CHAPTER 1
Less than zero. Below broke. Beyond bankrupt.
That’s where I was in my late 20s.
I almost couldn’t believe I was in that position.
We graduate high school with wide eyes and big dreams. We’ll conquer the world!
At least that’s what we’re told. And I genuinely believed it. I know deep down inside that I’m capable of anything.
Then life sets in, with all of its cruel reality.
After struggling with some personal challenges throughout my life, such as my mom committing suicide when I was 21, money became a scant concern.
I never thought about money. And so it never thought about me.
What I failed to realize then is that money is an incredibly powerful tool.
It can put you in a position to supplant pursuits that don’t offer you happiness, meaning and purpose with pursuits that do.
Yet many of us just use money to buy bigger, better, or more versions of what we already have.
Well, I was stuck on that same treadmill, too. I was running faster and faster but doomed to always stay in the same spot.
I was like a modern-day Sisyphus.
That all came to a head in 2009.
I was working in the auto industry. I was a service advisor, working for a car dealership just outside the Metro Detroit area.
We all remember the CEOs of the three major domestic auto manufacturers sitting in front of the House Financial Services Committee, begging for bailouts. We remember that, don’t we?
So I couldn’t have picked a worse career at a worse time in a worse place.
The dealership I was working for started letting people go. I was one of those people.
If I were in a better place financially, this wouldn’t have been too terrible.
But I was like most people – I was living paycheck to paycheck.
Worse yet, I was in debt. Deeply.
I had almost $30,000 in student loan debt to my name. I had very little cash in my bank account. And I was unemployed.
You remember that I mentioned earlier that I was below broke?
Well, there you go.
Babies are worth more than I was. A baby is worth $0 (no assets and no liabilities).
And a baby can’t even walk or talk.
I had managed to learn how to do both of those very basic tasks – and so much more – yet I was worth far less money. I was worth less than a baby, even though I had spent about 20 years in school and 10 years working.
I was 27 years old.
How embarrassing.
But you know what the great thing about hitting rock bottom is?
You have nowhere to go but up!
The first thing I realized is that I needed to stop working so much for money and instead have it work for me.
See, when I was let go in 2009, I had no power over my situation. My employer had all the power. Unless I started to make money again very quickly, I wouldn’t even be able to afford to have a roof over my head – or food in my belly – for very long.
So in order to get some kind of control over my life, I needed to have control over my money. I needed to master it. And I needed to have it work for me.
I made some radical moves in life.
I moved halfway across the United States, to Florida. I did this for a number of reasons.
Florida’s economy was far more dynamic, robust, and healthy than Michigan’s at the time. Instead of relying on a decaying manufacturing base, Florida relied on a multitude of industries. Florida dealerships were actually hiring – and paying more!
The lower tax rate would also help. I knew if I could save more of the money I was making, I’d have more to work with, which would result in more eventually working for me. Florida’s state income tax rate is 0%. Michigan had a state income tax well over 4% (and still does). If I could make more and pay less in taxes, I’d be in great shape.
And I also knew the warmer weather would make it easier to potentially get rid of my car, which was a huge expense. While waiting for the bus when it’s 20 degrees outside is pure misery, catching the bus when it’s sunny and 70 isn’t a bad way to go at all.
Well, I did all of this. I moved to Florida, snagged a higher-paying service advisor job, paid less in taxes, and spent far less on my lifestyle (especially after selling my car).
These changes resulted in excess capital being generated. Whereas I was constantly running a deficit before, I was finally running a surplus.
I was saving a significant percentage of my income.
Although I was only making, on average, $50,000 per year, I was spending very little of it.
But I knew that just putting this money in the bank account (or worse, under the mattress) was a terrible idea. It would barely grow with interest rates being so low. In fact, due to inflation, I’d actually lose money over time (in real terms).
Lose money I worked so hard to finally amass? I don’t think so!
So I had to figure out a way to intelligently invest this capital.
After some initial trial and error, I realized that investing in high-quality businesses that had excellent fundamentals, competitive advantages, and lengthy track records of growing profits was the way to go.
