How I Saved $150,000 By 26
Sean Potter
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Last year, I logged into my checking account, 401(k) and brokerage accounts, and realized something startling: By 25, I had managed to save a total of $100,000. Now, 11 months later, I’ve nearly hit $150,000.

Seeing that much in my account was shocking. I’d worked for it, but I certainly wasn’t raised with money like that. I grew up firmly cemented in middle-class Texas with parents who worked average jobs with long hours—and instilled the same work ethic in me.

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In elementary school, I remember saving my $3 weekly chore money rather than spending it. And I always found ways to earn a few extra bucks, like running lemonade and soda stands, as well as a baseball card trading business (though it only netted $29 in profit). But my first “real” job was digging ditches during those scorching Texas summers when I was 15.

Around that time, I learned that my grandfather, one of the cheapest guys I ever knew, was a millionaire. This was a guy who drove a 15-year-old beater, changed his own oil, drank the cheapest beer and was the sole provider for five kids. He never made more than a low five-figure, blue-collar salary, but he put his earnings in the stock market—and wound up with $1.2 million in investments by age 60.

This was my eureka moment. If Grandpa could do it, anyone could save their way to wealth.

I was inspired to kick my own savings into high gear. In 2006, at 16, I started a “retirement account,” where I contributed my life’s savings: $500 from odd jobs and working construction. I use quotes because it was just a savings account at first. But after much deliberation—and reminding myself of how my grandpa amassed his million—I asked my parents to open a brokerage account in my name, and I took the plunge. I continued contributing to this account through high school, just a few hundred dollars at a time.

Watching the market plummet during the 2007-2008 financial crisis didn’t help my nerves. Everywhere I looked, the talking heads on TV warned the end of the world was near. But I never stopped investing or withdrew a penny. In fact, I put aside as much as a few thousand a year—money I’d earned from summer construction jobs. Finally, the market rebounded—and my portfolio grew significantly. By 2013, my modest, periodic contributions had turned into $25,000. It was a powerful lesson to trust in buying low.

When I graduated college in 2013, I was offered an entry level job in finance, making around $50,000. Even though I was earning more money than ever before, I hardly changed a thing about my lifestyle, so I was able to invest about $15,000. I had been happy with almost no money in college—so, I thought, what difference would a few high-priced additions make to my life?

I still went out when invited, went on dates and bought dinners. I even took vacations. But I kept my old car—so I had no car payment—passed on the trendy downtown apartment in favor of a place 20 minutes away, saving over $500 per month in rent, and gave serious thought before parting with any of my hard-earned dollars. I also went without cable and signed up for the cheapest Internet package. My life wasn’t any worse than my friends who went down the opposite path, and I got the satisfaction of watching my account balances significantly increase. (If you’ve never experienced your own compound interest snowball rolling down a mountain, you’re missing out on one of the most prosperous and liberating feelings I know.)

Three years into my career, I’ve been fortunate to receive a couple promotions and am now making $70,000. I could have treated each raise like I’d won the lottery, upgrading my lifestyle and negating the increase entirely. Instead, I’ve stayed the course. I’ve pocketed the raises and bumped up my automatic contributions to my 401(k) and brokerage account—banking anywhere from $20,000 to $30,000 a year, plus my employer’s 401(k) match.

Today, I save around $35,000 each year—more than 60 percent of my after-tax salary—and my net worth has risen more in the past nine months than in the previous nine years, thanks to increased contributions and the powerful effects of compound interest. Barring a collapse of the free world, based on my average returns to date and my current rate of savings, I figure I can either work a standard career and retire with several million, or take an early exit from the rat race around age 40 with nearly $1 million—free to live life in whatever way I please.

And that’s exactly what my whole savings strategy is all about. As my returns multiply, so does my freedom.

* Sean’s details have been verified, but his name has been changed at his request to protect his privacy.

