These 10 Steps Made My Work Optional Before 50

Retiring early is a common goal in the FIRE community. I was fortunate to make work optional before 50. Many who retire early find that they continue to work in one form or another. My goal was to make my work optional. To transform the ‘RE’ in FIRE from Retire Early to Recreational Employment.

This article does not document a textbook approach to reaching financial independence. If that were the case, the title would have been something like, “ How I retired by 29”.

Today, I’m writing this piece to demonstrate that even when you make mistakes with money, there is hope. You have to find some serious discipline and have excellent savings habits. Many people will not have the resources to make this work, but it is possible.

I know that to be a fact because I lived this journey.

My 10 Step Process to Make Work Optional Before 50

Step 1: Dig a hole and filled it with debt

I dropped out of college in my first year and joined the US Air Force. By the end of my enlistment, I had nearly $18,000 in debt between credit cards, student loans, and a key and heater model truck loan.

I drove 2,000 miles across the country to start my civilian life with no job waiting for me on the other side. I had valuable training in Information Technology, and I was hungry to find success.

I knew that I needed to find a good job because that debt was a considerable burden. It felt heavy. I wanted to find a way out of debt and never wanted to go back.

Step 2: Started investing before I had a goal

When I started my career at IBM, a coworker suggested contributing 6% to the 401K to get the company match. I didn’t know anything about saving for retirement and had a mountain of debt.

However, my salary was more than double the Air Force pay. I started contributing on day one. I diverted at least part of my annual pay raise to increase retirement savings each year.

Eventually, I was maxing out my 401K annual contribution limit. I never saw a penny of this money in my checking account. It was a painless investment in my future.

This savings habit was the foundation on which every other success in my financial journey was built.

Step 3: House hacking to the rescue

I purchased a house soon after starting my career at IBM. My girlfriend and I had two roommates, and 25 years later, I learned that this was house hacking.

We hated having roommates but loved the rent income. Our roommates funded our wedding and gave us a huge leg up in our efforts to beat down debt.

Once we were married, we sent our roommates on their way. The financial benefit of this step was monumental. At times life was highly frustrating with roommates. I would do it all over again, though.

Step 4: Grew careers and income in our 9-5 day jobs

I repeatedly read that you need to have more than one income stream to be successful. This was true for me as well. In our case, it was two people with W2 jobs.

My wife and I both built professional careers that provided reliable income streams. My wife’s career started slower than mine, even though her skills were as strong as mine. Inequities run deep in society.

Over the years, we each took on new roles with increasing complexities. We were rewarded with escalating salaries.

Step 5: Eliminated our debt

Wiping out debt took a long time. We started with close to $30,000 in debt between my wife and me. We ate a lot of ramen. Our primary focus was to kill that debt and never go back.

We found success with our house hack, increased salaries, and a strict budget. Despite all of this, the process still took years.

I didn’t know anything about net worth back then. However, I know that we felt a huge relief when we finally eliminated the debt and had a net worth.

Step 6: I thought buying a house was a good financial move.

We’ve owned four houses. Not one of these has contributed to our net worth.

The American dream includes owning a home. That’s some great marketing. I don’t believe that owning homes versus renting was a colossal mistake. However, owning a home didn’t do anything to progress my financial journey.

I’ve broken even on the first three houses I sold. Houses are expensive to maintain. And all of those home improvements we did add zero to the value of the homes.

Step 7: Hired a financial planner

I didn’t know anything about investing outside of our 410K’s. I purchased a few tech stocks in 1999. There were some real winners in the mix, including MCI and Handspring. Both went to zero.

By the time I was 30, I knew that I wanted to retire early. I told myself that I wanted to retire by 55. Still clueless about how to get there, we hired a financial planner.

The good was that we started a habit of saving outside of our retirement accounts. More on the bad later.

Disciplined savings outside of our retirement accounts was a game-changer.

Step 8: Bought way too many new cars

I am fascinated with cars and had been bitten by some crappy used cars early in my adult life. I thought I was responsible, and our financial planner never seemed concerned that we were buying a new car every few years. Her only concern was that we continue to increase our investments in her funds.

If I had been smarter with cars, I could have gained the freedom to make work optional a decade earlier.

Step 9: Fired a financial planner

I’ll always be grateful that we started a savings habit when we hired our financial planner. However, it didn’t take a rocket scientist to realize that our investments with the financial planner were underperforming the index funds in our 401Ks. And we were paying a premium for the financial planner.

About this time, I found Mr. Money Mustache and 1500days.com. I was shocked to discover how easy it could be to manage my investments. We fired our planner and moved all of our investments to low-fee index funds.

This step was a massive win in our journey. Thank goodness there are so many low-fee options available today. Hopefully, you will never fall into the trap of paying for an overpriced financial planner.

Step 10: Lived an anti-budget life

Our savings rate grew every year. Savings was my number one priority, but I wanted to ensure that we did not live a life of deprivation. We saved a ton and spent the rest freely.

I reached a point where I didn’t even know when payday was. This was both a good and bad step in our journey. We were never stressed about money. We also lost opportunities to expedite the date to make work optional.

Now that I’m well into a mini-retirement, I realize that I could have been more disciplined. I love the freedom I have today, and all the crap I accumulated along the way delayed my arrival.

Wrapping up my work optional by 50 process

Not every step in my journey took me in the right direction. Each of them defined me, though.

It took serious savings discipline to make work optional before 50. I made mistakes along the way and started in a self-created hole filled with debt. I could have made work optional much sooner without these character-defining mistakes.

It’s possible to achieve work optionality freedom, even if you make mistakes along the way. The path is long and challenging.

The reward, on the other side, is well worth the effort.