After all, if a business doesn’t offer all of that, why invest?
But it went beyond that.
I also wanted to invest in businesses that were regularly and reliably sharing a portion of those growing profits with their shareholders. And if the profits were really growing, then so should the payments to shareholders.
We’re talking dividends.
Growing dividends.
Dividend growth investing.
This makes a ton of sense.
First, it’s a great litmus test of growing profits. If a company is actually growing its profit, I want them to prove it. What better proof than more cash in hand?
Second, it keeps a company honest. Less worries about squandering shareholders’ cash on fruitless acquisitions. And when a company knows that shareholders are counting on those bigger dividend checks, the last thing it wants to do is put itself in a position to negatively affect that. There’s pressure to sell more products and/or services so as to generate the increasing profit necessary to pay those growing dividends.
Third, the growing dividend income itself becomes another source of income that one can use to reinvest back into shares, buying even more stock and growing dividend income.
This creates a snowball of wealth and income that only accelerates over time.
It’s like an invisible second worker that shadows you, giving you the entirety of their paycheck to invest.
It increases your output without increasing your input. It’s money working for you.
Fourth, the increasing dividends are a great source of growing passive income. And we’re talking completely passiveincome here. One doesn’t need to worry about stock prices – or even the stock market in general. The dividends are funded from business operations, not from what millions of traders collectively think a stock is worth. Once one is done reinvesting the dividend income, it can be switched over and used to pay real-life bills.
Bingo!
That’s dividend growth investing in a nutshell.
And it’s that last part that allows one to potentially retire quite early in life relatively easily.
I knew if I could invest enough money into these high-quality companies, and generate enough growing dividend income, I could become financially free.
Once my growing dividend income exceeded my expenses, I was there. I would be financially independent.
Well, I got there at 33 years old.
I built a portfolio chock-full of high-quality dividend growth stocks that’s worth well into the six figures. And it’s generating five-figure dividend income for me right now that I don’t have to do any work for.
This dividend income covers my core personal expenses. That means I can pay my bills without working.
Said another way…
I’m essentially able to retire in my early 30s.
More importantly, I didn’t start that early. As I noted earlier, I didn’t realize that I had to change until I was 27 years old.
But I went from below broke at 27 to retired at 33.
And I did it without any tricks. There’s nothing I did that’s not available to anyone else.
I worked really, really hard at my day job. I hustled on the side. I saved a very high percentage of my income. And I intelligently invested my capital into high-quality dividend growth stocks.
In the next chapter, I further discuss how I saved and how much I saved. I use real-life numbers that I have saved from my historical financial reports.
CHAPTER 2
They say you need money to make money. Can’t invest money you don’t have.
I used to spend money willy-nilly, much like most people do.
I spent without thought, conviction, or purpose.
In many ways, I was just following the herd. I was spending like everyone else does because I thought that was the right way to live.
And that’s really the crux of a lot of issues we have in society in general, but it’s also an impediment to being able to retire extremely early in life.
People often spend too much money, and they do so because they think it’ll make them happier.
They have this notion not because of any actual research paper or study that tells them this is so but rather because everyone else is doing it.
If seemingly everyone is living a certain way, that must be the only way to live.
Right?
Wrong.
In order to spend less, one must first realize the folly of spending so much money in the first place.
Once you have the proper mindset in place, you’ll have the power necessary to start controlling your spending.
Consumption is not a game where you automatically become more happy the more you consume. Money and happiness do not operate under a constant 1:1 ratio of one another, where the increase or decrease of the former results in the same exact change in the latter.
What I realized is that life can be a lot like a giant treadmill. Many of us are running faster and faster, yet we’re not getting anywhere.
So I decided to simply step off the treadmill and live differently.
I already discussed in the last chapter that one of the first things I did in my major life pivot was to move to Florida. And I did so because of the reasons I already laid out.
Once I got there, I did all I could to find a job as soon as possible.
This was late 2009. I was 27 years old.
