How to Retire in Your 30's with $1 Million in the Bank

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
texasdiver
Posts: 2758
Joined: Thu Jun 25, 2009 12:50 am
Location: Vancouver WA

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by texasdiver » Mon Sep 03, 2018 12:58 am

I don't think this sort of thing is anything new. Nor is it a growing trend. People have been walking away from the rat race since Thoreau. Well, long before that I suspect. Back in the 60s and 70s it was the back to the land movement. Buy your homestead in Vermont and grow vegetables. I have an aunt and uncle who dropped out in the early 70s, bought an old stone ground flour mill in West Virginia, restored it, built a little cabin, and lived off the land.

What's different today is the chance to document your every decision and experience on the internet. And find like minded communities. Back in the day you used to have to actually write a book to share your experiences, or start a cult.

beachtech
Posts: 7
Joined: Wed Sep 14, 2016 11:23 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by beachtech » Mon Sep 03, 2018 1:27 am

I'm one of these 30's "male and work in the tech industry, left-brained engineer-types." This article is actionable for me (though my number is above $1M). I don't particularly hate my job. It's rewarding in many ways. I feel very fortunate to be in this situation. However, I also identify with the software industry-specific comments from telemark and Slacker above. Overall, I believe I'd be happier, more creative, and more productive in a self-directed entrepreneurial work environment versus a corporate one, and have good personal evidence for this from a few years I'd spent living like this in the past.

But the reality is that entrepreneurship is risky, stressful, and a long journey to seeing any returns at all. It would be significantly de-risked and de-stressed if my ordinary living expenses were sustainably covered by some reasonable SWR from my portfolio. For that reason I'm currently putting my skills to use as a full-time employee, saving and building my Boglehead-standard index fund portfolio (and taking advantage of the great simplification, diversification, asset allocation, and tax optimization advice from this forum), while I'm learning as much as I can, building my skillset and network.

I definitely prefer the name "financial independence" to "retirement." After hitting my number, maybe I'll simply switch to part-time work or consulting (CedarWaxWing's suggestion) while working on my own projects on the side. Maybe I'll be fortunate enough to use my skills to build and grow a profitable small "lifestyle business." Maybe I won't. Maybe I'll just teach or travel. But in any case, I'll be able to make these decisions to optimize for whatever use of my time best contributes to my daily happiness and quality of life, even if it doesn't bring immediate (or any) financial rewards. If it turns out that after a year or two I discover that having the full-time job is the best option for my happiness and quality of life, then it should be possible to go back to it... but I wouldn't bet on that one!

Economically the interesting part for people in the article is that their opportunity costs are tremendously high (high earning potential of at least ~2-3x annual expenses + large portfolio growth of ~1x expenses). That is the annual "price" of their freedom: an exaggerated case of "One More Year Syndrome."

madbrain
Posts: 5157
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by madbrain » Mon Sep 03, 2018 3:13 am

HomerJ wrote:
Sun Sep 02, 2018 7:15 pm
One can certainly change careers, and/or work part-time, or take a sabbitical for a year or three with $1 million in your 30s (or your 40s).
Depends on what industry you work in. A year in tech is a long time. Three ? You will be way behind. Don't expect to resume right where you left.
Note I'm NOT one of those people who think people need $5 million to retire.

I think retiring on $40,000 a year (4% of $1 million) with a paid-off house in a LCOL area is very doable... Especially with Social Security (another $10,000-$40,000) coming soon. I think that can be a very good lifestyle. Rich, even.
At 65, sure, that may be reasonable. In your 30s ? No way. As long as the social contract in the US does not include government healthcare coverage for all, this will remain a pipe dream. The political wings seem to blow one way for an administration, then the other way. The safety net in the US has way too many holes. Someone with $1 million in their 30s is very likely to run out of money.
But people who say they are "retiring" in their 30s with $1 million are just stupid or lying.
Agree.
Now most of those people make it work by making some extra money on the side. That's great. But that's not retired.
+1000

User avatar
Tamarind
Posts: 1185
Joined: Mon Nov 02, 2015 2:38 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by Tamarind » Mon Sep 03, 2018 5:09 am

market timer wrote:
Sun Sep 02, 2018 7:51 pm
I wonder if we are seeing a rising trend in the very early retiree demographic, or if there are just some vocal outliers who make for good headlines. Every one of these articles is little more than a blog advertisement.

If there is a trend, I'd point to the rise of commoditized high-IQ jobs (tech, law, banking, consulting), where smart people uproot themselves to live in expensive cities, serve as replaceable cogs in a machine, attain no real ownership stake in their employer or house, and have no sense of community with their neighbors. They left school with a lot of hope, but after 7-10 years pass, they haven't created anything noteworthy, and can't point to anything that's arguably theirs, aside from a seven-figure investment account. This account offers the opportunity to try again in middle age to achieve the sort of self-actualization they thought would be theirs not so long ago. But time is moving quickly now, much faster than it was in college.

Anyhow, just a guess.
+1. I think this is a major contributor, and recognize my own motivations here. And it also appropriately locates the phenomenon along the 10% who have the option of FIREing from their jobs because at least they were well-compensated.

I wonder if we will see in a couple of years a really of new companies, research work, nonprofits, etc from these early retirees. That would be an additional good to come out of FIRE, if so.

User avatar
Tamarind
Posts: 1185
Joined: Mon Nov 02, 2015 2:38 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by Tamarind » Mon Sep 03, 2018 5:33 am

cdu7 wrote:
Sun Sep 02, 2018 5:14 pm
Just wanted to post my families story on here before it gets locked and/or deleted. Someone in the last thread had mentioned that they couldn’t leave their big time job until they had enough saved for FIRE, then gave a rundown of why other jobs wouldn’t work etc. I just wanted to say that it isn’t true, you really can switch careers to be happy and still do just fine financially (not early retirement in my mind).

My wife and I are millennials in our 30s and did a big career change not too long ago after our first kid. We both had high stress high hour jobs and were making roughly 300k combined. After our first kid we both were like this won’t work; I changed careers and became a teacher (btw this is still a lot of work so you have to love doing it), she is working at a less demanding job (i.e. lower hour/pay) in her same field. Well guess what, we still make 130k plus combined! Now maybe that isn’t enough money for you, but it’s plenty for us and we are both happy and fulfilled in our careers and home life.

Did we FIRE? I certainly wouldn’t call it that, but I feel like we are both doing a lot more than watching Netflix all day. And you don’t need millions in savings to do what we did. There is more than one way to change your life for the better.
You may have meant me, or possibly not, but I was in the last thread telling a story about deciding to stay in a high paying career rather than do something I thought was more productive for society because those other jobs were so poorly compensated.

I'm really glad it worked for you and that you are teaching, as it's a critical job, but my numbers are very different from yours. I suspect we are in different CoL areas. Our "high-paying" is similar to your post-change "low-paying", and definitely enough money for us to reach fatFIRE in late 40s.

I've done some research into what would happen if my wife and I both jumped to the careers that interest us, and we'd be lucky to pull in $50k together. Our ability to save would drop sharply or else we would be forced to move away from friends and the local urban areas where most of the jobs are. That's a serious decision to make without having plenty saved up given we have the choice. I continue to look at the decision, but it really is a tug of war between my interest in a different field and my desire to keep making hay while the sun shines. This especially when I'm not burnt out nor bored with my current work, simply perplexed at how little of real value results from it.

Glad we both have the luxury of choice. #10percentproblems

User avatar
jharkin
Posts: 1918
Joined: Mon Mar 28, 2016 7:14 am
Location: Boston suburbs

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by jharkin » Mon Sep 03, 2018 6:38 am

HomerJ wrote:
Sun Sep 02, 2018 7:15 pm
No one should "retire" in their 30s with $1 million in the Bank.

