3597: How to Retire in Under Ten Years by Christina Browning of Our Rich Journey on Early Retirement

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[00:00:56] This is Optimal Finance Daily. How to retire in under 10 years by Christina Browning of ourrichjourney.com. Are you on fire? I'm referring to the acronym FIRE. Financial Independence Retire Early and not the literal definition. I hope that goes without saying. If you're on FIRE, again, referring to the acronym, yay! One of the best things about FIRE is the freedom you have to

[00:01:24] to spend more time with your family and to spend more time with your family and friends, to explore your hobbies, to focus on your health, to travel, to do whatever it is that you want to do. Aman and I achieved FIRE in eight years, two years earlier than we expected. At the ages of 39 and 41, we quit our government jobs, retired, and moved to Portugal.

[00:01:44] Most people are shocked when we were able to retire in less than 10 years after devising our retirement plan. In general, I think the shock comes from a lack of understanding. Who really understands how to retire in less than 10 years anyways? Well, we do. And it all begins with savings rates.

[00:02:08] The key to retiring in less than 10 years is all about increasing your savings rates. Your savings rate is the amount of money you make minus the amount of money you spend. Simple, right? Even better, there are two tried and true methods for increasing your savings rate. Number one, make more money while keeping your expenses the same. And number two, decreasing your expenses, thereby saving more.

[00:02:34] Technically, there's also a third way. Making more and saving more. Whatever method you choose, the goal should be to increase your savings rate by as much as possible. When you do this, you can invest more. And when you can invest more, you can grow your wealth more. If your plan is to grow your wealth in the stock market, which is what Aman and I did, you'll want to grow your stock portfolio to 25 times your annual expenses.

[00:03:00] This equation comes from the 4% rule. The 4% rule is all the talk in the FIRE community. The rule became popular from the Trinity Study. Not familiar with the Trinity Study? Here's a quick breakdown. It's a study conducted by a group of finance professors at Trinity University in Texas. The study calculated retirement portfolio success rates with various monthly withdrawal rate assumptions and various portfolio asset allocations.

[00:03:28] In other words, it looked at portfolios that had a mix between stocks and bonds, and it looked at different withdrawal rates at 3%, at 4%, at 5%, and so on. And it looked at the success rate of people withdrawing that money and being able to withdraw that money throughout a 30-year retirement. The success rate was based on whether money remained in the investment portfolio throughout the life of the portfolio.

[00:03:54] Based on the numbers, the study concluded that someone with a retirement portfolio of 100% stocks could safely withdraw 4% from their investment account, adjusting for inflation, each year and not run out of money over the course of 30 years. This study also showed a 100% success rate for an investment portfolio that consisted of 75% stocks and 25% bonds with a withdrawal rate of 4%.

[00:04:19] But when a portfolio was more heavily weighted in bonds, the study concluded that the success rate for the portfolio decreased. So what does the Trinity Study mean for you if you want to retire in less than 10 years? Assuming you want to grow your wealth in the stock market, it means you need to grow your stock portfolio to 25 times your projected annual expenses in retirement so that you can safely withdraw 4% from your portfolio.

[00:04:46] Let's work with some actual numbers to better illustrate my point. The average American family makes $60,000 a year. Let's say that your projected annual expenses in early retirement are $60,000. Based on the 4% rule, you would need an investment portfolio of $1.5 million or $60,000 times 25 before you could safely retire with a high likelihood of never running out of money during retirement.

[00:05:13] This is because historically, the average stock market return has been about 8%. If you only pull 4% from your stock portfolio, even adjusting for inflation, about 3%, you would only be pulling the interest from your portfolio. In other words, you wouldn't have to touch your principal balance. Mathematically, the 4% rule makes sense. But how can you grow a stock portfolio to 25 times your projected annual expenses in retirement?

[00:05:40] It all goes back to a high savings rate and compound interest. Another illustration with numbers. Let's look at two families, family A and family B. Both families make $60,000 a year. Family A is the average American family making $60,000 a year.

