Extreme Early Retirement

Most people go through their entire life following the plan.  You know the plan: grade school, college, marriage, mortgage, long hours, occasional vacations, retirement, death. The large majority of those hours are spent building your career and saving for retirement.  Here’s the average day:

  • 8 hours sleeping
  • 9 hours working
  • 1 hour commuting
  • 1 hour eating

The rest of the time is spent keeping up with chores and watching TV because any other form of entertainment is too exhausting after the laborious day of working.  This has been me, except replacing the TV watching with building an internet business.

Earlier this month I realized that this path was no longer for me, my passion for working as an engineer was gone, and my desire to spend more time with my kids while I’m still healthy and they are young has finally outweighed my Calvinistic need to work hard.  Fortunately for me, I’ve always lived frugally and saved money aggressively which has put me in a position to retire extremely early, probably at the age of 35 (I’m currently 33).

I have not made this decision lightly.  It’s been a month of very deep thinking, first solidifying my personal life philosophy followed by formulating an economic strategy, and finally coming up with my first draft plan for exiting the life I currently live.  I’ll be using this blog to continue to modify my strategy and share my successes and failures going forward, just in case anyone has similar desires as i do.

Here’s my master plan:

First I’ll be getting a new job in a new town that will pay similar but likely less salary, but will pay my moving fees and closing costs on selling my house (roughly a $30K value).  This will allow us to dump our $400K money sink of a house for something significantly smaller, which we will pay outright.  My first on-site interview in Colorado is next week and looks promising.  I’ll work there for 2 years, and quit in February of 2013, before my 36th birthday.

I’ll be spending the next 2 years driving down our costs to $36K per year for my family of 4, which shouldn’t be too difficult considering there will be no house payment (only taxes and insurance).  I’m getting rid of my car (I still have a motorcycle), and will have my bike.

I have ~$900K in assets, and hopefully more depending on what I get when I sell my house.  After 2 more years of work and what I hope is a reasonable return on my investments, I hope to be around $1M to $1.1M by the time I retire in 2013.  By my calculations, I should be able to spend 4% of my savings each year and see that number rise or remain flat over the long haul, though I may target 3% to be sure.   This would give me $30K-$33K, just short of my target budget.  Fortunately my wife and I also have a small online business that rakes in about $10K/year that we mostly do for fun, so that gets us over the top.

So why am I doing this?

I have a number of reasons.  Some of them are very good ones, some not as much. 😉

  1. I want to spend more time with my family.  Technically I could slack at work, do far fewer hours, get paid big bucks like I do now, and it would take years for them to do anything about it (i.e. fire me).  But I can’t make myself do it.  I don’t know if its pride or my competitive nature, but I haven’t been able to do less hours despite trying.
  2. I want to learn and do more.  Currently I have one skill, engineering.  There are plenty of micro-skills within the field that have allowed me to do very well (in my career), but at the end of the day I have one thing that people want to pay me for.  I can’t fix a car, I can’t boil an egg, and I can’t keep my pool clean (which, of course, I wish I didn’t own).  I just pay people to do these things, but I’d prefer to know how to do it myself.
  3. I want to live healthier.  To most people I seem very healthy, up until 2 years ago I was running ultra-marathons several times a year.  I go to the gym a few times a week, and I’m not overweight.  But my eating and drinking habits are atrocious, both in quality and quantity.




10 Responses to Extreme Early Retirement

  1. jack says:

    you have a wife that will still be working so you’re not retiring just mooching

  2. Donovan says:

    That was a ridiculous comment by Jack and completely lacking anything of substance. I can’t stand it when people are so jealous they just can’t help but try to bash others plans. I think your plan sounds fantastic and what you are doing is right in line with what my wife and I have planned. We are currently writing articles and will be starting our own blog to document our journey within the next month. She doesn’t like the idea of posting our net worth or financial details but I have told her that is what people are interested in. They want to see people doing it, not just a plan that they can’t apply to their own life. We just finished February 2014 with $715,736.35 in savings and we have our current home which we will sell when we retire and are hoping to live on our dividends and income from a commercial property that was inherited. February was not a good month for dividends as we only received $1,855.27 including our portion of the rental income from the property (it was inherited and is encumbered by a 50 year lease that will not expire until 2025. At that time we expect our portion of that income to go up to $2,762.63 per month. In January we had $2,005.72 in dividend income but had a couple CD’s mature from the “good old days” of 6.25% interest. Sorry to get off topic, but loved that you shared your plan and just wanted to let you know that you are inspiring others (myself included) to really focus on what’s important in life and couldn’t agree with you more that time is a finite resource and it becomes more and more fleeting as we age. I will be 33 in March. I would like to have about $5,000 a month in passive income but we will see how things go. I am ultra conservative with investing as we lost our entire net worth in the stock market and had to start over again once already. Planning on a 3% return rate that would require $1,852,672. I would of course like to keep our living expenses at or around the $2,500 mark so that we have gains in order to be able to maintain our lifestyle with inflation. We will see how much we are able to reduce our expenses and lifestyle leading up to retirement. The more we reduce, and the more we save, the quicker our exit point. Right now my forecast is that we would hit that number by December of 2024. Thanks again for the great blog and putting your information out there for us to compare. It is very inspirational and we will be following you in your journey.

    • Don’t worry about Jack. I could have deleted his post if it bothered me, but it’s kind of fun to point out when trolls have no clue what they’re talking about.

      Sounds like you are well on your way to achieving your financial goals. Just keep your eyes on the prize and there’s no doubt you’ll get there. 10 years is a long time for your end goal so I expect it to change over time, but with the direction you’re heading I doubt you can go wrong.

  3. […] The idea came to me right away, I wrote the plan out back in March 2011, before I had even interviewed in Colorado, let alone decided to move there.  I actually forgot I had written out the whole plan before it even happened back then, until “Jack” came by and left a comment on the article last September (you can see that lovely comment here: Brave New Life – Extreme Early Retirement). […]

  4. stefan says:

    Hi,

    I’ve only just started to read your blog, so my question can be wrong. But how can you have gained 900k by on your age? I assume this capital isn’t the regular, even in US.
    I’m living in Belgium, and since about 1 year searching for a way to exit the high level standards…
    Hope you can give some good ideas; I will definitely keep on reading your blog!

    Regards,
    Stefan (Belgium)

    • BNL says:

      When I started working at 22, I was making $50K but saving and investing $25K. At the 10 year mark of my career I was making $120K and living on $60K. At this point, I got more serious about saving, so my last few years I grew my salary to about $150K (this was my salary job, plus some side jobs online) but spent only about $36K. So I saved throughout, but I really ramped up my savings in the end.

      But these are just my numbers. What you should really focus on is the ratio of your savings/year to your after retirement expenses/year. Once you hit a 4% or even 3% safe withdrawal rate, you should be set. I could easily live on far less than $36K per year, but it’s a balancing act with my wife (and kids). If it was just me I’d happily live on less than $20K per year.

  5. Lincy says:

    Hi,
    I am new to this blog and enjoying the read quite a lot. My entry into the FI space is quite late in life. I am in my early 40’s and only beginning a plan to being mortgage free, live off passive income and pursue my rhythm. Thanks for sharing your journey and experiences.

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