Have a great Memorial Day weekend! We’re going to visit the Thai temple, drink some wine at the Willamette Valley Vineyard, power wash and stain the front deck, hit the RB40Jr Ultimate game, and have a BBQ. Wow, it’s going to be a packed weekend. I hope you have a fun weekend too. Drive carefully.

A reader recently asked me if I have any advice for a young boy or girl. I get a question like this from time to time when I meet someone new. My standard response is to save and invest as much as you can. This is a pretty good answer because it’s a simple message. However, is it really the best advice for early retirement?

Saving and investing as much as you can is too generic. It’s the answer to most personal finance questions.

  • How do I pay off my student loan? Save and invest more.
  • How do I save to buy a house? Save and invest more.
  • How can I pay for my child’s college education? Save and invest more.
  • How do I retire at 40? Save and invest more.

The answer is – save and invest more. However, most people cannot run. They want to save, but they want to spend even more. The change has to come from within.

My Best Early Retirement Advice

I started saving and investing when I got my first full-time job in 1996. Soon after, I maxed out my 401k and Roth IRA. I even invested extra in my taxable account. This is quite unusual because as a country our savings rate is a pitiful 5%. My family had financial problems when I was a child, which caused me to save more than usual.

My savings rate was higher and that gave me a big head start, but I wouldn’t have been able to retire early at that rate. It was only after “retire at 40” it became my mission that I was actually able to save and invest more. Previously, I thought I would find a new job or change companies. I was dependent on my career income to last until age 65. That was the crutch that kept me from doing something revolutionary.

Once I set my sights on retiring at 40, I was able to put all my energy into achieving it. Instead of using all my creative energy in my day job, I channel it elsewhere.

  • I Started Blogging: Retire At 40.
  • I tracked our cash flow to see how we were doing month by month.
  • I invested in rental properties and became an owner.
  • I converted our taxable account into a dividend portfolio to generate income.
  • We further increased our savings rate. Eventually, we were able to pay the bills without relying on paychecks from my old engineering job.
  • I looked for ways to generate income outside of my day job.
  • I read a lot of personal finance blogs to get ideas and connect with like-minded people.

Now that I look back, a lot happened after I set the goal of retiring at age 40. The previous 14 years were much more stable. I worked, came home and tried to decompress and have fun. This is how normal people operate. They save 10% and then use the rest of their income to enjoy life. If you want to retire early, you have to get out of that box.

Early retirement is achievable

I believe that early retirement is an achievable goal for most of us. You don’t have to be Google’s CFO to retire early. If you earn a decent income and put your mind to it, you can do it. Look at Jason. He was a service consultant at a car dealership and earned a middle-class salary. The easiest thing to do was continue like the other 160 million middle-class Americans, but he set a goal of retiring in 12 years. In just 3 years, he built his dividend portfolio from $5,000 to $100,000. Now, he is living his dream. His dividend income from him pays all his expenses.

That’s my best advice for early retirement. You have to make it your lunar mission. Going to the moon is not easy. It will take a lot of effort and there will be a lot of setbacks, but you will succeed if you persevere and are creative about it. Get obsessed with it.

What do you think of this advice?


Actually, I think it’s better to build a life that you don’t have to retire from than to retire entirely.

Image Credit: The Lego Movie cat poster

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joe started retire at 40 in 2010 to find out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at age 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have a lot of projects in the US so check them out!

Joe also highly recommends Personal Capital for DIY investors. They have many useful tools that will help you achieve financial independence.

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