I’m a typical person holding a job in corporate America (a.k.a. the rat race). The only difference is I’m doing it in one of the most expensive regions in the world – Silicon Valley. I’ve been fortunate enough to work in a field that gained tremendous popularity (analytics/data science) and see my salary skyrocket – the total compensation from my job has grown 7X since the first job coming out of college. Despite this, depending on a paycheck from others has always made me nervous. I can perceivably force income to appreciate via promotion and “career advancement”, but with that comes more headache, stress, and time spent at work for money. Ever since I turned 30 couple years ago, I’ve come to realize working at an office job for the next few decades is not my calling.
There are many reasons for retiring early when I’m in one of the hottest professions out there.
- Defensively, I can proactively address upcoming challenges with the job I’m holding today
- This won’t last – The current pay is tremendously skewed due to a shortage of people who can do the job. As market saturates, compensation will go down.
- Age discrimination – There’s a reason why we rarely see colleagues who are older in major tech companies. Implicit bias is a huge part of human nature and until it could be addressed consciously, this will always work against you by definition.
- Skills will be obsolete – The industry is moving very fast, what is relevant today will not be relevant tomorrow. Of course everyone should keep learning new skills if this is an area of passion, but having done this for more than a decade it’s starting to feel one-dimensional.
- Offensively, I can proactively evaluate things that are more important
- Spending time at a job is not scalable – Number of hours we get is the same, the more time we trade for money the less we have for ourselves.
- Priorities change as one ages – Would I rather spend time with kids (when I have them), family, and friends, or at a job?
- Worrying about money while being a 1% earner feels wrong – If my parents can provide for a family of three with less than 1/10 of the salary for so many years, why would I feel stretched earning 10X more.
I’ve been dabbling in the thought of early retirement, but never serious enough to make a dent. It is too comfortable to continue doing what I know – getting a paycheck everyday and the fear of unknown is too great to admit. This all changed with one catalyst.
Earlier this year, I missed a bi-annual college roommate reunion trip to Norway. As close buddies in college, we get together every other year to embark on epic trips, free of worries and distractions. We look to reminisce the old times and celebrate the present. These occasions are becoming rare with life responsibilities and obligations, but this year I had to skip last minute due to work. This made me realize I’m just a slave to my job. I’m trading off life-long memories with spending all my time working for someone else. I vowed to never have that happen again.
Today, I’m making good salary. I grew up in a low income environment and a culture of saving as much money as possible. Over the years, I’ve been saving relentlessly. As I built up my war chest, I was able to purchase three real estate properties in the Bay Area (I’ll talk about those in a later post). I look to achieve financial independence in 2.5 years.
My current plan to get there is as follows.
- Continue to track net worth rigorously and reduce expenses wherever possible.
- Build up passive income streams to use assets and capital to generate cash flow.
- Get rents from properties up to market – rough calculation says that the increased cash flow should allow me to live for free, which is a gigantic expense in the Bay Area.
- Keep earning from my job and invest cash wisely
- Put cash in alternative investment vehicles (e.g. Realtyshares, Crowdstreet, etc).
- Participate in real estate deals with partners and form those relationships.
- In the future, convert employer 401K to a self-directed IRA to invest in broader portfolio of options.
- Take advantage of small optimizations to increase income or decrease expense (e.g. spend habit changes, deals, etc).
- Take advantage of my core skill from work and look for side hustle that leverages it (e.g. startup advising, contracting, free lancing projects, etc).
- Free up time from work so there’s more time to think about what’s next.
I’m inspired by Biggerpockets and Financial Samurai to control my own destiny and not trade time for money. This blog will focus on topics, actions, and progress on getting to financial independence before age 35. If you’re also interested in early retirement, follow along!