27 Jun

The Impossibility of Early Retirement

The front page of MSN.com recently featured an article titled How this couple saved $1 million and retired in their 30s. Bruno was happy with this, since it’s always a great opportunity to potentially inspire and encourage new readers about financial independence. However, unbeknownst to Bruno, the posting of this article also turned out to be a poking stick that gently nudged a hornets nest. The incalculable fury of two notorious internet gangs was henceforth invoked. They call themselves The Doomers and The Denialists and upon reading about Bruno, they conspired to join forces and unleash a rainbow of disgruntled comments online. Tighten your internet seat belts folks, shit’s about to get serious.

It started with The Denialists tap-dancing all over the comment section of the MSN article, dropping such golden denial nuggets as:


These casual Denialist complaints are pretty silly and are mostly explained away with two posts we’ve already made: How We Saved $1M and Early Retirement With Zero Income Taxes

However, over at the Early-Retirement.org Forums in a thread so far totaling 19 pages, things get more serious. The Doomers turned up the volume on their Rapmaster 2000 megaphones and loudly proclaimed that our failure is all but a sure thing – it’s really just a matter of time until we’re homeless.

To summarize the all the negative comments into one, I fabricated this one:

 “these delusional millennials are gonna run out of money faster than the average bible belt teen gets pregnant!”

Doomers, I would like to say three things:

  1. Someone please correct me if I’m wrong, but I believe I’m allowed to make good-natured bible belt jokes, since I now live in the South! I have a free pass and it feels really good.
  2. Before anyone makes any North Carolina jokes, I would like to inform y’all that according to the latest study by the CDC – North Carolina is kicking teen-pregnancy’s ass and we’re currently in the same league as Colorado and California. HELL YEAH!
  3. Thirdly, back on the topic of running out of money – I think we urgently need to sit down together and have a friendly fireside chat on the basics of early retirement:

Revisiting The Basics of Early Retirement

Part I: The Ultimate Dilemma

A Serious Situation: Congratulations! You’re a self-conscious being that exists on a mote of dust suspended in a sunbeam, in a universe that is 13.8 billion years old. Your own species has been around for 200,000 years, has been civilized for 5,000 years, and only for the last 150 years have started making huge technological leaps forward. You’ve won the lottery ticket to be alive right now! Immortality and Artificial Intelligence have not yet been achieved, but they seem to be just around the corner. Average life expectancy is currently only 79 years. Knowing these facts, how would you like to spend the remaining years of your life?

One Possible Answer: You could aim to achieve personal freedom through financial independence, and then proceed to enjoy the short blip of time you have left on this planet pursuing whatever makes you happy! One way of accomplishing this is to analyse economic opportunities, become skilled in a trade or profession that is highly rewarded, then hustle to save money and ultimately achieve your freedom!


The big question mark is identifying exactly how much money you need to become financially independent. Once you know this number, you can work your ass off to reach this goal and ultimately quit your job in a blaze of glory once you cross the finish line! When your boss orders the celebratory office cake for your last day, the icing may read some like:

Congratulations, you’re now FREE from the chains of wage slavery!!

Ok, maybe that’s a bit over the top. But I should mention that alternatively you could try your luck and roll the dice at finding a job you actually love. But, since only 13% of people actually like their jobs, the odds are sadly not in your favor. More than likely you’ll be one of the remaining 87% of us who hustle our careers primarily for the money.

Part II: How much income do you need to live a comfortable life?

The Census Bureau actually answers this question for us by using Consumer Price Index data to identify how much money is needed to “provide goods and services commonly taken for granted by members of mainstream society”. It’s called the poverty threshold, and for a family of two in the US the amount is: $15,930.

I’m sure it’s possible to live a decent life on this amount of income, but let’s throw caution to the wind and actually double this number. I’d like to make the wild proposal that the annual amount of $30,000-$35,000 is more than enough to live an amazing, comfortable and happy life.

Taking a look at Annual Household Incomes for the US, currently 28% of all US Households make LESS than $30,000 per year.


Before we get too deep in this, how exactly do we define “comfortable and happy” anyways? Could we please randomly survey a number of individuals from human history and ask them: “What would you need to have a comfortable and happy life?”

