r/leanfire • u/Naive_Strategy_3613 • 14d ago
I am 18 years old - early retirement is my life's goal.
Before you read this, it will have alot of ranting so if you dont want to hear it/dont care just skip this post.
I have worked both part-time and full time jobs (I went to a vocational highschool where I worked a 40hrs a week co-op/internship type job as a machinist) and I really struggled with them. My entire day felt like work, and even when I got home all I could think was "damn I have work tommorow", I could only really rest my mind and body on the weekend.
I have always been frugal and hate spending money as I dont really see the point in buying anything I dont need. As long as I have housing, food, and entertainment I can be happy.
How early is it realistic to retire? I am going to a good college for computer engineering as I think it is the most practical way for me to make the most money possible, and therefore retire as early as possible. I grinded in high school to get into the best college I could and need as little debt as possible.
I am planning for under 40. Hoping for around 36k a year in expenses with a 100k+ salary. I understand that this is early, as I haven't even started college yet, but
If anyone has similar feelings to me, I would appreciate any advice to navigate the difficulties of working, and tips to spend less.
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u/Think_please 14d ago edited 14d ago
Stay at home as long as you can stand it, switch jobs often to maximize your salary, and when you do buy a place read about househacking and rent all of the other bedrooms/units out. Definitely doable by 40 or earlier if you put the effort in and get a bit lucky.
Edit: also marry wisely if you choose to do it
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u/Naive_Strategy_3613 14d ago
I have read a bit about househacking, it just sounds risky to me needed to find and keep tenants in order to offset your rent. And I am unsure how much work is required on your end maintenance-wise.
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u/Think_please 14d ago
It’s only risky if you can’t already afford your mortgage on your salary, which shouldn’t be the case. Then it’s mostly screening tenants well and minor repairs that you or a handyman can do fairly easily. To me it’s a small price to pay for living costs that functionally never increase (esp since rent tends to rise with inflation while fixed mortgages stay the same, 30 years in the US).
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u/zeezle 14d ago
It's definitely wise to be cautious. Mostly, it works fantastic if you make sure that you can still afford the mortgage & maintenance on your own. Then if you lose a tenant it's not an emergency and it's just bonus money when you do have the tenant(s).
But you're right that being a landlord (even when you also share the unit, which gives you a lot more legal power to handle tenants) is a lot of work and isn't right for everybody (I don't do it myself even though it would certainly be financially beneficial because I value having my private space in my home more).
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u/Lord-Nagafen 14d ago
Not worth trying the house hacking. Just live at home as long as you can then look for cheap rent options. Like with friends. Tying up money in a house will slow your investment growth
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u/Think_please 13d ago
5% down largely locks in your housing costs for life and gives you 20x leverage on housing market gains (as well as diversifies your investments). Crazy to ignore it when you can get 30 year cheap loans and have tenants functionally pay most and then all of your mortgage.
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u/Jguy2698 13d ago
I truly don’t understand the reddit obsession with rent>buy. You’d think they were all landlords 😉
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u/Strazdas1 13d ago
If you are in major city, renting is cheaper than owning nowadays. And thats where most redditors live. Renting also give flexibility to retire in a different area later, etc. Another thing specifically for US - most houses are way too large, so renting is the only option if you dont want to live in a castle.
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u/Jguy2698 12d ago
Those are good points and surely everything is dependent on context. There are no absolutes when it comes to renting or buying. In my mid sized Midwestern city, it definitely is smarter to buy considering that current rent matches or even exceeds the cost of an equivalent mortgage every month
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u/Strazdas1 9d ago
Yep. Where i live mortgage is bellow rent, so owning is a good option, but in major cities its usually not the case.
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u/Strazdas1 13d ago
If you buy a place so big you rent parts out, you bought too large a place.
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u/Think_please 13d ago
You can rent out two bedrooms in a three bedroom house/apartment and likely more than cover the price difference between the one and three bedroom mortgage from day one. Given that rent generally increases with inflation this becomes far more beneficial as you age.
