First of all, I am not a financial guru by any stretch of the imagination, but I love personal finance and enjoy reading inspirational stories about how others have paved their way to financial independence.
Most people who retire early are seeking life style freedom. They want to be able to plan their day as they wish. If they feel like playing golf, hiking, biking or taking a road trip somewhere, they just get up and go. If they want to vacation for a month or more, they can do it. If they want to work full or part-time on a job that is fun for them, they just do it.
We achieved life style freedom by selling our software company in 2009 but not everyone has a business to sell. So do you have to own and sell a business to achieve life style freedom? No, there are people that had jobs with average salaries that saved their way to life style freedom. Let me introduce you to a few of them.
Mr. Money Mustache
Mr. Money Mustache (Pete)
Although he goes by the name Mr. Money Mustache, his real name is Pete and his last name he wants to keep anonymous. He retired at 30 years old on a nest egg of about $600,000 of which he saved by stuffing away about 75% of his paycheck into savings. He is now a multi-millionaire.
He started the Mr. Money Mustache website to share his financial prowess with others and offers a free discussion forum where like-minded people swap advice about money, investing and creating life style freedom. If you like personal finance, I highly recommend visiting this website.
Website: http://www.MrMoneyMustache.com
Robert and Robin Charlton
Bob and Robin Charlton
Robert (Bob) and Robin retired at 43 years old the old-fashioned way, they saved their way to retirement. Although the couple averaged only about $89,000 in combined salaries per year, they amassed almost $1 million in savings over a 15 year period.
Bob recently wrote a book about early retirement called How to Retire Early (click here to see it) and it is one of the top-rated books in the Retirement section of Amazon. It takes you through a journey of exactly how they accomplished it. It is very transparent and incredibly motivating. We met Bob and Robin a few years ago after we retired. We share a love of travel and they document their travels on their personal website.
Website: http://www.WhereWeBe.com
Billy and Akaisha Kaderli
Billy and Akaisha Kaderli
Billy and Akaisha owned a restaurant and decided to ditch the working grind at 38 years old. After accumulating savings in their dual career jobs and selling the restaurant, they had a net worth of about $500,000.
They have been retired now for over 25 years and their nest egg is larger than when they retired. They live on about $30,000 per year and travel the world most of the year. Their website offers financial advice and documents their world travels.
When we started planning our early retirement, I read Billy and Akaisha’s book called “The Adventurer’s Guide to Early Retirement” and it offered motivation and pragmatic advice regarding retiring early. If you haven’t read it, I highly recommend taking the time to do so.
Website: http://www.retireearlylifestyle.com
How much does it take to Retire?
So how much is enough? First, try to reduce your monthly expenses as much as you can by following advice from the people above. Once you have that down, take your monthly expenses and make them yearly (multiply by 12) and then multiple that number by 25. For example, if your monthly expenses are $3000, your annual expenses are $36,000. Multiply that by 25 and it means you need $900,000 of investments to retire.
This is called the “safe withdrawal rate” or the “4% rule”. Click here for a really good article that explains the 4% rule in more detail.
Now, do you need all of that to quit a job you hate and take a cooler job that you enjoy? No. Let’s say you only have investments of $500,000 and your yearly expenses are $36,000. You can safely withdraw 4% of your $500,000 per year without ever running out of money, so that means you can withdraw $20,000 per year. So if you wanted to ditch your job and get a more fun job (maybe a part-time job) where you clear $16,000 per year, you could safely retire with the $500,000 in investments.
Are you nuts?
OK, I now hear you saying “Are you crazy? How can I (or we) save $900,000? I have almost no savings at this time!”. Bob and Robin Charlton also had no savings in 1992 and decided they wanted to change their life. So they embarked on a 15 year journey to save money and they retired with almost $1 million in the bank in just 15 years. Read the full story here.
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WeBeTripping Blog 
Steven that was very interesting but it is to late in my journey to have any thing to save or to invest but I can share with your readers to invest while you are younger to make your retirement possible I always thought the future was going to take care of itself it does but it needs help from you.