One can certainly change careers, and/or work part-time, or take a sabbitical for a year or three with $1 million in your 30s (or your 40s).

Note I'm NOT one of those people who think people need $5 million to retire.

I think retiring on $40,000 a year (4% of $1 million) with a paid-off house in a LCOL area is very doable... Especially with Social Security (another $10,000-$40,000) coming soon. I think that can be a very good lifestyle. Rich, even.

But people who say they are "retiring" in their 30s with $1 million are just stupid or lying.

At that age, 3% is the max withdrawal one can make to ensure the money lasts 50-60 years ($30,000 a year), and Social Security is a long ways away, and I'm not sure we can even assume they have a paid-off house. That is some tight living. For 30 years before SS (which will be less than normal)

Now most of those people make it work by making some extra money on the side. That's great. But that's not retired.

It’s even worse than that... somebody who “retires” at 30 having only joined the workforce at, say, 22 will get very little social security and probably just barely has enough earning years to qualify for Medicare even.

But as everybody pointed out, these folks are stretching the definition of retired, most have just downsized to a less expensive lifestyle and a part time income or side job. Some make more from blogging than they did in the traditional workforce.

I work in tech like many of these stories. My approach, rather than burning out and quitting, was to leave the high profile public companies for a private, non IPO track company and a less technical role. Doesn’t pay anywhere near what the FAANGs do, but it pays well enough, is only a fraction of the stress level, close to home, and is a very stable job with no worries of being pushed out in my 50s.

Like many, I couldn’t make 1MM at 30 work ( and that ship sailed a decade ago anyway) but I have no desire to work to 67 and 5MM either. I think splitting the difference, 2-3 @55 sounds about right ;)

User avatar
telemark
Posts: 2335
Joined: Sat Aug 11, 2012 6:35 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by telemark » Mon Sep 03, 2018 10:05 am

madbrain wrote:
Mon Sep 03, 2018 3:13 am
Note I'm NOT one of those people who think people need $5 million to retire.

I think retiring on $40,000 a year (4% of $1 million) with a paid-off house in a LCOL area is very doable... Especially with Social Security (another $10,000-$40,000) coming soon. I think that can be a very good lifestyle. Rich, even.
At 65, sure, that may be reasonable. In your 30s ? No way. As long as the social contract in the US does not include government healthcare coverage for all, this will remain a pipe dream. The political wings seem to blow one way for an administration, then the other way. The safety net in the US has way too many holes. Someone with $1 million in their 30s is very likely to run out of money.
Yes, living on $40,000 a year becomes noticeably harder when $10,000 of that goes for health insurance.

supersecretname
Posts: 73
Joined: Tue Sep 01, 2015 2:33 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by supersecretname » Mon Sep 03, 2018 10:06 am

As someone who will FIRE in the next 5 years, let me point some things out:

1 - healthcare. After quitting, I will set up my ROTH pipeline and control my income. That way I can qualify for the most beneficial ACA subsidies. Those are not going anywhere anytime soon. Yeah, people with higher incomes get screwed with ACA, but since I can control the income, I can find the sweet spot of affordable insurance

2 - social security. I'll get around 1k/month in when I hit the age. That's if it's still around paying 100% of current projections. Our generation is gonna get screwed on this one.

3 - lifestyle choice/being bored. If you won 10,000,000 tomorrow what would you do with your life? Would you still go into the office tomorrow? Some will say yes, and that's great. Those that said no, think about why not. Because we are no longer talking about the benefits of working, we are just talking about the number needed so you pull the plug. What often gets lost in these discussions is that people who FIRE don't want a fancy life. It's not that we are giving it up and struggling, I don't want to drive a BMW. I don't want fancy clothes or a big house or expensive dinners. Once you realize that, then it takes a lot less than 10 million to achieve the life that you want. The type of person that chooses to FIRE is not the type of person that gets tons of enjoyment/fulfillment from their job. If they did, they wouldn't FIRE.

4 - family - I have two kids that will go to StateU, and I'm a single parent.

5 - pending recession: Read this about the worst time to retire: https://www.gocurrycracker.com/the-wors ... ment-ever/ For someone to pull off FIRE you need to remember the type of person they are. It takes a lot of planning and execution, and the skills/aptitude that allowed someone to FIRE will serve them well if adjustments to the plan need to be made.

6 - getting hit by a bus: you only have one life and tomorrow is not guaranteed to anyone. I am going to make enough money to get outta dodge and then live the life that I choose (which is not going into an office for 9 hours a day). I'm sure everyone knows someone that died too young through no faults of their own. It happens. I view it as risky to continue working longer than I have to. It's a completely different change in perspective. How come I only get 2 of 7 days to myself? I want all 7.

I think detractors suffer from a lack of imagination. They just can't comprehend how someone didn't buy into the white picket fence fairy tale that gets sold in this country.

supersecretname
Posts: 73
Joined: Tue Sep 01, 2015 2:33 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by supersecretname » Mon Sep 03, 2018 10:20 am

telemark wrote:
Mon Sep 03, 2018 10:05 am
Yes, living on $40,000 a year becomes noticeably harder when $10,000 of that goes for health insurance.
In MD, post-subsidy, age 36, insurance would be ~320/month with 1000 deductible (gold plan) for a single person with 40k income. Age 56 gets an even higher subsidy so it'd be lower.

NextMil
Posts: 525
Joined: Wed Dec 13, 2017 12:33 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by NextMil » Mon Sep 03, 2018 6:21 pm

supersecretname wrote:
Mon Sep 03, 2018 10:06 am
As someone who will FIRE in the next 5 years, let me point some things out:

3 - lifestyle choice/being bored. If you won 10,000,000 tomorrow what would you do with your life? Would you still go into the office tomorrow? Some will say yes, and that's great. Those that said no, think about why not. Because we are no longer talking about the benefits of working, we are just talking about the number needed so you pull the plug. What often gets lost in these discussions is that people who FIRE don't want a fancy life. It's not that we are giving it up and struggling, I don't want to drive a BMW. I don't want fancy clothes or a big house or expensive dinners. Once you realize that, then it takes a lot less than 10 million to achieve the life that you want. The type of person that chooses to FIRE is not the type of person that gets tons of enjoyment/fulfillment from their job. If they did, they wouldn't FIRE.

I think detractors suffer from a lack of imagination. They just can't comprehend how someone didn't buy into the white picket fence fairy tale that gets sold in this country.
I am a detractor, and I don’t lack imagination at all. I want to FIRE eventually, just not in my 30s, and not on $40k a year. I enjoy my large house, luxury vehicles, and enjoy work and going on fancy vacations. That said, I still have a relatively high savings rate, thanks to hard work that helped me command a decently large salary.

I looked at the FIRE crowd, and they all seem so miserable. Go to MMM and there are literally threads entitled things like, what do you hate most about work, and threads set up to cheat systems such as ACA, taxes, and trade lines.

I did learn some smart ways to reduce some costs, but you Denominator folks seem to forget that Numerator is the other half of the equation.

bltn
Posts: 229
Joined: Mon Feb 20, 2017 9:32 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by bltn » Mon Sep 03, 2018 6:30 pm

FIREchief wrote:
Sun Sep 02, 2018 7:02 pm
texasdiver wrote:
Sun Sep 02, 2018 4:33 pm
Back in my day we called these guys "stay home dads" During my parent's time in the 60s and 70s they were called "dropouts" Now they are retired?
My favorite post of this thread! :sharebeer
Mine too.
I wonder if the retired people in their 30 s are enabled by a woeking spouse, like the stay at home dads.
It doesn t seem as though the term “retired” is appropriate if one person of a couple continues to work. At least in your30 s.
Don t couples share everything?

il0kin
Posts: 153
Joined: Mon Feb 26, 2018 8:19 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by il0kin » Mon Sep 03, 2018 7:46 pm

I became interested in seriously saving in large part due to the FI/RE community, but have no delusions about retiring in my 30s. One particular piece of motivation for me is that I worry about a combination of ageism and artificial intelligence becoming increasingly problematic for the labor force. I work on the “master” side of technology, fortunately, and objectively I think my job would be very hard to automate due to the massive amount of human knowledge about the business required to code, but technology moves fast and I want to get my piece of the pie as fast as I can. Too many Boomers got laid off at 50-60 in the 08 crisis and will never recover financially. I never want to be in that situation.