I ended up doing the same thing I was doing in Michigan – working for a car dealership as a service advisor – but I was making just a bit more money.
However, making just a little more money wasn’t going to radically change my life.
I knew that I had to start gaining control over my financial situation.
So I added up all of my assets and all of my liabilities. Assets minus liabilities would tell me my net worth. Net worth is one’s total financial picture, or what they’re worth.
Well, my liabilities far outstripped my assets back then. I had student loan debt that added up to almost $30,000. And I only had about $7,000 in assets. As you can see, I was in rough shape.
As I noted in the last chapter, babies were worth more than I was.
It was an embarrassing exercise. But it was also freeing. And it emboldened me.
See, once you know where you’re at, you have a starting point.
There’s no way you can possibly get from one place to another unless you know where you’re at and where you’re going.
I knew I wanted to be free. I craved financial independence.
But I first had to know where I was.
The first thing I did was take that “big picture” look at my worth.
While knowing my net worth allowed me to gain a sense of direction, I had to then discover exactly, down to the penny, what I was spending.
After all, the only way I could put myself in a position to retire early was if my spending was somehow covered by income sources other than my full-time job.
Well, I couldn’t know how much I’d need without knowing what I was spending. And I couldn’t cut expenses if I didn’t figure out exactly where the waste was. Said another way, you can’t plug a leak in a bucket without knowing the location and size of the hole.
Unfortunately, I had many holes.
I was eating out all the time. I was living in an apartment that was nicer and larger than necessary. I had a car that was only a few years old.
Did I need all of this in my life? And was it making me happy?
I realized that the answer to both questions was a resounding no.
That’s because I was working to earn, earning to spend – a vicious circle that imprisoned me.
Worse yet, all that spending was for naught. I was spending money I didn’t really have to buy things that didn’t make me happy just to impress people I didn’t even know. It was silly.
What would make me happy was to be free. Free of a job that made me miserable. Free of expectations. Free of responsibilities I didn’t want. Free of this imprisonment.
I wanted to be free to be me.
And in order to be free, I needed the passive income necessary to cover my bills. I knew that I could invest money and generate passive income, but this required money. As such, this passive income needed to be built from my savings. You can’t invest money you don’t have.
So I started a budget.
This means recording everything. Every penny that came in. Every penny that left my pocket.
And I realized I was earning about $3,000 per month. I also saw I was spending about $2,500 per month.
Not terrible but not great.
In order to get ahead quickly, I had to create a substantial gap between the earning and spending.
Earning more sounds sexy, but it’s not easy. And it’s not necessarily immediate. Moreover, we don’t totally control our earnings. I couldn’t just ask my boss for $10,000 more per year.
However, I can control my spending.
Spending is within our control.
Better yet, it’s immediate. A dollar I don’t spend is a dollar I save. And it’s an extra dollar I can invest. Furthermore, a dollar saved is actually better than a dollar earned, as it’s more favorable in regard to taxation. Plus, you don’t have to work harder for it.
So I started cutting excess fat over the course of the year.
Eating out less was one of the first changes I made. I became more familiar with my kitchen. Eating at home can be more satisfying and healthy in many ways, so I saw this as a positive change in many respects.
I also started to look into cheaper apartments. I knew if I could lower my housing costs, that would be extra money that would drop straight to my bottom line, allowing me excess capital to invest.
And I also developed a plan to sell my car. I was spending about $500 per month on my Pontiac G6. That included the car payment, insurance, gas, and the occasional repair.
But check this out: $500 per month compounded at 8% over 20 years is almost $300,000 (factoring out taxes and inflation). Yes, $300,000!
Was my car worth $300,000?
Absolutely not.
But we live in a car-oriented society. Public transportation is robust in only a few cities.
Does that mean I give up and just stick to owning and driving my car?
Nope. Time to get creative.
So I spent time looking into alternative methods of getting around.
Walking. Riding the bus. Using a bicycle.
I realized that there are a lot of options, once you open your mind.
Meanwhile, the rest of the budget was under attack. I became more ruthless the more time went on.
