Who wants to be a two million dollar-aire?

I’ve been watching our net worth. It’s just a number and an inexact number at that. Your real net worth isn’t known until you are dead and your estate is settled.

There are lots of vagaries when calculating your net worth, such as the value of your house, cars and other possessions. I use the city’s appraisal of our house as a benchmark. It’s probably understated, but the city assessed it at $558,800. Cars tend to depreciate. Once a year, I use Consumer Reports car value estimator to figure that out. Assessing the value of our other property like furniture and clothes seems kind of pointless, as you can’t live in a home without them, so I don’t. The value of our stocks and bonds will fluctuate from day to day. About 66% of our net worth consists of these investments, so when markets are up our net worth tends to balloon, and visa-versa. Generally Quicken will keep track of the bottom line for me, but it won’t read in the prices for my Thrift Savings Plan funds, so I have to enter these manually.

I’ve been paying more attention lately because we’re getting close to hitting a bigger number: $2M in net worth. It was ten years ago when our portfolio hit the $1M mark, which technically made us millionaires. Back then I noted I didn’t feel particularly rich, because most of our wealth was in our house and because inflation erodes away at the value of our assets when priced in dollars. I’m guessing our net worth would need to be $20M – $50M in today’s dollars to really “feel” like a millionaire. With that level of wealth I’d probably have a couple of vacation homes and fly first class everywhere.

We would have briefly passed the $2M net worth mark has I not booked a cruise for December. That cost us about $7000 . The cruise companies don’t give you much time before you are required to pay in full. So that money is gone plus the stock market has slumped a bit. So we’re not quite at that $2M net worth threshold, but closing in at about $1.982M in net worth.

I’d like to brag that it was our great investing that is responsible for nearly doubling our net worth in ten years. But I largely leave that to our financial adviser. In truth, aside from the true luxury of being debt free, most of it is due to spending a lot less than our income. Even in retirement, as much as twenty percent of our income is saved. Since early this year, we’re not even withdrawing from our retirement accounts. Money coming in, mostly in the form of a generous federal pension plus Social Security, is responsible.

The pandemic has helped too. Until recently there was no place to go and it’s still a bit chancy to travel today. So much sitting at home has allowed me, a retiree, to rake in additional income from consulting services that I do online. It’s not a huge amount (about $27,000 so far this year), but it’s enough where I became subject to windfall elimination provisions in retirement laws. My social security payment this month was reduced for one month to $460 this month. This will likely affect me for a few years as long as I keep doing consulting. At my full retirement age (66.5 years), side income won’t affect my social security payments anymore.

In short, we’ve been fortunate rather than savvy. Certainly my relatively high salary when I was employed helped us eliminate debt and fund investments. Having just one child doubtless helped a lot too. Retiring debt free helped as well, but living in an area of rapidly rising house prices helped a lot. Also, the Federal Reserve has helped by making markets behave abnormally, pushing equity prices up when they should have dropped.

I’ll take credit for a certain amount of common financial sense, but our wealth seems mostly due to fortuitous timing and our government’s actions to keep financial markets afloat. It mostly feels like a lot of white privilege to me.

If I didn’t have the comfortable pension though, we’d be much more circumspect in our spending. These days, building wealth for us comes mostly from having that pension and not spending down our assets to maintain our standard of living. My consulting helps as well, but that income is never guaranteed.

What we are experiencing though was not that unusual in the past. People routinely retired on a pension and by the time they retired their mortgages were paid off. It didn’t cost an arm and a leg to raise a passel of kids or to send them through college. We may have more opportunities to spend wealth on more exotic trips like Caribbean cruises, but living a comfortable retirement used to be routine, at least for white people.

Policies that have sapped wealth from the working class and moved it into upper class largely explains why things are bleak for so many people of retirement age these days. Much of our wealth is because we were grandfathered into a system that is not an option for most working people.

