Steve Adcock, a 42-year-old who retired from his corporate job in 2016 with $900,000, shares his financial journey and some regrets he has about not saving and investing more aggressively earlier in his life. Despite his current net worth of $1.3 million and living a comfortable life with his wife in Arizona, he wishes he had started saving and investing more money sooner, as he believes in the power of exponential growth in investments over time to increase one’s wealth for retirement.
In his early 20s, Adcock admits to only saving the recommended 10% of his income and believes this was the minimum he should have been doing. He took advantage of his company’s 401(k) matching program and contributed to a Roth IRA, which financial experts applaud as a smart financial move. By contributing enough to receive the full match on his 401(k) and investing in a Roth IRA, Adcock set himself up for financial success, although he wishes he had saved even more money earlier on in his career.
Adcock fell into the trap of lifestyle creep, where his spending increased along with his salary, when he first started working. However, as he and his wife aimed to achieve early retirement, they put themselves on a strict budget in 2014 and saved 70% of their income towards retirement accounts. Their strict budgeting and aggressive saving allowed them to accelerate their savings and work towards their goal of early retirement, a vision that motivated them to sacrifice immediate gratification for long-term financial freedom.
The couple prioritized their necessary expenses, such as mortgage payments and food, and invested the majority of their remaining income into retirement accounts to achieve early retirement as quickly as possible. Adcock’s motivation to retire early led him to save and invest heavily, foregoing immediate spending and luxuries for long-term financial security. While he acknowledges that his strict saving regimen may not be suitable for everyone, it was crucial for him in achieving his goal of early retirement.
Adcock’s regret about not saving and investing more aggressively earlier on in his career serves as a reminder to all individuals about the importance of starting early when it comes to financial planning and saving for the future. By finding a comfortable savings rate and gradually increasing it over time, individuals can work towards their financial goals and achieve financial freedom in the long run. Adcock’s story highlights the power of disciplined savings and investing in achieving financial independence and early retirement.
As part of National Financial Literacy Month, CNBC is sharing stories to help people manage, grow, and protect their money. Adcock’s journey serves as a valuable lesson in the importance of saving and investing for the future, and the impact that disciplined financial planning can have on achieving financial goals. By learning from Adcock’s experiences and taking steps to improve their financial literacy, individuals can work towards a secure and prosperous financial future.
