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How I retired in 9 years on a corporate programmer salary

by usedtolurk on 10/16/11, 11:34 AM with 156 comments

• by edw519 on 10/16/11, 1:49 PM

  I admire OP's financial project and appreciate his sharing it. I imagine quite a few people may benefit from it.

  But make no mistake about it, the #1 reason for any "How I did <anything regarding money>" is really, "I am cheap."

  We only get one chance at this life, and the thing that bothers me the most is, "What are you missing that you're too frugal to consider?"

  Some of the greatest pleasures of my life came as a result of a discretionary purchase. Incredible people, experiences, even business opportunities came my way because I bought a product, went to an event, or took a trip that most frugal people I know wouldn't have.

  Once you decide to be frugal, you'll probably be stuck that way for life because you'll rarely be in position to take advantage of those opportunities that would break the cycle.

  If that works for you, fine. But not for me. I may not be extravagant, but I don't want to miss any wonderful opportunity because I was too worried about my bank balance. In the grand scheme of things, how sad that would be.

  </sipsLatte>

  [EDIT: Yes there is a difference between "cheap" and "frugal". Every time I mention "frugal" above, I really meant "cheap", but I was trying to be nice. I will leave it that way to make the thread below make sense. Also, I failed to mention that there's a big difference between being cheap because you have to and being cheap because you choose to.]

• by mattmanser on 10/16/11, 1:55 PM

  How is being self employed retired? Is this a new meaning of the word retired that I have not heard of?

  He notes on his 'start' page that a mere 1 in 9 Americans are self employed like him. Only a few 10s of millions of people then?

  I think your office of national statistics would disagree with you buddy, you're a handyman, your wife's a realtor. You're not retired.

  What a plonker.

• by eliben on 10/16/11, 12:27 PM

  This is a nice article, but two observations:

  - He made a great home investment, apparently bought cheap and later was able to rent it for a lot of money. This is good for him, but somewhat lucky (or, alternative, a spark of insight into real-estate)

  - He made nice returns on stocks

  Both are fine, but not a part of "corporate programmer salary"

• by wheaties on 10/16/11, 12:36 PM

  Let me get this straight, he thinks 900k is going to be enough to retire on, send a kid to college, and lay for his future medical bills!? That home building business started during the home building boom better be earning more than 50k.

• by vetler on 10/16/11, 5:43 PM

  Wikipedia defines retirement as follows:

    Retirement is the point where a person stops employment completely
  

  Obviously not what the author of this article did. It seems that the author's goal was to get out of the IT industry. Why? Was he unhappy? Whatever the case, he seems much happier building houses. That's great!

  Personally I love software development, and don't really want to do anything else. Sometimes, when the stress gets to me, I find myself imagining doing something else, but it's usually just a phase.

  If you want to change your line of work, then by all means do it, but it's not retirement.

• by steve8918 on 10/16/11, 2:03 PM

  Sorry, but his stock trading seems bit hard to believe.

  He's saying that he made money on stocks during the dot com boom and during the bust as well? I don't think that's possible, unless he was psychic enough to short at the top.

  Anyone who made money on stocks during the bust got their heads handed to them during the bust. No one believed that the bust was going to happen. One of my coworkers turned 50k in 1999 into 250k by 2000, and then 6 months after the bust started, he was down to 20k. EVERYONE during that time thought they were stock picking geniuses, so when stocks went down, they thought it was a buying opportunity. I can't imagine there were any stocks you could have bought during the bust where he could have made money, let alone increase in value by 50%!!! During those years he went for 67k to 150k to 250k!

  Unless he was shorting stocks, there really wasn't any stocks that survived the bust very well, especially if he was investing in the likes of Cisco, etc.

  The same goes for 2008/2009. Unless this guy is some sort of stock trading guru, he would have lost 50% of his stock portfolio yet he made $35k. It just doesn't sound right.

• by padobson on 10/16/11, 1:28 PM

  I think this is completely feasible starting with a $0 net worth and having a college education. I am not remotely surprised he got to a $100k salary working full time plus nights and weekends. You'd be surprised how many people you can pass up in the work force just by showing up on time and working more than them.

  Frugality is also huge. If you can save 15-25% on products you knew you were going to buy anyway by clipping coupons or buying in bulk or searching for deals, that's far better than making 15-25% in the stock market because there's no risk.

  The real estate thing, too, isn't as hard as you think. Multi-unit dwellings can often be purchased at the price of a normal house and rented for 2-3x what a normal house would go for. If you can find a three or four unit building for $100-$150k and live in one of the units while you pay down the equity and fix up the other two to increase they're rental value, then getting $500-$600 per unit becomes very possible. That's $1500-$2400 a month to go towards mortgages, which would easily support two $100-$150k houses.

• by JoeAltmaier on 10/16/11, 1:07 PM

  I'd love to hear his wife's take on this frugality. "I didn't miss the 2nd car a bit" - I imagine the Mrs. has a different idea about that.

  So pretty much, have a high-earning wife and buy a firecracker realestate deal that pays 2 mortgages. Doesn't sound so much brilliant as lucky?

• by tl on 10/16/11, 3:34 PM

  So, let me get this straight. You:

  1. You and your girlfriend were making more money individually than the 2009 median household income [1], and you had been doing so since 1999.

  2. You ended up on the good side of a stock market that robs as many people as it enriches.

  3. You cut expenses whenever possible.

  And your end result is a nest egg that might be enough if you stay frugal and work part-time? How is this useful financial advice?

