- A 28-year-old couple in New Hampshire are trying to retire at 35.
- Aggressive saving and “house hacking” strategies have increased their net worth to more than $800,000.
- They live the FIRE lifestyle with the eventual goal of becoming full-time parents.
In 2019, at the age of 23, Lauren Simpson and her husband Ian decided to pursue an ambitious goal: to retire by 35.
Over the past five years, the New Hampshire-based couple, now 28, have grown their net worth from less than $100,000 to about $834,000 as of June, according to documents seen by Business Insider. Through a combination of savings, investments, and passive income through rental properties, they expect to spend up to $150,000 a year on decades of retirement.
Simpson said the FIRE movement, which she first learned about in 2019, was a major inspiration for her and Ian’s retirement goals — FIRE is an acronym for “financial independence, retire early.” Though some in the couple’s lives were skeptical that their goal was achievable, they remained steadfast.
“Our view is that 50-year-olds are panicking because they haven’t saved enough and they only have 10 to 15 years left before retirement — they save aggressively and then retire,” Simpson said. “Rather than panicking at 50, we’re panicking at 23.”
Many Americans struggle to save for retirement, but the FIRE movement has offered some people a blueprint for achieving financial security. While FIRE advocates’ methods and goals vary widely, some save a large portion of their income, work a side hustle, or postpone important life events like having children. While the FIRE movement isn’t for everyone, experts say some of its general principles — such as the benefits of saving and investing at a young age to take advantage of compounding — apply to a broad audience.
Simpson shares her and Ian’s best strategies for improving their finances and why one of their ultimate goals is to become “full-time parents.”
“House hacking” has helped them increase their wealth
Simpson works in financial services as a marketing director and Ian works in IT as an asset manager — they both earn six-figure annual incomes. About $350,000 of their net worth comes from retirement accounts like 401(k)s or Roth IRAs.
The rest comes from equity they built in four properties they purchased over the past three years: one primary residence and three rental properties. Their net worth of $834,000 includes Zillow’s estimate of the current value of the properties. The properties also provide the couple with rental income that they can put toward savings.
In 2021, the couple, who both work remotely, moved from Florida to New Hampshire. Simpson said Florida offered the benefit of no state income tax, but it was “too hot.” New Hampshire has no income or sales taxes, better weather and housing that fits their budget.
Given the competitive housing market, Simpson said they made an offer without seeing it in person — their first visit to New Hampshire was for a home inspection.
In addition to their primary residence, the couple’s real estate portfolio consists of two multifamily properties and one single-family property. To purchase their three investment properties — each located in New Hampshire — Simpson said she and Ian used creative “house hacking” strategies to minimize their down payment.
When someone buys a second home or investment property, mortgage lenders often require a minimum down payment of 10%. However, when someone buys a owner-occupied property — one that will be occupied — they can sometimes qualify for a down payment of 5% or less.
To qualify for the lower down payment and owner-occupied, the couple had to have lived in each property for at least a year. For the past three years, they have moved every 12 months.
“Moving home is an unwise move to get so much property for so little money,” he said.
Although this strategy requires carrying significant debt loads and incurring significant private mortgage insurance costs, Simpson said the rental income from their properties and rising home values have helped make it profitable.
As well as buying investment properties, Simpson said she and Ian have done everything they can to grow their savings.
“As we progressed in our careers and earned raises, our budget grew, but our target savings rate — 70% — stayed the same,” says Simpson, referring to the percentage of their income they aim to save each year.
Despite their financial progress, the couple has faced some challenges. They welcomed their first child last November, something that has put a strain on their savings.
“NICU bills and other medical expenses are going to reduce our savings rate by 60% by 2023,” Simpson said. “So, it’s a changing goal now that we have a baby to deal with, but ultimately, our son is what we’re doing this for.”
Early retirement will make it possible to be a “full-time parent”
Simpson said one of the biggest reasons she and her husband wanted to retire early was so they could be “full-time parents.”
Growing up, she said her parents dedicated “all their time” to her and her siblings. But when they stopped having children, they realized they “didn’t have much in common” and eventually divorced, she added.
In comparison, Ian’s parents spent more time prioritizing their relationship. They didn’t “attend every extracurricular activity” or “coach a little league baseball team.”
“When my husband and I talked about the benefits of both parenting styles, we realized we wanted to do both,” Simpson says. “FIRE gave us the opportunity to do that.”
By retiring early, they will have enough time to devote to their children and each other.
“We see money as a means to build relationships and raise families,” Simpson said. “It’s not meant to be buried under the mattress or hoarded like acorns.”
Are you part of the FIRE movement or live by some of its principles? Contact this reporter at jzinkula@businessinsider.com.
