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

What's up guys here's Graham so I posted a video the other week on how much money you should save each age and in that video I detail how much money you should save each year to make sure you're on track to

retire

at age 65. But I made a mistake because a lot of you start commenting that 65 is too long to wait and you want to be able to

retire

early because you could be dead tomorrow so yeah. When enough people comment that they want to retire much sooner, I bet I'll make a video on that and go over exactly what you need to do to be able to retire at age 30 and I'm going to be telling you all this from the perspective of someone who became completely financially independent. in his late 20's, in fact I just recently turned 30 and am very fortunate to be in a position today where if I stopped working I could hedge my lifestyle indefinitely from my investments and still increase my net worth at the same time, so yeah, none of this is theory and I'm not going to talk about false hypotheses from someone who has never done what you're saying. just go over the reality of being able to retire at 30 exactly what you'll have to do to get there and how squashing the like button helps for the youtube algorithm see it's one of the biggest mistakes and oversights people don't make I realize early retirement is that it all starts with a blue light button so once you do that congratulations you are one step closer to early retirement and with that being said let's start the video but real quick I want to thank you to the sponsor of today's video, morningbrew. is a daily newsletter sent Monday through Saturday bringing you up to speed with the biggest business and world news in just five minutes being able to keep up with the latest world events is essential if you want to learn how to make the most of your time and money, especially if you want to retire early and morning beer is the perfect wake-up recap before you get this newsletter, I would have to go through dozens of articles and websites to try and find the information that was most relevant, but now I can wake up and see your newsletter waiting for me with all the most important details and outlines just carefully summarized for you to read, this is not just news, that's usually boring, dense and dry, but on the other hand, the beer of warning injects relevance and information that simply leaves you wanting to read more.

I also heard that Chipotle is testing a new cauliflower rice to add more healthy options to their mix. This is the kind of news you would never have learned if it wasn't for your morning coffee and there's no reason not to join in if you do. If you're interested in technology or trade finance politics, it's completely free and takes less than 15 seconds to sign up, so click the link in the description to sign up for Morning Brew today and stay up to date on the best current events posted. straight to your email and of course with that being said this is how you could use all of that information to retire early ok first when it comes to being able to retire before 30 i want to introduce you all to what is known like the fire movement, which means financially independent, retired early and is a community. of people who dive into the analysis of exactly what it will take to be able to retire at any age.

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

years

and it's helped me tremendously in terms of getting me to where I am today which is about figuring out exactly how much money you need to support your current lifestyle without having to work another day at his entire life and the math behind it is incredibly simple to begin with. We have five different types of financial independence to aim for. and I'm going to summarize each one for you very quickly because this will determine how you can retire at 30. The first is known as lean fire.

This is a frugal type of financier. independence that allows you to retire from essentials without ever having to go back to work you are not going to retire in luxury or glamour, but you should be able to live in a small apartment drive a car eat some healthy meals at home and have some inexpensive entertainment from Again, it's all about frugality as to what it takes to get there. be spending less than forty thousand dollars a year in retirement then Lean Fire is something to aim for in the second 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 so at this point if you want to quit your job you can and then you can take a nice part time job to pay for all your other expenses as needed like working as a barista it's all about being able to move on to something you could afford 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 a coastal fire this is when you have saved enough money that it can grow to an amount in the future of the that you could be completely financially independent without any additional work, involvement or investment on your part, for example, if you have enough money invested in your 20s, sometimes all you have to do is let those investments grow and then at some point At some point in the future you will have enough money to be able to retire out of number four we have our normal term of financial independence this is our typical version of retirement that most of us think of as being able to live our regular normal lives without having to going back to work sure he probably won't be driving lamborghinis all day and going to and staying at the ritz carlton every weekend but he still won't have to worry about money within reason and you won't 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 to themselves how much money it costs and can i afford it this usually means you'll spend over two hundred thousand dollars a year in retirement and be able to earn what most Americans can only dream of without having to work another day in your entire life, so to tell you exactly how you could reach these fiery milestones , I'm going to 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 all of this in essence really comes down to a few things and this is what you need to know how much money do you need to spend each 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 that you honestly 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 for

