WE’D ALL love to retire early – but for many, it seems like something you only dream of.
However, one 29-year-old has revealed how she has set herself up for early retirement with five clever tricks.
Catie T who goes by Millennial Money Honey on social media was like any 20-something partygirl before deciding to pay attention to her finances.
And her hard work has clearly paid off as she is set to retire at just 35 with over a £1,000,000 in the bank.
According to Business Insider who reviewed her financial documents, the young woman is thirty years ahead of most when it comes to retiring.
“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” she revealed in one clip.
However, she then learnt about financial independence and retire early (FIRE).
“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,” Catie says of her lifestyle before embarking on her FIRE journey.
But after researching more and more about money, she realised she should be investing what she earns, which led her to take on a FIRE approach to her finances.
Now she has revealed the steps she has taken to retire early.
The first point of call was working out how much she had to save to reach her retirement goal.
She estimated her annual expenses to be around £30,000 so to be safe she doubled it.
Catie then used the 4% rule to determine her target retirement portfolio amount.
An easy way to calculate this number is to multiply your desired annual income by 25, which Catie did, giving her $1.5 million.
To ensure she could reach her goal, the money whizz then tracked her spending habits before deciding how much to save.
She found she was spending almost £1,000 a month on beauty treatments so decided to go back to her natural hair colour instead of bleaching it to help save cash.
Catie, didn’t stop there, in her bid to retire early she also switched jobs as a graphic designer in advertisement to work in the tech industry.
“I didn’t realise how much more lucrative it was to be a designer in that field, even though it is the exact same skill set.”
Now on to the important part, Catie put the money she had saved into investments.
Catie had about $30,000 saved up before her FIRE journey that she invested in a Wealthfront robo-advisor account. Now, the majority of her income is invested between her employer-matched 401(k), her Roth IRA, and her HSA (health savings account).
Outside of these accounts, she invests almost exclusively in index funds. “I’m with Schwab total stock market fund,” she says.
The money pro also managed to save thousands in rent as she moved back in with her parents during the pandemic.
She was lucky enough to live rent-free for a while which ultimately helped her save lots of money.
Catie saves 80% of her income, but she reveals it’s still important to put money aside for fun to keep on track.
To do the things she loves, she cuts out other things, like expensive clothes or hair treatments.
She doesn’t budget her day-to-day spending, but knows her expenses and makes sure she always has enough in her checking account to cover those.
Catie has now been sharing her top money tricks on social media to help others become financially free.
It’s important to note that investing your money does come with risks and doesn’t guarantee you will make money.
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