave himself to a credit card. I will agree that being sans a creidt card is a detriment today due to that four letter accronym FICO, but three cheers for a man who never knew the fear,shame and panic over the annoyance of a collection call, EVER! Let’s face it Lady’s and Gentlemen, if all of us could take 10% of this mans lifestyle or mindset and incorporate it into our own, this country could pull itself up from it’s bootstraps without govt. giveaways and the devaluing of our currency. Yes, I have learned a significant lesson here. One lesson that I will make my undergrad children read and hopefuly learn from.

In closing, when you do something that you love, be it assisting the public or working the sewage sifters, most people state that they feel that they would work for free just for the chance to do what they love so much. It becomes apart of who they are, it is a vast account of who they are as a human BEING, not a human DOING!

So, I say, lighten up on this modern day fiscal hero. Give him a job as an educator/moderator to the young men and women of this young generation and show them all how they can have their millions, just not overnight.

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avatar Philly girl

I think you should all read the article in its entire context. He does have friends he meets with almost daily for breakfast and he enjoys music, collects cd’s. Not everyone enjoys TV, big social events,expensive travel etc. When the original story was in our paper I thought it was inspirational. I think amassing that fortune on 11$/hr would be close to impossible with a spouse and children.

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avatar Sandra

Not necessarily, but it would be harder!

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avatar Chris

Is he still alive ?

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avatar uscroger

He is the most interesting man in the world; and, he doesn’t even read books nor do we know if he ever had a Dos Equis.

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