I can’t take our portfolio with me into the hereafter, but I can live a comfortable and in some ways luxurious life in the time I have left alive. My intent is to see if we can keep getting rich and leave the bulk of our estate to charities that will lift people not so fortunate into opportunity and hopefully out of poverty.

Mindlessly profiting from a pandemic

You’ve probably heard that the pandemic has made the wealthy wealthier and the poor poorer, at least here in the United States. The U.S. gross domestic product actually fell in 2020, but according to Quicken our net worth shot up 17% in what seemed like the worst year of our lifetimes.

Just four years ago we went through the expense of getting estate plans done. Here in Massachusetts, if you die with over $2M in assets, you are subject to estate taxes, unless you create estate plans that effectively shield a lot of money from estate taxes. Since the state does not index the amount for inflation, it seemed a sensible thing to do. I remember telling the missus, “It looks like our net worth is likely to be over two million dollars before we die.” Four years later, we’re nearly there.

Should I be thanking the coronavirus? Maybe I should be thanking the Fed (Federal Reserve). When the coronavirus hit and markets tanked they went to work pumping up the economy with lots of newly created money. Fortunately, it used the money to buy assets, so it’s not like they threw the money down the drain.

Crazily, it worked, at least for keeping the stock market overvalued, where we had plenty of investments. Nationally our economy otherwise collapsed. The stimulus intermittently doled out by our government helped some, but it’s clear that all this wasn’t enough for most people who live paycheck to paycheck. In many cases, there was no paycheck. Unemployment benefits sweetened by Uncle Sam helped. For most working folk at best it kept them from collapsing into debt and homelessness. The latter is largely a result of federal legislation that makes it hard for landlords to kick out many tenants.

Then there’s the undeserving: me and those of us who weren’t hurting to begin with. We got stimulus too: $2400 in the first tranche, $1200 in the most recent one and possibly more with the new bill going through Congress. Having nowhere to spend it we did what most of the rest of the reasonably well moneyed did: saved it or bought more stocks with it. Being retired with no mortgage or any debts, and with the pensions coming in monthly plus selling some of our retirement portfolio, and being unable to spend most of what was coming in, we were effectively saving 25% of our income.

And although neither of us has to work, I still do some consulting. And crazily 2020 was a banner year too, netting me nearly twice the income from it than it did in 2019, thanks mostly to one new client. There is no chance of contracting covid-19 from this work. It’s done in my upstairs office over the Internet. We went to the store maybe once a week at off hours, heavily masked but that was as much risk of catching covid-19 as we bore. In reality, covid-19 was never really a threat to us. No one came to visit. We had nowhere to go. One of the few things we spent more money on was services like Netflix. There was a lot of time to kill. Stuff we needed mostly got delivered.

All this while the effects of the pandemic were quite obvious. There’s a public middle school next to us. You would see a handful of cars in the lot, but no children noisily screaming or school buses going in and out. Those who weren’t masked more often looked like they were hit by a bus. All this plus Donald Trump was making everything exponentially worse; hospitals and ERs were overflowing and people were dying, about 450,000 of us last I checked.

I’d like to credit all this to my brilliant financial talents. But really I did nothing out of the ordinary. I just stayed home, deposited those pensions checks regularly and spent a whole lot less. The only pangs of regret I felt is that we couldn’t get on a cruise ship or take an exotic vacation. All that was in our budget. (We actually did take a cruise in early March 2020, came back okay, but it was scary. It had been paid for in a pre-pandemic world, and it was nonrefundable.)

Through my career I felt like I had earned my salary and then some, so there was no reason to feel guilty living a cushy retirement. But I often do anyhow. I didn’t realize until fairly recently just how big an advantage it was to be male and white, which I was. At the time I didn’t feel like it meant much, but now I see friends who are people of color generally dealing with an entirely different reality.

So as much as I’d like to think I rose on my own talents, in reality I was lofted at least in part on an unseen rising tide of white privilege. Not all my white male peers were so lucky, of course. Some really got the short end of the stick. Heck, my wife got downsized in the early 2000s and never recovered her previous salary, despite doing similar work. But she could ride on my income and prosperity.

