# Retired at 32



## JackJac (Mar 13, 2017)

Ex-laywer Anita Dhake is retired at 32 years old. She saved up $690,000 and invests in Vanguard fund(s) and utilizes the 4% rule. She makes a little money on the side from her book and blog. Here is a very brief interview with her. 

Did Anita successfully escape the rat race? Do you foresee any obvious pitfalls in her future?


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## redsgomarching (Mar 6, 2016)

to each their own. 

she says shes grown her net worth to 800k which is impressive. it takes capital to earn capital and she seems happy. she is mobile and has little attachment to material things and seems to be focussed on experiences from which she also has found out the experiences she likes the most from living frugally. 

pitfalls are hard to pinpoint because its not my future its hers and if shes doing what she thinks makes her happy - not my place to say.


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## tygrus (Mar 13, 2012)

Unmarried, no kids, no residence.

Hope she likes books.


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## gardner (Feb 13, 2014)

redsgomarching said:


> she says shes grown her net worth to 800k


Doesn't feel like enough to retire on at 32. At 4% that's only 2,670/month -- 32K/year. Not enough for an urban hotshot for sure -- probably not enough for a cheapskate.


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## Nerd Investor (Nov 3, 2015)

Neat story and if she's frugal and smart and still able to grow her money it can work. I wouldn't be real comfortable with the "4% rule" over a potential 60+ year time frame though.


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## james4beach (Nov 15, 2012)

If it helps inspire anyone, here's the story of my friend and coworker Bryce Leung, who retired in his 30s
http://www.cbc.ca/news/business/house-investment-wealth-1.3716641

The last time I ran into Bryce was in a Dollarama under College subway station. The guy really is frugal.

This seems to be the recipe for retiring early: Have a very high paying job, live frugally, save aggressively and then assume your expenses won't grow much in retirement.

Unfortunately, the pessimist/realist in me says, very few people have such high paying jobs and your expenses won't grow in young retirement only if you're lucky. (Being young and retired means that suddenly you'll want to travel and do a lot of things).



Nerd Investor said:


> I wouldn't be real comfortable with the "4% rule" over a potential 60+ year time frame though.


Neither are the mathematicians. The 4% constant withdrawal rate barely lasts for 30 years, in simulations.


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## JackJac (Mar 13, 2017)

I think people like Anita quit their career for good reasons (ruining their health and happiness), but they are too smart to stop working entirely. Their frugality paired with shrewdness (alternate, fun money-making ventures) will keep them afloat. Good for her. But I agree that strictly retiring off 690K at 32 is not possible in modern societies, unless you want to be borderline homeless (which might be better than being a lawyer for some).


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## My Own Advisor (Sep 24, 2012)

I just finished a two-part interview on my site about being "retired" at 32, not me, someone else:
https://www.myownadvisor.ca/retired-32-lessons-learned-part-1-2/

Lots of negative comments, because readers wanted a) details (don't blame them, they are open to ask what they want and b) clarity on what is meant by being "retired". 

Regarding the latter, all these 30-somethings and 40-somethings that "retire" young still work so by the classic definition of being retired, they are not. They do retire from some form of work only to take on new work. 

Like others mentioned above, to each their own. Certainly having a high paying job and living rather frugally gives you a shot at this - if you want it.

Regarding how much is enough, I personally wouldn't be comfortable with less than < $1 M to retire on early, because you still have longevity risk and tax obligations with some accounts (i.e., RRSP). I suspect there are still tax implications for Anita making $27,000 per year (4% of her $690k).


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## Mortgage u/w (Feb 6, 2014)

The pitfall in her future is Life - it doesn't always turn out the way you plan it.


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## GeoNomad (Aug 24, 2017)

Mortgage u/w said:


> The pitfall in her future is Life - it doesn't always turn out the way you plan it.


Life may not be a pitfall.

Life has a way of placing opportunities in front of us. 



