Early Retirement
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My wife was in a dead-end career as a travel
agent, earning less than $15,000 per year at
a job that was quickly turning obsolete. It was
1998 and we had been saving for 7 years –
nearly half of a 15-year retirement plan –
and yet we still only had a nest egg of
about $68,000. Robin realized she had
to invest in herself first before she could
do much to help with investing for our retirement. So for 1½ years
she went back to school to reinvent herself and become a nurse.
Think of it: here we were, in the midst of our primary investing
years, and instead of earning money... Read More
agent, earning less than $15,000 per year at
a job that was quickly turning obsolete. It was
1998 and we had been saving for 7 years –
nearly half of a 15-year retirement plan –
and yet we still only had a nest egg of
about $68,000. Robin realized she had
to invest in herself first before she could
do much to help with investing for our retirement. So for 1½ years
she went back to school to reinvent herself and become a nurse.
Think of it: here we were, in the midst of our primary investing
years, and instead of earning money... Read More
Nobody’s saying it’s easy to retire early on an average salary, but
it's not impossible either. It took us 15 years to get rich slowly,
investing steadily month by month until we had amassed a nest egg
of nearly $1 million -- enough to safely generate about $40,000 per
year. Here's how much we invested per month. Read More
it's not impossible either. It took us 15 years to get rich slowly,
investing steadily month by month until we had amassed a nest egg
of nearly $1 million -- enough to safely generate about $40,000 per
year. Here's how much we invested per month. Read More
Early retirement is not a pipedream: it is
achievable and primarily a question of
priorities and determination. What we
accomplished by investing in index
funds in a slow and steady fashion is
definitely repeatable by normal human
beings with normal everyday jobs and
lives. So let’s debunk four myths about
early retirement while finding the kernel of truth hidden at the heart
of each. Myth #1: You can't retire early unless you... Read More
achievable and primarily a question of
priorities and determination. What we
accomplished by investing in index
funds in a slow and steady fashion is
definitely repeatable by normal human
beings with normal everyday jobs and
lives. So let’s debunk four myths about
early retirement while finding the kernel of truth hidden at the heart
of each. Myth #1: You can't retire early unless you... Read More
| Free Investment Spreadsheet (Excel) |
If you’re planning a simple
early retirement, you stand a
good chance of paying much
lower income taxes than
you've grown accustomed to
in your working years. While
your income tax may not
always be zero in retirement,
it could quite conceivably be
10% or less. This is good news if you’re thinking of retiring early on
less. Let’s look at our own situation as an example... Read More
early retirement, you stand a
good chance of paying much
lower income taxes than
you've grown accustomed to
in your working years. While
your income tax may not
always be zero in retirement,
it could quite conceivably be
10% or less. This is good news if you’re thinking of retiring early on
less. Let’s look at our own situation as an example... Read More
When the headlines are screaming
“Dow Plummets!” and “S&P 500 Hits
New Lows!” you should be smiling and
thinking to yourself, “Blowout Sale on
Stocks! Limited Time Only!” Until we
retired, we always welcomed bad news
in the stock market. Why? Because
bad news is actually good news for...
Read More
“Dow Plummets!” and “S&P 500 Hits
New Lows!” you should be smiling and
thinking to yourself, “Blowout Sale on
Stocks! Limited Time Only!” Until we
retired, we always welcomed bad news
in the stock market. Why? Because
bad news is actually good news for...
Read More
| Articles on Travel & Other Topics |
We've heard it suggested that
investment timing was crucial to our
success in retiring early -- that we
started investing in the 1990's when
the stock market was roaring and
that the results we attained aren't
necessarily repeatable by others
under today’s market conditions.
Is this true? Did we benefit from exceptional market timing?
Read More
investment timing was crucial to our
success in retiring early -- that we
started investing in the 1990's when
the stock market was roaring and
that the results we attained aren't
necessarily repeatable by others
under today’s market conditions.
Is this true? Did we benefit from exceptional market timing?
Read More
Why peer through a peephole
when you can look out a picture
window? That's what we wonder
when we see investors peering
through a narrow window at just
one year’s fund or market results.
Whether the results are good or
bad hardly matters -- it's that the
view itself is distorted by the narrow dimensions. By looking through
a bigger window – at 10, 20, or even 100 years of results – the
picture suddenly becomes clearer. Read More
when you can look out a picture
window? That's what we wonder
when we see investors peering
through a narrow window at just
one year’s fund or market results.
