- 5 months ago
What does it really take to retire in your 30s? Business Insider spoke with six everyday Americans who left traditional careers behind to chase freedom, travel, and family time.
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00:00All right, this is exciting.
00:01Oh my gosh, Shaw.
00:04OK.
00:05I got it.
00:05You got it?
00:05I got my thing.
00:06OK, now you can talk about her.
00:07I retired early at age 29.
00:10I left my job at 40 years old.
00:12I retired early at the age of 31.
00:14I left my job at 32 years old because I wanted
00:17to spend more time with my husband.
00:18I realized that there's a lot more to life than work.
00:21In the US, we typically think of retirement
00:23as something like maybe 65, maybe 70 years old.
00:27In reality, retirement is just a number that you reach.
00:32My net worth is currently at $900,000.
00:35Over $5 million.
00:37$1.2 million.
00:38What is our net worth?
00:391.6.
00:40Is it?
00:41Oh my god.
00:44Like blushing.
00:48I'm the middle of five kids and a single mom living
00:53in a homeless shelter.
00:55Many times, having no car, using a lot of public transportation,
01:00sometimes not having enough to eat, living off food stamps.
01:04I wanted to get out of poverty.
01:05That was a big goal for me.
01:08I think the biggest financial struggle
01:10that I personally went through was going to college.
01:13I didn't have any help from family.
01:16I was a waitress for part of my college career.
01:21I was working full-time while also being a full-time student.
01:25My dad was a teacher.
01:27My mom was a nurse.
01:28We didn't have a lot of extra money.
01:29My parents prioritized our education,
01:32and that meant that we had to cut costs elsewhere.
01:35My parents did not feel like they got a great financial education
01:40from their parents.
01:41And my dad was very open of, hey, son,
01:44you've got to learn about compound interest.
01:45You've got to learn about investments.
01:47You've got to learn about these things.
01:49So back then, I was 22, and I started my job.
01:52I definitely was not focusing on retirement or saving.
01:56So I did spend a majority of my paycheck,
01:57didn't have a lot of savings outside of the 401k investing.
02:01In fact, I really didn't want to tell a lot of my friends
02:03what I was reading because I was a little embarrassed.
02:06It was not the comic books or not the other things
02:08that they were reading.
02:10I started working non-profit because I really
02:12cared about my community, and I wanted
02:14to give back to my community.
02:16Quickly realized that working a non-profit,
02:20you're literally one paycheck, maybe two paychecks,
02:22away from being on the street too.
02:24I thought, well, let me go into sales.
02:26I was a logistics manager for 10 years.
02:29I worked in marketing before retiring.
02:31I spent my career as a physics teacher.
02:33I worked corporate finance.
02:34I just didn't want to do that same thing over and over again.
02:37I never really could unplug.
02:39Having to meet new sales goals every month
02:41and just pushing myself, pushing myself every month
02:44to just survive.
02:46I never hated any of my jobs, but I'm like,
02:49do I really want to do this every day,
02:52eight hours a day for the next 40 years?
02:54And the answer to that would be definitely not.
02:57No, that wasn't the thing for me.
02:59I remember one particular day that was very crushing.
03:04I love your jacket.
03:06I was away on travel for work.
03:09My wife was going through some struggles on her own,
03:11and I realized that I wasn't able to be there for her,
03:14and that really hurt.
03:16And when I came home, I really decided
03:20that it was time to make a change.
03:22Cheers.
03:23I found out about the FIRE movement,
03:26and it really changed my life.
03:27FIRE stands for Financial Independence Retire Early,
03:31and it's essentially getting yourself to a position
03:34financially where work becomes optional.
03:37It doesn't mean that you will never do any work ever again.
03:41It's a math equation.
03:42Whatever you spend in a year,
03:44you need 25 times that amount invested,
03:47then you can reliably pull 4% of that portfolio's
03:51original value out of it every year,
03:55and you'll never run out of money.
03:56And it just comes down to what does your life cost,
03:59and how do you support that with your passive income
04:01that no longer is dependent on your job?
04:04The most impactful decisions early on
04:06were just saving and investing as much as I possibly could.
04:11Starting out, I was maxing out my 401k
04:15and maxing out my Roth IRA because I could.
04:20Low housing expenses is number one.
04:22Number two, we've always shared one used car between us.
04:27Even now, we only own one vehicle.
04:29The other piece is, has been willing to work,
04:33and work a lot.
04:34I worked at two to three jobs at any given time.
04:39Number three, just cooking at home, avoiding dining out.
04:44And number four, just delaying,
04:47if you want to have kids or have pets
04:49or any dependents of any kind,
04:51just delaying that a little bit further
04:53down the line in life.
