Anyone here retire by 40?

[Offgrid Organic Farmer]

... DW and I are in the accumulation phase and I wonder if the doomsday scenarios I come up with in regards to cash reserves (or not having enough of them) are far greater than the reality of what can be done in a downturn (e.g. spend less, get a job, etc). Nothing is predictable, of course, but there is considerable wisdom on the other side where you and some of the folks on this site are at. Any insight would be greatly appreciated.

'doomsday scenarios'

When I retired, we bought 150 acres of woodlot out in the woods and began building a farmhouse; where we raise pigs. We are vendors in a local Farmers Market barter honey, pork, fiddleheads, maple and assorted herbs. We are on solar-power, and we use firewood for heating and cooking.

My wife and I decided to focus on achieving this lifestyle as our goal, back when we were dating in 1980.

We associate with many other self-sufficient 'homesteader's and small-scale farmers, many of whom came here motivated to prep for various 'doomsday scenarios'.

At the time when I was forced onto pension, we were living in an expensive city and it would have been difficult to get by on my pension [if we were not living in an apartment complex that I already owned]. Since we moved rural we have been seeing our efforts toward self-sufficiency, to get a little better. Now living on a farm we do not need but maybe half of my pension income and we are doing really well with our Net Worth.

 

[razztazz]

[FONT=&quot]I’ve set the goal for myself to FIRE by 40 and I’m sure there are others here who have the same goal. I’m still about 12 years away from then, but I’m wondering if anyone here has managed to do so. If so, could you shed some light on the following:[/FONT]

I did at 38.

[FONT=&quot]1. [/FONT][FONT=&quot]What were your overall strategies for accumulating wealth before retiring?[/FONT]

Saved as much as I could. Literally lived about 1 step above poverty but at that age life is or at least can be a big game anyway so what's the harsh? The other part of the strategy was throw most of it into the stock market.

[FONT=&quot]2. How did you know you were able to retire? [/FONT]

I was living just fine on 1/2 of my take home pay. I was eligible for a small pension which mathed out to ... almost exactly 1/2 of my take-home pay. I had a lot of money in mutual funds, at that time, for about 12 or 13 years to cover any shortfalls. Employer also provided medical insurance

[FONT=&quot]3. How did you announce your early retirement at work? Was it awkward? And how did co-workers/boss react to it?[/FONT]

1) Walked into personnel / filed the papers. 2)No 3) Co-workers were not surprised. The boss? Really, now. Whatever he thought of it that was his problem.

[FONT=&quot]4. How long have you been in early retirement and what’s it like? Has your wealth increased since then? And were your estimated expenses on target with your current expenses? [/FONT]

1) 22 years & it's grrrreat! 2) Yes, I have more money now. 3) Yes, actually I calculated things pretty close to actual

[FONT=&quot]7. How did your investing/saving strategy (asset allocation) change once you transitioned from the accumulation phase to being financially independent and retired, and why?[/FONT]

I had had managed funds before I quit. After I avoided the 2000-2003 crash, when I got back in, I went with index funds. Asset allocation has varied over the years. Now I have more fixed income than I used to.

 

[Milton]

Many of my former renters retired at age 18. It seemed pretty easy.

So true!

 

[Nords]

Nords, I'm always eager and appreciative to read your insightful posts. Thank you for sharing.

When you had the two years' expenses for a decade, did you dip into those reserves (as predicted when you first designated them as cash reserves) or did you find them to be a resource that provided you more peace of mind but never necessary?

Yep. We used some of it in 2002-03 (I'd retired in June 2002). We replenished in 2004 and kept the stash until we used it again in 2008-09.
https://the-military-guide.com/survive-stock-market-crash/
I won't pretend that we were smiling confidently during those recessions, but we got through them by sticking to our plan.

We replenished the cash stash again in 2010 and kept it up through about 2014 or so, when we realized that our net worth had grown big enough (and our spending was still pretty flat) to reduce our withdrawal rate below 3%. At that point we no longer needed the cash stash (because we're no longer susceptible to sequence-of-returns risk) and we've since drawn it down.

DW and I are in the accumulation phase and I wonder if the doomsday scenarios I come up with in regards to cash reserves (or not having enough of them) are far greater than the reality of what can be done in a downturn (e.g. spend less, get a job, etc). Nothing is predictable, of course, but there is considerable wisdom on the other side where you and some of the folks on this site are at. Any insight would be greatly appreciated.

Can you conceive of scary scenarios that will wipe out your assets? You bet. Are they realistic? Probably about the same risk of getting struck by lightning during a shark attack.
The Retirement Calculator from Hell, Part III

More realistically, you can also Just-One-More-Year yourself right into the grave. Six years ago I lost a good friend that way: he had a cerebral hemorrhage right in the middle of the morning department meeting and died without recovering consciousness. He was well past the 4% SWR yet he was going to work for literally just one more year to pay off the last $50K of their mortgage. Even today, when I help his widow with a financial question she still bursts into tears because her spouse used to take care of that stuff.

As Bill Bernstein says, it's a waste of time to drive the success rate of the 4% SWR to 100%. However you can insure against those failures with defensive measures like an annuity (maybe Social Security is enough of that) or the other techniques mentioned in my other post and those links.

You can take prudent risks to enjoy your financial independence at a time of your choosing, or you can keep on working for more security until a family emergency or a health crisis chooses the time for you.

Me, I'm happy to take the risk of other doomsday scenarios. I don't need to have a paycheck to survive them.

 

[audreyh1]

I retired at 39, but that wasn’t the result of a very long planning process. Rather, when the small company I had joined long before went public, I realized I had the option. So we rode the coattails of company stock and cashed out when it reached a high enough number. Luckily we were already frugal savers and had no children.

Been retired over 18 years and luckily we never fell financially threatened in spite of two nasty bear markets since retiring.

Sorry, can’t answer in detail. It’s Koningsdag here today in the Netherlands, and I have to go out and see how Amsterdammers are celebrating it.

 

[LARS]

38 from a Wall Street Investment Banking career and now in my third decade of retirement.

Single most important factor in retiring early (and staying retired) has been living within our financial means.

 

[Dtail]

Impressive postings on retiring under 40 y.o.
I wasn't even thinking about retirement at that age, although was saving and living within/below my means.
In the end after I reached my 50's, I couldn't have retired before I did at 57 for various reasons.
All good in the end.

 

[NYEXPAT]

Retired almost 31 years ago at 33/34. No advice other than to always stay Financially flexible.