My good friends over at Daily Trade Alert asked me to put together a multi-part series on how I retired at such an early age on a fairly modest day-job salary. So I pulled back the curtain on my entire journey, discussing the ups and downs, the saving, the investing, the hard work, and the rewards. I hope it leaves you with lasting inspiration.
This is the third article. I’m including a snippet, and then you’ll see the jump to the article. Enjoy!
So I revealed in the last article how I was able to save such a high percentage of my net income.
But saving is just one piece of the “blueprint” to early retirement. An important piece, no doubt, but not the whole picture.
As someone who was aiming to achieve early retirement at a very young age, it was imperative for me to use the money I saved to build a passive income stream that would exceed my expenses and outpace inflation.
Exceeding expenses is obvious.
Outpacing inflation is less so, but still important. $1 today will very likely be worth much less in the future.
So I needed to find a source of income that isn’t just passive (so that I can enjoy life), but one that’s growing so that my purchasing power is increasing at least in line with inflation, but preferably in excess of.
But where could that kind of income stream come from?
I’ll tell you in a moment.
Image courtesy of: 9comeback at FreeDigitalPhotos.net.
Jason,
The article was well written. If that does not motivate someone, I do not know what will. Anyone reading that article should realize they need to do something whether it is real estate investing, dividend growth investing or any other form of collecting passive income.
I think a lot of people who work at jobs they hate, should read this. A lot of these people think spending money on having fun liking bar hopping, going to movies, playing golf etc. is their way of motivating themselves to go into their job day after day for years on end. I say use the job you hate as motivation to find ways to produce passive income and have a little fun on the way.
IP,
Thanks so much. I only aim to motivate and inspire. I really feel like if I did this, anyone can. Perhaps not as fast as me. But I also started pretty late in life. If you’re in your early 20s and reading any of this stuff, you have some absolutely incredible opportunities in front of you.
If you love what you do, that’s great. But I think you should still have options. The problem, however, is that most people (whenever they do studies and surveys) hate what they do. And they feel trapped. So they spend money to make themselves feel better. It’s just an endless cycle. It’s a trap.
Thanks for dropping by!
Cheers.
Hello Jason:
I just finished reading your current article. Fascinatingly, simplified article.
I just forwarded it to my 24 yr old daughter.
I have noticed that you have rare gift of simplifying a complex, confusing (sometimes on purpose!) ideas.
I remember a while back you had mentioned in an article about going to a store to buy an item which is on sale. And it didn’t matter if items sitting next to it were on sale or not. You were interested in only the item on the sale. I think you were referencing to market over all or something of that nature. I found the idea / thought very thought provoking and very very simple. It was great!
I read your biography and it is truly inspiring for anybody.
I wish you the very best going forward. You are a classic “Half-Full-Glass” guy. More power to you!
Vijay
Vijay,
Very kind of you. I appreciate that so much. I take a lot of pride in the craft. And I genuinely want to help people. To do so, I think one has to make complicated subjects as simple as possible. Once people see how something works, they’re able to understand it. And when they’re able to understand it, they’re able to actually make some intelligent decisions about what to do.
Appreciate you taking the time to read the book. I hope to follow that up with a second one at some point here. I still have so many ideas circulating in this brain of mine! 🙂
Hope you continue to stop by and enjoy the message.
Best wishes.
How big is the current dividend yield per year as a percentage of your total portfolio value?
Nicklas,
You can see my portfolio and the current dividend income it produces here:
https://www.mrfreeat33.com/portfolio/
Take care!
Jason,
Thank you for continually sharing your story and your thoughts. It propelled me to start my own journey a little over a year ago and I can honestly say that my wife and I’s future is much brighter for it. Keep doing what you do and we’ll keep reading and learning!
DR,
That’s good stuff right there. So glad to hear it! 🙂
Appreciate the support so much. Hope you continue to enjoy the content and inspiration.
Cheers.
Jason,
I’m amazed at how quickly you sussed out the key investment principles in such a short time, especially while working full time.
Your reasoning and critical thinking is solid.
Best,
Mike
Mike,
Thanks so much.
I’m really just glad the me of 2009/2010 started to make the moves that eventually got me here. I’m very thankful. Would love to travel back in time and give him a big hug. 🙂
Hope all is well!
Cheers.
Thanks for sharing – and it is great for people to see a real life example of how it can work – its not a myth, it is relatively straightforward in terms of the blueprint you lay out. It just isn’t easy for a lot of people, and I think that is where people often get confused. Do they really need the McMansion, or that nice big new pickup truck that they use once a month?
Keep providing the inspiration – its a shame I came to the FI side late in the day, I can only imagine where I would be now had I started in my early 20’s – the main thing though is not to regret it, or look back. You are where you are – look to the future!
FiL
FiL,
Indeed. We started thinking about putting this series together precisely because there are so many people out there that still aren’t aware that there’s a path. But it’s very possible. You just have to want it and be willing to make some key lifestyle changes. But the blueprint is here. I just want to help and inspire. 🙂
I used to wish I would have started earlier. I could have been in a position to retire before 30. But I don’t wish that anymore. All that’s happened has made me who I am today, and I’m pretty happy about that.
Look to the future, indeed!
Best regards.
Hi Jason,
Indeed it is – and hopefully people will see this and realise it is possible – especially with someone who has already done it showing how it can be done! The challenge is for people to make those lifestyle changes – that is the biggest challenge!
You are spot on – the past is what makes us – whilst I wish I had I would not trade in the experiences I have had in my life so its always about the balance of the journey!
Have a great weekend,
FiL
Another informative article. Thanks for sharing your philosophy and methods.
But…your portfolio only provides about $11,000 in dividends per year at this point. Where do you get the other $39,000 to balance out your expenses without working?
David,
I guess I don’t understand your question.
I don’t spend $50,000 a year now, nor have I ever.
You may want to re-read the second article, which goes over living frugally so that you can acquire the excess capital necessary to invest:
http://dailytradealert.com/2016/12/30/how-i-retired-in-six-years-on-a-50000-salary-part-2/
Moreover, I published my income and expenses for years over at Dividend Mantra, so you can see what that looked like for me. And I’ve published a few reports on my expenses here on this site since it went live back in September.
Take care!
Thanks for sharing your story. It might be “old news” for those of us that have followed you since the Dividend Mantra days, but that does not make it any less valuable.
Like many have stated, you have a talent for taking an investment strategy and making it simple to understand.
Sincerely,
ARB–Angry Retail Banker
ARB,
Thanks, man!
Yeah, it might just be a lot of recounting things for people who have followed along for many years. But I always try to keep in mind that there are countless new people joining the movement every day. 🙂
Hope you’re having a great weekend.
Best regards.
Jason,
I really enjoy reading your journey and your story of where you got to today. It has brought so much inspiration and motivation to my life. I enjoy telling my friends and family about your site and what you stand for. I hope that if they hear it enough from me, they will catch the inspiration bug, too. Best of health and wishes for you in 2017!
Best regards,
Joey
Joey,
Thank you so much for the support. It’s people like you that make all of the work and writing worth it. Truly.
And I appreciate you spreading the word. I only aim to help and inspire. The more people I can potentially positively impact, the better. 🙂
Wishing you a very happy, healthy, and successful 2017!
Best regards.