A 32-year-old college dropout reached millionaire status by sticking to 4 uncomplicated money rules (2024)

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• At 32, Paul Rawson has achieved millionaire status thanks to smart saving and investing strategies.
• He works hard to earn a high salary and saves a large portion of it in his 401(k) and his Roth IRA.
• He also eschews bad debt, like credit-card debt, and doesn't stick to a strict budget.
• Read more stories from Personal Finance Insider.

Paul Rawson isn't your typical millionaire. He has a roommate, never finished college, and works long hours as an employee for somebody else. But he is one — with a net worth tipping the scales at $1.6 million, this 32-year-old (who is the author's brother) has achieved a high net worth.

He's long been obsessed with computers — from building his own machines inside ancient record players to outmaneuvering his school's administrative controls, his interest in tech and its languages has propelled him along a career path that started with fixing his family's PCs. Now an employee at an aerospace firm, he lives frugally and makes more than six figures a year pursuing his passion.

But how did he reach millionaire status? His financial records show it's a combination of things: investment choices, smart savings strategies, and a sensible approach to budgeting, debt, and managing returns.

1. Invest early, invest often

Rawson's journey started like a lot of people's: with a low-paying job in customer service. Except instead of flipping burgers, he was rebooting computers, and instead of fryer burns, he received the occasional electric shock.

But even as a minimum-wage worker, he had one idea in mind: invest. It was a lesson that followed him to his next job, where his employer offered a generous 401(k) match, and one he continues to this day, where his firm rewards its high-performing employees with stock grants.

Invest early, Rawson says, and invest often. The younger you are, the better; you can assume a lot more risk in your 20s and 30s than you can later in life, when you won't have the time to recover from any dips in the stock market.

Rawson's investments vary: He owns three properties in California, purchased a handy amount of Tesla stock when its shares dipped because of controversy, and divvies up his stocks among a tech index fund (40%), a small-cap fund (40%), and whatever he likes (a full 20%). He prefers to use Fidelity and recommends index funds as low-cost, low-risk investments for those who aren't heavily educated about the stock market.

As a result of his investments, including his retirement accounts, he's sitting on a pretty hefty amount of money: $328,000 between his 401(k) and his Roth IRA, $360,000 in employer stock grants, and $275,200 in personal investments.

His property investments have also paid off. Though he splits two of his properties with others, his property shares in California ring in at $654,500.

2. Productive debt is good

Though many balk at the idea of holding any debt, Rawson uses it to his advantage. In 2014, he took out a loan against his 401(k) to purchase an investment property — something many experts advise against because it means you'll miss out on tax-advantaged growth. At the time, however, the stock market wasn't growing quickly, so he used that money to split the purchase of a rental home with a partner.

Since 2014, his portion of the home's value has more than doubled, to $165,000 from $63,500. And though he still owes $44,500 on his home loan, his rental is cash-positive. Each month his tenants pay $700: $367 goes to the mortgage and the rest to a savings account.

Productive is the key here. Like others, Rawson strongly recommends avoiding credit-card debt. Those high-interest loans eat away at your income with rates as high as 25%.

3. Don't budget

It sounds weird, but it works for Rawson. For him, the idea of a budget encourages spending right up until you've reached your monthly allowance. Much like a school ensuring it's spent every penny it's been granted in order to receive future funding, a budget clearly delineates how much you can spend, not how much you should. Rawson isn't naturally spendy, so not having a budget doesn't mean he goes wild.

He buys only what he really needs, such as necessities, food, utilities, and cellphone service. Anything else is the exception, not the rule.

This doesn't mean he doesn't have fun; he enjoys going out with friends and on trips just like anyone else. He simply avoids budgeting his discretionary spending so that it's occasional instead of expected.

4. Work hard

His company is known for its high turnover and grueling work hours. With a scrappy startup mentality, it expects the best from its employees — but it rewards them heavily for it. Since arriving at the company a year and a half ago, Rawson has been promoted three times and received more than $350,000 in bonuses. He works hard, and it pays off. And at 32, he's not quite ready to retire. His job, after all, is his passion.

But with his financial future secure, he is considering reducing his work hours — to "whenever I feel like it" — as long as his employer is game.