Retire at Age 30

What would it mean for readers of this blog if they could retire at age 30? Is that something you think is an unachievable dream or too challenging to execute?  Here we explore the story of someone who just did that. She decided when she  was 25, that she wanted to retire at 35. She made the required changes to her  lifestyle and achieved her dream half the time at 30. Here we explore the story of  "A Purple Life" who achieved this feat and will go through her story of how she  achieved it 
How do you figure out the math to retire at 30? 
So, the first question that needs to get answered is, how does the math work out  when someone decides to retire at a certain age? For "A Purple Life" when her  partner introduced her to the concept of FIRE (Financial Independence Retire Early) definition from Investopedia, she put it on the backburner for a couple of  years. When she reached 25, she finally decided to plunge into this and calculate  how she could retire early and live a fulfilling life. 

At the age of 25, "A Purple Life" was living in Manhattan, making about $65k a year  and spending $35k because, as everyone knows, rent in Manhattan is not cheap. Based on her retirement requirement, she calculated she needed to save about  25 times what she was spending at the time, which was approximately $35k. And  it was going to take ten years to accumulate that money. Hence, she originally  planned to retire at 35. But then she started optimizing her life, which led her  partner and her to move from New York City to Seattle. So, they got a better  experience and better quality of life for about half the cost. She increased the  salary by about $20k just for moving and cut her expenses in half ( as the rent was  cheaper in Seattle). After that, she had a couple more job changes, which  increased her salary by $20k each. So, the increase in income coming in and  keeping her expenses low at $18k helped her cut her time to retirement by five  years, and she could retire at 30. 

How do you prepare and analyze to achieve your goal? 
So when "A Purple Life" and her partner first realized that they wanted to follow the FIRE philosophy, they had to look at all their life choices objectively. They had first to figure out how to move out of the most expensive city in the world. So  they made a spreadsheet and listed every major city along with salary probability,  cost of living, rent, sound public transit system as they didn't own a car, and the  ability to get jobs if they lost a job. After a lot of analysis, they landed in Seattle,  where they could get comparable salaries, the cost of living was half, and jobs  were plentiful with good public transit. She also looked online at Numbeo  www.numbeo.com to see the available prices and the  price differences between New York City and Seattle before deciding. 

The other thing, "A Purple Life," had always done even before deciding to go  down this path was to keep a budget. So, once she moved to Seattle, she tracked  her budget closely and saw that she did even better than forecast. She only spent about $18K instead of the $35K she had planned. This change in expenditure was  one of the primary reasons she got into retirement at 30 rather than 35. 

"A Purple Life" used a tool called YouNeedABudget for budgeting. She has been using the  platform for almost six years now, and she relies on it and likes it a lot more than  Mint.com, which she was using earlier. Budgeting was critical because if she did not know what she was spending in New York, it would have been difficult to  calculate when she could retire. The other things are being consistent with  budgeting over multiple years. Knowing and tracking it allows you to see the  patterns and the exceptions and create a realistic retirement budget calculation. 

One of the reasons she likes YNAB is that it does not criticize you for not sticking  to a budget. It is not about like sticking to a number at all. It is about making  choices. For example, if she decides to splurge on a friend's birthday that she just  got invited, she should be able to do that. Even if she overshoots by 50 bucks her  eating out budget for the month, she can compensate for that by buying fewer  new clothes for that month. So budgeting is not about restrictions, but it is about  making choices. If you like budgeting using one and paper or an editable document you can find a couple versions here: budget sheets. 

How did she come up with half a million to retire number? 
Once "A Purple Life" was able to see that living in the middle of Seattle  downtown, she could spend $18K, living a wonderfully comfortable life. She  decided to calculate what would be her total expenditure in retirement. She  raised her yearly cost by like 11% based on what she read online and came to the figure of 20K on average, each year. So usual baseline to figure out how to retire  over 30 years is to 25 times your annual spending. So that is how "A Purple Life"  came up with a figure of half a million dollars needed for retirement. 

This number works for "A Purple Life" and her lifestyle, and it will be quite  different for someone else reading this blog. The only reason she is comfortable  retiring at 30 with half a million dollars is cos her lifestyle is entirely flexible. She  does have a partner, but they have separate finances. So, she is only responsible  only for herself. They do not have or want children, do not have a house, do not  have a car. So literally, she has no fixed expenses month to month. And that  allows her to be completely flexible. 

Pre COVID, she planned to use her flexibility and travel to Australia, New Zealand,  Argentina, and Thailand this fall. That has changed because of the pandemic, but  she hopes to use her flexibility and use geo arbitrage the same way she moved  from Manhattan to Seattle. If she keeps moving around to different places, she  can choose where she is going and can spend a lot less based on the cost of living,  say in a place like Thailand. 

Maintaining a Nomadic Lifestyle 
“A Purple Life” considers her to be a proponent of Nomad Life, which means not  having a place of their own and moving from place to place. She has a partner  who is not retired yet but has a remote work schedule, which means he can join  her on her travels and still work remotely. They have been doing remote jobs for  the past few years and are well versed in that lifestyle.  They have been living in monthly Airbnb’s for the past two months, but they are  still in Seattle. They are in different neighborhoods and are like slowly moving  farther and farther from the life and people they know. These moves are like  practice runs and getting used to living in an Airbnb in a city that you know and  speak the language fluently is much more comforting than just dropping into  Bangkok like right now. Next month they will be moving to Georgia and stay and  work in a nomadic fashion from there. So, they are only slowly getting farther and  farther away, and then post COVID can restart being nomads around the globe. 

What were the difficult parts of executing this plan?
Creating the financial model and putting in the numbers was the easy part. The  tricky part was taking action to make those numbers real. Once she figured out  how much she needed to save how long it would take her, she had a reliable  roadmap and added a countdown. 

The hardest was moving across the country away from family to a place where  her partner had never gone. She did not know how that would go, so it was a leap  of faith and challenging to execute. To find a job on the other coast where she  and her partner had never lived, where they did not have any connections, was  also really challenging. Continuing her daily work life in marketing because it is  very demanding and 70-hour weeks are not even blinked at really. So just keeping  that up to get the salary that she had projected for the plan to work.  
So yeah, it is simple to get the program together. But the steps she took were not  always easy to execute. 

---

​"A Purple Life" where does that come? 
"A Purple Life" is a blog that she started writing six years back and is found at A Purple Life. Purple is her favorite color, and it always has been, and  she has been a little obsessed with the color. Since she was about 16, she has  been dyeing her hair purple and used to have purple contacts. A lot of her  clothing is purple. 

She had been writing her blog in private for a year, and one fine day while talking  to another blogger, she decided to make her blog public. So, she went home to  find a domain name for a blog, and she was looking at herself with the purple hair  and decided to name the blog a purple life. But a Purple life to her means like a  slightly different life, not worrying about what other people will think basically  and just doing what you want to do.

I encourage you to take a listen to my discussion with A purple life, check it out here: Episode 64 or on any other platforms where you listen to audio podcasts. ​

Get your free budget bundle, which includes 2 budget sheets and a debt tracker. 

---