What Retire at 40 years old really means.

my money moustache

There are many blogs providing advice for young people on how to retire early. Basically, their advice boils down to 2 things.

1. Save a large chunk of your income while working in your 20’s and 30’s. By large I mean around 60 or 70% of your income.
2. Plan to live a very modest lifestyle when you “retire” until you become eligible for government social security in your 60’s. By then, you will have become so accustomed to living frugally, nothing will seem different to you compared to the masses who retire from work at age 65 and need to adjust to a reduced income lifestyle.

There is nothing wrong with the advice on these blogs. I’ve written before that my blog will be different but I wanted to add one more thing about the whole retire early phenomenon. Namely, many of the writers of these retire early blogs didn’t actually retire.

I’ll explain using Mr. Money Mustache as an example. He is probably the most popular early retirement blogger in North America. He and his wife quit their jobs as software developers when their son was born. The family lived very frugally while working and set aside much of the family income. They also planned to maintain a low consumption lifestyle while not working for any company. But what they didn’t do was retire from work.

Instead Mr. Mustache starting buying, renovating and selling homes in his neighbourhood. He also started and maintains his very successful blog. Mrs. Mustache became a real estate agent. I would not be surprised if they put in just as many hours “working” now as they did when they were software developers.

So is this actually early retirement? It’s more like freedom to work at things you want to work at, when you want to work. Nothing wrong with that. In fact, this freedom and control would probably go a long way to improving happiness for many stressed out corporate 9 to 5ers.

The point is you can’t expect to save some money until you are aged 40 and then spend the next 50 years relaxing in the sun. That is not realistic and probably not healthy for the vast majority of us.

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