How To Retire by 30 Years Old | Starting with $0

What's up, guys? I'm Graham here, so the other week I posted a video about how much money you should save for each age and in that video I go into detail about how much money you should save each year to be safe. You're on track to

retire

at 65, but I made a mistake because a lot of you are

starting

to comment that 65 is too long to wait and you want to be able to

retire

earlier because you could be dead tomorrow, so yeah. When enough people comment that they want to retire much sooner, then you can bet I'll make a video about it and go over exactly what you need to do to be able to retire at 30 and I'll be telling you all of this from the perspective of someone who became completely financially independent when I was 20

years

old.

In fact, I recently turned 30 and am very fortunate to be in a position today where, if I stopped working, I could cover my expenses. lifestyle indefinitely from my investments and continue to increase my net worth at the same time, so yes, none of this is theory and I am not going to talk about false hypotheses from someone who has never done what they are talking about. Just go over the reality of being able to retire at 30, exactly what you'll need to do to get there, and how hitting the YouTube algorithm's Like button helps. See, it is one of the biggest mistakes and oversights that people make.

What I don't realize about retiring early is that it all starts with a blue light button, so once you do, congratulations, you're one step closer to retiring early. With that said, let's start the video, but real quick, I want to thank the sponsor of today's video, Morningbrew. We're a daily newsletter, sent Monday to Saturday, getting you up to speed on the biggest business and world news in just five minutes. Being able to stay up to date with the most current events in the world is essential if you want to. to learn how to make the most of your time, the most of your money, especially if you want to retire early and morning preparation is the perfect summary to wake up to.

Before receiving this newsletter, you would have to review dozens of articles and websites. try to find the most relevant information, but now I can wake up and see your newsletter waiting for me with all the most important details and outlines, clearly summarized for you to read, this is not just news either. typically boring, dense and dry, but on the other hand, the warning beer injects relevance and information that leaves you wanting to read more, for example, I found out about Sirius XM's deal to buy podcast company Stitcher for 325 million dollars, the largest podcast deal in history and I also learned that Chipotle is testing a new cauliflower rice to add more healthy options to its mix.

This is the kind of news I would never have learned about if it wasn't for the morning beer and there's no reason not to join if you're interested in technology or politics in business finance, it's completely free and subscribing takes less than 15 seconds, so please do Click the link in the description to subscribe to Morning Brew today and stay up to date on the best current events sent straight to your email, and of course, with that being said, here's how you can use all that information to retire early. Well, first, when it comes to being able to retire at 30, I want to introduce everyone to what's known as the fire movement, which means financially independent early retiree and it's a community. of people diving into the analysis of exactly what it will take to be able to retire at any age.

This is a community that I have been involved in for about eight

years

and it has helped me tremendously in terms of getting me to where I am. Today is all about calculating exactly how much money you need to maintain your current lifestyle without needing to work another day in your entire life and the math behind it is incredibly simple to get started. We have five different types of financial independence to aim for. and I'm going to summarize each one very quickly because this will determine how you will be able to retire at 30. The first one is known as what is called lean fire, this is a type of frugal financial plan. independence that allows you to retire from the essentials without ever having to work again You won't retire surrounded by luxury or glamor but you should be able to live in a small apartment drive a car eat some healthy meals at home and have some cheap entertainment again, this has to do with frugality in what it takes to get there the real definition of lean fire is being able to retire on an income less than what the average american makes 61k a year usually if you're going to spend less than forty thousand dollars a year in retirement, so lean fire is something to aim for when we have what is known as barista fire, this is when you have enough saved and invested to cover most of your expenses, but not all, at this time. period, if you want to quit your job, you can do so and then you can do a nice part-time job to pay for all your other necessary expenses, like working as a barista.

It's all about being able to move on to something that might pay less money but you'll have a lot more flexibility and a lot more free time throughout the day to do what you want. Next number three we have a term called coastal fire, this is when you have saved enough money to be able to do it. grow to an amount in the future from which you could be completely financially independent without any additional work, participation or investment on your part - for example, if you have enough money invested when you are 20, sometimes all you have to do is let for those investments to grow. and then, at some point in the future, you will have enough money to be able to retire.

