Hope she enjoys her retirement. I retired 10 years ago at age 55 but it doesn't work: all your mates are still working. I chose to return to work part time in parking buildings just for customer contact and my on sanity. Retired again at age 65. It is better...

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As Brian said... your friends are all still working! So it is a lonelier time. I retired 5yrs ago at 35 years of age. Then became a Parent, supporting my child 100% on the same self-funded frugal income. Living well and teaching everything to my littlie... just as I'd dreamed of doing when I started my mission at age 19. Mission achieved! ! No handouts, no parents to live with along the way, no mentors, just hard work, plenty of saving and simply going against the grain :-) You can do it!

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Nineteen and living at home? What will she do when life actually happens to her? Marriage, children, rent/mortgage?

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2 extreme examples. The 19 year old, sure she will get there but would be slower once she has rent and definitely if she has a child/children. The engineer he will get from $300K to $1M in 5 years??? Must be earning a massive salary and saving a large part of it - not exactly the normal situation.

I agree though, most people don't save anywhere near enough/ spend a lot more then they need to. Retirement by 50 ish is possible for most, if they have a mortgage, if no mortgage then before that but probably not in their 30s unless they start very young/ have high paying jobs.

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For goodness sake! Get a career that you will enjoy, have a vibrant social life, eat sensibly, get good sleep & retire with you partner and friends at 60!

What's wrong with that!

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Click bait. The premise is good but then you use examples that are a little too extreme. Look at the averages across Australia, and find people who fit into these categories and how they do this then I will sit up and listen. You are better than this Money magazine.

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You clicked on a story about early retirement and now you're complaining that the examples are too extreme?

What were you expecting? "I'm 19, I buy coffee every day, drive a new car and go overseas every six months and I'm going to retire at 40." That's not how you achieve early retirement.

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You have to remember saving up a $ 1m and living of the 4% $40k and retiring at 40 years old, in 20 years time with inflation your 40k will have the buying power of 20k in today's dollars. Add to that if your capitol stays at $1m it to will lose value through inflation as well

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Agreed. Do any of these people actually HAVE a mortgage or do they just rent? If they do, they still have to rent when they've made their money because they have no house paid off.

And going on holidays is a MASSIVE expense so Pat needs to cut back on that... tell him he's dreaming to double his money in 5 years.

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To retire on $40,000 in twenty years time will be insufficient in my opinion. Kate needs a better plan and a good accountant - preferably one who is a millionaire to provide appropriate guidance). Plus, she needs her own property and ought to stay at home longer to garner a suitable deposit.

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The concept 'rule of thumb' of multiplying your target income by 25 to determine you require savings goal (i.e if you aim for $40,000pa income to retire you need $40,000 x 25 = $1,000,000 in savings), you withdraw 4% income from you savings in the first year. The 4% is net (or real) return, after inflation. Therefore, your gross invrstment returns need to be at least 7% and with about 3% inflation that leaves you with a real return of 4%. Then, in the second year you withdraw the 4% adjusted for inflation and so on for subsequent years.
There has been much reasearch about this 25, 4% rule of thumb and if not being conservative enough. It has less than a 100% probability of lasting 30 years or more.
A more conservative rule of thumb is a 33, 3% method, where for $40,000 income in the first year and indexed for inflation every year after that, you multiply $40,000 by 33 (not 25), which gives you a target of $1,320,000 needed for your early retirement savings goal. Statistically, this 33, 3% rule of thumb has been shown to last for over 40 years 100% of the time.
Search it to find out more...
Regards,
Robert Kennedy

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If you do well at school and obtain a decent job with higher than average income, obtaining financial independence at 40 isn't that difficult. My wife and I have done it.

However, we haven't ceased working. We still both work part time and have just embraced a slower lifestyle.

More people could easily do this if they just gave it some thought and maybe had a little bit better financial literacy.

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I see Pat is now up to $650k saved, and given the dividends from this I have no doubt he'll make $1Mil in the next 3 years, even after a pandemic. However, I think he realised a Mil won't cut it these days . . . so the target increased. Money buys you choice.

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