starting

how much money you spend will be the most important variable for this whole calculation generally speaking if you are under 30 and want your money to last 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 $100,000 invested, you could spend $3,000 a year without running out of money. you have a million dollars invested you could spend thirty thousand dollars a year without running out of money and so on now how much money you spend is going to have a big influence on how much money you will need to retire because for every $100 a month that you spend, you will need forty thousand dollars invested to For that hundred dollars a month to last forever, by that logic, it also means that for every hundred dollars a month less you spend, you'll need forty thousand less dollars invested and yes, that's a substantial amount, I mean it could be the check someone's year-long paycheck just to spend a hundred dollars a month, so once you figure out exactly how much money you'll need to spend each year, we can move on to the next step which would be how much money you've saved and invested whatever that amount is, just divide that by 33 and that's how much income your investments can replace from there, all you need to do is some super easy math to figure out how much more you'll need to retire, all you have to do is take how much money you spend each year, multiply that by 33, and then, whatever that amount is, how much you'll need before you can consider yourself retired.

This is all based on what's known as the Trinity Study which looked at investment portfolios of stocks and bonds through every year in history and calculated how much you could spend on your investments over a 30-year retirement.

years

and that study found based on hundreds of simulations that you could spend four percent of your portfolio each year and make sure your money lasts you 30 years; However, while a 30-year retirement might work if you're 65 or 70, it probably won't work if you want to retire at 30. Therefore, to preserve more capital so you can retire for a longer period of time, it's recommended make a withdrawal rate of three percent, for example, if you spend 40,000 a year, just multiply that by 33 and You'll need 1,320,000 if you want to be able to retire at 30.

If you want to be able to save 25,000 a year, just multiply that times 33 and you'll need $825,000 invested to reach that goal, so if you want to be able to spend $200,000 a year in retirement again, multiply that by 33, hit the like button and you'll need $6.6 million invested and that's practically all basic mathematics. obviously you will need to know now if you have higher yielding investments like if you are investing in real estate that gives you a return of 5 the same calculation also applies just tweak it slightly for whatever you are investing in and finally the last factor in this equation and that would be how much money you currently make this will tell you how long it will take you to reach that retirement number and whether or not you will have to make more money to want to get it It is not easy to retire before 30 and it is not cheap per se so If you currently make $30,000 a year, save nothing, and expect to retire with $40,000 a year in passive income from $1,320,000 in nest egg savings, you'll need to find a way to earn more money, and you can figure it out by taking your current expenses, multiplying by 33 , then subtracting what you've currently invested and saved, and then what's left over is how much more money you'll have to make from there figure out how much more money you'll have to make to get there before 30 and it's probably a very big number now let's get into the parts that I'm sure you all are interested in and this is how you could retire at 30 now obviously this is going to be a lot different if you're looking at this at 29 and a half and you think but graham I can't retire in six months at age 30. old vs someone else looking at this at age two and

starting

to save as they learn to walk so we're going to open this up instead of how to retire at age 30 so that way more people are 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 which determined that if you are able to save and invest the 70 to 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 only partially listening to this and distracted hey listen to this right now right now if you're watching just listen listen to this if you can save 70 to 90 of your income over 10 years you will have effectively saved enough money to continue your current lifestyle indefinitely and be able to retire without ever having to go back to work, but of course, he found out thanks to the math that the less money you save the longer you have to work but once you can start saving a significant part of how much money you will be able to significantly reduce the time it takes to retire wait a second the time it takes to retire the time it takes to retire that it's very hard to say, but anyway, for example, if you make 70,000 a year, in theory you should be able to retire in 10 years if you only spend 21,000 a year doing that will allow you to live indefinitely in the same style of life after those 10 years and then whatever else you do after that is just the icing on the cake but really the big 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 in your 30s, realistically most people will probably need to save more than 80 percent of their income if they want to reach this goal at an early age.

Get old, like it or hate it, that's the reality of what you'll have to do pretty much if you want to retire early.In your 30s, you'll either have to make a lot of money or spend very little money, but assuming you just want to make a ton of money so you can retire as quickly as possible, I'll give you a rundown and go over the details of what's probably required unless you're earning a hundred thousand dollars a year in a high-paying job right out of college while at the same time living just a few steps above homelessness, you won't be able to retire at age 30 while holding a traditional job.

If you're already making a lot of money, then it all comes down to cutting your expenses. all the money 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 lot of money is working in a career that pays you based on your results and not based on your time the biggest problem you I have to get paid for your time is there's only 24 hours in a day so if you work hourly or have a salary eventually you're going to hit a ceiling in terms of how much income you can make and once you get it achieves, there just aren't more hours in the day, on the other hand, if you get paid for your results, then theoretically 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 working harder.

