Early Retirement Strategy | Retire Early with $50 a Day

I was able to retire early at the age of 30 using the exact early retirement strategy in this post. While you might be thinking, how can you retire at 30? Well, it’s important to first define what early retirement actually means to you.

Here’s what it means to me.

You can click any of the links below to quickly navigate this post or continue reading so you don’t miss anything:

What is Early Retirement?

50 dollar early retirement

Early retirement is no longer defined as the moment when you stop working forever, it’s simply the moment when you no longer have to work for money.

But you can choose to keep working like I do, if that’s what you enjoy doing. It’s been scientifically proven that working is actually good for you and many people who completely quit working start losing their mental faculties and people who retire early might actually die sooner.

So to me, early retirement means being able to make the shift from work you have to do to work you want to do. The old school idea that when you retire you are done working, is just that, an old school idea. Now that we’ve got that settled, let me show you how I retired early and how you can too.

How Can I Retire Early?

While this is a hotly debated topic in the early retirement community, based on a series of papers known as the Trinity Studies, you need to save approximately 25-30x your expected annual expenses to have enough money to last you for the rest of your life.

This multiple is based on what’s known as your expected withdrawal rate, which is the percentage of your investment growth that you would be able to withdraw per year to live on. Based on this study (and many others), a safe early retirement withdrawal percentage is between 3%-4% adjusted for inflation (meaning you can also take out an additional 2%-3% per year depending on inflation).

How Much Money Do I Need to Retire?

Here’s how to calculate how much money you need to retire early:

First, figure out how much money you are spending each year by tracking your expenses. My wife and I spend approximately $50,000 per year and here’s an approximate breakdown of our expenses by category.

You can track your expenses using a free tool like Personal Capital. My wife and I spend approximately $50,000 per year, and you can see an approximate breakdown of my expenses by category here:

early retirement expenses

 

Using myself as an example, if you spend about $50,000 per year, then you need to have somewhere in the neighborhood of ($50,000 x 25) $1,250,000 to ($50,000 x 30) $1,500,000.

It’s important to note that this is how much money I currently spend, not how much I will necessarily be spending in the future, but it’s a great starting point for setting an early retirement goal.

$50 a Day Early Retirement Strategy

This is the single most important hack I’ve used to build wealth. It’s easy.

Set Daily Goals

I break down ALL of my money goals into daily goals. I still deposit money every day into my investment accounts and track my net worth for free using Personal Capital. Our minds are built to think about today. Our ancestors weren’t able to comprehend years into the future. This is one of the reasons it’s so hard for us to save money.

You’ve probably tried those retirement calculators or have used the retirement projector at Personal Capital. Most of the calculators come out with a number you will need to “retire” based on your inputs and current progression. The numbers are usually big and run into the millions. SERIOUSLY? Who can save $1,272,000 dollars? I was barely able to buy a burrito when I first started.

These numbers are so large, they seem impossible to reach, don’t resonate with us, and actually discourage saving. But, backed by academic research, a lot changes when we start thinking about money in daily increments. I used this hack to transform my savings and reach financial independence. If you are nerdy like me and want to go deeper on this topic check out the research of USC professor Daphna Oysterman.

How Early Do You Want to Retire?

So what should your daily goal be? I did some calculations and determined I needed to try and save approximately $50 a day in order to reach financial independence in 30 years. It can’t be a coincidence that I needed to save a Grant a day!

It’s a simple calculation, and I even created a calculator that makes it easy to figure out. In order to get to $1,250,000 I needed to save $50 a day and have an expected 5% annual compounding rate (a pretty reasonable expectation over a 30 year period). Thinking about it in annual terms I needed to save $18,250 a year. Max out that 401K!

But 30 years? Forget that.

Then I started really thinking. If I could save even $51 a day then I could fast track my financial independence. This was a mind-blowing moment for me. Just $1 more per day. I was hooked.

To figure out when you can retire early, check out this early retirement calculator:

Retirement Freedom Calculator

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Month EndInterestContributionRetirement Account BalanceBalance at age Retirement Balance Needed

Fast Track Your Early Retirement by Saving More

I started depositing as much money as possible every day into my investment accounts. I downloaded the Vanguard app and literally make deposits every single day directly into my investment accounts. Some days it was only $5, but I rarely missed a day. Then I started a side hustle and put 100% of what I made directly into the same Vanguard account. I barely let deposits clear my bank account. The minute I saw the money in there I put it into an investment account.

