The 3 most critical steps to retire early

Published July 18, 2017   Posted in How to Retire

Financially speaking, there’s a whole lot of goodness that has gone down in our household over the past year.  I mean, seriously life-altering shit that prepared my wife and me to achieve financial independence and retire before I reached the age of 40 36 35.

3 critical and easy steps to early retirementThings are happening quickly for us and I think that I have begun taking for granted just how important some of these changes have been in setting us up for early retirement. Truth is, we’re on track to beat our goal (we did, by a long shot), and it is definitely wise for me to keep my eye on what is getting us here.

Of all the changes that my wife and I have made, I have taken the liberty of distilling them down into three main core areas of badassery that are driving us forward down this path to jobless bliss. It goes something like this:

  1. First, we decided to prioritize (read: give a shit about) our future.
  2. Second, we began saving nearly 70% of our combined income.
  3. And third, my wife and I are open and honest about our financial situation and talk about our future almost every day.

Pretty easy, huh?  In truth, these changes were easy. It is interesting how natural it is to settle down into a new routine, even if that routine is frugality and minimalism sensiblism.

Let’s talk about each.

We decided to prioritize our future

In an earlier life, it was way the hell too easy for me to drop piles of cold hard cash on stupid shit that I thought would bring me oodles of happiness. Like the Corvette I bought less than a year out of college. Or the brand new Cadillac CTS I bought five years ago. Or those sport bike motorcycles that served as my way of satisfying my need for hardcore adrenaline.

I was making good money, and I could afford it – I thought.

I wasn’t a horrible spender on the little things. Instead of buying a lot of the small stuff (like models, computer equipment, expensive soaps or detergents and what-not), I instead bought fewer of the larger items, like those described in the previous paragraph. I loved my toys, baby! And honestly, I’m not even a “car guy”. In fact, I don’t particularly like to drive and abhor traffic.

Yeah, try and figure that one out. The math totally doesn’t compute. Why did I spend so much money on cars if I don’t like to drive? Don’t ask, ’cause I have no idea.

Once my wife and I decided to retire early, we immediately nixed the majority of spending on our present selves and began prioritizing the overall happiness and excitement of our future. The changes we made include:

  • Hardly spending any cash on anything that isn’t critical to our livelihoods
  • We no longer have an expensive cable television package
  • We don’t have unlimited data cell phone plans (actually, we did buy a grandfathered Verizon unlimited data plan that serves as our only means of Internet connectivity)
  • We don’t drive unless necessary

Oh, and we keep a fairly strict budget, and we record how well we managed them online from month to month.  For example:

  • We keep our food spending to $300/month for groceries and around $50 for restaurants
  • Both my wife and I have a small “fun money” pot, but it is rare when either of us spends it all
  • We consider budgeted money to be the upper limit of spending; in other words, we certainly don’t HAVE to spend it all each month. In fact, aside from our food budget, we rarely run our budget categories dry

Contrary to popular belief, budgeting is easy.

We are saving 70% of our combined income

Sadly, the majority of Americans save in the neighborhood of 5% of their income each year. And unfortunately, Americans may read stupidly-pessimistic financial articles, like this one published in Fortune (yes, “Fortune”), that all but gives up on the entire notion of saving big and acquiring substantial wealth.

In truth, my wife and I are both proof that saving a large percentage of your income is not only possible in this economy, but flat out easy. Both my wife and I work, and we save her entire salary along with a good portion of mine. Together, we save close to 70% of our total combined income.

And guess what? We don’t live in some cardboard box either. We don’t drive rusty and broken down cars. We don’t deprive ourselves of the little things in life that supposedly “make us happy”. We still “live a little”, just like the majority of Americans. The difference? We only “live a little”…a little!

On the contrary, we live in the lap of fucking luxury. We inhabit a 1600 sqft home (now a 200 square foot Airstream) with central air conditioning and heat with a pool in the backyard with a beautiful glass-sharded gas-powered fire pit.  My wife drives a Cadillac CTS and I drive a Honda VTX 1300c motorcycle (now just a Dodge RAM 2500HD).  We have two rescued dogs, both adorable as hell.

