How I Retired In My 30s – From Ugly Crying To Retiring Just 10 Years Later

Hello! Today, I have a great article from JT. JT has a great story about how he was down to his last dollars living in a hostel, to hitting his retirement number just a little over a decade later. If you’re looking for another great retirement article, I also recommend How This 28 Year Old Retired With $2.25…

Michelle Schroeder-Gardner

Last Updated: December 4, 2021

Disclosure: This post may contain affiliate links, meaning if you decide to make a purchase via my links, I may earn a commission at no additional cost to you. See my disclosure for more info.

Hello! Today, I have a great article from JT. JT has a great story about how he was down to his last dollars living in a hostel, to hitting his retirement number just a little over a decade later. If you’re looking for another great retirement article, I also recommend How This 28 Year Old Retired With $2.25 MillionBelow is his article on how to retire in your 30s. Enjoy!

Do you want to learn how to retire early? Here's JT's story about how he was down to his last dollars to retiring in his 30s. How to retire in your 30s!Have you ever seen a grown man ugly cry?  Our faces scrunch up like a squeezed sponge, wringing the water from our eyes.  Our shoulders shake uncontrollably.  We gurgle out a noise that’s a cross between a laughing hyena and a grunt.  We’re not pretty.

It was 2000.  I was ugly crying on the bed of the Spanish Harlem hostel where I was living, down to my last dollars.  Months earlier, I graduated college, sold my car, and drove from Los Angeles to New York City with sunny West Coast optimism.  Then after months of getting rejected from job after job after job, reality blew in like an East Coast blizzard.

They say, “New York City:  If you can make it here, you can make it anywhere.”  For those of us who have tried, it can feel more like, “Since I can’t make it here, I can’t make it anywhere.”

I wasn’t crying because I failed.  I was ugly crying because I thought I was a failure.

And yet, a little over a decade later, I hit my retirement number.  So what happened between the tears of sadness and the tears of joy?  I’ll tell you exactly what I did to hit my retirement number in my 30s.

Related articles on how to retire in your 30s:

What is Your “Retirement Number?”

First, let me define what I mean by retirement number. It’s not just sitting under an umbrella on a faraway beach sipping fruity cocktails (although that would be nice!).  It’s simply the point where if you were to quit working, you could still cover your basic needs.  Basically?  It’s when going to work is a choice.

You might find out, like I did, that you actually want to keep working.  The best part of reaching your retirement number isn’t money, it’s agency. It’s the ability to spend your time the way you choose — unless you have little ones like I do waking you up at 6:00am every morning!

Sound pretty good?  Here are my 6 steps to find out your retirement number and how to reach it.  I’ll spend more time on the first 2 because they are the foundation for the remaining 4 steps.  The math might seem a little intimidating at first, but if you write it down on paper, you’ll find that it’s not too bad.  As you’ll see, you don’t have to be a math or money genius to retire early!

 

The 6 Steps to Retire in Your 30s:

Budget to a Balance Sheet:

When many of us think about our finances, we focus on what’s called the “income statement.”  As a result, the budgets you see are most often just an income statement, like this:

Do you want to learn how to retire early? Here's JT's story about how he was down to his last dollars to retiring in his 30s. How to retire in your 30s!

Understanding your savings amount is a good starting point, but it’s where most people stop.  Instead, use it as a starting point.  The savings amount from your income statement is there to help make your “balance sheet,” which is just a fancy way of understanding what you have and what you owe.  It will take some time go gather up your statements, but it’s not harder to make than your income statement. 

Your balance sheet is basically:

Do you want to learn how to retire early? Here's JT's story about how he was down to his last dollars to retiring in his 30s. How to retire in your 30s!

Your savings amount flows into your “What You Have” bucket since that savings is now what’s called an “asset.”  Think of it like when you eat cashews and have several left in your bowl.  You’d go and put the remaining cashews back into the bulk container.  Those cashews just went from leftovers to future snack.

Do you want to learn how to retire early? Here's JT's story about how he was down to his last dollars to retiring in his 30s. How to retire in your 30s!

