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How I Plan To Retire In My 20's

Published on: December 4 2022 by Hayden Bowles

How I Plan To Retire In My 20's

How I Plan To Retire In My 20's

it might sound like a myth being able to
retire in your 20s or early 30s
but if you stik through this video i'm
going to show you exactly how that's
and break down the numbers behind what
you can actually do to make this happen
now most people think the numbers we're
going to tok about are insane
i'm going to make it seem very realistik
by giving you the actual numbers
based off someone who's actually done it
my credibility on this subject
i'm not retired in the sense that i
don't work however if i wanted to just
all of my free capital and money i would
be able to live off of
that not exactly how i would want to but
i would be able to live off that for the
rest of my life that's not the goal
as we're going to tok about here with
retirement the goal is to have the
the goal is not the act of actually
retiring so if you want to keep working
and continue to grow that nest egg you
can do that some of the things we're
going to tok about inside of here
might make people like dave ramsey upset
i'm sorry dave you're a good dude i'm
actually inside of multiple of his
programs i love getting many people's
especially on the topic of money and
retirement so today we're going to tok
about the numbers behind how you can
actually do this
to retire the goal here is to do this in
a 10-year window so if you're starting
at 20
get this done in your 20s if you're 35
right now
just apply this principle for the next
10 years you can do this from any
starting point
which is awesome okay so this is the
opposite of how most people think but
compound interest and paydown in terms
of real estate
make a huge difference so we're going to
tok about how the early days are super
important a lot of people don't think
about the compounding and this is where
things can get crazy
the amount of money that you're saving
for 10 years the money you've saved in
year one and invested
is going to be worth a whole lot more in
year 10.
so those first couple years are actually
such a big snowball in terms of growth
and can really add up so we're going to
tok about that now
i want you to focus on two things and
this is going to help you do this
a lot you need to save as much as you
can not for the purpose of saving i'm
sorry dave
you've given up but for the purpose of
investing i call that stashing money
that's stupid you're stashing money for
a future use
you can do this by doing two things okay
number one is gonna be
lowering your expenses lowering your
expenses is pretty obvious hey i'm going
to spend less on food less on housing
less in entertainment so that i can put
more money aside
that's logic 101 but you know what
there's only so much you can lower that
now if you switch your focus to
primarily increasing your income
there is no ceiling so you make sure
that floor is at a reasonable level
while still living okay
and you just continue to increase that
ceiling that's something i've put my
sole focus on
for the past five years okay i'm not
here to tok about specific numbers but
i made my first million plus when i was
18 years old i have focused for many
many years on just increasing that
ceiling okay
without letting the bottom floor get too
ridiculous i live well
but by keeping that gap there so there's
a huge amount of additional capital
to invest now the first thing we have to
tok about is the money
math did you take your math class this
is the most important thing
this is the equation this is what people
don't tok about they don't teach us in
school so
it's a little bit ridiculous but let's
assume an eight percent yearly return on
your invested
money you're not gonna wanna take eight
percent of that to live on because then
there's no future growth and not
every year is gonna have an eight
percent gain that's a typical average
based off the uh
s p 500 multiple index funds eight
percent can be a typical
market average in terms of growth and
returns so
you might want to only draw three or
four percent that's a good standard to
very conservative that means that you
can continue to support your lifestyle
while pulling that percentage
and you never touch the original money
so for an example if you had a million
and it was growing eight percent every
single year that's eighty thousand
you draw half that you now have forty
thousand dollars to live on
every single year without ever touching
the original million okay that's just
some simple math we're gonna go through
the goal is never to touch that initial
amount let's assume you're living on two
thousand dollars a month i think that's
a pretty good
average so let's assume you need 2500 a
month to kind of have
a base level of what most people would
consider financial freedom this means
you could have
a mortgage or you know a place that
you're renting that's pretty cheap
you're living you can cover your basic
expenses at least and that's a good base
30 000 a year i think that's very solid
so that's kind of
number one you can change this formula
around for whatever you need to live on
we're gonna tok about that
you will need about 750 000
invested at an eight percent return with
a four percent drop meaning again you
pull out
half of the gains some years will be 12
some years might be six
but pulling out that consistent amount
of money so that you can live and
maintain your lifestyle with no stress
okay from here you just have to do the
math if you want to spend five thousand
dollars a month
you're just gonna need to double that to
1.5 million this is conservative very
conservative numbers here
so either you're going to need to invest
more money in a shorter period of time
by making more money
or just make this take longer you know
