5 Things That Helped Me Retire Early
When I tell people that I’m retired, they usually assume that I came from money, struck gold from a tech IPO, or that I got lucky throwing my life savings into Tesla or Bitcoin. But none of those are true. To achieve financial independence sooner than most, I think that I simply developed certain habits early in life that put me ahead of the curve.
After reflecting on what I did to retire at age 31, I came up with a list of 5 things that helped me accomplish my goal. Surprisingly, not everything on my list has to do with money, so read on to find out more!
Learning how to save at a young age (and actually doing it)
Retiring early is not for everyone, but saving for retirement is. In order to retire at any age, you’ll have to have enough saved up to support your lifestyle for the rest of your life. You do not want to plan for your retirement when it’s too late and ultimately become a financial burden on your children or other family members, so start as early as possible.
I don’t know exactly how I learned to be a saver, but I know that I was a saver at a very young age. When I was growing up, my brother, my cousins, and I used to earn $5 gardening for our grandma. She’d then take us to the toy store to spend our allowance. But I didn’t always spend my money. I’d wait for a sale on a more expensive item that $5 just couldn’t buy. So after saving a week’s worth of chore money, coupled with toy sales, I’d bring home 1 cool, giant toy to play with and still have leftover allowance for the future.
This practice of saving and waiting for the future to make purchases is known as delayed gratification. It takes a lot of will power to actually do it, just as I did in my childhood days. But if you can incorporate this habit into your life, delayed gratification is one of the most powerful methods to build wealth. Nowadays, $5 isn’t much. But if you blow up that dollar amount into the hundreds, thousands, or even hundreds of thousands and save over multiple years, you will see very significant increases in your net worth.
Lastly, you can be the smartest person in the world, but if you don’t use that knowledge, that knowledge is useless. So just learning how to save isn’t enough; you have to go out and do it.
Having a strong support system
Being on the same page as my partner was key to retiring early, and it remains to be key in having a successful retirement, as well. Without the support of my partner to retire early, neither of us would be happy. The prospect of retiring early was a foreign concept to my partner when we first met. But over years of conversations and partnership, allowing me to retire early became a joint goal, not just my own.
In addition to having my partner by my side all these years, the FI/RE community has been very welcoming, educational, and inspirational. There are so many unique paths to wealth-building out there, so it’s been very interesting to learn from others and watch them progress towards their goals. Be sure to follow me on Instagram to interact with me and so many others in the FI/RE community. You’ll learn so much!
Investing early
Exposure to other investors is key to learning how to invest and what to invest in. Fortunately, I had that exposure in my life growing up. By the time I was in college, I knew I had to start learning how to invest in the stock market. So I gave that a go. I self-taught myself some bad investing habits, like gambling with stock options. I more than quadrupled my initial investment in my brokerage account while in college, but then I eventually lost it all. However, I took it in stride and wrote it off as a learning experience, an investment in my financial education. Unfortunately, it took me many years to unlearn that bad habit and I have lost tens of thousands of dollars because of it. Now I know that index funds and holding onto investments over the long-term is best for me.
Shortly after I graduated from college, I had enough money saved up to buy my very 1st home, a condo to be specific. For those of you who live in California, Silicon Valley specifically, you would know that that is no easy feat. 3 years later, I sold my condo and upgraded to a single family home. And the year after that, I bought 3 rentals.
The point? I started investing relatively early, both in stocks and real estate. A part of me is very lazy. So I wanted to make my money earn me money, instead of always having to earn money with my own time. And I knew the only way was through investing.
Privilege
One of the biggest boosts one can have in life is privilege. Growing up, I didn’t have to worry about having food on the table, clothes on my back, and a roof over my head. When you have to worry about those things, it is challenging (to say the least) to focus on education and honing your personal interests.
Beyond the basics, I was fortunate to graduate from a 4-year university with zero debt, whereas over 40 million people carry student loan debt with an average federal loan balance of $37,667 and take an average of 20 years to pay off!
Software engineering
Before I completed college, I already had a job lined up by the beginning of my senior year (that didn’t help my motivation for the remainder of the school year). That’s how much demand there was/is for software engineers!
I graduated a quarter early, moved to Silicon Valley in the spring, and started my very first full-time job. This was in 2012, but I had already cracked 6-figures immediately after college! No one could predict how hot the job market would be for software engineers in the coming decade. Let’s just say that compensation is out of this world and is probably the biggest contributor to how expensive real estate is in tech hubs like Silicon Valley, Austin, and Seattle. It’s also one of the biggest reasons I was able to save and invest so much in such a short period of time, ultimately allowing me to retire by the age of 31!
Conclusion
Ultimately, to achieve financial independence, the trick to getting there is through financial literacy, planning, and execution. You have to understand how to save before you can invest. Investing can only happen if you identify your expenses and how much you’ll have left over to invest. And the sooner you figure that out, the more time your investments have to grow over the long haul.
If you’re looking to learn about what to invest in, check out a few of my past posts on real estate investing and stocks. And please do reach out to me if you have any questions! I’m here to help!