Considering it’s been less than 100 years since electricity, radio, television, telephone, indoor plumbing, refrigerators, computers, the internet, automobile and aviation have been widespread – a typical human from history might just answer: “Uhh, I’d be happy with shelter, food and safety please.”

Despite living in a Golden Age of Information and Entertainment, most people seem to be jogging on their own hedonic treadmill and keep grasping at happiness by accumulating more money, status and material goods. We’re all living more luxuriously than all the Kings and Queens of history, but strangely it’s not enough!

To the Doomers who balk at living on “only” $30,000 per year, I question what essential part of life they think is being skimped on? Truthfully, by any measurement, we’re all ridiculously spoiled. What exactly do they think we need more of? How about a laptop, a smartphone, fast internet that connects us with the world and provides unlimited entertainment, a big screen TV, and perhaps a reliable vehicle with four wheels that can easily travel at 120km/h? How about a bunch of delicious fresh foods from around the world available at your local grocery store with very reasonable prices??

I have some really great news: ALL OF THESE THINGS can be had with a $30,000 per year lifestyle! I’ll leave it to Captain Bozo to react to this wonderful news:


Part III: So how big of a portfolio do you need to save?

While it’s impossible to predict the future behavior of markets (unless you’re an inside trader), the best we can do is analyze previous market behavior and speculate about the future. The famous Trinity Study did exactly this and has proposed that it’s reasonably safe to annually withdrawal 4% of a portfolio made up of 75% stocks and 25% bonds without depleting it over a period of 30 years. This study provides the basis for the popular “4% Safe Withdrawal Rate” that many base their retirement plans on.


It’s true, many believe that using a 4% Safe Withdrawal Rate (SWR) as suggested by the Trinity Study is overly optimistic and therefore too risky. It’s all been endlessly debated online, and many (including Amanda and I) opt to be extra conservative and use a lower SWR – we aim for 3%.  One “flaw” with the Trinity Study is that it assumes annual spending will continue to increase each year (at 4% of the original portfolio amount, plus inflation) regardless of market performance. An easy improvement, if you want to be more conservative than the Trinity Study, is to simply reduce your spending when markets are down – something Amanda and I are also doing.

So how big of a portfolio do you need to save? If you want to live on $30,000 per year (this amount would increase with inflation), and you want to use the very conservative 3% Safe Withdrawal Rate, then you need to save up $1,000,000 to become financially independent.

If you want to dig deeper, there are fantastic tools available to play around with early retirement numbers: cFIREsim and FIRECalc are two of them. You can enter a portfolio amount, expected annual spending, and number of future years you plan to live – and these tools will run through all stock market data since 1871 and tell you the number of market scenarios where your portfolio will run out of money.

For example, with $1,000,000 and an annual spend of $35,000, FIRECalc gives a 98.8% chance that the portfolio will last 60 years. cFIREsim provides even more options – for example it allows us to set a variable spending rate of 3.5% with a minimum floor of no less than 3.5% of the original portfolio, resulting in a 100% success rate over 60 years. Here ‘s the graph showing all possible market outcomes over time:




Are these tools bulletproof – most definitely not, especially when applying time-frames of 60 years. But they’re certainly helpful.

What’s going to happen in the future? No one knows for sure. My money is on transport truck and taxi drivers being replaced by driverless vehicles, our farms and manufacturing being almost completely automated by intelligent machinery (robots), and last but not least: we’ll eventually have some sort of Universal Basic Income.

On the other hand, even if we do have serious market downturns like the Doomers predict – we’re ready to tighten our belts, cut our fancy-pants luxuries, reduce our traveling, eat more basic foods, hustle some Airbnb income, and do some side contract work if needed.

Our willingness to be flexible with these extremely conservative precautions guarantees that our portfolio would survive even the zombie apocalypse that the Doomers are certain is just around the corner.

That being said, I believe there is more reason to be optimistic about the future than to be pessimistic. Sit back, relax, and enjoy the show folks. If technology trends continue to advance exponentially, who knows, maybe we’ll be lucky enough to achieve immortality in the next 50 years!

  • Anna Crisalli Paffrath

    Loved this article!

    • Travis

      Thanks Anna! Hope you liked the grumpy cat picture!

      • Anna Crisalli Paffrath

        I enjoyed your article. Enjoy your retirement, and those negative comments you received is because those people are not savy enough to understand how to be living within their means.

