How I Saved $380K By Age 29 To Retire Early | Fired Up
https://www.youtube.com/embed/dkTbBmJnp9U
Living a Frugal Life with Big Goals
Tanner’s Lifestyle and Savings
Tanner describes himself as one of the most frugal individuals, possibly in the top 1% or even top 0.1% among the whole population. He takes pride in being extremely cautious with his spending. For instance, his sofa came to him for free, and he found patio furniture without spending a dime. Tanner finds it unsettling to buy things unnecessarily and prefers to invest in more affordable hobbies.
Tanner’s Social Life and Interests
Tanner’s lifestyle is as diverse as ever. He enjoys hosting board game meetups, which have led him to meet people he genuinely enjoys spending time with. This has become a regular part of his life. He doesn’t feel like he’s missing out on anything by not indulging in expensive activities or purchases.
Financial Independence and Early Retirement (Lean FIRE)
Tanner’s Retirement Goals
Tanner, who is 29 years old, has ambitious retirement goals. He aims to retire by the age of 35 and has already saved $380,000 for retirement. He resides in south Minneapolis with his wife, child, and three cats. Historically, Tanner has been the primary breadwinner in his household, while his wife contributes through her hobbies and homemaking skills, which saves the family money.
Lean FIRE and High Savings Rate
Tanner is part of the Lean FIRE movement, which seeks to achieve financial independence and early retirement through higher-than-average savings rates. He estimates that they save about 50% or possibly even more of their income, a substantial portion of which goes toward savings.
Tanner’s Investment Accounts
Tanner has a well-diversified portfolio across various investment accounts, including:
- Personal brokerage account: $221,000
- Roth IRA: $57,000
- Health savings account (HSA): $26,000
- 401(k): $75,000
He acknowledges that some FIRE enthusiasts have specific target numbers, but he prefers flexibility in his retirement plans. His lower limit for retirement savings is $625,000, as he estimates he’ll need approximately $25,000 a year to live comfortably. However, he recognizes that individual circumstances can change over time, so he allows room for some variability in his plans.
Tanner’s Perspective on Retirement
For Tanner, retirement isn’t about lounging on the couch and watching Netflix all day or getting a perfect tan at the beach. Instead, it’s about achieving the freedom to do whatever he desires in life.
A Prudent Upbringing
Tanner’s Childhood and Money Values
Tanner’s frugal mindset stems from his upbringing. His family instilled a sense of financial responsibility in him and his siblings. They were taught the value of money and had to earn their own funds to buy things they wanted or wait for special occasions like birthdays and Christmas. Tanner and his siblings even had paper routes to earn money.
Tanner’s Debt Repayment
After graduating from college, Tanner was diligent in paying off a loan his parents had given him. It took him about five years to repay his parents, as the interest rate was 3%. This commitment to repaying debt demonstrates his responsible financial approach from an early age.
Balancing Frugality and Financial Independence
Early Savings and Investments
The narrator explains that they could have achieved financial independence and retirement earlier if they had desired to, but they chose to invest the difference in index funds instead. They always contributed as much as possible to receive the company match in their 401(k) and also invested in index funds. After college, they took the concept of Financial Independence,
Retire Early (FIRE) to an extreme level that they now consider unhealthy. They became very anxious about saving as much money as possible and delaying life experiences they truly wanted.
Shifting Priorities and Mindset
Over time, the narrator’s attitude toward money has evolved. They no longer have the same intense relationship with money and anxiety about retirement. While they still prioritize frugality and saving, it no longer impacts their life to the same extent. They’ve realized that it’s acceptable if it takes a year or two longer to retire if it means enjoying the present more fully.
Diverse Approaches to Saving Money
Side Hustles and Airbnb
The narrator and their partner have engaged in various strategies to save money. They once rented out the downstairs of their house on Airbnb, essentially covering their entire mortgage and then some. They’ve explored different side hustles to supplement their income.
Frugality in Everyday Life
The narrator acknowledges being the more frugal of the two in their relationship. They’ve adopted various cost-saving measures, such as choosing economical food options like beans and rice. They also take advantage of a nonprofit organization in their area, Ruby’s Pantry, which provides discounted packages of surplus food items.
Finding Value in Free and Inexpensive Activities
Despite their frugal lifestyle, the narrator emphasizes that many activities that bring happiness and satisfaction in life don’t require significant spending. They engage in activities like running, listening to podcasts, playing video games with their partner, going for walks with their family, meditating daily, and chatting with family on Zoom. They also enjoy cooking and board games, demonstrating that fulfilling experiences can often be budget-friendly or even free.
The True Value of Money
Balancing Saving and Experiences
The narrator challenges the perception that FIRE enthusiasts sacrifice all aspects of life for the sake of saving money. They believe that life offers an abundance of experiences that don’t necessarily require significant spending. While money is necessary for essentials like housing and food, saving money ultimately buys freedom. The narrator views saving money as an investment in gaining more time to enjoy life on their terms.
As found on YouTube
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