7 Unusual Steps I Took to Save $250,000 in My 20s

Today's post is a guest contribution from a fellow blogging friend of mine, Sean from The Money Wizard. When he approached me about sharing his journey to building an early retirement portfolio, I was intrigued because he comes from the financial world. It's a world where people celebrate high salaries, high expenditures, and retiring early is hardly even a consideration.

He saved $100,000 by the time he was 25. Broke $150,000 a year later. And then $200,000 a year after that.

There were no windfalls or inheritances. He has a good salary but not an exceptional one ($50,000-$80,000).

He also has some good habits and ideas and I wanted him to talk about what he did to save $250,000 in his 20s.

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If you've spent any length of time in the Personal Finance community, you've heard the standard advice a million times. Create a budget, spend less than you earn, make steady investments… yada, yada, yada.

While those fundamentals are certainly important, I'm not going to bore you with another round of those again.

Instead, as I sit here reflecting on the moves I made to save $100,000 by age 25, and then hit over $250,000 by age 28, I'm going to focus on all the things I did to make myself look like a total oddball.

Isn't that more fun?

Because after all, to get unusual achievements, it takes unusual action.

Hopefully, by sharing these, we can blow past the regular money advice, step off the beaten path, and start focusing on the fringe-like money moves it takes to fast track your finances.

1) I started investing early. (I mean, really early…)

In the investing world, “young” is typically considered anytime before you've started panicking about your upcoming retirement. If you've only got a couple of gray hairs, even better.

So, I flipped that script.

Instead of beginning my investment career during a midlife crisis, I pushed it up a couple of decades.

… I made my first investment before I could drive.

Most teenagers save a little bit of cash so they can make it rain on their high school crush at the movie theater's concession stand.

And while I was just as susceptible to that high school drama as the next dude, I saved a portion of my minimum-wage earnings for another purpose.

Inspired by a high school math teacher who explained how a few years of compound interest could make anyone a millionaire, I made my first investment when I was just 15. I took $500 from my leftover summer earnings, and I shuffled it from bank to bank, searching for the highest interest rates on Certificate of Deposits.

The feeling of my money earning its own money was intoxicating.

By the time I was 18, I'd worked up the courage to invest my first dollar in the stock market. At first, I tried to be the next Warren Buffett, pouring myself into financial statements and predictably, making some costly mistakes.

Eventually, I wised up to passive index investing ideas like the three-fund portfolio. Throughout college, I continued funneling any extra change I could find into these funds.

The result? By the time I was 25 and made my grand appearance to the world as “The Money Wizard” with $100,000 to my name, my money already had a decade of compound interest at its back.

Money Wizard's Net Worth

2) I rented a mediocre at best apartment in the ‘burbs

After graduating college, I suddenly found myself adulting in a new city.

As a native Texan, I'd just accepted my first job in finance in Denver. I was excited to try my hand at a brand new city and state, but I had a big decision about the place I should get.

I'd read up on the average American budget, and I knew the typical American spent 37% of their money on housing. The way I saw it, saving a couple of hundred bucks a month on rent could be the easiest money I ever made.

So, I found myself a basic place in the suburbs. Sure, I didn't get to brag about whatever downtown high rise I was renting (in the world of millennials, living in the burbs is about as cool as admitting you're a Star Trek fan.)

But my choice to live a few minutes outside of the trendy downtown meant I was saving almost $500 a month. With that money, my savings continued to build each month, without even trying.

Plus, with the cash I was saving on rent, I could easily hire an uber driver to send me back into the action whenever I felt the urge.

3) I said no to materialism

Around the same time, I stumbled onto the idea of minimalism.

For whatever reason, the idea that less is more is completely foreign to our culture. We could blame the strategic deployment of billions of dollars from the most sophisticated marketing budgets in the world, or maybe it's just an innate human desire to own stuff.

Whatever the case, I started questioning whether spending money on the latest gadget would make me happier, or whether using that same money to get myself closer and closer to financial freedom would be a better decision.

I began passing on expensive artwork, junky knick-knacks, and an overflowing wardrobe that I knew I'd never wear. I made a game for myself, to see how often I could walk through a shopping mall, art festival, or gift shop completely unphased. Could I appreciate something for what it was, without the succumbing to the immediate urge to own it?

To my surprise, this adjustment was way easier than I expected. Because when you know your money is going towards a higher purpose, buying a cheap piece of whatever feels like a total waste compared to building investments and buying your freedom.

