Anton Ivanov isn’t your average millionaire.
For starters, he’s barely 27 years old, he doesn’t work in Silicon Valley and he isn’t heir to a family fortune. He doesn’t live in a tiny house or get his food from a compost garden in his backyard, either.
Ivanov, who shares wealth-building tips on his blog, Financessful.com, made his million the old-fashioned way: He read books. He saved early and often. And he started planning his rise to millionaire status before most kids his age had their driver’s license.
“I’m a testament that if you want something bad enough and you keep working towards it … you will get to where you want to go,” he says. “It was my habits and my principles that made me rich.”
Here’s how he did it.
A decade ago, Ivanov was like any other teenager in the U.S.. He went to high school, earned decent grades, and held down a minimum-wage job at Subway. His parents, who had moved his family from their native Russia in 2002, both worked full time — his mother as an attorney, his father as an accountant. They lived a moderately middle-class life in the suburbs of San Diego.
But Ivanov realized early on that there was something different about his new neighbors — they all seemed a lot wealthier than his family. His parents were heavy spenders and harbored a deep mistrust of financial services. He couldn’t quite blame them — they had moved to the U.S. just a few years after living through one of the worst depressions in Russian history. But at the same time, he felt like he was missing something.
“In high school, there was pretty much no financial education and my parents wouldn’t talk to me about money,” he says. “Everything I learned about money I had to learn myself.”
He devoured books on wealth building. An early favorite was “Think and Grow Rich,” the 1937 classic by Napoleon Hill, which details strategies that can be used to overcome psychological barriers to wealth.
“That book was extremely influential,” Ivanov says. “It wasn’t a ‘how to get rich’ book but it gave me a vision and a mental system that I could use to achieve pretty much anything I wanted.”
At age 16, he had one goal in mind: become a millionaire.
College or career?
Anton opened a savings account at a local bank and socked away 100% of his Subway wages over the course of three years. By the time he graduated high school, he had saved about $10,000. He might have used the cash to cover part of his college tuition, but he knew it wouldn’t be enough to cover all of his expenses. He didn’t relish the thought of taking on tens of thousands of dollars in student loans to make up the difference, either.
“My family wasn’t really prepared to pay for my college tuition, so I knew I would have to rely on at least some student loans to get me through, which I was very much against,” he says.
He had other ideas for kickstarting his career. While his friends signed up for college classes, Ivanov celebrated his 18th birthday by opening his first Roth IRA. After spending some time working (mostly administrative jobs near home), he decided to enlist in the U.S. Navy at age 20. He earned about $55,000 a year as an electronics technician and took distance learning classes to earn a Bachelor’s degree in information technology and programming. Uncle Sam picked up the tab for his tuition and fees.
“When I compared [going to college] to joining the military, the latter seemed like a smarter idea because I would be earning income right away instead of waiting until I graduated,” he says. “And I could receive an education pretty much completely free, which I did.”
The ‘lazy’ investor
After Ivanov maxed out his Roth IRA (the annual contribution limit is $5,500), he opened up a small brokerage account with TradeKing. Years of careful research convinced him stock-picking wasn’t for him. His investing strategy was simple: focus on low-cost stock mutual funds that covered a variety of major asset classes and let the market do its job.
“It’s what I would call a lazy portfolio,” he says. After doing research, Ivanov decided to invest in seven asset classes: domestic, large-, mid-, and small-cap funds, emerging market funds, commodity funds, with a small chunk in bonds. Then he let it ride. He rebalances his portfolio once a year, if at all.
A couple of years into his stint with the Navy, Ivanov faced his first true test as an amateur investor. By saving 60% of his Navy income and taking on freelance jobs on the side, he had been investing somewhere between $40,000 to $45,000 per year when the financial crisis hit in 2008.
He says he lost “a good amount,” but when the market sank he didn’t sell like many other investors did. “I powered through and when the market hit bottom, that’s when I tried to save and invest even more. To me, it was a no brainer,” he says.
Getting into the real estate game
Heavily influenced by books like “The Millionaire Real Estate Investor” and “The Millionaire Next Door,” Ivanov knew he wanted to start investing in real estate. His timing couldn’t have been better. The bust had essentially turned the housing market into the world’s biggest bargain bin.
In 2009, Ivanov put down $80,000 on a $400,000 condominium in San Diego, which he rents out for a $36,000 a year (he nets about $12,000 a year after making his mortgage payments). Today he estimates the property’s value is well over $600,000.
Since then, Ivanov has added another property to his nascent housing empire. He purchased a $430,000 duplex earlier this year. He collects $21,000 a year in rent ($12,000 net after his mortgage is covered) renting out one of the apartments, while he and his fiancee live in the other.
“I believe in taking smart risks,” he says. “If you see an opportunity and you think it’s a good opportunity, you should take it and understand that you may be wrong and understand what the repercussions may be.”
He hopes to own at least 10 properties by the time he hits his 40s, but he’s in no rush. Once his housing expenses are taken care of, he puts all of his income — from his rental properties, his job and his freelance work — first into his retirement account, emergency savings account, and then into his taxable brokerage account. Once those goals are met, he contributes to a separate high-yield savings account, which he sets aside for future real estate purchases.
Keeping it simple
Committing to saving 60% of his income was no small feat for Ivanov. The average American manages to save only than 5% of their income per year.
He swears by one basic savings strategy: automate everything and never rely on credit.
“The day my salary gets deposited, I don’t even see that money,” he says. “It’s in and out of my account, which keeps me honest and keeps me on track.”
The emergency fund he’s been carefully maintaining since his days at Subway has come in handy as well. When both his parents unexpectedly passed away a few years ago, he was able to rely on that money to cover his airfare and funeral expenses.
Fortunately, military life was the perfect environment for a single person looking to save. The bulk of his fixed expenses — housing, food, transportation, insurance — were covered. He set up automatic transfers for his savings and investment accounts and followed a strict schedule. First, he maxed out his annual Roth IRA contribution. Then he contributed the maximum to his annual Thrift Savings Plan (the federal employee version of the 401(k)). He split the remaining balance between his brokerage account and the savings fund he keeps for future real estate investments.
While he studied, he earned extra cash through one-off web design and programming gigs he got through freelance job websites like elance.com and odesk.com. He estimates these side jobs added another $15,000 to $20,000 to his annual income.
“Definitely being in the military helped a lot, but I also had a mature outlook on life,” he says. “Buying expensive things isn’t really fun for me. I realized those things don’t really make me happy.”
Reaching the $1 million mark
Ivanov left the Navy in 2013, but even after he moved back to San Diego, he kept up his frugal lifestyle. Eager to add to his investments, he made increasing his income a top priority and landed a full-time job working as a software developer and test engineer. Combined with the freelance work he continues in his free time, he earns just shy of $100,000 a year (not including income form his rental properties) and still saves at least half of his net income.
Every expense — from his gym membership to his pending wedding in 2016 — is planned for and saved for well in advance. His detailed planning regimen is, he says, the key to his success so far.
“Usually, at the beginning of the year I look at my life for the next two to five years and I plan it out,” he says. “I write out any expense I’ll have that I won’t be able to cover using my paycheck and figure out how much I need to save each month to meet those goals by my deadline.”
Ivanov crossed the $1 million net worth mark just two months shy of his 27th birthday in June this year. He was thrilled to finally reach this milestone — but not surprised.
“If you have a really strong desire in your head, you can power through any obstacle you may face,” he says. “I truly believed that when I was 16 and I believe it now.