Building wealth is usually a slow and steady process—more of a marathon than a sprint. But as these extreme savers prove, it’s not impossible to cross the finish line early.
Their techniques may require more discipline than you can muster, but many of their habits—like living below your means, steering clear of debt and investing regularly—are easy to emulate.
Jeremy Jacobson, 42, location-independent retiree, currently traveling in Asia
“Most 30-somethings are still building up their retirement funds, not getting ready to cash them in. But that’s exactly what I was doing four years ago.
I got fired up about early retirement after spending six years paying off $40,000 of student debt. The experience left me exhausted and disenchanted with the traditional vision of the American dream—graduate, work till 65, retire.
Instead, I ruthlessly cut costs—selling my house and motorcycle, swapping my car for a bicycle and moving to a cheaper place with roommates in Seattle. My expenses went way down, and my savings shot up to more than $5,000 per month. In 2004, I met my wife, Winnie, who was on board with my frugal ways. Together, we began funneling our savings into index funds.
By 2010, we were saving roughly 90 percent of our $135,000 income, and living off the interest and dividend income from our investments. That gave Winnie the freedom to leave her program manager job. With seven figures in the bank—and plans to spend less than 4 percent per year—I retired from my job as a hardware architect three years later.
I earn some income from my blog and Winnie just published a book, but neither of us works a traditional job anymore. We’re now full-time parents to our almost 2-year-old son Julian and embrace a minimalist lifestyle—and we’re traveling the world in the process. We’ll see where the journey takes us.”
Matt, 43, and Misti DeMargel 40, a marketing specialist and nurse in Houston, Texas
“My wife Misti and I saved well over half of our net income last year, which landed in the low $100,000s, by living below our means, investing in index funds and staying out of debt (aside from our mortgage). We also have a six-month emergency fund and routinely top off both our Roth IRAs and my 401(k).
Our family opts for Netflix over cable and a free library card over new books and movies. We also have cheap Wi-Fi calling plans instead of expensive family bundles. And we’re proud couponers, always on the hunt for a good deal on food.
Another huge money-saver for us is sharing one family car, a 12-year-old Dodge Neon. (I ride my bike almost everywhere.) Our family vacations are usually road trips, Misti cuts our hair to save on salon bills and we rarely buy new clothes.
We’re big-time budget nerds, and I wouldn’t have it any other way. Once our home is paid off, we plan on maxing out Misti’s 403(b) and saving in a 529 plan for our 9-year-old’s college education. Funding a health savings account is also on our list.”
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