Some people are on the "10-year plan" to early retirement

Some people are on the "10-year plan" to early retirement

Some people are on the "10-year plan" to early retirement

Some people are on the "10-year plan" to early retirement

    Raise your hand if you've ever slammed yourself in the forehead with your hand after realizing that something your parents told you years ago was, strangely enough, right? Or, full of wisdom?

    I've seemed to do that quite a bit as I've gotten older.

    I was fortunate enough to have been raised in a stable and loving family. I've written about this before and don't hide this fact, nor do I apologize for its effect on my ability to retire early.

    The one thing that I've always remembered was something my dad told me off the cuff. At the time, of course, I didn't truly understand its significance.

    His words went something like this:

    "Some people are on the 10-year plan".

    Thinking back, I remember listening to those words. I mean, I knew what they meant, and while I might have harbored an inkling of interest, they made no real impact on my outlook.

    After all, this was shortly after I graduated from college. After all those years of working shit jobs loading people's cars with groceries, I was finally making money.

    You know, real money. Professional money in the corporate world.

    And at that time, I wanted to damn well spend it. I was on the crest of going from earning just enough to fund my legit expenses and nothing more to earning way more than I actually needed. I had an excess of cash.

    And, it was kinda cool. I could splurge when I wanted to. If I saw something I liked, I bought it (to include a pair of $220 Oakley sunglasses that I inadvertently donated to the Pacific Ocean off the coast of Puerto Vallarta, Mexico while slamming around the waves on a jet ski) years later.

    Who wanted to stop having all that fun and instead save cash? Sure, I could retire in 10 years if I did nothing but save money, but man, that didn't sound like fun.

    After all, I was finally in the position to have some of that fun.


    What is the 10-year plan?

    The 10-year plan isn't built for everyone. If you're working a low-income job, then 10 years is probably fairly ambitious (but, I've heard of people who live extremely frugal on a low salary!). Don't count yourself out if you aren't working in information technology or any other high-income field.

    The tenants of the 10-year plan are fairly straightforward:

    • You've prioritized saving money over spending it
    • You are prepared to live a decade of your life during the accumulation phase saving virtually every penny (within reason, of course)
    • Saying "No" to weekly happy hours with coworkers will become the norm; season tickets to a sporting event probably won't happen
    • After 10 years, you'll quit your damn job and live the rest of your life in pure freedom; buy those season tickets now...

    More or less, you are "sacrificing" 10 years of your life by living frugally so you can plow through the rest of your life without having to worry about commutes or performance reviews (except for maybe your early retirement performance review).

    This is like delayed gratification to the max. But, the payoff is better than anything imaginable...if you don't like working a traditional job, that is.

    In a round-about way, I joined the 10-year plan...but late

    It took about 14 years, total, for me to retire early. I met my wife and we got married in 2014, and the combined salaries definitely helped. I wouldn't be retired right now if we weren't married.

    I took several key steps to making the 10-year plan work for me.

    Step 1: I acknowledged my awesome life

    If you haven’t had to struggle much in your life, don’t be a jerk and ignore it. I’ve found that it helps to normalize our expectations when we acknowledge to ourselves (as well as to others) how fortunate we are to have been born into a warm and loving family with a solid support structure and active/involved parents.

    But, don't think I chalk all this up to privilege. I don't play that game.

    Still, it helps us to realize the world isn’t always as rosy for others as it has been for us. Though we’ve worked hard for our success, other people have worked harder for the same success. Much harder.

    Step 2: I didn't confuse income with wealth

    You make a lot of money. Good for you. It’s definitely awesome bringing home a lot of cash, but all that cash also has a way of lulling us “privileged” folks into a false sense of security if we don’t use it right.

    High-income debt, anyone?

    Vacation homes, expensive dinners, big homes and shopping for designer veggies in costly grocery stores all help to diminish our ability to build serious wealth.

    When we think we’re rich, bad things start to happen.

    And, make no mistake about it: A high income does not magically set us up for early retirement. However! A high income, when used in a smart way, can.

    Step 3: I didn't just save money; I invested

    The 10-year plan doesn't work if all we're doing is keeping our money in a checking or savings account.

    Here is the thing about saving money: Saving money has little to do with getting rich. It’s such a small component of the larger picture of building wealth that it’s just one of those assumed techniques that everybody uses to build wealth.

    Hardly even worth mentioning.

    Of course, spending money is a one-way street to becoming poor (aside from smart investments, of course). If you aren’t spending money, you might be saving. Okay, good. Saving is good, but saving money doesn’t build serious wealth.

    The act of saving money won’t, in and of itself, make anyone rich.

    Ordering water instead of soda or beer at restaurants might save you a few hundred over the course of a year. But let’s face it: A few hundred isn’t life-changing money. Those extra benjamins (alone) have no business convincing you to hang up your hat in corporate America.

    Wealth comes from a very different source: Investments. Here, take a look at a pretty graph that puts in chart form what little effect saving money has over your household wealth. I warn you, however, that there are a bunch of sleep-inducing financial buzzwords that permeate that post. You know, things like “market revaluation” and “consumer durable investments”.

    It’s not about how much money we have. Wealth is a direct byproduct of what we do with that money. It’s THIS that enables early retirement.

    Step 4: I understand my purpose in life

    Whether you work a traditional job or not, are retired, self-employed or just vagabond around the world in search of enlightenment, we all have a purpose.

    Truly, we do. Each and every one of us has a purpose. I believe that.

    But, here’s the kicker: Though each of us has a purpose, I also believe that most of us don’t have any idea what that purpose is. Or, at least a clear understanding of that purpose. We might have one of those “inklings”. But short of that, the majority of the population probably couldn’t recite their life’s purpose if we gave them 10 minutes to think it over.

    This isn’t meant to criticize. Instead, I’m encouraging you to reflect. To think about what gives your life meaning and understand your purpose as deeply and clearly as possible. This shouldn’t take any research on your part. This isn’t a science project or book report. This is life. You.

    If you couldn’t tell me your life’s purpose in, say, under a minute, spend five minutes and figure out how to make that happen. Jot down notes if you need. Do whatever it takes to:

    • Understand what your purpose is, and
    • Understand it well enough to recite it quickly and clearly

    Buzzwords need not apply.

    Step 5: I was persistent and didn't give up

    The previous four steps won’t do much good if you lose your motivation and quit building wealth six months after you start because things just got too boring.

    If you revert back to spending the majority of what you earn, nobody’s retiring early.

    Starting is great. We can’t get to the finish line if we never start. But, we also aren’t getting to the finish line if we stop midway through, either. Keep yourself motivated by breaking down your goals into smaller components that are relatively easy to achieve.

    Then, achieve each smaller goal and move to the next.

    And, reward yourself along the way. These rewards shouldn’t cost a lot of money, of course. A $10,000 vacation to Fiji isn’t the best reward if your goal is to retire early. But, picking up tickets for opening day at the ballpark might be.

    So, I'm curious: What wisdom did your folks impart upon you that, although you promptly ignored it at the time, you now understand was spot-on accurate?


    Steve Adcock

    774 posts

    Steves a 38-year-old early retiree who writes about the intersection of happiness and financial independence.