In retirement I am finding the ways to squeeze a nickel even harder without trying very hard. The tactics have changed since the days of my parents, who lived through a Great Depression. Rather than darning socks, I find new income in the darnedest places, like a 2% cash back no annual fee credit card. I went on a savings hunt and found, at least for a while, that I could lock in a 2.5% APR CD at an online bank. We also get income from our solar panels, about $2000 a year, paid by companies that use our green offset to pollute. And really, we save money because we are taxed too little. We could and should be paying more in income taxes, but Republicans have decided we shouldn’t have to. The only tax that increased this year was our real estate taxes, now nearly $10K a year. A city assessor came through the neighborhood. On the plus side, he reassessed the value of our house upward by $76,000. Add that to our net worth.

And we’re trying new things. We let go our old financial planner and found one closer to home, with an interesting model. They find out portfolios that match our risk tolerance and add their fees to that. When I mentioned I could no longer get a 2.5% APR CD, they suggested a bond fund that would likely beat that. No, it’s not FDIC insured, but it’s very low risk, and we should be able to net at least that for our cash assets.

We probably won’t be buying a second home or time shares, but I’m wondering if this is how someone like Mitt Romney spends his free time. Income just seems to keep compounding. I used to struggle to put aside a little money with each paycheck, now I don’t know quite to do with it all. It seems surreal and wrong somehow, particularly when so many are suffering.

Yes, we have given more to charity, quite a bit more this year, and helped bail out a few friends who were seriously struggling. Even four years ago when we were putting together our wills, we decided that we were unduly fortunate. When we depart this world, about half of our estate redirects money to charitable causes.

Half of my side of the estate is currently earmarked for scholarships for people of color, to be handled by the estate manager. At least in death I can partially rectify my white privilege and help elevate those who were denied it.

Greed is a terrible sickness

In the 1987 movie Wall Street, the corporate raider Gordon Gekko (played by Michael Douglas) informed us that greed is good. His character fit in well with the Reagan years, because this was essentially the mantra of Ronald Reagan and the Republican Party. If anything since then the Republican Party has become even more extreme on the issue. Not only is greed good, but also by implication being poor is bad and a personal failure. Poor people are just not trying hard enough, which they view as something of a crime.

According to Merriam-Webster, greed is “a selfish and excessive desire for more of something (such as money) than is needed”. “Than is needed” is of course somewhat relative. However, if you have or take more in the way of resources than you need almost by definition someone else gets less than they might otherwise have. Since Reagan was elected, the only constant is that more of our wealth has gone to the richest while the income for the rest of us has at best stayed the same but has generally declined.

It’s clear to me that greed is a terrible sickness, and not something that should be celebrated. It sure appears that those who are truly greedy are never satisfied. They always want more. Since they believe greed is good, they look on greediness as a kind of religion. Witness our president and most of his cabinet of very wealthy people and who seem to have no scruples. Government is for pillaging, which is why last year they gave themselves a tax cut and threw a few scraps out to the rest of us. Their reputed rationale was that tax cuts would pay for themselves, something that has never proven true. I don’t for a minute believe that they believe it. What they do believe is that if you have power then you should use it to enrich yourself, so they did, worsening income inequality and greatly adding to our national debt to line their pockets now.

Greed is bad and should be treated as a mental illness. A truly greedy person should be seeing psychologists to figure out what is the matter with them. There is something very wrong with our president, who clearly subscribes to the religion of greed. To see how greed perturbs someone, look at our EPA secretary Scott Pruitt. The “greed is good” mantra has him so captivated that he has no problem turning the EPA into the Environmental Destruction Agency. Entitlement is assumed. He has a round-the-clock staff of thirty to protect him, flies first class everywhere and built a soundproof booth in his office.

