How a 20-Year-Old Is Teaching Others How to Retire Early
Financial advisors looking to lure future millionaires by tapping into the millennial market may want to take a cue from a 20-year-old university student with a website.
Alex Smith, a student at the University of Northern Iowa, plans to retire with $1 million by the time he reaches 30, writes WHOTV.com, the website for local NBC News Channel 13.
To do so, he’s planning to go further than most advisors suggest to their clients: Smith intends to save 60% to 65% of his income by cutting out things like cafe-bought coffee and his gym membership, the website writes.
And others with similarly lofty goals can follow his progress. He has created a website, dubbed Wealthy Diligence, where in addition to blog posts about investing, managing money and planning for retirement, Smith publishes his personal financial statements, according to WHOTV.com.
“So, I tell you exactly how much I’m making, how much I’m spending and then at the end of the day what my net worth is,” Smith tells the website. “It gives kind of a source of hope and inspiration to people that may be in similar circumstance.”
The idea came to Smith during a financial planning class he took freshman year, where he learned that the average American saves only 5% of what they earn, which requires about 80 years to save enough to achieve the same standard of living in retirement as they had during their working lives, according WHOTV.com.
“What really makes this terrifying is your early ages. Your early 20s are the most pivotal, important times of your life to be saving for retirement because you miss those years of tapping into compounding interest,” Smith tells the website.