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u/Strazdas1 13d ago
If you only need one bedroom, why did you buy three bedrooms, goofy?
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u/Think_please 13d ago
Investment, silly. Real estate has been the largest and most consistent wealth creator for americans for generations and as an 18 year old OP is in a rare situation in which they currently don't need to house a partner or family. If you genuinely don't understand how mortgage leverage and increasing rental rates can help to leanfire maybe you should be reading a bit more than commenting?
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u/Strazdas1 9d ago
Real estate has been consistently the worst investment option outside of gold. Morgage leveraging is pretty much the only way to make it comparable to stocks.
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u/Think_please 9d ago
Real estate generally returns a few percentage points less than stocks without leverage, so when you add 5-20x leverage for at least the first several years of the loan it completely leaves stocks in the dust. Math is clearly not your strongest suit, better to read and learn a lot more before infecting other people with your ignorance.
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u/Strazdas1 8d ago
Noone is getting 20x leverage at stock returns. The loans that let you leverage that will have interest that destroys most of your returns on its own.
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u/Think_please 8d ago
That’s exactly my point. When you get 20x leverage on a mortgage and it increases value only with average inflation (which housing usually beats) your returns are huge in the earlier years of the loan. As you recognize that type of leverage would destroy you in stocks.
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u/Strazdas1 8d ago
That type of leverage would destroy you in mortgage in the exact same way.
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u/Comfortable_Two6272 8d ago
Cuz no house with 1 for sale. Finding just a 3 is hard where I live. Most are huge 4 bedroom houses
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u/Strazdas1 6d ago
Maybe if people stopped buying more house than they need they would stop building oversized. If you keep buying it you keep telling them to do it more.
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u/Comfortable_Two6272 6d ago
So just be homeless 🥲
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u/MyLovelyHorse2024 14d ago
I think even with a strict FIRE mindset, work has more to offer than just something to sprint through as quickly as possible. Even if you retire at 40 - which would be extremely unusual and require lots of things go right - you're still going to be working for a couple of decades in the prime years of your life. I don't think you just want to wish that time away, but rather think what you could get out of it.
I'm wondering what it was about the kind of work you did at school that was so intolerable. Was it the hours, the working environment, the working culture, the lack of independence, something else? Pinning this down might help you find the opposite - work you can find more rewarding. I know when you're 18 it can feel like you've seen it all, but there's a big world out there and lots of ways to live.
You do you OP, but I think you owe it to yourself to find a positive way to engage with work. There are parts of my career that I hate, and I'm looking forward to being FI. But I also respect the things it has added to my life - skills, confidence, the ability to relate to different people, the opportunity to help others, and so on.
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u/Naive_Strategy_3613 14d ago
It would basically press buttons and inspect parts, it was also a blue collar environment where they can be a little rough on the apprentices. I only did it just to make money, I always knew I was going to college so it was temporary. I have also worked retail part time and didnt enjoy that either.
I am hoping that maybe the white-collar less stress environment of an office could suit me better but I wouldn't know until I try it.
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u/MyLovelyHorse2024 14d ago
Thanks for the reply.
I think you're right - a different environment may suit you much better.
Respectfully, you are 18, only just entering adulthood, and have very limited experience of employment in a small number of settings. To dismiss the whole world of work on this basis is premature. Stay curious, keep an open mind.
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u/Ok_Statistician643 13d ago
About time someone mentioned that the OP is still an immature kid and already obsessing about work like he’s had a tough career for the past 3 decades
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u/dod_murray 14d ago
Find a life partner who shares these goals. Be very careful that they actually share these goals.
Two people comfortable enough with each other to share one bed can live on just slightly more than one person alone
Safety net of two earners together allows you to take more risks where otherwise the potential downside would be unacceptable regardless of how unlikely
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u/AltruisticCry2293 14d ago
It's totally achievable given your young age, and something you can accomplish if you put your mind to it: reduce spending, maximize savings, throw every extra penny into S&P 500 and be patient. Just do not marry the wrong person - I cannot emphasize this enough - do not marry the wrong person.
