Retire at 38? Pay Off $200K of Debt? Extreme Savers Share Their Secrets
Marianne Hayes
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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, Winnie & Julian“I retired in my 30s—without a windfall of cash.”

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 DeMargel and family“We saved more than 70 percent of our income last year.”

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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57 comments

    Cool story, but all of these cost-cutting measures are already a way of life for the rest of us who aren’t doctors and lawyers. How about an article about how to do something similar on minimum wage?

    Great comment, 32square! THAT would be a MUST-READ article. And its not to take away from the achievements of those who have gone down this path, but an additional article for the other tax bracket would be helpful.

    I agree with you 32square… I was with it until they start talking about living off of 4% and under their means.. I have 3 boys and two of them are teenagers… this is definitely not going to work for me.. everything that sounds good ain’t good🤦🏽‍♀️

    I was thinking the same thing!! 😀 I can easily live within my means if I earned $100, 000. I would like to see them live within my means… $1350/mo (fixed income)..,. which is what I am doing! 😀

    I’m sure you have a passion for something in this beautiful world, anything these days can be monetized. If $1350/month isn’t enough then go out and make more. It’s really that simple.

    I’m a doctor and this article doesn’t apply to me. The average doctor in the US graduates from medical school with >$250k in student loan debt, which then accrues interest while we make less than minimum wage for 3-7 years of residency. Like me, most of my friends are young doctors with families who are barely making it paycheck to paycheck while working 400+ hours a month. Sure we have decent earning potential, but most of us don’t get our first real paycheck until well into our mid-30s… just in time to start paying back the student loans. Just food for thought…

    Look for a book called Ramen to Riches by James G. Wood. Great financial education tool and a way to build good fiscal habits on a tiny salary.

    I agree to save 5 k per month a person with everyday bills and food needs to make 10k per month Congrats to him but that’s not reality for most people..

    I agree with 32square. I wish they’d even give an example of a minority who graduated college with a debt load that they paid off while living at or below means based on their education who was able to become a millionaire the disciplined way and not by a fluke like lottery or wealthy parents. That would be a must read. Let’s see if they’ll find and write about that… I’ll wait.

    I agree. I don’t make six figures so this doesn’t help me. Please include articles that the average person can relate to, and by average I mean people who make $30,000-50,000 a year. I know people that have their PhD who fit this bracket so please write for us hard working everyday people.

    Upvote! Seriously I read these things and talk to people who brag about having so much money and owning companies, but if it wasn’t for them being born into money they would of never been able to buy a single one. There isn’t loans for the lower or middle classes to begin financial independence. The system is set up to keep the rich, wealthy and the poor hustling to make ends meet. I can’t even imagine what I would do with $100,000 a year, I make $40k and that’s with a 4 year degree.

    @ Leo I use to think this way. You have to set goals for yourself and the amount of money you want to make. It may not happen over night but you can get there. I started at my job 10 yrs at 40k it took 6 years to get to 60k and now I am at 115k. When I was between 40-50 I could not even imagine making more but I knew I had to figure it out. I did not want to continue to struggle as a single mom. So I looked at which position would give me the income and a good work-life balance. The position I wanted seemed impossible to get because people only left them when they retired. You earn six figures and work from home. Success is not just for the wealthy it is for anyone that is willing to set a goal and work hard to accomplish it. I know many that started out with nothing. Please read the Mind of a Millionaire or the Millionaire next door. You will find most millionaires are not who you think they are and do not come from money.

    One thing I learned is whatever you make is never enough lol. You always need more money!

    I couldn’t agree more. Both of those books should be mandatory reading in high schools. My parents have nothing, so I certainly didn’t get any help there, but yet it never held me back. Hard work, insane hours, many sacrifices, saving every penny, learning how to use the tax system, making wise choices, and not being afraid to take a well thought​ out gamble will all pay off. The harsh reality is that it’s not for everyone though. If you want it bad enough, you’ll leave your comfort zone and make it happen.

    Seriously. Must be nice to be able to put $100k in the bank every year. If I could do that, I’d be doing that already. Of course you’re going to achieve independence that way. Not so much when it might take you 3 years or more to even make $100k.

    I agree with 32square. This is not realistic for most people. The examples you used were people who made $50-100k per year. This is insulting and depressing to those of us who have average or lower incomes. A lot of people are barely scraping by as it is and have already cut out damn near every luxury they can. This article makes me very angry.

    32 Square is right this is no where similar to us “lower class” need to see and read one from a successful person that has really started from the bottom !! 💯

    These are stories for those who actually made a high income. What about us, who make 20 to 40 thousand a year. There’s no way!

    Yep, I agree with everyone here. This is super unhelpful for people with expenses like student loans, child support, health issues, etc. Not everyone is a super healthy, debt-free high earner with a bikeable commute, only one child and a double income…

    Here is an article on retiring at 45 with minimum wage, its called: FORGET ABOUT IT. Its from a source called superobvious.com you should check it out. All sarcasm a side lets talk about why your request is ridiculous.