My Apartment
My first apartment, decked out in only the most basic furniture IKEA had to offer…

4) I kept my beater as long as possible

After my epiphany about materialism, vehicles found themselves as one of the items most in my crosshairs of questioning.

My salary was pegged at $50,000, and I didn't want to become yet another $50K Millionaire. You know the type… gets a job, becomes overly impressed they're no longer making minimum wage, and… promptly gives away all that newfound earning power to a sneaky car salesman.

So instead, I drove my 13-year-old beater pickup truck for as long it could last, saving hundreds each month in a new car payment.

5) I killed all recurring bills.

Amazed by how much easier saving was thanks to my cheap rent and nonexistent car payment, I started wondering what other automatic savings I could build into my budget.

I soon placed any monthly payment right in the center of my budgetary ax. It didn't matter how big or small the bill, if I was cutting a check for it every month, I seriously reconsidered whether I should keep paying for it.

I canceled my cable. I passed on the premium music app. I renegotiated down my gym membership, and I said no to the thousands of insurance offers I was being pitched.

(don't like doing this yourself? sign up for a service like Trim and they'll negotiate it down for you)

Combined, these built another hundred dollars or so of savings into my budget every month. Savings which would repeat, every month, with zero effort on my end.

6) I replaced expensive hobbies with cheap ones

Soon thereafter, I came to an interesting realization about our free time. We choose our hobbies, and yet their prices range from insanely-freakin-expensive to earning you money.

And yet, we seem to enjoy them no matter what, otherwise they wouldn't be our hobbies.

So, when we're not yet millionaires, why not choose the cheaper options?

I started questioning nightly bottle service at ‘da clubs, and instead built frugal hobbies into my lifestyle.

With my cable cord already cut, I diverted that couch time towards blogging, which to my surprise, can be a pretty profitable hobby. I started reading books about finance, learning how to cook, and enjoying the great outdoors with friends.

Hiking
Hiking with The Money Pup – a 100% free hobby!

I focused more on going to the gym, which was a fixed cost whether I was lazy or used their services every day.

Might as well get my money's worth!

That said, I did still keep snow skiing, which just might be the most expensive hobby in the world. You know, for balance's sake. 😉

7) When it came time to buy the home, I slashed the suggested home price in half.

When it finally came time to move on from renting, I wanted to keep the savings rolling.

So, despite the squeals from my realtor and lender, who both have an inherent interest in me spending as much money as possible, I pegged my budget at about half what my peers were purchasing. (On my now ~$80,000 a year salary, even Mint.com suggested I buy a $485,000 house!)

That decision worked out a-ok, since I was able to find the house of my dreams for just $180K, and continue saving huge chunks of my paycheck every month.

Want to improve your finances? Don't be afraid to live differently

“Yeah, that's all great Money Wizard, but enough about you. What about me?”

Here's the thing about my story. While the steps I took might have been unusual, none of those steps were all that difficult.

Switching out a few hobbies? Saying no to mindless purchases? Tempering down the home budget? None of these choices significantly impacted my daily life.

What did impact my life? Freeing up thousands of dollars in the monthly budget.

For me, I'm using those savings to put myself on pace for something equally unusual – the ability to completely walk away from mandatory work when I'm still in my 30s.

Maybe you have a similar goal. Or maybe, you're saving to invest in a side business, grow your discretionary income, or even just build up your first emergency fund.

In any case, the question remains. What strange steps could you take to improve your finances today?

“If you will live like no one else, later you can live like no one else.”

The Money Wizard is a 20-something financial analyst by day and money blogger by night. He's on a mission to build a million-dollar portfolio and retire in his 30s. His friends call him Sean, and when he's not busy working or writing about money, he can be found cycling, skiing, or visiting a few too many breweries. You can join thousands of others using his journey to learn about financial freedom at MyMoneyWizard.com.

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  1. DNN says

    Sadly, my mind wasn’t focused on saving money in my 20’s. I took a risk, moved away from home, and shacked up with a friend out of state. I was working job to job back then with no financial future in sight. Though life can present some challenges, I’m glad I went through them because I’m working independent today with the side hustle millionaire mind and though it was rough back then, I’m still moving forward today and doing the transformation business work.

  2. McKinzie | Moms Make Cents says

    Such an inspiring post! I’m 26 and in the last five years, my husband and I have gone from a negative net worth (thank you student loans) to a similar trajectory. It is crazy what you can do when you live within your means, side hustle and learn to stretch your dollar. Heading over to your site now to check it out!

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