        • Anna Crisalli Paffrath

          BTW the cat on Trumps head.

  • Got to love the internet trolls! Keep doing you.

    • Travis

      The internet wouldn’t be the same without them!

  • PhysicianOnFIRE

    Congratulations on the feature and living the dream, having done “The Impossible.”
    Haters gonna hate, but you gotta love the publicity. If enough of these stories are plucked from the FIRE blogs and presented to the mainstream media, more people may realize that an incredibly early retirement can credibly be achieved.
    Or maybe we’re a bunch of liars.

    • Travis

      Thanks PoF!

  • Freedom35

    Love the article! Gotta remember that quote: “People Who Say It Cannot Be Done Should Not Interrupt Those Who Are Doing It”.

    • Travis

      Thanks F35! I’ll see your humorous quote and raise you this one:
      “Before you insult a man, walk a mile in his shoes. That way, when you insult him, you’ll be a mile away, and have his shoes!”

      • Ryland @ The Hidden Green

        LOVE that quote! I fully believe everything will be 100% okay over the next 60 years at your ~3% (super low! way to go). But one question I’d love to explore more:

        In the CFIREism experiment that hit 98.8% success, what were the causes of the 1.2% of time that were unsuccessful? Then you can even play your cards to that as well, just in case you are in that 1.2%.

        PS — I’ve been a fan since the start of your trip! You guys jump started my $0 tax return exploration. So thank you! I can’t wait to follow your lead once I hit FI

        • Travis

          Hey Ryland, thanks a lot! I think the greatest risk to the lifespan of a portfolio is during the early years. So I would imagine that those 1.2% failures were during major market drops during first five years.

          I’m thinking that retiring immediately before Black Tuesday at the start of the Great Depression would not have been favorable…

          • Ryland @ The Hidden Green

            Great point. And there’s lots you can do to cushion that drop if it does hit within the first X years. Great stuff

  • Nice to see another early retiree named Travis. I “retired” a year ago at 25. While I clearly stated that I meant that I was partially retired from investments (about 60% FIRE) and that I was going to do random hobbies like tutoring to get a little side income to make up the difference, forum users including ppl at bogleheads blew up at me.

    It was incredible the amount of vitriol out there for people who do not want to stay in the traditional labor force and work in a meaningless job. I think it’s partly because they are in the 87%. Way to stand up for yourself Travis. Haters gonna hate. As a fellow Southerner, $30,000 buys you a great lifestyle down here. It’s only in NYC/California that $20 barely gets you a plate of french toast at brunch.

    • Travis

      Travis-es Unite! Thanks for the comment – now I want to eat some FRENCH TOAST! Yeah!

      BTW, nice work finding hobbies that give you income. I think if I had a garage I would potentially consider flipping a used vehicle on Craigslist once in a while. Wait for a nice arbitrage opportunity, buy the vehicle, possibly do some medium level mechanic work (I kind of enjoyed the challenge of fixing up our truck Bruno), and then sell back on Craigslist. Could be fun.

      But this is the kind of idea that might get you lynched over at Bogleheads, or arrested by the Internet Retirement Police!

      • Not a bad idea. While selling our 2000 Honda Accord last week, I had a couple of retired guys (traditional retired, as in age 70+) that checked out the car. They were doing exactly this – beer money and time away from the wives looking at good used cars to buy, fix, and flip. 🙂

  • Shift Upwards

    Great post Travis. The resistance is thick among the masses. Maybe they too could be financially independent if they chose to spend more time building their freedom as opposed to complaining at internet strangers.

    • Travis

      Let’s be honest, complaining is way easier and also kinda feels good. Plus it’s a great pass-time when you’re sitting in the office waiting for 5pm to arrive!

      • Shift Upwards

        Ha! Valid points, my friend. Valid points.

  • Congratulations on the article! I have found it awkward to talk to people about the subject because while the math is simple it is outside of the norm to be retired at half the usual age. This makes it hard for some to grasp and their first reaction is denial – sour grapes. Bottom line is you guys are free and living your life!

    • Travis

      Crazy Kicks, I agree. We usually don’t bring it up with people in person. But the internet is a pretty good medium to have discussions on the subject!