    1. This article is about retiring before 65. That implies that the person had to do something above average to retire before the average age. Either they got crazy returns from them market (unlikely considering this is a link form acorns, a pseudo-mutual fund that replicates index fund returns) or they put a larger than normal amount of money into retirement funds (401 k, index funds, mutual funds etc).

    2. Lets do some math, lets say (because of changing policies) minimum wage is $15 (40 hours a week and no taxes) and you invested in acorns and got index like returns at 5-7% yearly, lets go 7 here to reach an upper threshold. If you contributed your ENTIRE paycheck every year it would take you 20 years to reach 1.5 million. Remember this is at 15 dollar minimum wage, with high yearly return AND investing your entire salary (before taxes).

    3. If you have a lifestyle similar to them that’s part one, now to find a lucrative job. This is the light at the end of the tunnel because if you work a job you love and is at the lower end of your potential earning, who cares about retiring early, youve got it all already or you get a high paying job you hate and then you get to retire earlier. Either way you win, you just need to have realistic expectations for the amount of money you are contributing.

    I know this started harsh, but its because I use to be just like you (23 and making 32,000 a year), and I was always looking for the quickest way to retire. I didnt realize that was actually prolonging my working years. Instead of trying to” beat the market” I now try to ride it via index funds and just save as much as possible. Dont get distracted by the “too good to be true returns” put your head down, and contribute to your index funds. Before you know it we will be clinking glasses together on a beach toasting to our early retirement!

    thanks for breaking that down, i hope the writers of Acorns see this so in the future they can give us more realistic goals

    Gero – you are a TRIP. I laughed out loud (LITERALLY) after reading your first sentence. I loved your take on all this. I wish i could sit down with you and have lunch/dinner with you and pick your brain! You make sense to me!!

    I agree. This just isn’t realistic for the vast majority of people. The takeaway I get from this is if you have a six figure income, stop living life for ten years, then live as if you were scraping by or unaccountable to anyone but yourself for the rest of it. I’m a single dad raising three kids on less than any of the individuals in the article. This is just not going to happen in the American status quo.

    Take what you may from any read of sucess. I do agree, much easier for people that have 6 figure incomes to do this in such short time.
    But, what is see is…
    Index funds: ? What are they, and how do they work for me?
    Roth IRA, 401k, look into starting both by using a tax return, ir other large money income.
    Low mobile plan and wifi,, coupon,
    Many usefull tips, but see what you will.
    Sucess isn’t a measure of income or money, sucess is measued by how you work to improve yourself everyday.

    These stories are insulting to hard working families, where living off 4 percent of you income is a non starter. “If you save you’ll be rich” Just another “all you have to Do is” story designed to make hard working people feel inadequate.

    @32SQUARE great point!

    I have clients who spend $50-$60K (AFTER TAX) vacations a year! E.G. Salaries of $200,000-$300,000 combined spousal income.

    I routinely tell people if you make >$60,000 USD income per year you’re in the TOP 1% of the world!!!

    People have lost their minds (reporters/media) better wake up to the fact that MOST Americans (i.e. the world) are 1to2 maybe 3 paychecks away from destitute homelessness & bankruptcy! #REALITYcheck

    Sure we can ALL find ways to save, GIVEN you have $100k in your checking, no mortgage, maxing out (2) 401k’s, etc…of course you can live off of 4% ($1M) & thumb your nose at the rest of us plebeians SMH!!! I’m not anti-wealth by any means we ALL desire the American-Dream, yet, we need to remember the rest of humanity outside the bubble…

    I agree with all of the above, What about an article for us folks who are not in the “3 figure” earnings bracket, work 2 jobs just to pay the rent and eat.

    I think you guys are looking at this wrong: Think this is proof it can be done early, do not look at this article and say they make more I cant do it. The more extreme you earn, save or spend will directly affect the when of retirement. So rather than seeing 6 figure salary can retire in 10 years, you should be seeing 5 figures can retire in 15 or 20! Sure as heck better than 30-40 years! This article should be enshrined and passed to every person over the age of 18.

    Also, index funds are funds that “mirror ” an index and therefore its returns. For instance, the famous S&P Vanguard fund mirrors the S and P and should therefore have a return roughly equal to the corresponding index.

    Yeap , I read all the comments & these are all good points made. Also I did read the article you listed, but If I remember correctly the couple on that article didn’t have children. I on the other hand have 5 kids ages 2- college students ( with minimum wage part time jobs ) 1- pre teen & 2- toddlers. My annual salary 57K single parent / living in NYC were the rents are a super expensive, trying to keep this family off the streets. We all do what we can and listen /read on tips on how to save money for retirement & college. Clipping coupons, buying only on sale items & only when needed. Sometimes cutting expenses is more easy to say than done. But Im taking notes 🙂

    @32square and everyone else!
    Well please do not try to save being in your income when you cannot. Well try to grow by becoming like them and there is only one way to better job and better pay. No shortcuts. EDUCATION !