We watch a nice 46″ flat panel Sony Bravia television every night while we eat dinner (now a Chromebook). We make substantial meals consisting of beans and veggies, rice, tofu, sausage, tortillas, potatoes, guacamole and a variety of other ingredients. We often wash it down with a glass of wine (or, in my case, a vodka tonic or beer), margarita, sangria or some other alcoholic beverage.

We sleep in a gigantic king-sized bed (Now? Hah!). The walls of our home are covered in [my] photography and [not my] art pieces. I work from home with two 27″ flat screen monitors and a laptop (wait, work?). We also have two different Macbook Pros that my wife and I use for fun and writing purposes.

Hardly poverty.

My wife and I save close to 70% of our income and enjoy a life that probably beats 90% of the worldly population as measured by access to, and ownership of, pure luxury. And we have “Fortune” authors like Stephen Gandel lecturing readers on how only the lucky or fortunate can save 14% or more of their income?

Hogwash! Saving money – even a substantial portion of your income, is not difficult. It only demands an adherence to the “future” principle that I talked about above. Prioritize your future self and saving your dough becomes almost automatic. You might be surprised at how little that you actually need to live your life – even, as I wrote about above, in luxury.

We openly talk about our future every day

My wife and I keep our eye on the prize. Every. Single  Day. During the spring and summer, we walk our dogs every evening after dinner and, naturally, talk about our future comes up. We bat ideas back and forth. We talk about our budget and what tweaks can be made to squeeze a little bit extra out of it. We discuss both our short term and long term goals openly and honestly, and we do it almost every day.

Communication is critical in every relationship regardless of retirement plans. But, this kind of communication becomes even more important when the stakes are higher. The truth is both my wife and I would like to spend more than half of our lives living happily and comfortably without a job, and this sure as hell demands conversation.

We like it. One of the reasons why plans for our future keep coming up when we’re walking our dogs is because we enjoy the journey. Every day that we get closer to our dream is an accomplishment that was made possible not by some “ingenious” plan to retire early, but with the understanding that our future is more important than our present.

To us, working is a means to an end, nothing more. Our jobs do not simply provide us with the resources to aimlessly meander our way through our lives, working straight up until the average retirement age in the United States that has risen, amazingly, into the low 60s. Instead, our jobs are how we achieve our goals of early retirement; of traveling full-time throughout this beautiful country of ours – that most of us Americans never see.

It is important to note: much to the contrary of what our mothers would have us believe, there is nothing “special” about my wife or I. We are normal Americans with access to the same resources as everybody else. Where we differ from the majority is in the path that we have taken to maximize happiness.

It is not a tough journey, either. In fact, in many ways spending less money and acquiring fewer things in life makes your job of living much, much more simple and straightforward. I like simplicity. I like things being easier than they might otherwise be.

I like it when things just “work”, and the less that I have to maintain and pay for, the more likely things are to simply work.

Oh, and we aren’t the only ones who are turning our dreams of early retirement into reality, either. Miss Mazuma is doing it, just like Our Next Life. So is the Gen Y Finance Guy and Chris over at Money Mozart1500 Days is on top of it too, as is Zee from Work To Not Work. Check out Jason from Free at 33 who is practically a wizard at dividend investing and has long since retired. We are all normal Americans living in this wonderful country of ours who have chosen a much different path towards retirement.

The quicker one.

What about you?  How do you manage to turn your goals into reality?

Note: This article was originally published in April of 2015, but has been updated after my retirement from full-time work last December. 

We track our net worth using Personal Capital


45 responses to “The 3 most critical steps to retire early”

  1. Hell yeah, Steve! Keep it simple stupid is the best way to keep yourself out of the way and reach those goals. 70% is BADASS and it is this kind of insight that should motivate people to save more. You can still live a normal life of practical luxury and save enough for early retirement. There is nothing wrong with having a pool, central air, or walls (partially) covered with other people’s art!

    Frugality and minimalism is the way to go…you don’t spend needlessly on stuff you don’t need but you don’t have to worry about spending on the things that you really DO need.

    Great post, as usual – and I am still green with envy that you have managed to be able to work from home!

    • Thanks Brian! I won’t lie – working from home has given me so many opportunities to manage my schedule around my life rather than the other way around. As long as the work gets done, it’s all good when you actually work.

      Thanks for dropping by, and congratulations on your child. I’m sure you’re keeping pretty busy down there in Texas. I can tell that baby is definitely in good hands.