Being wealthy does not necessarily mean that you are greedy. Berkshire Hathaway head Warren Buffet seems to be one of these types: a billionaire many times over who otherwise lives modestly. To be greedy you need to flaunt it and be consumed by the need to become ever richer, and not always through entirely fair means. At its core, greed denies reality. It suggests for example that you will never die because it’s hard to actually spend and enjoy all the money you accumulate. I suspect Warren Buffet enjoys investing because he finds it personally interesting.

Then there are people like the Koch Brothers who are consumed by greed, so much so that they have no problem if their industries create their profits by foisting their pollution costs on the rest of us. That’s how much greed has perturbed their thinking. It’s not like there is another planet nearby that eight billion of us can go and populate. They either can’t see this reality or more likely simply don’t care. These people are very sick people indeed.

For much of my life, I pursued wealth. I wasn’t a fanatic about it but I wanted to be comfortable, particularly in retirement. It was a long and arduous struggle that I eventually achieved. To me, it meant feeling confident that I could maintain my standard of living until I died, that I would never go hungry or be impoverished again and that I no longer had to work to survive. It’s true that much of my wealth is dependent upon a well-earned federal pension, and I still don’t entirely trust that the oligarchy won’t take it away at some point to feed their insatiable greed. But I feel confident enough about it that I don’t worry about it anymore. In any event, I have a comfortable portfolio and plenty of cash assets set aside to handle future expenses. We have no mortgage payment nipping at our heels every month anymore, no college expenses to juggle and little in the way of electricity bills with the solar panels on our roof.

It’s reached the point where our relative wealth feels sort of surreal. What I don’t feel at all is the need to obsessively acquire more wealth. I feel no particular pull to buy a fancy car, for example. I take no particular pleasure in driving and see it as a chore. In January we took a 19-day vacation, 16 days of it on a cruise ship. It was nice but I don’t particularly feel the need for a more lavish vacation or more days dining on gourmet food in Holland America’s dining room. My needs and wants are pretty much satisfied. My financial anxieties are calmed. At my stage of life, people like me should simply enjoy life.

Today the things that give me the most satisfaction are the most prosaic: daily “constitutionals” around my community, doing the crossword puzzle in the paper, having a cat nearby that I can reach out and pet and having a spouse who I love and who loves me. And yet despite the ups and downs in the stock market, our portfolio keeps increasing. To the extent I still work through teaching and consulting (both very part time) it’s for enjoyment and to spread my knowledge to those who might benefit from it. This income is mostly saved, but occasionally it buys some nice stuff. We are planning a New York City trip next and hope to see some popular Broadway shows.

All these rich people could simply enjoy their wealth if they wanted to, rather than suffer from the psychosis that they must ruthlessly acquire more of it through pretty much any means available. A lot of our spare income now is given away to charitable causes. I feel not just a need but also a natural desire to share our wealth. I try to put it toward causes that I believe are productive uses. It goes to places like the Nature Conservancy, so it can buy up natural space for future generations. It goes to Planned Parenthood, so women in particular can make choices over their own bodies and get health care services at affordable prices. It goes to the Food Bank of Western Massachusetts, so fewer of the people I see holding cardboard signs at intersections have to go hungry. It goes to a local spouse abuse shelter, so mostly women can have a softer landing after from suffering domestic abuse. And increasingly a lot of it goes to arguably non-charitable causes: campaigns of people who seem to be sincere progressives who will work to reduce misery and straighten out the major problems with our politics most of which were caused by the greed is good falsehood.

For the truly greedy, to quote Mr. T., “I pity the fools”. They might want to read some Charles Dickens, particularly A Christmas Carol. Whether overtly or innocently, what they are doing to our planet and the rest of us is intensively evil.

Money is freedom

Americans celebrate freedom. Everyone is free, we proudly proclaim. But what exactly is freedom anyhow? Freedom amounts to being able to do what you want when you want to do it. Based on this criterion, it’s clear to me that some of us are freer that others, and those are people with more money. When you have a lot of money, you have the freedom to go backpacking in Tibet. You are probably not going to realize this particular freedom if you are a product of a single-family household and your mother lives in subsidized housing.

