My Best Early Retirement Advice

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My Best Early Retirement Advice

Have a great Memorial Day weekend! We are going to visit the Thai Temple, drink some wine at the Willamette Valley Vineyard, power wash and stain the front deck, go to RB40Jr’s Ultimate game, and BBQ. Whew, it’s going to be a packed weekend. I hope you’ll have a fun weekend as well. Drive safe.

Recently, a reader asked if I have any advice for a young guy or gal. I get a question like this occasionally when I meet someone new. My standard answer is to save and invest as much as you can. This is a pretty good answer because it’s a simple message. However, is it really the best advice for early retirement?

Save and invest as much as you can is a bit too generic. It’s the answer to most personal finance questions.

  • How do I pay off my student loan? Save and invest more.
  • How do I save up to buy a home? Save and invest more.
  • How can I pay for my kid’s college education? Save and invest more.
  • How do I retire by 40? Save and invest more.

The answer is – save and invest more. However, most people can’t execute. They want to save, but they want to spend even more. The change needs to come from within.

My Best Early Retirement Advice

I started saving and investing when I got my first full-time job in 1996. Soon after, I maxed out my 401k and Roth IRA. I even invested extra in my taxable account. This is pretty unusual because as a country, our saving rate is a woeful 5%. My family struggled financially when I was growing up so that influenced me to save more than the norm.

My saving rate was higher and that gave me a huge head start, but I wouldn’t have been able to retire early at that rate. It was only after “Retire by 40” became my mission that I was able to really save and invest more. Previously, I thought I would find a new job or switch company. I was depending on the income from my career to last until I’m 65. That was the crutch that prevented me from doing something revolutionary.

Once I made it my mission to retire by 40, I was able to devote all my energy to making it happen. Instead of using all my creative energy at my day job, I channel it elsewhere.

  • I started blogging – Retire By 40.
  • I tracked our cash flow to see how we were doing month to month.
  • I invested in rental properties and became a landlord.
  • I converted our taxable account to a dividend portfolio to generate income.
  • We increased our saving rate even more. Eventually, we were able to pay the bills without depending on the paychecks from my old engineering job.
  • I looked for ways to generate income outside of my day job.
  • I read many personal finance blogs to get ideas and connect with like-minded people.

Now that I looked back, a bunch of stuff happened after I set the goal to retire by 40. The previous 14 years were much more stable. I worked, came home, and tried to decompress and have fun. That’s the way regular people operate. They save 10% and then use the rest of their income to enjoy life. If you want to retire early, you need to break out of that box.

Early Retirement is Reachable

I believe that early retirement is a reachable goal for most of us. You don’t have to be the CFO of Google to retire early. If you make a decent income and set your mind to it, you can do it. Look at Jason. He was a service advisor at a car dealership and earned a middle-class salary. The easy thing to do was to carry on like the other 160 million middle-class Americans, but he set a goal to retire in 12 years instead. In just 3 years, he built his dividend portfolio from $5,000 to $100,000. Now, he’s living his dream. His dividend income pays all his expenses.

So that’s my best early retirement advice. You need to make it your moon mission. Going to the moon isn’t easy. It will take a lot of effort and there will be many setbacks, but you will succeed if you persevere and be creative about it. Get obsessed about it.

What do you think about this advice?


Actually, I think it’s better to build a life that you don’t have to retire from than to retire completely.

Image credit: Cat poster from The Lego Movie

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you reach financial independence.

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