Katie Donegan was just 35 when she decided to stop working and now splits her time between Basingstoke and holidays abroad – below she explains her road to financial freedom
A woman has explained how she retired at the age of just 35 – and with almost £1million in savings and investments.
Katie Donegan, who is now 37, says she has always been frugal with her cash and would even save up her pocket money as a youngster, rather than spend it.
But it wasn’t until she dropped out of the University of Oxford at the age of 18 and took a trip abroad to Costa Rica, where she met husband Alan, 43, that her saving journey really started to take shape.
The pair returned to the UK as a couple and Katie began a degree in statistics at University College London, living with her parents to save on costs.
She also ate cheaply and didn’t buy any new clothes, as she “hated the thought of getting into debt”.
After graduating in 2008, the couple moved in with Alan’s mum in Hampshire with the aim of saving for a house deposit.
Cutting costs means they were able to save up £42,000 to buy their £167,650 two-bedroom flat in Basingstoke in November 2010.
At the time, Katie worked as an actuary earning £28,500 a year and Alan was self-employed on a variable income, teaching businesses how to do presentations.
Speaking to The Sun, Katie said: “We ate packed lunches, drove a second-hand Skoda and invited friends over instead of going for expensive nights out.
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“We married in July 2013, keeping costs as low as possible by hiring the local community hall, emailing the invites, getting a friend to do the decorations and having a BYO bar.”
By late 2014, after several promotions, Katie was earning £58,000 – but despite the huge increase in her salary, she was determined to keep her outgoings low.
Alan was bringing in around £63,000 at the time, meaning the couple could afford to put away £3,000 in total each month.
The couple then decided to put savings into buying stocks “in every company available on the stock market” and lived off the money this made them.
Of course, like with any investment, this did come with risks as stocks and shares can fluctuate – meaning your money can go up or down.
Katie and Alan said they researched and studied the stock market intensely to maximise their chances of making money, so their investments weren’t made on a whim.
Their savings goal was inspired by the FIRE (Financial Independence, Retire Early) movement, which involves keeping your outgoings as low as possible and saving every penny you can.
By 2015, the pair had £291,000 in savings – Alan had been saving since 1996 and Katie began contributing after I graduated – and they set themselves a goal of having £1million in savings and investments within three years.
“It wasn’t because we didn’t enjoy our jobs – it was about financial freedom and quality of life. To bring in more money, I quit my job and began working as a contractor,” Katie said.
“Some friends and family thought we were mad sticking with our modest flat and old car, but we were laser-focused and studied how to invest in the stock market.
“By September 2018, we had £898,000 in savings and investments. We hadn’t quite reached our goal of £1million, but we were close, and between March and April 2019 our net worth rose by £46,000 – which meant our investments were making enough for me to retire.”
Katie says their investments now generate £65,000 a year, meaning the couple can afford to split their time between Basingstoke and abroad.
In July this year, the pair travelled to Bogota, Colombia, and celebrated their wedding anniversary with a meal that cost just £60.
They’ve also enjoyed trips to Thailand and Mexico and were in New Orleans last year when Covid hit.
Alan has yet to fully retire and still oversees his business, but isn’t involved in the day-to-day operation.
Katie, meanwhile, now runs the Rebel Finance School, which is a free 10-week online course to help people get control of their finances.