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Personal Finance > Millionaire in the Making
Living a little, but learning a lot
Rick and Victoria Woods are nearing the $1 million mark as they reach retirement age.
November 4, 2004: 2:37 PM EST
By Deshundra Jefferson, CNN/Money staff writer

NEW YORK (CNN/Money) - Rick and Victoria Woods are a match made in cyberspace.

Looking to start dating after his divorce, Rick responded to Victoria's ad on an AOL chat line. Victoria wasn't comfortable giving out her own number so Rick offered his.

"I remember thinking, he has all these degrees," Victoria says. "I am going to show him how smart I am."

Victoria was initially hesitant about dating someone who was divorced, but Rick knew this was a sure thing. Three weeks after their first date, he proposed to her.

Nine years later, the two have accumulated a net worth of $721,805 and are on track to reach $1 million before they reach retirement age.

A student of life...

"I am a perpetual student," says Rick, 52. "Actually, I am very lucky, my company has been paying for it all. They really believe in education."

Rick, a systems engineer for an aerospace company, earned his B.S. and first master's degree at West Coast University and later earned subsequent master's degrees from Azusa Pacific University and University of Southern California. He's currently working on an online MBA from Arizona State University.

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Victoria, 43, studied at Fullerton Community College for a year before leaving to pursue full-time work.

She held a string of administrative jobs since leaving college, but for the past two years she coached tennis at two local Catholic schools. Victoria took a leave of absence this season in order to spend time with her 76 year-old father, who recently lost his battle with prostate cancer.

The Woods have a comfortable income of $115,000 a year, which enabled her to care for her dad before he passed away.

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Most of their net worth is tied to their two condominiums, located within striking distance of each other in Orange County. Their primary residence is a three-bedroom, three bathroom unit which they bought for $119,000 in 1996 and is now worth $390,000 based on other properties in their subdivision.

"She is the one who talked me into buying it," Rick says. "At one point, I was like that is way too much money."

At $119,000 the condo was a steal -- and a foreclosure. Victoria found it through a broker but was initially tepid about putting in a bid until interest rates came down.

The couple also own a rental unit, which Rick bought in 1992 after his divorce, using a zero-down, no-closing cost VA loan to cover the $84,000 mortgage. They're aren't ready to part with that property, so Rick is renting it to his 25 year-old nephew and his fiancee to cover the mortgage.

"I could be a lot greedier," he says. "Right now, the California market is really tight on rentals so I could be charging more."

In early 2001, the Woodses refinanced that property, lowering their interest rate to 5.025 percent and shortening the mortgage term to 20 years. The unit is now worth about $190,000.

Their main residence was refinanced last year to a 4 percent interest rate and 15-year term. Rick and Victoria also pulled out some cash to pay off $10,000 in credit card debt and a $15,000 note for a car they recently sold.

Still, the couple has $345,550 in home equity thanks to the booming real estate market.

Rick and Victoria have a total of $201,108 in retirement with the majority of it held in Rick's 401(k) savings plan. He receives about $8,000 a year in matching funds from his company and contributes the full $13,000 plus a $3,000 catch-up contribution for workers aged 50 and older.

An avid investor in technology and science, Rick is looking to further diversify his 401(k) after losing as much as $100,000 following the tech downturn. He's regained a lot of lost ground by shifting his money from under-performing funds to his company's stock fund and an index fund.

The couple has another $195,000 stashed in cash savings, although Rick has toyed with the idea of investing some of that money in stocks. In the end, they decided to leave it be.

Living in the fast lane

Rick admits the pair splurged on their cars -- he drives a 2003 Mitsubishi Spyder and she drives a 2004 Chrysler Crossfire -- but Victoria got the dealer to shave $2,500 off the sticker price and throw in a free CD player for the Spyder.

"I never pay sticker price," says Victoria. "I try to get them to compromise between selling price and blue book."

Victoria concedes they could have done a better job negotiating that deal and says she suffered from buyer's remorse some six months afterwards.

Both say they did a better job securing a deal on the Crossfire, which they are currently leasing. The first dealership they went to wanted $5,550 down to lower the payment to what the Woods were willing to accept so they found another dealership online that offered a more favorable lease.

They owe about $20,000 for the Spyder, which lowered their net worth to $721,805, but they are willing to live with a little debt in order to enjoy themselves.

"I used to think that a car is something you get to go from point A to point B. Now I realize that there are some cars that get you there faster," Victoria laughs.  Top of page

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