We sometimes celebrate the homeless as free people. Perhaps there is a certain freedom in being a vagabond. You can go where you want but chances are to get there you will have to walk. You had best not walk into certain planned communities, particularly in Sanford, Florida. A George Zimmerman type anxious to try out the Stand Your Ground law may kill you. The homeless are free, but you are likely to frequently go hungry. I understand that the dumpsters behind neighborhood Burger Kings offer al fresco free dining opportunities. Sleep will probably be uncomfortable as you will be outdoors and subject to the elements. You likely won’t be allowed to sleep just anywhere, not even places you would think you would be, like a public park. So be prepared to be rudely woken up at 3 AM and asked to shuffle along, or hauled to a nearby police station and booked for being a vagrant. There you can at least you can get free meals and a warm place to sleep.

For most of us, this freedom is very limiting, and something to be avoided not embraced. In fact, it is a faux freedom. Wild animals have this sort of freedom too, but no one envies them. However, with money freedom becomes tangible. Money can buy you freedom from constant hunger and provide a safe place to call home. With more money it can buy health care and likely keep you out of a whole lot of unnecessary misery. With even more money you can become educated, attract a quality mate and take regular vacations. With yet more money you can take exotic vacations, afford homes in the Hamptons and maybe run for political office.

So in reality freedom is not so much about being free, it is about the how much freedom you can afford to purchase. And that depends on how much money you or your parents have. Consequently, in a nation that values freedom we also value wealth, because the more wealth you have the more freedom you have.

We are also aware that freedom is constrained by law. In many mostly Southern states, your right to vote can be constrained by requiring state issued IDs to be shown at polling places, which curiously affects the poor almost exclusively. Sometimes fewer polling machines show up in predominantly poor neighborhoods as well, making it harder to have your vote count, such as happened in areas around Cleveland in the 2000 election. The consequence of actions like these is to give those with money more leverage to influence laws than those with less money. The rich also have disproportionate resources to influence others politically. This is perfectly legal. In its Citizens United decision, the Supreme Court also asserted something wholly absent in the constitution: that corporations have the same rights as people and can give unlimited amounts to PACs. Unsurprisingly then, our government tends to disproportionately reflect the interests of those with money over those without.

Effectively money not only buys freedom, but also allows some measure of being able to take away freedoms from others. Lately the aspiration that all should have roughly the same amount of freedom has been classified as socialism, a strange assertion for a nation founded on the assumption that all men are equal. Make health care available to all regardless of their ability to pay, and poorer people will effectively have more freedom, but in the eyes of many it is an unearned freedom, thus it should not be allowed.

How does one earn more freedom? If freedom is wealth, it happens through acquiring wealth somehow, which can be hard to do without a good education and the right connections. Some time back I wrote about the rags to riches myth. Yet there was one famous president who arguably demonstrated that it was possible to ascend from rags to riches. He was our greatest president: Abraham Lincoln. He had no formal education and never went to law school, yet he became a lawyer and eventually president of the United States. How on earth do you get to become a lawyer with no formal education? At the time it meant convincing the Illinois Supreme Court, which had only recently become a state, that you were competent to practice law. Honest Abe did it somehow.

Rest assured that Lincoln’s tactic no longer works in Illinois or likely in any other state. If you want to practice law, you had best get a law degree and join the local bar association. That of course will require money, and it’s unlikely some benevolent nonprofit will be giving it to disadvantaged inner city youth. Anyhow, if you can acquire a law degree then maybe the Illinois Supreme Court will deign to let you argue before it. Since Abe’s time, Illinois has tightened its standards on who is allowed to acquire higher levels of freedom, and it is generally doled out only to those with the means. In effect, it has cut one pathway that enabled someone to go from rags to riches. There are virtually none left, but the Republican myth remains that there are all sorts of ways to achieve the impossible.

