Show of hands, how many of you have dreamed of quitting your day job today and retiring well before you reach 60?
We can't see you, but we're assuming there are a lot of hands in the air.
Now consider this: Right now, there are people out in the world who have retired in their 50s and 40s and even in their 30s. We talked to one recently.
Meet BNL, the anonymous blogger behind Brave New Life, who retired this past spring at the ripe old age of 36. So how is he enjoying his golden years?
"It's amazing. I mean, I thought it would be good, but it's so much better than I could have imagined," he says.
BNL told us that since retiring, he's realized that in the years he spent working a corporate job, he was never fully present when he was at home. He was always getting ready for work or unwinding from the day, and by the time he was tuned in as a parent, his kids were in bed.
"Now, I'm really getting to know my kids, and they're getting to know the real me," he says.
BNL loves the opportunity to be around for swimming lessons, karate practice and impromptu visits to the park; being at home has helped the whole family bond.
Here, BNL shares why he made early retirement a priority and how he reached his goal. He also offers some tips on downsizing and investing to help you on the path to retiring young. Read on:
Tell us the story behind Brave New Life...when and why did you start your site?
I started the site with the sole purpose of making it a site that earned enough money to get me out of my engineering job that I no longer loved. I didn't have a clear direction for the site, though, and so it's not surprising that it didn't make me any money. That was four years ago, maybe five.
Interestingly, it's never really made me any significant money, but it has helped me achieved my goal of retiring early. Had I not started the blog and gotten the encouragement from so many great and active readers, I never would have had the guts to pull the trigger and retire in my 30s, living solely off my investment income and some small supplemental income from my side projects.
You just retired in May at the ripe old age of 36...how did you pull this off?
I started saving money the day I got my first paycheck of my very first job. I was an 11-year-old paperboy. By 12, I had saved up $1,000 (which wasn't hard considering my parents covered the essentials like food and shelter). When I got to $1,000, my dad suggested that I take $100 and spend it on myself as a reward for a year's worth of hard work, so I bought myself a Gameboy!
By the time I quit that job at 13, I had $2,500 saved up and my dad helped me invest the money in the stock market. I still remember the stock I bought, Bally's Fitness. The ticker back then was BLY, and I used to check its price every day in the newspaper. Of course, this was a terrible way to invest, but it got me started. It made a little money, and eventually we moved it to a Vanguard mutual fund account. This was the mid-'90s, so the price rose quite a bit, and by the time I graduated college, it was worth $21K! My first house was $100K, and that paperboy money was my down payment.
From there, saving and investing became a bit of an obsession. I studied stock market investing in my spare time, read every book I could get my hands on and watched the money rise. Then, in 2010 or so, I read the book Your Money or Your Life and realized that my frugality and investing nature had unknowingly enabled me to retire early if I wanted to. So I spent a few more years mentally and financially preparing for that. I downsized my house, simplified my life and my family's life, and then in 2014 I took the retirement plunge.
At what point did you realize you needed to reevaluate how you were living your life? What spurred you toward early retirement?
I think what really spurred it, whether I knew it or not at the time, was the birth of my son in 2008. I was working 80-plus-hour weeks regularly, and I knew this wasn't the way I wanted to raise my kids. At that point, we had a huge, expensive house and way too many expenses in general, close to $7K/month. So I started various online businesses, the Brave New Life blog, and investigated a number of other ways to make money outside of my time-consuming office job.
But making $7K/month on a small business is no easy task, despite having a sizable investment account. And that takes me back to 2010, when I read Your Money or Your Life (and also Early Retirement Extreme by Jacob Lund Fisker) and realized something that should have been obvious - that rather than stressing about making $7K/month with a business, I could greatly reduce my expenses and then transition my investments to things that paid monthly and quarterly dividends to cover those reduced expenses.
That realization, by the way, is why I continue to write on my blog, albeit not as often as I'd like. Although the message about the power of frugality is so simple, I figure if it wasn't at first obvious to me then it's probably not obvious to a lot of other people. So I write to pay it forward - to let as many people know that it's not only possible in theory, it's possible in real life, too. And it's a great life!
What have been the most challenging aspects of shifting away from a more conventional consumer-driven lifestyle?