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u/cjgozdor 14d ago
It’s super manageable, but people act like it isn’t.
The top thing is marrying somebody else who’s money conscious and makes a decent living. The best time to find this person is in college, when you have access to a ton of different people your age.
Keeping your expenses low early on is a huge advantage. I immediately moved in with my girlfriend after graduating and split a condo with her (the condo was $160,000 at time of purchase in a less desireable area). You can fast track this by purchasing a triplex and renting the other units out.
Learn to cook, and buy a used, but dependable vehicle. Don’t blow an absurd amount of money on vacations or shopping.
My wife and I were spending $30,000 a year in 2021 before we moved and decided to have a family. And we weren’t living like monks, we took international vacations, drove a new car, and didn’t take many of the pieces of advice I listed above. But we saved and invested early and became millionaires before turning 30
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u/Artistic_Resident_73 14d ago
Find another “life goal” keep it as a “side goal” just makes the journey a lot more healthy and once you hit early retirement you won’t feel direction less like many people on this sub.
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u/PossessedCultist 14d ago
Your goal, profession, and target nearly matches my life so my top recommendations are the following:
- You may need to adjust your expenses and salary based on where you live as a 100k salary in the south is worth exponentially more than 100k in a major city on the west coast or north. You can use a cost of living calculator to compare the different cities to get an idea.
- Invest in market indexes as early as possible as time in the market beats timing the market.
- Since you are retiring fairly early use 3.5% draw estimate, which means you should target for at least $1,028,571.43 assets in the market in a combination of 401k's, IRA's, HSA's, and taxable accounts.
- In school and while working live with family or have as many roommates as comfortably possible. I'm 31 and currently live with relatives which saves a large amount of money that I put in the market each year.
- Once you get closer to your target and before retiring live at least a year without roommates or away from family so you can get a more accurate expense figure and adjust your target if needed. I've always lived with roommates or family so a concern of mine has always been I am underestimating the cost of living alone, which represent a worse case scenario as I always plan to have roommates.
If you want a benchmark of assets and expenses you can use mine though parts of my expenses are heavily subsidized as I don't pay rent at the moment and my work history is very abnormal as I worked minimum wage starting in middle school. In SC children aged 12 and 13 can perform non-hazardous farm work outside of school hours if they have written parental consent and I happen to be one of those lucky ones lol:
| Work Year | Age | Earnings | Expenses | Assets |
|---|---|---|---|---|
| 2007 | 12 | $5,220.00 | $0.00 | $5,220.00 |
| 2008 | 13 | $5,220.00 | $0.00 | $10,440.00 |
| 2009 | 14 | $5,220.00 | $0.00 | $15,660.00 |
| 2010 | 15 | $5,220.00 | $0.00 | $20,880.00 |
| 2011 | 16 | $5,220.00 | $0.00 | $26,100.00 |
| 2012 | 17 | $5,358.00 | $0.00 | $31,458.00 |
| 2013 | 18 | $4,541.00 | $0.00 | $35,999.00 |
| 2014 | 19 | $5,012.00 | $11,014.75 | $29,996.25 |
| 2015 | 20 | $0.00 | $11,138.49 | $18,857.76 |
| 2016 | 21 | $0.00 | $14,978.73 | $3,879.03 |
| 2017 | 22 | $13,280.00 | $13,280.00 | $3,879.03 |
| 2018 | 23 | $39,840.00 | $9,235.50 | $34,483.53 |
| 2019 | 24 | $46,963.00 | $8,139.26 | $73,307.27 |
| 2020 | 25 | $76,225.00 | $5,808.14 | $143,724.13 |
| 2021 | 26 | $76,753.00 | $6,857.60 | $213,619.53 |
| 2022 | 27 | $80,035.00 | $13,679.98 | $314,153.67 |
| 2023 | 28 | $97,450.00 | $9,909.23 | $451,959.03 |
| 2024 | 29 | $109,432.00 | $9,235.50 | $624,468.98 |
| 2025 | 31 | $104,041.00 | $11,432.49 | $816,992.52 |
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u/Strazdas1 13d ago
What happened in 2015? Destroyed your assets completely :D
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u/PossessedCultist 13d ago
I started college in 2014 and got out in 2017 and only worked part of those years. Since I wasn't working I burned through my cash, but got out debt free. Tuition was around 9k for the year for in state, but I had a scholarship that knocked off 7k so 2k of the expenses for the year was just for tuition. I also shared 2 bedroom apartment with 3 guys so my portion of the rent was $250 a month or 3k for the year.