We have created all sorts of barriers to keep people from moving from one socioeconomic level to the next. If it happens at all, it requires superhuman effort. Few of us are supermen, so we are virtually doomed to fail and we will stay in our social class. This seems to be fine for those who are already have wealth. Indeed, they seem anxious to add additional barriers that have the effect of making it even harder to ascend up the socioeconomic ladder. This is done in the guise of welfare reform, reducing or eliminating subsidized housing, and strict time limits to food stamps and unemployment benefits. The effect is to give certain classes of people more freedom than others and through lowered estate taxes give them the ability to extend those freedoms to their children. It also helps ensure a permanent underclass of citizens and keeps a permanent upper class as well.

The lack of defined pathways to become upwardly mobile feeds resentment and fosters insular behavior, heightening class-consciousness and dividing us as a society. To understand the brouhaha in Wisconsin, one has to look not at the bottom of the income scale, but at its middle and the brazen power of those at the top to push the middle class further down the income scale by lowering their pensions, making them pay more for their health insurance and not allowing collective bargaining. In effect, through legislation the middle class’s freedom and wealth is being moved to those with more wealth. Ironically, this is classified as being part of a pro-freedom agenda. The reaction by a vulnerable but politically important middle class was entirely predictable. It was fed by cluelessness and a sense of superiority of those with wealth that they know better. Mostly it is due to a fundamental unwillingness by those in power to understand the connections that implicitly bind us.

Some of the wealthy understand this connection. They know that their wealth is predicated on keeping the other 99% hopeful for a more prosperous future. They understand that marginally higher taxes on their income are actually an investment in their prosperity. Moreover, the smartest ones understand that for society to be stable there must be viable economic ladders to move between all financial classes. Most of those ladders have disappeared, mostly between the lower and middle classes, but also between the middle and upper classes. These ladders do not appear magically, or they would exist now. Instead they must be constructed by civilized society. While capitalism helps provide the wealth that makes these ladders possible, they do not occur from largess, but are a result of government.

In truth, upward mobility is what truly drives growth and by extension wealth and freedom. It is in the best interest of the rich to empower the poor and the middle class so their talents can be maximized for the benefit of society. For when that happens, rather than wealth trickling down from the moneyed, it trickles up. All are enriched, all share the benefits of greater connection, and all share in a greater freedom. It is a formula that worked well for America until it was abruptly changed with the election of Ronald Reagan. To become great as a country again we must rebuild these economic ladders. The decline of our country will be marked by the day when we deliberately destroyed these ladders of hope and opportunity.

Who wants to be a millionaire?

Not me, at least I never set out with the goal to be a millionaire. When I entered adulthood around 1978 with less than a thousand dollars in my savings account and $5000 or so in student debt, the idea of me being a millionaire someday seemed preposterous. The only millionaire I knew was a character on TV named Jed Clampett, and he had a mansion in Beverly Hills and a cement pond in the back. I kept my expectations more modest. Perhaps I could afford to go into hock for a townhouse, which my wife and I finally did at age twenty-nine. At the time I felt very much overextended, and I was. The first time I wrote a mortgage payment check, my hand actually shook. I had never written a check for that large an amount before and writing a check that big once a month was scary and sobering.

Today, on Good Friday of all days, I updated our accounts in Quicken and found that we had become millionaires. Quicken told me today that our net worth is $1,000,531.14. Approximately. I looked around. Nope, I wasn’t living in Beverly Hills. Nope, Texas Tea was not responsible for our amazing wealth. Nope, no cement pond in the backyard either, although after heavy rains we do get a transient pond, which occasionally will be inhabited by feathered friends. No BMW in our driveway. No butler to fetch my coat. No maid service either; I still clean our toilets. We do have a lawn service. Maybe in 2011 that is one clue you can use to judge if someone is a millionaire. In my case, it is because I am just lazy.