So number four, we have our normal period of financial independence. This is the typical version of retirement that most of us think it is. We'll be able to live our normal lives without needing to go back to work, I'm sure you probably won't be driving Lamborghinis all day or going to and staying at the Ritz Carlton every weekend, but you still won't have to worry about money. reason and you will not have to work if you don't want to and finally the last one we have number five and that is what is known as fat fire this is not only for people who want to retire but also for people who want to retire and never think for themselves how much money it costs and can I afford it.

This generally means they will spend over two hundred thousand dollars a year in retirement and will be able to earn what most Americans can only dream of without needing to work another day in their entire life, so to tell you exactly how you could reach these milestones fire, I'll go over exactly what you'll need to do to get there and exactly how much money you'll need and all the calculations you'll need to know, it's very easy, this all essentially boils down to a few things and this is what you need to know how much money do you need to spend every year?

Number two, how much money do you currently have saved and number three, how much money do you currently earn? If you know the answers to those three, honestly, you should know the answers to those three that are going to tell you everything you need to be able to retire at 30. And really, to begin with, how much money you spend is going to be the most important variable in this whole calculation. Generally speaking, if you are under 30 and want your money to last. you indefinitely without running out of money, you will only need to spend three percent of what you have invested each year, which means that if you have a hundred thousand dollars invested, you could spend three thousand dollars a year without running out of money if you have a million dollars invested, you could spend thirty thousand dollars a year without running out of money, etc., now how much money you spend will greatly influence how much money you will need to retire because for every 100 dollars a month you spend, you will need forty thousand dollars invested for those A hundred dollars a month lasts forever according to that logic, it also means that for every hundred dollars a month less you spend you will need forty thousand dollars less invested and yes, that is a substantial amount, I mean, it could be an entire year's paycheck. of someone just to spend a hundred dollars a month, so once you determine exactly how much money you're going to need to spend each year, then we can move on to the next step which would be how much money have you saved and invested?

Whatever that amount is, simply divide it by 33 and that's how much income your investments will be able to replace from there. All you need to do is some very easy calculations to figure out how much more you will have. You will need to retire, all you will have to do is take the amount of money you spend each year, multiply it by 33 and then whatever amount it is, it will be the amount you will need before you can call yourself retired. This is all based on what is known as the Trinity study which analyzed stock and bond investment portfolios throughout each year of history and calculated how much of your investments you could spend over a 30-year retirement and that study found that based on hundreds of Simulations that you could spend four percent of your portfolio each year and ensure your money lasts you 30 years;

However, while a 30-year retirement might work if you are 65 or 70, it probably won't work if you want to retire before age 30. So, to preserve more capital and be able to retire for a longer period of time, it is recommended to take a three percent withdrawal rate; For example, if you spend 40,000 a year, simply multiply it by 33 and you will get You will need 1,320,000 if you want to be able to retire at 30. If you want to be able to lay off 25,000 a year, multiply it again by 33 and you will need 825,000. invested to reach that goal, so if you want to be able to lay off $200,000 a year in retirement, multiply it again by 33, hit the like button and you'll need $6.6 million invested and that's pretty much all the basic math.

Obviously, you'll need to know now if you have higher yielding investments, like if you're investing in real estate that's giving you a return of 5. The same calculation also applies, just modify it slightly for whatever you're investing in and finally the last . factor into this equation and that would be how much money you currently earn, this will tell you how long it will take you to reach that retirement number and whether or not you will have to earn more money to want to get it. there, being able to retire earlier at 30 is not easy and it is not cheap per se, so if you currently earn 30,000 a year, save nothing and expect to retire with 40,000 a year in passive income with 1 million 320,000 You will have to Find a way to make more money and you will be able to calculate it by taking your current expenses by multiplying them by 33, then subtracting what you have currently invested and saved and then whatever is left is how you will need to make a lot more money from there.

