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How I Retired at 35 and in Just 4 Years!

Hey everyone, I'm super excited to announce that I'm officially retired! Seriously, and I can hardly believe it myself. It started with a comment my friend made while we were walking on the beach here in Bali. He said, "Johnny, I could do this forever, all we do is get coffee, surf, and eat." It was at that moment that I realized that I had been working my butt off for exactly four years and had been bootstrapping most of it into savings and wondered how much money would I need to save before I could retire. I decided to do some research and find out how much I would have every month to live off of if I took his crazy comment to heart and actually retired today.

For most people retiring means being able to do whatever you want, wherever you want and waking up or sleeping in as you please. The entire point of retirement is having enough set income last you the rest of your life without ever having to go into the office again or get another job. For some it may be golfing all day, scuba diving, others surfing, gardening or volunteering. For me, it's constantly evolving the more the world unfolds to me as I travel, explore, and find new hobbies but what I'm basing this number on is the question of, "if I stopped working right now and never built another business for the rest of my life, would I have enough money to be able to continue living this lifestyle, forever?"  The surprisingly answer is yes but with a lot of caveats, keep reading to find out why retiring might not actually be the answer we're looking for.







The 2008 Mini Retirement




If you've read my first book 12 Weeks in Thailand: The Good Life on the Cheap or have been following my journey for a while, you'll know that in 2008 I quit my corporate job back in the U.S. and took a Tim Ferriss style mini-retirement to life cheaply in Thailand for the couple of years. It was awesome, I got to scuba dive all day, and train Muay Thai whenever I felt like it. But it wasn't sustainable forever, I was running out of savings and going back to the U.S. every summer to work and save up wasn't a long term solution. I needed a business that I could start and run location independently.

So almost exactly four years ago, I created my first online income stream through publishing my first book via Amazon Kindle. It was then that I had my first taste of what it took to be successful at making money online and get out of the rat race. I had blogged for almost ten years before hand, but never made more than a few hundred dollars per year as I had no idea how to monetize the traffic. If I only knew then what I now each inside Earnest Affiliate, I would have retired a lot longer ago, but that's another blog post.

The lesson from these couple of years is, read the book, take a mini-retirement now and live cheaply off of savings and odd jobs for a few years, and figure out if the end goal of sitting on a beach all day, golfing, or scuba diving is really want you want to wait till you're 65 to start doing.






The 2013 Business Launch




Even though I had half of the 4-hour workweek life figured out, I was missing the money aspect of the equation. I had down just a bit over a thousand dollars and had to figure out something to do. I had a few hundred dollars coming in every month from my kindle books, but it wasn't enough to stay afloat, even at living cheaply at just $600 a month. I was basically starting over and this is the journey and if you read my 2nd book, Life Changes Quick it details exactly I went from having $1,000 in my bank to banking my first $30,000 which was the entire foundation of getting to where I am today.

The biggest key takeaway from this chapter is the 4 quadrants of early retirement that I somehow accidently figured out. The first being finding a location independent business you can create, scale, and eventually sell for a higher return. For me it was starting a dropshipping store. For you, it might be any one of the hundreds of other online businesses that I detail in my weekly podcast, Travel Like a Boss. After you've started your business, the second key is doubling, scaling, automating and growing that business to maximum potential which can be done by outsourcing or software. The third is finding a way to 10X your income either through partnerships, the franchise, or affiliate model. I call these three steps the 1-2-10 model. Where you first start 1 business, optimize it or start a second to double your income (2X), then find a way to truly scale and 10X your income.

And the fourth key is then to correct invest as much of the money you earn into something that can continue paying you in passive income for the rest of your life, which is something we dissect inside the Invest Like a Boss podcast. It comes from a combination of keeping your expenses lean while maxing out your savings accounts.

I know I brushed quickly through the four quadrants, if you're interested in knowing more watch the video explainer below or leave a comment below and ask me to explain more.






Retired in 2017




In the past four years, I've bootstrapped 75% or more of my income every single month and used it to buy income producing investments instead of liabilities. The lesson came from a $12.99 book I bought almost 8 years ago, Rich Dad, Poor Dad by Robert Kiyosaki. Even though I'm not a fan of anything he's put out since then, that book was one of the best returns on investment ever, which is a huge reason why I'm an advocate in spending money on ebooks, ecourses and anything else that can potentially change your life through knowledge and education.

