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In 2008, certified financial planner and "Financial Fives" author Gary Grewal was a pretty typical 19-year-old college student. He wasn't exactly broke, since he lived at home and his parents paid for the portion of his tuition not covered by his various scholarships. But he wasn't exactly rolling it in, either.
Still, his sights were already set on financial freedom.
Ever since he was a kid, he was thinking about how to earn and save. At age 11, Grewal started a hot chocolate side hustle in his neighborhood and even persuaded his grandmother to help out for a share of the profit. The stand took off, and word spread throughout his cul-de-sac and surrounding neighborhood. During high school, Grewal continued to take part-time jobs and stash away any extra money he received from his family on his birthday and other special occasions.
By his teenage years, Grewal had a few thousand dollars in his bank account. Not a fortune, but more than most teenagers he knew. When it was time to go to college, Grewal opted to live at home and put all of his extra cash into savings to keep the momentum going.
By 19, Grewal had saved up $10,000. A representative at his local bank convinced him to open a six-month certificate of deposit (CD), which earned Grewal about 5.75% APY. (CDs don't offer rates this high anymore, with the best CDs currently offering around 1% APY or less.)
The same banker then encouraged Grewal to start investing, explaining that since he was young, he could get a jump-start on maximizing compound interest. After Grewal's quick win with the CD, he trusted the banker's advice and put his money into something called a back-end loaded mutual fund — an option often criticized for having higher fees and a waiting period (known as a "holding period") of up to several years before the fees are reduced.
Grewal, now 32 and well-versed in financial planning, kicks himself for making that choice. But, in hindsight, something serendipitous happened.
The 2008 financial crisis hit and the stock market crashed. Though he was worried about his finances, Grewal was about to learn an important lesson.
"Half of the money was basically gone," he tells Select. "I was concerned."
But Grewal didn't pull his money out — in part because of the mutual fund's high sales charges and also because he was still living at home and didn't truly need the cash to live on. He stayed the course and saw that, in time, his money returned to its original value. Grewal also learned early how living modestly with low expenses can make it easier to weather unexpected events.
Grewal considers the 2008 financial crisis to be one of the key stepping stones that led to his financial planning career. By 31, he had grown his net worth to $500,000. He hopes to reach $1,000,000 by age 35. Unlike many high-net worth people, Grewal doesn't own property yet. His simple strategy to grow his wealth has always included making automatic monthly deposits into both savings and investment accounts, while keeping a tight watch on his spending.
Select spoke with Grewal about how he's achieved this goal and his advice for others looking to grow their net worth.
Grewal remembers overhearing his parents argue about a credit card balance once, and the early memory sealed the deal: He decided that he'd never carry debt of any kind, not even a $100 balance on a store credit card.
The decision impacted his career path: Before Grewal became a financial planner, he wanted to be a dentist. He wasn't passionate about teeth, but thanks to a college internship in a dentist's office, he knew that dentists made good money. (The average dentist salary in the U.S. according to Glassdoor is $161,018.)
But the dentist he worked for gave him some advice: "He was like, 'If you were my son, I'd tell you not to go into debt," Grewal recalls.
Grewal graduated from undergrad debt-free, but dentistry school would require taking out student loans in the five-to-six figure range. Since dentistry wasn't his passion, but rather a means to afford a comfortable life, Grewal instead opted for a career path with on-the-job training and professional development programs that allowed him to start working and earn his CFP license (debt-free) along the way.
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Since taking his first job at a life insurance company in 2010, Grewal's income has grown over time. Taking into consideration annual raises, new job offers, annual bonuses, etc., he now brings home more than double what he did at his entry-level position. Yet, his expenses are almost exactly the same as they were when he was a semi-broke college grad.
Instead of buying new cars and renting apartments in high-end luxury buildings, Grewal keeps things simple. He prefers to buy affordable cars (which he doesn't drive very much) and rent homes within walking distance of work to save on commuting costs. He has always lived with roommates, even when his income passed the six-figure mark.