Whether the results are good or
bad hardly matters -- it's that the
view itself is distorted by the narrow dimensions. By looking through
a bigger window – at 10, 20, or even 100 years of results – the
picture suddenly becomes clearer. Read More
People have a natural curiosity about
just how much an author can make as a
result of publishing a book. And if that
book happens to be about retiring early
(as ours is), then the curiosity can be
even stronger because folks wonder
whether the book itself is what’s allowing
the author to escape the nine to five
routine. Well, we’re here to set the
record straight. Below we post our actual
book royalties to date... Read More
just how much an author can make as a
result of publishing a book. And if that
book happens to be about retiring early
(as ours is), then the curiosity can be
even stronger because folks wonder
whether the book itself is what’s allowing
the author to escape the nine to five
routine. Well, we’re here to set the
record straight. Below we post our actual
book royalties to date... Read More
What makes this book different from all the other
books out there on early retirement? We think it's
the amount of personal financial detail we provide.
We don’t hold back! You can use this information
as a kind of financial yardstick to measure what is
possible in your own life.
books out there on early retirement? We think it's
the amount of personal financial detail we provide.
We don’t hold back! You can use this information
as a kind of financial yardstick to measure what is
possible in your own life.
A tiny condo fits quite
well with our retirement
travel lifestyle -- and
living in a tiny home can
also dovetail perfectly
with your plans for early
retirement. Here’s why...
Read More
well with our retirement
travel lifestyle -- and
living in a tiny home can
also dovetail perfectly
with your plans for early
retirement. Here’s why...
Read More
The steps we followed are repeatable and relatively
easy to implement by normal human beings with
normal jobs and lives. That's our primary message:
that retiring early is not a pipedream, but something
achievable and very much worth achieving.
easy to implement by normal human beings with
normal jobs and lives. That's our primary message:
that retiring early is not a pipedream, but something
achievable and very much worth achieving.
"I am a financial advisor and I enjoyed this book
very much. I am planning on adding the print version
of this to the lending library I keep for clients -- this
is saying something -- I read and discard probably
6 or 7 financial books to every one I keep to lend..."
very much. I am planning on adding the print version
of this to the lending library I keep for clients -- this
is saying something -- I read and discard probably
6 or 7 financial books to every one I keep to lend..."
"I have read dozens of retire early / personal finance
books and I can say with confidence this is the best.
I bought the Kindle version but then decided to buy
four more paperbacks to give as graduation
presents to my graduating son and nieces and
nephews. I feel this book encompasses all the
necessary topics to get a financial life on track
whether it be young or old. I highly recommend this
book!!"
books and I can say with confidence this is the best.
I bought the Kindle version but then decided to buy
four more paperbacks to give as graduation
presents to my graduating son and nieces and
nephews. I feel this book encompasses all the
necessary topics to get a financial life on track
whether it be young or old. I highly recommend this
book!!"
Best retirement / personal
finance book I have ever read!!
finance book I have ever read!!
Inspiring
"This is a fantastic book. If you are interested in
retiring early and want to figure out how to, and I
mean not only theoretically, but in a completely
concrete and hands-on way, then this is exactly
the book you need. I cannot recommend this book
highly enough!...
retiring early and want to figure out how to, and I
mean not only theoretically, but in a completely
concrete and hands-on way, then this is exactly
the book you need. I cannot recommend this book
highly enough!...
The perfect book on early
retirement planning
retirement planning
The ten-year mark seems like a natural
time to step back and see how you’re
doing with any big decision in life. So
how are we doing ten years after
retiring early? The short answer is,
great! As of January 2017 our nest egg
stands at... Read More
time to step back and see how you’re
doing with any big decision in life. So
how are we doing ten years after
retiring early? The short answer is,
great! As of January 2017 our nest egg
stands at... Read More
| Final Update: Net Worth |
As of August 2021, our nest egg stood at over $1.5 million
and our net worth (including condo) at over $1.75 million.
For comparison purposes, we retired early some 15 years
prior (in Dec 2006) at age 43 with a net worth of $926,000, so
we've seen our nest egg and net worth go up, not down, while
still withdrawing 3% to 4% in living expenses from investments
each year on average. We think this is powerful evidence that
your money really can work for you so you don't have to.
Note: we received no financial help from any outside source
at any time until Sep 2021 (see note below). We've always tried
to be up-front about our finances to give others on the same
path an idea of what to expect, so in that spirit we've provided
this progress report to inspire you to keep on investing!
Update as of Sep 2021: Upon the passing of both of Robert's
parents, we received an inheritance. Since this would skew any
future results, we've chosen to make this is our final progress
report. Nevertheless, we think the results above speak for
themselves and should encourage you as to what is possible.
and our net worth (including condo) at over $1.75 million.
