- To reach a net worth of $US1 ($AU1) million in her early 30s, Shang of Save My Cents made strategic moves.
- She started a side hustle, and she and her partner reduced their expenses to save 50% or more of their incomes.
- Then, she invested in low-cost index funds consistently in order to build wealth.
- This article is part of a series focused on millennial financial empowerment called Master Your Money.
Early retirement as a millennial can sometimes seem like a stretch, but it is possible.
Shang, who doesn’t share her last name online, reached a $US1 ($AU1) million net worth and became work-optional in her early 30s. Blogging online at Save My Cents, the millennial built her net worth with three strategies she used over time consistently.
Here’s how she reached this major milestone.
1. She started a side hustle
Shang started working as a wedding photographer to bring in extra income, adding to what she made at her full-time job as a corporate strategist. Instead of spending the money, she invested it.
“The money that I made from that I rarely spent,” she told Insider. Over 10 years, she estimated that her wedding photography side hustle helped her earn more than six figures.
By investing the money, she was able to earn even more from her side hustle and ultimately grow her net worth more quickly.
2. She and her partner saved 50% or more of their incomes, and saved any bonuses or raises
To keep their expenses low and their savings rate high, Shang and her husband decided to only live on the equivalent of just one of their incomes. Instead of one person putting their entire paycheck in the bank, though, each of them saved 50% or more of their own income.
“As I neared my mid-20s and I met my husband, and we were dating at the time, he started floating the idea of, ‘What if we lived on the lower of our two incomes?'” she said.
Using this strategy ultimately meant increasing her savings rate to about half of her salary, raising her savings rate from 30% to 50%.
Any bonuses they received at work were also invested. “When we say we live off the lower of our two incomes, we’re talking about our base incomes. We also do get generous bonuses and all of that was invested over time,” she told Insider. Her net worth is made up of her savings alone; her husband has his own savings and investments.
It’s a strategy that others in the FIRE community and those who have paid off large amounts of debt have used to reach their goals.
3. She avoided following trendy investment advice and went for a slow-and-steady approach
Investing has always been a part of her strategy, and Shang says that being consistent was one of the most important parts of her process.
She says that her focus has mostly been on index funds with low costs. “I’m not in crypto, I don’t day trade,” she said. “I’m very much a person that’s like, ‘Just be even-keeled and try to stay with the market as much as you can,'” she said.
Financial planners often suggest keeping investments for the long term, and avoiding feeling the stresses of ups and downs in the market, a strategy that clearly worked for Shang.