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Over the past decade, Gen Xers have seen their savings grow from $50,000 to $375,000.
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Her goal is to grow her savings to at least $1 million and retire before age 55.
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By buying less and paying down debt, she increased her wealth.
Miriam wants to retire at 55, and she thinks she’ll need at least $1 million in savings to do so. At 43, she’s confident her financial strategies will get her to that milestone.
Miriam’s retirement savings journey began around 2007 — when she said she had almost nothing saved and first started contributing to a 401(k). By 2014, her savings had grown to about $50,000, according to a document seen by Business Insider.
It was around this time that Miriam, who said she makes about $80,000 a year as an associate director in Georgetown University’s finance office, became even more serious about growing her finances. She said she started learning about the FIRE (financial independence, retire early) movement and searched for every personal finance book and blog she could find.
“I got really motivated to save and invest more in my retirement accounts,” Miriam, who asked not to give her last name for privacy reasons, told BI via email.
The strategies she’s adopted over the past decade are starting to pay off: She’s grown her savings from about $50,000 in 2014 to nearly $375,000 in July. If she keeps saving at the same pace (as much as $1,000 a month) and sees similar stock market returns, she’ll reach her $1 million goal over the next decade, she calculates — before her target retirement age of 55.
“When I reached the $300,000 mark, I knew I could reach my goal,” she said.
While many Americans struggle to save for retirement, some are putting themselves in a position to retire earlier than planned. Many of these people consider themselves members of the FIRE community, but they’ve used a wide range of savings and investment strategies to grow their wealth, including taking on side jobs, investing in real estate, and finding creative ways to lower their living expenses.
Miriam shared her top saving and investing tips that have been instrumental in growing her wealth, and she hopes they will help her reach her retirement goal.
By ‘pruning’ her purchases and paying off her debts, her wealth has increased
When Miriam was a teenager, she worked as a waitress, earning $2.65 an hour plus tips, she said. It was during these years that she developed a longing for the “sweet taste of freedom” that her own money offered.
She didn’t always know the best way to fulfill this desire, but over the years she has developed a financial approach that works for her.
One of Miriam’s best strategies for increasing her savings and investments is “trimming” purchases. When she’s planning a large purchase, she estimates roughly how much it will cost — and then tries to reduce, or “trim,” that number by 10%.
“If a trip costs $2,000, I’ll cut the cost by $200 to $1,800 and invest the difference,” she said. “It’s an easy way to invest more.”
Focusing on reducing her debt levels has also helped a lot. Miriam said that paying off her monthly $450 car payment 15 years ago was one of the biggest developments that helped her wealth grow. She took the money she put into her car and started investing it in the stock market — she said she hasn’t had a car payment since.
Miriam also started taking advantage of her employer’s 401(k) match — “you can’t beat free money” — and cut back on subscriptions. She started a personal finance blog, which helped keep her accountable, she said.
To determine her savings goals, Miriam experimented with several online retirement calculators, which helped her find the right amount.
Miriam said she prefers diversified mutual funds when investing her money, though she has also made individual investments in companies like Apple, Alphabet, Amazon and Nvidia.
It is true that the stock market is extremely difficult to predict and Miriam knows that she cannot count on her previous investment successes to continue in the coming years.
This is one of the reasons why, despite her success with saving, she still seeks financial advice. She says she regularly reads books by authors who focus on personal finance, such as Suze Orman, and the autobiographies of wealthy people, such as Mark Cuban.
“I believe that if you want to be rich, your house should look like a Barnes & Noble house,” she said.
Although she’s disciplined about her savings plans, Miriam says she still tries to splurge on things like travel, restaurants and concert tickets. Last year, she was thrilled to get tickets to Beyoncé’s Renaissance Tour.
“When I reach financial milestones, I like to go on adventures and reward myself for staying focused,” she says.
She also tries to invest a large part of her savings, but she also makes sure she has enough savings for emergencies.
Miriam says she owes her financial success to the personal finance knowledge she has built up over the years.
“Financial literacy was my secret weapon against debt and building wealth,” she said.
Have your savings and assets grown significantly over the past few years? Are you willing to share your best financial strategies? Contact this reporter at jzinkula@businessinsider.com.
Read the original article on Business Insider