Most people didn't understand why I was still living in a cheap apartment, wearing flip flops, generic t-shirts and bootstrapping in Chiang Mai when I started making over six figures a year and could have moved back to San Francisco or based myself in a cool place like London or New York. The secret is that I had a bigger picture and goal in mind. I wanted to save and buy as many income producing assets as I could with the hopes of one day being able to cash out and truly have enough passive income to sustain myself for the rest of my life. Sure I bought things like the new iPhone, traveled a lot, and used my credit card miles to fly business class, so it may still have appeared like I was spending a ton of cash. But in reality, I was spending on average $2,000 a month even when I was making over $20,000.

All of that extra cash went into index funds, real estate backed loans, and my retirement account. You can read about the exact streams of income in my monthly income reports that I've been openly publishing since mid 2014 in an effort to share my journey and the knowledge I've gained as it was happening. In these past four years, I went from having a total networth of less than a few thousand dollars to today having exactly $522,097.25 in the bank and in investments.






Halfway to Millionaire!




It's pretty crazy thinking back and seeing how quickly someone can go from having barely enough to get by in Chiang Mai for a few months to being able to see that many zeros in my bank account at any given time. The best thing about what I've invested in is the fact that everything is semi-liquid and online. I don't own any physical real estate or have any liabilities. I'm completely debt free, have paid off all of my credit cards, student loans, and I don't own a car. I'm currently living out of a hotel here in Bali and renting a scooter to get around.

Everything I own is fit into a 60 litre North Face rolling duffle and a 25L backpack. I enjoy eating at nice restaurants and the occasional splurge, but I never waste money and enjoy being both being minimalist and frugal. I enjoy reading personal finance and budgeting blogs such as Net Worth Snowball and Budgets Are Sexy both of which have recently become half-millionaires and are openly sharing their journeys. Here is an example that one of them shared that helps illustrate how limited spending, plus saving most of your income, reinvesting your dividends and interest along with market growth leads to huge year end numbers.



An example from Networth Snowball


The 4% Rule



So how exactly does $522,097.25 last me the rest of my life? Well first off it's not exact, but in general as long as your money is properly invested, drawing down 4% of your total net worth each year generally allows you to go around 30 years before running out of money. So if I were to just live off of the average growth of my investments, I'd be able to take out $1,740.32 a month for the next 30 years before I actually ran out of money. And since I'm currently spending a bit less than that living in cheap places like Chiang Mai, Thailand, I wouldn't even have to change my lifestyle to retire.

However, the 4% rule has it's flaws and I plan on living a lot longer than 65. Even though it's supposed to account for inflation, taxes, and market fluctuations, the 4% rule is just a rough estimation. To overcome that, I'm basing my retirement solely off of passive income, interest received, and the actual growth of my portfolio. My goal is to never be worth less than half a million ever again, even when I'm 95 years old.

I have passive income that not only gives me more money to spend today, but the excess also allows me to save and increase my net worth. Currently my truly passive income is between $5,000 - $10,000 a month, most of which should stick around for a while adding to my total networth as long as I don't change my spending habits too much. To that being said, retiring today, I could comfortably spend around $3,000 a month, still support my mom and be able to completely stop working today.

But that being said, I actually enjoy what I do. Things like running the podcast, I would do for free as a hobby even if I wasn't making over $1,000 a month from sponsored radio ads. My second podcast has finally stopped losing money after nearly 8 months of production and will most likely become a new, additional income stream. I also really enjoy blogging and sharing my thoughts and lessons, and have been doing it for ten years before it ever actually made money just because I enjoyed it.





The Actual Plan




I'm really am officially retiring today, so this article wasn't just theoretical and a cool headline. I am definitely, 100% never having a job again or going back to work. The reason why I'm retiring is because I never want to do something I don't enjoy for work every again. Even though I actually enjoyed the daily business stress and tasks of things like order fulfillment and tracking down shipments when I first got started, in reality that comes with stress and responsibilities that I no longer want in my life.  That being said, it was an easy decision to sell my other dropshipping store. I should have probably make a formal blog post about it, but Larissa is buying a house and to help pay for it, we've sold our dropshipping store, the one we started together two years ago. The total sale price was  $60,335.64 at a 27X valuation, which was just a  tiny bit more than the other store I sold on my own. But that meant we each got $30,167.82 from our share of the profit.