What I found is that the more I saved, the more I wanted to save.
It became this positive reinforcement where positive results gave me motivation to improve and experience even more positive results. It was this self-reinforcing loop of positivity and results.
Once 2011 took hold, I was in full swing.
No spending was considered sacred.
I moved to a cheaper and smaller apartment, saving hundreds of dollars per month in the process. I went from paying $610 in rent (for my half) to $450. Rent was cheaper right off the bat. And by downsizing, our utilities also dropped. I also found that it costs less to furnish a smaller place, which leads to less clutter and noise in my life.
I also sold my car in 2011. I went from spending $500 per month on transportation to about $40 per month. I started riding the bus – an ironic situation to be in, considering that I was working for a car dealership.
My food spending dropped significantly over the course of the year. Eating out became something reserved for special occasions. Food at home involved simple, healthy, and cheap dishes. And I started packing my lunch for work.
Oh, and I wasn’t just packing any food for work. I actually ate ramen noodles for about a year straight – every day for lunch at work. At $1 a package, I was essentially spending $1/week on lunch at work. Can’t do much better than that. I’d use very little of the included salt packages, in order to cut down on sodium. And I used to mentally pretend that I was eating something different every day. I used to joke that my lunch was spaghetti, pasta carbonara, or some other fancy pasta dish.
Housing, food, and transportation are what I call the “big three”.
These three budget categories usually represent the bulk of an individual’s spending.
The good news is that they can be controlled to a large degree. And I knew that if I focused on these three categories the most, the rest of my budget would be easy.
I also got rid of my expensive mobile phone plan, relying on a cheap VoIP service. Cable TV was also cut.
To give you a real-life example of what happened here, I spent $1,213 (on all expenses) in September 2011.
That’s right: ~$1,200. That’s real-life spending that I’m revealing from my historical reports.
So we’re talking less than half of what I was spending before I started aggressively cutting expenses.
That’s cheap rent, no car, watching the food spending, and limiting everything that could be limited.
Moreover, I was simultaneously working extremely hard at my day job. While cutting my expenses was well within my control, I also knew that if I could work hard and make more money at work, I’d be able to further create a larger gap between my earning and spending via the earning part of the equation.
So in that same month of September 2011, I earned $3,686 from work.
A nice little boost from where I started in early 2010.
What you can see here is a major gap between my income and expenses. In fact, my savings rate (savings/income) came in at just under 70% in September 2011.
Most Americans have a hard time saving just 5% of their income.
But here I was, saving almost 70% of my income.
And guess what? It wasn’t even that hard. Sure, some of these sacrifices may seem extreme to some people.
But you know what’s extreme to me?
Working your whole life for a job you don’t really want. Not being in control of your life is extreme to me.
So I suppose it’s all a matter of perspective.
On top of the hard work at my day job, I started side hustling as well.
I started a financial blog in early 2011, which was designed to show the world that a middle-class guy at a middle-class job earning a middle-class salary could achieve financial independence at a young age and essentially be in a position to retire decades faster than most people.
This blog allowed me to regularly collect my thoughts. It also kept me motivated and honest, as I didn’t want to disappoint my readers with terrible saving/spending decisions. Furthermore, my writing started to earn me a small income.
As time went on, the blog became extremely popular. And my writing income started to approach what I was making at my day job, so I quit my job and focused on my writing.
Not only was there the blogging, I also wrote a best-selling book. And I was freelance writing.
Basically, I was working extremely hard. Perhaps harder than I was in the auto industry. But it was enjoyable work, which is a totally different dynamic.
On top of this writing income, all that saving and investing started to work on my behalf.
See, money can work harder than I ever could. It works 24/7. Never sleeps. Never gets tired.
And so the money I was saving all these years was being invested in high-quality dividend growth stocks (which I’ll go over in the next chapter). These stocks were paying me growing dividends, which means my investments were generating an income all by themselves. That’s on top of everything else!