Edit: I think to summarize, I'm much more interested in the FI portion of FI/RE. It would be wonderful to slowly transition out of the workforce in my mid-50's by choice and let some contract work slowly taper off, though.

UncleBogle
Posts: 92
Joined: Sun Jul 15, 2018 7:53 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by UncleBogle » Mon Sep 03, 2018 9:21 pm

JBTX wrote:
Sun Sep 02, 2018 3:27 pm
There is so little room for error. I posted this in another thread.
JBTX wrote:
Tue Aug 28, 2018 7:56 pm
If everything works out absolutely perfectly you get the privilege of living at poverty level for the rest of your life. Best of luck.

Things that could go wrong:

- out of pocket medical expenses
- ACA policies become more expensive (I'm not sure how you live on $20k per year including ACA policy when you are 50. )
- God forbid you decide / need to buy something
- social security changes.
- prolonged market crash
- inflation
- Consumption tax - everything becomes more expensive.
I couldn't agree more. $1.2 M does not seem like a very comfortable cushion to rely on for the next 40+ years, even living very frugally.

Unless I missed it, I did not see any mention of assisting kids with educations in the article. I guess the kids would be responsible for 100% of their education(Not always a bad thing.....)

User avatar
MossySF
Posts: 2324
Joined: Thu Apr 19, 2007 9:51 pm
Contact:

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by MossySF » Mon Sep 03, 2018 11:44 pm

Obviously the crazy high income/savers here -- where 2% SWR is too aggressive -- are aghast at bailing from your career with "just" $1M at ~30.

But consider that regular Americans deal with this kind of penny pinching their entire lives with no $1M portfolio safety net.

We just should be careful about how we say things.

truenorth418
Posts: 409
Joined: Wed Dec 19, 2012 7:38 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by truenorth418 » Tue Sep 04, 2018 3:00 am

supersecretname wrote:
Mon Sep 03, 2018 10:06 am


I think detractors suffer from a lack of imagination. They just can't comprehend how someone didn't buy into the white picket fence fairy tale that gets sold in this country.
I agree that lack of imagination is part of the problem. But there is something else that I have never been able to fully understand.

Being early retired myself, I find that other people sometimes project their own insecurities and jealousies, which takes the form of snarky or judgmental comments. The previous thread that was deleted contained a lot of reactions like that. I remember years ago when I set a 10 year goal to become financially independent and retire early I told a couple of people about it, expecting them to ask questions or whatever - but instead they were openly hostile. After that I decided to keep it a secret.

And now that I'm retired, "But what do you do all day?" is a question I hear a lot, usually with a negative or condescending tone. Other people aren't usually all that interested. It took me a while to get used to that after I retired. I was surprised that more people didn't ask me questions about it or solicit my advice. I'm generally curious about such things, which is why I enjoy the Bogleheads forum so much, but not everyone is like us.

My advice to you is to stay focused on your goal and ignore the detractors as best you can. But also stay open-minded.. as it is always possible the detractors may point out something useful you hadn't considered.

lostdog
Posts: 1297
Joined: Thu Feb 04, 2016 2:15 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by lostdog » Tue Sep 04, 2018 7:47 am

MossySF wrote:
Mon Sep 03, 2018 11:44 pm
Obviously the crazy high income/savers here -- where 2% SWR is too aggressive -- are aghast at bailing from your career with "just" $1M at ~30.

But consider that regular Americans deal with this kind of penny pinching their entire lives with no $1M portfolio safety net.

We just should be careful about how we say things.

+1

I think a percentage of Boglehead's live in a bubble. You won't get many positive comments on this board in regards to FIRE and LEAN FIRE. You're better off posting portfolio help here and asking for FIRE help in the Reddit and MMM boards.

lostdog
Posts: 1297
Joined: Thu Feb 04, 2016 2:15 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by lostdog » Tue Sep 04, 2018 7:54 am

truenorth418 wrote:
Tue Sep 04, 2018 3:00 am
supersecretname wrote:
Mon Sep 03, 2018 10:06 am


I think detractors suffer from a lack of imagination. They just can't comprehend how someone didn't buy into the white picket fence fairy tale that gets sold in this country.
I agree that lack of imagination is part of the problem. But there is something else that I have never been able to fully understand.

Being early retired myself, I find that other people sometimes project their own insecurities and jealousies, which takes the form of snarky or judgmental comments. The previous thread that was deleted contained a lot of reactions like that. I remember years ago when I set a 10 year goal to become financially independent and retire early I told a couple of people about it, expecting them to ask questions or whatever - but instead they were openly hostile. After that I decided to keep it a secret.

And now that I'm retired, "But what do you do all day?" is a question I hear a lot, usually with a negative or condescending tone. Other people aren't usually all that interested. It took me a while to get used to that after I retired. I was surprised that more people didn't ask me questions about it or solicit my advice. I'm generally curious about such things, which is why I enjoy the Bogleheads forum so much, but not everyone is like us.

My advice to you is to stay focused on your goal and ignore the detractors as best you can. But also stay open-minded.. as it is always possible the detractors may point out something useful you hadn't considered.

This is very true. You'll see most of the snarkiness and jealous comments on the internet boards. I find most in real life do not care or they act like they don't and maybe talk behind your back but most act like they do not care. It's very rare in my case to see someone snarky towards you in real life. Most are just concentrating on their own situation. I now tell people that I free lance. That ends the "what do you do for a living" question pretty quick.

JBTX
Posts: 4281
Joined: Wed Jul 26, 2017 12:46 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by JBTX » Tue Sep 04, 2018 8:25 am

lostdog wrote:
Tue Sep 04, 2018 7:54 am
truenorth418 wrote:
Tue Sep 04, 2018 3:00 am
supersecretname wrote:
Mon Sep 03, 2018 10:06 am


I think detractors suffer from a lack of imagination. They just can't comprehend how someone didn't buy into the white picket fence fairy tale that gets sold in this country.
I agree that lack of imagination is part of the problem. But there is something else that I have never been able to fully understand.

Being early retired myself, I find that other people sometimes project their own insecurities and jealousies, which takes the form of snarky or judgmental comments. The previous thread that was deleted contained a lot of reactions like that. I remember years ago when I set a 10 year goal to become financially independent and retire early I told a couple of people about it, expecting them to ask questions or whatever - but instead they were openly hostile. After that I decided to keep it a secret.

And now that I'm retired, "But what do you do all day?" is a question I hear a lot, usually with a negative or condescending tone. Other people aren't usually all that interested. It took me a while to get used to that after I retired. I was surprised that more people didn't ask me questions about it or solicit my advice. I'm generally curious about such things, which is why I enjoy the Bogleheads forum so much, but not everyone is like us.

My advice to you is to stay focused on your goal and ignore the detractors as best you can. But also stay open-minded.. as it is always possible the detractors may point out something useful you hadn't considered.

