Real estate market springs into life in September increase 3.6% annually, according to the latest data from the Real Estate Institute of New Zealand (REINZ), …

How does it feel to be secretly rich?

First, some background …

I started a business in the telecom sector in 1991, and after 25 year in business I find myself at the helm of a 50 person company with sales in the $12M / year range with an after tax income of approx. $1.3M. Our top and bottom line revenue has increased steadily over the last many years, and since I am the sole shareholder with no corporate debt, or even line of credit for that matter, the firm’s profits are essentially mine to use, either maintained in the company, or, taken as dividend income as required.

Over the last 10 years, especially, and ironically, starting in 2008, my net worth has grown exponentially. I decided in 2008 to apply Warren Buffet’s famous expression “Be fearful when others are greedy, and be greedy when others are fearful”, and at the time, decided that when everyone was running for the exit sign was the time to start acquiring real estate, and business expansion. It’s like the market was on sale. Employee talent was readily available, talent that only two years prior would have been difficult to find and hire. Same with real estate, in particular, apartment buildings, which I began acquiring in 2008, and to date, have 4 buildings. I just sold one a few months ago. I can probably write many paragraphs on business and some of the risks and strategy I’ve taken over the years, but, I digress.

Back to the question at hand.

After 25 years in business me, and by extension, my wife and two kids, have an estimated net worth of approximately $25 million dollars. I figure it’s growing by approximately $2 million per year between the appreciation of the real estate, business profits, and conservative investments. BTW, I am no longer a big risk taker, I don’t need to be at this stage.

So what does it feel like to secretly rich?

One word. Liberating.

When I started my business in 1991 I had very little, and by the summer of 1992 I was down to my last $500 in the bank, so, to fast forward 25 years later and have accumulated so much provides me, and my family, with a sense of security. I know what it’s like to live dollar to dollar. Other than my wife, corporate controller, and accountant, no one knows how wealthy we are, and I’m perfectly fine that way. I don’t want anyone to know. Sure, they have the sense that we do OK, but, we just don’t talk about it. I don’t want to be judged any differently because of it.

We now have 3 homes. Our primary home, a year round cottage that we use in the summer and winter, and a large home in Florida, all paid for with cash and no mortgage. We rent the Florida house for about 12 weeks per year which covers all the expenses of the home and provides a small profit of about $10,000 per year.

Minor expenses, things like doing the roof, car expenses, home upgrades, clothes for the family, are just made without an issue. My wife needs a new car this year (she’s driving a 9 year old Honda Pilot), and we’ll pay for that with cash. I need a new car next year (it’s an 8 year old Lexus), and again, I’ll buy it with cash and won’t even notice the dent in the bank account. The religious organization we belong to needed to redo the parking lot, they did a fund raising campaign and weren’t able to raise not even 25% of the required funds to finish the lot, so, I wrote an anonymous check for the difference. All the above was this past year.

We took a family vacation this past spring to Costa Rica for 1 week, went all out, and are taking another one, this time for 2 weeks, to Europe, and again, are paying for that with cash.

My wardrobe is very understated. For example, I wear the same pair of shoes to work every day for at least a year before they need to be replaced. I spend no more than $1,000 per year on my wardrobe, it might even be closer to $500.

My wife works, not because she has to, but, because she wants to. She makes about $25,000 per year as an interior designer, and is happy to be busy with her clients, client projects, and looking after our family for the balance of the time.

My wife and I spend a lot of time making sure our kids are well grounded. They get gifts on their birthday, holidays, new clothes at the beginning of the school year, but otherwise, if they want something they have to buy it themselves with their own money that they make from their own jobs.

My son is headed off to university this September, and again, I’ll pay for the school tuition with cash.

We are not frivolous with our money. We live well, but spend time on things that create lasting memories. Family vacations and spending time with the family is extremely important. Making sure that me, and my family are looked after, living within our means, and knowing that we have more money than we can ever spend, is liberating.

It’s taken a lot of work, and time to get to this stage of my life. I’m 48 and am hoping to semi retire in 2 years. I work now because I want to, not because I have to.

I am a lucky man.

I have a beautiful wife, both inside and out, wonderful kids that appreciate what my wife and I do for them, we have our health, and know that no money in the world can buy that, happiness, and most of all, peace of mind.

So, how does it feel.

Liberating.