I read a fascinating article on Yahoo Finance a week or two back about a lady that retired at age 29 and is now a stay at home mom and part-time blogger. Granted, she took some pretty drastic measures and started saving and investing at an early age (16), but the concept amazed me! She and her husband would still take vacations (albeit smaller than normal) and eat out. She has a blog and gives great money-saving tips (which I know everyone can use these days) and has lots of helpful checklists for various things. And to think I could have retired next year if I were only a little smarter early on in life…here is her blog if you want to check it out. To get more on her personal story click here. Maybe, just maybe, if we all employ some of her tips, we can all retire that much earlier but still get to do fun things in the present! I plan to start once I get my rug… 🙂 It sounds as though there has been some controversy surrounding the article (and the realistic aspect of others being able to follow in her footsteps) but it is still a good read – and makes you think a little more about each dollar you spend.
The article is no longer on Yahoo Finance, but here are some excerpts from the text. Its a little long but is very interesting and worthwhile to read:
DuPaix got hooked on saving at age 16. “My mom, an accountant, did my taxes from my first job working in retail, and I ended up losing a lot of the money I made to taxes,” she says. “I was really upset, and my mom explained that if you open an Individual Retirement Account you would be able to get most of your money back. I saw it as a choice between getting the money after a long time and never getting it at all.”
DuPaix put away $600 that year. “That piqued my interest; it was this world that I didn’t understand, and I realized you could play around with things and make things happen. That started to intrigue me.”
Later, she got a full scholarship to the University of Wisconsin, where she double-majored in finance, investments, and banking, and risk management and insurance. While her college roommates were taking out student loans, she was investing her part-time earnings in low-cost index funds. (She switched her retirement savings to a Roth IRA when that vehicle became available.)
DuPaix worked for a year after graduation before going back for a master’s degree. She then took a full-time position in 2002, saving half of her take-home pay. “I started maxing out my retirement accounts right away and investing outside of retirement accounts in index funds,” she says. “Personal finance was my hobby.”
DuPaix frequented online forums about early retirement, and read books such as “Cashing In On the American Dream” by Paul Terhorst (who retired at 35 to travel the world). Part of her success was good timing: She and her spouse rented for a few years, then bought a condo with an adjustable-rate mortgage at 3.625 percent. They sold at the top of the market and rolled the profits into a new home.
Another key to success was her decision to super-save in her 20s before she had children; DuPaix says she simply extended the frugal habits of her college years. “I’ve always saved for something first before I buy it — it makes everything cheaper in the long run,” she says. “I never spent a lot on things people typically spend money on, like dressing great or coffee every day. When we went on vacation, we used frequent-flyer miles and hotel points. I always tried to work whatever system was available. My family teases me because they know I’ll find best bargain to do something or I won’t do it.”
But most important, DuPaix suggests, was setting clear goals: “I knew I wanted to retire early and thought 34 would be a good age. That was a fluid working number, but it gave me something to aim for. I reached it early because I realized I didn’t need as much.”
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