I got really stoked when I was able to pass the $50 a day deposit threshold. I started to feel in control. I knew that I was ahead. Every day that I deposited more than $50 I was ahead in my retirement savings.

Then I started trying to make as much money as possible every day so I could invest it. I stopped thinking long term and thought every day about making that $50 threshold. When I got a bonus or a new client, those were just bonus points. BOOM, right into my investment account.

Do your own calculation – you might need a lot less.

Here is how much you need to save per day to reach your number:

early retirement 50 dollars day

Depositing money into my investment accounts every day felt, and still feels, like a game.

Fifty dollars went from being my daily goal, to being my daily minimum. I started depositing $70, then $80, then $100 dollars a day. Then as my side hustles started really taking off I started deposit $500+ a day. Every check I got I put as much in as I could that day, but still kept my daily $50 deposit goal. Then I put $5,000 in a day, then $20,000 and the rest is history.

Using this early retirement hack I was able to reduce my 30-year saving plan down to just 5 years and reach financial independence!

Automate Your Early Retirement Savings

I still do this to this day. Now I automate most of it and simply have the money pulled out of my account and put into Vanguard. My current minimum threshold is $200/day.

But you can start at any level that is comfortable for you. There are a ton of ways you can take this idea and run with it. Try depositing $5/day to start and then increase it $1/week. Trust me you probably aren’t going to miss that extra dollar.

There are a ton of apps you can use like Acorn and Digit to do this for you, but good old fashioned manual depositing via your investment app (Betterment, Vanguard, Personal Capital, or any others) all make it super easy to deposit. I find that doing it manually is A LOT more fun and will get you motivated to escalate your limits.

You Can Retire Early Too!

The more you invest every day, the faster you will retire early. If it means that much to you, you’ll make time for it. Every $10 you invest today, could help you reach early retirement days, weeks, or maybe even months sooner in the future. Imagine how much time making that extra investment is buying you in future time.

Now that you’ve learned how to retire early, you need to pay attention to the mechanics and make decisions that minimize taxes, minimize fees, and invest consistently in the right accounts the right way, so you can reach early retirement as quickly as possible.

To learn more about how to retire early and the exact steps I took to retire at 30 check out my book Financial Freedom: A Proven Path to All The Money You Will Ever Need.

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Grant Sabatier

Creator of Millennial Money and Author of Financial Freedom (Penguin Random House). Dubbed "The Millennial Millionaire" by CNBC, Grant went from $2.26 to over $1 million in 5 years, reaching financial independence at age 30. Grant has been featured in The New York Times, Wall Street Journal, BBC, NPR, Money Magazine and many others. He uses Personal Capital to manage his money in 10 minutes a month.

Latest posts by Grant Sabatier (see all)

