Meet the Super-Saver Who Retired at 30

A blog about business and economics.
April 26 2013 3:32 PM

Meet the Super-Saver Who Retired at 30

I was probably born with a desire for efficiency — the desire to get the most fun out of any possible situation, with no resources being wasted. This applied to money too, and by age 10, I was ironing my 20 dollar bills and keeping them in a photo album, just because they seemed like such powerful and intriguing little rectangles.
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But I didn’t start saving and investing particularly early, I just maintained this desire not to waste anything. So I got through my engineering degree debt-free — by working a lot and not owning a car — and worked pretty hard early on to move up a bit in the career, relocating from Canada to the United States, attracted by the higher salaries and lower cost of living.
Then my future wife and I moved in together and DIY-renovated a junky house into a nice one, kept old cars while our friends drove fancy ones, biked to work instead of driving, cooked at home and went out to restaurants less, and it all just added up to saving more than half of what we earned. We invested this surplus as we went, never inflating our already-luxurious lives, and eventually the passive income from stock dividends and a rental house was more than enough to pay for our needs (about $25,000 per year for our family of three, with a paid-off house and no other debt).

We learn that the family lives off the $25,000 in net income generated by the rental house and also that they have stock investments "which could boost that by about 50 percent without depleting principal if we ever needed it, but, so far, we can’t seem to spend more than $25,000 no matter how much we let loose," so they just keep reinvesting the dividends. The federal poverty line for a family of five is $27,570, so this is indeed a meager lifestyle, but one-sixth of the population is currently below the poverty line, so it's hardly unique. The difference here is that unlike typical poor people, Pete and his family have the peace of mind that comes with living off savings rather than simply having low wages or a precarious work situation.

At any rate, his view seems to be that all middle-class Americans should try to live this debt-free consumption-and-work-averse lifestyle, which wouldn't actually work.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.