  • Linda@FrugalTurtle.com

    I was so happy for you guys when I saw the article. Great job! There may have been a lot of Doomers and Denialists in the comments section, but I’m sure there were also a lot of people that were like “If they can do this, so can we!” At least, I hope so…

    • Travis

      Well, let’s say that if there is 1 inspired person for every 100 complainers, then I’ll consider it a victory!

  • Karie Ng

    Hi there, I first found your site from another overlander while we were on the road as well. And now we are back in the states too and kind of doing a version of what you guys are. Spending basically about $2500 has been really hard for us though now that we are back home. We are still tracking our spending and molding a way to live within a budget while not feeling deprived in this society. I love that you write about personal finance. More people could use those tools to make better choices. I for one learned something today…geez I should have started that Roth IRA conversion when we were on the road!! But we will get on it this year for sure. Awesome informative articles you write and we appreciate the time you take to write them thoughtfully.

    • Travis

      Wow, thanks for the nice comment Karie! It’s my pleasure to document and share what we’ve learned over the years! Happy to help!

      btw, I’m curious to know where your overland trip took you?

      • Karie Ng

        We went all the way south, from California to chile over 18 months. You should do it! South America is so amazing, easy to travel in compared to Central America and cheap and just beautiful. Ourroadlife.com is our blog. We did it with two little ones and it was great for them. Btw we hear from multiple people it only costs a few thousand dollars for all obgyn pre and post natal in Mexico, chile and Argentina.

  • FIREcracker

    Haters gonna hate. We had the same problem when our story went live: http://www.greaterfool.ca/2016/05/20/chutzpah-2/, and the comments immediately clogged with haters. Some of my fav ones:

    “Oh so she’s got a rich business man Daddy from Hong Kong” or

    “A million bucks conservatively throws off $50k per year. Thats still kraft dinner level as far as I am concerned. Post something when your investments are spinning out $250k”.

    Gotta love the internet. I see haters as a badge of honour. If you don’t have haters, what you’re doing isn’t important enough to matter. Keep up the good work, guys!

    • I would hate to eat $50k worth of mac and cheese in a single year. Even if my wife and 3 kids could assist. And even if we’re talking $50k CAD.

      But maybe that commenter found a way to spend more than $1 for 3 boxes of mac and cheese?

      • FIREcracker

        Bwahahaha. Yeah, my reaction was “WHERE ARE YOU BUYING YOUR KRAFT DINNER FROM?!”


        • Travis

          Maybe they’re buying the more expensive whole grain Kraft Dinner? It costs a bit more, but it’s healthier!

  • I was laughing the whole time that thread at the Early Retirement Forums was active and about half the posters were criticizing your choice to retire (or “retire” as they might say 🙂 ) in your 30’s.

    It’s like you can’t ever earn another penny from hustling ever again in your life. No airbnb rentals, no fun side projects (muraling for money? doing webpages for local businesses? monetize a blog you post to occasionally?).

    I like to analyze problems from the worst case/ failure mode analysis. What’s the worst that happens to you? You figure sometime between now and infinity you’re on the path of running out of money. So you work just a tiny bit to temporarily relieve the pressure on your portfolio and thereby reduce your annual portfolio withdrawals. Do that for a few years and by then the market will recover in almost all the historical scenarios. The alternative is to work full time for a dozen more years to shore up your portfolio to the point where you can buy a basket of inflation indexed bonds from around the world to have a zero risk income ladder that’s hedged against the failure of the USD and the US government.

    By the way, congrats on proper use of the second person plural. Y’all are settling in well to North Carolina. And feel free to make plenty of bible belt jokes. But it’s not a joke if it’s true, right? 🙂

    • Travis

      I’m thinking even 100% bonds is too risky for a true Doomer. Since it’s almost guaranteed that the US government is going to fail any day now, right? A proper Doomer should be buying gold, guns and ammunition – and storing it all under their bed! 🙂

      • True. Per the Doomers, even inflation linked TIPS wouldn’t do the job because “CPI lies” and/or the US government will go broke. To your gold, guns, and ammo I’d add an off grid country retreat with an underground bunker stocked with a few years’ rations.

        In the meantime, I’ll stick with a passport, a globally diversified investment portfolio and enough liquid $$ to buy some plane tickets the hell out of here if the SHTF.

