How I Can Afford To Retire At 40

I promised that I would share how I plan on retiring at 40, so this is it.  If you’ve ever wanted to know how a regular Jane can do this, here’s your chance.  First, we have to get one thing out of the way before we even talk about my actual plans:

Retirement does not mean the same thing for everyone.  What I plan on doing is retirement will most likely be far from your idea of retirement.

Back when the dinosaurs roamed way back in your parents’ or grandparents’ day, retirement might have meant sitting at home watching television, while knitting socks.  They might occasionally take a cruise, visit the grand kids or host family events.  That’s not my idea of retirement.

Retirement to me simply means this – working on my own terms.  I know what you’re thinking, “What the hell does that mean?”  Well I can work if I want to, for who I want to, where I want to, when I want to.  I’ve never been good at working for someone else.  In fact, I’d say that I’m a horrible employee.  My heart has always wanted to follow an entrepreneur’s path.  Yes, I’ve tried it before, and yes, I’ve had some spectacular failures, but I’ve also had some wins.  I have proven that failure won’t kill me.  Everything above death is a win as far as I’m concerned.

Honestly though, I’m not looking through rose-colored glasses thinking that my retirement will be this perfect thing where I wilGuess who?l never worry about money and I’ll be able to travel like a European on constant holiday. Sidebar: I know a few people who have spent years traveling.  If that’s your shtick, hop over to Everyday Nomad where my friend Forest is living his dream.  I don’t think that he’s been home in years.  Anyway, being an entrepreneur is hard work, but gosh, if I can work hard for someone else, why can’t I put forth just as much effort for myself, knowing that my very future is at stake?

My planned retirement will be an active one.  I won’t be sitting at home waiting for death nor will I be sitting at home having babies and transforming into super mom.  Nope.  What will I do? Everything…and nothing.  Frankly, I’ll do whatever the heck I feel like doing.

But a retirement plan  – neither an early one nor the regularly scheduled one that occurs just before death – can be planned on wishes and dreams.  There’s no magical fairy dust that will transport me into the land of milk and honey (has anyone even tried that combination before? Honestly?). Everything hinges on careful planning and plotting.  Speaking of plotting and planning, 10 points to the first person who remembers who that guy to the right is.  Lots of plans.  So many plans…and years to go before I sleep.

Create Replacement Income

This is the most important and the hardest part of this crazy plan.  It’s too bad that we can’t barter for what we need but we’ll still need to buy every day stuff and pay bills.  I hear that money comes in handy for things like that.  Since I don’t plan on working for someone else or robbing banks, this falls solely on my shoulders.

I have a serious amount of anxiety about depending on any one type of income replacement method in case it fails or falls significantly. I have a couple of ideas here on how to combat that and I’ve already started putting a few of these plans in motion.  A number of these methods have already been discussed on this blog, so I won’t go into too much detail.  The search bar is your friend.  Here’s how I plan on making money, listed in no particular order:

The consulting thing is the one that I have never mentioned, but it makes perfect sense.  I’ve worked for some huge global companies and picked up a decent amount of knowledge in my area.  Why can’t I take my knowledge and use it for consulting work geared towards medium sized businesses? I know that I can bill at a minimum of $55 per hour right now and with a bit more certification and a few more years under my belt I should be able to push my rate up to at least $75 per hour or $600 per day.  It sounds like a lot, but when you’re self-employed, a minimum of 35% goes to my good Uncle Sam.  Also, keep in mind that you get no benefits or perks.

Consulting gigs are usually short-term but can add up if you’re knowledgeable, have a good network, and almost as important, a great personality.  I have the personality thing down, am currently building a network that can give me referrals and I’ll be working on my knowledge as my time frees up more.

I also mentioned public speaking as an income source.  The public speaking circuit has made millionaires of people like Tony Robbins.  I don’t envision myself as someone on that level in the least bit, but I do have something to offer.  I’m just not completely there yet.  People hire speakers based on their content and their expertise.  Having a solid brand with a loyal following helps, but having a published book will get you there faster.  I don’ t know what it is about published authors seeming to be more of an authority on a particular subject, but that’s how it works.  I’ve seen people with crappy books go on to land speaking engagements, but that’s them, not me.

Snippet of my promotional infographic

A snippet of my public speaking pitch for Pinterest use.

Between now and retirement, I need to build a course or workshop from the ground up and publish a book.  I have one half-finished sitting on my hard drive, but again, I need to find the time to actually finish it.  Time is not my friend right now.  I’ll have to carve some out of get this done.  Getting published isn’t much of a big deal anymore because anyone can self publish.  What I’ll need to do is develop a cohesive brand.