Next, add your investment account balances to your “What You Have” bucket.  Don’t include your car, house, jewelry, or any other physical things unless you actually plan to sell them within a year.  You’re trying to figure out all your “What You Haves” that can be used to fund your living expenses, and last I checked, biting into your steering wheel wasn’t all that filling.

“What You Owe” is your credit cards, student loans, mortgage, and that loan you took out from your uncle.  The technical term for these is “liabilities.”  So, once you organize your information, you basically have your balance sheet.  You’ll see in the next steps why having a good grasp of both your income statement and your balance sheet is so important.

Know Your Retirement Math:

A study by financial planner William Bengen found that if you withdraw 4% a year, your money would last you at least 30 years if you had a 50/50 portfolio of stocks and bonds.  Others have found that most of the time (although on a 60/40 stock/bond portfolio), you would actually end up with more than when you started.

Bengen got to this 4% rate by back testing the withdrawal rate that would have worked even through the Great Depression, basically taking the worst case scenario in history.

The 4% withdrawal rate is a helpful guide for knowing how much to withdraw, but not very helpful to let you know how much you should have to withdraw from.  To find that, you’ll need to convert it into a goal.  We’ll start with the 4% withdrawal equation:

Do you want to learn how to retire early? Here's JT's story about how he was down to his last dollars to retiring in his 30s. How to retire in your 30s!

But that’s not a goal.  It’s basically where you are today if you were to try to retire early.  To convert it into a goal, you’ll need to do some mathematical jujitsu with the equation above (not to worry, I did it for you!).  It’s the same equation, but I’ve mixed it in a blender to make it more helpful:   

Do you want to learn how to retire early? Here's JT's story about how he was down to his last dollars to retiring in his 30s. How to retire in your 30s!

If you look carefully, I just reversed the “retirement withdrawal” equation.  I changed the “retirement withdrawal” to “living expenses” and inverted the 4% to make it 25.  By doing this, you can get to your “Retirement Number” goal. 

You might be thinking 25 times your expenses is a big, scary number.  It can seem unreachable.  But, I’m excited to show you how it can work in your favor.  To do that, turn the “25 times” into the ratio:

Do you want to learn how to retire early? Here's JT's story about how he was down to his last dollars to retiring in his 30s. How to retire in your 30s!

When you look at it as a ratio, you can see the power of reducing your expenses.  For every $1 you shave off of annual expenses, you’ll need $25 less in your “What You Have” bucket to hit your retirement number.  To illustrate how powerful this is, let’s look at an example:  Say you spend $35,000 a year but shaved off $4,000 in expenses.  Take a look at what happens:

Do you want to learn how to retire early? Here's JT's story about how he was down to his last dollars to retiring in his 30s. How to retire in your 30s!

If you put your money into the stock market, you might get the historical 7% annual returns.  Your account might get bigger.  But it also might get smaller.  But if you cut expenses, you’re guaranteed to get a 2,500% return!  ($4,000 savings x 2,500% = $100,000 effect on your retirement number)

Isn’t math fun?

You’ll notice I’ve only focused on “What You Have,” so why did I want you to know your entire balance sheet?  It’s a little circular, but I think you’ll get it one you think about how the income statement and balance sheet talk to each other:

Reducing your expensive “What You Owe” (like credit cards) items on your balance sheet leads to…

Lower expenses on your income statement, which leads to…

Higher savings on your income statement, which leads to…

Increasing your “What You Have” on your balance sheet, which leads to…

Hitting your retirement number sooner!

So don’t ignore your “What You Owe” number.  The sooner you get rid of your high interest rate ones like credit cards, the sooner you can hit your goal.

Alright, so how are we going to apply this to our actual lives?

(Do you wish you knew how to do this when you were younger?  Would you like to teach it to your child?  I’ll show you how teaching your children about money can be fun, fast, and easy starting here.  Download the FREE Guide to Helping Your Child Start Their First Business and you’ll also get access to a FREE course on how to get your finances in shape for early retirement!)

Make As Much As You Can:

I know — you’re shocked!

Even though it’s basic, let’s take a moment and think through the implications of what this means.  It means that if you’re serious about retiring early, you don’t work for passion.  You work for money.  If Goldman Sachs is offering you a job but you’d really rather be glassblowing, take the Goldman job, hang in for as long as you can, then retire early and spend the rest of your life glassblowing.  Till the ground now so that you can enjoy the fruit of your harvest later.

