How a Navy vet took his net worth from -$6,000 to $1.85 million while making under six figures

This Navy vet went from being in debt to having a net worth of $1.85...

Aerospace engineer Michael T. Miller doesn't regret buying his "most recent toy," a 1995 Ferrari F355 Spider, though he does wish it didn't cost him so much to maintain: "A major service cost me $13,000 and you are supposed to do this every three to five years," he grumbles.

Still, he can afford it.

After starting out $6,000 in debt and without ever making six figures until quite recently, the Navy vet was able to amass $1.85 million.

Miller did it by first paying off his student loans — he was debt-free by 30 and he stayed that way. He now makes $117,000 a year and puts away an astounding $6,000 a month. That's "in addition to the eight percent to the 401(k)," Miller, 64, tells CNBC, "as my mortgage is paid off and I have no bills other than property taxes, insurance and utilities."

Miller's life hasn't been one of unending sacrifice. In addition to a 2014 Mercedes E350, he says, "I have owned three Ferraris and am looking seriously at another F car." The first, a 1970 365GT 2+2, he bought too early: "One year of Ferrari ownership nearly bankrupted me," he says. But having to sell that vehicle made him start thinking seriously about personal finance. He "got educated," he says, read about a dozen books and started aiming to save 50 percent of his salary.

"I didn't get married until 58. Being single probably made it easier to save," he acknowledges. Still, he also made lots of canny decisions along the way.

1995 Ferrari F355 spider. Photo courtesy of Michael T. Miller.

Here are this self-made millionaire's top five savings tips.

1) Defer gratification

Don't buy large ticket items such as cars and boats that will put you into debt for a long time, which Miller defines as "more than a year or two." And don't put together elaborate travel plans either: Even if you're excited to see the world now, as a younger person, "postpone," he says, "and invest this money" so it can grow.

2) Stick with cash

"Avoid all credit cards," says Miller. "I had only one credit card and paid the balance off monthly."

Restricting yourself to buying what you can afford worked for CNBC writer Kathleen Elkins, who went on a six-week Cash Diet and saved $1,000. Leaving the plastic at home, she found, helped her resist the pressure to spend.

This couple paid off their student loans in 54 days

3) Be disciplined

"Once you [start] a saving/investment plan, stick to it, month in and month out. Stay focused on your long-term goals," says Miller.

Accountability can help. Meg and David Cahill managed to save $7,800 in 54 days in part by telling themselves, "Sacrifice now in order to win later," and in part by telling their friends about their plan and asking for their help. Securing the support of their community was the wisest move they made, Cahill says: "The support that we got from them — the texts and phone calls of encouragement — really made a difficult experience for us that much more gratifying."

4) Buy and hold

Invest with an eye toward the future. "Never sell anything just because the market is down. Look at these times when stocks are down as them being on sale and buy more – be a contrarian," says Miller.

Michael T. Miller

Billionaire investor Warren Buffett concurs. His advice is to think long-term too.

"His approach is to be really sure of something before he buys it, and one of the ways he exercises that discipline is to sort of almost never sell. Not never sell, because he does sell stocks, but he sort of says to himself, 'If I know I'm almost never going to sell it, I've really got to like it before I get into it,'" Buffett's biographer Roger Lowenstein, author of "Buffett: The Making of an American Capitalist," explained to Yahoo's Alexis Christoforous.

5) Buy and hold real estate, too

Miller's advice is to secure "the best house you can afford in a nice neighborhood and keep it for 25+ years."

"Don't buy a new home every few years, as your monthly costs will take more and more of your income," he says. Instead, "try and put down a large percentage of the home's cost to keep your mortgage as small as possible, enabling you to save more." Back in 1987, he says, "I put down 45 percent, which kept my mortgage at $500/month, enabling me to save 50 percent of my pay."

These strategies have served Miller well. He can retire whenever he wants — probably a few years from now, since he still likes his job — and meanwhile he's savoring his success. He's also benefiting from what he calls his "10 percent rule," under which, "I told myself it was OK to buy a toy (motorcycle, Ferrari etc.) if the cost wasn't more that 10 percent of my net worth. So, for instance, if my net worth was $500,000, I could buy a toy for $50,000.

"This way I didn't feel as deprived and still had nice toys once in a while."

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