However, I didn’t let lifestyle inflation creep up on me. I didn’t start spending vast sums of money simply because I was earning more. Just because you can spend money, it doesn’t mean you should.
If we fast-forward to June 2015, I earned $6,245 from all of my writing activities. And I also earned $657 in dividend income that month. That’s a total of $6,902 in income for me.
Meanwhile, I spent $1,915 that month.
More than I was spending back in late 2011, but a good chunk of that spending was directly related to business expenses necessary to support my high income. In addition, I had some extraordinary expenses that included a vet bill and the replacement of some kitchen gear that month.
My core personal living expenses that month were under $1,200.
Nonetheless, I saved approximately 70% of my net income once more.
So even though I was spending a little more, I was making a lot more.
But this was only possible by keeping my spending in check. There are a lot of people out there that make six-figure incomes, yet they’ll spend everything they’ve got (and then some). Controlling your spending is absolutely vital to being able to retire early in life.
I was still living in the same small apartment that I moved to back in 2011. I was still living without a car. I was still watching my food spending as I concentrated on the “big three”. And I wasn’t wasting one penny that could otherwise be saved and invested.
It always occurred to me that my income could oscillate wildly.
And there was no guarantee that the income would persist. Anything can happen.
However, by controlling my spending, I didn’t need to worry.
I could sleep well at night knowing that I could earn much less and still get by just fine.
And you can also see here what was happening with the investing.
All that prior saving was starting to work on my behalf.
Old money was turning into new money. And new money was turning into future money. It’s really amazing stuff.
But let’s just consider the savings of June 2015 for a moment.
I saved $4,987 that month. If you compound that at 8% for 20 years (again, ignoring inflation and taxes), that’s over $24,500. We’re talking just one month of savings. One month!
Now just imagine what can happen if you repeat that over and over again.
Let’s say you can save this much for just one year. Just one year of your life.
If you can save that much money every month for 12 months in a row and never again save a dime, it turns into almost $300,000 after 20 years.
Imagine now what’s possible if you can save a high percentage of your net income for years on end.
The possibilities are almost unlimited. And so is the potential freedom!
Even today, not much has changed.
Although I could easily afford to live a pretty luxurious lifestyle, I still own no car. I still live in a very modest apartment. And I’m still thoughtful about finding value and purpose in every penny I spend.
My core personal living expenses are currently hovering around $900 per month. That’s rent, food, transportation, and all the essentials.
Meanwhile, my passive dividend income is hovering around $1,000 per month.
That’s right. My passive income pays for my essential basic bills.
I’m essentially retired in my early 30s, decades before most people.
I haven’t worked at a traditional day job in more than two years. I’m living the life of my dreams.
And I think you can live the life of your dreams, too.
But living well below your means so as to generate the capital necessary to invest and build passive income is absolutely necessary to making that happen.
In the next chapter, I go over how I invested all of this excess capital.
If you consider how hard I worked for every penny, and how frugal I am, you’ll know that I invest my money very carefully only after much thought and deliberation. And I picked the strategy I use because I believe it’s the best way to buy financial freedom at a young age.
CHAPTER 3
So I revealed in the previous chapter how I was able to save such a high percentage of my net income.
But saving is just one piece of the “blueprint” to early retirement. An important piece, no doubt, but not the whole picture.
As someone who was aiming to achieve early retirement at a very young age, it was imperative for me to use the money I saved to build a passive income stream that would exceed my expenses and outpace inflation.
Exceeding expenses is obvious.
Outpacing inflation is less so, but still important. $1 today will very likely be worth much less in the future.
So I needed to find a source of income that isn’t just passive (so that I can enjoy life), but one that’s growing so that my purchasing power is increasing at least in line with inflation, but preferably in excess of.
But where could that kind of income stream come from?
I’ll tell you in a moment.
But first, let me back up a little…
Up until just before turning 28 years old, I had never invested before in my life.
I barely had a bank account!
Investing seemed intimidating.
Guys in suits on Wall Street know what they’re doing.
Rich people with yachts know how to invest. Millionaires have all the inside tips.