    To those who are making less money in a lower tax bracket. I understand better than most the issues you face. I used to have 2 and 3 jobs at minimum wage to make ends meet. I would suggest talking to a counselor at a local university or community college to work on your resume and apply for jobs you normally would think are above you to earn more money. Also look at taking classes, even if it’s only 1 a semester. There are tons of grants, scholarships and financial aid programs available to better yourselves. This will be a hard path but worth it if you stick with it. This will also show your kids what hard work looks like and how they can better themselves. You don’t need to be the smartest person in the world to get a good job; you do have to be motivated and determined though.

    Hopefully, dealing with budgeting issues pisses people off enough to learn how the Federal Reserve Bank has sucked the value out of what few dollars we poor folks are lucky enough to get our paws on. Until we have a stable economic unit to trade with, we’re all hopeless debt slaves.

    I think it’s important to see these articles as idea generators, not magic solutions.

    My family makes comfortable money, but daycare and student loans eat a significant amount of our income. Coupons and rebate sites cut my grocery bills by about 15%. And with a background in marketing I’ve offered small business consultations as barter for kids activities, even for organic meat from a farm. I’m shameless in looking for a deal. And while my kids clothes are name brand, I buy off season and sell to consignment. And that money goes to my kids savings.

    Think of ideas, not magic solutions. 🙂

    Wow, it never fails to amaze me how Americans will spit in the face of free advice. Anyone who focused on the salaries and or jobs of the articles subject focused on the wrong thing. The emphasis is on cutting back wherever you can and using the simplest strategy, starting as early as possible. Regardless of race, color, creed or job title, you need this to retire:

    Time (can’t get this back once it’s gone)
    Money (find a way to make more if you want to accelerate)
    DISCIPLINE
    Tax Advantaged Savings
    Rate of return

    I’m already saving, man. But when you only make a k or two a month, you’re never going to have money. It’s not that easy for everyone to just “find a way to make more.”

    It is good to read examples of financial discipline leading to early independence from paid employment but I hope these people find a real calling in life – something that helps others or the planet, instead of just drifting around the world writing a blog. What a vapid self-indulgent thing to do with freedom!
    I also agree it’d be nice to have a few more articles aimed at people with incomes withing $25k of the national median wage. Not everyone earns >$100k and can easily stash away $1.5M by 38.

    Depends on where you live….. In Los Angeles, I have my own business and am apparently in the upper middle class according to some people’s standards. But I have debt and a grad school loan, car payment, rent is $1450, etc. Also investing in a business is costly. Utilities, car insurance, health insurance, living alone, etc. It’s surprising how much I need to pay all of my bills (I do pay a business coach $500/month, but again, that’s an investment). So while it would be awesome to be some extreme saver, it’s hard to save an extreme amount when the cost of living is rather high here. And yes, I guess I could get a roommate, but at 36, going on 37, renting a small house with a separate room as a studio/office is worth the extra rent I guess. Just scale up my business and make more money is the solution. Or cohabitate, but I don’t believe in doing that to save money.

    If you had children, that’s your choice. If you entered a low-paying career path, you chose that. High cost of living area? Another choice. Chose to get married to a partner who doesn’t share your financial goals, chose to get divorced, chose to go into student debt to study a field that doesn’t pay well enough.

    The key takeaways from this article should be that, regardless of income, your choices play a major role in whether or not you can retire early. If you’re going to make poor financial choices like “I don’t believe in cohabitating to save money” or “I want to live in NYC despite a low paying job” or “I didn’t like school so I didn’t study hard” — you are prioritizing those choices over early retirement. The people who have retired early were willing to make sacrifices that you are not willing to make, so of course you won’t get the same benefits they do. Frankly, if you’re not willing to make those sacrifices, you don’t deserve to retire early without putting in the work.

    Do you really assume, Jamal, that everyone chooses a low-paying career path? Some people do because they like the work. Others do because they have no choice. Others simply cannot find decent work despite earning a degree. It’s frankly nonsense to pretend that all of those things are realistic choices that people make. It’s not like people CHOOSE to be low-wage, or go through a divorce. So then why is there such school debt for fields that don’t pay well enough?

    I don’t think you really know what sacrifices are.

    This is the only wise comment i read for this article so far. I share your point of view and I agree that life’s outcomes are directly related to our own choices. Good points indeed and very well explained. Cheers

    Hi. To everyone taking about education. Did you notice the doctor whoo replied to this post?

    Personally speaking, you can get a master’s degree and still not be making enough to pay your student loans. I scrape every dollar, coupon, cent. Sometimes I still can’t pay the rent.

    The misconception is cute. The educate yourself and earn more thing, it’s cute. Basic econ classes show that minimum wage rises and much slower than cost of living. Common sense means that someone has to have a menial job or the country will stop working. There aren’t enough jobs that pay over minimum for EVERYONE to have a decent job. The problem is the policies and greed. Think about it. And stop patronizing people.

    Sincerely,
    Mother of two with a college education who sees her kids 6 days per month while earning 40 k a year, a luxurious wage.

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