Are you interested in early retirement and financial freedom? Today, I have a great interview with Lauren and Steven, a couple who managed to save enough money to retire from their full-time jobs at age 29.
He’s done some really fun things since freeing himself from full-time work, like spending six months in Hawaii, visiting every US National Park, and more.
In this interview, you will learn:
what they do for health insurance now that they don’t have full time jobs what is lean fire when they started saving for early retirement how are they able to keep their expenses down how much they spend traveling in early retirement whether they still work before they leave the jobs they had
This interview is packed with valuable information on reaching early retirement.
1. Tell me your story. Who are you and what do you do?
I’m Steven Keys, co-founder of the blog Trip of a Lifestyle, which I write for with my wife, Lauren.
We retired from full-time work at age 29 by working middle-class jobs, living frugally, and investing 60-80% of our five-figure income in broad stock and bond market index funds.
Most people assume that we lived some sort of depraved existence throughout our twenties to reach that point, but in reality, we’ve had tons of fun and cool experiences (like our six-month honeymoon in Hawaii). , while our expenses remained fairly low (about $18,000 – $22,000 per year, combined).
Traveling and enjoying life is surprisingly conducive to frugality and financial responsibility!
2. Can you explain how early retirement works? What is Lean Fire?
“FIRE” stands for “Financial Freedom / Early Retirement.” The basic concept is based on something called the 4% rule, which says that if you have at least 25× your annual expenses invested in a healthy mix of stock and bond market index funds, you can make a lot more money on withdrawals from that portfolio. can survive. The rest of your life (even after accounting for inflation) – without needing to work for money.
“Lean Fire” involves achieving this goal through the magic of low living expenses.
For example, if you only need $20,000 per year for your lifestyle, you can retire on a portfolio of only 25 × $20,000, which is half a million bucks. Not only is that goal too low at first, but it can be reached even faster because of the low rate of spend along the way.
Regardless of the specific dollar amount of your spending, if you save 50% of your income, you can start from zero and reach FIRE in about 16 years.
If you save 80% of your income, you can retire after just 6 years of career.
3. When did you start saving for early retirement?
When most people search for financial freedom, they have to go through a (sometimes painful) process of reducing their expenses in order to get on track.
We were really lucky that this never happened to us, because we were exposed to these ideas shortly after graduating from college (that’s the main reason we target a younger audience with our blogs).
Since we were already having so much fun living the “broken college kid” lifestyle, we continued to do exactly what we were already doing while earning a shiny new full-time income. As a result, we were able to bank on over $100,000 on a public school teacher-level salary in just two years.
From there our income kept increasing while our expenditure remained the same. We had a mortgage-free home by age 25 and a net worth of over a quarter million dollars by 26—all while earning a per capita salary of $50,000 a year.
4. What made you want to retire early?
For us, early retirement isn’t just about “not working”. We never really hated our jobs. But we valued freedom.
Our first taste of complete freedom came the summer after college graduation in 2012, when we took a 45-day, 17,000-mile road trip from Florida to Alaska and back. Once we came back from him, we were never the same again.
We really encourage people to take a “mini retirement” at some point during the accumulation phase of their fire. In fact, this is step 4 of our financial roadmap.
Taking a break and experiencing some completely self-directed time in your life can tell you a lot about why you’re saving so much money in the first place.
5. Would you say you live comfortably?
Today, we wake up every day without alarm clocks in a hostage-free condo across the street from the Atlantic Ocean. I would not say that we live comfortably; I would say we live lavishly.
And yet, our household expenses are still somewhere in the $25,000 to $30,000 a year range, combined, which I’m told is “ridiculously low.” The key to our “less” spending isn’t depriving ourselves of valuable experiences – it’s just reducing waste.
Instead of owning two cars worth $40,000 each, we only share one vehicle with over 180,000 miles on its odometer (plus a couple of used bikes and kayaks). Instead of shopping at white glove grocery stores like Publix, we buy the exact same brand at our local Walmart for 20% off.
stuff like that.
