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Case Study: Two Teachers Can Retire After 15 Working Years

The math is simpler than you think.

· Money

It's easy to get discouraged when you click those articles that say "This 28 year old retired with $2 million!" and realize that many of these people featured have higher than average salaries from working as management/ strategy consultants, investment bankers, engineers or just being extremely frugal.

Regardless of how it may appear, I'm determined to convince you that an average earner can make this work -- without giving up lattes, manicures or resorting to drastic frugality measures like eating beans and rice for every meal, or becoming an extreme couponer.

The early retirement formula is basic math and you can plug any numbers in to make it work for your circumstances.

Even if you’re in a stereotypically low-paying white-collar career, like a teacher. And there are no gimmicks required: no time-consuming real estate rehabbing and flipping, no trading, no scammy get rich quick schemes. Only consistency and patience. If you begin planning at 25, even at a modest salary with student loan debt, retirement before 40 is not an extreme, or even unrealistic goal.


Here’s an example of how two teachers who combine their incomes can retire in 15 years. First, a few assumptions:

They both make $40,000/yr.

There are no raises, promotions, or extra income.

They both have average student loan debt of $20,000.

They invest in pre-retirement brokerage accounts, and invest primarily in index funds.

After taxes, they’ll bring home $5,000/month.

They’ll maintain a 50% post-tax savings rate, allocating $2,500/month to living and $2,500/month to investing.

Here's a sample budget, assuming a modest lifestyle. Now, we can make a lot of adjustments to this (lower than average rent, a paid-off car using the “How to Never Pay for a Car Ever Again in Life” Method, higher rent but walkability to work, no loans, etc.) but the core idea is that if you don’t saddle yourself with a bunch of debt through auto loans and credit cards and unnecessary recurring purchases, your monthly bills become substantially lower. Less bills = greater cash flow to invest regularly.

  • $1,000 to rent

  • $400 to loans

  • $200 to utilities and internet

  • $200 to transit monthly passes

  • $300 to groceries

  • $400 to entertainment

After 15 years of steady investing, with 9.7% annual returns, they’d have: $1,021,000. Assuming a 4% withdrawal rate, they’d have enough to generate $40,800 annually, or $3,400 monthly (more than they had been living on) without ever having to touch the principal.

Now plug in your numbers. How early could you retire?

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