How could a broke auto service advisor have any chance?
Well, knowledge is power, folks.
So I started reading. A lot. Book after book. Article after article. I read voraciously… and I learned how to analyze companies and read financial statements.
After researching how some of the world’s most successful (and wealthy) investors went about allocating their capital over their careers, I noticed a common theme.
Great investors routinely invest in great businesses. And they hold these shares for the long term.
It seems intuitive in hindsight, but that’s what actually creates a fairly easy learning curve when it comes to investing. One can and actually should keep things very simple when investing their money. Intelligent investing comes natural once you’re on your way.
Once I learned the secret of sticking to great businesses over the long haul, I set about discovering exactly what high-quality businesses look like.
This, too, is somewhat intuitive.
When I think of how a great business operates, I hearken back to how I started to operate when I started thoughtfully exploring my own personal finances as I became fixated on the idea of being able to retire very early in life.
I was spending less than I was earning. I was taking care of my debt. I was taking the idea of capital allocation very seriously. I was lowering expenses while simultaneously increasing my income.
Well, great businesses do this, too.
When I look for a great business, I want to see excellent fundamentals.
I’m looking for a lengthy track record of increasing revenue and profit. A balance sheet without too much debt but plenty of cash. Strong profitability metrics (margins, return on equity, return on invested capital, etc.). Competitive advantages, like recognizable brand names, robust distribution networks, cost advantages, pricing power, and patents.
And perhaps most importantly, I’m looking for growing dividends, because growing dividends can be a great litmus test for quality.
How so? Because a company is only able to increase its dividend for decades on end if its underlying profits are rising in kind.
A dividend is paid in cash from cash. It can’t be faked – a dividend is basically the “proof in the pudding”. Don’t tell me how profitable you are; show me.
So after researching just about every possible investment strategy out there, I settled on Dividend Growth Investing (DGI) as the strategy to get me to financial independence.
In my opinion, owning a portfolio of high-quality dividend growth stocks is the most reasonable, sensible, and intuitive investment strategy available.
What’s a dividend growth stock?
Put simply, a dividend growth stock is a company with a proven track record of raising its dividend (a cash payout to shareholders) year after year.
High-quality dividend growth companies typically dominate their industry, realize steady profits, and generate massive amounts of free cash flow.
As a result, they’re able to pay their shareholders a portion of that cash in the form of a dividend that increases every year… often rising faster than the rate of inflation.
The beauty of owning a stock like this is that no matter what happens to its share price, as long as the company continues to grow its dividend, we — as shareholders — stand to collect larger and larger payouts each and every year.
That’s why these stocks are so compelling: you buy them when they’re trading at a reasonable price, hold them, and then get showered with growing cash payouts for potentially decades to come.
Even in economic downturns, recessions, bear markets, periods of war, etc., these high-quality companies have the ability to continue paying increasing dividends.
How is this possible?
Consider a few of my favorite dividend growers…
Johnson & Johnson (JNJ), Wal-Mart (WMT), Target (TGT), Procter & Gamble (PG), PepsiCo (PEP) and Coca-Cola (KO) have increased their respective dividends each and every year for over 25 years in a row!
Many of these (if not all of them) are boring companies that don’t necessarily come to mind when you think of making a lot of money.
But by their very nature, “boring” companies like these have the potential to generate enough cash to pay shareholders throughout practically any kind of market environment.
That’s because they sell the kind of ubiquitous products and/or services that people use every single day.
These companies provide the food you eat, the beverages you drink, the gas you put in your car, the toothpaste you use to clean your teeth, the power you use to light up your home, and the hardware and software necessary to power the device you’re probably using to read this guide.
Selling products and services that billions of people around the world use every single day is precisely what protects these businesses from recessions and allows them to expand even in times of distress. Even if you’re unemployed you’re still going to eat, drink, and brush your teeth!
You can see how that worked out during the financial crisis and ensuing Great Recession that started back in 2007.
