I recently mentioned two Liz Pulliam Weston articles in passing. They're good enough to merit closer attention. Both articles profile couples who found the courage to save money when they were young so that they could enjoy the freedom of early retirement. Weston writes:
Think it's impossible to retire in your 40s? I'd like you to meet some ordinary folks who have done it. “Ordinary” may be a misnomer, because retiring after just 20 years or so in the workplace is an extraordinary act, and most took extraordinary measures to get where they are. But they're ordinary in the sense that they were working people with pretty regular jobs. They didn't strike it rich with stock options, inheritances or the lottery.
Their retirements look different from the retirements depicted on television. These folks don't live on the golf course or roam the country in 32-foot recreational vehicles. Most, in fact, are actually still working — but usually part time and in their own businesses, doing things they feel strongly about. They've retired from the 9-to-5 world, but not from their passions.
In Retired by 50: What it really takes, Weston looks at Brad and Janine Bolon, who took the lessons of The Tightwad Gazette and Your Money or Your Life to heart. By being frugal, they made early retirement happen.
Brad was fortunate to find a high-paying job in southern California. But rather than live like they were earning a quarter million dollars per year, he and Janine pinched pennies. They bought a house across the street from his office so he could walk to work. They made use of the public library. They watched their costs wherever they could:
“We saved $35 a month by hanging the laundry instead of using the dryer,” Janine said. “We didn't use our air conditioner more than six or seven days of the year,” an accomplishment in sunny Southern California.
“We went to ‘U pick it' farms. I'd go with the kids and we'd pick fruit … and can them and make preserves,” Janine said. “And I used a price book. That saved us $3,000 to $5,000 every year.”
Though the family had a salary that many people dream about, they lived like Brad earned much less. After eight years of frugal living, the Bolons sold their home and moved to Utah. They could now live solely off investment income, but they continue to work.
I love this story because it highlights a couple that focused on a dream, pursued it, and made it a reality. It might be easy to write off their success by saying, “Yeah, but if I made a quarter million per year, I could do that too.” I'm not so sure. First of all, it takes a lot of work to put yourself into a situation where you can earn that kind of money. Second, I think it shows tremendous restraint to live frugally when those around you do not. It's easiest to accumulate wealth when you minimize expenses and maximize income.
Pulliam's second article, Retired by 50: Real-life stories, profiles three more couples who have achieved this dream.
One of the couples — the Hennesseys — found inspiration in books like the afore-mentioned Your Money or Your Life and Paul Terhost‘s Cashing in on the American Dream: How to Retire at 35 (which I recently ordered from Amazon, and hope to review later this week). On unremarkable incomes, the Henneseys made all the right moves to ensure they could retire early:
They reduced their grocery bill by making beans, rice and powdered milk staples of their meals. (Of course, they could also eat at the restaurants in the days they worked there, which helped liven up their diets.) They replaced their light bulbs with compact fluorescents to save energy — and this was back in the early 1990s, when that was unusual. They paid off their debt, including car loans, student loans and their home mortgage, to eliminate interest payments. They also kept meticulous records of their spending.
For most of these couples, early retirement means partial retirement. Instead of leaving the workplace completely, they downshifted into jobs that are more meaningful, but for which they earn less. This supplemental income also means they don't have to draw heavily on their retirement savings.
Early retirement has always been one of my goals. I used to dream of retiring at 35 and moving to a cabin in the woods. I'm 38 now, and though I don't have my cabin, I do have a good life. I still dream of early retirement. But now my dreams resemble the sorts of lives these couples lead.
October 21st-27th is National Save for Retirement Week in the United States.