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Extreme Frugal Minimalists Plan to Retire by Age 35!

>>> > MAT: Hey every person in this video, we'' re conference a pair from Vancouver BC who are intending to retire by age 35. They'' ve adopted an incredibly prudent minimal way of life and for the previous 7 years, they'' ve been able to save over 65%of their yearly earnings.'They ' ve been carefully spending their financial savings and they intend to live off the passion when they do retire. Although very early retirement isn'' t obtainable to everybody, we do believe that what Stephanie and Celestian are doing is actually intriguing because economical way of life options might aid make some financial goals like getting out of debt, as an example, much easier to achieve. We'' re truly excited to share their tale. Let'' s go fulfill up with them. >> > > STEPHANIE: So basically concerning seven and half years ago, we chose to go after very early retirement. We identified a system including lowering our expenditures a lot, so we can obtain our cost savings rate truly high approximately around 60, 65% and just investing that and afterwards just gradually the cash simply kind of collects and currently at this factor we'' re possibly concerning 2-3 years away from having simply sufficient in investments that we wear'' t requirement to function anymore.So at this moment, we'' re nearing completion of the trip we started. [Music Playing]>> > CELESTIAN: What early retired life suggests to us, is being able to retire at a fairly very early age but still have adequate cash to be able to sustain ourselves via our financial investment income without needing to work. We may function if we desire however we wouldn'' t be compelled to function in order to spend for our costs and such. [Songs Playing]>> > STEPHANIE: The biggest things we do is make our huge expenditures rather a little bit lower. We lease a very inexpensive apartment or condo. We wear'' t have a cars and truck. I do all our food preparation from scratch. I do bulk meal prep. Typically, you recognize, we'' re extremely minimalist. We put on'' t really buy points. There are all these groups for a lot of people that simply don'' t exist for us. I suggest, we don'' t have a restaurant spending plan'; we put on ' t have an alcohol budget plan; we put on ' t have an auto budget. Most of those categories are$0

invested in those categories.So, it simply indicates our price of living is extremely, extremely low which allows us to … you understand although we don'' t make that much cash, we are still able to conserve regularly 65%, 70% of our earnings annually, in spite of making just extremely ordinary earnings for our city. [Music Playing] I'' m an assistant at an accounting firm and Cel is a freelance editor. >> > > CELESTIAN: So I primarily do novels, like people self-publish books on the Amazon Kindle Shop and similar markets. Those are the major people that I work with. >> > > STEPHANIE: Typically, our mixed revenue is around $80k/year. We spend regarding $9,500 on traveling, about $9,500 on housing, and regarding $2,500-$3,000 on food annually for both of us. To maintain our costs down for grocery stores, it'' s actually just an issue of food preparation everything from the ground up and not acquiring icy dishes or points like that, yet simply really cooking and baking every little thing from square one. It drives the expense way down. We invest much less than $300 a month on food for both of us, and that'' s no difficulty because we shop at the kind of areas that are very cheap.We buy a huge sack of flour on a monthly basis. That ' s at Costco, a$'6 sack of flour. That ' s all our bread, pizza dough, cooking, you know, muffins … I buy huge sacks of rice. >>> > CELESTIAN: We purchase like cases of soy milk from Costco which'' s a bit less costly too. So there are some points that we purchase wholesale that are less expensive and afterwards we likewise go to a neighborhood market and acquire

