Rebalance CMO Lauren Simpson shares how she and her husband became millionaires before 30 — and why she believes FIRE isn’t about sacrifice, it’s about freedom.
Transcript
I’m Lauren Simpson. I’m the Chief Marketing Officer at Rebalance, and something I’m really passionate about is FIRE. FIRE stands for Financial Independence, Retire Early. And the philosophy behind it is to be able to create enough passive income that you can live off of it without needing your nine to five job. And to some people, that means retiring early entirely and not working at all and sitting on a beach. And to other people it means being able to pursue things that they’re more passionate about.
It might be a side project that you’ve always wanted to do, but it doesn’t create the income that you need, or it might be traveling. Or for me it’s a focus on family. I have an aggressive goal of trying to reach my FIRE number by 35. And a FIRE number is something that when you go on the onset of this journey of trying to create enough passive income for yourself, you look at how much money you need to be able to live off of it and still sustain the growth of that portfolio. So a general rule of thumb is to be able to live off of 4% of your portfolio. So I have a goal of saving and investing two and a half million dollars and being able to live off of 4% of that, or a hundred thousand a year. And I set this goal six years ago, and this year I achieved the milestone of reaching a million.
So my husband and I both became millionaires before we were 30. And we believe that we are on track to hit our two and a half million number by the age of 35. We’ve certainly had trials along the way where life throws you curve balls and you can’t expect them. But what you can expect is that they will come. And so part of FIRE, and really part of just best practices for saving for the future, is making sure that you have an emergency fund. Because if you do not have that cushion, if you don’t have three to six months in savings and something comes at you, you’re going to have to take on credit card debt. You might have to take early withdrawal penalties on your retirement accounts.
And so something that happened in my personal life last year was my son was born seven weeks early and had to spend quite a bit of time in the NICU. We were out of state at the time, and all of this contributed to over $40,000 worth of unexpected expenses. And had we not had an emergency fund, that would’ve sunk our entire plan. One of the biggest criticisms of FIRE is that you are sacrificing the now for later, or you’re not living right now. I mean, that’s a concern that I heard from family members. My dad had that concern when we started this journey. And because of that being his concern, it’s something that my husband and I have focused on.
We’ve made sure that we enjoy our lives now while also preparing for the future. And we’ve been able to achieve that. It creates some creative ways to have to do it. I mean, we had a trip to Italy. We did eat PB and J for some of it, but I’ve seen Italy, I’ve seen Iceland. I own a home that’s comfortable in a safe neighborhood. So I’ve enjoyed things now, but it has to look a little bit different. You can’t spend all of your money now.
I will say when we first told friends and family that we wanted to retire by 35, they thought we were crazy. And as we’ve gone, we’ve been on this path for six years now, we’ve gotten more and more credibility and at this point, friends and family are coming to us for financial advice. And it’s been really exciting to be able to tell them this year that we became millionaires. And it’s been exciting to help other people start to get on that path.
We don’t have any friends and family who want to retire early the way we do, but all of our friends and family want to retire. And it’s the same principles. It’s really serendipitous that I ended up at Rebalance because in my personal life, finances have been a huge focus for me.
I love spreadsheets. I love creating a plan. I was a big proponent of index investing even before finding Rebalance. And when I found this firm, I found that there are wealth managers out there who don’t just manage your investments and don’t just manage your portfolio, but they actually help to manage your life. They’ll create a financial plan where you can think through different what-if scenarios. And what I was already trying to do on my own with index investing, partnered with the expertise of what Rebalance has, it’s really made sure that we’re on track to actually reach this goal.
