How to Retire in 10 Years (starting with $0)
Advice from a doctor turned multi-millionaire entrepreneur
Retirement is a subject that has been much discussed.
A subject where there is no model answer (if you’re looking for one).
Everyone has their own definition of retirement. Retirement is not as simple as laying on the beach doing nothing.
I recently watched a Youtube video by Ali Abdaal, a doctor turned entrepreneur.
In his video, he shared about the 3 levels of retirement, and some ways to get there.
3 levels of retirement
Level 1: Traditional Retirement
Traditional retirement is the gold standard which we’ve been brought up to believe.
Work till 65, retire then enjoy the remaining years of your life.
But, there’re some of us who don’t want to wait till 65 or 70 to enjoy life. By then, we may be too sick or fragile to do the things we truly enjoy.
In Okinawa, people have been known to live till over 100 years old. Retirement sounds alien to them.
There’s a reason why they use the word “ikigai”, which means reason for living.
They don’t look forward to retiring. Instead, they look to live the best they can everyday.
Level 2: Mini Retirements
Take a few times off every year and do whatever you want.
Easier said than done.
It’s not always easy to take mini retirements if you’re a 9–5 employee.
You can take unpaid leave or a sabbatical, but your finances will take a hit.
The way around this would be to find a job that offers flexibility.
Flexibility to work from anywhere.
It’s something that I’ve recently done (here’s looking forward to my adventures in the months ahead).
Level 3: Perpetual Retirement
“Retirement is when you stop sacrificing today for an imaginary tomorrow” - The Almanack of Naval Ravikant
“When today is complete in and of itself, you are retired.”
When we work, we are trading our life energy for money, so that in the future we can enjoy the money that we generated.
If you enjoy what you do, you are “perpetually retired”.
The three methods to retiring early:
Method #1 — Make loads of money
The first method involves making loads of money, and retiring off that.
In the FIRE community, this is known as FAT fire.
With a 4% withdrawal rate, a million dollar portfolio would generate $40k income annually.
There’s just one problem with this.
You got to build up a big enough portfolio, which is really difficult for most people.
Method #2 — Lean Fire- reduce expenses (a lot)
The second method involves reducing your expenses a lot.
It may even involve eating plain bread with water everyday, if that’s what it takes.
If your lifestyle cost is $20k per year, you would need a $500k portfolio, instead of a $1 million portfolio.
Is this a life even worth living? I doubt so.
Method #3 - Love your work
This is where you are doing what you love and you never have to work a day in your life.
Sounds cliche, but it can be done.
No doubt a privileged position to be in, but more realistic than fat fire or lean fire.
Conclusion
The harsh truth is that most of us probably won’t make so much money that we don’t have to worry about it.
Driving our living costs to the floor certainly doesn’t appeal either.
Life is not about taking things to extremes.
Making a plan to retire early can be summed up in 3 steps.
Step 1: Make money (Duh)
Step 2: Reduce costs
Step 3: Love your work