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Not bad for a person who never heard of a 401(k).

3 minute read

Helen from Retire Early Helen grew up in the 1960s in a village in northern China. Her family was very poor. She remembers money being scarce. She also remembers that her parents didn’t spend a lot, but they did manage to get Helen and her brother through college.

Growing up, Helen didn’t learn much about investing money. Even when she finally earned her second master’s degree in 1998, after living in America for two years, investing was a foreign concept. But she caught on quickly.

“I still remember the orientation day on my first job in the fall of 1998,” says Helen. “It was an IT job in Northern Virginia. During the new-hire orientation, everyone was talking about the company benefits like the 401(k) match and insurance. I had no clue what they were talking about.”

Helen called friends who were living in the U.S. and they explained the details. She became more acquainted with basic investing tools and started contributing 12 percent of her pay to the 401(k) and also invested in a few mutual funds.

Then she got brave. “I used all my savings and bought tech stocks (Dell, AT&T, etc.),” remembers Helen.  “That was very aggressive.  Luckily, I sold them all in January 2000 right before the crash.  Nobody knew the storm was coming. The reason was that, I was relocating to central Ohio, and just bought my first house.”

Learning about finances on TV

After almost losing all her investments, Helen stopped investing. She says, “Since then, I have not owned a single stock.  All my investments are on mutual funds.  There is an old Chinese saying: ‘Bitten by a snake once, you’ll be afraid of hay ropes for 10 years.’”

In 2002, Helen started watching the Suze Orman show. That show helped her realize that buying her home with a 30-year mortgage at a fixed rate of 8.25 percent was a big mistake. She also learned about “wants and needs.”

“The house purchased was what I wanted, not what I needed, and it was brand new,” says Helen. “The same house in Northern Virginia would’ve cost at least 50 percent higher at that time. That made me think the wrong way:  ‘The house price was so low, and let me get a better house.’  But the most important questions were ignored:  Do I really need it?  Can I afford it?”

That was the first time Helen experienced debt, and she didn’t like it. So she did something about it. She pushed herself very hard for 10 years, and paid her mortgage off in 2010. She also lived a frugal life and saved as much money as possible.

“The money didn’t come easy, as I had to work very hard,” says Helen. “As a result, I appreciated the money, and didn’t waste it on anything that didn’t matter to me. I tried to save and invest wisely. In terms of sacrifices, I didn’t travel much or buy the fancy car, clothes or handbags.”

Leaving the cubicles

“During my 25-year engineering career, I probably spent half in cubicles,” says Helen.

“Cubicles were cold to me. I stayed at my last engineering job for eight years, in those high cubicle farms. Some coworkers didn’t like the ceiling lights. So, they took several fluorescent tubes out. Our working area looked so ‘cloudy’ every day. Sitting in those dark cubicles, I always dreamed about getting out. Sometimes, I walked to the windows, and peeked at the outside world for a few minutes like a caged bird.”

Helen did get out. In early 2013, she quit her engineering career — but she didn’t stop working. Helen studied hard so she could become a financial adviser. But Helen says, “I didn’t get a financial adviser job, I became a personal banker for 19 months.”

She took a huge pay cut, but she says, “The change was not about money, it was more about trying something new.” After the 19 months, Helen realized that she enjoyed the work, but it was time.

“The day I quit was a beautiful day,” remembers Helen. “When I walked out of the office, it was sunset.  The bank branch was located close to the airport.  One airplane was hovering around the super blue sky to prepare for landing.  The scene was mesmerizing.”

Now Helen enjoys her early retirement and frugal lifestyle. And she provided some tips that might help us retire a little earlier too:

  • Don’t carry the credit card balance if the interest rate is higher than 0 percent. Pay the full amount each month and on time. If you don’t have the money to pay in full, it means you are living beyond your means.
  • Contribute to your 401(k). Besides that, invest some after-tax money each month if you don’t need that money for the next four to five years. The reason is: If you plan to retire early, you’ll have at least five years left before you can touch the 401K or regular IRAs, without paying the 10 percent penalty (the cut off age is 59 ½).
  • Invest consistently. Don’t stop investing simply because the market is crazy. For the same amount of money, you’ll get more shares of the same mutual funds when the market goes down.

I’ll end on why Helen created her blog: “Sharing ideas and having great conversations with you on what matters to us — retirement, family, money, emotions, and life.”

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About the Author

Brian Bienkowski

Brian Bienkowski

Brian Bienkowski has been writing about personal finance for over 15 years covering debt recovery, fraud, and credit topics. He has worked on several personal finance books and guides that help consumers navigate the US credit system. When he’s away from the keyboard he enjoys craft beer and fishing – and once enjoyed a cold Sweet Water IPA after catching a sailfish.

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