I’M (KINDA) RETIRING

I have given my notice, my last official day of full time work is scheduled to be April 29th. I’m 44 years old.

How can I retire so young? Am I rich or from a wealthy family? The answer is no. I am financially independent and live a very simple lifestyle. Plus my wife, 42, will probably continue to work until she’s 60 and eligible to receive her pension.

I will give step-by-step how I gained financial independence at the bottom of the post.

Financial independence just means I do not have to rely on a job to meet my basic needs. My basic expenses are about $2,100 per month. This includes $800 in car loans which will be paid off soon. I make about $21,000 in interest and dividends annually, so I’m only short about $4,000 per year.

I do understand that unexpected things come up, like the $2,600 in car repairs I have this month on my wife’s 6 year old car. I do not want to pull from savings, so I will work enough to make sure I meet basic income needs.

Using a basic financial calculator , I will exceed my savings goal at age 66 using a 6% return and investing nothing else. I don’t want to continue working 50 plus hour weeks anymore, when I don’t have to.

My plan is to work enough to earn $2,900 per month. This will cover basic expenses, have enough for a little travel and dates, and the unexpected things that come up.

I can’t really use interest and dividends, 75% of my savings is in retirement accounts. So I want to develop three equal income sources.

First – Part time job. I already have this lined up, starting May 2nd. I will only work a few days per week.

Second – Writing. This is a passion, but I’m not really that good at it. Maybe I’m too analytical and not creative enough. I have written a fiction book, a finance book, two accounting books and two CPA study guides. The CPA study guides are the best sellers by far, so that is where I will start to concentrate.

Third – Tax preparation. I did pretty good with this on the side before, but let go of all my clients while working for a Big 4 firm. I will need to start over, but earn the highest hourly rate with this source.

Steps to How I Gained Financial Independence at Age 44

1. My grandmother started me in Dividend Reinvestment when I was a freshman in high school. She bought me 1 share of PepsiCo (PEP), which later spun-off YUM brands. She put $10 for every A and $5 for every B I made on my report cards. I graduated with a 3.2 GPA, so not stellar, but a decent start.
2. I went to college and graduated debt-free in 2000. I went to a State college and had the Hope Scholarship. I worked approximately 30 hours per week while in college. College was less costly 20 years ago, approximately $3,000 per year in tuition costs. I came out of college earning $32,000 per year.
3. I got married a week after graduating college. I married the right person (we have been married almost 22 years.) Divorce is expensive. I also married someone that is OK with a simple lifestyle.
4. I started a 401(k) and also purchased company stock at a 10% discount at my first job. I also invested $50 per month in DRIP (Dividend Reinvestment) stocks.
5. In 2002 at age 25, I started a side hustle, my janitorial company. I did it for 19 years. It carried me through a career change, allowed me to save down payments for our house and investment properties, and build my retirement savings. I earned anywhere from $7,500 to $70,0000 per year on this side business. The downside was I could never take a week long vacation. The bulk of my savings over my life came from this source. At age 25, I was socking away over $1,500 in savings from that business, plus putting 10% in a 401(k).
6. We bought our house in 2004 for $106,500. We still own today, paid off in 2022. The house is work about $170k now, but I have no intentions of selling.
7. I started an IRA and taxable stock account with Scottrade in 2007. I maxed out the IRA every year until my income became too high in 2020.
8. In 2008 I left a sales job and went back to school. I was earning a little less than $30,000 in the janitorial company, so I lived within my means. My wife worked PT at a local church’s school. I paid for college out of pocket from savings. The tuition had increased from $1,5000 to $4,500 Per semester in those eight years.
9. In 2010 I started my career in accounting. I earned $48,000 per year as an audit manager, my wife was making about $3,000 per year. I saved 15% of my salary in the 401(k). I was bringing in over $1,700 per month in the side business and saved al of those earnings. I also bought a rental house that year.
10. In 2012, I took a less stressful job with the State of Georgia. I also sold the rental house for a loss. I earned a really good capitalization rate, but working with tenants was exhausting. I saved 10% of my income in the State’s retirement plan.
11. My wife started college in 2013 and I left the State (75 minute one-way commute daily) to watch our daughters. I was down to my last cleaning account at that time, so the income was $7,500 per year. I worked seasonally as an auditor and tax preparer, earning about $30,000. I also became a CPA.
12. In 2015 I started my own CPA firm and did that until June 2018 when I started FT work again. I only earned about $30,000 per year, just enough to cover expenses. My wife started teaching in 2016, earning a little over $33K per year.
13. In 2018 I went back to work as a Finance Director for a nonprofit. I earned $65,000 per year, but over $100,000 with side businesses. My wife was up to about $37K. I contributed $1,500 per month to the 401(k).
14. In 2020, I took a position with the Federal Government for $95K. I also did the side businesses and together we earned over $170K. In 2020 and 2021, I maxed my TSP and saved $50-80K those years.
15. In January 2022 I took a position with a Big-4 firm, with a base of $150,000. I had to drop my side businesses and sell a lot of my positions. My wife is earning about $42K. I saved a little over $21K in the first quarter of this year. I decided I did not love working for a Big-4 firm. I will be going back to the nonprofit PT that I left in 2020.

Summary in Order of Importance

• Live within your means. Even though we have earned over $200,000, our expenses never exceeded $60,000
• Marry the right person
• Go to a low cost college and get a marketable degree
• Invest regularly, always taking advantage of tax-deferred company plans and saving at least 10%.
• Use a side hustle to boost savings or reduce debt