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Average earners can be millionaires too
Hai Tieu, a 35-year old teacher, has turned $60,000 a year into roughly half a million.
May 26, 2005: 3:48 PM EDT
By Steve Hargreaves, CNN/Money Staff Writer
Hai Tieu's monthly budget
How to get half a million dollars in net worth from a $60,000-a-year salary.
Mortgage and Taxes:$1,300
Gas and insurance:$200
Car payments:$0 (he paid cash)
Spending money:$200
Total expenses:$2,000
Monthly income, after taxes:$3,500
Amount left for investing:$1,500

NEW YORK (CNN/Money) - For all of you who'd like to see a "Millionaire in the Making" about someone who isn't either flipping real estate or pulling down six figures a year, meet Hai Tieu.

Tieu is a 35-year old 6th grade English and history teacher in Los Angeles making $60,000 a year. Through a combination of hard work, family, financial smarts and discipline he's now worth roughly half a million dollars.

Tieu is originally from Vietnam. His family was one of the "boat people" who fled the country after becoming disillusioned with communism.

He was eight years old at the time, living on an island off the coast of South Vietnam. After the communists took over his father, a jeweler by trade, was sent to a "reeducation camp."

"It was just brainwashing people into thinking communist ways were the best ways," said Tieu. "But we were feeling we didn't have the opportunities" there.

So his family and another combined their life savings to buy a 35-foot wooden fishing vessel, which they sailed around Cambodia and up the gulf of Thailand to Bangkok. Eight months later they were granted refugee status by the U.S. government and flew to L.A.

Tieu won a several scholarships that allowed him to graduate from California State University Los Angeles, where he became interested in education after having a work-study job in a day care center, debt free.

Following his graduation in 1993 Tieu went to work for the L.A. school system, where he's been ever since.

Yet Tieu didn't let his newfound job and regular paycheck tempt him into getting his own place in the city.

Instead, he stayed at home with his folks, paying just $300 a month in rent and socking the rest away in various mutual fund investments.

By 1997, on the cusp of the real estate explosion, he had saved enough to put down $37,000 on a $182,000 three-bedroom house in a planned development just east of Pasadena, about 30 minutes from where he teaches.

Eight years later Tieu carries a $116,000 mortgage balance on the house, which he says is now worth almost $450,000.

Shortly after closing on his home Tieu's brother moved in, paying $400 a month in rent, which certainly helped offset the cost of the $1,000-a-month mortgage and freed up more cash for fund investments.

Over the last decade or so Tieu has been diligent about setting aside a good chunk of his paycheck into index funds, splitting them between non-retirement index funds and index funds in a 403b retirement plan.

"I prefer them because they are immediately diversified," he said of the index funds, also noting that he spreads his funds around between large cap, mid cap, small cap, European funds and real estate trusts.

He's also attracted to the index funds because they charge very little in the way of fees.

When he first started investing he was paying one-and-a-half percent a year to a broker.

"That was way too much," he said. "I thought this person was looking out for me. But it turned out this person was just a sales person."

So he educated himself with various investing books and cut out on his own.

When his brother shared the house with him Tieu said he put most of his money into non-retirement funds, which now total some $100,000.

But now he lives by himself and puts most of his investment money into his 403b, some $1,400 a month, and that retirement fund now totals almost $100,000 as well.

He also picks up some extra cash by teaching summer school, and uses some of it to help put another $5,000 a year into his non-retirement accounts.

He says he could get another roommate if he wanted to save even more money, but doesn't believe the trade off would be worth it.

"I like the privacy," he said. "I like going home and just having a nice quiet place."

Tieu said with the help of his teacher's pension, which should pay about $1,500 a month if he stays with the job, he'll be able to retire by age 55.

He's also looking to diversify his investments outside of index funds. He mentioned getting into individual stocks but isn't exactly sure.

"I'm definitely not going into real estate," he said. "I don't think now is the time to buy with the inflated prices."

For millionaires in the making Mark and Lori Gorney, "Working class heroes," click here.

For millionaires in the making Edgar and Amy Hilton, "Millionaires by the book," click here.  Top of page


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