Woman set to retire at 35 with £1.2 million had no money four years ago
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A 29-year-old has outlined her plans to retire at the age of 35 with a cool $1.5m (£1.2m) in the bank to tide her over.
You might look at that number and think that it isn’t enough money to get you through to the bitter end, but at least she has a number and is working towards a goal, right?
Catie T, who goes by Millennial Money Honey online, wants to share her journey towards complete financial freedom with everyone, and the social media influencer has built up a large following doing exactly that.
Now, she’s shared five tips for people like her who want to get out of the rat race whilst they’ve still got plenty of living left to do, rather than working away five days per week until we are 65 – if we’re lucky.
Let’s face facts, the retirement age is 65 now, but how many times are the goalposts going to change in the coming years?
That’s if the world even makes it that far, anyway.
Bleak though that thought might be, it does suggest that – to quote the Shawshank Redemption – we’d better get busy living, or get busy dying.
Anyway, Catie T has some practical advice for those who – like her – want to get out of full-time work in their 30s.
She made the decision in her 20s, and – according to Business Insider – she’s already 30 years ahead of other people her age when it comes to retirement.
In one of her videos, she said: "Four years ago, I was 26 and still had no money to my name, I thought I had to work hard until I was 65, and then I could finally retire.”
However, she then learned about a growing movement called the ‘FIRE’ movement - which stands for Financial Independence (and) Retire Early.
"I was just living your average LA millennial life, hanging out with my friends, getting my hair done, trying to keep up with all the latest fashion trends," she said.
After deciding to go down the FIRE escape, she started investing her money, cutting back on some stuff, and saving away 80 percent of her monthly wage.
The first step, she reckons, is setting a goal amount.
For her, that’s about £30,000 per year in expenses, although she doubled that to be on the safe side.
Then, she used the four percent rule to get a target retirement amount.
Take your desired annual income, times that by 25, which brought Catie to $1.5m.
Some belt-tightening was then required.
Beauty treatments and unnecessary stuff had to go, saving around $1,000 per month.
She also switched jobs to the more lucrative tech sector for her graphic design skills.
"I didn't realise how much more lucrative it [the tech industry] was to be a designer in that field, even though it is the exact same skill set,” she said.
Then come the investments.
Of course, it’s worth saying that investing comes at a risk and you can end up losing money as well as making money.
She invested $30,000 of saved cash into a Wealthfront robo-advisor account, and now uses her employer-matched 401k, a Roth IRA, and her health savings account, as well as investing in index funds.
“I’m with Schwab total stock market fund,” she said.
What’s more, she was lucky enough to be able to live with her parents for free during the pandemic, saving loads of money on rent.
Whilst she does save 80 percent of her money, there’s still time for fun stuff, too.
If you want to learn more about how she’s planning for an early retirement, you can check out Catie’s social media accounts and give her a follow.