Your Recipe for Retirement (leave the 9-5 early)

^{Read time - 3 minutes / Disclaimer}

How much money do you need to ditch the rat race?

$500,000?

$1,000,000?

$3,000,000?

It's not an easy answer.

But —

Having a rough idea can:

- Help you plan.

- Help you sleep better.

- Help you exit the 9-5 early.

Unfortunately, if you ask 10 "money experts" how much you need to retire.

You'll get 10 different answers.

Life Is Unpredictable

Pinpointing exactly how much you need is tough.

You may live to be:

- 80 years old

- 90 years old

- 100 years old

Knowing your expiration date would make things easier.

(my attempt at a bad joke!)

So, what do you do?

Luckily, there's a study that tries to answer this question.

It's called the Trinity Study.

^{Trinity University in San Antonio, Texas}

3 professors at Trinity University did a study in the late 90s.

The goal —

Figure out how much you need for retirement without running out of money.

Here's 2 rules of thumb based on the study (plus a better option):

Rule 1: The 25x Rule

The 25x rule states:

Save 25 times your annual expenses.

The lower your expenses, the less you need to save.

This leads to rule 2...

Rule 2: The 4% Rule

The 4% rule states:

Now that you have 25 times your annual expenses saved.

You can quit your fulltime job.

And begin living off your investments.

The rule suggests you withdraw 4% of your money each year to cover your expenses.

This assumes your money is invested in the stock market.

A Better Option:

If your goal is to ditch the 9-5 early.

Let's run an example based on the study.

If your monthly expenses are $4,000.

$4,000 x 12 months =

$48,000 in annual expenses

Rule 1 says you need to save 25 times your annual expenses.

So —

$48,000 x 25 =

$1,200,000 saved

Most people laugh at this number.

But —

There's one big flaw.

It assumes you don't make any more money for the rest of your life.

Which is unrealistic.

I spent 10 years in banking, and this is what I saw most retirees do:

- They retired.

- They had big plans.

- They sipped margaritas.

1 year later:

- They missed having purpose.

- They began part-time work.

- They were much happier.

 I would see this over and over.

Retirees in their 60s would say:

"Leave fulltime work sooner."

"Control more of your time."

"Spend time with family."

They loved their new life working part-time.

It brought them balance.

So —

I revised my game plan.

The new plan became:

- Invest as much as possible.

- Leave 9-5 life asap.

- Work part-time.

I took their advice.

And doubled down on investing.

It allowed me to leave the 9-5 in 2020 (in my 30s).

I've been working part-time for myself since.

If meaningful work, spending more time with family, and having more control over your time resonate —

Learning to invest is a path worth taking (starting small works too).

If you're just beginning your investing journey, this may help:

Investing Your Money
(3 things to remember)​ 

Keep building💰

See you next week.