quite cheap vegetables.It ' s called Sunrise Market. That'' s component of it. And we try to obtain produce that'' s pretty economical and in season. We take 2 big worldwide holidays a year, usually one in the summer and one in the winter season and after that we do a couple of little journeys to neighborhood areas occasionally. It'' s something that we truly appreciate just going to new countries, new cultures trying brand-new experiences, trying brand-new food. >>> > STEPHANIE: I think every journey we do is actually just inspiration towards layoff because it'' s like a taste of it! We invest near to $10,000 a year on travel. So it'' s not like we do a traveling budget plan. A great deal of it is just we do the very same kind of things when we take a trip that we do in the house. We have a tendency to head to the food store, obtain active ingredients and cook. When we travel, we tend to go to perhaps a local market or the outdoor markets or something obtain ingredients, bring them back and cook or in your home we put on'' t use an automobile, we walk areas and bike places.When we travel, we do the exact same. We take public transportation or bike or we walk locations. I assume there'' s simply a great deal of it is just living the same way of living that we live at home, certainly reduces into the cost of taking a trip a bit. So our transport costs usually would be about $40 a month that would be with recompense, however it can frequently be much less than that, particularly throughout the summertime, where we would certainly just walk and bike a lot more. We really obtained major concerning it, once we understood layoff was even an opportunity which had to do with 7 years ago. So we'' ve been type of taking it a lot more seriously and servicing it and really concentrating on spending a whole lot and obtaining our high savings price and making development simply for around 7 and a half years now. When we initially started, Cel had a little web well worth. He was simply completing up institution. I had concerning seven thousand bucks of debt.I did one year of post-secondary before deciding I didn'' t intend to do anymore of that, however that was gone truly swiftly. We purchase index funds. We simply have extremely simple portfolios through a robo-advisor. When we make money, we transfer money, it'' s handled, and we wear'' t consider it and it just sort of grows behind-the-scenes. Annually, we obtain our tax slips and file our tax obligations. That'' s the level of what we pertain to our investments, however we don'' t truly do any kind of kind methods or psychological stuff to spend less. We just really check out our costs all at once and kind of determine exactly how we feel about that and we'' re either pleased with this amount or we'' re not and if'we ' re not, we would certainly simply >>spend much less. > > CELESTIAN: We attempt to set it up such that saving is much easier than not. Due to the fact that individuals just have so much psychological power therefore much technique they desire to make use of daily, right? One example is that we do bulk meal prep on the weekend breaks and afterwards we just put all of our food in the refrigerator therefore then after work with the week days, instead of eating in restaurants and mosting likely to the dining establishment or obtaining takeout, we can most likely to the fridge and put something right into the microwave.Not only is it the even more inexpensive alternative however it ' s the easiest choice. > > STEPHANIE: I would certainly claim in regards >>to that I assume an additional among things people face occasionally is they make this plan and they say day-to-day i ' m gon na go home from job and I ' m gon na cook a healthy and balanced supper. I suggest maybe for some people that works. For me, it doesn ' t. For me, when I obtain'home from job I ' m kind of weary.'I intend to just consume something. You understand, I don ' t desire to cook a meal. I might be able to maintain a system like that possibly I can manage it for a week, possibly 2 weeks, but after that, I wear'' t assume I might do it every day. So I intend around that to make sure that I have food prepared to go, prepared to simply essentially reheat during the week which makes a big difference. >> > > CELESTIAN: There are drawbacks, but it depends on … they are sort of subjective downsides.It depends on your values or your preferences like your individual preferences. A lot of people would certainly see not consuming alcohol as a significant downside. For us, it'' s not because just we wear'' t wish to drink it. Some people would see that not having a vehicle and not having the flexibility to drive, any place they desire as a big drawback. For us not having a vehicle and not driving, are not drawbacks, that'' s simply how it is. > > STEPHANIE: We have a blog. We'' re not incredibly energetic, however we have a great deal of details on there. It'' s called Incoming Properties. It ' s pretty very easy to discover. We have kind of updates in our lives, areas we travel, type of just how our total assets is going, and after that a little bit concerning spending and self-employment and penny-wise living as a whole, type of several of the important things we do.We want to do things like possibly longer-term traveling. We'' ve spoke about possibly relocating to an island, constructing a cabin and type of doing a bit of a homestead point. There are great deals of various things we'' d like to do or simply having the versatility simply to to relocate to various areas and not have to think “” Well, what about getting a job there or whatnot?”” Simply have the ability to kind of have that freedom to do type of some unconventional way of living options. I think that'' s among the real allures of early retired life is to have that flexibility to primarily live your life the means you desire.

[Songs Playing] As for how our way of life will look when we retire contrasted to exactly how it is now. It really depends. I mean if we make a decision to remain in a city, it would certainly be similar. If we do make a decision to relocate to an island and construct a cabin, there would most likely be some relatively significant distinctions. I think at the core a lot would remain the same. >> > > CELESTIAN: Without a doubt we have no intents after retirement instantly spending a great deal of money on dining establishments, acquiring lots of things on Amazon. It'' s certainly still going to be a prudent way of life blog post retired life. [Music Playing]>> > MAT: If you wish to adhere to Stephanie and Celestian'' s trip in the direction of layoff, you can have a look at their blog which is called Incoming Assets where they share all sort of information concerning their economical lifestyle and traveling adventures.Please share this video clip if you liked it and thanks for seeing.

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How I retired at 36, and spent 20 years sailing (FIRE, Minimalism, and when “Enough” is Enough)

