http://www.collegescholarships.org/research/student-loans/

Thats $825 per month without living with a roommate, having a car, and keeping a fridge full of beer. The least I’ve ever lived on was $300 in feb 2009. That was $212 for the apartment, $55 for food, $5 for Internet, $30 for heat and electricity, and I didn’t spend any other money. Me and my roommate kept it a cool 34 degrees all winter long because that place was horribly insulated.

1. Find a career you like and are good at. If it is one where you generate revenue for your employer you’ll be able to work when you want.
2. Save 50% of your money.
3. Invest in low cost index funds. Everybody believes they can “beat the market.” I certainly did and spent decades and lost mucho trying. I’d have been better off putting it into cookie jars. But a 50% savings rate makes up for a multitude of sins.
4. Spend the remaining 50% however you like, but don’t worry about keeping up with the Joneses or anybody else.

Doing this I:

1. Quit my job at 38, except for a little consulting, until I decided to accept another job when I was 45.
2. Quit that job 5 years later to take a summer off.
3. Got laid off from the next one when I was 51. Enjoyed life for four years until a guy that used to work for me persuaded me to come work for him.
4. Still doing that and enjoying it at 59. Debating on when to hang it up again. Permanently, perhaps or maybe not.

Be clear on your goal. Seems to me the whole point of FI is not retirement but the freedom to choose what you want to do when you want to do it. Sometimes, at least for me, that requires accepting pay. ?

Just a small plug for the value of a degree in English (or anything else generally seen as non-commodifiable)

It is fully doable. The only question is whether one wants to do it. In my experience most people would want to spend a little more.

Rent a two bedroom, utilities included, apartment for $600 and get a roommate – $300
BTW it’s within walking distance of my job and a grocery store, it’s also on the metro bus line so for $3 round trip I can get anywhere in the city given enough time.
$6 a day for groceries – $180
10 trips a month on the bus – $30
$50 for the house necessities for cleaning etc.
$30 for a Sprint SERO plan (500 minutes, unlimited text and data, nights @ 7, & PCS2PCS)
Leaving $160 for whatever else that month.

come on guys get real – i am all for extreme early retirement but lets keep it realistic otherwise credibility falls away.

BTW I don’t think i 35-40 years is arbitrary – I think it is exactly measured out to extract the maximum total productivity from the aggregate workforce.

@all – in terms of how to invest during those five years, clueless or blind stock investing is not the best option. After all, one might buy directly into a declining market and given that five years is shorter than a business cycle, one should think more like a retiree already and seek a very low beta the closer one gets to retirement keeping in mind that it is very close already. That was a long sentence :p

@adfecto – I don’t know of a painless way of posting a table (I’m no Excel wizard). I can give you the math though. The condition you are looking for is

FV(-PMT,i,n,PV) > (1-PMT)/withdrawal rate,

where FV is the future value, -PMT=-0.75 (percent of salary saved), i is the interest rate (pick whatever, it almost doesn’t matter, since n is small), n being the number of years – that’s the quantity you’re solving for, the withdrawal rate is 0.04 and 1-PMT=0.25. you’ll recognize the rhs as a perpetuity. If you pick n=5, you do get the 18% you’re talking about and the 8 years required to reach 25%.

Verily, if you’re not getting any raises, 8 years is the right answer. However, consider getting a raise (probably not that rare during the first five years of your career) without lifestyle inflation, that is, raise PMT on the lhs but keep it constant on the rhs.

Generally when I talk about savings rates I mean relative to NET income.

$10k will go quite far in the midwest. Over there I spent $6600 a year. Single emergencies are no problem – after all you have six-figure liquid assets that can be replaced by working a bit. The problem is recurring expenses like for instance chronic health problems or a cable subscription.

Adventure, yes, I imagine that I’ll be the captain on the yacht you’re chartering. The sunset will look the same to both of us, only you’ll be the one paying me

@moneymonk – I think expectations has a lot to do with it. Most people simply don’t see ERE as an attainable option (Did you win the lottery or what?!)

@mjukr – I’d almost say when you reach a level of wealth where market fluctuations have a bigger impact on your wealth than your savings rate, you owe to yourself (or at least your fortune) to learn how to manage it – at least if you’re still working for money at that point. The crossover point is the point where how you manage your money becomes much more important that whatever your savings rate is. Incidentally investing for income is much more “natural” than speculating in capital gains which is what practically all index investors do.

@claire – investment ROI during such a short period will make little difference unless it’s spectacular.

@patrick – Indeed. I find it harder and harder not to make money. I think people still think of retirement as a period where one has absolutely zero work-related income and spends a lot of money to get entertained. Don’t know about you guys but many of the things I like to do actually pays me as a nice side effect. Maybe to give an example: I was wandering the SF marina (at Pier 39 in case anyone wants detail) the other day with DW and an old friend. So I was pointing out the kind of [sail]boats I’d like to buy someday (24-31′ cruisers), whereas F remarked that she would want a powerboat so she could just run it out, anchor it and sunbathe. So F will pay a hefty price for the boat and have major running expenses in terms of diesel. I would be spending my time learning to sail to the point where I could crew on other boats, fix my own boat and perhaps even be hired as an instructor at some point.

If graduates followed Jacob’s plan for 5 years, they could then feel free to work (or not) at their pleasure for quite a long time, as long as they were dedicated to keeping costs down.

There is absolutely no reason for disciplined savers to work the 35-45 years that society has arbitrarily assigned to the “pre-retirement” column. If a graduate is committed to maximizing income and savings while minimizing expenses, 5 years is plenty of time to build a very comfortable stream of lifetime income.