If all goes according to plan, 34-year-old Alex Tran only has about 10 working years ahead of her. She and her partner are using aggressive savings strategies and practicing a frugal lifestyle as they work toward their goal of retiring in their mid-40s.
Building up enough savings means Tran has to watch her cash flow carefully and weigh every expense. She uses a habit she formed in college, when she lived on a shoestring budget: “I keep adopting that process of analyzing and discerning between my wants and my needs,” she says. “It allows me to stay under budget most of the time.”
To keep on track, the couple strives to save at least 30 percent of their income each month, and Tran says they sometimes manage to put away even more. They began on this path six years ago when they lived in California and found a great deal on a foreclosed property in Mission Viejo, outside of Los Angeles. By selling off some investments, they were able to buy the $150,000 house outright, fix it up and rent it out.
After they moved to Seattle for new job opportunities, they waited to buy a house until another good deal came along. They’re now working on paying off that new mortgage. To reach their milestone faster, they’ve rented a room in their home to a college student—a positive experience Tran says they plan to continue. The rental income helps them pay about $1,000 more per month on their mortgage.
Even though retirement is still years away, Tran and her partner have had to become—and remain—excellent savers to make their dream a real possibility. In addition to establishing passive income streams, such as the rental income, Tran also earns money from her side hustles: blogging and teaching yoga part-time.
Her biggest savings practice, she says, is simply limiting her spending to an absolute minimum. “I have this list of questions in my head that prevents me from impulse buying,” she says. “I ask myself: ‘Do I need this? Is there something I already have at home that does the same thing? Could I borrow this from a neighbor? Could I go get this at Goodwill?’”
On the whole, Tran takes a thoughtful, intentional approach to how she lives and spends. Even in retirement, she and her partner don’t wish for an extravagant lifestyle. They are thinking about their life after work strategically. They hope to retire in Thailand, Tran says, where they expect the cost of living to be lower. And if all goes as planned, they’ll continue to collect income from their investments—even as they sit on the beach or stroll through the jungle.
Emily E. Smith is a freelance writer in Bozeman, MT. She writes for national and regional publications on topics ranging from personal finance to crime to wild animals. Her work has appeared in The Guardian, Smithsonian magazine and Atlas Obscura.
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