your number might not be 2 500 it might
a thousand it might be ten thousand
whatever that number is you just have to
do the formula for you
so again making money in a shorter
period of time is always the best route
to go
i'm someone who believes in sacrificing
a little bit of the pleasures and the
when you're younger just to get the
money equation out of the way so that's
something that i've done
over the last many many years i still
work on this to this very day i am at no
near where i need to be to do what i
consider retiring for me
and how i want to live and be able to
take care of the people around me that's
going to cost more money so
it just is what it is but it's a great
equation and we can continue going on so
let's tok about the actual dollar
amount 750 000
is a lot well it can be you got to
switch your mindset a little bit but
breaking things down is going to help
you wrap your head around this a lot
750 000 over a 10-year span is 75 000 a
you might say well hayden i don't even
make that much this is the beauty of
compound interest
we're going to tok about it if you
really want to break it down
and 6 dollars a month now if you could
put six thousand two hundred fifty
dollars a month which most people cannot
into a side savings for investing your
is not going to be 750 000 after 10
because as you've invested that money
the money you invested in year one that
first seventy thousand is probably gonna
be worth two hundred thousand
the year two seventy thousand you
invested is going to be worth 180 000
because compound interest so you'll be
sitting on a multi-million dollar nest
by the time that 10-year window is up in
this example so
you got to factor in that growth of your
earlier investments
so to be very very conservative and
probably be even faster than this you
don't need to put in 750k
maybe it's more like 500 000. if you're
consistent with your investments
year over year so 500 000 would mean you
need to save about 4 100 a month
for 10 years depending on the type of
investments that you select
this could be more this could be less so
for me
i highly recommend real estate the
reason for that you have more control
and there's more formats of income
plus tax benefits that nothing else has
now from a retirement perspective you
probably don't want all your eggs in one
even though warren buffett says it's
okay to put all your eggs in one basket
as long as you watch that basket i do
agree with that but i think it'd be nice
to have a little bit of diversification
just for some security and mental
comfort however real estate we're going
to tok about that we're going to tok
about the stok market side of things
but being able to put away about 4 000 a
month that would be nice
so this is also assuming a very
conservative four percent pull
and that you need 2 500 a month if you
have two people working towards this a
it becomes a lot easier and the numbers
become better so that's from an income
let's tok about expenses these are just
some basic things to consider i've
worked on all these myself
my phone bill i actually have two phones
right i need this for work in fact i
have four but the other two are not on
plans because i don't use them out and
about i can just use them on wi-fi
phone bills okay family and friend plans
are cheaper
this is where you have four plus people
and so just thinking about your phone
bill usually this gets pretty expensive
food i spend about 600 a month i know
people who make a very very very single
fraction percentage of what i make and
they spend more money than that
that to me is ridiculous now i used to
spend about two thousand dollars a month
on food
that was my pretty average over the
years but that was with eating out a lot
traveling okay i'm in monaco with a
meeting for two days i take someone out
to a 600
dinner i'm like all over the place i
have scaled that back if i need to go to
a nice meal for a meeting that's totally
but i don't really eat out a ton i do
eat healthy and i eat a lot of food so i
spend about 600 a month
usually about 80 a week on basic
groceries plus eating out a few times a
that's my level of spending i don't
think that anyone needs to spend more
than that
now if you're married you have a wife
you have two kids
that number might be a little bit
different but this 80 bucks a week
i mean my eggs alone are 22 or something
so like i'm buying the nicest stuff
based off what i need to eat so that's
just that's kind of my cost
there car insurance shop it out look at
other places get quotes you can usually
lower this
car payment either get a cheaper car or
pay it off i don't like having overhead
on a lot of stuff so that's why i buy
most of my cars in cash
housing get a roommate i've pretty much
always had a roommate there was two
condos where i didn't
but for the most part i've had a
roommate and you know obviously down the
road with the family that probably
wouldn't be the situation
but you can house hack which is where
you basically live for free you know
let's say you have a mortgage that's
1200 bucks and you rent out a room to
your friend for a thousand dollars
you're pretty much house hacking
plus they're probably covering a portion
of the utilities there's things you can
do i
i haven't done that in a rental house
where i live for free i've done
something pretty dang similar in houses
that i
own so could go either way house hacking
great way to lower your cost
subscriptions people spend an easy 80
plus a month on music apps netflix hulu
all this stuff you can lower that
entertainment do
free stuff you can absolutely find fun
free things to do
a lot of people spend too much money on
entertainment now let's move forward
with this this is a super important
i love toking about this from an income
perspective the average
individual income in america is 35 000.
