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Saturday, May 15, 2021

How a 32 Year Old Reached a $4 Million Net Worth in 11 Years

Must read

  • Adrian Brambila became a self-made multi-millionaire by the age of 32 after starting off broke.
  • He avoided bad debt, spent wisely, built an emergency fund, and invested in a diversified portfolio.
  • He also built multiple streams of income so that he wasn’t dependent on one source. 
  • Visit Personal Finance Insider for more stories.

Adrian Brambila started his career doing what he loved, as a backup dancer for T-Pain. He was on tour in the US when his job ended suddenly and he had to seek alternative employment. He found a 9-5 job as a customer service representative for a retirement planning firm in Dubuque, Iowa, making $27,000 a year at the age of 21. 

The two jobs were vastly different, but they each taught him something important. When he worked for T-Pain, he witnessed the life of someone who had an abundance of wealth, which made him desire financial freedom. But being flat broke, he didn’t understand how he could get there. It wasn’t until he started working at the retirement firm that he began to understand the importance of smart money management, and that anyone can reach financial independence by making the right moves. 

“I was listening to [what] I would call ordinary but extraordinary Americans who saved throughout their careers and were about to retire. I was 21 and I had access to help them. I could see their accounts. I could see how much they had saved. And when I noticed someone who was about to retire at 59 or even earlier who had $1 million, I asked how,” Brambila told Insider. “None of these people that I would talk to via that call center really had high, extraordinary incomes. These were people who probably made less than six figures a year.”

Today, Brambila is 32 years old. He spends the majority of his time living out of a converted van traveling across the country with his wife. And that’s not because he’s still flat broke. Within 12 years, he’s managed to build up a net worth of more than $4 million, according to financial documents viewed by Insider. 

He shared with Insider how he did it. 

1. He never took on credit card debt

Brambila has always been focused on using his money to invest to build long-term wealth. Because of that, he knows the rate of return he can get for his money when it’s placed in a brokerage account or a retirement fund. When he considers the interest rates associated with credit card debt, he knows he can’t match that in an investment, so he stays away from any type of high-interest debt

Based on this awareness, he believes that the first step to becoming a millionaire is to eliminate credit card debt and any other type of high-interest loans before beginning your wealth-building journey. If he uses his credit card, it’s paid off within the month. 

“Living within your means is something that we Americans struggle with. Marketing and social media will tell us that more is better, bigger is better. Owning more stuff is better than less stuff, and that if you can’t buy it now, it’s all right, just put it on credit so you can still impress those people,” Brambila told Insider. “Credit card debt is an American Dream killer.”

2. He was always tight with his spending habits

Brambila isn’t big on spending on expensive things. He’s always been a minimalist. That approach has helped him save a large percentage of his income throughout his life. When he was making $27,000 a year, he managed to save 30% of it, Brambila told Insider.

Now that he makes substantially more money, he’s able to save 90% of every dollar he makes. He inherited this approach from his parents, who taught him to only buy what he needs and not what he wants.

“This scrappy mentality is actually great for building wealth. It helps you focus on saving versus spending. Today, although I’m a multi-millionaire, I’ve learned that the best experiences in life don’t come in objects you find at the store,” Brambila said. “You don’t have to be a minimalist like me, but you do need to optimize your spending habits on needs versus wants if you are serious about achieving financial freedom. Trust me, the sacrifice is worth it.”

3. He built a 6-month emergency fund

It was very important for Brambila to have an emergency fund that would provide him a safety cushion while he was still building his wealth. Without having cash in the bank, he knew that any little thing could set him back or cause him to end up with credit card debt. 

“When you are starting from zero you have to climb up a steep hill, and anything can knock you down, like a car failure, medical expense, or something that takes you out of a job,” Brambila said.

4. He invested his money

He knew he couldn’t earn or save his way to financial freedom, so he began investing his money. He takes advantage of all investment vehicles he is able to contribute to, including a Roth IRA, a traditional IRA, and a brokerage account

When he had a job and a fixed annual salary, he followed a particular order when it came to investing in his retirement funds. First, he would take advantage of his 401(k) by contributing up to the employer’s match. Then, he contributed monthly to his Roth IRA. Once he’d maxed out his Roth, he’d send the rest of his annual contributions to his 401(k).

Now that he has access to more funds, he avoids making risky investment choices. He sticks to the dollar-cost averaging method, where he puts a steady amount of money each month into a balanced and diversified portfolio.

He focuses on index funds and exchange-traded funds. His ETFs are balanced between stocks and bonds. His top ETFs are VFIAX and VOO Vanguard funds because they are a pot of some of the top-growing US companies. 

5. He diversified his revenue streams 

Brambila believes multiple income streams is key to growing your wealth. He implemented this approach early on in his career. When he first graduated from college, he had three jobs: He worked a day job, taught dance at a studio, and had a very small online business teaching dance virtually.

Within four years, his online company grew to the point that he was able to work on it full-time, he told Insider. 

“That little part-time job produced an extra income. That’s something I’m always encouraging people [to do] is to find ways to make money outside their 9-5 jobs. It’s just a good way to do it. You can have fun. I had fun teaching dance; it never felt like work,” Brambila said. 

Today, he continues this approach and has three main streams of income: investing, rental real estate, and an online affiliate and e-commerce company.

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