New cars

401(k) millionaires Baumunk
By not having car payments, Jon Baumunk has been able to dedicate more of his salary to savings.
  • Name: Jon Baumunk, 54
  • Job: Accounting lecturer at San Diego State University
  • Savings: $1.1 million

Jon Baumunk has only bought two new cars in his entire life.

In his 20s, he relied on cheap used cars that he bought for only a few hundred dollars in cash. When he turned 31, he bought his first new car, a Honda Accord.

Today, he drives a Mercury Cougar that he purchased in 1998. It now has 188,000 miles on it.

"You have to make them last," he said. "There is more value than keeping your current car on the road than simply buying one."

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Baumunk believes in paying with cash. He's bought every car that way and paid for his house in 2001 with $225,000 of his cash savings. He's been debt-free since his 20s when he finished paying off his student loans.

Without debt to worry about, he has been able to max out his contributions to his 401(k) and other retirement plans for decades, even as his earnings fluctuated in a variety of different jobs, from an investment analyst for the state of New Jersey to an attorney.

"[Saving] is very much a learned behavior," said Baumunk, who currently teaches accounting at San Diego State University. "The younger you start, the better."

First published September 23, 2014: 6:23 PM ET