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Wednesday, September 26, 2007

Millionaires in the Making - Tracy and David Seim

The CNNMoney.com article discusses the finances of a couple in their early 40s, Tracy and David Seim. With a combined salary of $103,000 from a small company they run, they have managed to have a net worth of almost $750,000, consisting of:

$67,000 in savings accounts
$300,000 in retirement accounts
$200,000 in home equity
$175,000 in business equity

How did they do it? By working hard, being frugal and saving diligently. The couple max out their Simple IRAs by contributing $10,500 each last year. They’ve also saved $52,000 towards their daughters’ education, and have about $15,000 in bank CDs.

"They have no credit-card debt, have lived in the same house (worth about $300,000) for 14 years and don’t drive fancy cars."

The Seims, however, don't think they have enough when comparing themselves against their free-spending friends. However, as per a financial planner, Seims aren't doing as bad as they think. I liked the recommendation for the Seims:

"Don’t judge progress by looking at other people’s stuff. Just because a neighbor owns a vacation house or drives a Jaguar doesn’t mean he’s smarter with his money: He may be living scarily above his means. The Seims need to stick to their own plan and stop worrying about what everyone else is doing."

While their comparison with their friends is natural, Seims, hopefully, will realize that for couples in early-40's, they are doing very well. Its kind of like in a school where you see some of your friends partying and always having a good time, without worrying about grades etc, while you are working hard to acquire as much knowledge as possible along with good grades. Reason? You want to study now to ensure you have a better future. That's the same way when it comes to personal finances and being frugal - you work hard and make some sacrifices now in order to have a better future for yourself and your family. So, as the article suggests, stick to your goals and avoid comparison with others.

For complete article, see:

CNNMoney.com: Millionaires in the Making:Tracy and David Seims

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Labels: frugal; Investing; invest

posted by Ruby @ 9:06 AM

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