Retire at 30? Save $1 Million on a $55,000 Salary? They Did It
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Travis and AmandaThe 30-Something Retirees

Travis and Amanda Jones*, 31 and 33, Asheville, N.C.

Last year, at the ages of 30 and 32, Travis and Amanda reached the $1-million mark. Once they did, they promptly quit their jobs, bought a used SUV and drove from their home in San Francisco through Central America, all the way to Costa Rica. The husband and wife team have garnered attention by blogging about their adventures—but how did they gain entry to the millionaire’s club so quickly?

Travis worked in IT and Amanda worked as a chemical engineer, both earning approximately $100,000. While this certainly gave them a head start, it’s what they did with their earnings that made the difference: Ever since they started working, they each maxed out their IRAs and 401(k)s. Travis estimates they were investing about 25 percent of their joint income. By June 2012, after several years of maximum contributions, the couple’s portfolio had already grown to $450,000.

Travis was laid off for a few months in 2012, and while searching for another job, he found that he had time to really enjoy life. “It was during those delightfully happy months that the idea [of early retirement] grew from a seed into a blossoming flower of excited Internet research and Excel sheets,” he says.

The couple began reading blogs for inspiration, and a favorite, Mr. Money Mustache, “gave us the basic education needed to hustle toward the goal of early retirement,” Travis says. “Before we knew it, we were saving money like crazy.”

The couple did things like consolidate their collection of IRA and 401(k) investments into Vanguard funds, which helped them “immediately start saving money with the more efficient and lower-cost funds,” Travis says. “We also started paying attention to how we’re spending our money, and finding ways to make our lives more efficient and less wasteful.”

For instance, they saved energy at home by giving up the air conditioner, using the furnace only sparingly in winter and drying clothes outside. They cut their grocery bill by shopping in bulk, used bicycles instead of cars for errands and cut back on dining out from a couple times a week to only rare special occasions.

That allowed Travis and Amanda to save between 50 to 65 percent of their income between 2012 and 2015, and tipped them over the million-dollar mark in March 2015.

To make their portfolio last, the couple religiously track their expenses. “At the end of each month, we check our portfolio balance and calculate what the 3-percent budget will be for the next month,” Travis says. “This method of budgeting is even more conservative than the 4-percent ‘Safe Withdrawal Rate’ that’s recommended. Whenever the market drops, we immediately tighten our belt to reduce over-consumption.”

After a year of traveling through Mexico and Central America, they’ve recently settled down in Asheville, N.C.—a less-expensive city than San Francisco—and are in the process of buying a home. While they have no plans to return to work, they are considering occasionally hosting Airbnb guests for easy income.

Their advice for others: For Travis and Amanda, straightforward investing completely changed their lifestyle. “Thanks to index funds, investing is now extremely simple,” Travis says. “There’s no need to hand-pick stocks. If anyone is intimidated by the stock market, they should be afraid no more.”

In addition to contributing liberally to a diversified retirement fund, Travis recommends “living simply and focusing on low-cost things that truly increase happiness, [such as] family, friends, helping others, eating healthy, exercising regularly and continuing to learn new things each day.”

For those who are working toward early retirement, he advises working hard to advance your career as quickly as possible, and moving to a less-expensive city if it makes sense.

May 11, 2016

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