How I saved over $200,000 by age 27

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As I’ve mentioned in a previous post I started on this road to financial independence about 7 years ago. Thinking back on it now, I think the mindset was always kind of there for me. I remember being a young kid probably about 8 years old and always wanting to save money. Back then, I had a savings account that came with a little book which time stamped any withdrawals or deposits I made, and I always wanted to have as much money as I could in there. Even at 8 or 9 years old I was seen as the “family bank” and was giving temporary loans to my family members.

One of the hardest things for me as a kid was that my age was holding me back from working. All I ever wanted to do was get a job and work as much as I could which is kind of ironic because now all I want to do is not have to work anymore! So I did little summer jobs here and there and got my first real job at a bowling alley at the age of 15. At 16, I got a second job working as a bus boy at a local pizza restaurant and at 17 I was working at an asphalt company, full time in the summer. I continued to work two jobs throughout the end of high school and even into my college career.

So there I was, 18 years old and I’m finally ready to actually start investing my money.

I took the advice of someone from my local bank and went and found a financial advisor to begin investing into a Roth IRA. I was proud of myself for starting this even though I was only putting in $100 a month but it was a start, and I was doing it earlier than anyone else I knew. So I continued doing this for about a year and at the same time began reading as many articles and books on finance as I could. I learned that I didn’t need a financial advisor investing this money for me and that I could do it all on my own using one of the most common investment companies, Vanguard.

Within the next few years my income began to rise and with it I was able to start putting a little more money away into that IRA account. Looking back on it now, I only had a total of about $5,000 invested by 2013 at the age of 21. I remember being a little discouraged at this time thinking “What is going on? I’m investing this money but it’s barely growing. But all the books I read encouraged me to keep at it and refreshed the idea that time was on my side and this money would continue to grow.

In 2013, I reached my lifetime goal of becoming a Police Officer and was now getting a whopping salary of $48,000 per year.

Finally, I would have the opportunity to really start saving some money. I remember my goal at this time being that I wanted to max out my Roth IRA which, at the time, meant saving $5,500 per year. Then I would put the remaining money I was saving into a savings account as an emergency fund.

So throughout the first year of my new career I continued to save as much as I could while paying off approx. $16,000 in student loans that I had. I lived at home at the time and to that day had not payed more than $6,000 for any car that I had owned. My goals were to keep my expenses low, pay off my loans, then work on becoming a real grown up and getting my own place. A big part of this motivation was my co workers constantly making fun of me for living at mommy and daddy’s house.

One year passed and it was 2014. I payed off the $16,000 in student loans and finally bought my first house for just under $130,000. My pay had gone up slightly and with things like overtime, I was now making a gross salary of about $60,000.

I had a mortgage payment of just over $1,000 a month, no car payment of course and a total net worth of just under $30,000, at this point.

Now is when the fun part starts. My income begins to rise and my debts, excluding my mortgage are all paid off. My #1 goal now is to save as much money as possible. My Roth is maxed out and I’m putting as much money into Vanguard index funds as I possibly can.

This continues for a few years leading us to today. My income is now approaching six figures and I’m investing as much as I possibly can which is just over $5,000 per month through different investments which we’ll dive into in a later blog post.

I’m currently sitting at a net worth of just over $230,000 and am really excited to hit that quarter of a million number.

I want to make it clear that I’m not trying to brag in any way and am aware that along the way, I made plenty of financial mistakes that I’m not proud of. I’ve come to learn that my freedom is now what is most important to me and my way of reaching that is by putting away as much money as I possibly can to benefit my future self a few years down the line.

I hope sharing this story not only shows you a little transparency but also shows what a difference just a few years can have in your financial situation. I appreciate you reading my financial story and look forward to continuing to share it with you as openly and honestly as I can.

Tell us about your story and some financial milestones you have overcome. Maybe tell us what age your wanting to retire and how you plan to get there. And finally what can you do to increase your savings rate now given your current situation.

Thanks again

-Matt-

4 comments on “How I saved over $200,000 by age 27”

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