hi i'm clark and today i'd like to talk to you about money goals and little everyday choices that can help you lead a successful life for those of you that aren't familiar with our channel we normally do videos on how to sail and uh wonderful places that we go to my wife and i sail a 50 year old sailboat we travel all over the world this video is going to be a little different this is a little more personal this is me kind of telling you my story of how i was able to retire young and lead this life i hope it could be inspirational to you even from a very young age i have wanted to live an intentional life i didn't necessarily have the name for it back then but i wanted to live honorably i wanted to live on my own terms i wanted to live in a way that was right but not in a way where i was following the herd not in the way that i was doing what other people wanted me to do lately there seems to be a trend for people to live a little more frugally a little lighter on the world uh you see that with tiny house people my wife used to do that you see that with us cruisers we live out here uh quite lightly um it's and i see that with a group that's referring to their idea as fire f-i-r-e stands for financial independence and retire early it's kind of all the same thing make some money don't spend everything you make don't live paycheck to paycheck so that you can be free and not live a life where you're just accumulating stuff to to impress others or impress yourself the minimalists are kind of doing the same thing though maybe they're not working so hard to retire young but they're still kind of trying to spend less and not accumulate stuff as their personal badge i've been living this way for a very long time if you're contemplating a lifestyle change in this direction i thought it might be helpful to see what happens when you've done this for like 30 years let's start out with my story i grew up in a farming town in northern new york state my dad was a barber my mom was a secretary when i was first born and became a stay-at-home mom later on she got a degree and became a school nurse we didn't have a huge amount of money we had enough though we always had food we always had shelter we never had worries but we just didn't have enough to have that new fancy car and trendy clothes and it just wasn't our thing to try to keep up with the joneses i'm really glad i was raised that way after i finished college i found a job locally in northern new york it wasn't a great job it's not a really industrial or technological part of the world and i do tech and also it was the middle of the recession in the 80s this recession was bad the unemployment numbers were worse than the 2007 recession that well wiki calls the great recession so it was the job i could find i um was a little bored with the job and it didn't pay very well because that job was so boring um i started uh consulting during the day i started meeting with local businesses and uh showing them how to use a pc pcs had just come out i mean they were the first ones uh but right along with the first pcs were the first clones so i would show them they could save a lot of money by buying a clone i'll help them buy them i would write custom software for them sometimes sometimes i just show them how to use word processors but anyway um it taught me that i could be a consultant basically i didn't have to necessarily work for a company with a paycheck i did a little better i bought a sailboat i bought a 25-foot sailboat and i i never owned a sailboat before i'd only been sailing like twice in my life at that point i worked at a kids camp and found some sailboats and ended up teaching sailing that was the first time i ever did it but sailing really intrigued me so i bought this boat and i'm sailing it around lake ontario and one day i found myself out at some little island on lake ontario alone uh no friends came that day and i'm reading a magazine cruising world i think it was and it had an article on the economics of well living the lifestyle i have now and i realized it's achievable it you know it's it's a big deal but it's not something that can't be done i knew i was gonna have to work hard i knew i was gonna have to take some risks but i became kind of a goal for me to try to retire young and get out and see the world on these terms it was it was really important that article changed my life so pretty short order after that um i found a contracting gig in austin texas i helped ibm develop os2 i quit my day job big risk there because i was just hired to come and do if they didn't like me they would kick me out but there was more money and it was a much more interesting project that one went well um i started doing some other projects and next thing you know my client list was ibm boeing starbucks uh a t a bunch of other ones you haven't heard of but doing interesting things i was successful by basically anybody's standard and i didn't quite live like other people who were doing what i was doing i was still a barber son i really didn't have this concept that money was happiness that stuff was happiness for me money was uh freedom chips a way to to not have to work later i had this saying that if you make more than you spend you're rich and if you spend more than you make you're poor and the scale of it doesn't matter this is before donald trump was president or anything like that he was like my poster child of how not to live to be in bankruptcy every five years you know it didn't matter if he was doing it at the million dollar level as far as i was concerned he was poor i tried to be rich so i lived on the rich side of that i put money away and i invested it and i set myself up to be able to retire young but not to say i didn't spend anything when i was 27 i sold my 25-foot boat and i bought a larger one i bought the one that i'm well sitting in right now uh i spent 55 thousand dollars on her uh she's um she can cross oceans she is a very sound hull but she was in bad shape so i had to tear her down and build her back up it took about eight or ten years of work while i was working and during those eight or ten years i did a lot of work on myself too i prepared myself for this long voyage one advantage of buying a boat as your well obsession or hobby is it can be home so i did save some money uh by not having an apartment anymore i just moved right aboard the boat of course the boat and its slip cost what much more than the apartment but i was gonna have the boat anyway so i tried to save money any way i could in 2000 i was 36 years old and i realized i had enough not enough in frustration i loved my job but i had enough money put away i had enough to achieve my dreams and i wasn't going to just keep chasing something uh so the right thing for me to do at the time was to close down my corporation right at the height of my income and take off sailing it was a wonderful time to be an engineer there was the tech boom going on it was really great closed it all down got in my boat and went south literally within months the tech boom bubble crashed the market dove i lost so much money in the market but since i had this minimalist mindset and since i really was living on very little money before when i was saving i just tightened my belt stayed at this lower income level as it were and wrote it through since i didn't spend spend my principal it came back it took a while but it came back the point is i was able to live on very little and actually out sailing was easier because there weren't commercials in my face saying buy this be happy buy this be happy i had a