Figure out how much more money you'll have to earn to reach 30. It's probably a big number. Now let's get into the parts that I'm sure everyone is interested in. And this is how you can retire at age 30, obviously this is going to be very different if you're looking at this at age 29 and a half and you say, but Graham, I can't retire in six months at age 30. old versus another person who is looking at this at two years and you are

starting

to save as you learn to walk, so let's open this up to how to retire at 30 so that way there are a lot more people. included, but regardless the strategy is exactly the same now blogger mr money mustache did the math for us and calculated how much time you will need to work compared to how much money you will save for retirement using the four percent rule and determined that if you are able to save and invest between 70 and 90 of your income.

You could effectively retire within 10 years of working. Let me say it one more time because I'm sure some of you are partially listening to this and getting distracted. Hey, listen. to this right now if you are watching it listen just listen to this if you are able to save 70 to 90 of your income for 10 years you will have effectively saved enough money to continue with your current lifestyle indefinitely and be able to retire without needing to work again , but of course he discovered that, because of the math, the less money you save, the longer you will need to work, but once you can start saving a significant portion of how much money you make you can significantly reduce the time it takes to retire expect a second the time it takes to retire the time it takes to retire that's very hard to say, but anyway, for example, if you earn 70,000 a year, in theory you should be able to retire in 10 years if you only spend 21,000 a year in that it will allow you to live indefinitely with the same lifestyle after those 10 years and then anything else you earn after that is just the icing on the cake, but really the most important thing.

The picture here is that you won't have to work unless you want to as long as you keep your expenses exactly the same, so first of all,A high savings rate is a must if you want to be able to retire early or especially if you want to retire at age 30. Realistically, most people will probably need to save more than 80 percent of their income if they want to reach this goal at a faster rate. early age. whether you like it or hate it, that is the reality of what you will need to do practically if you want to retire at 30 you will have to make a lot of money or spend very little money, but assuming you just want to make a ton of money In order to retire as quickly as possible, I'll give you an overview and go over the details of what it will probably take, unless you're making a hundred thousand dollars a year in a high-paying job right out of college, while simultaneously living just a few steps away.

On top of homelessness, you won't be able to retire at 30 while working a traditional job, if you're already making a ton of money then it all comes down to cutting your expenses, living frugally, investing. as much money as you can and then it's just a matter of time and for everyone else who wants to be able to retire at 30 and make a ton of money it's working in a career that pays them based on their results and not on your time. , the biggest problem I have with getting paid for your time is that there are only 24 hours in a day, so if you work hourly or are paid a salary, you will eventually hit a ceiling in terms of how much income you can earn. and once you get to that there are simply no more hours in the day, on the other hand if you get paid for your results then in theory you should be able to find a way to optimize those results so that you can end up making a lot more money without necessarily work harder.

I'll use myself as an example. I started as a real estate agent. The number of hours I worked was completely irrelevant. I only got paid when I sold the house and was able to take advantage of my time. much better if I focused on the houses I knew I could sell the fastest and the areas where I knew I could make the most money, even here on youtube it's exactly the same job for me to make a video to reach 10 subscribers as It's up to me to make a video that reaches 2 million subscribers, although it's pretty fun, I end up working a lot harder now, but you get the idea that it's essential that you work in a career where you can take advantage of what you do and earn more money without necessarily. working longer hours is why I think the best business today is anything you can do from your computer on the Internet or anything that is paid on commission.

If you use your time efficiently you could end up making a lot more money right off the bat and that is It will help you retire sooner or the amount of work and then you will be involved in this for years so that you are successful but if you want to be able to retire within a decade, you're most likely going to make it by working for yourself and really, at the end of the day, if you want to end up making a lot of money so you can retire very quickly, you have to completely decouple the notion that the harder you work and the more hours you work, the more money you will get. do it because that's not true at all, secondly, one of the ideas I read from the book Millionaire Fastlane just sums this up perfectly: think like a creator, not a consumer, instead of watching and consuming YouTube videos, start create YouTube videos instead of going and consuming. and buy t-shirts and clothes online sell the clothes online instead of not hitting the like button, smashing the like button, you get the idea that you need to start creating value and building something, not just using and consuming, and finally you will have a There are many more chances of earning a lot of money if you fully enjoy what you do.