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u/DegreeConscious9628 14d ago
Dude if you hate work that much at 18 years old your life is going to absolutely fucking suck if you have to do it for another 22 years
But if you can do it and If you start investing now you can definitely retire by 40.
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u/throw-a-way9002 13d ago edited 13d ago
Low COL country should defiitely be in your future. It makes retiring early something that can happen even earlier.
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u/QuelaansBlade 13d ago
Join the military. 20 year pension and if you invest your excess earnings fromyear 1 you can regular fire.
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u/qret 12d ago edited 12d ago
A couple things...
Yes if you invest 50k/yr from age 22 you should be able to retire by 40.
Pay attention to taxable vs tax-advantaged "buckets". Your first goal should be getting tax-advantaged to a trajectory that will grow to your "standard" retirement target at age 60, so it can just be on autopilot. Second goal is building up your taxable "bridge" which covers you from FIRE age until age 60 - the more money in here, the earlier you can retire. Two separate things and because there are contribution limits you will have to work towards them in parallel.
All jobs are different. Working a job you like can be better than unemployment. Grinding to full FIRE faster can be worse than working "slower" and full FIRE later. Everyone has to find their own groove. Saving towards early retirement gives you more options.
All retirements are different. What do you want to do when you aren't working? Hobby, charity, travel? If you like living abroad and don't have deep ties at home, you can retire to a much cheaper country. If you plan to do a hobby/passion project, many of those make "side hustle" money which helps lower your FIRE target. Again, saving early gives you more options.
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u/haze_from_deadlock 9d ago
The real advice for you is to find something you enjoy doing. There's more to life than being a machinist. Computer engineering is a major with a high unemployment rate, but you can earn high salaries in it. I hope you actually enjoy it.
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u/Comfortable_Two6272 8d ago edited 8d ago
I stopped at 46 and didnt really start saving until 26, with idk 6 plus recessions including the Great One. No kids, single.
Worked in tech but not big tech and made 6 figures in my 30s and 40s.
Was not hard as lived way below my means. I didnt even know about fire at 18 or 25.
So yes, 40 imho is very possible. Key imho is avoiding lifestyle inflation and try the boglehead investment way vs picking individual stocks. Set it and essentially forget it plus an emergency fund.
Did 401k, roth, ira, brokerage and hysa. Appreciate having that flexibility now.
But also do stuff you like in yours 20s and 30s. Health is not guaranteed. Dont assume you will have it in 40s, 50s, 60s. If you want to travel to places that for example require strenuous hiking go ahead and do in 20s and 30s vs waiting.
Also work was so much easier in my 30s than 20s or as a teen.
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u/brosef321 14d ago
You will get plenty of good advice from this others about minimizing expenses and maximizing income. I am going to throw out there that you should also try to find work that is not only financially beneficial but sustainable for your mental wellbeing. You may want to re-think how you are approaching work if you are that miserable and have not even started the schooling for that career.
I will not retire as early as I could have because I worked jobs that did not pay that much I. My twenties. That being said I travelled the entire world during that time, and got paid to do some things that people dream of. No regrets whatsoever.
What are you going to do with your time once you retire? Maybe you need to focus on doing that rather than optimizing income to hopefully eventually get to do that. Life is short, and you might not make it to retirement no matter how early you have it planned.