Even though it was a relatively hands off business that we only spend maybe an hour on each day, it was still a business that required one of us checking in on day to day to make sure there were no shipping delays, or other mishaps that tend to happen with physical products. We're both super glad we started the store as it allowed us to travel around the world for the years we were together, but now it was time to let it go and use that money and time for something else and to move on with our lives. I'm planning to invest the $30k into PeerStreet and my SEP-IRA retirement account and using my newfound free time to only do what I'm really passionate about.






The Power of Compound Interest




Another reason why we sold the store is the fact that by simply investing $30,167 today even with no future additions, that money will be worth 10X that in 30 years when I'm 65. By not spending that $30K deposit I got from selling my store, I've essentially made myself $303,568.42 in the long run which is money I wouldn't have had otherwise. This was compounded annually (monthly would have been even more) at 8% which is the average interest rate I'm getting from PeerStreet and the average growth of index funds over history.

But taking the power of compound interest another step, by continuing to take my passive income and investing just $5,000 of it every month. That $30k will then be worth 7 Million dollars by the time I'm 65. This essentially guarantees that I'll be a multi-millionaire by the time I'm of normal retirement age just by continuing to follow this plan forth. It's an awesome feeling knowing that we can all retire multi-millionaires by thinking about our finances now and following a straightforward plan that isn't overly complex.

My advice is to have as much time in the market as possible and just like how debt can quickly add up, so can compound interest add to your wealth.






The Wrap Up




So there you have it. An end of an epic era. To some four years may not seem like a long time, and if I still lived a normal life in corporate America, went to the same job, and had the same routine everyday after work and on weekends, it wouldn't be. But the fact that we live as location independent entrepreneurs, our lives are accelerated. Last year I visited 17 countries, interviewed 50 entrepreneurs, and helped build multiple businesses. My life has been a constant whirlwind of new adventures, information, and leveling up.

This is going to end my chapter of bootstrapping small businesses such as ecommerce stores, but hopefully I've left enough information along the way for others to follow the journey and get started. I'm going to focus on enjoying life, being healthy, and only doing what I actually enjoy doing. I will continue blogging but I'm going to stop fighting other people's battles. I've written enough about dropshipping to counterbalance the haters in the world and give those genuinely wanting to look into it as a business model enough good advice to help them get started. So from now on, even when I hear people make statements that are completely wrong, I'm going to look the other way. I've done my part, and have been transparently sharing everything I've been doing for the past few years. Now it's time for me to enjoy the fruits of my work and some time off.

Who knows what will happen. I've always been a fan of minimalism, tiny homes, and living off the land. Maybe I'll be a surf bum and live a forever summer. Or maybe I'll get sucked into starting a passion project.  Maybe I'll fall in love, want to start a family, and start another business so I can support a bunch of kids. Who knows where life will take me, but I'm glad I now have options and I'm glad to be able to take as much time off as I need to take care of myself first. I sincerely hope that everyone reading this will be able to do the same.




Update: Where's My Cash?




A lot of people have been asking where I've actually kept my money and what I'm doing with it. The majority of my money is in Vanguard index funds such as VTI and small cap value funds such as VBR. Below is a screenshot of my account. I talk about the rest of my investments in this episode of Invest Like a Boss if you want to know more.


My main investment account: Vanguard Index Funds




Warm Regards,


Johnny "Retiree" FD


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  1. Congratulations. I'm retired myself but I have enjoyed your journey and more importantly your integrity. That's how I retired early and it's the most important quality to be successful in everyway. Good luck, I wish you everything. Your fellow entrepreneurial earthmate ��

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    1. Hey thanks so much Boogie I super appercaite that! Congrats on your early retirement as well!

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  2. Congratulations, Johnny! You're an inspiration. Good luck on the rest of your journey.

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  3. Beautiful. One of the greatest stories of the modern era! So glad to have followed the journey, and I hope you continue travel like a boss until your last breath.

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    1. It's been a fun journey to have you along!

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  4. Awesome Johnny congrats, your journey has been great to follow and emulate - I'm 2 online business exits from achieving the same :)

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    1. Nice stuff Richard! Keep putting in the work and let us know when it's time to celebrate!

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  5. Congrats Johnny. You did it man.

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  6. Fuck yes johnny. I'm just getting started on the journey it seems like you've just ended, inspirational stuff indeed.
    Respect for living the dream!

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  7. Yo JFD! Dang! I'm like SOOOOO HAPPY for You, Bro,...But at the same time kinda sad,......Because just like Ben (in his comment above),....I, too, am just getting started (literally just enrolled via the White Glove DFY option in DSL via your affil link, just last Friday, March 10!),...and am stoked as a MoFo to get started! :) I just watched your awesome "CRUSHING LIFE" presentation at Kona, HI! WOW! Thank you for your inspiration and for being the One, that connected me to Anton & DSL for the start of my journey. I CAN'T WAIT, Brah! I'll stay in touch and keep ya posted!.....We Will meet one day, Johnny D. Count on it! - Alain D.

