She became a millionaire by investing in the right stocks - now she’s retired early

Finance-Focused Summary

Jackie Cummings Koski said she built a liquid portfolio worth more than $1 million, primarily through employer retirement plans, index funds, and a smaller allocation to individual stocks. After her divorce, she began improving her financial literacy, tracking expenses, and investing more deliberately. She started investing around 2008, retired from her corporate job in December 2019, and had about $1.3 million invested when she retired.

Strategy and Portfolio

• Increase savings: Koski raised her savings rate from roughly 10% to about 40% over time. She said her salary averaged about $80,000 a year and that she never earned six figures.
• Use tax-advantaged accounts: She prioritized her 401(k), Roth IRA, and health savings account (HSA), investing HSA funds where possible. She described an unusually generous employer contribution of about 9% of pay and said her total annual retirement contributions reached the low $20,000s.
• Invest for long-term growth: With retirement still years away, she invested more aggressively in stocks rather than relying on savings alone. Her portfolio was mostly low-cost index funds, with about 20% in individual stocks. She also reported roughly $150,000 in home equity at the time; her primary residence was not the main source of her liquid wealth.
• Hold cash for retirement risk: At retirement, she kept three years of living expenses in liquid assets outside the stock market. She initially regretted missing a strong market year, but the cash reserve helped her avoid worrying about selling investments during the COVID-era downturn.
• Plan for early retirement access: She researched ways to bridge the period before age 59½, including accessing Roth IRA contributions and using a taxable brokerage account. She also investigated health-insurance costs through the Affordable Care Act, including potential income-based subsidies.
• Allow for emotional readiness: Although her estimated FIRE target was $1 million, she worked two additional years, retiring with about $1.3 million because she wanted a larger cushion and needed time to feel comfortable leaving work.

FIRE Calculation and Key Figures

• Koski used the common FIRE guideline of 25 times annual expenses.
• Her estimated annual spending was about $40,000, making her target $1 million.
• She used an 8% growth assumption in a multi-year projection, while noting that actual market returns varied.
• She said the market was up more than 30% in 2019. The subsequent COVID-related market decline initially made her concerned about the timing of her retirement.
• She had been with her former employer for 21 years and participated in an investment club for about 12 years.

Funds, Stocks, and Investment Observations

Koski’s preferred broad-market holding is Vanguard Growth ETF (VUG). She chose it after comparing longer-term performance over three-, five-, ten-, and, where available, fifteen-year periods and reviewing its benchmark. She favored an ETF over a mutual fund and said growth funds can be more volatile than the broader market.

She contrasted VUG with Vanguard S&P 500 ETF (VOO) and Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX). She said VOO may suit investors who prefer a less volatile broad-market option, while VUG holds about 200 companies, compared with roughly 500 in the S&P 500.

Her individual-stock examples included Apple, Nvidia, Alibaba, and Chipotle. She said Apple had been her longest-held stock; Nvidia had gained more than 400% for her; and Chipotle was up close to 500% from her purchase, though she had not sold it. Alibaba was an example of a losing investment.

Koski bought Chipotle after its foodborne-illness incident. She researched how other restaurant companies had recovered from similar issues, whether the problem appeared geographically limited, and whether customers were still visiting. She said the company later changed leadership and made operational changes.

For riskier stocks without long track records, she said she generally kept the position below 0.5% of her portfolio. She acknowledged having both winners and losers and said she was not rushing to buy Starbucks based solely on its CEO’s past turnaround at Chipotle.

The host separately described her own approach as roughly 90% in an S&P 500 or large index fund and 10% in more speculative investments, mentioning Tesla and Palantir as past personal examples. This was the host’s allocation, not Koski’s.

Stock Research and Financial-Planning Framework

Koski described her investment club’s long-term, company-focused approach—not day trading, swing trading, options, or crypto. Its process included presentations on prospective stocks, discussion, and a member vote.

Her broader FIRE framework, as described in her book, was to:

• Increase savings, investing, and income.
• Decrease expenses, taxes, and debt.
• First assess financial readiness and personal money-related concerns.
• Establish a baseline by reviewing debt, expenses, net worth, and savings rate.
• Research retirement-account access, healthcare coverage, and other practical requirements before setting a retirement date.

She also values direct ownership for the ability to follow company leadership, vote proxies, and consider a company’s conduct. She said she sold an individual holding after learning it invested heavily in private prisons, even though the company was also part of the S&P 500.

Cautions and Disclosures

• Koski said her choice of VUG was personal and not a specific recommendation for others. She cautioned that growth funds may fall more than the broad market in downturns and emphasized choosing an allocation that fits one’s risk tolerance.
• She acknowledged that individual stocks can lose value and that no one can predict whether a struggling company will recover.
• She noted that investors who want to retain control of their own investments may not want an adviser using an assets-under-management model that requires them to turn over investment management.
• No blanket “not financial advice” disclaimer was stated in the subtitles.

Presenters and Sources Mentioned

Presenters: Simran Kaur (host) and Jackie Cummings Koski (guest).

Sources and organizations discussed: Better Investing and its investment clubs; Vanguard; the Affordable Care Act; Fire for Dummies (published April 2024); the Catching Up Defy podcast (as named in the subtitles); Mr. Money Mustache; The Mad Fientist; Choose FI; and the Root of Good website.