For comparison purposes, we retired early some 15 years
prior (in Dec 2006) at age 43 with a net worth of $926,000, so
we've seen our nest egg and net worth go up, not down, while
still withdrawing 3% to 4% in living expenses from investments
each year on average. We think this is powerful evidence that
your money really can work for you so you don't have to.
Note: we received no financial help from any outside source
at any time until Sep 2021 (see note below). We've always tried
to be up-front about our finances to give others on the same
path an idea of what to expect, so in that spirit we've provided
this progress report to inspire you to keep on investing!
Update as of Sep 2021: Upon the passing of both of Robert's
parents, we received an inheritance. Since this would skew any
future results, we've chosen to make this is our final progress
report. Nevertheless, we think the results above speak for
themselves and should encourage you as to what is possible.
 | First, get out of debt. Obvious but essential. Pay off credit cards, car | |
| loans, etc. so the only debt you have left is for your home mortgage. |
| Start saving early. We started saving in earnest at age 31. The earlier | |
| the better, since it gives your investments more time to compound. |
| If you own a home, do a 15-year mortgage instead of a 30-year. You'll | |
| save a lot on interest, and the 15 years matches up nicely with an early retirement goal. You'll want to pay off your home before you retire. |
| Pay an extra $100 towards the principal on your home each month. |
| Consider renting out part of your home to help offset mortgage costs. | |
| We owned a bi-level home and rented out the bottom half. |
| Don't try to keep up with the Joneses. Until retirement, we drove the | |
| same cars and remained in the same starter home we started in. Keep your biggest costs (home and cars) as low as reasonably possible. |
| Figure out what you care about most in life and spend more freely in | |
| that area. For us, that means spending more on travel and less on material possessions (other than camping equipment!). If you feel you're depriving yourself of something you really love, you'll never be able to stick to your plan over the long term. |
| Settle on an amount you can invest every month and make sure you | |
| invest regularly, regardless of how the market is performing. |
| Try to put at least 10% of your paycheck into a 401(k) or equivalent. | |
| This is a no-brainer -- usually there's a company match; it comes out of your paycheck automatically; it's pre-tax money so you hardly notice it's missing from your paycheck; AND you save on taxes each year. |
| Open a Roth IRA and begin socking away as much as you can each | |
| year. You invest already-taxed income but never pay taxes on the money you take out, including the earnings. Great for the long term! |
| If you plan to retire before age 60, you also need a TAXABLE account | |
| that you can draw from without penalty. In a sense, you need to save for two retirements -- the near-term one and the post-age-60 one. Half of what we have invested is in taxable Vanguard Index Funds for use over our first 15 years. The other half is in 401K and Roth IRA accounts and will remain untapped (continuing to grow) until age 60 or beyond. |
| Put together a 15-year plan of how to get where you're going. We use | |
| an Excel spreadsheet that tracks our taxable, 401(k), and Roth IRA investments, with a "Grand Total" column at the end. |
| Assume a 9% annual return if you are investing in the stock market. | |
| This represents the long-term annualized return of the stock market as a whole (7% adjusted for inflation). |
| At the end of each year, assess how you are doing against your plan. | |
| We plug actual results into our spreadsheet at the end of each year so we can plan for future years using actual results rather than estimates. |
| Don't get discouraged if (I mean when!) the stock market goes down. | |
| We did our best investing during bear markets. We bought stocks "on sale" and reaped the rewards afterwards. |
| Forget about timing the markets. We recommend picking a handful of | |
| Vanguard Index Funds and investing regularly in those. Vanguard expenses are the lowest in the industry, the funds are tax-friendly, and your investments are spread over a wide range of asset classes. |
| Specifically, we recommend Vanguard 500 Index Fund (VFINX), | |
| Vanguard Extended Market Index Fund (VEXMX), and Vanguard Total International Stock Market Index Fund (VGTSX). We put 1/3 of our investments into each of the three stock funds -- simple as that. This provides incredible diversification. |
| We also own Vanguard Total Bond Market Index Fund (VBMFX). When | |
| we downsized to a condo at retirement at age 43, the remaining equity from our home went into this bond fund, not into stocks. A bond fund becomes much more important once you've retired and are withdrawing money on a regular basis -- it's your "safety net." |
| Get buy-in from your spouse (if you're married). It's very difficult to | |
| accomplish these goals if the two of you aren't on the same page. |
| Balance "living for tomorrow" with "living for today." You HAVE to be | |
| an optimist to plan 15 years into the future for an early retirement! But you also have to enjoy life along the way. Both are important. |
| How to Retire Early |
| Updates & Additional Early Retirement Advice |