  2. Hannah says:

    One thing that’s crazy to me is how freaking simple the path to financial independence is; it’s a path that I’m excited to be pursuing (although we aren’t specifically on a quest for early retirement).

    I don’t specifically equate financial independence with happiness, but it can’t hurt, that’s for sure.

    • It’s true that financial independence isn’t necessarily tied with happiness. Just like money – money CAN buy happiness, but that certainly doesn’t mean rich people are happy. In fact, many times their lifestyles are downright negative and draining.

      But yep, financial independence sure is EASY. It’s not necessarily quick, and it takes determined discipline, but the reward is damn sweet.

  3. Communication is key!

    It is so hard for me to fathom that the national savings rate is only 5%. I am not at your 70% savings rate but we save anywhere from 20% to as high as 70% of our income depending on the month. These last few months have been tough based on a few big expenses that we will finally move past in May.

    Keep up the good work. And enjoy that pool 🙂


    • Yeah, isn’t the savings rate amazing? I certainly don’t expect Americans to save half or more of their income every year, but seriously, only 5%?

      This reminds me of something I noticed last weekend. I was at an apartment complex of someone I know. This apartment complex is definitely, shall we say, lower-end in term of amenities and general safety in the area. Low cost living in a questionable area of Phoenix. But sure enough, I don’t think I was there more than 10 minutes before I saw someone wheeling in a huge 70″ flat screen television.

      But Americans just “can’t save”?

      Thanks as always for stopping by Gen Y. 🙂

  4. Chris Muller says:

    My favorite quote… “To us, working is a means to an end, nothing more.” We get so sucked into our day to day jobs without thinking of it as a means to an end – hell I know I have. It’s really cool to see your views on money and frugality come into practice, and how well it’s working for you.

    I agree with you in that financial independence is easy – but few have the discipline and patience to achieve it. We want quick results – that’s the American way, lol. Thanks again, Steve – I really enjoyed reading this one and getting some insight into your success!

    • Hey Chris!

      Truthfully, I used to pay a lot more attention to my job. I used to intentionally work extra hours to look better to my bosses. I wanted the promotions. I wanted the title. I wanted the recognition.

      Man, what nonsense. Now, I only pay enough attention to do my job and do it well, but that’s it. Basically, I try to ask myself every month whether or not the business that I work for would hire me back after the month of work that I just completed. If I honestly say yes, then that satisfies my work ethic.

      • Zee says:

        that’s a great way to evaluate how hard you should work… I need to start working like that… Right now I’m working like an animal which sucks, but I’m about to get probably a once in a lifetime opportunity from my work so perhaps it’s paying off. (I plan to write about that soon. very soon.)

        • I look forward to hearing what your job might have in store for you. Truth is these opportunities really are exciting whether you particularly like your job or not. It’s something new to try, and you never know what you might like, or be really good at, until you try it.

  5. So true Steve.

    When my friends or girlfriend complains, my first response is “suck it up” in a joking, endearing manner of course. But what I’m trying to convey is the fact that whatever event or scenario that is making them feel that way, is really not that bad. Glass half-full approach.

    I took the same approach with myself when I decided to travel down this financial independence path. I’d ask myself questions like “do I want to cook dinner or get take out? – suck it up and cook” or “should I take an Uber or take the train? – suck it up and walk/take the train.” These little decisions where I “suck it up” are going to make it that much easier to reach FI, and i’m A.O.K. with that.

  6. Great post Steve!

    I need to learn that work is simply a means to an end, though I’m getting there. Unfortunately, it took nearly working myself to complete failure before I did so.

    It’s impressive that your savings rate is up to 70%! We are focusing on getting more frugal and if would be great if we could get above 40%, will figure that out by the end of the year when we do our first look back and calculation.

    • Thanks Happy Frugaler, I appreciate the kind words. Good luck in nudging your savings rate higher – it’s a process that, believe it or not, I find kinda fun. It’s almost like you’re playing a game of hide and seek, and what you’re ultimately seeking are those hidden expenses that you never before knew about. 🙂

  7. Even Steven says:

    I really like the dog walks with the wife talking about your financial future, I sent this portion to the wife, thank you. 70% is fantastic, I always feel like we have some holes here and there, but we are on track, that and my spreadsheet tells me so.