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23 comments

    Retire at 40 with $1 million? If you live to 80 you will have to make that work at $68 per day….this is sans inflation. Am I missing something? I do love your tenacity on saving on a side note! I wish I could do it 😉

    Yeah Christina you need to look into mutual funds and compound interest. You could very reasonably expect 7-10% per year returns. so 7% of 1 Million is like 70,000. and he is already living off much less than that. So he could practically live off the interest as they say. I read a book one time called The Automatic Millionaire and I was suspicious b/c it sounded too good to be true but I did the math and the author was right in their calculations. The gist was to invest in mutual funds and let the money be automatically deducted from your paycheck pretax into your retirement account.

    Even 68$ a day thats a little less than a thousand a week and doing nothing to get that money. On top of that his money will still be earning some in his retirement throughout the rest of his life. Ontop of all this he his living a basic (financially) life so its not like he needs thousands a week to stay afloat. It is very doable if it is just him. And even more doable if he has a partner.

    You missed that his million will continue to grow and earn if he keeps it invested. For example, a 5% gain on his million dollar principle is $50k a year or an average annual salary. He could live on the investment or interest gain alone. Hope that helps.

    Very encouraging story. I have looked for legitimate work from home jobs to add to retirement but only find scams. Can you guide me in this search?
    PS. What can you tell me about N2 Publications?

    Look into Appen and Leapforce for PT work from home jobs that aren’t scams. Or goggle social media and web Search Evaluator jobs. Good luck!

    Shocked that you can put away $20-$30K a year on a $70K income, when taxes are commonly that amount. Wouldn’t leave much besides after taxes and savings ($10-$30K for all expenses and discretionary, or $830-$2,500 a month). This would be challenging to impossible in a city with a high cost of living. I admire your spirit and persistence in any case.

    This is pretty inspiring, despite having a big expense coming up (my wedding!) I hope to keep saving the same amount I am currently saving but putting it into the 401(k) at my job and also some stock options of my own. I do use Acorns right now with recurring investments, it is a great service to get your feet wet in the stock world. Retiring at 40 with 1 mil sounds nice (with living off the interest), a lot more than most people have at 60 these days.

    Sean, I love your story. I can identify with much of it. However, compound interest exists for savings/ money market accounts only. With stocks, mutual funds, etc., there is a risk of depreciation. While your fortunate timing of income inflows and early investing have obviously turned out well according to your words. Imagine you wrote this in 2007-8. Not everyone understands the markets; this article could lead to a lot of angry people soon, including yourself.

    Investing in the market includes risk. But ultimately that is the best investment strategy. Compound interest most definitely exists in the stock market, not only in savings accounts (a poor way to invest). I dont know which people would currently be upset if he had written this in 2007-2008, given that the markets are all up from back then.

    Easily done when you make 2 times average income. I’m doing all that and scraping by. I could teach you. $70k a year, I’d have $40k In The bank a year with a family of 8 and mortage. But you’re doing good, for a rookie.

    That’s what a broke 40 year old would ask. I agree there needs to be living, but the whole YOLO attitude is why my roommate will be working as a walmart greeter at 60 and Ill be travelling the world.

    Sorry but not buying this story. From 2008 to 2013 you managed to save up $25,000. That amounts to saving roughly $416/month … EVERY month without fail. You say you had a meager income working odd jobs in construction? How could you possibly save $416/month EVERY month for five years straight? You got an entry job in finance starting at $50K? While entry jobs in this field start more around $40K/year, I still don’t think you managed to save what you claim, even if you lived ‘cheap’. How about bills? Education to name one. How about ordinary living expenses: electricity, car insurance, gas, food, etc.? While I am not disputing that are probably saving money, I believe you have inflated the numbers a bit.

    He stated that the savings of $20k-$30k per year were spread between his bank account, brokerage account and 401k. For anyone under 50, which he is, the contribution limit right now is $18k annually. Assuming he’s maxing that out first, which he should because it’s pre-tax savings, that leaves him contributing anywhere between $2k and $12k of additional money towards conventional savings and brokerage accounts.

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