you call it 36 000
okay the average household income with
two people working is 62
000 okay so just keep that in mind now
let's assume basic living expenses of
two thousand dollars it's pretty basic
might be less might be more i know some
people are hustlers they're working
multiple jobs living with their parents
their expenses are 400 bucks
that's great you know this is just kind
of a basic average okay i don't like
either of these numbers
i don't think 62 000 or 36 000 is going
to be very helpful now
in the 62 000 situation you and someone
else working
you could make this work you absolutely
could but these are averages
don't be average if you want to do it
fast most people take 45 plus years to
and they do not retire with remotely the
right amount of money they're depending
on social security
which probably won't be around if you're
in your 20s right now they're depending
on programs that are being dwindled away
and that are probably not going to last
so you have to take action to do this
yourself which means don't be average
don't spend all your money
don't be stupid throughout your life and
you got to put some money aside for the
purpose of investing it's pretty simple
as long as we break it down okay so
part-time pizza delivery drivers
make about fifteen hundred dollars a
month when you're hustling you get back
from your job at four or five o'clock
and you go do the night shift from seven
to midnight and you're working doing
pizza delivery you can make some extra
money doing that right
pretty simple uber driver set your own
schedule all the new businesses like
that that have popped up
offer a great opportunity get any sort
of second job it's weird for some reason
people think this is like above them you
know they're like oh like i'm not gonna
work another job are you kidding me
i just worked all day why would i work
at night well dude if you have a goal
that you're working towards you've got
to be willing to do whatever it takes
i work more than two two jobs like i
work multiple things inside of multiple
of my companies
i do a lot of different things and
that's totally fine because i have a
goal that i'm working towards and i'm
willing to do
absolutely whatever it takes with no
exception so you just got to have that
mindset when you're going into it
now make it your target to stash not
save again that difference
you want to stash money for the purpose
of investing about four thousand dollars
per month i think if you can
somehow hit that target you are no
doubtedly going to be able to be retired
in 10 years
especially if you put a lot of attention
on your investments and what you're
investing in
some people just throw it into a
standard index fund or mutual fund it's
very basic they just throw it there but
if you do research and you work a little
bit harder and maybe you're interested
in real estate or other types of
you could probably get a better return
on your money it just depends on the
level of focus you want to put
on the investments but if you can save
that four thousand dollars it's 50 grand
a year
that's a great base i think that will
100 percent bring you there
you'll probably have more than the 750
000 you probably beat a million invested
by the end of 10 years so that's super
solid i think if you can be there
you're in a great position i know 10
years sounds like a long time but it's
really not
so let me give you a real example i
bought a duplex about a year and a half
ago if i would have bought it in cash
which i didn't we don't borrow money for
i would have been in that duplex 375 000
plus the 15 000 in renovations so if i
had bought it in cash that'd be four
hundred thousand dollars invested
for a three thousand dollar a month
gross rental return
expenses on that if i owned any cash
with no debt servicing
would be about six hundred dollars a
month pretty simple
that's with management that is with my
expenses that's great so that's 2400 a
in cash flow now if you own the property
in cash
versus having a mortgage on it there's
different things that you can't do
in terms of tax write-offs so there are
reasons why you'd want debt on real
sorry dave ramsey this is absolutely
ludicrous there's a lot of depreciation
benefits which makes your cash flow
tax-free i also understand why dave
doesn't like to do this what he did was
his own fault just like any other
investor who makes a mistake
he toks about having a million dollars
worth of equity on 4 million dollars
worth of real estate
the problem was his loan type it wasn't
fixed 30-year mortgages
he was having all sorts of weird balloon
payments and things that were short-term
commercial loans so
that was on him also my duplex by the
way is worth 475 thousand dollars now
so my 110 000 has been turned into about
200 000 i basically doubled my money in
a year
so now if i wanted to i could do what's
called a cash out refinance
i could pull probably a hundred thousand
dollars pretty easily out of this
refinance it based on the much higher
rents i could pull a hundred grand out
tax free and then go buy another
property and you just rinse and repeat
so you could actually if you start
buying a couple properties you could
turn that into
way more than 750 grand over a 10-year
span it could even be multiple millions
of dollars depending on how much you can
