Earning

29-year-old who went from 'broke' to millionaire: I was 'religious' about saving and investing

"I was like, 'I want to grow my bank account to $100,000 as soon as I can.'"

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Ian Mack.
Courtesy Ian Mack

When Ian Mack graduated with a degree in psychology in 2014, he didn't have a clear career path in mind. He thought grad school seemed like "a terrible idea," and, he says, "I [needed] to make money. I [was] broke."

His roommate suggested he try sales. As Mack dove into what would become his career as a software salesman, he began crystallizing some financial goals. "I was like, 'I want to grow my bank account to $100,000 as soon as I can,'" he says. That amount, he figured, "was enough money for me to know if I lost my job, I would be OK." 

By 25, he hit his goal. He's been growing his wealth ever since: By 28, he had reached a net worth of $1 million.

Mack, who is now 29, acknowledges he's had both help and some serendipitous breaks along the way. His parents helped him pay off $20,000 in student debt, for instance, and his first long-term job out of college, a software start-up, offered him equity as part of his compensation package. When he cashed out his shares, he used the money to put a down payment on his first investment property. "I just consider myself super-lucky," he says.

Mack built on those advantages with disciplined saving and smart investing, though: "I was as religious as you could possibly be," he says. Here are some steps Mack took to become a millionaire.

He made saving a habit

In his first long-term job in tech sales, Mack's starting salary was $43,000 per year, plus commission. This brought him to $57,000 his first year. He got pay raises each year and was able to pull in bigger commissions as he found his footing. By his third year, when he reached his initial savings goal, he made $127,000.

Having homed in on that first $100,000 goal, Mack began saving rigorously. He budgeted to spend less than $1,800 per month altogether, regardless of how much he was making, which at first meant he would aim to save between $2,000 and $3,000 per month.

His cost-cutting moves included strategies such as "bringing my lunch every day and not eating out for dinner," he says. If he wanted to dine out, he might splurge on a $6 breakfast sandwich at a local Boston eatery. "I'd have three, four drinks before we went out and would refuse to pay $10 for a vodka soda at a bar or $12 for a beer," he says.

Other budget cuts were bigger. "I wore the same clothes," he says, and drove the "beater Saab" his parents bought him in 2010 for years.

Mack didn't give himself any spending slack even as his earnings grew. "Every year or every month or every quarter, I was making more money, [but] my lifestyle did not change. It was always the same." This meant the more he was making, the more he was putting away.

He generated passive income from rental properties

In 2018, Mack cashed out his stock options to buy his first investment property, a two-bedroom condo in Dorchester, Massachusetts, for $418,000. Having done some research on investing, he thought real estate seemed like a good first step. Even if the value of the property depreciated, he reasoned, "I could at least go live there."

Real estate investing opened up an opportunity for Mack to bring in passive income. "I rent it for $2,500 a month, and my total costs on it are about $1,900," he says. "So I make $600 bucks in cash flow" each month just on that property.

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In 2019, he used a commission check to buy a second property in Dorchester, Massachusetts, for $539,000. He has been sharing the three-bedroom property with two roommates to cut costs while building equity. "I was able to live here and have my two buddies live with me and cover all my living expenses ― my mortgage, my taxes, everything."

Mack plans to convert that property to a rental soon and move into a third property he bought in March 2021, a $350,000 condo in Tampa, Florida. He'll rent out his current apartment for $2,900 per month. "I'm hoping that it's going to be like $700 or $800 a month in cash flow," he says.

Together, he hopes the two Massachusetts properties will cover his living expenses down South.

He built wealth with investments

At the start of 2020, Mack decided to open a brokerage account. Although his high-yield savings account had a 2.5% interest rate at the time, he realized he could turn the hundreds of dollars in interest he was making there every month "into a couple thousand every month, if I have it invested."

He decided to hire a wealth manager to invest his money, "and just focus on earning it."

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Because Mack had continued adding to his savings over the years, he was able to make an initial investment of $75,000. Thanks to some big commissions, he put in another $50,000 last March, just as the market started recovering from its shortest-ever bear market. Now he makes recurring contributions of at least $8,000 per month.

"We've done indexing, ETFs, mutual funds, the whole nine," he says. At his young age, Mack keeps most of his portfolio in stocks, with a focus on tech, given his work in the field. He saw a 44% return on his portfolio in 2020.

The next goal: $10 million

"I don't really see myself as a person that once I get to a certain amount I'm just going to stop," Mack says. If he really had to put a number on his next money goal, he's probably gunning for a net worth of $10 million, he says.

Thanks to his early efforts with saving and investing, Mack now feels more comfortable with a little spending to boost his quality of life. One recent such investment: his 2-and-a-half-year-old Siberian husky, Oakley. "She gets me outside all the time," he says. "And she's the best purchase I've ever made by far, by far, especially through a pandemic."

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