Life is good, and we don’t feel like we’re neglecting to go to an office every day to buy more.
6. How much do you spend on travel every year? What do you spend your money on these days?
We love to travel! Our biggest travel achievement to date was visiting all 63 US national parks.
Travel is a wildly fluctuating spending category for us, but we’ve discovered some great hacks for traveling cheap.
For example, we can take a 2 month road trip using our Nissan NV200 camper van for a total of $4,000.
Simultaneously, we are looking to increase our spending a bit by traveling more internationally in the near future. We’re hoping to offset that cost by renting out our house when we’re moving – something we’ve done with great success in the past.
7. What was your career before you retired? Do you think you need to have a high income to retire early?
My career was in education. I taught physics – first in public school, then later through private tutoring to college students. Lauren made her living doing marketing work for small businesses.
At the beginning of our journey our full-time salary was as high as $30,000 a year. Even at that point, we were still able to save consistently over 50% of our income, so no, I don’t think you need a “high income” (in US terms) to retire early.
However, earning more makes the task faster and easier. Our income grew over time and touched about $90,000 per person before finally saying “I quit” – while our expenses remained mostly flat. This speeded up our accumulation process in a big way.
8. Do you still earn income in early retirement?
Yes we do!
I still do freelance work for my previous employer (somewhere around 10 hours per week, in a flexible format that allows me to travel whenever I want).
Lauren also has a freelance project, but realistically only works an hour a week these days. And we sometimes do still photography gigs together – a fun side we’ve had since high school.
When most people think of early retirement, they envision this very tough cutoff, where you save exactly 25x your annual expenses and stay away from careful budgetary withdrawals as per the 4% rule, while you yourself limited to only “leisure” activities such as golf. and travel.
There is no reason for this to happen.
To tell you the truth, we saved our annual expenses with a little less than 25× the scheduled “retirees” from our full-time jobs, because we knew we weren’t going to earn zero dollars from work for the rest of our lives. ,
We worked our way to complete financial independence in the next few years after retirement, with easy money from part-time work, which pays a much higher rate than a full-time job.
Furthermore, our blog makes very little money, although we have donated most of it to charity. It’s never really been a “business” for us.
Anyway, if you’re considering retiring early from your job in your 20s, 30s or 40s, consider that you’ll certainly find yourself earning extra money at some point in your life. for entertainment).
You are young and energetic, and you will probably end up getting richer than you need to be.
So, don’t be afraid to cut down your hours as soon as possible.
Will be fine!
9. What sacrifices or hard decisions did you have to make to reach early retirement?
Talking about money, we have never felt any shortage.
The hardest part about choosing the path to financial freedom is that your friends and family probably won’t be along for the ride, and most of them probably won’t understand your choices.
As long as you don’t let other people’s opinions guide your actions, you are golden.
10. What do you do for health insurance in early retirement?
It’s so simple, in fact: we buy it now!
Depending on the amount of our premium tax credit each year, our health insurance premiums have fluctuated between $250 – $550 per month, combined (currently about $250, in 2022).
We combine this high-deductible health care plan with an HSA (Health Savings Account) for additional tax benefits.
11. Now that you are retired, what are your long term plans?
Our biggest “passion project” at the moment is our blog.
Access to information about financial independence and early retirement from college changed the entire course of our lives, and we want to help as many young people as possible with as much information as we can for free.
In the future, who knows?
More travel, charity work, starting a business, raising a child, creating artwork, going back to school – anything can happen. That’s the beauty of financial freedom.
12. If you were just starting out at the beginning, what would you do differently?
We would have skipped our short phase of actively trying to pick stocks and high-fee mutual funds and went straight to low-cost, passive index funds.
13. Lastly, what is your best tip (or two) that you have for someone who wants to reach the same level of success as you?
practice gratitude; Be grateful for what you have – especially friends, family, health and nature.
Apart from these, you really need very little else to live a happy life. When your spending reflects this attitude, you will find that you are getting rich much, much faster.
Are you interested in reaching early retirement or financial independence? why or why not?