Cracking the Code to Early Retirement, No Matter Your Starting Point

Many individuals, yourself included, may find themselves working well into what used to be considered retirement age.

The prevailing notion that excelling in academics, securing good grades, and landing a rewarding job guarantees a comfortable early retirement is often a misleading narrative.

Let’s debunk the stereotype that retirement is solely for older people; it’s more about achieving financial independence and giving you the freedom to pursue your desires without constraints.

I aspired to retire early, ensuring a life of comfort without external dictates. Admittedly, I’ve never been one to conform to authority easily. Through unwavering determination and hard work, I achieved this goal in my late 20s, starting from scratch.

However, the landscape has evolved. Over the past decade, housing prices have surged by 48%, the stock market is at historic highs, and the specter of an impending recession casts a shadow with a potential lost decade of returns.

These shifts are exacerbating wealth disparities, with the affluent growing richer and the less privileged facing further economic challenges. As someone who rose from humble beginnings, I am committed to preventing the perpetuation of this divide.

Embarking on retirement is akin to conquering Everest—a formidable challenge where not everyone reaches the summit. Those who diligently undergo years of training stand the best chance of attaining this financial peak.

Today, I’ll delve into the four distinctive levels of retirement and illuminate the pathways to each in our current economic climate. Contrary to popular belief, achieving retirement is feasible with the right knowledge to secure financial freedom.

Let’s navigate the levels of retirement: envision it as scaling a mountain with distinct plateaus based on your goals and aspirations. Understanding your destination is paramount to selecting the optimal path up the mountain.

At the foundational Level is drifting—no shame in this, but it signifies the bare minimum.

Progressing to Level Two is stability, an upgraded version of drifting with the financial equivalent of Captain America’s shield safeguarding your interests.

Level three signifies freedom, discernible through a clear benchmark known as the four percent rule.

The pinnacle, Level Four, represents abundance. Attaining this summit varies; some reach it at 65, while others ascend swiftly, achieving it in their early 30s.

The atmosphere at this peak is celebratory—a joyous gathering that embodies the ideal retirement experience. This is the coveted destination where you want to be.

Abundance manifests when your financial resources empower you to pursue your heart’s desires. However, with great power comes great responsibility. At this stage, the focus shifts to aiding others in their ascent up the mountain.

It’s essential never to lose sight of your origins. In that spirit, I’ll share personal stories for each retirement level to guide you on your journey up the challenging mountain ahead.

Early Retirement: The Four Levels

Level 1: Drifting

At the foundational Level is drifting—no shame in this, but it signifies the bare minimum for early retirement. Before reaching this Level, financial dependence on others, whether through student loans or parental support, is common.

The triumph here lies in gaining independence from those who exert control. Take Daniel, a friend working a regular job at Home Depot in America. For financial stability, he lives with his parents, a prudent strategy for building finances.

Yet, there’s a risk of complacency. While Daniel enjoys his job, he’s trapped in the “rat race,” earning enough to survive but not thrive.

The challenge with drifting is its transient nature—you can’t work forever.

Relying on potential inheritance for retirement security isn’t a luxury everyone enjoys.

 I certainly didn’t.

To conquer this Level, securing a job covering living expenses with a surplus for debt payments is crucial. Simultaneously, maintaining an emergency fund—equivalent to three to six months of living expenses—is imperative.

 This safety net guards against unforeseen emergencies that could disrupt your financial stability and liberate you from the paycheck-to-paycheck cycle, avoiding both comfort and debt traps.

Level 2: Stability

Making it to this stage signifies a significant accomplishment in your early retirement journey, as you’ve secured your retirement, albeit later in life. Yet, the challenges intensify, with the lingering risk of being pulled back down the mountain by those still drifting.

Allow me to illustrate this Level through the story of Lucas, a 45-year-old acquaintance navigating these complexities.

Lucas, a carpenter and joiner, owns a house, maintains an emergency fund, and possesses a robust investment portfolio.

While he anticipates financial security in retirement, he faces a unique challenge.

Economic volatility hampers his wage growth, creating a shortfall when providing for his family and managing mortgage payments.

Instead of depleting his retirement funds and regressing to drifting, Lucas ingeniously taps into a hobby—airsoft. Conceiving the idea of running his airsoft events, he rents land, initially planning for weekend operations.

Overwhelmed by demand, Lucas expands operations, even catering to corporate events. This not only generates additional income but also prevents him from dipping into his investments.

The key to Level 2 success involves focusing on three critical areas.