Each of the “boring” companies I mentioned above actually increased their respective dividend payments to shareholders right through the worst financial calamity my generation has ever witnessed (and then again through the pandemic in 2020).
Here’s my point:
The growing dividend income offered by high-quality dividend growth stocks can be a fantastic source of growing passive income… no matter what’s going on in the global economy or stock market.
And it’s truly passive income: I’ll likely collect over $20,000 in dividends from my portfolio in 2025… and I don’t have to do ANYTHING to collect this cash.
I don’t have to wake up at a certain time. I don’t have to clock in. I don’t have to call a 1-800 number. I don’t have to report to anyone. I don’t have to sell any stock.
I literally do nothing… other than continue to hold shares in these great businesses.
Now, dividends aren’t the only way to extract income from a stock portfolio.
In fact, many people take a completely different approach.
They invest in index funds or stocks that don’t pay dividends and then perform a controlled sell-off of assets in order to meet expenses and maintain a certain lifestyle once income is necessary.
This would usually involve building up a large portfolio over your working years and then drawing down income from the portfolio by selling off stock once you’re retired.
You would determine a safe withdrawal rate, based on your expenses and asset base, and then start to slowly bleed your portfolio dry.
This makes no sense to me.
If you build out a portfolio of stocks that do not pay growing dividends, but you need passive income to pay your expenses, you’re going to have to slowly and methodically sell off shares of these companies.
I realized very early on that I don’t want to be in that situation. It’s just nonsensical to me.
If I have 100 shares of a wonderful business, why would I want to slowly sell off shares? Why would I want only 95 shares next year? 90 shares the following year? All the way to the point where I potentially have zero shares?
I prefer a different approach: dividend growth investing.
In short, I sleep soundly at night because I’m generating income without having to sell ANY of my stocks.
That’s right, as dividend growth investor, I don’t plan to sell ANY of my stocks. I want to own them for the growing dividends they’re paying me each and every year.
Again, dividend income is what’s funding my early retirement. Not the selling of any shares.
I hope you can see how this all works by now, and that it’s really starting to make sense.
At the end of the day, I’ve relied on my savings and dividend growth investing strategy to get me to where I’m now at.
And where I’m now at is financial independence.
I’m essentially retired in my early 30s, living the life of my dreams.
And you can get here, too.
Nothing I did is particularly hard. I shared with you my “blueprint.”
I simply took my excess savings and invested it intelligently, like many of the most well-known and successful investors have done for years.
I stick to high-quality companies with histories of paying out higher and higher dividends. And I buy into these companies when their stocks appear undervalued.
The fact that the growing dividend income I’m now collecting from my portfolio is used to pay for my real-life expenses makes dividend growth investing a clear winner, in my opinion.
I’m waking up to fresh dividends in my brokerage account almost every single day. No work on my part. I just sit back and collect.
Now that you see what I’ve done, how I’ve saved, and how I’ve invested, there’s only one more chapter to come.
In the next and final chapter, I will wrap things up.
CHAPTER 4
So I pulled back the curtain, guys.
I showed you exactly how I went from below broke at 27 years old to retired at 33.
I like to say that retiring early is easy but hard.
See, it’s easy to pull out a calculator and figure out what you have to do. It’s easy to punch in numbers. Anyone can do the math.
But it’s hard to actually make the major lifestyle changes necessary to have the math pan out in real life. It’s hard to make supposed sacrifices every day, for years on end. It’s hard to swim against the current of society. It’s hard to be your own person.
In order to actually realize an audacious dream, you have to be audacious.
The sacrifices I’ve made are real.
I’ve taken thousands of bus rides. I’ve eaten lots of ramen noodles. I’ve worked 100-hour weeks, building an online business on top of a normal career that demanded 50-60 hours per week.
But what is sacrifice?
I think the idea of sacrifice is subjective.
To me, the biggest sacrifice of all would be to spend most of your waking hours doing things you don’t want to do.
In my opinion, it’s most of society that is making the big sacrifices. Most people are working at jobs they don’t like, and they’re spending decades doing it.
That’s sacrifice to me.
