I asked 3 people how they retired before 40 and they said same thing | Personal Finance | Finance
A trio of young retirees who achieved the enviable feat before turning 40 have revealed how they managed to do it. A dream shared by many, early retirement may well feel like an unattainable goal, one that can only be achieved when we win the lottery or find ourselves in the possession of a large inheritance.
Yet, in three exclusive interviews, Eric Hughes, Andrew Hulbert, and Naz Avo have demonstrated that it could be possible for anyone, provided you have the dedication, work ethic, and skills to make it a reality. The entrepreneurs have laid out what it takes to leave the world of work behind and become financially independent, while still enjoying the potential decades ahead to enjoy your life without the drudgery of the morning commute, deadlines, and even alarms. In the process of this exploration of early retirement, one prevailing theme has emerged – save, save, save.
Eric Hughes (retired aged 39)
Eric Hughes, 45, from Washington D.C is the founder of Rental Income Advisors. He worked as an executive in the retail industry, specifically in the fields of store operations and merchandising systems. Eric, who developed a portfolio of rental properties and made enough money to retire, opted not to quite put work in the rear-view mirror just yet.
From home, he writes his blog, runs a coaching business, and keeps the books for small businesses. Yet, Eric now enjoys a “very flexible” schedule, frequent holidays, time off when he needs it, and may even be spotted on the golf course during the week.
Eric’s approach to financial independence
In terms of his approach to early retirement, Eric hinted that financial independence could well be a case of how you approach saving. Indeed, he described himself as an “aggressive saver”.
He said: “I was an aggressive saver and investor during my career in retail. At the point I retired, the key insight was to redeploy my capital into more cash-productive assets — specifically, low cost rental properties with the potential to produce cash flow.
“In 2018, I sold my primary residence and became a renter, while also liquidating some stock holdings; I used the combined proceeds to buy 16 rental properties in the Memphis, TN market, and have since scaled to 25 properties.”
Life as a retiree
Eric said it felt “incredible” to finally be free of work, noting how he’s no longer dictated by an alarm and how he now owns his time in a way that he “never had before”.
He also highlighted the incredible impact early retirement has had on his personal life, pointing out that the stress in his life is a “fraction of what it was” during his office career.
Imparting some of his wisdom to others, he highlighted a “pernicious trap”, that being what he termed “lifestyle inflation” – the temptation to “spend more and upgrade aspects of your lifestyle”.
He stressed that the act of resistance to these temptations is a “‘superpower’ often found among those who retire early”.
Eric’s tip to achieve early retirement
When asked to name the steps everyone should take now to achieve early retirement, he added: “‘Growing the gap’, or the difference between the amount you earn and the amount you spend, is the critical engine of financial independence, particularly in the early stages.
“This difference should be invested, so that the power of compounding is working for you. “Growing the gap” can be achieved to some degree by cutting expenses, but for many people, earning additional income is also important.
“I did this through a strong focus on advancement within my career, but it can also be achieved through a second job, side hustle, or business venture.”
Andrew Hulbert (retired aged 37)
Andrew Hulbert, from Oxford is the founder of property services firm Pareto. He founded a business in the property services sector when he was 27, with its humble bedroom beginnings developing into a firm with a £75 million turnover and 500 staff.
Hailing from a working-class background, Andrew decided to “completely dedicate” himself to his business efforts, working “every waking hour for ten straight years” to achieve his goals.
His sacrifices, which included “friendships, hobbies, fun, holidays and almost anything enjoyable”, ultimately paid off, as his business delivered £100 million in exit value (the approximate value of a firm when it’s sold), meaning he could retire.
Live beneath your means
Similar to Eric, Andrew clearly understands the importance of saving. In fact, he even had some practical advice for anyone hoping to successfully squirrel away their cash – “live beneath your means”.
Andrew said: “Live beneath your means. Focus on spending less than you need to each week so you can start to build up savings. For example, if you budget £100 per month for nights out, that doesn’t mean you have to spend £100.
He added: “Concentrate on what really matters and build up savings pots that will give you the freedom to make choices. You have to make sacrifices. Sometimes you have to go without in order to reach a higher goal. It is never easy, and it is never a straight path.”
An idyllic life
Once he achieved early retirement at the young age of 37, Andrew described the feeling as “strange” and noted that it was “quite surreal when you see eight figures appear in your bank account”.
He bought his parents their house, gave his dad £500,000 to retire five years early, bought his sisters their houses, and bought a farm to live on (where he now enjoys an idyllic life with his family).
Andrew even bought himself a quad bike and a “bright yellow McLaren”, but he later sold this as he “did not enjoy the constant attention for something so materialistic.”
Staying financially independent
When asked to explain how he ensures he stays retired with all those years ahead of him, Andrew added: “I have invested my money across a variety of areas that deliver a reasonable return each year. I have not taken any unnecessary risks.
“When you make a significant amount of money, you become quite protective of it. So I have a low-risk portfolio that provides a steady return. I live off the growth rather than the original capital, so the base amount remains intact.”
Naz Avo (retired aged 32)
Naz Avo, 34, who’s currently based in Chiang Mai, Thailand, spent a decade in software engineering . Technically he retired aged 32 from the wealth he accumulated. But, while he now enjoys a much more relaxed lifestyle, he opted to step back into the workosphere to run the employee surveying and engagement platform FeedbackPulse.com.
Ever since his days in a Texas high school, Naz, who also consults for small businesses and startups, has dreamed of financial freedom. At the young age of 19, he secured his first programming job.
It would lead to a six-figure salary, the purchase of rental properties, a “growing stocks portfolio”, and retirement at the staggeringly young age of 32. Similar to our other young retirees, Naz was a stickler for saving.
Invest your savings relentlessly
He said: “So, I got on with the savings project right away. By the end of my 9to5 career, I was saving 70-80% of a six-figure salary. First big investment was buying a rental property in Krakow. The rental income fed my growing stocks portfolio. Few years later, I bought another rental property in cash. My thinking was simple – earn a lot at high-paying markets like the US, spend little, invest all the savings relentlessly.”
Naz also described how he enjoyed “constant travel to different countries” and was living a “nomadic life” in his 20s on a budget of $1,500-2,000 per month (£1,100 to £1,500). He now starts his days at 5.30am by choice, takes in some exercise and possibly a sauna, completes some work, rides his scooter to lunch, and then enjoys flexible afternoons.
Avoid lifestyle inflation
Addressing the harmful habits we should avoid, Naz also pointed to “lifestyle inflation with every raise you get”. He then recounted a time when he “contracted” in New York City. He said he saw people with six-figure salaries living paycheck-to-paycheck and “drowning in debt”. Naz also shared his “unpopular opinion” for saving money.
He said: “Maybe unpopular opinion, but you can’t budget your way to early retirement on a minimal salary – you need to make more money. Negotiate the base salary aggressively, switch companies every 2-3 years.
“Once you are earning well, move to a lower cost location. There are a lot of countries where your disposable income will be much higher earning half of what your San Francisco friends do. They keep 25% of their salary, I keep 75%. Can’t beat simple math.”
The importance of diversification
Approaching the topic of staying retired, Naz highlighted the evolving nature of trends and the importance of “diversification”, something he says “helps to keep things balanced”.
He added: “I use 3% rule – spending only 3% of my portfolio annually. It is conservative, but most simulations show following this rule leads to 99% success rate.