I've said it all along, but if you absolutely hate your job, there's no way you can perform at a high enough level. Be good at what you are doing so you can make a lot of money and retire in 10 years. Everyone I have met who has been able to retire at 30 has had a passion for what they do and I have not. I think it's by chance, find something you like, create a business that pays you based on your results and then take advantage of it to expand it and make even more money, and I'm sure at this point some people would like to mention some investments extravagant things, like buying, trying options shorts or buying cryptocurrencies, but in general, the riskier the investment and the higher the payouts, the greater the chance that you will end up losing money, you are not winning anything at all, so in That time you can also go and buy. lottery tickets because if that works, then yeah, that's how you could retire at 32.

And because everyone wants details with these things with real numbers, here you go if you're 20 right now and you want to spend 50,000 a year on The retirement. at the age of 30, then you will need 1 million 650,000 invested, which is equivalent to that you will need to invest 93,000 a year with an average return of 8 on your investments to be able to reach that goal, that means that if you could find a way to average a hundred and fifty thousand dollars a year in income for twenty years before taxes and spend only twenty-two thousand dollars a year, that's what it takes to be able to retire at age thirty with fifty thousand dollars a year in passive income indefinitely then, if you want to retire with 40,000 a year just apply the same calculation we just did and that means you will need to invest 75,000 a year for 10 years and if you want to spend 25,000 a year in retirement then you could do the same by investing 48 000 a year for 10 years.

This all assumes that you start at age 20 and keep your expenses exactly the same. Some investments could definitely speed things up a bit depending on how involved you want to be. real estate for example, if you can save 50,000 then you could use it as a down payment to buy a 250,000 house and if you search hard enough to find a deal you could buy a place that is worth two hundred and eighty thousand dollars but you only pay two hundred fifty thousand dollars for it, giving you an additional thirty thousand dollars in free capital. So let's say you spend twenty thousand more dollars to fix it and it now has a market value of three hundred and thirty thousand dollars.

In that case, you've spent seventy thousand dollars and you have a property that's worth 60,000 more than what you paid for it, so you've basically doubled your money in about a year if you're able to do something like every 12 to 24 months. You will be able to reach retirement age much sooner, especially if that property generates a return of more than three to five percent. It's all about trying to make your money work for you while also living frugally. while trying to make as much money as possible, I know some of this may seem like yes, Graham, that's obvious, but the reality of early retirement is just numbers, you have to make enough money to be able to save between 70 and 90 of your income. for a matter of 10 years and essentially that is what it will take if you want to retire at 30.

I was able to do this through a combination of living very frugally, as during my 20s my take home pay cost was every month. It was fifteen hundred to eighteen hundred dollars, although at that time I was making one hundred and fifty thousand dollars a year or more and also never improved my quality of life until I had enough money invested to be able to sustain it indefinitely even now. that I've moved to a new place that actually costs money because I'm not going to rent it all out. I made sure my investments could cover that cost so I never spent more than I earned on my investments and that is what has given me the freedom to have the option to retire at any time, even though I love working and have no plans to retire. stop doing it soon, but in general that is the guide, if you want to retire at 30, there is no magic pill.

There is a way to make this happen, but it all comes down to how much money you are saving, how much money you are earning, and how much money you want to spend in retirement, and it really helps significantly to leverage your time, getting paid based on results. your money is constantly investing and as usual hit the like button for the YouTube algorithm so with that being said guys thank you so much for watching I really appreciate it as always make sure to subscribe hit the notification bell and Also feel free to add me on Instagram.

I post almost daily so if you want to be a part of this feel free to add me there as on my second channel the Graham Stefan show I post there every day I won't post here so if you want to see a new video of mine every day be sure to add yourself to it and lastly if you want your two free shares use the link below in the description and weeble will give you two free shares when you deposit 100 on the platform with one of those shares with potentially worth up to $1, so if you want your two free shares and get two shares closer to early retirement at 30, use the link below, let me know which two free shares you will get, thanks.

Much to see and until next time.