Posted in: FI/RE, Most Popular

70 Comments
    Kate @ Making it Rain
    Posted Feb 26 2017
    Simple but such a great hack, thanks for sharing! I know how awesome it feels when my automated transfer shows up in my investment account once a month - I can totally see how it would be so much more rewarding to do it manually and daily (addictive, in a good way!).
      Grant Sabatier
      Grant @MillennialMoney
      Posted Feb 26 2017
      Thanks Kate. This one hack changed my life. I hope it helps others do the same!
    The Financial Tech
    Posted Feb 26 2017
    Awesome hack but did you have a daily cash flow? I am trying to transfer money every week since I get pay every week, but I don't really see what difference it can do to transfer this amount on a daily basis.
      Grant Sabatier
      Grant @MillennialMoney
      Posted Feb 27 2017
      Good question. Yes as my side hustles picked up I started having more frequent cash flow. It's also more of a mindset, where the daily deposits have made a bigger impact than weekly ones. I tried weekly and would forget, or put it off if I had a big expense. Doing it daily really got me excited and focused on my finances. So for example even when I got a bi-weekly check instead of depositing it at that time, I would wait and put it in at $50 a day so I knew I was sticking to my plan. When there was extra I would deposit extra. Some days If I only have $60 for that day, I'd forgo going out so I could put the $50 in. For me it's mindset and daily repetition that works best. Hope this helps. Thanks TFT.
    Peter
    Posted Feb 27 2017
    Good hack. Personally I don't do this daily, but to prevent myself from overspending when I get my paycheck I put aside the money which I need for special tasks. One third goes to mortgage payment, one third goes to savings account/emergency fund and one third remains for monthly expenses. The only trick in this that I cannot use money directly from the savings account so in case of something emergency expense I need manual work to make it available, and if you have to do something like that you have to have a good reason. Also if there is something left of the money for monthly expenses in the end of the month it goes also directly to the savings. (Please don't judge me for not investing my savings, unfortunately I don't have easy access to brokerage accounts)
      Grant Sabatier
      Grant @MillennialMoney
      Posted Feb 27 2017
      Thanks Peter. It sounds like you have a system that works for you - which is most important. This is just the system that worked best for me and really help bring the idea of "saving enough for retirement" down to earth for me. I couldn't grasp the huge numbers and I know this trips a lot of people up. It's just too daunting. But $50 a day seemed doable for me and when I really started maximizing it every day, my investing account really started to build a lot faster than I expected. Where are you located?
    Graham @ Reverse The Crush
    Posted Feb 27 2017
    Hey Grant, I usually just try to save a percentage of my income. However, this seems like it could be a really motivating way to save. Thanks for sharing!
      Grant Sabatier
      Grant @MillennialMoney
      Posted Feb 27 2017
      Thanks Graham. It's definitely worth testing a few ways. It was always easier and more effective for me to think about hitting a daily savings goal. The daily habit was/is huge for me. But taking the same idea I could also save $350 per week or $1,400 a month and still get there. BUT...... when I do it every day I always try and deposit more. When I tried to do it each week I would be like boom, $350 deposit done! Doing the deposit every day really helps me push it. So some days I was putting in $100 or more - then looking back at the end of the month I would have put in $2,600 instead of just the $1,400 if I just deposited monthly. That's key for me.
    Liz@ChiefMomOfficer
    Posted Feb 28 2017
    Love this hack! It's a great way to break down what seems like an impossible goal, like a million dollars in savings, and see it as achievable through small daily steps. It's certainly worth a try if you're finding it difficult to put away money towards long-term goals or financial independence - start with just a few dollars a day and work your way up.
      Grant Sabatier
      Grant @MillennialMoney
      Posted Feb 28 2017
      Thanks Liz!
    kindoflost
    Posted Feb 28 2017
    We don't need that much money to retire. The financial industry tries to convince us we need millions to retire safely, but we know people are retiring with so much less. $50k a year is $137 a day! Maybe I am cheap but I can't imagine spending that much... Great post!
      Grant Sabatier
      Grant @MillennialMoney
      Posted Feb 28 2017
      Thanks! I agree. I think a lot of people will need a lot less money than they think. But better safe than sorry right. $50K a year is a lot of money most places today, but who knows what $50K can buy in 30 years.
    Lars-Christian
    Posted Feb 28 2017
    Great way to break the goals down into daily chunks in a way that makes the goals not just comprehensible, but also manageable for most people. I think everyone who lives moderately comfortable today could probably find a way to finance those $50 per day, either by reducing expenses or by hustling on the side.
      Grant Sabatier
      Grant @MillennialMoney
      Posted Feb 28 2017
      Thanks Lars-Christian.
    Matt @ Distilled Dollar
    Posted Feb 28 2017
    Great hack! I love this approach of viewing it on a daily schedule. Weekly or monthly can be easy to forget!
      Grant Sabatier