beautiful dive to go down and look at fish that costs nothing over the next 20 years i sailed this boat twenty thousand ocean miles i visited fourteen percent of the world's countries i had some amazing adventures uh because of the decisions i made in my i've been able to live a life sailing i've been able to visit the warm parts of the world get close and personal and meet other cultures hang out with some really cool people now in 55 um i've got friends who are still working and hoping to retire i've got friends that didn't make it to retire they're dead they're never going to have these adventures i'm so glad that i made those decisions in my 20s and i stuck with them in my 30s and 40s and it's given me such such a wonderful life i want to encourage you regardless of your age to live your best life come up with a plan and stick with the plan i can tell you that little everyday choices can make a huge difference in adding up to a wonderful life how do you do this where do you start i started with something that i call the economy of enough the economy of enough boils down to two things number one understand your goals what makes you happy what will make you happy you're thinking about your whole life here for me it was having financial independence and having the freedom to go off sailing for you it's going to be something else but decide what that is you have to choose something that's actually achievable if it's not achievable you're never going to get there and you have to find it exciting if it doesn't excite you there's no sense living a life without passion choose wisely you only get to make this choice once it's just not going to be time to restart once you have an achievable exciting goal that's your definition of enough it's enough to make you happy it's enough to give your life meaning and it's enough to keep you going most importantly it's a point that you can reach if you don't have a definition of enough you're cursed to chase more and more is just never achievable without that definition of enough knowing and knowing that you've succeeded to get to it a million isn't enough 10 million isn't enough the whole world wouldn't be enough you need to have your own definition of enough to find happiness number two commit to making daily choices that will let you get to your goal this is how you're going to use a little of that chasing more to get to you're enough if your life goal requires any money at all and let's face it they all do you're going to need some money achieving my goal of retiring young and finding financial independence had a lot to do with my saving and spending habits most of what i'm going to talk about now is about saving money how to build wealth through delayed gratification what do i mean by that let me first tell you about marshmallows there's a really well known and simple psychological test that's given to kids and it's like the best indicator of how well they'll do in later life it's called the marshmallow test and how it works is the the researcher gives this little kid a marshmallow and he says you know like this is your marshmallow you can eat it you can do whatever you want but if you don't eat it and i'm gonna leave the room for a bit and if you don't eat it when i come back if you still have the marshmallow i'm gonna give you another marshmallow now this is a really cool test you can just google it look it up on youtube and it's fun to watch because it's little kids trying not to eat marshmallows the point is though that the kids that can delay gratification the kids that don't eat their marshmallow are the kids that later on in life can like not have that five dollar starbucks coffee because they can know five extra bucks in my schwab account it's gonna mean like ten thousand dollars when i need it it's just the way you should live life it's so telling of a test if i had kids i'd give the kids the test and i'd use it as a training thing i'd just give them the test occasionally until they got it until they realized hey if i don't eat the marshmallow i get two marshmallows i think it would train a kid later in life i think in our society most people eat their marshmallows right away and i'm gonna teach you or tell you how i anyway got to financial success by saving marshmallows by putting off these instant gratification purchases and saving the money for when i can do really cool stuff with it and have freedom let's talk about the way to save up some marshmallows number one we're going to talk about work when it comes to work choose a profession that you're good at but choose a profession that is something people want and choose something that pays well many minimalists think that money just doesn't matter and they go into jobs that just don't pay well it's important to actually make money if you're going to follow this model while you're young in a small amount of time or you're not going to be able to retire young so again find something that people need do it really well and demand a fair payment for your efforts the world basically doesn't need another waiter what we need is a welder there's always a demand for welders you put six months into learning to weld and you're gonna get paid well bottom line understand the economy of what's valued out there and pursue a career that will let you maximize your income early the next topic is savings you need a long-term savings account for your retirement and you need a short-term working savings account just to live off of whenever money comes in pay yourself take some of that money and put it in that long-term savings once it's in there it's invested it never comes out again until you are retired you don't say there's a big expensive toy i want it i'll use that nope that money is is just locked your short term account is what you need to live on you shouldn't be going paycheck to paycheck you actually should be moving using money in that account that's a little bit old uh if you're spending everything in that account you're doing it wrong you you should have enough left over in this account to actually slip some more into that investment account when you do write that check to yourself because you save some money on not buying a latte or whatever you should feel really good the brain chemistry you make in this is an important part of it you should celebrate when you're able to put more money in that long-term retirement account let's talk about spending you should decide what you can spend based on what you need not based on how much money is in your account you want to avoid lifestyle inflation especially when you're 20s and your 30s your peers are going to start spending a lot of money around you you're not keeping up with them you're living a different life avoid the temptation to spend that extra money to show your success live below your means you've got a longer goal in mind let's talk about skills our society spends a lot of money on convenience basically paying for other people's time part of saving money is learning how to do stuff for yourself for example your car needs an oil change you can pay someone to do it but you can do it yourself and once you've done it you now know how to do it trust me it's trivial brake pads same thing really really easy job you can do it in the driveway someplace once you've learned to do that you've kind of got the confidence to start learning to do other things the more things like this you put in your belt the more things you know how to do yourself the more you can save keep this up and eventually your collection of skills become vast you can take better care of yourself