This is very true. You'll see most of the snarkiness and jealous comments on the internet boards. I find most in real life do not care or they act like they don't and maybe talk behind your back but most act like they do not care. It's very rare in my case to see someone snarky towards you in real life. Most are just concentrating on their own situation. I now tell people that I free lance. That ends the "what do you do for a living" question pretty quick.
I'm probably one that comes across a bit snarky here. That probably isn't helpful. These are some of the reasons - real and perceived - I list them not to be contentious, but to articulate the reasons for my (and potentially others) skepticism:

- FIRE - from my perspective, one isn't "financially independent" with $1 million at age 30. Sure, they have a great head start, for which they should be congratulated. But the future is murky, and a lot can happen (which I listed above - biggest of which are long term market crash and health events/health insurance uncertainty) that may blow up a plan to live on $25K-$30K a year for the rest of your life.

- The term "financially independent" can come across humble-braggish. I'm sure that isn't what is intended, but for those who have worked decades and endured a lot, to hear somebody say they will work 8-10 years and retire for 50-60 years is going to make some bristle.

- The term "retire" seems to me to be used rather loosely. If your plan is to continue substantial work of some sort, that isn't really retirement. From my perspective, saving up early, and then making a change to a more palatable line of work is admirable, but it isn't retirement.

- It isn't uncommon in early-mid 30's to experience career dissatisfaction. I certainly did. That probably is an indication that some sort of change is needed. But true retirement seems kind of drastic, and seems like a last resort. Your perspective does change on things as you age.

- While I am all for getting out of the rat race and not wasting precious years - there is something that rubs me the wrong way a bit - living for 80+ years, of which only 10 year or so are productive, (notwithstanding charity work one may engage in during retirement)- including living on public assistance such as subsidized health care

- From my perspective, of the things I want to do when not working, many require more money than an early FIRE scenario would allow.

am
Posts: 2794
Joined: Sun Sep 30, 2007 9:55 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by am » Tue Sep 04, 2018 10:10 am

I think many in this forum are too conservative. Trying to plan for the bottom 1% or worst of historical outcomes. Remember that even the average historical outcome with regards to retirement will leave you with more money than you started with on your death bed.

winterfan
Posts: 103
Joined: Mon Jan 05, 2015 11:06 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by winterfan » Tue Sep 04, 2018 10:33 am

When I was in my 20s, way back in the 90s, I read Your Money or Your Life. I loved it and really embraced the whole simple living thing and still do. I envy some of the salaries of these people in the NYT article. I averaged about $40K over my working career (started at 18K, peaked at 67K when I was almost 40).

I "retired" almost seven years ago and became a stay at home mom. We can live on 3% of our portfolio now and be OK. I don't view myself as retired, and it would seem weird to me to start a blog dispensing advice or to be featured in a newspaper! I think people would just see me as being supported by my husband. We are FI, but people can't see that we saved a good chunk of our income for years.

My husband can retire, but he doesn't want to. He enjoys his work and doesn't want to be home looking for something to do. I don't think it helps that we are kind of hampered by school schedules and kid stuff. We can't exactly pack up and travel unless it's during summer or Christmas vacation. Even a day trip somewhere is hard when we'd have to be back by the school dismissal time.

winterfan
Posts: 103
Joined: Mon Jan 05, 2015 11:06 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by winterfan » Tue Sep 04, 2018 10:45 am

bltn wrote:
Mon Sep 03, 2018 6:30 pm

I wonder if the retired people in their 30 s are enabled by a woeking spouse, like the stay at home dads.
It doesn t seem as though the term “retired” is appropriate if one person of a couple continues to work. At least in your30 s.
Don t couples share everything?
I agree. My husband works and I am a mom/housewife. I'd feel silly calling myself retired and I think it seems pretentious. Plus, I feel like it advertises the fact that we have money stashed away. I prefer to remain under the radar.

DrivingFun
Posts: 212
Joined: Wed Sep 19, 2007 6:12 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by DrivingFun » Tue Sep 04, 2018 10:57 am

telemark wrote:
Sun Sep 02, 2018 9:13 pm
As some people have noticed, the quickest way to get to the requisite multiple of your expenses is to work on the denominator :)

Also, software development (a.k.a. "tech") is prone to burnout, partly because of constant deadline pressure but mostly because everything is critical path. If you're an E.R. doc and you want to take a month off, you can find someone to cover that spot in the calendar and everything is fine. Try that in software and the whole project is likely to come to a halt while someone else gets up to speed on what you were working on. And the fun never stops: by the time the current project is finished, usually long past its original unrealistic schedule, there are several new ones waiting in the pipeline. So you see people working crazy hours and eventually deciding "I don't need the money this much."

Personally, I enjoy designing and writing code, but I also take pride in doing it well and was finding fewer opportunities to do that. Sure, I could "just do a crappier job" but why?
For me (mid 30s) the burnout is more from the fact that I simply cannot stay current. I enjoy what I do, but I'm already about 5 years behind in my skills. There is little chance for me to get up to speed as our projects are very long tenured projects, that can last a decade. I used to have the want-to and time to stay current on my own, outside of work. Now as a family man, the desire and time dried up. I can't see myself surviving too long, something will have to change.

alfaspider
Posts: 1631
Joined: Wed Sep 09, 2015 4:44 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by alfaspider » Tue Sep 04, 2018 11:02 am

I agree that the people who have simply gone from a dual income household to a sole breadwinner are not really "retired." However, I do think it speaks to the real underlying purpose of FIRE idea- to put yourself in a situation where what you do in life is not dictated primarily by financial concerns.

Personally, that's where I stand. If, for example, my DS and I decided one of us should stay home with the kids, it would be nice if that decision was made without having to worry about the financial side of things.

To the extent that "FIRE" is a new trend, I think it speaks in large part to a generation that has seen varying levels of financial trauma in the wake of the financial crisis. Even if you have not personally suffered financial trauma, one sees co-workers or friends laid off with no warning, "gig economy" workers who have no stability at all, and savings that can plummet in value overnight. It makes sense that many have a strong desire to insulate themselves from those things as much as possible. Having a $1 million in the bank means working a "gig economy" job is not nearly so traumatic as it might be if one was living paycheck to paycheck.

If I won the lottery today, I'm quite certain I'd still show up for work tomorrow. But that doesn't mean I don't want a parachute ready if work isn't there tomorrow.

gotester2000
Posts: 598
Joined: Sun Nov 12, 2017 1:59 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by gotester2000 » Tue Sep 04, 2018 11:23 am

StevieG72 wrote:
Sun Sep 02, 2018 4:31 pm

I find this article interesting because the guy works in IT, which in my mind is a dream job. Working on a computer for 7 to 8 hours a day and nobody bothers me is how I envision this job. I am sure reality is quite different and people get burnt out at many different types of jobs.

Retail for 25+ years has me longing for lazy days in retirement.
Most of the IT guys would like to do what MMM is doing. I did not want to operate any machine, after working on a computer for 60 hour weeks for several years - just wanted to do something physical.

