[ABC] Financially independent by 35?

30 year old. With $250k shares. Wants $1m by 35 but doesn't want to own home. Happy with $40k pa.

Why I decided to skip home ownership to retire at 35

Article doesn't say how much he's earning. $1m without own home is a bit on the light side for $40k pa. $1m plus own home paid off would be more solid. Risk is that with all those hours not working that's more hours to spend so expenditure may well be higher than when working. But does accept may need to work longer if returns aren't high.

Blog at Home -
(some people are comfortable at telling the world their finances!)

 

Winning at life.

 

As Peter Adeney, who blogs about financial independence under the pseudonym Mr Money Moustache, points out:

"If you can free yourself from the need for money, you have no choice but to do work that is better for you, and better for the world … If you're doing it for love instead of money, you'll have no choice but to do a better job."

 

30 year old engineer, he has probably only been in the work force for 7 years.

Unless he intends to live with Mum and Dad even renting in a regional city would cost $350 per week unless it's a shoe box.

I don't think $1m is anywhere close to enough without home ownership as well. Even then it's very lean.

 

I applaud his mindset and attitude, but I don't think $40k/yr (assume net) is enough. As hugh points out, rent would eat up about half of that, leaving only $20k/yr for living expenses.

While it's possible to make do with that, you really need to shoot a bit beyond the break-even goal in order to fund all those holidays and support a family, let alone keep the portfolio growing and healthy.

 

It would seem he is quite prepared to live a very frugal lifestyle. While the $40k p.a. seems on the lean side to us, obviously not so much to him, and in fairness he did say he was flexible in relation to his financial needs.
As long as he isn't on the public purse strings receiving benefit of some description I too applaud his mindset and attitude. Will be interesting to see if he reaches his goal.

 

Is it really that bad being a productive member of society though? I mean, you live here take advantage of all the first world facilities and services, have plenty of opportunity to make something of yourself but no... you want to drop out and go bare back through south east asia permanently? I don't get it.

I think the whole self help movement is a lot to blame for this mentality. YOU SHOULD PURSUE HAPPINESS. YOU SHOULD PURSUE PLEASURE AND YOU SHOULD HAVE IT ALL NOW! Problem is those feelings are fleeting. You shouldn't be pursuing them at all. If you get yourself in a situation where you have a balanced life. A good level of income, financial security, a good family and friend situation, your health. What you get is a fair dose of happiness and pleasure. You don't get happiness and pleasure all the time, but you get your fill of it. In between you get to deal with all the $**** and problems that are part of life and when you look at it that is what life is - One series of small and big problems you're resolving.

 

Well he does say:

Perhaps his definition of "fair dose of happiness and pleasure" is different to yours?

 

Am I correct in assuming that you believe this person isn't allowed to make his own life choices? If he is not encroaching on your lifestyle, what's the problem? He is simply taking a different approach to fulfill his goals.

 

He can do whatever he likes, it's his life, it has no effect on me. I'm just making an observation.

I'm always sceptical of these stories where 20, 30 somethings are championed like they have it all figured out.

 

Great post!!

Without the problems, we cannot know what bliss is.

 

Our own @Snowball here on PC retired recently at 28 from memory. His blog might be of interest to some:

Strong Money Australia - BUILDING FINANCIAL STRENGTH AND A LIFE OF FREEDOM

 

Thanks for share

 

Hey - I knew it all at 20-ish something ... now that I'm nearly 50 I know I don't know squat

 

I think most could agree that frugality levels are relative.

The 200k spender thinks the 100k spender is running a pretty tight ship, whereas the 50k spender thinks they're both spending off the charts!

Everyone might be happy and satisfied with their situation, even though it's different from the others.

The important part is each level is a choice and whenever they've each got their spending covered by investments, they're free to work on whatever they please.

To be fair, Pat did say he is keen to be productive and work on many things in the future. Probably not fair (or accurate) to say he's dropping out of the workforce because it's hard and doesn't want to be a productive member of society!

I don't think any youngsters who do it (become FI or aiming for it) are wanting to say '****, look how good I am'. I think it's more a case of trying to create awareness that there's another way. The people I've spoken to have never questioned the norm and had no bloody idea it was possible.

After becoming aware, some are happy to continue on as they were before, but some see it as a wake-up call and work towards it, as they see it as a great way to create some freedom and more choice in their life.

 

To be honest, I'm actually aiming for retirement at 35 and a $40k passive income. $40k has been more than enough for me through all my adult life.

I lived on much less than that as a student for 8 years, and when I started full time work anything above $40k has just been put towards my investing anyway.

I don't even live that frugally.

 

i disagree, i would argue, depending on your personality/lifestyle. living at SEA is actually better than living in australia, especially if your earning at minimum $40k aud a year.


and back to this lad's life at 40k in south america or SEA.

i think its possible..and he seem ready to accept the trade off. .and tbh not having the latest phone and smash arvo is a small price to pay for what he believe is freedom.

i wish i can.. but i like nice things.. but i too hate 9 - 5 office.

i am also looking for away out .. but retirement is not for me ... yet.

 

Good mindset, Good luck to him, but I think sometimes the reality is not as rosy. $40k goes a long way as a young person living in share accomodation with very few financials obligations.

From my own experience, married with two kids, two cars, daycare, school expenses, family holidays, medical expenses, family activities, gifts, cots, beds, prams, car seats, school "devices", dance lessons and costumes, swimming lessons, ENT specialists, orthodontist, uniforms, clothes, $350 a week grocery bills. Its death by a thousand cuts! $40k doesn't go far. And that is with them both in public schooling. the local public high school isnt great either so probably will need to go private so there's the whole $40k chewed up each year for the two girls right there!

Some people do seem to be able to make their money go a long way but at this stage in my life I would definitely need at least $100k.

 

Half of that goes in to child care.