  [1] http://quickfacts.census.gov/qfd/states/00000.html

• by skrebbel on 10/16/11, 12:16 PM

  i don't understand this sudden focus on retirement. You could've had a nice programming job and done it for years with enjoyment

• by wallflower on 10/16/11, 12:55 PM

  My landlord used to vacation in a nice coastal area. For a number of years, he went to the same town, same rental. At one point, the cottage came up for sale. $200k. He dismissed it as too much of a risk for his financial situation at the time. Less than five years later, the boom and bubble in coastal properties had exploded the market value to $600k. For a humble cottage. That regret (he could have bought the cottage and rented to cover) - missing that opportunity is why he purchased multiple properties in an up and coming area before it became the young professional magnet that it is today. He had done quite well for himself, a liberal arts major who has minored quite successfully in real estate.

• by pragmatic on 10/17/11, 2:15 AM

  The timing of the housing market and stock market couldn't have been better for this guy.

  I'm not saying he didn't have anything to do with this for being frugal (I'm doing the same thing), but stock and housing gains seem to account for a large portion of his wealth.

• by malbs on 10/16/11, 10:43 PM

  Here in Australia, the commonwealth bank provided a guideline on how much super you needed to retire on to main various life styles, and what struck me as scary was how much you needed at retirement age 65, to survive for 20 years, if you wanted such first world pleasures as running a dishwasher, going out to dinner once a week, and so on. 800k was not anywhere near the amount needed.

  I'm not calling this guy out, but you would be living a minimalist lifestyle in order to make 800k last you 40 years..

  If you had it all in a 6% long-term savings account, you're barely making 50k pa before tax, for two people to live on. Sure, you have no mortgage, but you still have all the other costs of life involved. They'd be able to do it, but they certainly wouldn't be living the high life.

• by apieceofpi on 10/16/11, 7:34 PM

  Step 0: no debt. You could attribute that to luck or smart early decision making, but that's definitely a large step ahead of everyone else.

  Personally, I have measured it will take me approximately three years of post-college work experience to get out of debt (with my current income, budget, amount of debt, etc.). I haven't heard of any startup founders that go into a startup with debt already in their wallet so I feel that the amount of student loan debt universally shrinks the space of potential new entrepreneurs.

• by huhtenberg on 10/16/11, 1:42 PM

  Retiring on 900K? Here's a breakdown for 3-4 mil range and, no, it's not enough under conservative assumptions - http://www.tonywright.com/2010/no-you-cant-retire-rich-at-30... - though this is not to say that this analysis is accurate.

• by shinratdr on 10/17/11, 6:26 PM

  You can, if you want to live like this guy. I don't. I would rather work and spend the way I want to on my off time than spend every waking hour managing my budget without a job. If always going to the library rather than grabbing a book on Amazon or always bringing stuff from home rather than eating out or getting a coffee is key to living like this, then count me out. If $5 is unacceptable discretionary spending, then a coffee or meal out once in a while is the least of what you're giving up.

  Frankly, I also think the guy is a little delusional about the future. You've got everyone on board now, something tells me that might change once you have a kid. Or multiple kids. Perhaps you already "agreed" to only have one kid, but then you are truly being naive in assuming that will stay the case. It may, but I wouldn't bet on it like this.

• by davidu on 10/16/11, 3:20 PM

  It's worth pointing out that this man is exceptionally frugal. It's a great strategy if you can be happy with a modest spend throughout your life.

  This is why the guy who owns the laundromat down the street is a millionaire -- great stable income, but he and Mr. Money Mustache are far from having a lavish lifestyle.

• by Tycho on 10/16/11, 5:44 PM

  The key thing for me was that he was able to clinch such big pay-rises. Not complaining or anything, but I wonder how universifiable the abilities/opportunities are which made that possible. He just mentions them almost in passing.

• by Sindrome on 10/16/11, 8:27 PM

  I'm convinced money grew on trees in the 90's... Too bad I missed out. Maybe it's just beacuse OP highlights what went right, I'd be much more interested in hearing what went wrong w/ his plans.

• by 1point2 on 10/16/11, 9:41 PM

  Wait till the family arrives... That's when the fun begins - more rewarding than anything - and the fastest way out of retirement u will ever find. Not into kids(?) - time will tell.

• by Murkin on 10/16/11, 4:47 PM

  Can someone explain how a combined income of $150K (before tax) allowed the OP to save $100K/year ?

  And why is the idea of stopping being a productive member of society at 30+ is a good thing ?

• by incosta on 10/16/11, 2:10 PM

  I am assuming the author and his wife are both Canadian citizens. If he moved to the U.S. in year 3, and his wife a year later, I wonder how the guy has retired (without moving back to Canada)? He got his green card in 4 years or less? Not likely. Did he already have it? Also, if he was on H1 visa, it's very unlikely (if possible at all) to become less-than-full-time worker (as he did in year 8) in this status. Lots of questions..

• by mark_l_watson on 10/16/11, 4:13 PM

  With only one piece of income property, I am a little surprised that the author of the blog post thinks that his family has enough for the rest of their lives.

  That said, if they maintain their job skills, they should be fine because of part time work income when the will need it.

• by suivix on 10/16/11, 4:08 PM

  So marry someone who makes a lot of money, and get lucky with investments? Ok.

• by gcb on 10/17/11, 9:26 AM

  Deciding to live near work. House on 1st yr/job. Several other jobs.

  Or boulder have one single building with all companies, or this guy can sell houses for homeless people

• by grimen on 10/17/11, 12:22 AM

  I don't want to retire. I could not live without creating stuff. Maybe I missed the pointof the article, but it all felt very sad - capitalistic.

• by brianobush on 10/16/11, 5:57 PM

  I find it interesting that people strive to retire from their work by living frugal (or cheap!). I have always enjoyed what I do and don't mind working till I am in my seventies if so allowed. I still save a large portion of my income and have a high net worth, accumulate little material possessions but still do not feel like a slave to the machine.