My goal is to have enough to retire at 40. I have 11 years to go (I'm 29) as of the past 15th. To be clear, I don't plan on retiring, maybe ever, but I want to have enough to just quit one day if I decide to.

This will be a multi-part question because there is no easy way to ask this.

So far, my strategy has been as follows

  1. 6% of pre tax income into my 401(k) and company adds 3%
  2. Save (and invest into ETFs and rental properties) 18% of my annual income
  3. Reduce living expenses (mortgages included) down to 40% of annual income

So my questions are

  1. Does it make sense to invest more into my 401(k) beyond what my company will match?
  2. Are ETFs a bad choice for short term aggressive growth? I can't seem to find any information on this.
  3. Are there any resources you can point me toward that provide realistic early retirement options?

Before anyone asks the other 36% of my income is discretionary spending (29%) and rental repairs (7%)

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    Ohhhhh I love that line about including the answerer's qualifications. On the Internet,nobody knows that I am a dog..... Commented Oct 26, 2015 at 15:03
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    mrmoneymustache.com is a good place to start. Commented Oct 26, 2015 at 15:08
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    @AnthonyRussell IMHO, I think the downvotes are due to your "qualifications" remark. On Stack Exchange sites, the active, voting members of the community will upvote the quality answers and downvote the terrible ones, while commenting where something isn't correct, clear, or appropriate. "Qualifications" don't necessarily mean you are getting the best advice. On the contary -- many financial advisers are not conflict-free and will steer you into investments that line their pockets more than yours. Commented Oct 26, 2015 at 15:39
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    "Short-term aggressive growth" is not necessarily what you want if your goal is to be able to retire early. Investments with short-term aggressive growth may also have longer-term plunges, which could put you in a tough spot if you retire and then the market takes a dive.
    – BrenBarn
    Commented Oct 26, 2015 at 16:55
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    @AnthonyRussell Yes: ask follow-up questions in comments; ask for supporting references; compare/contrast answers; etc. Commented Oct 26, 2015 at 16:58

2 Answers 2


1) Does it make sense to invest more into my 401k beyond what my company will match?

Yes. The tax advantages of the 401k typically are worth it and especially so in an early retirement scenario. If you retire at 40 and have no income in year 41 you can spend year 41 converting money from your 401k into a Roth IRA and end up with money that you have never paid income tax on and will never pay income tax on (assuming laws stay the same).

2) Are ETFs a bad choice for short term aggressive growth? I can't seem to find any information on this.

ETFs are a type of investment container. They have different goals and different expenses. It's almost like asking if "Mutual Funds" are a good for short term aggressive growth. Here's PIMCO's BOND ETF: http://www.pimcoetfs.com/Funds/Pages/BOND.aspx That would be a terrible choice for aggressive short term growth, but it is an ETF.

3) Is there any resources you can point me toward that provide realistic early retirement options?

Check out http://www.mrmoneymustache.com/ or https://www.reddit.com/r/financialindependence or http://www.firecalc.com/

You are looking to search for "FIRE" or "Financial Independence/Retire Early".

  • With question two allow me to elaborate. Is it a better choice to put money into a growth focused ETF instead of picking a couple growth stocks. Do ETFs under perform? As a young person looking for risky growth, do ETFs stiffel what I am attempting to do? Commented Oct 26, 2015 at 18:52
  • @AnthonyRussell I would ask a new question on the site: What is the best way to invest in aggressive growth stocks? Then in the body: Am I better off investing in a growth focused ETF or picking a couple of growth stocks. Are there other ways to get aggressive growth investments that I should look at? And then detail what your risk tolerance is, your time period, your expected contributions, etc. and see what investment vehicles come back.
    – Alex B
    Commented Oct 26, 2015 at 19:01
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    @AnthonyRussell I'd personally go with an investment vehicle that diverisifies my interests more than just picking a couple of stocks, but that's based on my personal risk profile.
    – Alex B
    Commented Oct 26, 2015 at 19:02
  • I am of course being very general here. Like I said, I am putting into my 401k, Real estate and now finally also ETFs. I just want to know if ETFs are a bad idea for you folks lookin to grow. Commented Oct 26, 2015 at 19:08
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    ETF's are really just mutual funds with a different mechanism for buying/selling shares.The same questions apply to them as to traditional mutual funds -- whst is their investment profile/goal, what fees are being taken out of your profits, etc. -- plus the question of transaction costs (which aren't an issue for my mutual funds, may be for others, and afaik certainly are for ETFs.)
    – keshlam
    Commented Oct 26, 2015 at 23:49

The scope of your question is pretty broad. The 401(k) issue has other questions, one about a horrible 401k plan. If your plan expenses are reasonable, it makes sense to use the 401(k) as much as you can. You'll see warnings about pre-59-1/2 penalty, but if you are wealthy by 40, or 50, you can transfer the account to an IRA and use Sec 72(t) withdrawal rules to avoid penalties.

You can easily construct a spreadsheet or use one I refer to at How much money do I need to have saved up for retirement? to see how you're progressing. Keep in mind, while I assume a savings goal of 20X income to replace 80% of preretirement income, it's really based on the assumption that 80% is the post retirement spending level. If you live on 40% of income, 10 times your current income is the target, if you subscribe to the 4% withdrawal rule. To be clear, if you make $100K, but live on a gross $40K per year, it would take $1M to generate that $40K.

To add one last point, you won't be in line for too much in the way of social security, having worked just 20 years, but if you simply want to have a level of wealth to be able to quit, yet continue working, you can also consider SS at some point. I remember thinking of SS as being so far into the future, but decades passed, I retired at 50, and my wife turns 60 soon. So those checks aren't far off.

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    I know this sounds pessimistic but retirement is so far off for me that I think it's much more likely I will die in a car wreck, a heart attack while on the treadmill or some other random act of the reaper. I just want to make sure that the money is there so on the off chance I do plinko my way to retirement that I can use it. Commented Mar 21, 2016 at 19:02

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