Build This Brand

I somehow stumbled into creating a brand.  Years ago, when I registered this domain, I didn’t think of this thing as a potential brand, but Yes, I Am Cheap has grown.  When I wear my YIAC t-shirts, I feel a sense of pride that I have built something that people deem worthy of reading.  I’m happy that I get a good amount of questions form readers and that people within the industry seek me out for reviews of their books and products. Why not grow that by kicking it up another level?

I need to attract larger brands by polishing up just a little bit.  Here’s what I have in mind:

  • Publish more consistently and be on topic
  • Redesign this website.  It’s stale.
  • Consistent design across all media channels including Twitter and Facebook
  • Promote myself as much as I promote the blog

Alright, I have a lot of work to do here and some of it will probably cost me some money.  I am allergic to spending, and I’d rather bank the money, so, knowing me, I’ll attempt to do pretty much all of these things myself.  I’ve already added a fabulous header to Twitter page that now features both my photo what this blog is about.  The Facebook fan page also has a new header and my private Facebook page has the same.  Consistency!

header - retiring at 40

Good Lord, do I hate that photo.  I’m going to take new ones, but for now, it’ll have to do.

Up next is a redesign of this blog.  I’ve been working on that one and you might have seen it too.  I tend to test things late at night, so you might come to this site and randomly see that it looks completely different for a few minutes.  That’s just me tinkering with site designs.  Once I settle on one that feels like us, that will be the new design.  Here’s a tiny sneak peak of what I’m working on.  Let me know what you think in the comments.

How do you like to new site? - retiring at 40

Eliminate Debt

Listen, I wouldn’t need to have a lot of money to be comfortable if I didn’t have a shit ton of debt.  It’s time to get rid of the debt.  Honestly, Since I reversed my net worth from negative $100K to positive $100K in only 5 years I know that I can do this.   It might mean that I stop buying rental homes.  I’m kind of on the fence about that because the rentals, as long as they fit my 5 year maximum repayment limit.  I’ve been debating myself way too much about this and I need to settle on a strategy soon.  If I continue my current rental strategy, I would need to add another rental unit this year.

If I don’t add another rental, I know for sure that I should have just about everything repaid by the time I retire.  I’m not too concerned with my rental mortgage nor am I concerned with my student loans.  My repayment amount is low which means that the government is milking me for as much interest as possible.   Whatever happens, as long as my unsecured debt is gone, I’ll be happy.

What does this all mean? It means work.

Other…Stuff

Before retiring, I have to consider what I’ll do for health insurance.  If I’m lucky enough to live another, oh, 40 years, I suspect that I’ll need insurance.  Even with the Affordable Care Act, health care insurance can be expensive.  As you are probably aware, the cost of medical care is what pushes the majority of Americans into bankruptcy every year.  No one plans on falling prey to that statistic, and I sure as hell won’t either.  I will have to suck it up and buy health insurance and then save an amount equivalent to at least the annual out of pocket maximum so that I don’t end up in the poor house.

What Else?

Clearly, this isn’t it.  I’m thinking that I’ve bored you long enough with this particular article.   I am considering other things such as socking money away in retirement accounts; unexpected events that might cost money, like my last car accident; creepy crawlies known as babies; the lifestyle that I would like to live in retirement; and running out of money.

There are many thing to consider before embarking on such a journey, but people can and are doing it.  Joe over at Retire By Forty is successfully living out his retirement plans and doing so while raising a young child  Does his idea of retirement match mine?  Absolutely not, but our ideas don’t need to match for them to work.  Maybe you don’t want to retire by 40, but maybe you don’t want to retire at 70 either.  I don’t plan on dying at my desk, so 40 works just fine for me.

What do you think about my plans? Am I absolutely psycho?

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4 thoughts on “How I Can Afford To Retire At 40

  • Good luck with your plan. You’re right, there’s an alternative “retirement” available for those who don’t want to work the normal daily grind for a paycheck. I’ve been buying rental real estate as well. Tell me, how are you paying off your properties within 5 years? And why, with interest rates being so low, would you want to pay them off so quickly? My first 2 are at 3.25% and 3.75% 15-year loans and my current purchase is at 4.75% for 30-years. Factoring in inflation and the tax deduction, to me it doesn’t make sense when that money could generate better returns by buying more rentals or contributing to stocks in your retirement accounts.

    • I debate myself on the whole rental property mortgage payoff thing. On the one hand, I’m not concerned because the rents cover the mortgage, but on the other hand, there’s something about that zero balance! 🙂

      The homes that I buy are cheap and cash flow well enough to be repaid within that period. The first was slightly less than 3 years. The second had a 10 year note on it. If I follow my rental property strategy, I would be buying one rental every 2 years. It’s a decent way to retire.

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