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  8. Hey Johnny, good shit man. I knew you back in the Wolf days and you were a great help to me then. Without you I'd never have met my wife! It's inspiring to see what you are doing now. I'm on a different path, but doing well and I incorporate a lot of what you do into my life. Let me know if you are in the Bay Area and you have a dinner on me.

    ReplyDelete
    Replies
    1. Dude that is so refreshing to hear that! Congrats on getting married! I've been meaning to write a post about the positive things from those years and your comment just reminded me that even though there are a ton of negative aspects to the PUA community, there are also just as many if not more normal, shy guys that just wanted to learn how to talk to girls so they could eventually get married and find love.

      Delete
  9. Hi Johnny. I've been following your blog for some time now and love your stories. It inspired me to quit my job, travel the world, and start my own blog. Within the next few weeks (after dealing with some other things) I want to start my own online store as well and your material will be a great help.
    Thanks for all you've provided and so cool you've decided to take this step in your life. It must feel like total liberation.

    Good luck with your next step!

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    Replies
    1. Hey thanks so much Vincent, glad you've been following the journey for so long. Best of luck with your own journey!

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  10. Congrats!.. having said that, no plan there for the costs of raising a family?:)

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    1. I mentioned it somewhere towards the end of the article. Right now i'm single and taking a break...but if I decide to have kids things might change. =)

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  11. Congratulations Johnny! You are an inspiration! Have fun in Bali! xoxo Lizz (the mom of the twin girls you met in Chiang Mai =) =) )

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  12. wow that's awesome and coincidentally enough i just listened to episode 79 of travel like a boss this morning - how to retire at 45 and I remember thinking - wow to retire at 45 is something special. Then literally a couple of hours later I read you are retiring at 45! Many congrats.

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  13. Johnny, your writing style evolved beautifully over years. Do not give it up. Congrats!

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    1. Aww thanks so much for following the journey for so many years Marina! I appreciate the nice comment!

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  14. Congrats, Johnny! I've been following your blog for a while now. Happy to see you finally reaching this milestone!

    I have a question that you may have answered elsewhere: What do you do for medical insurance?

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    1. Hey thanks! I have travel insurance for emergencies and don't believe in long term prescription drugs or treatments in most cases anyways. I've put aside savings for out of pocket medical expenses and will go to Thailand for care if needed.

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  15. Congratulations Johnny. Im really happy for you and your podcast is keeping me focused to follow shortly. :-)

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  16. Congratulations Johnny! It's rad seeing an actual conclusion to this chapter of your life.

    I was inspired by your posts of training Muay Thai in Thailand all the way back from 2011. It excited me enough to take the dive myself and it's been the most incredible journey since.

    Stay wild Johnny, I'm looking forward to seeing what you get up to next :)

    ReplyDelete
    Replies
    1. Hey that's awesome you've been following the journey since 2011 and my Muay Thai days! It's been a fun close to this chapter and I'm excited to see what's next for me as well. =) I'll keep everyone posted! =)

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  17. It's all relative. Our household just exceeded $2 million net worth but we live in the Bay Area. It's not nearly enough to retire. Relocate is not an option as we want to be near family.

    Good for you. You've done well for yourself.

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  18. A true inspiration to follow! Sincerely, Congratulations man!! Well deserved after all the hard work years, and expanding knowledge.

    Most importantly thank you for sharing all of your passions, experiences, knowledge and business adventures! Still looking forward to seeing you around on the web, and of course meet again at Nomad Summit 2018!!

    Cheers to whats next to come! Where ever that may be.

    - Alfonso Torres

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    1. Thanks Alfonso, hope you see you in 2018!

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  19. Congratulations Johnny!,thank you for sharing with us and you can download Mini Militia App for pc and android and enjoy your Retirement.

    ReplyDelete
  20. Your little Johnny Junior will thank you for being an awesome dad

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  21. Plan vendors can either purchase the entire premium, for a portion of the high quality or they might decide to have retirees go into the plan on the voluntary non-contributory foundation. In contrast to the actual Retired person benistar Drug Subsidy, the EGWP factor degree does not affect savings from financial assistance and discounts.

    ReplyDelete

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