And I still pinch pennies, although not as hard as I used to. There was a time when I kept track of all my cash expenses in a little notebook because I had to make my GS-5 salary stretch to the next payday. Perhaps as a result toward the mid 1980s I started tracking income and expenses. Around 1990 bought a version of Quicken for an antiquated operating system called MS-DOS. Back then our net worth was about $20,000. Still, I had no expectation of someday being a millionaire. For much of the last twenty years I didn’t see how it could possibly happen. Life was just so darned expensive! There were all these massive payments, for the mortgage, for childcare, and to keep our house from falling apart. I needed loans to live my lifestyle, principally car loans, and later home improvement loans. How on earth did we become millionaires?

It is still something of a mystery so I went investigating. One major factor: stocks have recovered. In fact they recovered so well I suspect they are currently overvalued, so my millionaire status may not last too long. In addition, thanks to the recession and all our deficit spending, the dollar has declined precipitously. Which means that a million dollars today is probably the equivalent of $750,000 or so a few years ago, based on what we can actually buy with it. I doubt our purchasing power has gone up that much since the recession began.

We became millionaires principally by holding steady jobs and steadily advancing in our careers, which at least in my case finally got me to a comfortable salary. We did it by investing in us, specifically our educations (a graduate degree for me in 1999, and a bachelor’s degree for my wife the same year). When our income allowed, we saved as much as we could. It also came from living for a few more decades. If you do your best to consistently follow a sound financial strategy, your net worth tends to grow. Another likely factor: having just one child.

It is also true that we were either lucky or canny. I had no idea that when I moved to the Washington D.C. region in 1978 that it would be financially rewarding, at least compared to other places in the country. The high cost of living appalled me, but I had the good fortune to settle in Fairfax County, Virginia, a prosperous county full of beltway bandits and clean industries, mostly of the software kind. It is a place where good jobs were as fungible as money and never required the hassle and expense of moving. While I often groaned while making my house payments, my property values steadily appreciated over the years. Real estate as an investment rarely returns more than inflation, but our house, purchased for $191,000 in 1993 is worth $460,000 today. I expect it at least held its value. We were also lucky. We generally bought in buyers’ markets, getting good value for our money. We could have easily ended up underwater, like many homeowners today. We weren’t bright enough back then to time our real estate transactions to the market.

Building net worth takes tenacity and well-practiced self-denial. It often meant buying used cars when I lusted after new cars, and when buying new cars, buying practical cars like Toyotas and Hondas instead of Lexus and Mercedes Benz. It meant gritting my teeth and adding a couple of hundred dollars to my mortgage payment every month. It meant living somewhat below my income; our single-family house with a one-car garage is modest living. It meant avoiding shiny new toys like cell phones until they got dirt-cheap. My cell phone is currently a $10 model from Virgin Mobile. I still don’t own a smartphone. Since I am by a computer most of the day anyhow, paying $50-$100 a month for an iPhone or Android device seems a poor value.

I still constantly scan the market for real value. Consumer Reports recently recommended the Ooma Internet phone for those of us with landlines who are already paying for high speed internet. I guess we don’t need a landline but we are used to having one for its clarity and reliability, attributes I don’t associate with a cell phone. I currently spend $25-$35 a month for a landline, which includes modest long distance charges. With my Ooma, after paying $249.99 to buy it, I will spend less than $4 a month, all of it going for taxes. I can do all the local and long distance calling within the United States I want for free, forever. My effective cost for a landline will go from $30 a month to $5 a month. Free from my bundle with the cable company, I will now get to play a bidding war between Verizon and Cox for my high-speed Internet and HD TV service.

While we may be “millionaires”, most of our wealth is not easily touched. Our house remains theoretical wealth until we sell it and/or we own it free and clear. ($75,000 to go!) About half of our wealth is invested in retirement assets that we cannot touch without penalties. Perhaps that is why even though we are millionaires I still tread cautiously financially. The kind of wealth where you can rarely think about how much money you are spending still eludes us, and always will.