User avatar
bligh
Posts: 932
Joined: Wed Jul 27, 2016 9:13 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by bligh » Tue Sep 04, 2018 11:27 am

JBTX wrote:
Tue Sep 04, 2018 8:25 am
- FIRE - from my perspective, one isn't "financially independent" with $1 million at age 30. Sure, they have a great head start, for which they should be congratulated. But the future is murky, and a lot can happen (which I listed above - biggest of which are long term market crash and health events/health insurance uncertainty) that may blow up a plan to live on $25K-$30K a year for the rest of your life.
Having money is about having options. A 30 year old with $1 million that could cover his current lifestyle expenses has the field wide open to him/her. Would having more money provide more options? Always.. But you could use this endless quest for more money (ie. more options) to work till you die.
JBTX wrote:
Tue Sep 04, 2018 8:25 am
- The term "financially independent" can come across humble-braggish. I'm sure that isn't what is intended, but for those who have worked decades and endured a lot, to hear somebody say they will work 8-10 years and retire for 50-60 years is going to make some bristle.
I had an uncle who, in my presence, angrily said he wanted to "slap" people when he saw them talking on their cellphones. This was back when cell phones were super expensive and rare. He didn't know it but I was a 16 year old kid with a cell phone. I have had clients I have worked for who were born into more money than I can ever hope to see in my life. That is just life. Having a person bristle that someone else didn't have to endure what they endured is more about the person doing the bristling than anything else.
JBTX wrote:
Tue Sep 04, 2018 8:25 am
- The term "retire" seems to me to be used rather loosely. If your plan is to continue substantial work of some sort, that isn't really retirement. From my perspective, saving up early, and then making a change to a more palatable line of work is admirable, but it isn't retirement.
- While I am all for getting out of the rat race and not wasting precious years - there is something that rubs me the wrong way a bit - living for 80+ years, of which only 10 year or so are productive, (notwithstanding charity work one may engage in during retirement)- including living on public assistance such as subsidized health care
These two of your points are in opposition to each other. On the one hand you hold to a strict definition of retirement whereby one must remain completely idle or engage only in uncompensated work.. on the other hand you look down upon that idleness. You are claiming that financial independence is too "humble braggish", and retiring should be using in a more restricted sense to only mean idleness.. but you look down upon someone being idle for most of their life. Don't you see how these restrictions and boundaries are just so arbitrary and nit picky?
JBTX wrote:
Tue Sep 04, 2018 8:25 am
- It isn't uncommon in early-mid 30's to experience career dissatisfaction. I certainly did. That probably is an indication that some sort of change is needed. But true retirement seems kind of drastic, and seems like a last resort. Your perspective does change on things as you age.
I agree with you here. In my case my career dissatisfaction led me on a path to shift my career somewhat and take on more risk. It has rewarded me handsomely, but there was no guarantee of this when I made the shift. It was a huge risk when I did it, and I could easily have regretted the shift. The way I see it, people who amass a large sum of money and consider themselves FIRE'd are essentially taking on a similar (perhaps larger) risk and the payoff could be proportionately larger, or they could live to regret it too.
JBTX wrote:
Tue Sep 04, 2018 8:25 am
- From my perspective, of the things I want to do when not working, many require more money than an early FIRE scenario would allow.
That is a totally valid perspective.. I share it. It seems like when you hear FIRE you might be thinking of it as Lean FIRE .. but there is also Fat FIRE. In my case, that is what I am pursuing. It necessarily has me working longer to achieve it. That is my personal tradeoff in terms of comfort, security, and time.

By your definition, I will likely never willingly retire... I enjoy what I do too much, but that doesn't mean my work will take the form of a 9 to 5. The main point behind the FIRE movement (at least to me) is : Focus on amassing enough wealth that you can do what you want with your time, when you want to do it. Optimize your expenses. Stop keeping up with the Joneses, stop paying attention to the marketing and realize that you don't need to spend money to be happy.

It doesn't say that you must quit your job (though some people do), it doesn't say you cannot pursue entrepreneurial activities (though most people do), it doesn't say you have to live on a shoestring budget (though it is often the case) ... If nothing else you should respect them for trying something different for themselves. Everyone knows the standard life script we are supposed to follow.. build up your "human capital" by studying hard.. then working from 22+ to 65.. doing mostly the same thing over and over again for most of your life.. climbing the corporate ladder .. looking for work when you get laid off.. taking the 1 or 2 weeks off a year.. spending your weekends doing chores.. squeezing in some "quality" time with the kids.. enjoying your "success" by spending money on nicer things, fancier cars and bigger house.. and if you are lucky, after having spent most of the best years of your life in the rat race, growing old, retiring and dying. At least they are trying something different .. yes it is risky.. going off the beaten path is risky.. you can get lost, you can get eaten by a bear.. but that is the risk you take when you are willing to try something different....

rgs92
Posts: 2284
Joined: Mon Mar 02, 2009 8:00 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by rgs92 » Tue Sep 04, 2018 11:38 am

I know a lot of folks in IT who retired in their 40s, but not by choice. Telecom and some other IT areas collapsed and made people unemployable except maybe for things like entry level food service jobs, even with lots of education and graduate degrees and good skills. They were just marginalized.

It happens all the time.

So FIRE is something you have to prepare for from day one, especially if you are in the corporate world.

JBTX
Posts: 4281
Joined: Wed Jul 26, 2017 12:46 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by JBTX » Tue Sep 04, 2018 11:57 am

bligh wrote:
Tue Sep 04, 2018 11:27 am
JBTX wrote:
Tue Sep 04, 2018 8:25 am
- FIRE - from my perspective, one isn't "financially independent" with $1 million at age 30. Sure, they have a great head start, for which they should be congratulated. But the future is murky, and a lot can happen (which I listed above - biggest of which are long term market crash and health events/health insurance uncertainty) that may blow up a plan to live on $25K-$30K a year for the rest of your life.
Having money is about having options. A 30 year old with $1 million that could cover his current lifestyle expenses has the field wide open to him/her. Would having more money provide more options? Always.. But you could use this endless quest for more money (ie. more options) to work till you die.

I understand the argument that enough is never enough. What is enough? It is hard to pin down. But an annualized cash flow of $25k-$30k, at a point when market valuations seem to be relatively high, just seems like a needless risk to me.
JBTX wrote:
Tue Sep 04, 2018 8:25 am
- The term "financially independent" can come across humble-braggish. I'm sure that isn't what is intended, but for those who have worked decades and endured a lot, to hear somebody say they will work 8-10 years and retire for 50-60 years is going to make some bristle.
I had an uncle who, in my presence, angrily said he wanted to "slap" people when he saw them talking on their cellphones. This was back when cell phones were super expensive and rare. He didn't know it but I was a 16 year old kid with a cell phone. I have had clients I have worked for who were born into more money than I can ever hope to see in my life. That is just life. Having a person bristle that someone else didn't have to endure what they endured is more about the person doing the bristling than anything else.
JBTX wrote:
Tue Sep 04, 2018 8:25 am
- The term "retire" seems to me to be used rather loosely. If your plan is to continue substantial work of some sort, that isn't really retirement. From my perspective, saving up early, and then making a change to a more palatable line of work is admirable, but it isn't retirement.
- While I am all for getting out of the rat race and not wasting precious years - there is something that rubs me the wrong way a bit - living for 80+ years, of which only 10 year or so are productive, (notwithstanding charity work one may engage in during retirement)- including living on public assistance such as subsidized health care
These two of your points are in opposition to each other. On the one hand you hold to a strict definition of retirement whereby one must remain completely idle or engage only in uncompensated work.. on the other hand you look down upon that idleness. You are claiming that financial independence is too "humble braggish", and retiring should be using in a more restricted sense to only mean idleness.. but you look down upon someone being idle for most of their life. Don't you see how these restrictions and boundaries are just so arbitrary and nit picky?
They weren't meant to be contradictory. Perhaps this is just a definition issue. If one really dislikes one's career trying something new (that generates income) once you have some level of financial security is perfectly reasonable. If the idea is to exist and support on non-income activities for 50+ years, that is another story.

