A Million Dollars and Not Even 60 Yet

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A few years ago, I reported on Dave and Catherine Neal, a couple I read about in our Rule Your Retirement newsletter. Their story of retiring early in their late 40s, was inspiring, and they were also generous enough to explain how they did it.

Some of the keys to their success were:

• Keeping track of where our money comes from and where it goes. If you don't know how much you spend on food or travel, for example, you'll have trouble finding places to save some dollars, and you'll also have trouble with the following:
• Having a realistic idea of how much money you'll need in retirement. Don't just accept a rule of thumb, such as 80% of your current income. In retirement, your tax rate might be very different (especially if you move to a different state). Your needs will likely be different, too; you might want to spend a lot on travel and little on business clothing. And you may have to spend more on health care than you do now.
• Making the most of retirement accounts such as 401(k)s and IRAs, both traditional and Roth.

That article was published more than three years ago, though, well before the woe and tumult of the recent market crash. How have the Neals weathered the storm, you might ask?

They're actually doing quite well: they're both approaching age 60, as the combined value of their Roth IRA and health savings accounts approaches $1 million. They also have almost $1 million in non-Roth retirement accounts that they've been steadily converting to Roth accounts.

Dave notes that they were expecting to hit the million-dollar mark back in mid-2008, but the stock market didn't cooperate. Still, by staying the course (i.e., not panicking and selling out of all stocks), they've seen their portfolio recover "nicely" -- up around 35% so far this year.

Dave mentioned that for the small-cap portion of his portfolio, he has "made extensive use" of our Motley Fool Hidden Gems newsletter, having invested at various points in recommended stocks like Buffalo Wild Wings (Nasdaq: BWLD), Chipotle Mexican Grill (NYSE: CMG-B), and Ctrip.com (Nasdaq: CTRP).

Lessons to learn
No investor is perfect, though -- but the smart ones learn and improve along the way. In 2007, after realizing that he couldn't keep up with the 100-plus stocks and funds he owned, Dave thinned out his holdings to around 45 different securities. One kind of investment that is an "important kicker" for his portfolio is the dividend-paying security. At the Fool, we too love these, as they're companies that just keep paying you back.

Here are some dividend payers you might want to look into more closely. Each offers a yield of 3% or more and also sports a five-star rating (out of five) from our Motley Fool CAPS community:

Company	Recent yield
Huntsman (NYSE: HUN)	4.8%
Bristol-Myers Squibb (NYSE: BMY)	5.4%
Diageo (NYSE: DEO)	4.3%
Sysco (NYSE: SYY)	3.5%

Data: Motley Fool CAPS.

Lastly, the Neals couldn't help but mention that they've been enjoying their early retirement, recently spending eight months in Hawaii.

The bottom line is that if you take some time to plan your retirement, and you save aggressively and invest effectively, you can pull off some amazing things -- just like the Neals did.