As I have mentioned in the past, I am a big fan of the Mr. Money Mustache Blog. When I heard a group of Mustachians (as the followers call themselves) in the Seattle area were organizing a weekend retreat, I really wanted to go.
I figured I could do two things if I made the effort to get out there from Florida.
1)See how others have managed to retire early (some in their 30’s).
2)Get my wife to embrace early retirement also (Lets just say she was somewhat of a skeptic).
I was able to do both with rousing success. The retreat was held at a lakeside camp with around 60 – 70 like minded people of all types that were all trying to figure out how to retire early. There were several breakout sessions on topics such as Goals to Financial Independence, Bike Commuting and Repair, Investments for Income to name a few.
The best part though, was the endless discussions of a liked minded group trying to figure how to get off the Hamster Wheel of living for work. It was just a great time and I cannot thank the organizers enough for the great event they put together.
Here are some varied items and links that you may find useful from my time there:
Bloggers I met at CampMustache who are worth reading.
Mr Money Mustache – Follow Pete to see how early retirement can be done and some great tips on construction, budgets and everyday subjects.
JD Roth – He was the original Author of Get Rich Slowly but now produces a blog under his own name. He covers all types of topics along with some great stuff on how to get out of debt.
Retire By 40 – Joe is probably one of the most open Bloggers I have followed. He writes almost daily and is very open about his finances to let you see how it can be done.
Life Reengineered – Brandon is a pro at Travel Hacking. He managed to get around $7,000 in flights for free last year. Sign up or his Blog and he sends you a PDF book on how to do it.
It was a pleasure to meet these 4 individuals in the flesh and have a chance to hang out and ask questions. All 4 have managed to retire early and have great ideas and stories to tell in their Blogs. I highly recommend giving each a look.
Ideas and Links I gathered that help to answer early retirement questions.
4% Rule – How much do I need to retire? The 4% rule allows you to withdraw 4% of your investments per year in order to not draw down your principal (if invested in a Stock Index Fund for instance).
This was one of the main questions on everyones mind at Camp. I do not think it was answered for most people since the yearly amount is based on everyones individual needs. Find out how much you need per year and divide by .04 to get a rough idea. If your number is $40,000, you probably need $1,000,000 invested to produce $40,000 per year for the next 30 years. Follow the link to Wade Pfau’s update to the Trinity Report to get more a more in depth analysis on the 4% rule.
cfiresim – This website allows you to make all kind of assumptions to calculate how much you need invested in order to retire. It takes into account how long you will live, other sources of income and different investments (split between stocks and bonds) you can make. It then runs the number against the same time periods for the Stock Market since 1871 to show you what chance you have of running out of money based on past history. It is a very interesting test and came out much better for my own personal situation then I would of thought.
Crossing Wall Street – Eddy Elfenbein is one of the highest rated Buy and Hold Bloggers on the internet. I really like his Blog and easy to follow investment style. He buys 20 stocks and holds them for 1 year. He then replaces 5 of the stocks once every year. Very simple and regularly beats the averages. I am currently averaging in one of my accounts to put it on autopilot.
Vanguard ETF’s – Vanguard is one of the lowest cost Fund Management Companies around. I prefer ETF’s since they trade like a stock (Over Mutual Funds) and you can find all types for any investment style. Want to invest in Emerging Markets, try VWO. Want to invest in Healthcare, try VHT. Take a look at Vanguards site for all the information you could possibly want.
FINVIZ – Great free site for stock and ETF screening. Lots of data you can sort by. I use this all the time for basic research.
Budgeting – Wife and I are currently tracking our expenses and income in order to see where we stand. Over the next 6 months we will look at where we spend, what will be gone once we retire, what we can cut back on and then formulate a budget going forward. Having a budget once the income drops is a very important step to making your money last. Try Mint, Quicken or the numerous Apps available.
Health Care – This is probably one of the biggest concerns anyone has who will retire early. I hear all the whining about the Affordable Care Act (Obamacare), but personally I think it is one of the best things to come along in a while. Now people who want to retire early get cheap coverage but may also get a subsidy as their income drops. It stays with you and you cannot be denied due to pre-existing conditions. The lack of Health Care options was one of the biggest reasons we stayed in our jobs. Got to HealthCare.gov to see what options are offered.
A) It was amazing to meet so many people in their 20’s and 30’s who had real plans to retire in the next 5 years. I really give them credit for living frugally and banking money (way faster than I did at that age) with a goal.
B) Retirement does not mean you have to stop working. You can work part time, volunteer or get rid of it all and take your show on the road. Options abound once you get off the Hamster Wheel (tick, tick, tick).
C) Come up with a plan. List what your priorities and goals will be for the next 5 years. Create a budget and start tracking your expenses. Now is the time to start.
D) Live below your means. 2 people can live comfortably in 1,000 sq ft. Imagine how much you could save if you could make do with 500 sq ft. Forget the 1.5 hour commute. Move closer to work or change jobs. Make getting rid of debt a priority. It turns people into slaves to an income.
E) Start by reading one of the Blogs I listed above. You will find examples of people who have really managed to retire early in order to enjoy life now. If you go to the Forum on the MrMoneyMustache site, you will see other Mustachians getting together. Check it out and go meet some like-minded people. If you are like me, the Hamster Wheel seems like a waste of time after a while.
Some good books recommended by Mustachians (If you click-through the link, I get a little piece of the action from Amazon – but try your library first)