JBTX wrote:
Tue Sep 04, 2018 8:25 am
- It isn't uncommon in early-mid 30's to experience career dissatisfaction. I certainly did. That probably is an indication that some sort of change is needed. But true retirement seems kind of drastic, and seems like a last resort. Your perspective does change on things as you age.
I agree with you here. In my case my career dissatisfaction led me on a path to shift my career somewhat and take on more risk. It has rewarded me handsomely, but there was no guarantee of this when I made the shift. It was a huge risk when I did it, and I could easily have regretted the shift. The way I see it, people who amass a large sum of money and consider themselves FIRE'd are essentially taking on a similar (perhaps larger) risk and the payoff could be proportionately larger, or they could live to regret it too.
It just seems to me like you exhaust other options before going to "full retirement". A leave of absence can do wonders. I've known several people who burned out, took 6 months or more off, give or take, and came back with a different perspective. If you have only worked, and never not worked, you have a distorted perspective. There is a tendency to fantasize about not working at that age - I certainly did. I got laid off and for a few months loved it. But after a while it became somewhat routine.
JBTX wrote:
Tue Sep 04, 2018 8:25 am
- From my perspective, of the things I want to do when not working, many require more money than an early FIRE scenario would allow.
That is a totally valid perspective.. I share it. It seems like when you hear FIRE you might be thinking of it as Lean FIRE .. but there is also Fat FIRE. In my case, that is what I am pursuing. It necessarily has me working longer to achieve it. That is my personal tradeoff in terms of comfort, security, and time.

By your definition, I will likely never willingly retire... I enjoy what I do too much, but that doesn't mean my work will take the form of a 9 to 5. The main point behind the FIRE movement (at least to me) is : Focus on amassing enough wealth that you can do what you want with your time, when you want to do it. Optimize your expenses. Stop keeping up with the Joneses, stop paying attention to the marketing and realize that you don't need to spend money to be happy.

It doesn't say that you must quit your job (though some people do), it doesn't say you cannot pursue entrepreneurial activities (though most people do), it doesn't say you have to live on a shoestring budget (though it is often the case) ... If nothing else you should respect them for trying something different for themselves. Everyone knows the standard life script we are supposed to follow.. build up your "human capital" by studying hard.. then working from 22+ to 65.. doing mostly the same thing over and over again for most of your life.. climbing the corporate ladder .. looking for work when you get laid off.. taking the 1 or 2 weeks off a year.. spending your weekends doing chores.. squeezing in some "quality" time with the kids.. enjoying your "success" by spending money on nicer things, fancier cars and bigger house.. and if you are lucky, after having spent most of the best years of your life in the rat race, growing old, retiring and dying. At least they are trying something different .. yes it is risky.. going off the beaten path is risky.. you can get lost, you can get eaten by a bear.. but that is the risk you take when you are willing to try something different....
I have not had a typical career - alternating long terms of employment, with fairly long stints of self employment/contract work in between, including periods of not working. It isn't the optimal way for career advancement, but it has in my case lead to more contentment and less frustration with the "rat race" aspect of it. The only downside is the instability and inconsistency of the work, but my wife works for a small company in a job she really likes, so that gives us flexibility.

I would never criticize a person for taking calculated and educated risks, that have an upside and a reasonable chance of success. I just don't see retiring in your 30's with $1 million as one of those calculated risks.

It just seems like I am seeing a lot of these types of posts, and people saying just put your money in FANG, should I be 100% in stocks / why would anybody want bonds, etc, etc - I wonder if we have a generation that really hasn't experienced ups and downs. it is starting to feel like 1999 when everybody wanted to day trade. The good times will never end! I suspect these types of posts will almost completely go away the next time the market really tanks. What happens if you are 32 years old, you are pulling out $30K a year, and your million goes to $500K? Sure, odds are that you can probably squeak through, if nothing bad happens, but it seems like a needless amount of stress.

User avatar
tfb
Posts: 7980
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by tfb » Tue Sep 04, 2018 12:31 pm

JBTX wrote:
Tue Sep 04, 2018 11:57 am
But an annualized cash flow of $25k-$30k, at a point when market valuations seem to be relatively high, just seems like a needless risk to me.
Here's an open secret among featured FIRE subjects: nobody actually lives on $25k-$30k cash flow or plans to live on it permanently. Many don't take any withdrawals at all. You don't have to worry about them. They all have other sources: a spouse who still works, rentals, a blog, ... It's all about working a different schedule, in a different field, in the attention economy. The $1 million is only there as a backstop.
Harry Sit, taking a break from the forums.

JBTX
Posts: 4281
Joined: Wed Jul 26, 2017 12:46 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by JBTX » Tue Sep 04, 2018 12:35 pm

tfb wrote:
Tue Sep 04, 2018 12:31 pm
JBTX wrote:
Tue Sep 04, 2018 11:57 am
But an annualized cash flow of $25k-$30k, at a point when market valuations seem to be relatively high, just seems like a needless risk to me.
Here's an open secret among featured FIRE subjects: nobody actually lives on $25k-$30k cash flow or plans to live on it permanently. Many don't take any withdrawals at all. You don't have to worry about them. They all have other sources: a spouse who still works, rentals, a blog, ... It's all about working a different schedule, in a different field, in the attention economy. The $1 million is only there as a backstop.
That is all fine, but that isn't retirement.

Also having one spouse work and the other not (other than stay at home parent role) can lead to some negative relationship dynamics.

supersecretname
Posts: 73
Joined: Tue Sep 01, 2015 2:33 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by supersecretname » Tue Sep 04, 2018 12:42 pm

Ah yes, the arrival of the whole: if I don't understand it, it can't possibly be true.

25-30k would be a very lean FIRE, and I'm sure there are some that do it. 40k is a more realistic number that people can wrap their heads around. Very few bloggers actually make money, only the top handful that are household names around these parts.

Again, just because YOU can't, or don't want to, or don't understand how, doesn't mean others aren't.

On MMM there is a running thread of people who FIREd in 2018. Its up to over 50 people. I'm sure their numbers/situations are all different. And some of you might scoff.

The point is to arrange the life that you want, not that someone else says you should have.

Texanbybirth
Posts: 1001
Joined: Tue Apr 14, 2015 12:07 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by Texanbybirth » Tue Sep 04, 2018 1:50 pm

tfb wrote:
Tue Sep 04, 2018 12:31 pm
JBTX wrote:
Tue Sep 04, 2018 11:57 am
But an annualized cash flow of $25k-$30k, at a point when market valuations seem to be relatively high, just seems like a needless risk to me.
Here's an open secret among featured FIRE subjects: nobody actually lives on $25k-$30k cash flow or plans to live on it permanently. Many don't take any withdrawals at all. You don't have to worry about them. They all have other sources: a spouse who still works, rentals, a blog, ... It's all about working a different schedule, in a different field, in the attention economy. The $1 million is only there as a backstop.
Exactly. MMM is the genius who seemingly started this phenomenon, and I'm sure he makes bank at this new job.

am
Posts: 2794
Joined: Sun Sep 30, 2007 9:55 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by am » Tue Sep 04, 2018 1:57 pm

tfb wrote:
Tue Sep 04, 2018 12:31 pm
JBTX wrote:
Tue Sep 04, 2018 11:57 am
But an annualized cash flow of $25k-$30k, at a point when market valuations seem to be relatively high, just seems like a needless risk to me.
Here's an open secret among featured FIRE subjects: nobody actually lives on $25k-$30k cash flow or plans to live on it permanently. Many don't take any withdrawals at all. You don't have to worry about them. They all have other sources: a spouse who still works, rentals, a blog, ... It's all about working a different schedule, in a different field, in the attention economy. The $1 million is only there as a backstop.
Seems like Justin and his family at root of good does it on 30k or so if I remember correctly. But he has a blog that provides income and a large 7 figure portfolio.

wolf359
Posts: 1462
Joined: Sun Mar 15, 2015 8:47 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by wolf359 » Tue Sep 04, 2018 2:12 pm

am wrote:
Tue Sep 04, 2018 1:57 pm
tfb wrote:
Tue Sep 04, 2018 12:31 pm
JBTX wrote:
Tue Sep 04, 2018 11:57 am
But an annualized cash flow of $25k-$30k, at a point when market valuations seem to be relatively high, just seems like a needless risk to me.
Here's an open secret among featured FIRE subjects: nobody actually lives on $25k-$30k cash flow or plans to live on it permanently. Many don't take any withdrawals at all. You don't have to worry about them. They all have other sources: a spouse who still works, rentals, a blog, ... It's all about working a different schedule, in a different field, in the attention economy. The $1 million is only there as a backstop.
Seems like Justin and his family at root of good does it on 30k or so if I remember correctly. But he has a blog that provides income and a large 7 figure portfolio.
Justin publishes his budget including blog income. (The blog doesn't make much). I think the last time I saw it (2016?), he raised his budget to $40,000. He uses a variable 4% withdrawal from his portfolio as the basis for his income. That year, 4% would have supported $66,000.

