Early Retirees Reveal Top Money-Saving Strategies
As the quest for financial independence gains momentum, early retirees and frugal savers share their top money-saving strategies. Insights from various individuals illustrate diverse approaches to mitigate costs and save for a comfortable retirement.
Creative Money-Saving Strategies from Early Retirees
The Power of Real Estate Investments
Letizia Alto and Kenji Asakura, the innovative couple behind Semi-Retired MD, leveraged real estate to leave their medical jobs. After purchasing their first property in 2015, they expanded to over 100 rental units, facilitating a shift to part-time hospital work.
This transition allowed them to benefit from a significant tax strategy known as Real Estate Professional Status (REPS). By qualifying for REPS, they could offset substantial income losses from their rental real estate against their medical salaries.
- To qualify for REPS, individuals must meet specific criteria annually:
- Spend over 750 hours on real estate activities.
- Work more than half of their professional hours in real estate.
- Participate materially in rental operations.
Frugality as a Lifestyle: Carmelo Camilleri’s Story
Carmelo Camilleri epitomizes savvy saving. Adopting his father’s advice, he prioritized savings from his early income. Living at home during college, he avoided housing costs and saved for his first home, purchased at age 27.
Carmelo utilizes various strategies to minimize expenses:
- Avoiding subscriptions, which he deems costly.
- Comparing prices for gasoline through apps like GasBuddy.
- Shopping around for groceries to secure the best prices.
His negotiation skills proved beneficial when buying his home, which he acquired for $25,000 less than the asking price.
House Hacking: A Path to Financial Freedom
Jeff White and Suleyka Bolaños adopted a unique approach known as “house hacking.” This method involves renting out parts of their primary residence to eliminate mortgage costs. By relocating annually, they benefit from favorable owner-occupied financing terms.
- Key elements of their strategy include:
- Living in one property for at least 12 months.
- Converting their previous residence into a rental property after moving.
Having successfully house-hacked for eight years, the couple significantly increased their real estate portfolio. This strategy has fast-tracked their journey to financial independence, enabling them to break free from traditional employment.
Conclusion
These examples highlight diverse and effective money-saving strategies employed by early retirees and financially savvy individuals. By investing wisely and adopting frugal habits, anyone can explore pathways to expanded savings and financial independence.
