Saving

My wife and I retired in our 30s with $900,000, thanks to 4 money moves

Steve Adcock shares the financial rules he and his wife followed to save, invest, and pay down debt to be able to retire early in his 30s with nearly $1 million.

Steve and Courtney Adcock on one of their post-retirement travels.
Courtesy Steve Adcock

At the age of 35, I quit my full-time job in information technology and set off with my wife, a genuine rocket scientist, and our two dogs, to travel around the country in an RV. Our dream had been to save up enough money to quit corporate America and hit the road. In 2017, we sold our homes in Tucson, Arizona, and made that happen. 

At the time, we had a little less than $900,000, but four years later, thanks in part to the power of investing, we are hovering at just over a million. Everyone's financial path is different. But these are the money habits that helped us accomplish our biggest goals and could help you reach yours too.

We put our money to work for us 

When I think about building wealth, it helps me to see it as an equation: Wealth = Income + Investments - Lifestyle. Nobody ever got rich just by saving money. That may sound counterintuitive, but saving is only a piece of the puzzle. Wealth grows when we put our money to work for us, buying assets, like a share of stock, a piece of property, or even a business investment, that appreciates or increases in value over time.

So a big portion of our wealth is invested. Because we are younger, we've taken a less conservative approach to our investments. This means we have more stocks than bonds. Nearly a fourth of our investments are in a shorter-term Vanguard brokerage account that we set up and funded when we both worked. Another fourth is in long-term retirement accounts like 401(k)s and IRAs.

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The rest we keep in a high-yield savings account, which serves as our emergency fund

If you are in a position to utilize a company-sponsored retirement account, I recommend doing so, especially if your employer will match a percentage of your contributions. If you are self-employed, there are several options you can pursue to stay current with your retirement savings, like a SEP IRA or Roth IRA.

The earlier that you begin investing, the more money you stand to earn. And it's never too late to start.

We made saving and investing automatic

When my wife and I signed up for our company-sponsored 401(k) and IRA plans, we opted to contribute automatically through payroll deductions. Once we set this up, we never had to lift a finger and, for nearly 14 years on the job, that automation helped us slowly build up over $800,000 between us in our investment accounts.

We've used automation for nearly everything. We funded our long-term retirement accounts, shorter-term brokerage accounts, our savings account, and paid off our credit cards, every month, by putting everything on autopilot.

When I think about building wealth, it helps me to see it as an equation: Wealth = Income + Investments - Lifestyle.
Steve Adcock
Early retiree

Setting up an automatic monthly transfer to our emergency fund has helped us build up three years of living expenses.

Most banks that maintain an online portal offer customers the ability to easily set up automatic payments and transfers of money. By making your savings and investment habits automatic, you remove the need for any kind of self-discipline. Just set it and forget it. 

We downsized and minimized expenses

Before my wife and I met, I spent a significant portion of my $100,000-a-year salary on what I thought was the "American Dream," on things that signified wealth, like a nice house in a suburb and a Corvette sports car. But when we got married and shared what we really wanted out of life, especially leaving our corporate jobs, we decided to get serious about saving money to make that happen. 

We did a lot of personal inventory and closely inspected our bank and credit card statements to fully understand every expense. And we started to scale back, starting with selling that car.

We opted for smaller cuts, too. We ditched cable television and budgeted only $50 a month for dining out. We tracked our spending meticulously, so much so that at one point my wife could tell you how much we spent on sweet potatoes during the course of the year. 

We married in 2014, and by 2016, we had transformed our lifestyle significantly. We went from spending around $65,000 a year down to about $40,000.
Steve Adcock
Early retiree

We discussed every purchase. Both my wife and I had to agree that the expense was worth the money before we bought anything, especially from Amazon or a department store.

All those small shifts made a difference.  We married in 2014 and by 2016 we had transformed our lifestyle significantly. We went from spending around $65,000 a year down to about $40,000. That was $25,000 we didn't have before, going toward a goal that really meant something to us. 

We prioritized paying off debts

My wife and I were fortunate enough to not have student loans, but we both had mortgages. I had a car loan for a Cadillac CTS that I bought brand new in 2009. Luckily, we never ran a balance on our credit cards.

For a couple of years, eliminating our debt was our top priority. We would make extra payments every month on our mortgage to help reduce the remaining balance. 

Before getting married, my wife and I also owned separate homes. After I moved in with my wife in 2014, we rented my house for a year before selling it. I lost about $70,000 in that house because the value had dropped since I bought it in 2007. In 2016, we sold my wife's home and moved into our Airstream RV. And we were 100% debt-free. 

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There are two primary ways to eliminate debt: the debt snowball method and the debt avalanche method. You'll still make minimum payments on every debt using either method. 

  • The snowball method is a strategy that favors paying off the smallest debt first, then working up to bigger debts
  • The avalanche method favors paying off high-interest debts first and working down to the lowest-interest debt last 

I like the avalanche method because it prioritizes debt based on interest payments, but either method works. Choose the one that makes the most sense to you. 

Going forward, as you build your wealth, in addition to automating your saving and investing, and meticulously tracking your expenses, one of the most important things you can do is be honest with yourself. Check in and ask yourself when you're about to make a purchase, 'Is this something I want or something I need?' Over time, these changes can add up to something big. 

Steve Adcock retired from full-time work at 35 and writes about personal finance on his blog and is a regular contributor to CNBC, MarketWatch, and Business Insider. He travels the country and lives in an off-grid home in the desert with his wife Courtney and two dogs. You can find him on Twitter at @SteveOnSpeed.

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