Introduction

Retirement is a dream that many of us aspire to, but it can be challenging to grasp when or if we will actually be able to leave behind our careers. For me, the realization of having enough money to retire happened gradually rather than as an overnight revelation. By the time I turned 36, this realization had come faster than I expected, thanks to careful planning and strategic financial decisions.

Financial Decisions Leading to Retirement

The two largest factors that allowed me to retire early were my home and my business. Without high monthly expenses and financial leverage, I was able to accumulate wealth more effectively. Here, I will detail the steps and decisions that led me to this point.

First, my home had very low mortgage obligations, and I bought it during the recession, taking advantage of lower prices and 15-year mortgages. This decision not only reduced my monthly expenses but also allowed me to build wealth more purposefully. Additionally, I invested a significant amount of my income into my own startup, which, after seven years, is now valued at a level that could support me indefinitely. Even though starting a business is inherently risky, this move has proven to be one of the most successful decisions I've ever made.

Another contributing factor is the lack of children. While having kids brings immense joy and love, the costs associated with raising them are substantial. For me, this factor along with the other financial decisions made the leap into early retirement feasible.

The Path to Financial Independence

The journey to financial independence was a slow accumulation process. I began by estimating my retirement at the age of 65 and creating a detailed spreadsheet that outlined my sources of income and expenses over the next 10 years. This included projected college educations, vacations, and long-term elderly care expenses. My goal was to ensure that I could enjoy a comfortable retirement by the time I reached my retirement age.

After being surprised by a WSJ article that discussed the Federal Reserve's triennial Family Wealth Report, I decided to analyze my own financial situation more closely. I created a spreadsheet that summarized my net worth, its sources, and projected future net worth using programming skills I had previously acquired. This analysis provided several paths to a viable retirement, which bolstered my confidence in my financial decisions. I also sought professional advice from brokers and CPAs to guide me forward.

The Realization of Early Retirement

By the second half of my 40s, I felt confident that I had accumulated enough savings and assets to retire early. My forecasts were conservative, but reality surpassed them. Not only did I retire a decade earlier than expected, but I also ended up with more income in retirement than I had anticipated. This was partly due to discovering a Social Security loophole that provided me with additional financial support.

Conclusion

Early retirement is a attainable goal for those who are prepared to make the necessary financial decisions and plan strategically. For me, the key was focusing on reducing expenses, leveraging risky but rewarding investments, and proactively planning for the future. With the right mindset and approach, the realization of financial independence can come faster than you might expect.