My wife retired for her 41st birthday

How do you retire in 20 years or less? Be frugal and marry a civil servant. I’m joking. That’s a little too simple of an answer. However, my wife is retired at the age of 41, 19 years after graduating from college.

We set a long-term goal when we both started working. We knew I had a 20 year (at the time) career in the police department, and we planned for her retirement to coincide with my official 20th year anniversary, which is coming up very soon. She actually retired a year ahead of schedule. As for me, I will stay working, playing it by ear. But, it’s a great feeling knowing that I too can leave any time I want to.

As I stated previously, this blog is dedicated to helping our young police officers (and anybody in a similar situation) and their significant others plan well ahead for an early retirement.

All cops have a dangerous job, but young cops have it especially tough. When you’re new to the job you get sent to the busiest, most crime-ridden areas of the city. Between the demands of the job, the danger, and all the odd hours and days off, the stress quickly takes its toll. I’m sure oftentimes our young officers don’t even know if they’re coming or going.

We’ve all been there. The least I can do is help ensure that retiring in a comfortable manner is not a worry for them. They can choose to work another career after “retirement,” but it shouldn’t be necessary, if they plan it right.

However, even if you’re not a cop, or perhaps you’re married to a cop, the principles that we’ve stuck to can apply to anybody, working in any job (although it will be much more difficult to retire in 20 years in the private world, without a pension, earning a comparable middle-class salary.)

So, this whole discussion is based mainly on a dual income couple, at least one of whom is a police officer. My wife would be the non-cop.

How was my wife able to retire in 19 years? Here are the main principles that we’ve stuck to most of our lives:

• Work/study hard, especially early on.
• Live well below your means. Be frugal.
• Save and invest. Pay yourself first, start early.
• Have no debt, other than a moderate mortgage and a small student loan.
• Set goals. Meet them, and exceed them. Constantly out-perform your goals and expectations.
• Talk to your spouse about finances and goals. Be on the same page.
• Have discipline. Stick to the plan no matter what.

She came from immigrant parents who led by example and instilled most of the above principles into her. They lived in government assisted housing, with up to 6 family members in a 1 bedroom apartment (an aunt and grandma lived with them for some time). They made sure, at the end of a 12 hour workday, that the kids had done their homework. They saved and bought a small townhome in 1987 and paid it off in 15 years.

They lived well below their means, so they knew they could pay off their loan in 15 years, instead of the more conventional 30 years. By the time they retired, about 2010, they still had not made more than $70,000 a year, COMBINED.

There are no secrets to their success; only hard work, discipline, and the rest of the above listed principles.

Both kids had side jobs making jewelry at home from the time they were little; both were told to look for jobs outside the home by the time they were 14. So, technically, my wife has worked for much longer than 19 years.

Both kids maintained A averages, and part time jobs, all the way through college. No wonder they both easily snagged good jobs right out of college.

My wife’s grades, part time tutoring job, and the experience gained in internships meant financial firms were recruiting her right out of college.

She worked 100 hour weeks for the first several years as a rookie consultant. But, that hard work allowed her to get early promotions, which eventually allowed her to jump to a different firm, at a much higher salary, closer to home, and working a much more typical 50 hour week.

Like me, she lived at home up for the first few years, maxed out her 401K within the first few years, and every year after that. She was even able to buy her parents a brand new SUV, their most expensive car ever, using her bonus one year.

Our first home together was a small 1-bedroom apartment. We both had savings and easily qualified for a 15 year mortgage, using 20 percent down and basing our housing expenses on my income alone.

We then set a goal to have a house at 30, again based on my income alone, and then start having kids. We assumed that she could lose her job at any time in a volatile market. This mentality allowed us to save nearly 1 of our 2 salaries. She didn’t lose her job of course, because she was always one of the top producers in her firm.

Through all the years, we’ve only basically maintained only 1 kind of long term debt-our mortgage.

We always paid off the car note early. And, she paid off her student loans within the first few years of working.

We pay off the credit cards every month. We love credit cards for their convenience. But, we never charge more than what we can easily pay off next month.

Debt is money owed to another person. It basically means you are working for that other person. The only person we will work for is the bank, and that’s only because the bank gives us back something even more important-a home to live in.

We’ve always set goals and made detailed plans. And, we always made it a point to not only achieve our goals, but to exceed them every time.