  • Ricky

    One thing the fear-mongering people who live in constant denial is that: if you DID run out of money, SO WHAT!? What’s the point in working super hard and socking money away if not for the hope/semi-guarantee that you will be able to live off of it sometime in the future? I’d rather take the risk and adjust my lifestyle when necessary than to deny that it’s possible at all and work my entire life doing things I hate. Worse case scenario, you go back to work! Big deal. People over-estimate the danger of anything that they themselves either aren’t capable of doing or will never do out of fear.

    • Travis

      I agree! Personally, I think Doomers have a different outlook on life. They’re looking for the closest possible guarantee of safety and comfort in retirement. The traditional retirement dream is sitting on a beach with your feet up, NEVER having to worry about work again, spending the same amount of money each year.

      So if the markets have a bad year 5 years in the future, the idea of having to temporarily adjust your lifestyle and reduce spending probably sounds extremely annoying (and possibly frightening).

      But the truth is, no matter what size your portfolio is, you’d be much better off reducing your spending during down market years. If you can actually EARN income during those periods, even better!

  • The Jolly Ledger

    Awesome news on the article! I say this bumper sticker yesterday and thought of you, “The more you know, the less you need.”

    • Travis

      Thanks Jolly Ledger! We have a friend who quit her high-income job as a Chemical Engineer a few years back and she now lives in India teaching yoga, spending a lot of time in Ashrams, and generally living a very frugal and minimalist life. She’s very content! It seems you don’t need many “things” to be mindful, exercise and stay healthy. The more you know!

  • Ah, yes, there will always be the doubters, the skeptics, and the just plain ornery. It sure is easy to attack other people’s life choices through the anonymity of the internet. I take comfort in this: even if they are right — that we’ve under-saved and won’t be able to sustain our lives without some amount of additional income in the future — would I be doing anything differently right now? Would I regret any of the travel and adventure we’re enjoying right now? I don’t think so.

    • Travis

      You’re on it Matt! Life is so short, I personally think it’s worth taking a bit of risk and “cutting it close” to maximize one’s enjoyment in life. Even the worse case scenarios are only slightly annoying (temporarily reduce spending and earn some side income if possible).

  • Great response! It’s always entertaining to see what the haters say–and more entertaining (and informative) to hear how the doers answer them. I love that you can do so with humor.

    • Travis

      Thanks Kalie! Your “doers” comment made me think of doozers from Fraggle Rock. I tried to think of a clever analogy to post here, but I can’t decide if the haters would be Doozers (they live to work) or Fraggles (they laze around and eat the Doozer’s construction efforts). https://en.wikipedia.org/wiki/Fraggle_Rock#Fraggles

  • It’s always hard to accept something that seems so far out of reach. It’s good to read the level of disbelief above because I find it easy to forget what the masses think is “possible” when it comes to FI. I’ll happily keep plugging along, calculating our guaranteed years of freedom accumulated (net worth / yearly expenses) and let the naysayers, well, naysay I guess…

    Enjoy your “bought and paid for” personal freedom. Cheers.

    • Travis

      Some of the complainers online remind me of this George Carlin quote, which I think applies nicely to the world of FIRE:

      “Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?”

      When some of these slow driver “retire at 50” folks see people retire in their 30’s, they definitely think we’re maniacs!

  • Best just to ignore the deniers and carry on toward an early retirement goal! Once you’ve achieved the goal, the deniers will still be there. “Oh, he must have gotten an inheritance,” or “I bet the bank of Mom & Dad helped with that [fill-in-the-blank],” the deniers will be thinking. Because they can’t fathom and are incapable of doing what you’ve done, they disrespect your success and posit that there must have been a “trick” to it. Just let it be, and enjoy! 🙂

  • If only the media captured ERE stories from the beginning, it wouldn’t seem impossible. But cutting expenses and saving money isn’t glamorous, is it? Kudos to you for what you’ve accomplished!

    • Travis

      I also think news stories about cutting expenses and saving money is counter to the message that most news corporations push, which is CONSUME AS MUCH AS YOU CAN – especially these SHINY PRODUCTS from our SPECIAL SPONSORS!!