As for me, I persisted and eventually found myself at a hedge fund that allowed me to stay in New York City.  But most of us don’t have the opportunity to immediately get a six figure job.  What then? 

Side hustle.

Michelle has 65 Ways to Earn Extra Money.  There should be at least one that tickles your fancy.  Remember, you are trying to increase your income so you can increase your savings so you can increase your “What You Have.” 

So that I could extend my runway until I could get a full-time job, I worked as a sales associate at Banana Republic.  When I finally did land a full-time job, much to my friends’ puzzlement, I kept my sales associate job and turned it into a side hustle.  (Imagine how mortified my boss at the financial firm where I worked felt when she ran into me at Banana Republic!).  My balance sheet thanked me, as it helped me quickly pay off my “What You Owe” items, including student debt.

Change Your Spending Mindset:

Change your default question from “What can I afford?” to “What can I withstand?”  Often times, when we get an upgrade in pay, we too often automatically think we need an upgrade in lifestyle.  Why default to this assumption?

Let’s say you just got a promotion that is paying you $5,000 more a year.  You’re tired of asking your roommate clean up her dishes.  Your car is fine, but basic.  You think about how hard you’ve been working and how you deserve your own place and a new car. 

We’ve all felt this tug to spend more.  But as we’ve seen in step 2, the ability to minimize your spending is the most powerful thing you can do to reach your retirement number. 

Even though I was making six figures, I lived with roommates in non-prime areas of Manhattan until I got married.  I never had a doorman.  I hardly took cabs.  I stayed in and cooked most nights.  Within a few years, I paid off $15,000 of school debt and started building up my net worth.

Invest (Almost) Everything:

Saving is not the same as investing.  Saving is the act of putting money away for a rainy day.  Investing is putting money to work.  In fact, if you simply save without investing, you actually lose money due to inflation.

After you’ve saved enough for 3 to 6 months of living expenses, invest the rest.  The S&P 500 has historically returned 7% a year, after inflation.  Meanwhile, the average annual salary raise has been around 3%.  This difference is huge!  It means that at a certain point, your investments will actually start making more than what you’re saving per year.  Then, with enough time, it will actually start making more than your entire annual salary!

Basically, you’re trying to shift your finances from the picture on the left to the picture on the right.

Do you want to learn how to retire early? Here's JT's story about how he was down to his last dollars to retiring in his 30s. How to retire in your 30s!

Now, the last step can be tricky, but greases the path to your goal.

Move to a Lower Cost Area:

This is the trickiest part but also has the most potential to get you to your early retirement goal. An easier way to do this is finding an employer that also has a location where you want to be. For the East Coast, that’s either moving from Manhattan to a borough like Queens or transferring to another city like Philadelphia or Stamford.  On the West Coast, it’s like moving from San Francisco to Portland.  (Or, for the ultimate move, live in an RV and see the entire country like Michelle!)

A few years ago, I moved to Philadelphia while keeping my New York City salary.  In so doing, I significantly reduced my housing expense by thousands of dollars…every month. With that one move, because I reduced my biggest expense, my wife was able to stay at home with our 3 children.  In other words, it allowed my wife to retire (although her work as a SAHM is much more challenging than mine!).  At the same time, I was still able to accelerate our retirement timeline by decades!

So, if reducing your expenses is the most powerful thing you can do to reach your retirement number, cutting your housing expense is the most powerful thing you can do to reach your expense reduction goal.

But Can You Really Hit Your Retirement Number Before 40? 

Let’s put all six steps together. 

You’ll see that it can be done without making six figures.  Let’s say you make $50,000 out of college and have a side hustle that makes you an extra $12,000 a year (I based this on the 20-25 hours a week I worked at Banana Republic while keeping my full-time job).  Also, you live with a roommate and pack lunches most days a week and only occasionally eat out for dinner.

Do you want to learn how to retire early? Here's JT's story about how he was down to his last dollars to retiring in his 30s. How to retire in your 30s!