04:54I went to an inexpensive, you know,
04:56church-sponsored Brigham Young University school.
04:59That was very critical.
05:01So no debt when I graduated,
05:03and had been working all through college at various jobs.
05:09It wasn't until later that I really found out
05:11about brokerage account investing
05:13and how powerful just simple index fund investing is.
05:19So instead of trying to pick the hot stock,
05:23you just pick an index fund
05:24that essentially tracks an index with the market.
05:28And for most within the FHIR community, that's VTSAX,
05:33or the Total Stock Market Index.
05:35And for others, it's the S&P 500.
05:38And that's the one that I primarily do.
05:40Sometimes those, you know, those early years were hard,
05:43because it was like, man, I'd only make a few grand this month,
05:45but I'm putting 500 away or 1,000 away this month.
05:49I was investing and saving, you know, 30% of my income
05:54and putting that towards my future,
05:57which was extremely important
05:59and really set me up for that path on FHIR.
06:03We chose a slightly different path.
06:04We did real estate or house hacking specifically.
06:08We eliminate our biggest expense, which was housing.
06:11And it's really depends on how comfortable they are
06:13with like living with roommates or basements
06:15or making sacrifices to maximize your return.
06:20Two bed, two bath up here, two bed, one bath down here.
06:24We purchased a fourplex in August 2017 for $630,000.
06:31We rented out their other units
06:33and we're able to save up that $18,000
06:37for that second one.
06:40It's like a savings account for number two
06:42without having to change your job or ask for raises
06:45or reduce your other expenses.
06:47We wanted to enjoy life.
06:50We didn't want to just minimize everything
06:53and try to scrape by.
06:56Eating like ramen noodles every night or something.
06:58We didn't want to do that.
06:59We did cut back on a lot of things.
07:01Jeff ended up selling his beautiful sports car
07:06and he ended up using a lot of public transportation
07:09and I would drive him to and from work sometimes too.
07:11I was willing to live in one house
07:13with seven other dudes sharing one bathroom.
07:16I was fine with that.
07:17But there are certain things that like feminine things
07:20that you just want to do, want to have.
07:23Did you have any challenges at all along the way?
07:28I would say that very first one,
07:31everything that could go wrong with the place
07:33went wrong in that place.
07:34Okay, we have eight people living in the basement unit
07:37with no lease, paying the old owner cash,
07:41mold issues, cockroaches, bed bugs.
07:44The faucet was broken off.
07:46I was working so hard in my job but I was worried
07:49that I wasn't really enjoying myself and my life now.
07:55We didn't really know how much things cost.
07:58We didn't know like the steps to go through an eviction.
08:02Like we had to find a property manager for a lease.
08:04We had to go through all these extra like learning curve moments
08:08where it was such a big hurdle mentally.
08:12And it was just an overwhelming amount of effort
08:16and time invested and mental stress, I would say,
08:20just to get over that hurdle.
08:22I think the thing that turned out to be harder
08:25about retiring early is your sense of identity.
08:29It's who you really are.
08:33You have a lot more time to think about those things.
08:36And, you know, for most people,
08:39your job is a big part of your identity.
08:43Working does bring a sense of fulfillment and purpose.
08:46It's not just the money, but it's the interaction.
08:49It's the leadership.
08:50It's watching and enjoying other people grow.
08:53I do miss my coworkers.
08:55I miss spending time with them.
08:58And I miss the adventures that we would have
09:01and the laughs that we would share.
09:03It's a lot easier to like see your friends every day
09:06at work.
09:07Now I have to like, OK, when are you free?
09:09When can you get like a sitter for the kids?
09:13And like, you know, it's a whole coordinated thing.
09:15You at least get that face time with them that I do feel like
09:18it's a little harder to coordinate nowadays
09:20with most people still working.
09:22If today you had to start over again,
09:25what are the things that you would do differently?
09:28We would probably get a divorce.
09:30We would actually be able to reach financial independence quicker.
09:35And then we would both buy a house once a year separately
09:39and then remarry.
09:40So we would actually make it a lot faster.
09:43One of the mistakes that we made really early on
09:46was trusting the wrong people with our investment choices.
09:49That is, we went to the bank and spoke to an investment advisor there
09:55who we later learned was motivated only by making a commission
09:59on the investments that they sold to us.
10:02And so rather than giving us unbiased advice,
10:05they gave us slanted advice and sold us into a mutual fund
10:09that we had no business being in at age 22 at the time,
10:13had very high fees on it.
10:15Luckily, we undid that mistake pretty quickly.
