If anyone could devise a mathematical formula for becoming a millionaire before age 40, it’s Charles Glass. The 31-year-old Howard University professor earned a Ph.D. in civil engineering from the University of Colorado, where he conducted research in the microbiological treatment of municipal, industrial, and hazardous waste. By the time he received his graduate degree in 1997, he was fully committed to using his math background to build wealth, primarily by practicing DOFE principle No. 2: to be a proactive and informed investor.
Glass learned the benefits of saving — and the danger of debt — early on. His parents’ willingness to sacrifice their savings to pay for his undergraduate education allowed him to graduate without student loan debt. Lucky for him, because he racked up more than $2,000 in credit card debt on what he says were “college expenses.”
“When I received my undergraduate degree, I had $2,000 in credit card debt at an 18% interest rate,” says Glass. “I was amazed at how the interest rates meant that I gave bankers money for free.” He paid off the debt while in graduate school, and then cut his investment teeth by opening a Putnam mutual fund and a TIAA-CREF account.
Soon after graduation, Glass landed an assistant professor position at the University of Nevada, earning $49,000. He arranged to have 10% of his salary put in his TIAA-CREF account through payroll deduction, which was matched by the university. He increased his Putnam mutual fund contribution from $200 to $500 a month, and he began placing $300 a month into a money market account to create a six to nine month cash reserve. Financial advisors recommend saving this amount in case of an unforeseen job loss.
Glass bought his first home in Reno, Nevada, after learning about the benefits of owning real estate. The purchase was a no-brainer. “You’ve got the tax write-off from the interest you pay on the mortgage, and you build equity over the time you own the home. And, if you rent the property later, you get depreciation from taxes and can create a positive cash flow from the rental,” he says.
After accepting his current job at Howard, Glass moved to Maryland, where he purchased his current home in 2000 for $183,000. His salary jumped to $95,000, and he moved to accelerate his plan to become a millionaire by opening his own environmental consultancy firm, ETEC L.L.C., in the fall of that year. He rented his Nevada home for two years before selling it in 2002 for $135,000, reaping a profit. Glass then refinanced his current home, from a 30-year loan at 7% interest to a 15-year loan at 5.25%. He controls his spending by keeping his overall expenses to $1,000 a month.
These moves have helped him build a $51,000 TIAA-CREF 403(b) account and a Vanguard mutual fund account worth $100,000. And he’s even closer to reaching his million-dollar goal. His current home has appreciated by $77,000 and is now valued at $260,000.
To achieve these impressive financial goals, Glass has stuck