Couple who paid off $200,000 in debt and are on track to 'retire early' focus on earning instead of saving—here's why

Rich & Regular co-founders Kiersten and Julien Saunders
Source: Julien and Kiersten

Entrepreneurs Julien and Kiersten Saunders are well on their way to achieving financial independence by growing their digital business, creating multiple revenue streams and putting the majority of their disposable income into low-cost index funds, where it can grow over time.

They're part of the FIRE (financial independence, retire early) movement, which embraces the concept of saving the majority of your income in your 20s or 30s so you can retire and have the freedom to do what you want to in your 30s and 40s.

For the Atlanta-based couple, financial independence means hitting a net worth of about $1.5 million. That's their "FIRE number," roughly equal to 25 times their annual spending, and the amount they would feel comfortable living off of for the rest of their lives without having to work.

The Saunders, who share their FIRE journey on their blog Rich & Regular, recently quit their marketing jobs (Julien in June 2018 and Kiersten in April 2020) to focus on building out their website and pursue a more entrepreneurial career.

They're on track to hit their savings goal within a couple of years. "Once we eclipse that number, we're not going to stop," Julien tells CNBC Make It. "Our goal is to continue to build wealth and to inspire black people to explore the financial independence movement as a way to achieve economic freedom."

Our goal is to continue to build wealth and to inspire as many black people to explore the financial independence movement as a way to achieve economic freedom.
Julien Saunders
co-founder of Rich & Regular

Julien, 39, and Kiersten, 35, believe that the key to building wealth is to focus on driving revenue more than cutting back on expenses.

"We tend to focus on earning because you can't save what you never had," says Kiersten. As creative entrepreneurs, they earn six figures from a variety of sources: they generate revenue from their blog, which they launched in 2017, by working with brands to tell creative stories about money and they recently signed a book deal. 

The Saunders previously invested in two rental properties, and they sold them after the properties tripled in market value. They took their profits and invested some of it back into their business and some of it in low-cost index funds.

Climbing out of debt and gaining control of their finances

They haven't always been in control of their finances: When the 2008 economic crisis hit, Julien was a recent homeowner and underwater on his mortgage and Kiersten struggled with overspending. "Everything I spent my money on was meant to elicit a certain type of feedback from somebody, whether it was I wanted to hear that somebody liked my pants or liked my hair or enjoyed the restaurant that we went to," she says. "I could convince myself to spend money for any reason because I had attached it to something external versus something internal."

Between 2013 and 2018, they buckled down and paid off $200,000 in debt, including auto loans, student loans, credit card debt, tax debt and a mortgage. "We were counting coins at that point and throwing ourselves into work," says Julien, who tripled his salary over the 10 years he was working in marketing for a hospitality company.

The Saunders saved and invested more than half of their combined income by keeping their big expenses low: They chose to live in a smaller, less expensive home and drive their old cars instead of upgrading.

While paying down their debt, they launched their personal finance blog to share their story and offer advice on how to achieve economic freedom.

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Building sustainable wealth

A key to building wealth is to change your thinking, says Kiersten. Don't think that your income is limited to your salary or an hourly rate set by your company: "Your salary is not an indication of what you're worth or what your time is worth. That's just what that company decided for that job — and the irony of the system is, if you are a black person or a woman filling that job, you're still getting paid less than what it's worth. Open your mind to the possibility that your time and contribution is worth way more than whatever you're making at your job."

Your salary is not an indication of what you're worth or what your time is worth. That's just what that company decided for that job.
Kiersten Saunders
co-founder of Rich & Regular

Explore the number of ways in which you can earn income, especially if you're already at a disadvantage as a black American, says Julien: "For a lot of black middle or upper middle class, it's very common to be reliant on a single source of income. The challenge we have with that is, as black professionals, the data suggests that's just not a very trustworthy approach to building wealth because we are not promoted as often as many of our white counterparts."

They also don't earn as much: Black Americans can expect to earn up to $1 million less than white Americans over their lifetime, according to a recent study by McKinsey & Co. That same study also found that in 2016 the median wealth of a white family was 10 times the median wealth of a black family. 

Understanding the racial wealth gap is "something that inspired us to explore entrepreneurial routes to earning income," says Julien.

As for how to go about making more money and finding other income streams, it depends on your skills and interests. "There's no one business that I would recommend to everyone," says Julien. "But I will say we're particularly bullish on the growth of the internet. ... There are very low barriers to entry. Whether it's starting a blog or throwing up an e-store or being an affiliate for other companies that already have products and services, it is all there for the taking."

FIRE as a pathway to freedom

The FIRE movement is more than a path to early retirement for the couple. "We see it as a viable pathway for black people to achieve a degree of freedom that has eluded them in this country," they wrote in an Instagram post this week.

By sharing their story, the Saunders hope to show that the FIRE movement, which lacks diversity and traditionally has consisted of mostly white members, can be a viable option for marginalized people. 

Participating in the FIRE movement is by no means a solution to the institutional racism that still persists, the couple emphasizes, but it's a pathway that has worked for them. "We have to think differently than some of our white counterparts," Julien tells CNBC Make It. "We can't assume that we will always make the same income for the foreseeable future because the data suggests that that's just not the case.

"That's one of the reasons why we're trying to promote this [FIRE] lifestyle. We think it's a truly powerful decision and helps people gain a degree of freedom that otherwise has not been afforded to our community."

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