[00:05:59] They spend the typical 30% of their income on housing, 20% of their income goes to food, 10% goes to clothing, 15% goes towards transportation, 12% goes to medical expenses, 3% is spent on entertainment and other expenses, and 10% goes to savings. Only $500 a month. In total, family A spends 90% of its income and saves 10%.

[00:06:25] Let's assume that this family's expected expenses in retirement remain the same. This means that this family would need $1.35 million to retire. With a monthly savings of $500 invested at a return rate of 8%, it would take this family more than 50 years to retire. 50 years just sounds, insert sad face emoji. But there's a better way. Let's look at family B. Family B also makes $60,000 a year.

[00:06:54] But family B house hacks, so they spend 0% of their income on housing. They also eat out less, so they only spend 10% of their income on food. They practice minimalism, so they only spend 3% on clothing. They drive a used car, so they only spend 5% on transportation. Their medical bills are the same as family A, 12%. But family B spends only 3% on entertainment.

[00:07:20] The big difference between these two families is that family B has managed to save a whopping 67%, $3,350 each month. In total, family B spends 33% of its income and saves 67%. Assuming that family B's expected expenses in retirement remain the same, this means that this family would need $494,000 to retire.

[00:07:47] With a monthly savings of $3,350 invested at a return rate of 8%, it would take this family less than 10 years to retire. Less than 10 years. It's possible. Maybe you're not like family A or family B. That's not the point. The point is that by increasing your savings rate, you're propelling yourself closer to fire. And isn't that the end goal? Let me rephrase my rhetorical question. That is the end goal.

[00:08:17] So do yourself a favor. Increase your savings rate and get closer to fire. Your future self will thank you. You just listened to the post titled, How to Retire in Under 10 Years by Christina Browning of OurRichJourney.com. My philosophy with money? It's a tool for freedom, not a source of anxiety.

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[00:09:38] Terms and conditions apply. This is a paid endorsement of Wealthfront. Client experiences will vary. Wealthfront brokerage is not a bank. The base APY is as of January 30th, 2026 and subject to change. For more information, please see the episode description. When you need to build up your team to handle the growing chaos at work, use Indeed Sponsored Jobs. It gives your job post the boost it needs to be seen and helps reach people with the right skills, certifications, and more.

[00:10:06] Spend less time searching and more time actually interviewing candidates who check all your boxes. Listeners of this show will get a $75 sponsored job credit at Indeed.com slash podcast. That's Indeed.com slash podcast. Terms and conditions apply. Need a hiring hero? This is a job for Indeed Sponsored Jobs. In my experience, early retirement is an agitating concept for most people because they assume it's simply not possible.

[00:10:31] The word retirement typically is understood to mean not working, and our culture glorifies work and productivity. So in many ways, retirement is also unappealing. But I think of retirement as an end point where your work is no longer dictated by your financial needs. For example, when Michael Jordan retired from basketball, no one expected him to sit around and do nothing. We all expected that he would do something after that.

[00:11:01] And we should expect that from our own retirements as well. I retired from my corporate career, but I didn't sign a blood oath that I would never again make an income. Keep in mind that there are different flavors of fire. The one that I'm following right now is known as Coast Fi. I basically front-loaded my traditional retirement savings. If I don't touch what I have right now, even if I don't contribute one more dollar,

[00:11:27] it will grow through the power of compound interest to what I need in my 60s, which is when I'll start drawing down. This has allowed me to downshift much sooner than waiting until I have 25 times my yearly expenses, also known as my Fi number. Also, because my circumstances have changed so much, my Fi number continues to be a moving target.

[00:11:51] Coast Fi allows me to gain all the benefits of traditional fire and that I have full autonomy over my time, but it maintains flexibility because my focus on self-employment provides me the ability to turn up or turn down my level of income as needed or desired. Even if you're in the large majority who aren't interested in early retirement, the way you get there is the way you get to any financial goal.

[00:12:18] Live below your means and invest the gap between your income and expenses. But that should do it for today. Have a great rest of your day and I'll be here reading to you tomorrow where your optimal life awaits.