  • Your salary and expenses each increase 3% a year, which is in line with historical inflation.
  • Your investments earn 7%, which is the historical S&P 500 return above inflation.
  • At ages 28 and 34 you get a promotion, getting a $5,000 bump in salary each time.
  • Your first promotion at 28 gave you more responsibilities, so you decided to quit your side hustle.

At age 34, you move to a lower cost part of town, reducing your living expenses by 15% over the prior year (yes, it’s possible – I saved more than this moving from Manhattan to Philadelphia).

As you can see, by the time you’re 39, you could withdraw almost $43,000 a year.  So, if you were this person and quit your job at 39, you’d have enough to cover living expenses and taxes until social security kicks in. 

As you can see, it’s possible even if you don’t have a big salary.  So the real question is not “can you?” but “do you?”  Do you have the desire to transfer the math into your actual lifestyle?  Do you put in the effort to create the habits to sustain this level of investing for almost 2 decades even when life throws you curve balls (which will happen)?  Do you set aside time and energy to start a side hustle even when your friends are going out and having fun without you?  Do you say “no” to the tug to spend more and that desire to show the world how successful you are by the clothes you wear or car you drive?

If you do, then the only thing between you and achieving that goal is…you. 

A Different Cry:

Several years ago, I had a different moment while sitting down.  This time, I was looking at my balance sheet and realized that I had surpassed my retirement number.  There was no blubbering this time, just a calm lightness.  I felt liberated.  From then on, every day I walked into work was because it was my choice. 

The funny thing?  I realized I wanted to keep working because I was still having fun.  For now.  My 67 year old boss just retired.  Instead of the joy and excitement you would’ve expected, he had a lot of fear about how he was going to fill the rest of his days.  Do you want this fate?  You work so hard for so long that when you do have financial freedom, you’re either too old or too set in your routine to experience all the things you used to want to do. 

For someone working toward a single purpose for so long, it’s actually challenging to not have a big goal anymore.  And the time to figure out what else to do is while you’re still employed.  This is why I started Just Making Cents so that I could still have purpose and projects of my own choosing, and to have greater impact on people’s lives.

And that’s when life gets really fun.

Author bio: JT is passionate about viewing money differently, having spent over 15 years on Wall Street.  He writes about money from the perspective of faith and as a father of 3 spunky kids. 

Are you interested in learning how to retire early? Why or why not?


Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. Hi JT,

    You are so right. Side hustling and investing most of your money are key to achieving financial independence. That’s how we are able to bring in $400K+/yr and live on only 15%.

    For taking advantage of location arbitrage, we haven’t made our decision yet since we have family here. Did you leave family behind in the west coast? If so how often do you get to see them?

    1. Hi Ms 99to1percent!

      Living on 15% is an amazing accomplishment. Congratulations!

      My family actually left me first, moving to Florida when I was in college. I get to see them once a year — not enough! I have 3 young kids so they have to travel to see me these days!

  2. Hi JT, it’s great to see you here! I have read your story on your blog before, but I was still really impressed by your hard work, progress, and success when I read your blog today. It’s truly inspiring to see someone open their heart and let us into their life like what you did.

    There have been times in my life when I looked at myself and saw a big failure. It’s hard to look past the fact that I haven’t accomplished all the things I set out to do. But life goes on, and we move on ๐Ÿ˜‰

    1. Hi Ms. FAF!

      Thanks so much for commenting. We’re so often tempted to think of ourselves as failures. But our life is a big impressionist painting that can only be made sense of when we step away and look at it in full. Only then can we appreciate how the bright and dark points of our lives come together to form a beautiful picture ๐Ÿ™‚

      1. Hi JT, Ms FAF mentioned you to me and thanks for offering us Pinterest help haha. We both appreciate it a lot!

        Onto the post, stop making me cry. I never been to New York but I’m feeling like a failure in Seattle haha. I was going to comment on more ho-hum things (and the incredibly details you gave for FIRE) but I really love what you just said –

        “But our life is a big impressionist painting that can only be made sense of when we step away and look at it in full. Only then can we appreciate how the bright and dark points of our lives come together to form a beautiful picture ๐Ÿ™‚”

        I’m going to need to quote that soon FYI ๐Ÿ™‚

        1. Lily! Thanks so much for the kind words. Feel free to quote it ๐Ÿ™‚

          We take failing as a judgement on who we are and our talents. But I kind of like to think of it as a chance to learn something I otherwise wouldn’t have. It makes our lives much richer when we embrace it rather than run from it.

