Mike Rogalski is featured as one of CNN’s Millionaires in the Making. He’s a civil engineer working for the U.S. Department of Defense in Florida, making $84,500 a year.
He chooses not to take advantage of an IRA for retirement savings, instead investing $33,000 in stocks and mutual funds. With $105,000 already put away in his government thrift savings plan (at age 32), as well as a decent pension in the works, he doesn’t have to.
He has a sizable amount of cash on hand for regular expenses and emergencies, and his philosophy is “pay yourself first.” Compare his numbers to mine:
Every two weeks for him (equating to every paycheck for me), he invests $450 into his TSP. I invest around $100 into my 401(k), but this varies due to overtime worked. He invests $450 into mutual funds. I invest about $150 into my Roth IRA. He deposits $400 into his savings, and I deposit about $100 that I’m confident is safe from being touched for a while. Just about everything else for me goes to expenses.
Either I need to double my salary to match his or continue cutting my expenses. Maybe cable TV will be the next to go, saving $40 a month.