His current budget may be higher -- his portfolio is bigger, he's been doing home repairs, and he had a big trip to Europe last year.

am
Posts: 2794
Joined: Sun Sep 30, 2007 9:55 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by am » Tue Sep 04, 2018 2:26 pm

wolf359 wrote:
Tue Sep 04, 2018 2:12 pm
am wrote:
Tue Sep 04, 2018 1:57 pm
tfb wrote:
Tue Sep 04, 2018 12:31 pm
JBTX wrote:
Tue Sep 04, 2018 11:57 am
But an annualized cash flow of $25k-$30k, at a point when market valuations seem to be relatively high, just seems like a needless risk to me.
Here's an open secret among featured FIRE subjects: nobody actually lives on $25k-$30k cash flow or plans to live on it permanently. Many don't take any withdrawals at all. You don't have to worry about them. They all have other sources: a spouse who still works, rentals, a blog, ... It's all about working a different schedule, in a different field, in the attention economy. The $1 million is only there as a backstop.
Seems like Justin and his family at root of good does it on 30k or so if I remember correctly. But he has a blog that provides income and a large 7 figure portfolio.
Justin publishes his budget including blog income. (The blog doesn't make much). I think the last time I saw it (2016?), he raised his budget to $40,000. He uses a variable 4% withdrawal from his portfolio as the basis for his income. That year, 4% would have supported $66,000.

His current budget may be higher -- his portfolio is bigger, he's been doing home repairs, and he had a big trip to Europe last year.
He’s living better than most (including me) on 1/10 the income. Seems like he has a plan for everything that can come his way. True inspiration. I fear that if I follow the advice of those on this forum, I’ll be one of the wealthiest in the grave yard :D

User avatar
tfb
Posts: 7980
Joined: Mon Feb 19, 2007 5:46 pm
Contact:

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by tfb » Tue Sep 04, 2018 3:03 pm

wolf359 wrote:
Tue Sep 04, 2018 2:12 pm
am wrote:
Tue Sep 04, 2018 1:57 pm
Seems like Justin and his family at root of good does it on 30k or so if I remember correctly. But he has a blog that provides income and a large 7 figure portfolio.
Justin publishes his budget including blog income. (The blog doesn't make much). I think the last time I saw it (2016?), he raised his budget to $40,000. He uses a variable 4% withdrawal from his portfolio as the basis for his income. That year, 4% would have supported $66,000.
July 2018 financial update: Blog income $2,706, which was the largest income item, 2x the investment income. It covers 80% of the $3,333/month ($40k/year) expense budget.

June 2018 financial update: Blog income $2,402, which was lower than the $6,439 investment income but remember most dividends received in June were quarterly.

No withdrawals from the portfolio other than receiving interest and dividend. A large part of the interest and dividends is reinvested because the blog income already covers 70-80% of the budget. We really don't have to worry about them. If the $40k budget isn't desirable any more, it can easily go to $60k or $80k. It's very far from having only $25k-$30k/year forever.
Harry Sit, taking a break from the forums.

bhsince87
Posts: 1909
Joined: Thu Oct 03, 2013 1:08 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by bhsince87 » Tue Sep 04, 2018 3:04 pm

texasdiver wrote:
Mon Sep 03, 2018 12:58 am
I don't think this sort of thing is anything new. Nor is it a growing trend. People have been walking away from the rat race since Thoreau. Well, long before that I suspect. Back in the 60s and 70s it was the back to the land movement. Buy your homestead in Vermont and grow vegetables. I have an aunt and uncle who dropped out in the early 70s, bought an old stone ground flour mill in West Virginia, restored it, built a little cabin, and lived off the land.

What's different today is the chance to document your every decision and experience on the internet. And find like minded communities. Back in the day you used to have to actually write a book to share your experiences, or start a cult.
Or subscribe to "Mother Earth News"! :)

This was actually a dream of mine during my high school years in the early 80's.

I'm very thankful I chose a different path.
Retirement: When you reach a point where you have enough. Or when you've had enough.

JBTX
Posts: 4281
Joined: Wed Jul 26, 2017 12:46 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by JBTX » Tue Sep 04, 2018 3:14 pm

supersecretname wrote:
Tue Sep 04, 2018 12:42 pm
Ah yes, the arrival of the whole: if I don't understand it, it can't possibly be true.

25-30k would be a very lean FIRE, and I'm sure there are some that do it. 40k is a more realistic number that people can wrap their heads around. Very few bloggers actually make money, only the top handful that are household names around these parts.

Again, just because YOU can't, or don't want to, or don't understand how, doesn't mean others aren't.

On MMM there is a running thread of people who FIREd in 2018. Its up to over 50 people. I'm sure their numbers/situations are all different. And some of you might scoff.

The point is to arrange the life that you want, not that someone else says you should have.
It probably isn't that hard when you are in your 30's with minimal health insurance and medical needs with a continually rising stock market. Let's see what happens when they are in their late 40's or 50's in the middle of a stock market rout.

I'm not saying it is impossible, just a higher level of risk than I'd want to assume. But sure, there are lots, millions in fact, of people that live on 30k-40k, so I'm not at all saying it is impossible. Just not something I'd want to do by choice.

renue74
Posts: 1210
Joined: Tue Apr 07, 2015 7:24 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by renue74 » Tue Sep 04, 2018 3:25 pm

These posts pop up every few weeks. Regardless of post contents, you'll always have the negative comments.

It could be a post about the discovery of a Unicorn with rainbow hair that helps sick children recover after surgery and somebody will say something negative.

The key is...the title should be "How to quit your soul grinding job in your 30's with $1M in the bank and enjoy a different lifestyle."

I'm fine with them. I applaud their efforts...however they save their $. It's better than 95% of the rest of the population.

User avatar
JoMoney
Posts: 6327
Joined: Tue Jul 23, 2013 5:31 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by JoMoney » Tue Sep 04, 2018 3:27 pm

JBTX wrote:
Tue Sep 04, 2018 3:14 pm
... But sure, there are lots, millions in fact, of people that live on 30k-40k, so I'm not at all saying it is impossible...
To note, the median hourly wage is $18.12 an hour, assuming a 40/hr work week that's under $38k a year for half the country.
https://www.bls.gov/oes/current/oes_nat.htm#00-0000
"To achieve satisfactory investment results is easier than most people realize; to achieve superior results is harder than it looks." - Benjamin Graham

F_E
Posts: 3
Joined: Tue Sep 04, 2018 3:17 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by F_E » Tue Sep 04, 2018 3:35 pm

It seems that many folks are equating the lower (ie $30k-$40k) investment income with a commensurate lowering of living standards. Seems likely that the qualities necessary to achieve early retirements, also allow for getting more value out of available income. Simply having the time and energy to in-source home repairs, renovations, and other tasks can allow for a very comfortable life off a lower income.

texasdiver
Posts: 2758
Joined: Thu Jun 25, 2009 12:50 am
Location: Vancouver WA

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by texasdiver » Tue Sep 04, 2018 3:35 pm

My own experience with this sort of thing is a bit different. I worked in the Peace Corps in Guatemala in the 1980s and knew a number of volunteers in their early 30s who basically decided not to go home. One guy I knew very well got married and opened up a gift shop and tour guide business down there. Two different women opened up small B&B hotels. And one guy developed a small farm growing and exporting fresh herbs to US markets. Basically they all scratched out enough of a living to get by but weren't really building any kind of future savings or even social security.