Firstly, shedding high-interest debt is imperative for stability; paying off anything not contributing to your wealth is a priority.

Secondly, investing in the markets is essential for securing retirement in later years.

Lastly, discovering innovative ways to augment income, as Lucas did with his airsoft venture, proves to be an effective strategy.

This dual-purpose approach not only provides extra income but also offsets personal spending on the hobby, resulting in substantial savings.

A highly effective strategy for financial growth is utilizing tax-advantaged accounts such as the Roth IRA in the United States and the ISA in the UK.

These accounts facilitate tax-free growth of your money over time.

I prefer investing in index funds within these accounts due to their reliability over the long term and minimal maintenance requirements.

If you’re looking for an extra perk, nothing beats securing a free stock slice from, valued between $3 and $1,000. stands out by prioritizing investors and fostering an engaging community where insights are freely shared on the app.

Additionally, it’s crucial to leverage your existing skills strategically to generate extra income. Recognizing your unique strengths and stacking is key.

The goal is to identify your “unfair advantages,” making your skills stack difficult to replicate. This approach enhances your ability to create diversified income streams and further fortifies your financial stability.

Level 3: Freedom

This Level marks a profound shift in your early retirement journey where you transition from earning based on time worked to receiving compensation aligned with your value.

Let me illustrate this Level through the journey of my former chiropractor, Henry.

Initially, Henry focused on the basics, providing chiropractic services and earning a living. However, he reached a point where his income was directly tied to the hours he worked, and raising prices risked losing clients.

To break free from this constraint, Henry needed to rethink his approach. Recognizing that a significant portion of his time was spent on non-income-generating tasks, he sought a solution.

During the half-hour he spent with a patient, about 20 minutes were unproductive, consisting of the patient getting ready and a warm-up massage.

Henry’s ingenious solution was to hire a masseuse. Upon arrival, patients would immediately receive a massage, optimizing the time spent on Henry’s specialized chiropractic skills.

This innovation tripled his earning potential. Going further, Henry addressed the issue of patient retention. Realizing that fixed back problems didn’t lead to return visits, he introduced a membership program, emphasizing the cost-effectiveness of retaining customers over acquiring new ones.

At this Level, achieving financial freedom involves investing 25 times your desired annual salary. This calculation ensures a sustainable income, allowing a 4% withdrawal rate per year.

 Known as your “freedom figure,” it varies for each individual. For instance, desiring a $50,000 annual income necessitates a $1.25 million investment in a reasonably liquid asset. If you seek investment diversity beyond the stock market, consider that Bitcoin emerged as the best-performing asset of the last decade.

Level 4: Abundance

Abundance is the pinnacle, with a formidable difficulty rating of 10 out of 10.

This is the realm of “FUmoney—financial abundance that empowers you to decline opportunities that don’t align with your interests because, quite frankly, it doesn’t matter in your early retirement.

Achieving this Level involves integrating the lessons from all previous stages. I navigated a traditional 9-to-5 job akin to Daniel, cultivated an investment portfolio like Lucas, and established a profitable business akin to Henry.

However, I didn’t stop there. I diversified into various businesses and investment assets, ensuring adaptability to disruptions.

Over three decades of financial evolution, the key differentiator between financial freedom and financial abundance lies in the willingness to embrace the new.

A common pitfall at the abundance level is the temptation to concentrate on preserving one’s gains rather than uplifting the talented generations below.

It’s crucial to recognize that many who read articles like this won’t take any action, giving those who do a significant advantage.

Taking that initial step up the mountain may surprise you with the momentum you gain, opening doors to a level of abundance that extends beyond personal wealth to make a lasting impact.

Wrapping up

So, dear reader, you’ve scaled the conceptual slopes of this article, explored the peaks and valleys of each retirement level. Now, the most exciting part begins: your unique expedition. Remember, retirement isn’t a pre-packaged trip; it’s a bespoke adventure crafted by your aspirations, skills, and a dash of calculated risk.

Perhaps you’re at Level One, yearning to break free from the paycheck-to-paycheck cycle. Maybe you’re a Lucas navigating the tricky terrain of Level Two, seeking creative income streams. Or, you might envision Level Three’s freedom, your “Freedom Figure” a beacon guiding your ascent.

No matter your starting point, remember: the climb is as enriching as the summit. There will be moments of doubt, unexpected detours, and maybe even the occasional avalanche (market crash, anyone?).

But with each challenge overcome, you’ll grow stronger, wiser, and closer to your financial Everest.

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