  8. Love the passion! We have very similar approaches: saving north of 70% of income, aiming for FI by 40. Only we ride scooters. 🙂

    Living the good life.

    • Steve Adcock says:

      Living the good life is right! This stuff just isn’t that hard as long as you’re properly motivated to succeed. Anywhere around 70% is darn good, and ain’t nothing wrong with scooters. Whenever I visit Key West, I rent a scooter for the day and ride around – it keeps my desire to be on two wheels satisfied. 🙂

  9. Jason says:

    I love the fact that discuss how you are ordinary Americans. I am so sick and tired that people can’t save, they “deserve” certain things, etc. It drives me nuts. Now I am no fool lots of people face obstacles (e.g. entrenched poverty) and I am a liberal. But even understanding that I don’t buy that all of us are determined to a specific fate based upon past experience and current expectations.

    My question to you guys is do you consider your mortgage payments part of your savings rate?

    • Steve Adcock says:

      The entitlement culture in this country runs profoundly deep, unfortunately. Too many people have been taught that some one, or some thing, will take care of them, and that everyone is essentially OWED a living in this country. Not only is this belief simply wrong, but it’s completely destructive to achieving great things in this country.

      Anything is possible in the U.S. You just gotta want it bad enough.

    • Hi Jason

      Since I’m the budget number cruncher I wanted to answer your question. No we do not include our mortgage payments in our savings rate. The savings rate is money we save via 401ks, brokerage accounts or put into our savings account each month. Hope that helps!

  10. Zee says:

    Your 3 steps are right on point. But as for getting more specific for #2 (saving 70% of your income) I would say the 2 biggest pieces to that are housing and the small things. Housing is generally everyone’s biggest expense, if you can cut that down you’re more than half way there. The second thing is just all the little things. Everyone pays for convenience because we work 40 hours (or more) weeks. If we took the time to prepare our own dinners and not go out to eat or make coffee at home instead of starbucks…. lots of little things add up pretty quickly.

    I once heard this quote somewhere but I don’t know the true source of it, “Little by little, a little becomes a lot.” Originally I thought of this and connected it to saving. The more you save, even if it’s a little, it will eventually become a lot. When it comes to investing, money makes more money. But it also applies to the little purchases in life. The little things add up and kill us without us even realizing it.

    • Hey Zee,

      Yup, housing is a very, very big one. Minimize that cost or get that damn mortgage paid off, and your savings potentially literally skyrockets.

      The little things really do end up adding to a lot. I like that quote, “Little by little, a little becomes a lot”. It reminds me of another quote that I like, “A journey of a thousand miles begins with a single step”.

      Gotta start somewhere, and ultimately, it all adds up.

  11. Thank you for this. We agree with every word of this. It’s about prioritizing the future and changing your own norms. If everyone expected to retire at 50, we’d all act a whole lot differently and make way better decisions! We’re saving well above 50 percent of our income, not counting what we’re putting against our mortgage in an aggressive attempt to have our 15-year loan turn into a seven-year loan. We’re privileged to be able to do that, of course, but we agree that just about everyone could save a lot more than most do.

    • Getting your home paid for in 7-years is definitely a worthy goal! We have plans to sell both of our homes in the next coming years to buy a town house up in Sedona with as little of a mortgage is possible, then devote every spare cent that we can come up with to getting that sucker paid off, and paid off quick! Living rent/mortgage free has got to be completely liberating.

  12. Jeff says:

    Hi Steve, I agree that the an important key is to prioritize the future. Most people just like to live in the present and leave the future out of the equation. As a result, they may end up living paycheck to paycheck. It definitely takes some sacrifice to get to early retirement but I am pretty sure it is worth it!

    • Hi Jeff,

      I agree, prioritizing your future is definitely worth your time – well, it’s worth it if you care about your future, that is. It might not be as fun now (but it certainly can be!). But later, you’ll thank yourself big time. Good things come to those who delay gratification. 🙂

  13. Lidia says:

    Hi Courtney and Steve,
    You guys are an inspiration to everyone who wants to retire (at any age) but doesn’t even know how to get started. Believe it or not, people tend to have similar savings and spending habits as the other people in their neighborhood. Check out our website at to see how you compare to people like you in your neighborhood and get a kick out of it!

