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Published: Apr 03, 2018 5 min read
Lily He with her husband, Jared, in their home in Seattle.
Lily He with her husband, Jared, in their home in Seattle.
Photograph by Ian Allen

Some kids want to be a fire fighter, astronaut or a ballerina when they grow up. Lily He wanted to be a millionaire.

Lily and her parents immigrated to the U.S. when she was nine and lived in poverty on the outskirts of San Francisco. She had just two pairs of pants in fourth grade and couldn’t afford glasses even though she had trouble seeing the blackboard.

Now 26, Lily is working to ensure that she—and any future children she might have—will never experience poverty again. She and her husband, Jared, save $150,000 a year and project they’ll become financially independent by 2029. That is, they’ll have enough money so that they won’t have to work.

“I’ve been pretty much planning this since I was 12,” Lily says.

She and Jared, who live on the outskirts of Seattle, belong to a movement known as FIRE, an acronym for financial independence, retire early. Jared works as a software engineer, and Lily works as a full-time Airbnb host, renting out an investment property and two bedrooms of her and her husband’s primary home on the outskirts of town. “We’re hard core,” she says.

The amount that the couple is saving each year is about three times the average salary for a 25 to 34-year-old, which is $39,416, according to SmartAsset. Here’s how they do it.

Educate Yourself

When Lily met her husband soon after graduation, she learned he had plunked his earnings into a savings account earning something like 0.01% interest. So she began to teach herself investing, diving into the Bogleheads forum, an online discussion group named after Vanguard founder Jack Bogle. “It was a steep learning curve,” she says.

But she plowed on, convincing her husband to contribute more in his workplace 401(k) and investing future savings in low-cost index funds.

Lily established a solo 401(k) for herself and placed her investment property inside it so she can put the Airbnb rent she collects into her tax-deferred retirement savings.

The couple doesn't own a car. They live on the outskirts of Seattle and take the bus everywhere they need to go. For Lily, that’s 45 minutes to the lakeside house that she rents through Airbnb, and 45 minutes back. For her husband, that’s an hour commute to his office in downtown Seattle, and an hour back. (It would be about 25 minutes by car.) About two times a month, they rent a car. "It's $80 a day, which is a steal compared to the initial drop of $20,000 on a normal sedan," Lily says.

The family economizes on food just as they economize on transportation. Lily’s father lives with them, and the household's food budget for three adults is between $250 and $300 a month, including the continental breakfast of mini-muffins that Lily feeds her Airbnb guests.

They rely heavily on staples like rice and potatoes. Chicken is their go-to meat — delicacies like shrimp, crab meat and lamb are reserved for special occasions like Chinese New Year. As for veggies, “scallions are cheap,” Lily says, as are bok choy and cabbage.

Lily He with her husband, Jared, and their dog Grace at their home in Seattle.
Photograph by Ian Allen.

Stay Away from Stuff

Lily was never an acquisitive child, maybe because acquiring wasn’t even an option. Her parents each earned under $6.00 an hour chopping vegetables and meat at a Chinese grocery store, and there wasn’t any money left over to give her an allowance. Plus, her mom objected in principle to the American practice of handing out money for every A on the report card.

When she went to the mall with friends, Lily wasn’t tempted by the trinkets they bought. “I was always perplexed by why my friends wanted so many things, she says. A $7 lip gloss wasn’t worth more than an hour of her parent’s time, she would think.

Today, she enjoys free entertainment with her husband. The two love head-banging to Scandinavian heavy metal. They used to go to concerts, but now they simply dance around the living room.

“Don’t attach purchases to happiness,” Lily says. “That’s the secret to getting off the treadmill.”

Lily He writes about her money-saving experiences on The Frugal Gene.