"I learned over time from living on my own that I need at least $1,500 a month to live," says Grewal. "That's like my bare minimum."
And he's stuck to this number: No matter how much his salary grows, Grewal keeps his rent to anywhere from $800 to $1,200 per month and caps his grocery budget at $400. He then allocates any remaining income toward saving and investing.
Grewal isn't interested in spending the surplus between what he needs and what he earns. Instead, he automates his savings, giving every single dollar a purpose.
Here's a rough breakdown of how Grewal prioritizes his saving and investing, in order of how he automates it.
- He maxes out his 401(k), Roth 401(k) and Roth IRA every year (making sure to take advantage of any company matches).
- He auto-deposits $2,000 per month into a separate, non-employer-sponsored brokerage account.
- He auto-deposits $1,250 into an online high-yield savings account.
- He manually deposits any surplus money (bonuses, side hustle income, etc.) without a clear purpose into a savings and/or money market account where it can accrue interest while he decides how to use it.
Grewal wasn't always able to deposit so much into the different accounts. He started small, with just over $1,500 in monthly discretionary income to work with. Over time, he's grown his contributions to their current levels by avoiding lifestyle inflation and keeping his costs low.
Budgeting and expense tracker apps can be instrumental in teaching you better money management skills. The robust app, Empower (formerly Personal Capital), acts as an investment tool as well as budgeting, making it easy to see an overall view of all your personal finances in one place.
Mint is a good pick to get a baseline view of your net worth and set shorter-term goals like saving a nest egg, paying down credit cards, etc. Set up automatic savings transfers with your bank to correspond with your Mint goals, and the app will update your progress after every transaction goes through.
And if you're in need of a serious money heart-to-heart with yourself, or if you just want to revamp your budget to squeeze more savings out of it, You Need A Budget (YNAB) might motivate you to kick-start your savings into high gear. Using the zero-based budgeting method, YNAB allocates every dollar of your budget to a job, helping you avoid lifestyle inflation like Grewal did.
Even frugal lifestyle enthusiasts like Grewal like to treat themselves. Though Grewal is strict with his salaried income, he splurges occasionally using money from his side hustle, a sustainable moving box company called California Box Rental.
"[My side hustle] is very low-capital. The inventory is paid off. I've never been cash flow negative, and that's why I went into a business where you rent things out. I saw these companies that rented out party supplies and I saw that you can basically buy all this stuff and then rent it out. [The customers] pay it off for you, and then you still have the inventory."
He splits the labor and proceeds with a business partner in California — Grewal handles the marketing and administration, while his partner delivers and stores the boxes. It's relatively hands-off, and there are definitely still slow months. But for the initial investment of $5,000 for supplies and the low, recurring cost of maintaining a website, Grewal has had a secondary stream of income to supplement his strict budget for going on five years.
"It's not a million-dollar or even $100,000-a-year business," says Grewal. "The income is just something that I can use for fun," says Grewal. "I use the money to travel and dine out and and and buy other things that I may need."
His newly published book, "Financial Fives," is another revenue stream Grewal hopes will diversify his income.
Though Grewal is now a certified financial planner, he got his start by starting small, making a few mistakes and, of course, taking full advantage of free resources along the way.
"Education is really key," says Grewal. "Just simply reading books and articles at your library can help you visualize what the money can do for you if you're smart with it."
He recommends the book, "Your Money or Your Life" by Vicki Robin, Joe Dominguez and Monique Tilford. It served as inspiration when Grewal was in his early twenties and helped him stay focused on his long-term goals.
"Also find people that you relate to," advises Grewal. "We're social creatures and social comparison works."
Instead of getting stuck trying to keep up with the Joneses, find people who you admire and listen to their money advice, the way Grewal took the advice of that dentist back in the day.
"Look at people who are doing well — maybe they have a really cool side hustle — and your competitive nature will come out and you'll be like, 'I can do that, too.'"
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