Do you know anyone who retired before 30?

no mo po po wrote:

Plenty of public service (police, firefighter) friends who like me "retired" around age 41, but all went in to second careers because half of your highest 3 yrs average isn't enough to live on and send kids to college.

Why not have them:

- go to a cheaper college

- go to a college that offers them a good scholarship

- work first until they have enough money to pay for college

- get a loan

- skip college and attend a trade school instead

no mo po po wrote:

That doesn't sound remotely fun

You're definitely right about that, but let's see if this is even plausible in the first place. Average engineer's salary is what, 85-90K/year or so? To achieve this, the OP's classmate needs to top out at 110-120K since his starting salary won't be anywhere near 90K. Tough, but not unheard of. Take home pay will be around 65K/ year.

So we have 6 yrs * 65K/yr = 390K total

Subtracting 90K for a house payment leaves you at 300K. He can't have any student loans either.

He needs to pay for 10 years of living expenses from age 18-28. He can't live as cheaply since he still needs to commute and buy presentable clothes. He's not going to have much time to grow his own food either, but let's assume he can live on 10K/yr.

That leaves 300K-100K = 200K for his retirement. The standard "4% rule" for retirees means you can withdraw 4% a year to have enough for retirement. But that's for those who retire "normally" in their 60s. Those who retire before 30 would need to withdraw less, probably around 3%.

200K*3% = 6K/year, or $500/month. Is this doable? Let's see:

$125/month for food

$100/month for utilities

$100/month for clothes, shoes, and household maintenance

$100/month for minimum health insurance

$75/month for emergencies

So it really may work out after all, but it's not going to be pretty.

I'm pretty sure ~3.5b people are currently subsisting on

Sub

Mustache ride wrote:

I'm pretty sure ~3.5b people are currently subsisting on

A dollar in a developing country buys you a lot more than a dollar in a first world country.

Also, many of them have their own livestock and crops (free food), live with extended family (minimal or no rent or property tax), and can poop and pee in the open (no water/sewer bills, but you could be a sex offender if you do that in the US).

Taxes taxes my man. Subtract 25% off that gross income. 30% depending on state taxes.

5.3% of people with an income did earn less than $4400 last year:

https://dqydj.com/income-percentile-calculator/

They still can get by due to help from family, using their savings, and getting welfare. That wouldn't apply to the OP's classmate. Living on $7K/year like the "early retirement extreme" guy may be possible, but I doubt you can spend less than $4400 without dying of hunger, disease, or heat/cold exposure within a year or two.

Low Income Runner wrote:

Damn...where do you get 1000 bucks for being "anxious?" When ask for something from the Government all I get is the finger! 😁

That's SSI disability payment, so it's available anywhere in the U.S. Just get the federal government to believe that you can't work because it causes you anxiety. Add $200 a month in food stamps and there are places you could live a reasonably comfortable life. And enjoy a never-ending holiday. If I were in that situation, I would put the panniers on my touring bicycle, and travel. Direct-deposit benefits would go into my bank account ... no need to be near my mail box!

Taxmancometh wrote:

Taxes taxes my man. Subtract 25% off that gross income. 30% depending on state taxes.

Already accounted for:

Kosmaj wrote:

Average engineer's salary is what, 85-90K/year or so? To achieve this, the OP's classmate needs to top out at 110-120K since his starting salary won't be anywhere near 90K. Tough, but not unheard of. Take home pay will be around 65K/ year.

Kosmaj wrote:

200K*3% = 6K/year, or $500/month. Is this doable? Let's see:

$125/month for food

$100/month for utilities

$100/month for clothes, shoes, and household maintenance

$100/month for minimum health insurance

$75/month for emergencies

So it really may work out after all, but it's not going to be pretty.

What about property taxes? You're going to need at least another $50/month even if you live in a cheap shack in a low-tax state.

across the pond wrote:

It's going to be tough even if you're not paying for a mortgage or insurance.

England's cost of living isn't that much different than that of some places in the US, so I'll use this as a rough guide:

http://www.bbc.com/news/magazine-22065978

Food: 18 pounds/week (that's pounds as in currency, not pounds as in weight)

Heating and electricity: 14 pounds/week

Water: 5 pounds/week

Furniture and household appliances: 10 pounds/week

Utensils, toiletries, etc.: 10 pounds/week

Clothes and shoes: 5 pounds/week

Total: 62 pounds/week = $80/week = $4160/year

Adding $240 in property tax (not possible in most areas) brings you to the $4400/year limit. If anything goes wrong - a busted leg, a leaking roof, or even a flat bike tire - you're friggin' screwed.

There were a few people who tried the 53 pounds/week challenge (google it). Experiences varied, but the consensus was that you could only do it for a few weeks because things like clothes, shoes, and even toilet paper would run out. An additional 9 pounds/week might cover that, but just barely.

And even then, you'd have no money to pay for health insurance or emergencies. You'd last a year on that budget at most.

I know multiple people who either have retired, or could if they wanted to.

Two guys I know were both day-traders at a little no name firm, one guy had a few six-figure income years, then a 7-figure year, then after a couple more years decided that with a couple mil in the bank he didn't need the stress and quick. Does little side business stuff now as he feels like it.

Also have several friends who went to wall street. Something like start as analyst at age 22 making 100k, by 25 making 200k, then go to an elite MBA program (Ivy, Stanford, etc) and come back to wall st at 27 with a 400k base salary and a bonus of between 400k and 2 mil. None of those guys are retired though, because they like their lifestyle where they can drop $20k on a 3-day weekend trip without worrying about it.

The closest example I know of is a computer science guy who put in a sh!tload of hours for five years, burned out, and never worked full-time again.

He's not completely retired, though. He lives like a ski bum, does random part-time gigs, and sometimes rents out one of his rooms on AirBnb.

Set For Life - Scott Trench

The main "problem" with retiring early is that most people's lifespans are just too damn long, though it may not feel like it.

An 18 year old can expect to live another 60+ years. This is like repeating high school 15 times. Even people who loved all four years of HS would get sick of it.

To retire at 28 like the OP's classmate, your 6 years of work has to support 60 years of life. Even with a moderately high salary, your standard of living is going to be brutally low. Your best bet may be to move to a third-world country where a dollar can buy a lot more than it would in the US. Out of all the 190 or so countries in the world, almost half of them (around 90) have a GDP per capita that is less than $4400/year.

Hunter-gatherers usually retired at 30, which is also when they died.

Ever hear of The Bucket List Family? He developed an app that sold in the neighborhood of $50 million, they invested all of it, sold all their possessions, and have been travel bloggers ever since. I think they were mid-20s at the time of sale.

http://www.thebucketlistfamily.com/

29 right now, could theoretically do it in about two years if I moved someplace with a low cost of living. Have spent 7 years at a HF where I've been treated well and able to compound my own money at high rates. 200% 401k match as well which has been amazing. Actually like the work and will keep doing it. Nice to know I could pull the plug if needed though.

Think this is what it would like to be comfortable:

300k earmarked for house

1.5mm liquid, would reasonably provide 60k in income.

500k retirement accounts

I know a woman whose husband did it. He hit it big in the dot.com boom with stock options. Sold out and retired. Unfortunately he died with cancer a few years later (before I met her). She continues to live off of that money.