By Ishita Srivastava, Dailymail.Com 2024-07-21 06:40 Updated 2024-07-21 06:43
A 29-year-old software engineer in Minneapolis who makes $135,000 a year plans to retire early by age 35.
Tanner Fahl and his wife, Isabel, have already saved more than $380,000 and plan to retire with about $625,000 by their mid-30s.
The couple, who also have a son and three cats, describe themselves as extremely frugal and have adopted FIRE, which stands for financial independence, retire early, as their financial strategy.
“I don’t really like buying things. In fact, it makes me anxious. If I had to guess, I’d probably be in the top 1%, maybe the top 0.1%, of the most frugal people out there, out of the population at large,” he told CNBC.
“It just didn’t make sense to me. Most people have a problem with not spending money. We have almost the opposite problem.”
Tanner Fahl and his wife, Isabel, have already saved more than $380,000 and plan to retire with about $625,000 by their mid-30s.
His main source of income is also the couches and patio furniture he gets for free on Craigslist.
He also told the channel that he treats himself to a pair of second-hand sneakers every year or two.
Farr explained that by consistently saving about half of his paycheck, he’s been able to secure more than $221,000 in a personal brokerage account, more than $57,000 in a Roth IRA, and more than $26,000 in a health savings account.
He also managed to save over $75,000 in his 401K account.
When asked how he manages to be so frugal, Fahl explained that it was the same as when he was a kid, when going to the bowling alley and pulling gumballs from the machine was a joy for him and his siblings.
“If I wanted something, I had to buy it with my own money or wait until my birthday or Christmas,” he noted.
The couple, who also have a son and three cats, describe themselves as very frugal and have adopted FIRE (short for financial independence, or retire early) as their financial strategy.
In 2017, the couple bought their first home and rented out the first floor on Airbnb to raise money to pay off the full mortgage.
The following year, the couple bought the 675-square-foot home they now live in for $185,000 and again listed part of it on a short-term rental website.
However, this hustle and bustle quickly ended once they became parents.
The pair’s in-depth budgeting techniques come just days after US finance guru Suzie Orman revealed that self-sabotage is the main reason American workers feel short on money.
Speaking onstage at the personal finance conference, Orman told the audience that each individual’s mindset is what keeps them constantly short on cash.
In 2017, the couple bought their first home and rented out the first floor on Airbnb to raise money to pay off the full mortgage.
She explained that this is because Americans believe “they don’t deserve it.” [money] Or give it away.”
In the short video, Orman speaks passionately to the audience: “I’m here to say to every single one of you, if you don’t have the money you want in life, it’s your own fault.”
“You either think you don’t deserve it, or you say you’ll never be able to get out of debt, or you think you’re unworthy so you take action and give your money and everything you do to someone else.”
In May, Orman advised potential retirees to put as much money as they can into a Roth IRA.
A Roth IRA is a type of individual retirement account where you put after-tax money from your paycheck into it, and as financial expert Orman points out, all future withdrawals are tax-free.