JackJac said:


> frugality paired with shrewdness (alternate, fun money-making ventures) will keep them afloat


continues to work for me after 33 years.


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## STech (Jun 7, 2016)

In my early and mid 20s, I was all Gung-ho about this early retirement dream as well. Had I decided to stay the course, and remained single, I definitely would've "retired" by now. But it dawned on me later, that it was the job I hated, and not the idea of actually working longer. Really, what the heck was I going to do with my time for the next 50 years?

None of these "early retirees" are retired in the full sense we think of. They all move on from their busy fields, onto something else and become self employed for the most part. Derek Foster never retired, he just became an author, and his wife continued to work full time. For me, if I really hated my work, I'd absolutely look for something less stressful and more enjoyable, instead of calling it quits and hoping the shoe string budget holds up. At a minimum, I'd also go for the 1M invested in dividend paying stocks to live off.


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## tygrus (Mar 13, 2012)

Takes hundreds of thousands to raise one kid. If she stays childless in a micro rental, sure no problem. 

Most of these peoples retirement plans include a bridge to OAS/CPP. Just make it to 65 then the govt will take care of me. I would never ever count on such a plan. I would never give up a family to be retired.


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## Dilbert (Nov 20, 2016)

My Own Advisor said:


> Regarding how much is enough, I personally wouldn't be comfortable with less than < $1 M to retire on early, because you still have longevity risk and tax obligations with some accounts (i.e., RRSP). I suspect there are still tax implications for Anita making $27,000 per year (4% of her $690k).


+1, at least $1M and a paid off house, IMHO!


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## gardner (Feb 13, 2014)

tygrus said:


> CPP


After retiring from conventional employment at 32, CPP is not going to be a big payday.


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## Pluto (Sep 12, 2013)

She's a survivor. She'll make it. Of course a book deal after retirement helps - apparently writng a book isn't considered work. She will get married to a high income earner, have kids, and will probably end up a multi millionare....


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## Karlhungus (Oct 4, 2013)

james4beach said:


> If it helps inspire anyone, here's the story of my friend and coworker Bryce Leung, who retired in his 30s
> http://www.cbc.ca/news/business/house-investment-wealth-1.3716641
> 
> The last time I ran into Bryce was in a Dollarama under College subway station. The guy really is frugal.
> ...


Actually its more optimistic then that. Newest research shows 4.5% WR would last 30 years and 4.1 or 4% would last forever. As per the guy who started the 4% rule. He mentioned it in an AMA on reddit.


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## My Own Advisor (Sep 24, 2012)

gardner said:


> After retiring from conventional employment at 32, CPP is not going to be a big payday.


That's a key thing some folks overlook - contributions to that plan. On the flipside, I don't know of any young retiree that isn't working (for compensation) to some degree.


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## gardner (Feb 13, 2014)

My Own Advisor said:


> I don't know of any young retiree that isn't working (for compensation) to some degree.


Umm. Then we have different definitions of what "retirement" means. If you go on to do something that earns CPP eligibility, I would put that under the heading of job-change or possibly career-change, but not retirement.


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## My Own Advisor (Sep 24, 2012)

Retired = having left one's job and ceased to work. 

Very few, young retirees, cease to work. They work for sure; they write books, run blogs, etc. They are striving to earn some income / compensation but just not working on what they used to.


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## Gumball (Dec 22, 2011)

My Own Advisor said:


> Regarding the latter, all these 30-somethings and 40-somethings that "retire" young still work so by the classic definition of being retired, they are not. They do retire from some form of work only to take on new work.


This is well stated... to me it seems these 30-somethings flash the word around RETIRED at 30...as a headline to get publicity and hey good on them for doing that, but like you stated they are not retired in the true sense, seems more like a shift from full time to part time... Derek Foster did it, now theres a bunch of others....don't mean to take anything away from her or anyone of them at all, just my opinion....


