Retire at 38? Pay Off $200K of Debt? Extreme Savers Share Their Secrets
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Lisa Perry“I paid off close to $200,000 of debt in six years.”

Lisa Perry, 55, an attorney in Phoenix, Ariz.

“A decade after I graduated with my PhD, I was still up to my ears in debt—about $160,000 in student loans. Credit card debt and a car loan tacked on another $40,000. I was unwilling to spend the next 30 years making minimum payments, so I got serious about eliminating every cent.

As an hourly worker—I’m a temporary document-review attorney—I picked up every project that came my way and got a second job teaching. I even participated in research trials at a nearby college.

In addition to bumping up my income, I majorly slashed my expenses. I moved into an apartment with roommates, biked to save on gas, cut cable and stuck to a strict budget that limited my food and entertainment spending. At one point, over half of my income was going toward debt.

I kept this up for six years before becoming debt-free. My income fluctuated a good bit, but it was mostly between $80,000 and $120,000. However, a lot of my accelerated payments toward the end—sometimes upward of $2,200—were made on a $50,000 salary. I’m living proof that it’s not how much you make, but what you’re willing to do with what you have.

I’ve since loosened the purse strings a bit, but I have zero regrets!”

Carl and Mindy“We increased our wealth by more than $764,000 in four years.”

Carl, 43, and Mindy, 44, a software developer and writer in Colorado

“Four years ago, my wife Mindy and I set a huge goal: to boost our portfolio from $586,000 to $1 million by 2017. That’d give us the freedom to work on things we truly care about, like writing, web development and other passion projects.

Great investment returns have accounted for a lot of our increased wealth. (If you haven’t noticed, the market’s been on a tear.) But one of our most powerful savings tools has been tax-advantaged retirement accounts. In addition to maxing out IRAs, we’ve invested a lot in 401(ks). In 2013 and 2014, I maxed out my traditional 401(k) and got a 25-percent employer match. In 2015, I started doing contract work, and opened a self-directed Solo 401(k), which benefited both Mindy and me. Since 2015, we’ve invested more than $130,000, thanks to the 25-percent corporate match.

The other piece of the puzzle is frugality. I drive a 2003 Honda Element with 160,000 miles on it. We cook most our meals and live in a modest, 1,800 square foot home in a neighborhood we love. For us, these aren’t sacrifices—living below our means allowed us to save over 70 percent of our six-figure take-home pay last year, which we’ve invested in a regular brokerage account.

Smart investing is the other game changer: We’re usually passive investors, which has paid off, but we also got lucky with some stocks we purchased a while ago and held onto, including Google in 2004 and Facebook in 2012. The latter is my biggest success. I bought 2,000 shares for about $30 apiece. Facebook now sits at almost $140 per share. This alone counts for a gain of over $200,000. (I attribute much of my success here to luck! These days, I’m mostly an index investor.)

Our portfolio now sits at $1.35 million and early retirement is on the horizon.”

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