A 31-year-old self-made millionaire shares his investing and savings secrets of how he started with only $5000 and turned it into seven figures within seven years, as well as what can be learned from his mistakes.
Danny Baldus-Strauss, now 31, started investing while he was in college. He studied finance and entrepreneurship at the University of Wisconsin-Madison. It wasn’t until he got out of college that he started investing.
“When I graduated college, I had about $5,000 in savings and $50,000 worth of student loans,” Danny says. “So I didn’t really have much capital.”
Danny didn’t start saving and investing until he landed a full-time job at IBM selling IT equipment.
However, Danny managed to pull off some high earnings with his sales commissions at IBM, making up $200,000 to $350,000 at his peak. He confesses he made a lot of money in his 20s. Between the years 2013 and 2020, he managed to save and invest most of his income.
“Throughout my 20s, I was saving 80%, sometimes even 90%, of my income,” Danny says, noting that his work required constant travel.
“I was barely spending anything because I was getting per diem on the road, so I didn’t need to get groceries,” Danny said. “And I never really ponied up for big rent.”
Danny is the first to admit that luck played a role in building a seven-figure portfolio within seven years. However, he also points out that he had positioned himself to receive some luck. It reinforces the old adage: “The harder you work, the luckier you get.”
“I was investing in a very long bull market that continued for that core piece of my career,” Danny said. “At a young age, I focused on getting as much money into the market.”
Danny also adhered to a strict savings regimen. Despite getting raises, he stuck to his savings plan.
“Every couple of years I would get a promotion that would bring my income up a lot,” Danny said, noting his commissions increased each year as he improved at sales with experience. “I never spent more money than I did in 2013. My lifestyle didn’t really change.”
Danny says after reaching seven figures of net worth from his seven years of investing from 2013-2020, he fell below millionaire status in March 2020 when the stock market had a crash triggered by the pandemic and a mini-recession. Danny made the mistake of not diversifying his portfolio.
“I dipped well under a million because I had almost all of my money in the stock market,” Danny states.
However, after realignment, two and one-half years later Danny’s portfolio has recovered and he’s currently worth $2.5 million today, according to Business Insider.
With the US seemingly on the doorstep of a recession, the lesson investors can take away here is to reduce spending, focus on savings, and diversify your portfolio. Look for the best inflation- and recession-proof investments.