How to retire early : some do it in less than 12 years!

how to retire earlyHow to retire early… Wow! Isn’t it the dream of many of us since the big crisis of 2008 with all the layoffs and all the stress? In the recent years, I frequently felt on blogs talking about early retirement and about how to reach it while Googling about frugality. Honestly I never really took the time to really read what they were talking about because unless there would be a miracle, there are no ways thay I can stack up tons of hundreds of thousands of dollars aside within a couple of years. But, during the week-end, I have decided to read a posts about the subject to understand how they plan to do it and why. Wow! I was impressed!

The first site I felt on was Allan’s website from through a link. He’s a thirty something Canadian guy wishing to claim his independance from the chains of a 9@5 corporate America job. Based on what I read and understood, he wants to save, within a 12 years period, enough money to make around 30k per year from dividend stocks investments and from his online ventures. He calls his strategy ‘dividend growth investing’.

He wants to work from home online to be close to his family and to see his kids grow. That’s a nice dream! He estimates that he will make close to 2000$ this year and he started his journey at the end of 2013. Not bad. That’s almost 200$ per month. But there’s still a long road to reach his goal. I wish him all the best!

I wasn’t quite sure to really understand what ‘dividend growth investing’ meant so he was kind enough to forward me to his infographic. It’s pretty simple actually. He buys stocks of great companies paying quarterly dividends. These companies, he picks through a select list of maybe 500 names, not only pay a dividend every quarter but they also raise it every year. So he gets his income “raise”. He plans on investing fresh money and reinvesting all the dividends thus creating what he calls ‘a snowball’ until he’s 45 years old. Interesting! But maybe a little complicated for me. He actually have a lot of knowledge in finance and have been working for a long time in the industry but he told me that he learnt his knowledge by luck thanks to another blogger who’s also part of the dividend growth investing community. When he saw the potential, he grabbed tons of book and learned how to invest by himself.

Here is the book he recommends the most:

single best investment

I also took the time to read a couple of posts from Jacob Lund Fisker from This guy has a PhD and after teaching for 5 years, he retired in his early 30’s! His trick? He saved a lot of money and spent… well the bare minimum. He lives with 7000$ per year if I’m not mistaken. That’s a frugal life!

He explains it by the fact that he has a lot of time to spend. So instead of buying new, he can either repair used stuff or build it by himself. The same applies to food. He can grow his food, cook it and save a lot.

After reading Jacob’s blog, I finally read enough to understand their strategy. (You can get his book here by the way) It’s pretty straightforward :

1. Spend less than you earn

2. Pay down debts to zero and never have a debts again

3. Once debts paids, save as much as you can. Jacob used to save almost 85% of his salary while Allan saves between 20 to 40% right now because he’s paying off his 172k mortgage within 7 years. After that he’ll be able to save twice as much.

4. Invest wisely in income producing assets. It might be dividend stocks, rental properties or other income producing assets.

5. Create other passive sources of income (blogs, books etc)

6. Learn how to repair stuff and be good with your hands to avoid spending unecessarily. Allan loves this one. He told me that his favorite book was the 12 volumes encyclopedia of popular mechanic, the 1954 edition. He said that there is everything in that encyclopedia. You can learn how to build a fridge or a boat, how to build a GoKart or to built a chalet.

When you are used to live on less, you can also save less (you don’t need millions) to reach early retirement because you need less income to cover your expenses so you can reach early retirement faster. Also, both of them are not touching the capital. They want to live by the income it generates.

Sounds like a nice plan!

After Googling a little, I realized that they were not alone. There is litteraly a huge community built around these principles of simple living and owning your time by living debt-free and living frugaly.

We’re a pretty frugal family. But after reading that, I know that there is still room to do better.

So, that’s it! Here’s how to retire early. It’s as simple as that. Spend less, save more, invest wisely! 🙂

Resources :

The 4 hour workweek

Personal finance ultimate blogger’s list

How to make money online – one of the biggest and most extensive resource on the web

Image courtesy of savit keawtavee from