early retirement is actual

retire early and watch the corn grow

retire early and watch the corn grow

It might sound like fantasy, but early retirement is actual.  For me, and very likely you.  The way I figure things, if I play my cards right, Mrs. Impersonal Finance and I should be able to retire comfortably in about 10 years.  This will put our retirement just short of us turning 40.  Now, it wouldn’t be easy, and would require significant work on our part.  It also assumes we would continue to progress in our careers (provided things go according to plan, we will have a significantly increased income in the next couple of years).   Considering we had about $70k in debt around our 26th birthdays, this really isn’t too bad.  That would mean around 15 working years for me, since I went to grad school, and about 17 for the Mrs.  Like I said, this would be a comfortable early retirement.  Nothing extravagant, but we wouldn’t go wanting.  So, how would we do that?  How would we be able to retire at 40, a full 25+ years before the average American?   

Live below your means.  Here’s the thing everyone knows but not everyone acts like they know- if your expenses are equal to or greater than your income, you’re never really going to get ahead. It might feel great to have the latest fashions, newest technologies, bigger house, and eat out several times a week.  But you won’t get anywhere doing that, and you’re going to be working until the day you retire.  And you likely won’t be ready to retire. One of the things that always seems to pop up in politics is the notion of generational theft, where seniors are robbing the younger generations.  But, I’m not talking about politics here,. Think about that term, and how you live your life. Are you stealing from your future self to pay your present self?

Take advantage of opportunity.  You know that old saying “they wouldn’t know a good opportunity if it jumped up and bit them on the ass?”  Does that apply to you?  Do you take advantages of the opportunities afforded you by virtue of living in America (or Canada.  Some of you may live elsewhere, but the vast majority of people who read this blog live in America).  I’ve written about how I’m in law school, and I’m not paying a cent for tuition because my employer covers it.  I may never use my JD,  but I’m learning about a lot of things that are going to save me money, from estate planning to taxes, to my basic rights as an American.  I firmly believe education is key to a more successful life- and not just formal education.  People are afraid to invest in the stock market, or get into real estate, or save money on taxes, and what is the most common excuse?  They don’t know enough about it.  There is no reason this should be anymore.  Internet access has changed education to the point that some of the most prestigious universities in the world offer free courses from the comfort of your own couch.  From economics to finance to biology to astrophysics.  If you don’t know something, it’s not because you don’t have the opportunity to learn it, it’s because you don’t want to.

Invest.  I’m not an investment professional.  I don’t invest in hedge funds, and I’m not able to value companies like Aswath Damadoran.  I don’t need to, and neither do you, thanks to a man named John Bogle.  If you’re unfamiliar with him, he is basically the father of index funds.  An index fund provides immediate diversification.  It basically is like investing in all of the companies that create a certain sector of the stock market.  An additional benefit to index funds is their fee structure, which is massively lower than a fund that has active management.  Even a Vanguard Target Date Fund has low fees, and is comprised mainly of index funds.  Do you avoid putting money into a 401(k) or Roth IRA because you’re afraid that if the stock market crashes, you’ll lose it?  If so, that’s not a good move on your part.  The stock market probably will crash a couple of times in your investing lifetime.  The bank isn’t a better investment choice, though.  You’re not going to get much if you save a bunch of money, but leave all of that in a savings account.  You’ll likely lose money due to inflation.  The stock market, while volatile, has historically been one of the best hedges and protections against inflation, since as the value of a dollar decreases, the price of any given stock will typically increase.  So, in order to get the serious kind of wealth that will allow you to retire early, you will have to get over any fear of the stock market. *

Use debt to your advantage.  Smart people are terrified of debt.  Smarter people utilize debt to their advantage.  The 30-year mortgage hasn’t always existed, and it’s actually a rather new device that helped the massive growth of the middle class over the latter half of the 20th century.  If you couldn’t take a mortgage out on a home, do you think you would be able to afford to own one before you turned 40 or 50?  Some of you might.  Others, myself included, would not be able to.  But, we have mortgages!  Rental property can be an excellent way to grow your wealth.  Not only can it provide you with additional monthly income, but it can build equity in a home at no cost to yourself.  A lot of folks are afraid of real estate speculation since the housing bubble collapse.  But, those prices were driven by subprime mortgages.  People were getting approved for massive amounts of money without any real way to afford it.  You’re not speculating in real estate if you do your research.**

Live simply.  It’s easier to live below your means if you commit to living simply.  Lifestyle creep is a killer, and it’s hard to see because it’s a creep.  It happens slowly.  One of the gifts I received over the holidays was a magazine subscription.  It was a very nice gift, but in all honesty, I don’t have as much time as I would like to read a magazine every month.  When I do sit down to peruse it, you know what I see?  Ads.  Every other page ads screaming at me to buy something I don’t need.  Waste my money on something I don’t want.  Pictures telling me how my clothes aren’t cool, or how I’m going to be the hippest kid on the block if I just buy this one product.  And, you know what happened to me?  I began to want those things!  I fell for it.  I began to justify the purchases with that little phrase that creeps into your head “I can afford it.”  Yes, I can afford it, technically.  But not if I am going to get to where I want to be.  Now, of course if you’re one of those Apple fanboys, and where you want to be is in line 2 weeks early for the iWatch or iPhone 6, that’s all you pal.  And you might be able to afford it and get where you want.  But realize you don’t need a bigger house, new car, or expensive accessories to live a happy life.  There are people all over the internet who succeed in this area.***