There’s great satisfaction in achieving your goals. But, you should make sure they are worthwhile, yet still attainable.

(I have goals for everything, not just for finances and other important areas of life. For example, when I go to the gym, I set a goal of doing 12 sets of chest exercises. It’s a decently high number, allowing me to get a nice workout. But, I always end up doing 13 sets. It’s a fun little game I play. And, it’s proven to be a great motivator and keeps me disciplined.)

Every time we achieved a goal it was a great feeling, and it made us want to set more goals.

We were constantly thinking of ways to exceed our goals. Set a goal. Meet it, and exceed it every time. Constantly out-perform your goals and expectations.

When the market crash came in 2008, we were ready. Living on 1 income meant we always had savings on the side. This allowed us to contribute the max to our retirement funds from each paycheck, taking advantage of the low prices.

Our retirement investments have always been in equities only, the riskiest category. Given our long timeline, we could weather the volatility.

By 2010, with the encouragement of real estate savvy friends, we started looking into investment properties. Everybody agrees that real estate is how the rich got rich. But, nobody told us what kinds of real estate to buy, and how, and when.

I nearly made the biggest mistake of my life when I almost bought a cheap house simply because it was cheap. That is another topic that needs to be covered extensively in another article. However, I must say that you cannot simply listen to others say that owning real estate will make you rich, and then just go out and buy houses.

It’s like hearing that fighting in the UFCs is a great workout and a potential way to make a living, and then just jumping straight into the Octagon. That’s a disaster waiting to happen. That’s how people end up in foreclosure. You have to read, research, plan, etc.

The house that we currently live in, bought in 2007 on a 15 year loan, was aggressively paid off by 2014. We were still only living off of basically one income. We paid ourselves first (automatic 401K/457K deductions, 529 plans for the kids, etc) and lived on the left overs.

My wife often jokes that I still bring home the same amount I did when I was a rookie cop. It’s not far from the truth. This meant we never had a lot of extra money to spend, another reason why our expenses were never able to get out of control.

With our home paid off, our monthly expenses dropped to about $4000 a month, a small amount for living in NYC, and an amount that I could easily cover with my income alone (or pension, should I retire).

That’s when we knew that my wife could truly quit her job, to stay home and help our kids with their ridiculously, and seemingly needlessly, difficult common-core homework that I really can’t deal with.

(Actually, I must say it’s a great thing that the kids are being pushed to be smarter, and the teachers are doing a great job).

Yes, you might say that our scenario is unrealistic for most middle-class wage-earners because we have rental homes, which provide some extra income, and because my wife made more than the typical middle-class NYC income. But, the main reason she was able to retire is because we had decreased our expenses to an amount lower than what a typical middle-class family in NYC spends, while still operating on 1 civil service income.

The rental income, as well as the fact that we have much more saved for retirement than most people in our income bracket, is just an extra layer of safety. They are not being used to support our life-style, and were not the deciding factor in her retirement.

She was able to retire early mainly because we had gotten used to living well below our means, living on the 1 reliable income that civil service provides.

So, you see, it hasn’t been easy. I’m sure you didn’t expect me to say that it was some magical pill that we both took. But, it IS simple. The formula is:

-work hard and educate yourself;

-be frugal, use your money efficiently;

-build up your knowledge and financial base to be able to take advantage of opportunities that are available to anyone;

-avoid debt like the plague;

-have worthwhile, attainable goals, and exceed those goals every time;

-be on the same page with your partner;

-and, develop the discipline to carry it all out.

But, you don’t even need to follow the whole formula. My wife and I are just a tad bit OCD when it comes to finances.

If I had to boil it down, it’d be about setting goals and having the discipline to go after them.

There is no secret to it. It’s not miracles or luck or rocket science. It’s having goals-decide what it is that you want to accomplish; and discipline-do what you have to do to achieve them.

If you know what you want to achieve, and you have the discipline to go after it, then all the other stuff will eventually come along too.

We did what we knew we had to do in order to get to where we wanted to go. That’s how my wife was able to retire in 19 years. That’s how I can leave my job at any time from here on and not have to work another day. And, it’s not too late for you, either. Even if following these principles does not ultimately lead the both of you to retirement in 20 years, they’ll at least hasten your retirement.