When you think of retirement, what comes to mind? Shuffleboard with Grandma? Chess with Uncle Chester? Watching reruns of that fishing show for the 18th time, hoping for a different outcome?
Well, let me paint you a slightly different picture.
What about traveling the world with your family, letting your curiosity guide you? Or sleeping in on a Thursday morning and going to the gym because you finally have the time to focus on your fitness? Or working 16-hour days occasionally—but not to make some jerk in a corner office richer. You’re working on something amazing, something that pulls you, something that inspires you—doing meaningful work with incredible people.
And what if you could do all of this—early retirement—decades sooner than most? Sounds far-fetched, huh?
Well, here’s the truth: I was able to “retire” when I was 27.
Now, before you roll your eyes, stop reading this, and start scrolling through your Instagram feed again, listen up. I’m going to show you how I did it through the power of real estate and how you could do the same.
Stick with me.
How to Retire Way Earlier Than Most People
OK, let’s define early retirement—also known as financial freedom or financial independence. Early retirement means you no longer HAVE to work anymore in order to pay your bills.
But I want to get a little deeper. You see, there are two types of financial independence.
The 2 Levels of Financial Independence
Level one means you can pay all your bills with passive (or mostly passive) income. This could be income from stock dividends, cash flow from rental properties, or regular profits from a business. If you’ve attained this type of financial freedom, you don’t need to work full-time.
For me, I achieved that level at just 27 years old. BUT it’s possible to go even further.
Level two means you can pay all your bills—but you can also do all the extravagant things your little heart desires. Buy that Tesla. Sail around the coast of Africa. Buy a pet lion.
For the purpose of this post, I’m going to mostly focus on level one. However, I’ll leave you with the secret to achieving level two.
How Did I Achieve Financial Independence at 27?
For me, it was simple: At 21, I started buying cheap rental properties—not hundreds of properties but a duplex here, a single family house there. Usually I’d fix it up a little bit, rent it out, and make a few hundred bucks in profit after all the bills had been paid.
It wasn’t a ton of money at first. But the cool thing about rentals: they grow.
Every rental unit I bought was like this little tiny oil well, pumping out oil from the ground—$100 from this one per month, $300 from this one, $200 from this one.
You see, every rental property I owned rented for a certain amount, and each month, there were expenses. When the income is greater than the expenses, that’s called cash flow.
Related: This App Will Help You Track Your Way to Financial Independence
Here’s an example.
Consider a property that has four units, and each unit rents for about $700 a month. That’s $2,800 total.
I have to pay the mortgage payment, the taxes, the insurance, and the lawn care, and I have to fix stuff when it breaks. But I don’t want to deal with tenant phone calls, so I hired a property manager. All in all, these expenses are $1,800 a month on average. That means, I’m keeping about $1,000 per month in extra money… in my pocket… each month.
So, when you buy awesome home run deals like this, it doesn’t take long to make more from rentals than from your job.
Back to my story. Before I knew it, I was making about $3,000 per month from the cash flow. And this leads me to point number two if you want to retire early: You gotta keep your expenses LOW.
Look, if you need $3,000 to pay all your bills or you need $30,000 to pay all your bills, which is easier?
Duh! $3,000.
But here’s what most people do. They get a job. They get a paycheck. They spend their entire paycheck every time they get it.
Then, they eventually get raises or get a new job that pays more. And guess what? They spend that, too.
In college, they could live on $28 and favors from friends. As a 30-year-old, many people can’t live on $10,000 a month.
Now, am I saying you need to live like a college kid to retire early? Not really—but it wouldn’t hurt. It’s the principle I’m trying to make clear.
If you want to retire early, you have to find ways to keep your expenses low. Don’t fall victim to what we call “The Income Creep,” where you just keep spending more and more, the more and more you make. That’s a game that is impossible to win.
When I was 27, all my bills came to $3,000 a month. And I had bought enough cash-flowing rental properties to pay me $3,000 per month.
If $3,000 just isn’t going to cut it, then just “X” out of this article and go back to the same crappy job you’ve been working—because all of this is impossible.
Just kidding, of course!
You can still cut all the unnecessary stuff from your life. Do what needs to be done if early retirement is really that important to you.
Sell that expensive car and get rid of that car payment. Stop eating out entirely and use the extra income to pay off credit card debt. Or consider house hacking, where you buy a duplex, triplex, or fourplex, live in one of the units, and use the rent from the other units to pay your bills.
Maybe $3,000 isn’t the exact number for you. But it shouldn’t be $10,000 or $15,000 for a seeker of level one financial freedom, either.
So, I retired at 27. I quit the job I hated, and I sat on the couch for a few months, bored out of my mind, and realized that retirement wasn’t about playing shuffleboard with Grandma. It was about freeing up your 9 to 5 hours to spend working on stuff that matters to you.
No one achieved early retirement and then stayed doing nothing. And I wasn’t satisfied with $3,000 a month—that was just a start, just the foundation.
And you can do that early. I recommend looking into real estate investing to get there, because I believe it’s the single greatest wealth-building tool on the planet. But only if you do it right!
There are a lot of ways to invest in real estate that will just make you more broke—less rich than when you started. So just like any hard thing, LEARN.
Resources to Learn About Achieving Financial Freedom
Get some books. Listen to some podcasts. Attend some webinars. I host one almost every week over at BiggerPockets.com/webinar.
But you can retire (very, very) early through real estate if you really want—and I bet you could do it in less time than you’d think.
In fact, if you want to see a really cool strategy for achieving level one financial freedom in just a few short years, search YouTube for “The Stack BiggerPockets”—or click here. It’ll walk you through a concept I call “The Stack,” and it’ll show you the power of exponential growth and real estate.
But maybe real estate isn’t the right approach. That’s fine. There’s business. There’s stocks. There’s other investments.
But they only work if you work.
Related: Retirement Accelerator: 7 Steps to Reach Financial Independence in 5-10 Years
OK, so, before I end this post on early retirement, let’s talk about the secret to financial freedom level two. Here it is.
Once you’ve achieved level one financial freedom, your days are freed up to reach for level two.
Here’s a tangible example. Once I “retired” at 27, I didn’t stay seated on the couch. I started spending MORE time on my real estate, and I also started doing some other passion projects, like writing books and starting the BiggerPockets Podcast (which has become one of the largest podcasts on the planet with more than 60 million downloads).
Now I get to work on work that is meaningful, exciting, helpful to others, and profitable. And I’ve increased my passive income through all those things to the point that I’ve achieved financial freedom level two. In other words, now I can travel around the world led by my curiosity, sleep in on a Thursday morning and then head to the gym, and sometimes work 16-hour days making videos, podcasting, buying real estate, and doing other work that I am passionate about.
I don’t say this to brag. I say this as a simple truth to show you that it can be as true for you as it was for me.
And the late, great Jim Rohn said it best: “If you really want to do something, you’ll find a way. If not, you’ll find an excuse.”
For more on using real estate investing to achieve early retirement, don’t forget to subscribe to our YouTube channel and check out some of the real estate books we’ve published over at BiggerPockets.com/store.
Do what ya gotta do to gain the knowledge needed to make your early retirement a reality!
What questions can I answer for you about retiring early and real estate investing?
Ask me in the comment section below!
Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.
