How To Retire Early

Retiring early is not rocket science.

It's not that golden handshake after working 30+ to 40+ years. Not at all. And no, I've not retired yet, but I'm working on it consciously.

To me, retiring early means that:

I don't really have to worry about money anymore and I don't have to make decisions based on money ie taking a higher paying job that decreases my life satisfaction

Retiring early doesn't mean I'm swimming in money like Scrooge McDuck. It just simply means that my passive income is more than my daily expenses.

The mathematics is simple:

  • how much is my monthly living expenses

  • how much my passive income is

As long as my passive income is more than monthly living expenses (factoring in anomalies and unexpected expenses), then we're good. According to my wife who is also the finance minister, we need S$ 6,000 a month. That'd translate to S$72,000 per year ($6,ooo per month x 12 months).

You'd realize my 2016 dividends amounts to $12,000 for the entire of 2016, which means that I'm $12k/$72k = 16.67% "there".

So basically means that for me to have an early retirement, I'll need to have 100%; and if $12k is generated from $150k invested in dividend stock, hence I would need:

  • if $150k invested = $12k passive income per year

  • and if I need $72k per year passive income to retire early

Hence I will need 6x invested amount ie $150k x 6 = $900,000.

The maths behind this is because I had a 8.137% return on investment (ROI), which is pretty decent, and I want to factor in a buffer, say the market tanked or I made a series of shitty/wrong decisions.

We can do this 2 ways:

  • Buffering based on total amount vested. So I'd want 100% buffer, hence I will prefer a $900,000 + 100% buffer = $1,800,000 portfolio in dividend stocks.

  • Buffering based on ROI, giving a 50% drop so 4% returns instead of 8%. Again, same as above, I'll have to have a nest of $1.8m to give me $72k based on 4% return

The maths remains the same.

Hence my target will be $1,800,000 for me to be "truly passive".

OMG.

$1.8m is not a small sum, how can I get there?

To eat an elephant, we do it in parts.

So, we need to see that it'd take time. Question is, how much time?

At this point in writing, I am 35 years old. Say I want to give myself at most 10 years. If I have $150k invested, and I want to hit $1.8m, hence my shortfall is $1.8m - $150k = $1.65m

According to http://www.moneychimp.com/calculator/compound_interest_calculator.htm

passive income planning 10 years

I'll need to invest $95k injections every year (or $7916 per month) for the next 10 years to hit $1.65m.

Ok, that's a little hard for me.

I'll drag time a little more, say 20 years.

passive income planning 20 years

The numbers look soooooooo much more doable now, at $22500 per year (or $1875 per month) when I drag the timeline to 20 years.

So that'd mean that I can "truly retire" when I'm 55 (shit!!!) but of course, I have other assets to help accelerate the amounts that I can invest either by means of increasing cashflow or selling the businesses to fund my retirement income.

My real target is $72k per yer (or $6k per month) and I can achieve that with $900k invested at 8% return which is my previous achievement. I prefer to buffer it, so I effectively x2 the amount I need ie $900k x 2 = $1.8m which requires more time. Factoring in my current salary and conservatively, it'd take 20 years. I do have assets that I can sell or increase my personal cashflow to accelerate it, and the important thing is I'm aware and conscious of what my options are.

I will keep building my physical businesses, online businesses, reinvesting my dividends etc interim.

What's more important is I know my goal, what I need to do to get there, and the timeline involved.

What about you? What's your passive income goals and how will you get there?

join me in intuitive, loving, gentle and good success and self mastery that actually matter. no hype. no bullshit.

Hang around here for some time, you'd see that I don't well with hype or bullshit. I can smell that typically a mile a way, and I hate that shit too.

I've been working on myself and on NigelChua.com for years, since 2006, and only in late 2019 I started to focus on intuitive and loving leadership, entreprenership and personal development.

Here are some areas that I work on a consistent, ongoing basis.

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See the Tools & Resources I use to improve my life, businesses, health, build passive income and more.

The core topics I cover in NigelChua.com is:

  1. Eternal life and salvation: Jesus Christ is the Way, the Truth & the Life
  2. Fix your health: get healthier, live longer, run faster, more energy, fuck more
  3. Passive Income Lifestyle: Become financially secure by building assets that provides multiple streams of passive income that's more than your living expenses
  4. Personal Loving Relationships: Attract, build and grow relationships you love
  5. Philanthropy: give to the poor and needful
  6. Philosophy: Conscious, purposeful and positive living
  7. Productivity: How to become more efficient and productive in less time
  8. Insure yourself and your loved ones (Health insurance is important)
  9. Optional Adventures: Become rich and wealthy
  10. Optional Adventures: Build businesses that adds positive value to your society and life
  11. Success Principles

passive income lifestyle actions to take today and EVERYDAY To build streams and streams of passive income

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#4 Diversify, Protect & Multiply Your IRA/Cash

Billionaires are investing in precious metals and cryptocurrency such as Richard Branson, Peter Thiel, Eric Schmidt, Michael Novogratz and not to mention scores of very smart people and multi-millionaires like Tim Ferriss. I too am investing in cryptocurrency.

Ever-Green Assets: Precious Metals (Gold & Silver)

Experts agree that the financial market is now even more fragile than pre-2008. Will your current retirement portfolio weather the imminent financial crisis?

Threats are many:

Is gold really useful in times of trouble? See for yourself:

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You may wonder why investors worldwide are flocking to digital currencies (also known as cryptocurrencies or cryptos)?

Take a look at this chart showing the growth of a 10K portfolio invested in just three cryptocurrencies.

This is just one of the reason. And it'd continue to grow as utilization and applications increases.

Diversify and invest into future currencies and cryptocurrency such as Bitcoin, Ethereum, Litecoin and Ripple today, find out how here

One year from today, you'll be one year older. What would you have done by then?


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