Penny Saved is a Penny Earned

So how does a 40 year old single women take a few years off to travel the Caribbean by sailboat?  The answer is incredibly simple.  SAVE!!!!

Oh if it was just that easy…. Well in many ways it is, but saving comes with immense sacrifice. Anyone who has tried to save for a vacation, house, or wedding knows that it can be done, that with good income and good decisions you can save a large chunk of money in a pretty short period of time.  That is the formula that many who cruise follow.  They save up and spend it on a true adventure.  I took a longer term approach and put myself in a position to shift my life dramatically at 40, taking time off and ensuring that when I came back I would be able to do life differently.  

I decided I was going to take my 40’s off over 20 years ago, and I have been saving and planning ever since.  My life has been a series of choices, do I save or do I spend?  Looking back I think I managed to strike a very good balance.  I never sacrificed today for tomorrow, and never felt like I was missing out yet at the end I was saving 50% of my income!!!

My goal was to take my 40’s off to sail and by then I would have my retirement set and cash on hand to sustain me for 10 years.  It was a lofty goal, and one I got pretty darn close to accomplishing!

People ask me how, what’s the magical formula?  Well I believe it comes down to choice and sacrifice.  But here are a few of my tips and tricks.  🙂

  • Start early, compounding is your friend.  Start small, contribute 2% to a 401K and $50 a week to a savings account.  The hardest part is starting!!!  It may seem like a sacrifice, but you won’t miss it.  Then when you get your first raise, take ½ of the increase and put it to your 401K etc.   In college, one of my professors had illustrated the value of saving early and it stuck with me.  Here is a similar example


  • Don’t underestimate the value of a good adviser!  There is more than a savings account and a 401K, there are many vehicles and options.  Advisers help identify the right types of investments, and your distribution across all forms but they also hold you accountable to your financial goals and commitments.  Unfortunately, there are a lot of bad advisers out there so interview them, make sure you find one you can trust, that understands your goals and is open and honest with you about your financial situation.
  • Take advantage of free money!!!!  Most people think of 401Ks when they think free money, many employers will match a % of your contribution.  This is true and you should absolutely find a way to contribute the matching %.  But, that isn’t the only free money out there.  Buying a home is like free money…..  What am I crazy, probably but let me explain.  If you rent you are playing someone else, if you buy you are paying yourself.  Yes there are bad restate investments, but for the most part money invested in property has a way of compounding.  You not only pay yourself each month, ie you should get much if not all your “rent” back when you sell, you are also watching that property accumulate value.  
  • Don’t let your life grow with your income.  As you start moving up at work, getting raises and promotions, simply put that the majority of that money aside. This is probably the the biggest reasons I am here now.   I lived modestly, in a small house with a small economic footprint.  It is amazing to see my friends and family making great money and still living paycheck to paycheck because they have chosen to surround themselves with things.  Not only do things cost you money, they also tie you down.  I chose to live in small houses with modest cars that I drove until they gave up the ghost.  I chose to accumulate memories not physical possessions.  
  • Lastly, it does take a bit of luck!  I have had good and bad luck in my financial life.  Two great income generating properties, one horribly bad investment, friends and family who I have prioritized over my own goals.  But through it all I had a plan and I was committed to my goal.  It is an amazing feeling when you realized that you are, in fact in a financial position to live your dream!

In the end, I managed to sock away a healthy amount into retirement accounts, enough to live a simple life in retirement.  But I also saved enough to take this trip, maybe not 10 years but 5 if I managed my money right. Yes, I will have to go back to work eventually, but I should be able to chose a job based on my desires not on the paycheck and enjoy my last years of working while my retirement accounts continue to grow! 

I am no expert, in fact I often use to minimize this accomplishment.  But the reality is that I am semi-retired, living off my savings at age 41!!!!  How many people you know that can say that.

So take this blog for what it is worth, two cents from someone who is living the life in the Caribbean.  🙂  

A Side Note – How I respond to the kid question

But you don’t have kids, if you had kids things would be different.  This is something I hear a lot.  No doubt kids would change things, but I still believe it is possible.  I have met a number of boats out here traveling with kids.  The parents have skimped and saved and now their kids are enjoys the benefits of an amazing, life altering, adventure.  Kids are expensive, there is no doubt, but how expensive is still a choice.  If I had kids they may not sport the latest fashion trends and they may not have the latest gadgets, but they would not be without either.  All I know is that if I had kids I wouldn’t have let that stop me from obtaining my dream!  This is my, uneducated opinion and the answer I give when asked.  

One comment

  1. Good post.. Pretty much echos the one I wrote when we started.. You are absolutely right about kids. Its harder, but is done the exact same way. Savings and sacrafice!


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