with less money let's talk about food you can save a lot of money by eating cheaply i've done it to get through bad times but it's no way to live life what i'm suggesting here is just don't blow money on food you can save a lot of money by learning to cook yourself it's another skill just like your car and it'll save there's a lot of other ways to save money pack your lunch don't order coffee on the way to work don't go to restaurants as much buy a steak at home learn to cook it well when you do go out to a restaurant order water instead of some crazy drink and whatever you do don't buy bottled water if the restaurant's water isn't good enough to drink why are you eating their food it was made with that water emily and i love to throw dinner parties and that's kind of how we get that food being better feeling not going out to a restaurant and paying someone to carry food to our table but making food for friends and sharing it with them and then they reciprocate and we have much more intimate wonderful evenings that way bottom line is you eat three times a day it's a really big opportunity for savings even saving a dollar a meal adds up a lot over the long haul let's talk about housing housing is a really major expense it's probably your largest expense and because of that it's an opportunity to save a lot of money there's a lot of people out there that kind of organize their whole life around owning some big crazy expensive house they spend 30 years paying for it and it owns them because housing is such a big expense it's your biggest opportunity for savings i saved a lot of money by living on my boat i was going to own this boat anyway it was my obsession if i had this boat and tried to keep a house or an apartment that's that's a lot of money so i lived on the boat emily my wife uh she did it a different way she's a tiny house person so she lived in well tiny houses you probably know what those things are if not look them up that's pretty cool she minimized her housing expenses by like literally minimizing her house and she had the advantage of just not having a lot of room to collect stuff much like on the boat it's liberating probably those two approaches aren't right for you but there's going to be something that's right for you some way of savings living a little bit outside of the city can save a lot of money or even living in a in the city but in a less expensive neighborhood without hoa fees or a bunch of joneses to keep up with you can save a lot of money in your housing and if you live outside of the city you avoid the temptation of spending money on nightlife there just won't be as much out there emily and i live on a boat anchored in a beautiful natural bay and that decision has turned our living expense at least the housing part of it to zero bottom line rethink the size location and format of your housing you might be able to save let's talk about cars cars are like the most rapidly depreciating item you'll ever buy it's a big opportunity to save money buy an older car and learn to maintain it yourself buying a brand new car is just throwing money down the drain that doesn't mean you can't drive a nice car i drive what is probably one of the best luxury cars ever made and i bought it at 65 000 miles for four and a half thousand dollars emily has a car that's older than her but it's a really cool car and it's it's fun to drive if you want to know more ask in the comments i won't get into the details on the cars here bottom line don't buy a new car buy something that's like 5 years old but make sure it's a really good quality car nobody wants a 5 or 10 year old kia but an old mercedes or a porsche that's still a really good car and there's a lot of good choices in the middle also learn to maintain your own car we talked about that in the skill section there's a lot of opportunities to save money taking care of your own car if you stick with an older inexpensive car you really don't need to carry collision insurance i mean you can literally just buy another one for what the collision would cost in like two or three years just stick with the minimum liability that your local government requires and you're going to save a lot this list could just go on and on but there's one more thing i want to talk about that's relationships it's very important that your long-term relationships are compatible with your goals if you live with roommates or have a lot of friends that don't share these goals it's going to be difficult to keep frugal likewise if you're in a relationship with someone that finds joy by spending and chasing more it's going to be doomed to failure either you're just not going to make your goal or the relationship's going to suffer emily and i were both married before and probably the biggest problem with both of our relationships were our partners didn't understand enough they were still chasing something they didn't understand when at least we felt we had found enough so bottom line try to find someone to share your life with that understands and agrees with your idea of living frugally it can make life a lot better and of course when you get to the point of deciding whether you want to start a family that makes a huge difference financially you can live frugally with kids but understand whatever you do your costs are going to grow and you're going to lose a lot of control over your life in the u.s it cost a quarter million dollars to raise a kid to adult age and our population is booming the planet is full take that into consideration if you do decide to have children have a small family and by all means give those kids the gift of letting them understand enough and find joy in enough the biggest thing about the concept of enough is this one day if you do everything right and you meet your goal you'll be there realize when you're there stop just don't keep striving for things and position when you've got enough you've got enough now it's time to live for yourself this sounds trivial this sounds like duh you know but it isn't um i know the stress i went through when i retired i couldn't identify because it seems like everything was perfect but society had raised me to keep wanting to keep striving i stopped and it took a couple years to feel good my wife emily is running a corporation right now she does management consulting she's not going to be doing that forever and she's starting to think about shutting it down and she knows and she also knows because i've told her it's going to be stressful uh prepare for that achieving is addictive you're going to want to continue to try for more it's like natural probably the human condition but when you're there take some time to [Music] to live for yourself and you can always go back to work you just really deserve to try the other way for a while once you've achieved it let it feel good everyone should have their own philosophy if my concept of enough rings true with you use it it's yours if not try to find something else but leave that leave that intentional life have intention and how you want to live i hope sharing my experience has allowed you to feel maybe a little less alone and more inspired to lead your own better life thanks so much for watching if you enjoyed this video please hit the like button share it with a friend i really want to thank you guys for watching the guys that subscribed thanks a lot uh and really special thanks for those of you who've decided to be our patrons on patreon um we never really thought that would happen uh it was it's quite exciting to see the support come in thanks again bye [Music] you

