Thu, Jul 25, 2019 - Page 14 News List

They became millionaires and retired at 31. They think you can do the same

The authors Kristy Shen and Bryce Leung are part of a movement called Fire that encourages people to save intensively to retire early

By Miranda Bryant  /  The Guardian

A couple in March walk during the sunset by the sea in Cyprus. Early retirement is possible if you don’t have a mortgage and invest wisely.

Photo: AP

Growing up in poverty in rural China, where her family collectively lived on as little as US$0.44 a day, Kristy Shen learned to make decisions based on pragmatism rather than passion from a young age.

On her first ever trip to a toy shop aged eight, after her family moved to Canada, she declined the offer of a teddy bear in favor of a cheaper one and requested that her father send the remainder of the money to their family in China. As a teenager, she chose to be a computer engineer, ignoring her dream to be a writer, based on a formula she devised to rank the best value university courses based on tuition fees versus future pay. And as an adult, any domestic disagreements with her husband, Bryce Leung, are generally won or lost based on who makes the best mathematical case.

But when, in 2012, Leung told her that in three years’ time their savings had the potential to hit C$1m (US$760,000) and they could retire in their early 30s, she was convinced the facts in front of her were incorrect.

“My reaction was like, ‘No, this is wrong, your math is wrong, there’s something wrong here,’” she says. “I didn’t believe that was possible at all.”

In the end, of course, the most logical argument won. Three years later, Shen, then 31, and Leung, then 32, retired.

They are part of the growing Fire (financial independence retire early) movement that encourages workers to save intensively to enable them to stop working for money far earlier than is commonly done.

Today, at the grand old age of 36 and 37, respectively, Shen and Leung are reveling in their “retirement” (to use the term on two people so pulsating with youth seems disingenuous).

Since leaving their old jobs — they both worked as computer engineers — they have travelled the world almost constantly — spending time in countries including Japan, the UK, Portugal and Thailand — started a successful blog, Millennial Revolution, teaching others how to retire early too, and co-written two books.

The first was a children’s book, Little Miss Evil. The second, Quit Like a Millionaire, a memoir-cum-how-to guide came out this month and presents financial independence as a route to happiness and is refreshingly dismissive of home ownership as an investment.

To begin with, their friends and families were skeptical, expecting them to return penniless after a year. But traveling cost them less than spending a year at home in Toronto, and their investment portfolio has grown since they left their old lives behind, so they now have more money than they started with. Some people, says Shen, see what they’re doing as “invalidating” because it challenges the status quo.

“It really makes people question their lives and they don’t like that because it’s scary,” she says.

Their journey to Fire started fairly conventionally — they were saving for a deposit to buy a house. But the more they saved, the more house prices went up and the less sure about getting on the property ladder they became. By 2012, after seven years of saving, they had C$500,000, but Leung started looking for other solutions. After coming across early Fire bloggers like Mr Money Mustache, “I realized based on what they were doing and where we were that we could either be in debt for the next 25 years or retired in about three,” he says.

Using an adapted version of the “4 percent rule” — a principle borrowed from the traditional retirement world — they calculated their basic living expenses, C$40,000, and multiplied it by 25 to come to C$1 million, the amount they would need to retire. In a total of nine years they managed to accrue over a quarter of that in savings, plus a further C$200,000 through low-risk investments.

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