A Gen Xer shares the saving strategy that grew his net worth from $50,000 to $1 million in 15 years

Todd first earned $50,000 annually in 2011 at the age of 40, but he wasn’t satisfied with his pay. He decided to pursue a tech certification through the enterprise-tech company Cisco — which he hoped would give him the résumé boost needed to land a higher-paying role. By 2013, he’d received his certification and accepted a new IT job — one which bumped his salary from roughly $52,000 to $80,000.

In 2017, Todd said he earned $100,000 a year for the first time and, last year, he earned about $115,000, according to a document viewed by BI. Over the past decade, Todd said his six-figure salary has enabled him to save and invest over 50% of his income and transform his finances.

Todd’s net worth — which includes his investments and equity in his home — has grown from roughly $50,000 in 2011 to over $1 million as of June, according to documents viewed by BI. He said that retiring at age 60 is now a “realistic goal.”

“This would not have been possible without more than doubling my income,” said Todd, who asked for his last name to be excluded for privacy reasons. “I’m always preaching to people I know how important it is to save and invest, and that’s something I was only able to do in earnest after I had a six-figure income,” he added.

A $100,000-a-year salary doesn’t go as far as it used to in an economy where the elevated costs of food, housing, and childcare continue to weigh on people’s finances. However, for many Americans, reaching a six-figure income could still have a significant impact on their lives. As of July, the average annual salary for full-time workers was about $85,000, according to a New York Fed survey.

Todd shared how he’s turned his six-figure salary into a $1 million net worth — and why he plans to extend his working years longer than he might need to.

Prioritizing saving over spending is key to maximizing a six-figure income

Todd grew up “very, very poor,” he said. He lived in a trailer and was raised by a single mom.

“I knew we were poor, but only saw how little mom made when I applied for college financial aid,” he said.

When Todd landed a six-figure income — and his financial circumstances began to change significantly — he didn’t go on a spending spree. He knew he had some “catching up to do” when it came to his finances, and that it would be wise for him to prioritize saving.

“I’ve always adhered to the adage ‘pay yourself first,'” he said. “Every time I’ve gotten an increase in pay, I put it toward more saving and investing rather than feeling free to spend more.”

Todd said he takes advantage of his company’s 401(k) match and contributes the maximum allowable amount to his Roth IRA each year — $8,000 for people aged 50 and older as of 2024. He said he also makes significant investments in his personal brokerage account.

Saving and investing at high rates have helped Todd grow his investments to roughly $900,000 as of June. He said the other roughly $400,000 of his net worth comes from the equity he has in his home, which he bought in the late 1990s. He hopes to pay off his mortgage before age 60 — his goal retirement age.

However, despite his financial progress, Todd said he doesn’t feel rich.

“A higher income hasn’t led me to feel wealthy but definitely eased day to day money stress,” he said.

Postponing his retirement could help him build generational wealth

Todd said he still lives “pretty modestly” and is not a “materialistic” person, which has made it easier to save money. The only big “indulgence” purchase was a new car he bought in 2021, he said.

But over the years, Todd said he’s let himself splurge a bit from time to time.

“I spend more freely at good restaurants than I used to, and for the first time I purchased a first-class airline ticket for a trip,” he said, adding that he’s also enjoyed trading hostels for hotels when he travels internationally.

Todd also decided to get an American Express platinum card. He said the benefits, which include getting airport lounge access and avoiding “inflated” airport food and drink prices, outweigh the $695 annual fee.

Moving forward, Todd said he plans to keep working toward his retirement goal of age 60. He said he sometimes “fantasizes” about quitting his job and retiring ahead of schedule, but then he thinks about the over $1 million he could make over the next decade that he’d have to give up. To ensure he has a “comfortable” and “stress-free” retirement, he said it would probably be wise for him to keep working.

But boosting his personal retirement savings isn’t the only reason Todd values the additional income. While Todd is single with no kids, he said he wants to have extra money to support his mother, siblings, nephews and nieces in the future.

“My mindset now is not only saving for my own comfortable retirement but also building generational wealth,” he said.

Are you trying to build generational wealth? Are you willing to share your story? Reach out to this reporter at jzinkula@businessinsider.com.