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How to Retire Early: The Shockingly Simple Math

Hi, my name is Phil. I’m a video creator and online instructor. I’m also a personal finance nerd. Because of that, I want to create a series of videos that breaks down some of the most mystifying topics that plague our society. In a world where people’s finances are typically locked away and not-talked about, I believe opening up the gates of financial conversation will help everyone live a better and smarter life. In this first video, I want to explain the shockingly simple math behind early retirement – thanks to one of my biggest heroes, Mr Money Mustache. While the ability to retire may seem like a distant and unreachable goal for many, the premise comes down to one thing. You need to invest money so that it earns more money.

This could be investing in stocks or bonds, real estate, or any other of investment vehicles. As soon as your investments earn enough money for you to live on each year, you are able to retire. Let’s break it down further to know when you can retire. The most important concept is knowing your savings rate, basically how much you make minus your expenses. If you spend 100% of your income, you will never retire… because you will never be able to invest any money that earns money for retirement. If you spend 0% of your income, you can retire right now… because somehow you are living without needing to make any more money. Between 0% and 100% are a number of savings rates that correlate with the years it will take to retire. For this, let’s assume your annual investment return is 5% (which is conservatively low) and your withdrawal rate is 4%… meaning you spend 4% of your net worth each year.

For example, if you have a $1,000,000 net worth, and you live on $40,000. If your savings rate is 10%, you will be able to safely retire after years. Safely, meaning you will never run out of money. If your savings rate is 25%, you can retire in years. 50%, you can retire in years. And if you can somehow save 75% of your income, you can retire in years. Now getting to that savings rate might not be easy in our world of societal pressures, keeping up with the Joneses, and bad habits. But you can get closer by making smart decisions, avoiding debt, and living simply. The key take away is… Cutting your spending rate is way more powerful than increasing your income because no matter how much money you make, decreasing your spending will speed up the process. A note, The math behind early retirement works if you are working a minimum wage job or a 7-figure CEO salary. It’s all about the savings rate. So if you want to retire in 10 years, the math tells us that you need to save 66% of your income. Now there is a lot that I didn’t talk about – like how to invest, and how to cut expenses to get to a high savings rate.

Those will come in a future video. For now, get excited about the honest truth about retirement (and early retirement at that!)! Let me know what you think in the comments below? Is this exciting or bogus? Until next time… start being money smart. .

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HOW TO BECOME A MILLIONAIRE WITH $5 A DAY

