I want to be able to retire by age 50.
And it’s not because I hate what I’m doing. On the contrary. I just want to see if I can do it. And I’m going to break down my plan to do it. It will take a bit of grit, good old fashioned hard work and a helluva bit of investing to make it happen. And even if I fail to achieve the ability by that age, just the act of attempting should put me that much closer to that type of financial freedom. So strap on your first principles thinking cap and see what’s potentially waiting for you when you knock on that big ‘R’ word.
First of all, let’s lay out some ground rules here. At no point does this plan require me to win the lottery or do anything unethical like dealing illegal hyperlaced fluoridated toothpaste. (I just renewed my DEA license, man is that highway robbery for writing a couple of scripts each month, oofda). And this article is not financial advice, so no need to send me fuming emails saying I told you to put all your money on rare beanie babies…
And this plan doesn’t require the purchase of, or even management of a dental practice. So if you’re a forever associate, there is plenty of hope for you too.
Also, this isn’t a FIRE plan either. Far from it, I still want to enjoy certain aspects of my current life and not sacrifice it for the sake of retirement. For those of you who don’t know the acronym FIRE, it’s a millennial term for Financial Independence, Retire Early. Which is defined by a lifestyle of frugality and extreme savings. Nah, forget that! I’m going to still enjoy my millennial Avocado Toast
I’m currently 37 years old. So that leaves 13 years of accumulation time before making it to the five-o promiseland. For about $10k a month in retirement living standard, you’ll need around 4 million dollars for a comfortable retirement at that age (adjusted for 3% inflation and capital gains taxes).
I don’t have a million dollars yet in assets or in my name yet to this point. So I’ve got to really high tail my savings and leverage the next 13 years. But for some perspective, once you reach your first million, it only requires one doubling to get to two million, and one more doubling to get to four million.
There are really two main ways to accumulate wealth and savings. 1) By Working For It, and 2) Through Compounding Returns.
The traditional thought process working towards retirement is to work hard, squirrel away a set amount each month towards some managed 401k and financial advisor that whips out their calculator and tells you with a modest 5% annual return and your current savings rate you have a 50% chance of making it to to your retirement goals. BTW, I fired any of my financial advisors and completely self direct my own retirement vehicles now.
Not I said the Lam. Forget traditional ways of letting others manage your own money YOLO! At least that’s how it looks from the outside. But the way I see it, who would care the most about your own nest egg…probably you.
To retire unconventionally, you must earn, save and invest unconventionally.
I’m making a dentist’s salary. And I’ve been putting away a comfortable 10% monthly, but there’s no way in hell I’ll make it to my own early retirement party at this rate. I’ll still be spinning up a high speed trying to see through my cataract filled eyes.
Infinite Dental, has supplemented my dental income with the consulting and ad creation side of things. I love doing it too. Supplemental and secondary income streams are absolutely a helpful aid in making it towards that early retirement agenda. It may not be for everyone, but starting something on the side that is your passion, it certainly doesn’t feel like work when working on it. If I plan this further and begin automating further, it becomes more automated and a passive income stream opening up more time as I pursue more projects.
This is where I can labor the power of Compounding Interest. As I mentioned earlier, once you get to your first million, it’s only two doublings to get to early retirement heaven. Everything mentioned before is earning by Working For It.
So for now, volatility is my friend. Emotion is my enemy whenever investing. And let me also make a point, I do not day trade, that’s too much work. Dollar cost average, invest for the decade.
And if I asked you what has been the best performing asset class over the last 10 years? Would you know what it is? Take a guess…
You might put in an edumacated guess of Amazon, Apple or Tesla stock, maybe Gold? But it’s not. Not by even a close margin.
Believe it or not, it has been Bitcoin. Born in 2010 originally for $1. Yes that crazy cryptocurrency that spiked back in 2017 to $20,000. Well it’s quieted down since then to under $12,000 but even doing so, it still remains the undisputed champ for performance. And lately, more and more public large million dollar cap US companies are buying Bitcoins and putting it on their balance sheets. Probably should be on your mind as our government considers to print more stimulus and devalue our currency.
I will not only be investing in vehicles like cryptocurrency, but stocks as well, doing the back end research, listening to earnings calls and making decisions based on facts and a gutteral judgement. But it’s mainly for the fact that the 10 year outlook has the potential to get me to that big retirement bash I’d like to host in 13 years.
I should mention none of this article is investment advice. It’s an outline of a plan I have to retire early. If I get pie in my face re-reading this article in 13 years that I haven’t done what I set out to achieve, so be it. To my future self re-reading this though. I know you certainly made a valiant effort!
Thrive on my friend,
Lam