          Sincerely,

          Someone who has failed a lot!

  3. Great Post! I really enjoyed the detailed layout of the plan. It’s a nice way to guide the reader through a “change” in their thinking. I wonder, and this is the big challenge of writing in the FIRE community, if this will resonate with a new reader – someone who doesn’t know about FI at all. You’ve done a great job gently introducing the ideas, its a different tack. Most FI bloggers will run through the numbers which invites the inherent salary criticism. You nicely avoided this with your “middle class” example. I also really liked your conclusion with the story of your 67 year old boss. Sadly this is way too common. We have but one life to live and we choose to spend it in a very small mental box of possibilities.

    I look forward to reading more of your posts on your blog!

    1. Hi Handy Millennial! Thanks so much for your thoughtful read and reply. You know, criticism is just part of it. If you put yourself out there, there will be people who don’t agree. The dialogue, if done respectfully, makes us better!

  4. Cara @ Finances For Families

    JT, Congrats! I enjoyed your article and really liked the points you made about getting a side hustle AND moving to a lower cost area. You’ve certainly come a long ways since your days in a hostel and set a great example for others.

    1. Hi Cara!

      You know, we don’t do it alone. My wife is a better budgeter than I am, so she keeps our spending low. She’s also a big reason for moving to Philly.

      We encourage each other on and I hope my story can help a fellow financial traveler.

  5. John

    Sounds funny retiring in 30s. But awesome post. Loved it as a visual learner.

    1. Hey John! Thanks so much — from one visual learner to another.

  6. Hi Dave!

    I’m also very visual, so I felt like charts could effectively say what words do inefficiently.

    You’ll be at 9x to go soon, then 7x, then 4x, then 2x then 0x. It picks up steam!

  7. Michelle,

    Can I tell you what a great host you are? Thank you so much for this chance to write for your site!

    Michelle’s Readers,

    (Full disclosure: Michelle did not ask me to write any of this. I write it based on my real life experience working with Michelle and think her readers deserve to know who she is)

    We search for authenticity from those we read, then become disappointed and disillusioned when they’re different from how they present themselves. I want to tell you that Michelle is true to her blog persona. I’ve not met many people achieve her level of success yet stay welcoming and real.

    She’s a gift to the blogging community and I will always be a fan.

  8. I’m glad I read this article, I wish I knew about it on my 30s, but think would be a good idea to tell my children about your article! thanks for sharing all this valuable information.

    1. Thanks Alejandra! It’s never too late to learn (or to early to teach it to your kids)!

      You should hear my 9 year old talk about compounding interest and leverage!

  9. Absolutely loved this article, JT –so thorough and well written, so much went into it.

    Sharing it far and wide, thanks for telling your story. Knowledge bombs, all over the place.

    1. Thanks Mike! Really appreciate the feedback. You spend all this time writing it hoping that at least one person will benefit, so it’s great to hear if it’s been helpful!

  10. Hey Michelle,

    You have not a clue how many people you truly inspire with your humble blogs. You give people so much hope, and I mean those who read and don’t comment, about how they too can start blogging and turn a blogging side hustle into a full time business like you and earn healthy residual monthly income. I’m so proud of you for being an ideal blogging business side hustle role model for others and most importantly, staying consistent in your blogging journey to empower others with information. Don’t stop doing what you’re doing. DNN is rooting you on every step of the way! ๐Ÿ™‚

    1. Totally agreed, DNN! Michelle has been an inspiration to me in my journey!

  11. Lion Travel

    Yeah!! Doing job should be our choice… This article really inspired lots of people including me. There are many bloggers who are good but still they hesitate to make it as their full time job…. You can surely make money if you are ready to trust on you… I must say this is a great article to share … Thanks for sharing it with us ๐Ÿ™‚

    1. Thanks Lion Travel! Your comment was a nice boost to my morning!

  12. “What can I withstand?”

    Great way to flip the mindset on spending. I got to remember this one. Thanks, JT.