You know before making this video I was just thinking back to some of the greatest things that I learned in my days in school we sure did learn a lot of great stuff in school didn't we for example if you give me the link of two sides of this right triangle here I can actually tell you the length of this third side right here pretty useful stuff huh I can also write in cursive play hot cross buns on a recorder and I can even spell boobs on a calculator my favorite lesson in high school though was how to become a millionaire with just five dollars a day wait a second I didn't learn that in high school did I did you guys learn that in high school did anyone learn that important lesson in high school or was that just left out when we were learning how to cite a source using correct MLA format my point here is about 99% of what you learned in school is useless information and this is a very important lesson that was left out that I'm going to share with you guys today I'm going to show you how to become a millionaire with five dollars a day this is the magic of compound interest pretty magical all right so the first thing I want to point out to you guys is this you cannot save your way to millionaire status one of the most common things people tell you to do if you're looking to grow your wealth is to save your money and put it in the bank that is the most stupid piece of advice anyone could give you because that is a guaranteed way to lose money I'm going to explain why that is so first of all if you have five bucks a day can you simply save your way to millionaire status absolutely not here's an example let's say for whatever reason you were able to save five dollars a day from the day you were born to the day you were a hundred let's say you even lived to be a hundred years old if you save five bucks a day for a hundred years it will have one hundred eighty two thousand five hundred dollars that is a far cry from a million dollars so unless you're planning on living past five hundred years old you cannot save your way to millionaire status second of all interest rates in a savings account do not keep up with inflation so you cannot put your money in the bank and expect it to keep up with inflation so in 2016 inflation was two point one percent okay the average checking account pays zero point zero five percent interest on the money you put in there so here's just an example in terms of how much money you're losing by keeping your money in a savings account so ten thousand dollars in 2015 is equal to ten thousand two hundred sixteen based on that two point one percent rate of inflation now let's say you had ten thousand dollars in your checking account over that year as well so you're ten thousand dollars grew to an astounding dollar amount of ten thousand and fifty dollars at that point so you made fifty dollars okay also known as you just lost one hundred sixty dollars of value maybe that doesn't sound like a lot of money but if you had a hundred thousand dollars in there you just lost sixteen hundred if you had a million dollars you just lost sixteen thousand dollars because your interest rates are not keeping up with the rate of inflation so that is why a savings account is a guaranteed way to lose money so when people recommend you save your way to retirement or you save your way to being rich that's a guaranteed way to lose money there you're basically guaranteeing that you're going to fork over a lot of money because you're not going to keep up with the rate of inflation with what these banks pay you as far as interest goes so what is the solution to this problem I'm going to give it to you right now I'm going to show you how to become a millionaire with five bucks a day all that I ask you guys to do is subscribe to my channel and drop a like on this video and help this message be spread to other people out there who are stuck saving money in a bank account all right guys here it is here's how you become a millionaire with five bucks a day no this is not some course that I'm selling for a thousand dollars on how to become a millionaire that has 40 hours of video content this is this is four steps four steps guys and you can become a millionaire with five dollars a day okay here's how you do it number one set aside five dollars each day I'm talking about the amount of money you probably spend at Starbucks every single day at the end of the month you will have one hundred fifty dollars saved up okay what you're going to do with that money you're not going to put it in your bank account you're going to invest that money you're going to invest in a diversified portfolio of blue-chip stocks and investment-grade bonds okay for those of you who don't know blue chip stocks are these stocks of well-established companies they have a very high market capitalization they are things that have been investing in for many many years and over the last 100 years on average blue chip stocks have paid a 10 percent return you're also going to be investing in investment grade bonds these are high-quality low-risk bonds over the last 100 years these bonds have paid out on average 6% what I recommend doing is investing 50% of your money in blue chip stocks and 50% of your money in investment grade bonds over the last 100 years on average this portfolio page you 8% return on your investment you're never going to sell you're going to leave it there and you're going to let it compound over time you're taking advantage of compound interest now you may not have enough money each month to invest but you're going to save that money and when you do have enough money you're going to buy more shares of blue chip stocks and you're going to buy more investment grade bonds okay after 50 years now we're talking 50 years I know that sounds like a long time but like we said before if you save five dollars a day for a hundred years you'll have a hundred eighty two thousand five hundred dollars okay so now we're talking about half the time 50% less time we're talking 50 years okay you do this for 50 years and due to the magic of compound interest you now have a portfolio worth 1 million thirty two thousand seven hundred eighty six dollars and 28 cents you just became a millionaire for the price of a starbucks cup of coffee each day why is this lesson not being taught in school

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How To Retire Early? (Young And Rich: Is It Possible?)

Hey, what's up? John Sonmez here from simpleprogrammer.com. Tired of pushy recruiters sending you LinkedIn requests for jobs you have no interest in? Tired of blasting out resumes into the dark? If so, you should check out Hired.com. Hired.com flips job searching on its head by having top employers like Facebook come to you after you fill out one simple application. You also get your own job coach to help you on your next job search. If you haven't checked it out, I highly recommend you at least fill out the application. Just go to Hired.com/simpleprogrammer. When you get hired with Hired, you'll get double the normal sign-on bonus for using that link. Today we're going to be talking about real estate.

Yes. I have done some videos on real estate. Some of you are like, “What the heck? Why is this guy talking about real estate?” Well, I've done fairly well in the real estate realm. If you're interested, you can always check out my playlist on real estate investment and investment in general. I'm not going to go into all the details here, but occasionally I like to answer a few real estate questions on this channel. I got one here from Jonathan and he says, “I'm 21 and set a goal that I want to retire by 40 to 45.” Cool. “With 20K of passive rental property income.” Man, that's awesome. I like that. I love that goal. That's a good goal. “Currently saving money to buy my first property and hopefully, when I get a web development job I can speed up the process. My question is how do I plan for this goal?” This is good.

So, 21, Jonathan is 21 and he's thinking this way and he's got this plan by 40 to 45 to make 20K of passive income from rental properties. I love this. This is great. “Thanks for everything you do and have a beautiful day.” I am having a beautiful day. Thank you, Jonathan. “P.S. I was thinking of buying a duplex and live in one and I rent out the other one so basically the tenant pays my mortgage.” So, okay, there's a lot of ways to approach this. I think Jonathan has got his head screwed on right. Well, I'll start with the last, the P.S. of renting out a duplex and living in one side. I think that's a great idea. This is a fantastic thing. More people should do this. A lot of you young people out there that are thinking about renting or buying a house, consider buying a duplex and renting out one side and if you find the right deal which—it's out there, you could actually have the renters pay your rent.

You see what I'm saying? You could actually live for totally free by having a duplex and renting out one side. I'm not going to say it's going to be super easy. I'm not going to say that those deals are everywhere. It depends on where you're at. You're not going to find that deal in California or New York, San Francisco, not going to happen, but if you're in the Midwest you might be able to find that deal. I've seen it before. I think that's a great idea, but let's talk about the plan. 21, you want to retire by 40 to 45. You want to get 20K of passive real estate income. It's not going to be easy, but it's certainly doable. What you need to do is you need to calculate backwards where you need to be and have a real solid plan for this.