  14. […] praise us as being frugal! I don’t think we’re cheap by any means (in fact, we probably live in the lap of luxury). Being cheap can cost a person a lot: of happiness and in the end of money. How? Take a look at […]

  15. lc says:

    Wow, that is amazing given that I am 40 and you want to retire by then! I did notice that you do not have human children (only 4 legged). That plays a huge part in the equation of wealth. In the first 5 years of my son’s life, I have tabulated over 100k of direct monetary costs and even more in opportunity costs. I get how this parenthood thing is not for e eryone everyone or only have one child (like myself). Though retiring soon or saving 70% of our income is not possible right now, I appreciate the road that you are laying out. I do hope to retire after my son finishes college or graduate school (aka before 60).

  16. […] investment blogs (hat tip: Mr Money Mustache) and learned how frighteningly easy it is to create a retirement plan that prioritizes true happiness out of life.  The more I read, the more convinced I became that […]

  17. financeswithpurpose says:

    Great post. Totally agree about focusing on the goal: that’s how you do it. We’re just starting out, but I check and chart our progress regularly as an encouragement. It also helps to know where we’re slacking, and to see how much we’re moving forward, even though it seems really slow right now (for a variety of reasons) – we’re at least moving forward!

  18. Miss Mazuma says:

    Hey!! Thanks so much for the mention. As I type it is from my hotel balcony overlooking the resort pool and clear blue ocean in Cancun. Not retired yet, just practicing (and getting paid for it!). Tracking was HUGE when I first began this journey because it showed me all the holes in my spending. I have a few years left and am still tracking but have lightened up a bit now that the holes have been removed. Curious if you guys are still tracking expenses as strictly as you were pre retirement? I know you had it down to sweet potatoes at one point. 🙂

    • Steve says:

      No problem, Miss Mazuma. We are still tracking expenses pretty darn closely, yup. I don’t know if my wife is tracking down to the particular veggie still or not to be perfectly honest. We certainly don’t need to be THAT specific! 🙂

  19. Ahh, I’m loving that 70% savings rate! We hover in the 40 – 50% savings rate right now, but that should dramatically increase once we pay off our mortgage in a few years.

    • Steve says:

      40 to 50% is huge, Mrs. Picky Pincher. You’re totally killing about 99% of the people out there. And yeah, once that damn mortgage is gone, your savings rate can REALLY increase.

  20. DadsDollarsDebts says:

    Are you trying to light a FIRE under my A$$. It sure seems that way. Man what a motivating post and depressing since I am on my way to work…thanks for making me a restless mess all day. Really Steve. Thanks!

    One of the hardest parts of my journey is having my wife on bored. She says she is on it, but the enthusiasm is lacking. We have a son. She wants to fund his college (which I am okay with), we enjoy good health insurance, and we buy things for him. Honestly our personal spending (for us) is so low, but since he is a stay at home kid (26 months currently) she buys educational toys, etc. I get it. He is turning out to be bright and she is at home with him all day. They need variety and change.

    Still I see small changes. My changes lead to changes in her. I wrote about how we could retire at 48 (posting this Sunday) and she seemed excited by it. Our biggest expense right now is our home (running us about $6500 a month with utilities, PIT, and maintenance. That is a ton of cash. If we could get that back down to $2k we would have $4500 of income to save and plan for an early exit. Ah life changes.

    • Steve says:

      Wow, $6500 / month?!? Phew, that is quite a bit. If you can cut that back to $2k, that would make a HUGE difference. But yeah, having your wife on board helps a ton. I’m thankful that my wife was completely with me on this.

  21. Oldster says:

    You hit it out of the park with this one. I tell folks all the time that without spousal buy-in nothing good that is big ever happens. This shit is not accidental. The first two of your points are the core, but the third is what makes it work in a relationship.

    Well said, Steve.

    • Steve says:

      Why thank you, Oldster. Appreciate the kind words and you taking the time to comment. You’re right, spousal support is absolutely critical!

  22. Dollar Habits says:

    Great post, Steve. Thanks for the motivation and for reminding us even us regular Joes can save a bunch and retire early.

  23. TSR –

    The high savings percentage rate is the biggest area that will have the most impact on your financial future – as that shows that you want/need less and have an abundance for investments. Focus on savings and the rest will follow!


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