10:17If I were to go back and do it again,
10:19I probably would invest a lot more heavily in my brokerage account
10:24versus my traditional retirement accounts.
10:26I always have regrets of maybe not saving more
10:29because I've seen what that has turned into 15 and 20 years later
10:34now in my life.
10:36But you live and you learn
10:38and you try to make the best decisions you can at the time.
10:41That's something I'm trying to spread awareness on
10:43because most people only know about investing for retirement.
10:47They don't know about investing for early retirement
10:50or just financial independence.
10:54What would be your advice for other copiers
10:56considering this journey together?
10:58Just start on this finance stuff early.
11:01I would definitely advise them to talk about their non-negotiables,
11:06to talk about what they are willing to sacrifice.
11:10Being honest with themselves and each other is super important.
11:13I think it's really important to have a really good plan
11:16of what you're going to retire to.
11:20And maybe that isn't working at all.
11:23Maybe it is hobbies, volunteering,
11:26other things that you've always wanted to do, traveling.
11:29Maybe it does include starting up a small business,
11:32internet business or something you can do from your house
11:35or wherever you are in the world.
11:37But I think having that plan in place is really important.
11:40I think you're going to have all these friends
11:42and people are going to be just as available as you are.
11:45And most of the time, at least if you're in your 30s,
11:48that's not the case.
11:49Everybody still is kind of plugging away.
11:53I retired at 33 and decided to go back to work
11:57to stay busy and engaged.
11:59I'm a goer, a doer,
12:01and I work and function much better in that environment
12:05than I do in an environment where my calendar is completely cleared.
12:09I don't long for the day anymore at all
12:13that I can go say that I'm retired again.
12:16I also didn't want my kids to think that this was what life was.
12:23The crazy thing about reaching early retirement
12:26is you find that you're still making money
12:29just doing little things for fun here and there.
12:32We decided to start a company with a business partner.
12:35It's a college tutoring company.
12:36And that's now bringing in this whole new wave of money toward us.
12:41For me, the time and energy that I have now
12:44to focus on what matters most to me is worth it all.
12:48We're still bringing in, you know,
12:49between a few different side hustles,
12:51over $100,000 a year combined.
12:54We own nine properties and 16 units total.
12:58We're collecting about $14,000 per month
13:02or $168,000 per year.
13:05Right now, my 401k and Roth IRA is around $500,000.
13:11It's going to continue to grow and compound on its own.
13:15So that's a very freeing feeling.
13:19We live in a paid off house.
13:20Our spending is a little higher than it used to be.
13:22It's probably in like a $30,000 to $40,000 a year range.
13:25So that's still good for our investments to support on their own.
13:31Our houses are our children, our kids.
13:34Sometimes they act up and we got to discipline them.
13:36But overall, it's been a fun journey.
13:40What does the future hold for you now?
13:42One of the great things about having the time that we have now
13:46in early retirement is choosing what new adventure we're going to be on.
13:52Now we're able to have a lot more time to focus on travel
13:56and getting out and exploring the world,
13:58both internationally as well as within the U.S.
14:02We're probably traveling about three to six months every year nowadays.
14:07We were in Australia for three months.
14:09We were in Iceland for a month.
14:11We go to Canada a bunch in our camper van.
14:13We want to see all of the national parks
14:16and we want to go to all seven continents.
14:20We still take time to set other goals
14:22like learning a new language together
14:24or starting a business or, you know, whatever it may be.
14:28And that keeps us going, keeps us having fun
14:31and doing something new and interesting and challenging every day.
14:34When you don't have anything on your calendar,
14:36you can wake up anytime you want.
14:38You can do whatever you want.
14:40We can go on a bike ride, we can take a nap,
14:43we can watch the Tour de France.
14:45I'm happy to be outside the Matrix and just enjoying this other life.
14:48The world becomes the oyster in the sense of trying to figure out
14:51what you want to do and at what time you're going to do it.
14:56Not a day goes by that we don't go take an hour-long walk on the beach.
15:01One of my favorite purposes is getting our story out
15:06or telling them about our story, telling them that it's possible.
15:11I don't have a real estate background.
15:13I don't come from, you know, wealth.
15:16I don't come from that mindset where you can retire early
15:20or where you're a landlord or just anything like that.
15:23And the fact that what I wanted was a better life for myself
15:27and I was able to earn that and it's awesome.
15:30At the end of the day, worst case scenario,
15:32I go back to working a traditional job,
15:35but that's not what I plan on doing.
15:38I forgot to include Jeff.
15:39What about me?
15:41Let me rephrase that.
15:43What do you want me to cut out there?
15:45Yeah, I'll just start again.
15:46Let me rephrase that.
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