* If you’re interested in learning about investing, read some Ben Graham, John Bogle, or check out Joshua Kennon’s blog.
**If you’re interested in learning more about how to be successful in real estate, check out what Charles has to say.  Smart dude.
*** Check our The Frugal Farmer, Mr. Money Mustache, Johnny Moneyseed, or just google it.

Do you think you will be able to retire early?  If not, what’s holding you back?



  1. Early retirement is a real possibility, if one commits to that goal at an early age and follows guidelines like those you describe. The scary part for me would be: If one stops paid employment at age 40ish, that could easily leave 40 or 50 years of life ahead. The uncertainty about what might happen during those several decades would mean to me that I need to have a really big cushion–or margin of error–before I could convince myself to ‘retire’ at age 40. Tough to re-enter the workforce at, say, age 55 if a financial need arises. I might feel a lot better about retiring from full-time paid employment at age 40, but continuing to work part-time indefinitely. Not just for the money, but for the fun and stimulation too.

    I’m curious about your plans post-age 40?
    Kurt @ Money Counselor recently posted…Could Your Fridge be Repossessed?My Profile

    • I agree Kurt, you definitely have to be willing to live a more frugal lifestyle during your working years. Sounds like you and I are in the same boat, as the same thoughts have crossed my mind. To be honest, I would like the option of being able to retire at 40, but I don’t know if I would actually do it. To know I have that freedom, I think that’s my goal and definition of financial independence. But I do fear were I to retire that early, I would need to find more than a few things to occupy my time.

  2. Great point about using debt to your advantage, and if you are able to retire at 40 that would be awesome (and inspiring). I’m 25 and my wife is 24 and the idea of retiring in 15 years sounds amazing.
    DC @ Young Adult Money recently posted…The Weekly Quick Hits RoundupMy Profile

  3. Thanks for the link love, Ryan! You’re so right when you say early retirement is a possibility. That, and there’s SO much free education out there in the way of blogs like yours. Great post, my friend!
    Laurie @thefrugalfarmer recently posted…Steps To Self-Sufficiency and Why They’re Important to UsMy Profile

  4. Ryan thanks for the shout out, I’m glad you’re looking at leverage and learning about taxes. That is the huge missing component of building wealth that is never discussed because it seems boring or complicated. Reducing your tax burden annually will save you so much more than cable cutting or coupons. Did u look up the tax book I recommended. I’m going to have a few posts on taxes whenever I get my lazy ass to it.
    charles@gettingarichlife.com recently posted…What It Means To Be Poor In AmericaMy Profile

  5. I hope so, but if not, I at least hope to be doing something that I love. I don’t want to end my working career on a miserable note. I am certainly planning to live simply and within my means. I guess I’m “lucky” in that my tastes are inherently simple and I find happiness in the little things. I can imagine that you’re learning a lot by studying law! It’s great knowledge to have.
    E.M. recently posted…How I Plan to Reach Financial IndependenceMy Profile

    • I agree with you E.M. I might not retire, but I definitely want to be in the situation where I can work a job I love without having to worry too much about the pay. And yes, I have learned a lot about law… I can only hope it comes in handy one day!

  6. I’m shooting for early retirement and am on track to quit the corporate world by age 45. Living simply and living below your means are key in my opinion. I look forward to following your progress!
    Kay recently posted…What’s the Difference Between an ETF and a Mutual Fund?My Profile

  7. I hope to free myself to do better things by the age of 45. I will use index funds and dividends to reach my goal. As for real estate I hope to use it as well to cover half of my living expenses for life.
    EL @ Moneywatch101 recently posted…Blogs that Give Great ValueMy Profile

  8. I don’t know if we’ll be able to early retire but I would love to. To be honest, we haven’t thought a lot about early retirement because we have been laser focused on paying off student loan debt. Once we jump over that hurdle I think we will begin to really think about retirement more critically.
    Liz recently posted…Gallery Wall UpdateMy Profile

    • I hear ya Liz. I didn’t even think retirement, let alone early retirement, was any kind of real option until I started paying off my loans and realized how much I could save if I weren’t putting that money into someone else’s pocket!

  9. That’s amazing that your company is paying for law school! I would absolutely take advantage of something like that if I had the opportunity. It sounds like you guys are doing all the right things. I’ll likely still work part time once my early retirement comes, but probably more creative jobs.
    Cashville Skyline recently posted…Living Frugally Isn’t Enough: An Investment Post Round UpMy Profile

    • I hope we’re doing the right things! And yeah, free law school is definitely one of the best perks of my job. I don’t think I could ever truly retire early, as I would feel like I needed something to do with my time… and to make even just a little bit of money.

