Retire Early and Then Start a Company

With the popular conversation about making lifestyle adjustments to be an entrepreneur, there’s another, more aggressive option: retire early and then start a company. The Washington Post recently profiled Mr. Money Mustache, a man in Colorado that retired at age 30 and now writes a popular blog on happiness and retiring early with a modest lifestyle. If you haven’t read about his approach, start with Getting Rich: From Zero to Hero in One Blog Post.

So, the idea is to reduce lifestyle expenses as much as possible combined with saving enough money such that you can live solely off investments forever. For many people, it’s somewhere in the neighborhood of $20,000/year in expenses, and thus $500,000 in investments (assuming you live off 4% of the investments per year). In places like Atlanta, this is readily doable, even with a small family, by having an extremely modest lifestyle (own a $200,000 house with no mortgage, always cook at home, have catastrophic health insurance, share one used Honda with no car payments, etc).

After retiring early, starting a company or joining a startup becomes easy as there isn’t pressure or a self-imposed timeline to get back to a previous salary or compensation level. There also isn’t the feeling that you have to raise money from investors before taking the plunge, as you control your own destiny.

Retiring early isn’t for everyone, but it should be evaluated as a potential path.

What else? What are your thoughts on retiring early and starting a company?

2 thoughts on “Retire Early and Then Start a Company

  1. But… does that mean that by retiring at age 30, you expect to win more money in the long run through a startup? Its a relatively large risk decision to take considering many people want to live a comfortable life with their family. Follow me @aamq93.wordpress.com

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