After 10+ years, all of them gave up and returned to the US. And in every case found themselves WAY WAY behind and completely out of the career and job loop and found it extremely difficult to get back into any kind of middle class career path in their late 30s or early 40s. They are all doing pretty low-paid jobs like assistant manager/clerk at a health food co-op, that sort of thing. Whereas nearly all of our peers that returned to grad school and professional jobs in the late 80s are well into peak earning years in professional jobs.

That would be my big fear for someone walking away from middle class professional life in their early 30s with only $1 million of assets. You can cruise along for a long time on $40,000 per year but chances are some sort of unexpected life event is going to upset those plan: Major medical crisis, aging parents, unexpected child rearing expenses, financial crash, etc. etc. 10-15 years into this kind of life it is extremely difficult to get back into any kind of middle class profession.

User avatar
greg24
Posts: 3308
Joined: Tue Feb 20, 2007 10:34 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by greg24 » Tue Sep 04, 2018 4:15 pm

The headlines and ledes on these articles are frequently misleading. The articles could more applicably be titled "Hey, you can leave the grind in a HCOL area and LBYM in middle America and life is kind of easier that way."

Lets look at the folks in the article:

Carl Jensen - quits his job to be SAHD and let his wife be primary breadwinner
Jason Long - pharmacist, sounds like he actually FIREd.
Kristy Shen and Bryce Leung - quit their jobs to travel. I'm not sure that they're FIREd, or between jobs.
Scott Rieckens - Moved from CA to OR. Still working. Just living an easier lifestyle.

bhsince87
Posts: 1909
Joined: Thu Oct 03, 2013 1:08 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by bhsince87 » Tue Sep 04, 2018 5:42 pm

I wonder if many of these folks understand the power of compounding?

Of course, they are throwing away their peak earning years. That might be worth the trade off for free time.

But the ones who are retiring and planning to live off a 3-4% withdrawal rate until death are squandering a huge advantage they have over most of their peers.


Folks letting the nest egg ride and grow while they live off side gigs or lower income, lower stress jobs probably have it right.

But man, that's a huge decision to make at age 30! Not much life experience at that age.
Retirement: When you reach a point where you have enough. Or when you've had enough.

madbrain
Posts: 5157
Joined: Thu Jun 09, 2011 5:06 pm
Location: San Jose, California

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by madbrain » Tue Sep 04, 2018 6:17 pm

supersecretname wrote:
Mon Sep 03, 2018 10:20 am
telemark wrote:
Mon Sep 03, 2018 10:05 am
Yes, living on $40,000 a year becomes noticeably harder when $10,000 of that goes for health insurance.
In MD, post-subsidy, age 36, insurance would be ~320/month with 1000 deductible (gold plan) for a single person with 40k income. Age 56 gets an even higher subsidy so it'd be lower.
Do you want to make the bet that this will remain so for 40+ years ? The current administration is doing all it can to roll back subsidies. It already did away with the cost-sharing for silver plans. It is now allowing policies to be sold that exclude coverage for certain medical conditions. So for example, as I HIV patient, I qualify to buy that policy, but it would be nearly worthless to me. As much as I love the ACA, making a bet that it will not change for that length of time is being very optimistic. Things can easily get much worse, unfortunately.

User avatar
Cycle
Posts: 882
Joined: Sun May 28, 2017 7:57 pm
Location: USA

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by Cycle » Tue Sep 04, 2018 6:41 pm

HEDGEFUNDIE wrote:
Sun Sep 02, 2018 3:23 pm
$4M in my 40s for me
Same, plus paid off house (400k). I came up with our target based on cost of healthcare and we want to be able to afford to travel luxuriously and send kids to whatever undergrad college they want.

I'm currently 35 with 1mm in investments, plus live in a paid off duplex worth $360k. Just predictable results from two engineers working in non-silicon valley megacorp jobs and saving somewhat aggressively for 13 years in target funds during the longest bull market in history.

livesoft
Posts: 63093
Joined: Thu Mar 01, 2007 8:00 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by livesoft » Tue Sep 04, 2018 7:09 pm

I like the idea of working from age 22 to 39 and then marrying someone who is age 22 who can work their own age 22-39. That way, both work about the same number of years and life is golden.

And then the divorce allows the new 39-year-old to marry their own 22-year-old and the cycle repeats.
Wiki This signature message sponsored by sscritic: Learn to fish.

User avatar
market timer
Posts: 5970
Joined: Tue Aug 21, 2007 1:42 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by market timer » Tue Sep 04, 2018 8:24 pm

As Bob Dylan says, "You gotta serve somebody." I wonder how many "retired" stay-at-home-parents find their working spouse becomes the de facto employer. For me, there is no comparison between an intellectually challenging 9-6 and an on-call 24/7 handyman/cook/maid/nanny/errand runner.

WanderingDoc
Posts: 1296
Joined: Sat Aug 05, 2017 8:21 pm

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by WanderingDoc » Tue Sep 04, 2018 9:07 pm

software wrote:
Sun Sep 02, 2018 3:19 pm
I don’t think many bogle heads fall into this category. This is more of the Mr. Money Mustache crew. I would say bogleheads tend to err on the more conservative side as far as amount of assets before retiring, atleast from what I have seen.

In any case, I think this is one of those things that sounds better in theory than it actually is. “Retiring” with 1 million would significantly limit your ability to enjoy that retirement. To each their own I guess.
Agreed. $3M is the new $1M.
I'm not looking to get rich quick (stocks), I'm not looking to get rich slow (indexing), I'm looking to get rich, for sure (real estate) | Don't wait to buy real estate. Buy real estate.. and wait.

marcopolo
Posts: 1299
Joined: Sat Dec 03, 2016 10:22 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by marcopolo » Tue Sep 04, 2018 10:10 pm

madbrain wrote:
Tue Sep 04, 2018 6:17 pm

Do you want to make the bet that this will remain so for 40+ years ? The current administration is doing all it can to roll back subsidies. It already did away with the cost-sharing for silver plans. It is now allowing policies to be sold that exclude coverage for certain medical conditions. So for example, as I HIV patient, I qualify to buy that policy, but it would be nearly worthless to me. As much as I love the ACA, making a bet that it will not change for that length of time is being very optimistic. Things can easily get much worse, unfortunately.
While I agree with your general point, the bolded statement above is incorrect. They eliminated reimbursing insurance companies for the cost sharing. But, to the end consumer, the cost sharing payments are exactly as they were before. The insurance companies simply raised premiums in different ways to absorb the lost reimbursements. Since most people on ACA (something like 85%) receive premium tax credits, all this did was increase the size of those credits since the amount consumers are required to pay is tied to their income, and does not go up as the premiums are raised.
Once in a while you get shown the light, in the strangest of places if you look at it right.

marcopolo
Posts: 1299
Joined: Sat Dec 03, 2016 10:22 am

Re: How to Retire in Your 30's with $1 Million in the Bank

Post by marcopolo » Tue Sep 04, 2018 10:13 pm

livesoft wrote:
Tue Sep 04, 2018 7:09 pm
I like the idea of working from age 22 to 39 and then marrying someone who is age 22 who can work their own age 22-39. That way, both work about the same number of years and life is golden.

And then the divorce allows the new 39-year-old to marry their own 22-year-old and the cycle repeats.
Brilliant. Kind of a new twist on Logan's Run.
Once in a while you get shown the light, in the strangest of places if you look at it right.

Locked