Getting started is the biggest challenge. Once you get started, you realize that the consumer-driven life is a manufactured life, and not really all that great. And once I did get started and made the necessary changes, I could see very clearly how miserable so many people are. People at jobs they can't stand, and not only are they there unhappily, they are scared of getting fired or laid off because they have little or no safety net. Hell, I worked in an office where all of my peers were making six figures, and yet several were in debt despite having made that sort of money for two decades and more.
So my question to those people is simple: Is your lifestyle of convenience and instant gratification really worth the hard work, stress and compromises it forces upon you? To me, it's not even close.
What have been the most rewarding parts?
The simple things. Yesterday, for example, I was able to stay at home with my daughter while my wife volunteered at my son's school. The day before, I spent eight hours volunteering at the local food bank sorting boxes and stacking pallets. This morning, I took my son to school, then came to a coffee shop to finally finish this interview. These things wouldn't be possible if I had a job.
Also, I'm never in a hurry, and I love that. I can ride my bike or walk anywhere in town. Even if it takes an extra hour to get somewhere that's far away, it doesn't matter to me. I can just enjoy the bike ride. Like I said, it's the simple things.
What are some simple things everyone can do to get to retirement faster?
I'm going to steal the basic idea that is presented in Your Money Or Your Life to answer this one. Basically, track all of your expenses and at the end of each month take a good look at how you spent your money and how much joy or happiness it provided to you. Then figure out how many hours you'd need to work at your current wages to pay for it. Then ask yourself, was it worth it?
I'll give you an example.
Before I made the necessary changes to retire early, I lived in a McMansion in Austin, Texas. Even though I had paid 40 percent down, my mortgage payment was still $2,300/month ($1,300 principle and interest, $1,000 taxes). It cost me an additional $400/month on average to heat and cool the house and another $150/month on average in general maintenance and upkeep. So that's $2,850/month to live in that house, and in that city. Based on my after-tax wages, that meant I spent two weeks out of each month just to pay for our shelter.
When we moved to Colorado, we figured that by downsizing we could use our equity in the previous house to completely pay for our new house. Taxes are much lower as well, so with no mortgage and reduced taxes, we pay only $150/month, or roughly two and a half hours of work based on my after-tax wages.
By thinking this way, it puts a very clear perspective on spending decisions.
What about things that might take a little more effort (or might take longer to get used to)?
For most people, I've found that the thing that takes the most effort is wrapping your mind around the total philosophy of living a more frugal lifestyle that is not consumer driven. But before you start making changes, it's very important that you do have a clear direction and philosophy, so that you have a solid answer when you're challenged by others or even by yourself about rejecting the common philosophy of consumerism.
That's the reason I wrote the series of articles on the core principles of a Brave New Life. If you have that foundation of belief, then you can withstand the storms of occasional judgment and inconvenience that anti-consumerism will throw at you.
What sorts of investing did you do to reach your goals? What did you steer clear of?
Over the past 15 years or so, I've been all over the map with my investments. I started in mutual funds, then switched to 100 percent individual stocks. I've played with real estate, hard money lending, P2P lending, among other things. Basically, I haven't steered clear from much.
These days, I'm happy with my current portfolio and don't plan to change much for a long time. I have a fixed allocation of 60 percent in dividend growth stocks, 10 percent in treasury bonds, 3 percent in P2P lending (Lending Club and Prosper), 20 percent in real estate (REITs and some private funds), and 7 percent in cash and non-dividend paying stocks. I'd like to have less in the non-dividend paying stocks, but the capital gains are very high and I'm waiting for the right time where I don't get killed by taxes.
What's been the most surprising part about reclaiming your life?
I love the way that you phrased that: "reclaiming your life." That idea of reclaiming my life is actually the answer to your question. What started as a goal to retire early and get my time back, ended with me reclaiming my life. The surprise was in the fact that I didn't realize my life needed to be reclaimed. I simply didn't realize that by working the corporate grind, so much of me had been taken away. Not just my time, but my mental and physical energy, as well as my creativity. And it's only been a few months; every day I feel more energized and more creative. I can't wait to see what tomorrow will bring.