NEW YORK (CNN/Money) - It's a simple savings philosophy, but Mike Rogalski hopes that discipline and "paying yourself first" will put him at millionaire status by the time he reaches his early 40s.
If his plan is fail-safe, his assets should reach $2 million by the time he is ready to retire.
"I'm estimating about 55 to 57 and if I could beat it I would," says Rogalski. "I'd be pretty happy to walk away with that."
Thirty-two years old, unmarried and without children, Rogalski currently works as a civil engineer in the U.S. Department of Defense in Jacksonville, FL where he earns $84,500 a year.
With $105,000 socked away in his government thrift savings plan, $25,000 divvied up between his checking, savings and a certificate of deposit accounts, another $33,000 invested in stocks and a variety of mutual funds, a lucrative pension and a recently purchased home valued at $245,000, Rogalski is a millionaire in the making.
Zen and the art of saving
The concept of "paying yourself first," says Rogalski, is a simple one: putting money into one of his many savings vehicles so he is forced to live below his means. He estimates that every two weeks, he pours $400 into his savings account, $450 into his mutual funds and approximately $450 into his government Thrift Savings Plan.
He says he doesn't miss this money since it is automatically withdrawn from his paycheck or checking account every month. Transferring funds electronically also makes the savings process easier since he doesn't have to worry about forgetting to write a check every month.
Being disciplined, he explains, does not mean a lack of a social life or denying himself every shopping urge. At the same time, he says that even when he got a raise, he didn't feel that it was necessary to up his lifestyle. Put simply, he just tries to keep his spending habits within reason.
"I go out, visit with friends, but I don't think I shortchange myself," he says. "I just live within the budget I give myself."
Sticking with what works
On the cusp of graduating from New Jersey Institute of Technology in Newark in 1995, Rogalski began working for the government. He spent the first eight years of his career living in New York City, before heading south to Florida. During that time, he juggled work and school before completing his masters in business administration from Pace University.
One year later he was off to Florida with his girlfriend, Christine, who he credits with supporting the decision to risk relocation.
From that experience, Rogalski realized that traditional investing methods are still the most effective means of planning for his future. At the same time, business school provided him with an awareness that he needed to strike a balance between his long-term goals and short-term flexibility.
"That was definitely a big help for me in terms of personal finance, that's for sure," he notes.
As a general rule, he keeps $25,000 in his checking and savings accounts and a nine-month certificate of deposit. He says those funds are allocated for emergency savings.
"In case something happens, I can pull it out at any time," says Rogalski.
He also opted to forgo opening up an IRA, or individual retirement account, for mutual funds instead. Again, he says, the motivation was flexibility. Right now, Mike has five mutual funds, each with a particular focus ranging from healthcare, to international small cap, to equity income to capital appreciation.
"It gives me exposure all around and keeps me pretty balanced," he says.
At the same time, Rogalski maintains his perspective on his long term goals. He maxes out his contribution to his government thrift savings plan at 15 percent, he purchases blue-chip stock every month from General Electric and JP Morgan Chase through their DRIP or dividend reinvestment plan, hoping that they will pay off down the road and he is expecting he will get a healthy pension if he stays with the Department of Defense until he retires.
Assuming he received no more raises and retired at the government's minimum retirement age of 57, his pension alone would provide him with $29,575 a year.
While it may not be a communicated element of his wealth-building strategy, knowing how to spot a deal seems to be essential for Rogalski's wealth-building strategy.
From saving a few bucks by buying stock directly from the company instead of through a broker to figuring out the best time to purchase a new car, Rogalski tries to exploit any advantage he can get.
Rogalski's home, his largest asset, is a perfect example. A little over a year ago, he plunked down $190,000 for a brand new four-bedroom, three bathroom home in St. Augustine, FL, which is located approximately 40 miles southeast of downtown Jacksonville. The only other occupant of his home, which is 10 miles from the beach, is his girlfriend.
What made this particular house so lucrative was the fact that it was on inventory, which meant that the builder needed to get rid of the property. Mike knew he was in a better position to negotiate. As a result, he estimates he got it for 10 to 15 percent below market value.
In addition, since he opted to finance the home with the builder, he did not have to pay closing costs.
Rogalski's only other major source of debt, his 2005 Acura TL, he purchased at the end of the month when he knew the dealer needed to get rid of some of his inventory.
While timing and negotiating is critical, Rogalski points out that there is a balance between saving a dollar and quality. Sometimes it is worth it to pay a little extra for something that will last.
"The best value is not so much the cheapest thing," he says. "Get something that you like that maybe has the feature you want and try to work a good deal with financing and pay it off quickly rather than get something cheap or you can't afford."
Reaching the goal
While Rogalski's current savings plan puts millionaire status well within reach, he admits that his saving abilities are helped by the fact that Florida does not have a state income tax and that the cost of living may be slightly cheaper in St. Augustine than other parts of the country, such as New Jersey where he grew up.
Even though these perks may raise an eyebrow about the legitimacy of his savings plan, he knows he can silence critics who believe he is basing his wealth on the value of his recently purchased home.
"With the plan I have I can see that without the real estate," says Rogalski, on potential investment in real estate. "At the rate I'm saving, I would hope to accumulate enough money and have little debt that I'd be able to live a pretty comfortable life."