How To Realistically Retire In Your Thirties

Get-rich-quick schemes are scams, but conservative investment strategies can allow one to become financially independent before the age of forty.

Basic Steps

1. Become Debt-Free

The first thing that is going to get in the way of your financial independence is any kind of debt.

In the modern world, the most common forms that debt takes are:

  • Student Loans
  • Home Loans
  • Credit-Card Debt

If you're already in one or more of these, your first item of order should be to get out of them as soon as possible.

2. Invest In Equity

While any sensible investment strategy requires a distribution of one's assets across both Equity and Debt classes, the fact of the matter is that most wealth creation is based some kind of Equity exposure.

Equity exposure can take many forms; such as ESOPs, start-ups, and small businesses. But the most easily available Equity investment option, to the person of moderate means who is just starting out on one's career, are good old-fashioned stocks.

The following is one of the tweets from the famous tweetstorm by Naval Ravikant, co-founder and chairman of AngelList.

Why Equity?


Any form of fixed income — be it a salary or bond yields — will find its value eroded invisibly over time by Inflation, which is an unavoidable facet of modern economies.

However, both Real Estate and Equity (Value) investments are automatically hedged against inflation by their very nature; since they are based on tangible assets whose prices fluctuate in direct proportion to Inflation.

Interest > Rent

The reasons why a loan-based Real Estate investment will not yield the same returns as a home-rental and equity-investment plan are beyond the scope of this discussion.

Suffice to say that since any Real Estate commitment (apart from REITs) will require a large capital outlay and loans, the interest payments themselves will largely negate a large portion of any gains made from increase in market value of the Real Estate investment.

The most common assumption by house owners is that the interest payments will be countered by rent saved, but the combined value of a rent+equity investment strategy can easily be shown to far exceed that of a loan+home strategy.

Stocks > Homes

Equity markets are also proven to have historically outperformed all other modes of investment. There are also multiple studies that show that Real Estate investments benefit builders and bankers more than the actual homeowners.

Stocks offer more liquidity by virtue of their actively being traded on the markets, and — being regulated by law to disclose all relevant information publicly — are also easier to analyze that homes.

Note: If one continues to feel that home-loan payments offer a more disciplined investment approach for oneself, one should follow that strategy. This post is intended towards those who can follow a disciplined investment plan, without the need for an external enforcement mechanism.


Five Years' Expenses

A good rule-of-thumb to keep in mind is that one can survive indefinitely if one were to have the equivalent of five years of one's expenses in Equity investments.

As an example, if one's basic annual expenses are currently $30,000, one could survive indefinitely from the returns on $150,000 in Equity investments. This is considering returns from both capital gains and dividends, some of which would be used for expenditure and the rest reinvested as an additional hedge against inflation.

Note that the above assumes a CAGR of 20% which, while on the higher side, is not implausible with a normal-sized investment in Equities.

"Size is the anchor of performance."

Other Factors

The above target assumes that one would be having Zero income after retirement. But realistically, a financially independent person in their thirties is likely to continue to have some sort of income; perhaps just a slightly reduced one, from a job that they actually like.

Another thing to keep in mind is that one's expenses can be significantly reduced without the daily requirements of a high-pressure job.

Therefore, depending on how early one starts investing and the cost of living in the region one resides in, it's not unreasonable to expect financial independence even in one's early thirties.

Investments too, just like debt, can grow surprisingly fast!


Value Investing as taught by Benjamin Graham — Warren Buffett's mentor — provides a great way of generating wealth from Equity.

DCA + Indexing

Basic investing is a lot simpler and a lot more effective than most people realize. Simply combining Dollar Cost Averaging with an Index Fund provides a highly effective way of applying powerful Value Investing principles with very little work.

"By periodically investing in an index fund, for example, the know-nothing investor can actually out-perform most investment professionals."

Avoid Risk

One of the misconceptions that most people seem to have hardwired into them is that success has a high correlation with risk. But the modern world is one of intellectual challenges, not physical or probabilistic ones.

Risk is usually not even a factor in success, especially not in investment success.

What Next

Once one achieves a basic degree of financial independence, one is free to pursue work that one is passionate about; or even other forms of more long-term Equity exposure such as entrepreneurship or starting a small business. One could also simply opt to use the free time to take better care of one's health, and one's family.

More advanced Value Investing strategies too can be pursued; once one is financially independent, and has more time for study and research.


Naval on Equity

Naval Ravikant explains his tweet above, why you're not going to get rich renting out your time.

House ≠ Asset

In this 2009 interview, Donald Trump and Robert Kiyosaki — two real estate moguls — explain why one's house is not necessarily an investment and can even be a liability.

Assets vs Liabilities

One of the most common misconceptions people have is what constitutes an Asset and what is actually a Liability. Kiyosaki has multiple educational videos about this subject on his YouTube channel, including the one below on converting Liabilities to Assets.

Income from Debt

Once basic investing and compounding are covered, more advanced techniques — such as using Debt to leverage investments — can be looked into. Even Debt can be Asset if used correctly.