I can give you a general outline, but I haven't run the numbers so I can't tell you exactly. There are going to be some factors in here, but you actually need to take a spreadsheet and actually need to calculate this and figure this out. It's going to be fairly complex, but you don't have to be super detailed. You can kind of ballpark this, but you do need a spreadsheet. You can get some rough answers here, but calculate this out, 20K of passive income from real estate. Let's say 45. What does your gross need to be? You're going to have expenses, you're going to have rents, I mean you're going to have property management, you're going to have a bunch of things here. That can give you an idea of what kind of wrench you need to be pulling in. It's not going to be a 20K wrench, you're not just getting 20K. It might be like 30 or 40K a month of rents. In order to get 40K a month of rent how many properties do you need and how much will those properties cost? How can you divide that over time and put inflation into the equation a little bit here over that period of time? Work backwards and make a spreadsheet and run some scenarios.

This is going to take time and some planning. Like I said, you can rough ballpark it. If I were just going to give you what I think would probably work for you, it also depends on how big your budget is. How much money are you investing every year? How much money do you have to invest every year. If you can put 10K down onto a rental property every year that's different than, “Hey, I've got 50K to invest in real estate every year.” That's different. Or 100K. Those are all different scenarios. What you're planning based on your current scenario might—there may not be—there might be this gap and you might be like, “Well, how do I get there?” It might not be apparent.

You might have to do some other things. You might need to make more money in your job or start a side business in order to fuel that. I had to do that to reach some of my real estate goals. Think about that and calculate that out. I'll give you kind of a rough timeline, a rough plan that I would have if I were you which would be something like—and this was the plan I initially developed when I was doing this which would be to buy one property every year, regardless. The nice thing I like about this plan is that it's scalable.

The size of the property depends—is dependent upon how much money that you have in that year. When I first started in real estate investment when I was close to your age, I think I bought my first house at 19, but I really started doing investments around 21 and started this plan of buying one house per year. I think the first house that I bought I was able to put $10,000 down. It was like a $100,000 house or $120,000 house. The next year it was probably about the same and then probably like the third or fourth year I had more money. I was able to put $20,000 or $30,000 down. I got to the point where I was buying properties and I was putting about $20, $30, $40,000 down every year on a property when I buy it. Some of that was because of the real estate that I was already making me money. Some of it was because I was making more money in my job and I had businesses and side things going on which helped me to do that. That's the kind of plan that I would—it's not going to happen magically. I think that's the key thing. You actually have to have a solid plan for this and you can run these numbers and calculate this out.

There's actually a really good book that I recommend called The Millionaire Real Estate Investor. I think that's by Garry Keller, the founder of Keller Williams if I recall correctly. I don't recommend very many real estate books, simply because a lot of them are crap. The reason why I'm really going to recommend that book to you is because it has these charts that show you—it gives you a realistic expectation over 20 years what the value of a property is likely to be, how much money you're likely to make from it, cashflow and all that. Again, it's as complex equation. You're not going to be able to nail this down perfectly, but at least if you run the numbers and you do the best job that you can, you can have a ballpark idea and you can always adjust the plan. You've got to have—you've got to know where you are and where you need to go in order to reach these goals. I'll also recommend for you—I have a course that I created called Simple Real Estate Investing for Software Developers.

You can check that out here. If you buy that course, obviously it has a money back guarantee on it, but that's going to help you to give you the basics of everything I know about investing. Just to give you a background, I have about 26 rental properties. They are all paid off. I started investing when I was 19. I kind of know what I'm talking about here. I don't give a lot of bull shit advice about this. I give you exactly—practical advice on how to get started and how to do this.

The reason why I created the course, even though it might not seem like it goes along with a lot of my other content, it was just simply because I was tired of so many people giving BS real estate advice and doing all these kind of scamming, no money down, speculative moves that just doesn't make sense. You need some kind of practical advice so that's what I put together there. Go check that out. This is good. I think you've got a good plan here. You just need to develop the plan further and it's going to be very dependent on your individual factors and—I think you have information though to say, “Okay, can you do this in 45—by the time you're 45?” absolutely! I believe that you can. It's not going to be easy, it's going to be hard to do. 20K is a pretty big number but it's certainly possible, but you're going to have to start moving now, which it seems like you're going to do, and you have to have a plan and it's going to take a lot of work and a lot of effort and you got to find good deals in order to be able to do this in that time frame.

All right, I hope that is helpful to you. If you have a question for me, you can email me at [email protected]. Don't forget to click the subscribe button if you haven't already. Click that Subscribe. Click the bell to make sure you don't miss any videos especially if you like the real estate stuff because, hey, those videos might not show up and then you'd miss it and then you wouldn't find out the secret to life and how to make millions of dollars. All right, I'll talk to you next time. Take care .

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