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Every self-made millionaire has a different story of how they attained their wealth. While there are countless ways to build up your bank account, each approach requires focus, goals, commitment, a little luck and smart moves.
For Andrew Lokenauth, a finance expert who leverages his Wall Street background to educate his millions of followers seeking investing and personal finance advice through his newsletter, Be Fluent in Finance, he found a strategy that got him to the top. Today, he’s a successful entrepreneur who helps others increase their net worth, but he also lost a significant amount of money to financial mistakes that he estimates cost him a staggering $5 million in wealth.
“The worst part is that most were completely avoidable,” he said.
Lokenauth has impressively achieved multimillionaire status, but his path wasn’t easy — is it ever? He still has regrets, but reveals how he overcame his financial blunders and how others can avoid them in a candid interview with GOBankingRates.
Regret #1: Not Maxing Out My 401(k)
For employees with access to a 401(k), Lokenauth advises taking advantage of it and maxing it out.
“My biggest regret was not maxing out my 401(k) in my early 20s,” he said. “I was making good money — about $100,000 to $300,000 — but I only contributed enough to get the company match. I thought I was being smart by keeping cash for opportunities.”
The “rookie” mistake cost him $1 million to $1.5 million in compound growth, he estimates.
Regret #2: Pulling Out of Investments Too Soon
Lokenauth used timing to work in his favor early on, but timing wasn’t on his side later when he misread the market and pulled out a large portion of his portfolio during a downturn — his second major regret.
“It was my failed attempt at timing the market,” he said. “I was thinking I could outsmart everyone else and missed the recovery completely. The thing is, I was convinced I had special insight into market patterns.”
That move cost him around $400,000 in lost gains.
Regret #3: Letting Great Real Estate Deals Slip By
Lokenauth’s third regret is not buying certain properties when he had the chance because he thought the asking price was too high.
“That same property’s worth four times more now,” he said. “Sometimes I drive by it just to torture myself.”
Despite these costly missteps, Lokenauth made some other smart moves that paid off in a big way.
Timing Is Key When Building Wealth
In 2008, the U.S. was in the midst of the Great Recession — the economic downturn triggered by a housing crash. The following year, Lokenauth graduated. And while many would have considered that bad timing, he didn’t.
“While everyone was panicking, I was buying,” he said. “Properties in NYC were practically on sale — and looking back, those real estate investments were game-changers. Same with the stock market.”
How You Spend Your Salary Matters
Besides turning a bad economy into an opportunity, Lokenauth’s finance degree opened doors to high-paying jobs in the $100,000 to 300,000 range. But his paycheck didn’t make him rich — it was how he invested his money.
“I lived well below my means and invested aggressively,” he said. “We’re talking 50% to 70% of my income going straight into investments — S&P index funds and tech stocks.”
Boring Investments Work Best
The real wealth builder for Lokenauth was what he invested in. He called it a “boring-but-effective investment strategy.”
“I dumped money consistently into S&P 500 index funds and some tech stocks,” he said. “Nothing fancy — just steady contributions month after month. And man, those early tech investments, particularly in companies everyone uses daily, really paid off. I also got into Bitcoin relatively early.”
Lessons From Financial Mistakes
Lokenauth may have lost a lot of money along the way, but he also learned valuable lessons that helped him become a multimillionaire.
- Understand how to pay taxes. “I structured my business completely wrong in the beginning, paying way too much in self-employment taxes,” he said. “A good CPA would’ve saved me at least $100,000 over those first few years.” Now he has a full team of tax professionals — expensive but “worth every penny.”
- Don’t wait for the perfect real estate deal. “I missed countless good opportunities,” he said. “My philosophy now is simple: If the numbers make sense and the location’s solid, pull the trigger.”
- Don’t overcomplicate investments. “I spent way too much time chasing complex investment strategies when simple index funds would’ve done better,” he said. “All those hours researching individual stocks, options trading, and hot tips from investment groups… Meanwhile, my boring index fund portfolio has consistently outperformed my active trading.”
How To Avoid These Wealth-Building Mistakes
Lokenauth not only advises his clients, but regularly shares tips through his newsletter and social channels on how to sidestep investing pitfalls. Here are five methods he recommends:
- Have a tax strategy from day one. Lokenauth says he saves 35% more on taxes annually just by structuring his finances correctly. “That’s money that goes straight into investments instead of to Uncle Sam,” he said.
- Assemble your wealth-building team early. Hiring professionals like tax strategists, financial planners and attorneys is essential. “Sure, it costs $50,000+ annually now, but they’ve helped me structure deals that returned multiples of their fees,” Lokenauth explained.
- The power of boring investments can’t be overstated. There’s nothing wrong with basic index funds, and they require minimal effort. “These days I put 80% of new money into index funds and only play with 20% in more speculative investments,” Lokenauth said.
- Timing matters — but don’t wait forever. Don’t hold out for the picture-perfect deal in real estate. “I could’ve doubled my returns by starting five years earlier — just make sure you understand the risks, because overleveraging can wreck you fast,” he explained.
- Protect your assets. Lokenauth said he lost $200,000 in a lawsuit because his LLC structure wasn’t set up correctly. “Now everything’s properly separated and insured — this seems obvious, but many skip this step until it’s too late,” he said.
Becoming a self-made multimillionaire doesn’t happen overnight. For Lokenauth, the first million came after five years of savings and investing his salary. But the real wealth? That took a decade.
“That’s when compound interest and appreciation started doing the heavy lifting,” he said. “My early real estate investments doubled — then doubled again.”
In addition, his index funds grew steadily, and his early tech and Bitcoin investments paid off.
For Lokenauth, the first million was the hardest to achieve — but after that, his money started working for him.
“My investment income eventually surpassed my salary — that’s when things got interesting,” he said.
The road to millions was bumpy for Lokenauth, but small habits, like saving an extra $1,000 a month, made a huge difference over time thanks to compound interest.
“The core approach was pretty straightforward: Earn, save, invest, repeat,” he said.