do this
so that 110 000 also makes me currently
over a thousand dollars a month in
tax-free key word there in tax-free cash
forever live on that forever so all i
would need is a couple of these if i
three of these properties just three
that would be three hundred thirty
thousand dollars invested
for three thousand dollars a month tax
free plus my net worth is going up every
single month as the tenants pay down the
plus natural appreciation on property
which is pretty much parallel to the s p
500 depending on your location and where
you're in
like for arizona market is way higher
it's moving way faster than that
so that's an 11 return cash on cash
the irr internal rate of return when you
factor in all the variables
is probably closer to 18 or more even if
we're not factoring in crazy
appreciation and stuff which is
happening in the arizona market so
that's just one example of a real deal
something that i bought i put
six figures of my own money behind a
deal like that okay
so again the goal is the option not to
actually retire i still love working
every single day i don't know what i
would possibly do with myself
if i wasn't working right but most
people just don't sit down and do the
math on what's needed they dream about
not working one day
but save like 100 bucks a month and did
you know the average american can't
touch a thousand dollars if there is an
that's a huge problem i know i don't
like that i think that that should
definitely change so
you know if you know the math now you
can work backwards on your numbers
whether it takes you 20 years blah blah
all the stuff that we just toked about
the goal is to kind of in my opinion
have a never-ending basically six-figure
income when you retire
i think that that puts you in an amazing
position that is obviously ahead of like
97 of people when it comes to retirement
if you just pay attention to this and
use that formula of getting an average
of an eight percent return while pulling
four percent out to live on every single
that puts you in a very conservative
position and now you can just plug in
your numbers if you need
four four thousand forty two hundred
bucks a month to live just do your
numbers based off that
you're gonna need a solid million
dollars invested you can do that
it's not unrealistik it is going to be
harder if all you're trying to do is
save money in cash
but if you're investing in things that
are secure solid and provide a return
real estate's not the fastest thing in
the world
i understand that i can make a lot more
money just using that money inside of my
or you know trusting what my friends are
saying throwing money into crypto or the
stok market right now
i refuse to do that because it goes
against my investing strategy
if there's not cash flow and if it's not
very low risk i don't want to touch it
and in fact i've lost out on the
opportunity to literally
make millions and millions and millions
and millions of dollars even a hundred
thousand dollars of tesla stok that i
held that i made good money on
i could have turned that into five six
hundred thousand all these other ten
positions that i had
all the crypto but it's because i have
simple investing principles that i live
by and i don't regret
getting out of any of those investments
so i hope you enjoyed this video toking
about retirement something very new for
the channel please drop
a like down below if it's something you
enjoyed if you want to see some more
financial oriented videos like this
i think this is a phenomenally important
topic that a lot of people don't know
just because it's not common sense you
know my parents are decently smart with
money i definitely respect them in that
sense you know they're not out here
walking around with a billion dollars i
don't have a trust fund or anything
but uh you know i've been able to see
that but i still didn't learn about
specific numbers
i wasn't you know fully explained about
how to do certain uh retirement accounts
set by arrays roth iras
um that stuff was stuff that was
self-taught for me you know it was a lot
of research
watching some youtube videos buying a
ton of different courses going through
all sorts
of different stuff on finances real
estate business stuff and i love
learning you know this is all just a
game of understanding
what you're trying to do and then what's
the best path in order to get there
so i hope you enjoyed this video toking
about retirement all the numbers
everything behind it
as well as a little bit of personal
information with one of those real
estate deals i don't want that to come
off as bragging that was purely just an
example of a property that was going
pretty well
so i wanted to give you that real life
example based off something that i've
actually put my money behind
i'm here putting my money where my mouth
is not just toking about industry
this is from someone who's actually
doing it every single day okay
hope you enjoyed this video make sure to
drop a quick like down below don't
forget the launch
for the performance dropshipping program
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how we structure our business inside of
be sure to reference some of the links
in the description and with that being
said i'll see you
in the next video peace

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