I will use myself as an example. I started as a real estate agent. The number of hours I worked was completely irrelevant. They only paid me when I sold the house and I was able to take advantage of my time. much better off focusing 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 get to 10 subscribers as it is for me making a video that hits 2 million subscribers funny enough though 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 build on what you do and earn more money without necessarily working more hours that's why I think the best business to be in today is anything you can do from your computer on the internet or anything paid on commission if you use your time efficiently you could end up making a lot more money early on and that's will help you retire sooner or the amount of work and then you'll be in this for years to make it successful but if you want to be able to retire a decade from now you'll most likely achieve that by working for yourself and really at the end of the day, if you want to end up making a lot of money so that you can retire really fast, you have to completely decouple the notion that the more you work and the more hours you work, the more money you'll get to make because that's not true at all in second place one of the ideas i read from the book fastlane millionaire just sums this up perfectly think like a creator not a consumer instead of watching and consuming youtube videos start creating youtube videos instead of going and consuming and buying t shirts and clothes on online sell the clothes online instead of not mashing the like button mashing the like button you have the idea that you need to start creating value and building something not just using and consuming and eventually you are going to have a much better chance of earning a lot money if you really 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 do be able to make a lot of money and retire in 10 years everyone I've met who has been able to retire at 30 has been passionate about what they do and I don't think it's a fluke, find something you like, create a business that pays you based on your results and then take the opportunity to scale it to make even more money and I'm sure at this point some people would like to mention some wild investments like buy try reduce options or buy cryptocurrency but in general how much the riskier the investment and the higher the payouts, the more likely you are to end up losing money, you're not earning anything at all, so at that point you might as well go and buy. lottery tickets because if that works then yes this is how you could retire at 32. and because y'all want details with this stuff with real numbers here you go if you're 20 right now and want to spend 50,000 a year on retirement At age 30 you will need 1,650,000 invested which you 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 if you could find a way to average percent fifty thousand dollars a year in income throughout your twenties before taxes while only spending twenty two thousand dollars a year That's what it takes to be able to retire at thirty with fifty thousand dollars a year in passive income indefinitely so, yeah you want to retire on 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 per year for 10 years.

This all assumes 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 with real estate, like if you could 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 worth two hundred and eighty thousand dollars, but you only pay two hundred and fifty thousand dollars for it, which gives you an extra thirty thousand dollars in free capital, so suppose you spend twenty thousand more dollars fixing it up, and now it is worth market price 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 you paid for it, so you've essentially doubled your money in about a year if you can do something like every 12 to 24 months you can get at retirement age much sooner, especially if that property is generating much more than a three to five percent return, it's all about trying to make your money work for you while living frugally while trying to make as much money as possible i know some of this may seem so graham thats a no brainer but the reality of early retirement is just numbers you have to make enough money to be able to save 70 to 90 of your income for a matter of 10 years and essentially that's what it's going to take if you want to retire at 30.

I was able to do this through a combination of living very frugally through my 20s, my net out cost each month was fifteen hundred to one thousand eight hundred dollars even though at the time I was making a hundred and fifty thousand dollars a year or more and also I never improved my quality of life until I had enough money invested to be able to sustain it indefinitely even now that I have moved to a new place that actually costs money because I'm not renting everything. I made sure my investments could cover that cost so I never spend more than I earn on my investments and that is what has given me the freedom to have the option to retire whenever I want even though I love to work and have no plans to quit early but generally that's the guideline if you want to retire at 30 there is no magic pill.

One way to make this happen, but it all comes down to how much money you're saving, how much money you're making, and how much money you want to spend in retirement and it really helps significantly leverage your time. your money invest constantly and as usual hit the like button for youtube algorithm so with that being said thanks so much for watching i really appreciate it as always be sure to subscribe hit the notification bell and feel free from adding me on instagram i post almost every day so if you want to be a part of it feel free to add me there as on my second channel the graham stefan show i post there every day i am not posting here, so if you want to see a new video of me every day be sure to add yourself to that 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 in the platform with one of those shares potentially worth up to 1 dollar so if you want your two free shares and get two more shares closer to early retirement at 30 use the link below let me know which two free shares you get, thank you. much to see and see you next time