    1. Thanks Mr. Groovy!

      I write about this in my financial boot camp, but the very way we approach a budget starts off with the wrong mindset. When we put a number to our budget, we think “this is the most I can spend on this category.” But if it’s not a necessity, if it’s not something that brings you joy, then the question I ask is “why am I spending any money on this at all?”

  13. This is such a great step by step walkthrough of achieving financial independence. It’s really true that if you make it a priority, anybody can do it.Congrats on your achievement!

    1. Thanks Jason! I remember the moment when it became more than just math, more than something from a textbook — when it became existentially real. I was far from hitting my number but I realized what could be if I just made the math my friend and committed to it.

  14. MR. FWP

    Love your story, JT! We’re on the same path. I like your simple illustrations to really break it down. I’ll be sharing this with others. Like you, I have a lot of things I want to do in life and it’ll be great to have my finances covered.

    1. Thanks MR. FWP! We financial travelers need sojourners to keep us going. Keep walking it and keep me updated on your progress!

  15. Awesome article JT, love your story! Inspiring, well written, and thorough. Very nicely done.

    1. Thanks so much Matt! It’s encouraging to read that others are encouraged!

  16. I’ve ugly cried as an adult too, but it turned out to be a life-saving blessing in disguise…

    Back in early 2001, I drove from Raleigh, North Carolina to a park and ride New Jersey. I then took a bus to Manhattan to interview in person for a financial services company. Everything went well initially as I passed the written test and an interview with a mid-level manager. I thought I was inching closer to being hired. But the interview with the VP was a disaster as he asked me a series of obscure questions that I don’t have an inkling about. I was sent home emptyhanded.

    I went back to the parking lot and discovered that someone forced his way into my car with a screwdriver and my leather jacket was missing in the passenger seat. I was very disappointed not only did I not get an offer, my jacket got stolen, and I probably have to spend a couple of hundred bucks to fix my car door.

    A couple of hours later, just when I was about to recover from my emotional disappointment, as I was driving along I-95 South, I remembered I left my $2,000 Toshiba laptop in the trunk before the interview. I quickly made a stop at the nearest rest stop. And boy, it was no longer there. All my personal information probably got stolen along with it. The string of bad luck was too much for me, I had to cry inside my car. That’s probably the last time I ugly cried as an adult.

    By the way, the interview was on the upper floors of the World Trade Center. I don’t remember which building it was, but it was one of the two that literally fell that fateful September.

    1. Menard, thanks so much for sharing your story with me. I can just feel the hurt as your day cascaded into that moment in your car. Not only can I relate to that feeling, I also interviewed (and was rejected) by a firm in the upper floors of the WTC. How blessed we are.

  17. This is great. I do think living below ones means is key. Then, you can make less and you’re already used to a lifestyle that doesn’t require so much stuff and consumption. I don’t really want to retire cause I love what I do (writing) so much; I want to do it forever. I just don’t want to be held down to a boring 9-5 job!

    1. Here here Kristin! You’re blessed that you found writing. Or, for those of us who love what we do, it feels like it found us.

  18. […] How I Retired In My 30s โ€“ From Ugly Crying To Retiring Just 10 Years Later (Crying) – In 2000, JT was down to his last dollars living in a hostel, ugly crying with just a few dollars to his name because he thought he was a failure. He was rejected from job after job and was having a tough time in life. Just 10 years later, he hit his retirement number and retired in his 30s. Here’s how he changed his life around. […]

  19. I remember feeling just like you did in my 20’s – like a failure. My 30’s have been much, much better, thankfully. I feel like I am on track to reach “FIRE” – although more likely “leanFIRE” – by my 40’s, which (frighteningly enough) is only six years away!

  20. […] How I Retired In My 30s โ€“ From Ugly Crying To Retiring Just 10 Years Later (Crying) – In 2000, JT was down to his last dollars living in a hostel, ugly crying with just a few dollars to his name because he thought he was a failure. He was rejected from job after job and was having a tough time in life. Just 10 years later, he hit his retirement number and retired in his 30s. Here’s how he changed his life around. […]

  21. tai

    Hi JT, This article really put retiring early into perspective.. I love the break downs because it helped me get a realistic view of how much I need.