  10. Yay for the early retirement crew! When Carlos and I talk about wanting to retire by the time we’re 40 – so many people either laugh it off or simply think we’re lazy cuz we don’t want to work.

    We’re both successful in our careers but if we had a choice, we’d much rather be travelling or sitting at home reading a book. Whatever really!

    So yes, we are doing everything we can to save and to increase our income now. It will pay dividends when we both say sayonara to our 9to5 :-)

    Anneli @thefrugalweds recently posted…Hi, we’re the frugalweds and we’re taking the Yakezie Challenge!My Profile

    • That’s awesome to hear! And most people I’ve spoken with think I’m crazy for even talking about early retirement. They assume I must be making much more money than I actually do, rather than just spending more wisely. Definitely will pay dividends (literally and figuratively) in the long run! Best of luck to ya!

  11. That’s awesome that you guys are on track for early retirement. I think early retirement (40s is what I consider early in the pf blogosphere) will be tough for me because of 2 things: living in an expensive area- NYC and because of my student loan debt. Great that your company covers your tuition.
    Andrew@LivingRichCheaply recently posted…Are You (Financially) Better Off Than Your Parents?My Profile

  12. It’s not easy but yes. Living below your means will help you save a lot of money. Although it’s okay to splurge every once in a while.

  13. Right now it’s way too early for me to know if early retirement is actually in the future for me, but I am planning to strive for it. Even if that ends up being 50 years old instead of 60 something years old I think I will end up being happy with it. I’m also fine with getting close to my goal and just working part-time.

    I definitely want to stick to living below my means and not spending more than I make though, I think that is extremely important whether you are going for early retirement or not. It’s not fun to have the stress of (most) debt.
    Debt Hater recently posted…Feds Blow Through $100BMy Profile

    • Right on debt hater. And I don’t know if we’ll actually retire early, but the good thing to see is that if we wanted to, we’d be able to. I think that’s more motivation than I’ve had in quite some time. It’s a pretty great reminder of why we live below our means and do all the crazy shit that it seems like so few others do. If you’re able to live frugally while you’re earning money, it shouldn’t be too hard to do it after you retire, at least the way I figure it.

  14. Early retirement is something that I will always strive for. I can’t imagine being 65 and retiring – that sounds awful!
    Daisy @ Add Vodka recently posted…Alcohol at Weddings: Open Bars, Cash Bars, and Limited MenusMy Profile

  15. If more Americans lived within their means and saved something (anything) each month they’d be able to retire a lot earlier (or at least a lot more comfortably). It still shocks me how little people save for retirement (my own family included). If we saved the money we spend on “i-stuff”, cars, clothes and crap we’d be much richer by the time we retire.
    KK @ Student Debt Survivor recently posted…Classic Clothes Save Me MoneyMy Profile

  16. There’s also something to be said just in being ABLE to retire if you wanted to. We don’t know that we’ll have an interest in not working in our 40s, but knowing that we could is almost as good as doing it right? Early retirement is as much about the freedom for needing income as it is the actual leisure time or lack of a traditional job. If I love my job enough I would want to keep doing it. If I start to hate it – I can quit! That’s what I’m hoping for when I say affording early retirement. Just the choice.
    2 Copper Coins recently posted…Money Lessons From Arrested DevelopmentMy Profile

  17. I love your views on investing. I’m the same, I’m not one to go out and value a company from scratch. Instead, my early retirement plan is very focused around investing in ETFs, just like Vanguard.

    Btw, not all of your readers are in North America, I’m in Australia!! :)
    Mr Ikonz @ Project Ikonz recently posted…I’m now debt free! (and have no car)My Profile

    • Sweet man! I think you’re one of my first, and only, international readers. Vanguard is a gem. If more individuals took a few minutes to learn about their options and availability, and invested what they saved from living beneath their means, we wouldn’t be seeing so many people complaining about how they’ll never be able to retire.

  18. Great post!!

    That is awesome that you guys can see yourselves in the position to retire early… I am sure that is an amazing motivator for you!! Keep up the good work!
    Jon @ Our Fine Adventure recently posted…February 2014 Financial UpdateMy Profile

  19. All great tips here. I’d be interested in reading how you are modeling out your numbers. Even though we started saving in college or just after, I still get really nervous about whether we’d be able to afford a comfortable retirement, especially as I’m planning for us to live to 95-100 (hoping we won’t live that long… but you never know). I see many blog posts talking about early retirement, and the ones that have calculations are always the most interesting/useful.
    Well Heeled Blog recently posted…The Perfect Summer JobMy Profile


  1. […] like to thank Brick by Brick Investing, Young Adult Money,Dividend Mantra,Frugal Farmer, Impersonal Finance and BudgetAndTheBeach for including my […]

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