Have you ever had that “Holy shit, what am I doing!?!” kind of feeling about something really important?
That was a recent revelation I had about the future. About my future. About my family’s future.
This thought has been on the back-burner in my mind for quite a while, but never surfaced as fast as it did when a couple of our friends clued us in to their plan – they’re retiring in 5 years. Immediately I thought to myself “What?? How is that possible?” That sent a shock through me as they are only in their mid-40’s and everyone knows you retire at 65.
Immediately that knee-jerk human response of friendly competition kicked in as I said to myself “Really?? How could we do that? I don’t want to be left behind grinding away endlessly at a job like everyone else while our friends are globe-trotting the world like rock stars.”
EARLY retirement? It hadn’t necessarily occurred to me (as most people don’t plan on retiring early). Retirement is this far-off thing that just happens as you get older.
As they laid out their financial road map, many mainstream ideas & concepts were thrown around like IRAs & 401ks but instead of the typical 5% allocation (for company matching) or maybe even an extreme 10% – they were accelerating their retirement by completely maxing out all options 100% and betting on the stock market.
That immediately got a response out of me somewhat to the effect of “What if the stock market crashes? Isn’t that pretty risky?”
They began to explain the reasoning behind their strategy of betting on the market. Paraphrasing,
“You know all of those corporations that get the big tax breaks and are making record profits? I figure… what’s their #1 goal? – To deliver profits to their shareholders. Imagine the entire American economy with all of the major companies in it, made up of armies of millions of employees working tirelessly every day for the specific goal of turning money into more money. What if you could invest your money in those companies and own a piece of the the money-making machine that is the economy? We’re talking about Apple and Google and Walmart, the oil companies, medical companies, manufacturers, restaurant chains – basically all of the major companies that make up the entire stock market.”
That had me intrigued. It’s a fact that no matter what happens, throughout history, there has always been clever people that start companies, hire employees, put capital to work, and build wealth upon itself which then creates new opportunities, starting the cycle all over again.
Peering Into the Financial Window
While discussing these topics, other things slipped into the conversation that caught my attention. With regards to retirement accounts, fees were mentioned and how they can eat up a lot of your expected gains over the course of your lifetime – especially when you’re dealing in the hundreds of thousands.
With very little actually saved for retirement, hearing about numbers that large gave me pause for sure. How in the world could an average person be able to save up that amount of money?
On top of that, they trusted us enough to let us glimpse into their wealth. Growing up, I was taught – you don’t talk about money to anyone. It’s secret.
Here was a couple that had a plan, was very confident about their future, and also confident about the ability of highly successful corporations and companies to put their money to work for them.
Well, I want to be like that. How could we put ourselves on the same path and retire early like them? A sense of friendly competition set in. Not a competition to win the race, but to join our friends and run the path together.
The Early Retirement Gateway Drug
Once the seed of early retirement was planted, our friends passed us “the drug” that is Mr. Money Mustache. In another sense, I also consider it the rabbit hole to an entire culture of people, websites, and groups teaching you several methods of how to retire early.
Not only does this culture teach you about early retirement, many of them are already living financially independent and are living the way they want right now. Some of them in their 30’s!
Seeing others with a plan and how this could really work, it was time to put together some calculators and spreadsheets and make this happen for us as quickly as possible.
It was time to put ourselves on the path to financial independence.