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## Plugging Along (Jan 3, 2011)

I think there is a difference between on who blogs, writes books, art, etc after they retire so they can have an income, vs just for fun, where the income is the side product

In the case that a person can really not work and live off of their investmentt as they lifestyle they want, they are retired. In the case they quit a job they don't like to find some thing lose. It's really a question of need which is hard to see.


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## nathan79 (Feb 21, 2011)

Well, she made a ridiculous income... 160-320K a year.

Even she admits that retiring at 45 is more realistic.

I really doubt that most could achieve what she did, especially someone who is not Type-A, or doesn't have an extraordinary skill.


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## tombiosis (Dec 18, 2010)

I recently started reading a blog about this called "mrmoneymustache" 
www.mrmoneymustache.com
Same ideas about aggressive saving, living frugally and retiring early with the 4% rule.
Interesting.


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## james4beach (Nov 15, 2012)

Mr Money Mustache is a good site. The guy lived in Toronto for a while, I think.

Yup there really isn't much mystery about the whole picture. If you have a ridiculously high income, you can save up money. These people earning 200K-300K a year can just dump the cash into a savings account, and they'd still retire early.


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## hboy54 (Sep 16, 2016)

Hi:

No high incomes here. I only had 3 years over $50K employment earnings with best year ever about $75K. My wife was a teacher so her salary give or take 10% is a matter of public record, but would have averaged $$80 to 85K maybe these past 15 years.

I packed it in about 2002 at age 40 with a family NW about $0.5M at the time. My wife was done as of the end of the last school year at just under age 52. Family NW now around $3M including commuted value of my wife's pension. So average retirement age about 46.

For the past 15 years our average family income from employment was something like $80 to $85K from one person, so the income tax hit over two @ $40K would be at least $5K annually. Our annual savings from employment probably averaged no more than $20K annually the past 15 years.

We never hit the real estate jackpot by living in Toronto or Vancouver.

Key reasons why we are where we are:

No excessive housing. House #1 was under 1000SF. Current house 1600SF, plus out buildings.
Controlled spending on discretionary items: restaurants, booze, travel etc.
The vast majority of our possessions were purchased used or free.
I never owned a car until marriage and while married we had 1 car 15 out of 20 years.
I had roommates in my house until early 30s.
No FI investments for close to 30 years now. When one can handle the volatility of stocks and have a long time frame, why own a historically lower returning asset class?
I have many useful skills and have done pretty close to all house maintenance.
Never ever purchased a lottery ticket (for personal use, but a few throw away gifts on occasion) or gambled in a casino.
I expect my life long investing record is top decile.

Total inheritance funds "passed through" from deaths of grandparents $15,000.
Paid for our own university degrees.

hboy54


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## redsgomarching (Mar 6, 2016)

hboy54 said:


> Hi:
> 
> No high incomes here. I only had 3 years over $50K employment earnings with best year ever about $75K. My wife was a teacher so her salary give or take 10% is a matter of public record, but would have averaged $$80 to 85K maybe these past 15 years.
> 
> ...


wow hboy. that is very commendable. good job on building that! hope you and your wife enjoy your nest egg to the fullest after that!


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## JackJac (Mar 13, 2017)

GeoNomad said:


> continues to work for me after 33 years.


Share your secret sauce -- what fun side hustles are you engaged in?


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## GeoNomad (Aug 24, 2017)

JackJac said:


> Share your secret sauce -- what fun side hustles are you engaged in?


If there is a secret sauce, it is to engage in activities you love so much that they don't seem like work, but still pay attention to getting them to pay for themselves many times over.

I like to play with computers and build electronic gadgets. It turns out that other people like to buy such things, if they are done well.

When monetizing an activity, make sure the revenues will continue without the need for ongoing effort. For example, shareware I wrote for my own use in 1993 is still generating sales today. The last update was over 5 years ago. 

Never work by the hour unless the remuneration is enough - I charge $5K a day for consulting, when someone really wants my help.


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## tygrus (Mar 13, 2012)

Mr Money moustach lives on an acreage and hauls water and chops wood by hand and is off the grid. 