      Grant @MillennialMoney
      Posted Feb 28 2017
      Thanks Matt. A Grant a day makes retirement possible!
    Steven Goodwin
    Posted Feb 28 2017
    This is great! I usually look at what I can do monthly versus daily... I guess with some minor tweaks I could start upping that! When you start turning it into a game and get serious about playing, this can really add up!
      Grant Sabatier
      Grant @MillennialMoney
      Posted Feb 28 2017
      Try it! It's a lot of fun. Thanks Steven.
    Thefrugalprof
    Posted Mar 06 2017
    Good post. I like the idea of it being a game and competing with yourself. I've been selling stuff on eBay and I transfer money everyday from my PayPal account into my savings account. I think it's very motivating to see the progress and growing balances.
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 06 2017
      Nice Frugal Prof. It's definitely super motivating transferring money daily. I'm happy to hear you've been saving your eBay side hustle money. Great call!
    Kurt Fischer
    Posted Mar 06 2017
    Hey, any strategy that helps us reach savings goals is a good strategy! I'm all for it, thanks for sharing.
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 06 2017
      Thanks Kurt.
    Julie @ The Family CEO
    Posted Mar 06 2017
    I LOVE this! I blog a lot about found money and this is a great example of it. I also have a son named Grant. :)
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 06 2017
      Nice! I've met 11 Grants in my life. Most of them were under 10 years old. Maybe it's getting more popular? My Mom picked it because she didn't want me to have a nickname. Now she calls me Millennial Money - lol. j/k. Thanks for the kind words Julie.
    jen
    Posted Mar 07 2017
    Great idea! Think I'll start this once we get settled in our new place
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 08 2017
      Thanks Jen. Best of luck! Let me know how it goes.
    Miss Balance
    Posted Mar 07 2017
    I love the concept of breaking down goals to make them more achievable. When I first read I'd need to save $1 million to retire I looked at my bank balance and thought 'this is never going to happen.' By breaking it down it didn't feel so overwhelming. Seeing that my current savings rate it will take me 33 years to reach my goal has also been a motivator to increase my income and I've been working on that for a little while now. + 1 as well for manually transferring money. It's fortnightly for me in line with my pay periods, however it is really motivating to actually see the money moving. Thanks for a great post!
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 08 2017
      Thanks Miss Balance. I was overwhelmed too and saving daily helped make it more manageable, and accessible to me.
    Scott
    Posted Mar 08 2017
    My 29 year old son and I both read this post. Mind. Blown. Scott Lara, Jax Fl.
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 08 2017
      Thanks Scott!
    Charlie
    Posted Mar 11 2017
    Great idea! We as humans work best when we break the task at hand down to the smallest measurable task. This is a perfect example of that. Thanks for sharing!
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 11 2017
      Thanks Charlie.
    Joe
    Posted Mar 11 2017
    I think that's a great way to save. Personally, I can't do it everyday, but I'm glad it works for you. It's just easier for me to do it once per month or something like that. You gotta take it one day at a time.
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 11 2017
      Thanks Jow. Whatever works - as long as the saving happens. I personally always made excuses when I pushed it to the end of the month.
    Warren @ Be Smart Become Rich
    Posted Mar 12 2017
    This is a great concept to build a habit and achieve large goals. Another way to look at contributions... some plans focus on auto increasing annually. Say your target is 15% and you're at 10%. Instead of doing a full percent increase each year break it down monthly. 1/12% increase each month. This takes the sting away while you ramp up to your goal. Great post.
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 13 2017
      Thanks Warren.
    Sue
    Posted Mar 19 2017
    Grant, I currently have a Roth IRA at Vanguard, with I max out yearly. You have motivated me to start the $50 daily strategy! What type of investment account did you deposit your $50 into at Vanguard? Do I pick the investments within this account? Thanks.
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 25 2017
      Hi Sue - checkout https://millennialmoney.com/millennial-money-portfolio/
    ct
    Posted Mar 20 2017
    This sounds like a great idea, and I'm sure it is to save daily. However, not many people can reach that same amount, without a tremendous "side hustle". Most of us 9 to 5'er's don't have time for a side hustle or one that pays so hugely. What is your side hustle?
      Grant Sabatier
      Grant @MillennialMoney
      Posted Mar 21 2017
      Thanks CT. The $50 was my number I needed to hit - there are so many factors that impact what your own number should be. The key idea is that when you transition from thinking about saving once a month to once a day. What worked best for me was investing a little each day until I could get up to the $50 mark. When I started I was only investing $5 a day and worked hard to find side hustles to push that number higher. Most of my side hustles have been focused on digital marketing - you can check out more here: https://millennialmoney.com/best-side-hustles/

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