  • Gundo Money

    I always find it interesting how negative the general population can be about FI. I think the idea of retiring at 30 is just so new and sounds so ludicrous no one ever thought to try it. Somewhere society fell into a pattern of spending all your money until you’re too old to work, then worrying about now working.

    Indeed, our community is doing great work to change that trend. I think when you threaten the very bedrock of “good financial logic” that people hold, they get scared. You mean I’ve been spending away my money when I could’ve been retired by now? You will surely fail!

    I love the people who are fearlessly going after this and actually achieving it. 2/3 of millennials are in debt, we need people like you to know this is possible. Our parents certainly don’t think it is. Keep it up!

    • Travis

      I recon most people stumble upon the hedonic treadmill without knowing it, each year they up their standard of living without paying much attention. Their spending continually increases and they end up with a lifestyle that simply requires them to keep working to maintain it. Gotta spend $100/mo on that sweet unlimited mobile phone plan, gotta drop $100/mo on a full cable TV package with HBO, gotta upgrade your lease every 5 years for a new $35,000 vehicle, gotta take that long flight to a new fun vacation destination every year.

      Cable TV didn’t really exist until the 1980’s, smartphones are only 15 years old, the average well-maintained car should last more than 200,000 miles (so no need to get a new one after 5 years), and flying halfway around the world every year is an extravagance that can easily be toned down. Expenses are pretty easy to keep under wraps, it just takes a bit of awareness and self control.

  • It is always fascinating to me how so many people feel so strongly about other people’s financial choices that do not impact them. Straight up not believing their numbers. It’s ludicrous.

  • bugaboo

    This seems to use money-I-need-to-spend and money earned interchangeably. Are you assuming zero taxes? Early in the article you link to another blog entry about early retirement with zero taxes, but it wasn’t clear in this article if you are assuming that.

    • Travis

      Good question bugaboo! Previously when we were renting/traveling as residents of Nevada, we were assuming zero income taxes. However, now that we’ve bought a home in North Carolina, we’re expecting annual income taxes of $750 and property taxes of around $3300.

  • EarlyRetirementNow

    Nice article which I found through Rockstar Finance.
    3% withdrawal rate is a very nice prudent choice. The problem with 4% is that it’s calibrated to the average stock performance not when stocks were on the expensive side as they are today. But your 3% will work, pretty much for sure. Yay!
    Love the classification Denialists vs. Doomers! Their criticism is because they want to make their own existence as hopeless over-consumers more bearable. I’m glad you are not taking this personal, and even find the humor in this!
    Good luck and good FIRE!

    • Travis

      Thanks ERN! I sometimes wonder if their over-consumption actually gives more fuel to stock market growth, which in turn benefits my portfolio. Or perhaps if everyone spent less money and rode bicycles around everywhere, stock market growth would be lower but there would be more bicycle infrastructure and climate change would be less of a problem. Who knows!

      • EarlyRetirementNow

        If everybody retired early we’d have a shortage of labor and oversupply of capital. If everybody succumbed to consumerism we’d have an oversupply of capital and shortage of capital. Neither is appealing. So I think that the aggressive savers and aggressive consumers live in a symbiotic relationship. We need the consumers to support our equity earnings and the consumers need us, otherwise they wouldn’t be able to buy all their stuff without the capital/machines producing. So everything is in order, nobody needs to feel guilty! 🙂

  • Ten Factorial Rocks

    Spot on Bruno. If you are fairly sure of your expenses remaining the same over the entire life, then your target is realistic and your SWR is sustainable. Naysayers never die, just do what works for you, and be prepared to improvise if situation changes, which it appears you guys are prepared for anyway. I follow a slightly different approach as my expense targets are higher, but to each their own. My blog http://www.tenfactorialrocks.com maybe of interest for you.

  • kleezysleezy

    people are haters. it is possible to make insane returns all it takes is some capital and ALOT of homework/discipline. at the rate im going, ill hit the million dollar mark in 6-12 months. I had a 100k net worth only 6 months ago. cant wait! hate my job!

  • kleezysleezy

    gonna move to panama, and start living tax free.

  • LOVE IT! Us FIRE folks are behind you all the way! In the words of Yoda, ““Fear is the path to the dark side. Fear leads to anger. Anger leads to hate. Hate leads to suffering.” The Doomers & Denialists are heading for suffering, while we’ll all enjoy our early retirements.