But it doesn’t have to be that way, folks.
You just have to think differently. You have to truly want it. And you have to actually make some drastic changes to your lifestyle if you want make early retirement a reality.
But let me tell you, it’s all worth it.
At least for me.
I wake up without the help of an alarm clock.
I then go about my day as I please.
Most importantly, I’m filling my life with passions, pursuits, and challenges that make me happy and live with more meaning and purpose.
And that’s the great gift of early retirement: One is able to supplant pursuits that don’t offer them happiness, meaning and purpose with pursuits that do.
Maybe you’ve always wanted to start a non-profit or write a book, but you’ve just never had the time.
Maybe you want to take some classes or learn a new skill.
Maybe you like exercising. Or cooking. Or reading.
Maybe you have a passion for helping others and you want to be more involved with volunteer work.
Or maybe you just want to spend more time with your family.
Whatever your hobbies or pursuits might be, you’ll have so much more time, energy, creativity, and passion for these activities. Once you’re no longer wearing yourself out with work you’d prefer not to be doing, you’re freeing up so much physical and mental capacity for the things you do want to do.
Look, if I can do it, anyone can do it.
I was 27 years old and unemployed when I first decided that I had to make this change in my life.
I had no formal education for any of this. In fact, I couldn’t have been further away from Wall Street if I had tried. Working for a car dealership isn’t exactly priming one for personal finance expertise.
When I started to share my plans with people, they basically laughed at me.
After all, how could this guy who had mismanaged his money so badly all of a sudden retire decades before everyone else?
Well, I had a secret weapon they didn’t know about.
Desire and discipline.
I wanted it. And I was willing to make some major lifestyle changes to get there.
I exhibited patience, persistence, and perseverance. I stayed optimistic, I worked hard, and I never lost sight of the goal.
Don’t let fear hold you back. Don’t let the naysayers convince you that you can’t retire early.
After all, what’s the worst thing that can happen?
I figured even if I fell slightly short and retired in my early 40s, I’d still be far ahead of the curve.
They say if you shoot for the moon but fail, you’ll still be among the stars. That’s how I approached this journey.
However, I believe that anyone who gives this lifestyle a serious shot has almost zero chances of failing.
We all have different goals. Different interests. Different lives.
But I think the pursuit of happiness is something that binds humanity. We all want to be happier. We all want to feel like we’re living meaningful lives. We all want to feel like we have purpose.
Well, as I’ve already touched on, early retirement can help with much of that.
You have the blueprint.
The math is quite simple.
You have to live well below your means. You should aim to save at least half your net income.
To do so, you’ll have to make some hard choices.
You have to think about what’s really making you happy. And is whatever it is that’s keeping you from saving a very large chunk of your income really worth it? Is that worth keeping you from climbing this amazing mountain and achieving all the freedom that comes with early retirement?
But you can’t stop with just saving a high percentage of your income. You have to invest that free cash flow intelligently.
As I went over in the previous chapter, I think dividend growth investing is the single best available strategy out there for those who want to retire very early in life.
That’s because owning shares of high-quality companies that pay growing dividends is a great source of passive income.
It’s passive income you don’t have to do anything for.
And the income is likely to grow in excess of inflation for the long haul, increasing your purchasing power.
However, it’s really up to you to take action. It’s up to you to save and invest for early retirement.
If you think it can’t be done, I’m here to tell you otherwise. Early retirement is indeed possible. And I can say firsthand that because of the freedom I now have to pursue only those things that are meaningful to me, it’s worth all the hard work.
I hope I’m leaving you with inspiration.
I’m certainly leaving you with the blueprint.
But it’s now up to you to follow the road to your own freedom. It’s up to you to climb that mountain.
It’ll be bumpy. No doubt about it. And it won’t always be fun.
However, there is an incredible reward awaiting you. The freedom is worth the climb.
The dream is alive, guys. You just have to want it and make some major lifestyle changes.
Save, invest and stick with it.
I wish you a very happy early retirement!
Thanks for reading.
— Jason Fieber
