![\"Alan](\"https:\/\/www.newsbeep.com\/uk\/wp-content\/uploads\/2026\/01\/105406179-15452277-image-m-22_1768074160649.jpg\")
<\/p>\nIt was a grey and rainy day in 2014 when Katie Donegan\u2019s husband Alan asked her what she \u2018really wanted from life\u2019. Katie, who was 29 at the time, had never given it much thought. But this simple question sparked a new shared goal in their lives: to retire as soon as possible.<\/p>\n
Alan had discovered a community of extreme savers online whose sole focus was to leave behind the world of work as early as they could.<\/p>\n
The couple began a journey of extreme budgeting and in 2019 retired from work at ages 35 and 40. Since then, they have spent their time on travelling and hobbies.<\/p>\n
Recently they won the British Empire Medal (BEM) for their services to financial education through their free money \u00admanagement course Rebel Finance School.<\/p>\n
Now 41 and 47 and travelling in Colombia, they told us how they scrimped, invested and worked their way to financial freedom.<\/p>\n
They reveal how they turned \u00a3100 into \u00a31 million in just five years and have advice for anyone wanting to do the same.<\/p>\n
<\/p>\n
Alan and\u00a0Katie Donegan forked out \u00a3100,000 living in Colombia and travelling this year.\u00a0They spent \u00a340,000 a year when living in Basingstoke<\/p>\n
Starting out<\/p>\n
When Katie and Alan first met in 2005, aged 20 and 26, money was tight. Alan was working as a landscape gardener, paid bi-weekly, and Katie was a student.<\/p>\n
After graduating she took a job at global accountants Deloitte and was paid about \u00a328,000, initially working as an actuary.<\/p>\n
Alan started his own confidence and skills training business in 2009, which made about \u00a350,000 a year and in 2014, he discovered an online community called Fire, which stands for Financial Independence Retire Early.<\/p>\n
The movement is popular in the US and advocates investing as much as possible in your youth so you can stop, or reduce, the amount you work long before retirement age.<\/p>\n
Alan says: \u2018That changed my mindset. Why would you not want to stop working early?\u2019<\/p>\n
The secret to success<\/p>\n
Alan says the couple had a \u00adformula and worked within it.<\/p>\n
\u2018You need to save 25 times your annual spending,\u2019 he says.<\/p>\n
By working out how much you spend over the course of a year \u2013 or would need to spend if retired \u2013 you can figure out how much you need to squirrel away.<\/p>\n
This is based on the principle that if you keep your money invested, it will almost always grow over the longer term (with some bumps along the way).<\/p>\n
That money should be in a \u00adcombination of tax-efficient \u00adwrappers, such as Isas, pensions and Lifetime Isas, he adds.<\/p>\n
If you are flexible with your spending and are happy to reduce your expenses in years where the stock market falls, or take on work to top up your savings, you could save a smaller amount.<\/p>\n
\u2018Our very first target was annual spending of \u00a334,000 and a total pot of \u00a3650,000. Once we understood our spending patterns more, we revised our annual spending\u00a0 target to \u00a340,000 with a total pot of \u00a31million invested,\u2019 he says.<\/p>\n
Building their fund<\/p>\n
To build a retirement \u2013 or \u00ad\u2018freedom fund\u2019, as they called it \u2013 Katie and Alan focused on putting as much money as possible into low-cost global tracker funds.<\/p>\n
These follow the world markets and their performance. Alan says: \u2018We created a gap between what we earned and what we spent, invested it every month in global index funds, and let compounding do the heavy lifting.<\/p>\n
\u2018The steps to building your pot are exactly the same regardless of what you earn. Reduce your spending, increase your income where possible, take the gap between the two and invest it in low-fee index funds.\u2019<\/p>\n
The couple\u2019s main focus was the savings rate, or \u2018freedom rate\u2019 as they call it \u2013 the percentage of their income that went into investments every month. They aimed to set aside six per cent \u2013 and at the height of their saving managed to save 81 per cent.<\/p>\n
Alan and Katie started using this strategy in early 2014, investing just \u00a3100 a month. However, they ramped this up quickly, living as carefully as possible and later \u00adtaking on contracting work to increase earnings.<\/p>\n
By December 2015 their \u2018freedom fund\u2019 was worth \u00a3291,233.\u00a0<\/p>\n
This money came from working and putting away as much of the cash as possible as well as rent from two buy-to-let flats in Basingstoke, Hampshire that they later sold.\u00a0<\/p>\n
By December 2018 the fund was worth \u00a3898,002, and they hit their \u00a31m target in April 2019 and gave up work.\u00a0<\/p>\n
In 2021 they sold the flat in Basingstoke they had been living in and invested the \u00a3240,000 proceeds.<\/p>\n
Today, their fund is worth \u00a32,453,612, even though they no longer work and make an annual loss on the free course they run.<\/p>\n
Their \u2018freedom fund\u2019 has dipped and grown over time, including when the Covid pandemic hit and when Trump\u2019s tariffs spooked the market. That hasn\u2019t stopped the pair continuing to put all their money into stocks, even though having some of your money in bonds is a widely recommended way of reducing investment risk.<\/p>\n
Katie says: \u2018We learned that volatility is the price of admission.\u2019<\/p>\n
Living frugally<\/p>\n
To hit their target quickly, Katie and Alan focused on their income and outgoings. Living in the flat in Basingstoke and driving a Skoda Citigo helped cut costs.<\/p>\n
Alan says: \u2018We weren\u2019t \u201cgiving things up\u201d, we were trading short-term comforts for long-term freedom, and that felt powerful. Every pound invested was buying back our future time.<\/p>\n
\u2018We cut what didn\u2019t matter to us and kept what did. Intentional spending beats miserable budgeting every day of the week.\u2019<\/p>\n
Now Katie says: \u2018We have been working to spend more and let go of the frugal habits.\u2019<\/p>\n
They spent \u00a340,000 a year when living in Basingstoke. This year, they spent \u00a3100,000 living in Colombia and travelling.<\/p>\n
Making mistakes<\/p>\n
They admit to making many mistakes along the way, including investing in property. They bought the two buy-to-let studio flats intending to make a profit from renting and house price inflation<\/a>.<\/p>\n \u2018They were extremely slow to sell and barely grew in real terms,\u2019 Katie says.<\/p>\n \u2018Property can work, but it\u2019s not as liquid as people think. We sold, simplified, and moved the money into the stock market.\u2019<\/p>\n They also regret having put money in Premium Bonds.<\/p>\n Katie says: \u2018We found our money was being eroded by inflation. You should absolutely have some cash in an emergency fund but having too much is a mistake.\u2019<\/p>\n Alan says the journey towards retirement didn\u2019t feel quick.<\/p>\n He says: \u2018Mathematically, we knew compounding would work. Emotionally, we didn\u2019t expect it to feel so slow at the start. You invest your first \u00a3100 and it grows by \u00a31. Then years later your portfolio moves more in a day than you used to earn in a month.\u2019<\/p>\n Alan has one crucial piece of \u00adwisdom to share with anyone who wants to retire early.<\/p>\n He says: \u2018If you want the same financial results as everyone else, do the same as everyone else. If you want extraordinary results, do something extraordinary.\u2019<\/p>\n