I mean anything is possible. I can live in a cave or my parents basement too. 

But experiences cost money. Not a ton, but some and by my calculation you cant experience much on $30K a year after your basics are taken care of.


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## My Own Advisor (Sep 24, 2012)

james4beach said:


> Mr Money Mustache is a good site. The guy lived in Toronto for a while, I think.
> 
> Yup there really isn't much mystery about the whole picture. If you have a ridiculously high income, you can save up money. These people earning 200K-300K a year can just dump the cash into a savings account, and they'd still retire early.


+1.

You make $200k. You decide to live frugally for 10 years at $25k. Not rocket science  That said you need a) major discipline and b) some investing knowledge to pull it off.

Most don't care about a) or b). You can barely get most Canadians to think about b). If it ain't an app, people don't care!


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## My Own Advisor (Sep 24, 2012)

@hboy,

Impressive. Some comments:

No excessive housing. House #1 was under 1000SF. Current house 1600SF, plus out buildings - well done and you were smarter than most, getting the "big decisions" right in life early on.

Controlled spending on discretionary items: restaurants, booze, travel etc. - again, good discipline. Most don't have it nor want it. 

The vast majority of our possessions were purchased used or free.- smart.

I never owned a car until marriage and while married we had 1 car 15 out of 20 years. - again, you got the "big decisions" right.

I had roommates in my house until early 30s. - a great way to save money. Most people wouldn't do that....

No FI investments for close to 30 years now. When one can handle the volatility of stocks and have a long time frame, why own a historically lower returning asset class? - totally agree. The financial industry loves to preach the benefits of GICs and bonds because they can lend that money out. 

I have many useful skills and have done pretty close to all house maintenance. - that's impressive. Most can't.

Never ever purchased a lottery ticket (for personal use, but a few throw away gifts on occasion) or gambled in a casino. - Most don't.


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## GeoNomad (Aug 24, 2017)

tygrus said:


> you cant experience much on $30K a year after your basics are taken care of.


You can boondock in a van in Mexico or Arizona or California all winter on less than it costs most people in Canada to heat their house. Last winter in Baja, we lived on the beach with several Canadian snowbirds, where locals came every day to sell fresh fish and shrimp. If that kind of life appeals.


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## james4beach (Nov 15, 2012)

tygrus said:


> Mr Money moustach lives on an acreage and hauls water and chops wood by hand and is off the grid.
> 
> I mean anything is possible. I can live in a cave or my parents basement too.
> 
> But experiences cost money. Not a ton, but some and by my calculation you cant experience much on $30K a year after your basics are taken care of.


Is this true, does he really live like that now?

I agree that a bare minimum for comfortable + fun living in Canada/US is around 30K. I have tried to keep my expenses low for years and the lowest it gets is around 34K. If I cut out all forms of fun, I could probably get it down to 29K but I doubt that I could go lower.


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## nathan79 (Feb 21, 2011)

james4beach said:


> Is this true, does he really live like that now?
> 
> I agree that a bare minimum for comfortable + fun living in Canada/US is around 30K. I have tried to keep my expenses low for years and the lowest it gets is around 34K. If I cut out all forms of fun, I could probably get it down to 29K but I doubt that I could go lower.


It depends on the person. In my experience 20-25K is fine, with some caveats;

-you must rent somewhere not crazy expensive (ie. apartment in a suburb)
-need at least one roommate/spouse/relative to split the rent & bills
-minimal clubbing/going to bars (once in a while is ok)
-no car payments (reliable used cars are everywhere for as little as 1K)
-no travel that involves flying large distances or pricey hotels

You can still travel by car, go camping, etc. You can go to movies, go hiking, do sports, and do other low-cost activities.

Somewhere along the line it seems like spending 5-10K+ on vacations every year became normal and necessary for happiness. Does it work? If you ask me, people aren't any more happy than before (maybe less).


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